<PAGE>
As filed with the Securities and Exchange Commission on September 15, 1999
Registration No. 333-84977
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------
PRE-EFFECTIVE AMENDMENT NO. 3 TO
FORM S-11
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------
CRUSADE MANAGEMENT LIMITED
(ACN 072 715 916)
(Exact name of registrant as specified in its governing instruments)
Level 4
4-16 Montgomery Street
Kogarah NSW 2217
Australia
Telephone: 612 9952 1315
(Address, including zip code/post code, and telephone number, including area
code, of registrant's principal executive offices)
------
agent for service
CT Corporation System
111 Eighth Avenue
13th Floor
New York, NY 10011
Telephone: 212-590-9100
(Name, address, including zip code and telephone number,
including area code, of agent for service)
With a copy to:
<TABLE>
<S> <C> <C>
Michael H.S. Bowan Diane Citron, Esq. Daniel Rossner, Esq.
Company Secretary Mayer, Brown & Platt Brown & Wood LLP
Crusade Management Limited 1675 Broadway One World Trade Center
Level 4 New York, New York 10019 New York, New York 10048
4-16 Montgomery Street
Kogarah NSW 2217
Australia
</TABLE>
------
Approximate date of commencement of proposed sale to the public: As soon
as practicable 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. / /
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Amount to be Offering Price Aggregate Offering Registration
Securities to Be Registered Registered Per Unit Price* Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A-1 Mortgage Backed Floating Rate Notes........... $300,000,000.00 100% $300,000,000.00 $ 83,400.00
Class A-2 Mortgage Backed Floating Rate Notes........... $569,000,000.00 100% $569,000,000.00 $158,182.00
Class A-3 Mortgage Backed Floating Rate Notes........... $125,000,000.00 100% $125,000,000.00 $ 34,750.00
- -----------------------------------------------
Total Mortgage Backed Floating Rate Notes............... $994,000,000.00 - $994,000,000.00 $276,332.00*
- -----------------------------------------------
</TABLE>
* $278.00 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.
==============================================================================
<PAGE>
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
Name and Caption in Form S-11 Caption in Prospectus
<S> <C> <C>
1. Forepart of Registration Statement and Front Cover of Registration Statement;
Outside Front Cover Page of Prospectus Outside Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Inside Front Cover Page of Prospectus;
Pages of Prospectus Outside Back Cover Page of Prospectus
3. Summary Information, Risk Factors and Summary; Risk Factors
Ratio of Earnings to Fixed Charges
4. Determination of Offering Price *
5. Dilution *
6. Selling Security Holders *
7. Plan of Distribution Plan of Distribution
8. Use of Proceeds Use of Proceeds
9. Selected Financial Data *
10. Management's Discussion and Analysis Description of the Trust;
of Financial Condition and Results Description of the Assets
of Operations of the Trust
11. General Information as to Registrant The Issuer Trustee, St.George Bank
and the Manager - The Manager
12. Policy with respect to Certain Description of the Class A
Activities Notes
13. Investment Policies of Registrant Description of the Transaction
Documents
14. Description of Real Estate Description of the Assets of the Trust;
St.George Residential Loan Program
15. Operating Data *
16. Tax Treatment of Registrant and United States Federal Income Tax
Its Security Holders Matters, 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 Class A Notes
19. Legal Proceedings *
20. Security Ownership of Certain The Issuer Trustee, St.George Bank and the Manager
Beneficial Owners and Management
21. Directors and Executive Officers *
22. Executive Compensation *
23. Certain Relationships and *
Related Transactions
24. Selection, Management and Custody Description of the Class A Notes; Description of the Transaction
of Registrant's Investments Documents; St.George Residential Loan Program
25. Policies with Respect to Certain Description of the Class A Notes
Transactions
26. Limitations of Liability Description of the Transaction Documents
27. Financial Statements and Information *
28. Interests of Named Experts and Counsel *
29. Disclosure of Commission Position on Part II of Registration Statement
Indemnification for Securities Act
Liabilities
30. Quantitative and Qualitative Disclosures
about Market Risk
* Not Applicable
</TABLE>
<PAGE>
Subject To Completion, Dated September 15, 1999
US$994,000,000
CRUSADE GLOBAL TRUST NO. 1 OF 1999
[LOGO]
Crusade Management Limited (ACN 072 715 916)
Manager
St.George Bank Limited (ACN 055 513 070)
Seller and Servicer
Axa Trustees Limited (ACN 004 029 841)
Issuer Trustee
---------------
The notes will be collateralized by a pool of housing loans secured by
properties located in Australia. The Crusade Global Trust No. 1 of 1999 will be
governed by the laws of New South Wales, Australia.
The notes are not deposits and neither the notes nor the underlying
housing loans are insured or guaranteed by any governmental agency or
instrumentality. The notes represent obligations of the Crusade Global Trust No.
1 of 1999 only and do not represent obligations of or interests in, and are not
guaranteed by, Crusade Management Limited, St.George Bank Limited or AXA
Trustees Limited.
An application has been made to the London Stock Exchange Limited to
admit the Class A-1, Class A-2 and Class A-3 notes to the Official List.
Investing in the notes involves risks. See "Risk Factors" on page 18.
<TABLE>
<CAPTION>
Initial Underwriting Proceeds
Principal Initial Price to Discounts and to Issuer
Balance Interest Rate Public Commissions Trustee
<S> <C> <C> <C> <C> <C>
Class A-1 Notes..... $300,000,000 LIBOR + % % % %
Class A-2 Notes..... $569,000,000 LIBOR + % % % %
Class A-3 Notes..... $125,000,000 LIBOR + % % % %
Total $994,000,000 $ $ $
</TABLE>
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these notes or determined if this
prospectus is accurate or complete. Any representation to the contrary is a
criminal offense.
Credit Suisse First Boston
Deutsche Banc Alex. Brown
J.P. Morgan & Co.
The date of this prospectus is September __, 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
You should rely only on the information contained in this prospectus. No
one has been authorized to provide you with any other, or different,
information.
The securities are not being offered in any state where the offer is not
permitted.
The Class A notes will be offered by the underwriters, subject to prior
sale, if and when they are issued to and accepted by them. The underwriters
reserve the right to reject an order in whole or in part and to withdraw,
cancel or modify the offer without notice. Delivery of the Class A notes in
book-entry form only will be made on or about September __, 1999.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
<S> <C>
Disclaimers with Respect to Sales to Non-U.S. Investors ................. 3
Australian Disclaimers .................................................. 6
Summary ................................................................. 7
Structural Diagram ................................................... 8
Summary of the Notes ................................................. 9
Structural Overview .................................................. 10
Credit Enhancements .................................................. 10
Liquidity Enhancements ............................................... 11
Redraws .............................................................. 11
Limited Substitution ................................................. 12
Hedging Arrangements ................................................. 12
Optional Redemption .................................................. 12
The Housing Loan Pool ................................................ 13
Withholding Tax ...................................................... 14
U.S. Tax Status ...................................................... 14
Legal Investment ..................................................... 14
ERISA Considerations ................................................. 14
Book-Entry Registration .............................................. 14
Collections .......................................................... 14
Interest on the Notes ................................................ 15
Principal on the Notes ............................................... 15
Allocation of Cash Flows ............................................. 15
Distribution of Total Available Funds on a Payment Date .............. 16
Distribution of Principal Collections on a Payment Date .............. 17
Risk Factors ............................................................ 18
Capitalized Terms ....................................................... 27
U.S. Dollar Presentation ................................................ 27
The Issuer Trustee, St.George Bank and the Manager ...................... 27
The Issuer Trustee ................................................... 27
St.George Bank ....................................................... 28
The Manager .......................................................... 28
Description of the Trust ................................................ 29
St.George Bank Securitisation Trust Programme ........................ 29
Crusade Global Trust No. 1 of 1999 ................................... 29
Description of the Assets of the Trust .................................. 29
Assets of the Trust .................................................. 29
The Housing Loans .................................................... 30
Transfer and Assignment of the Housing Loans ......................... 30
Representations, Warranties and Eligibility Criteria ................. 30
Breach of Representations and Warranties ............................. 32
Substitution of Housing Loans ........................................ 32
Other Features of the Housing Loans .................................. 34
Details of the Housing Loan Pool ..................................... 34
Housing Loan Information ............................................. 35
St.George Residential Loan Program ...................................... 40
Origination Process .................................................. 40
Approval and Underwriting Process .................................... 40
St.George Bank's Product Types ....................................... 41
Special Features of the Housing Loans ................................ 42
Additional Features .................................................. 45
The Mortgage Insurance Policies ......................................... 46
General .............................................................. 46
Coverage ............................................................. 46
Timely Payment Cover ................................................. 46
Requirement and Restrictions ......................................... 46
Description of the Mortgage Insurer .................................. 47
Description of the Class A Notes ........................................ 47
General .............................................................. 47
Form of the Class A Notes ............................................ 47
Distributions on the Notes ........................................... 52
Key Dates and Periods ................................................ 52
Calculation of Total Available Funds ................................. 53
Available Income ..................................................... 53
Principal Draws ...................................................... 55
Liquidity Draws ...................................................... 55
Distribution of Total Available Funds ................................ 55
Interest on the Notes ................................................ 58
Excess Available Income .............................................. 59
Gross Principal Collections .......................................... 60
Principal Distributions .............................................. 61
Redraws .............................................................. 63
Application of Principal Charge Offs ................................. 64
Payments into US$ Account ............................................ 65
Payments out of US$ Account .......................................... 65
The Interest Rate Swaps .............................................. 66
The Currency Swap .................................................... 70
Withholding or Tax Deductions ........................................ 76
Redemption of the Notes for Taxation or Other Reasons ................ 76
Redemption of the Notes upon an Event of Default ..................... 76
Optional Redemption of the Notes ..................................... 77
Final Maturity Date .................................................. 77
Final Redemption of the Notes ........................................ 77
Termination of the Trust ............................................. 78
Prescription ........................................................ 79
Voting and Consent of Noteholders ................................... 79
Reports to Noteholders .............................................. 80
Description of the Transaction Documents ............................... 81
Trust Accounts ...................................................... 81
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Page
<S> <C>
Liquidity Reserve ................................................... 82
Modifications ....................................................... 82
The Issuer Trustee .................................................. 84
The Manager ......................................................... 87
The Note Trustee .................................................... 88
The Security Trust Deed ............................................. 89
The Redraw Facility ................................................. 97
The Servicing Agreement ............................................. 99
The Custodian Agreement ............................................. 104
The Seller Loan Agreement ........................................... 106
The Servicer ........................................................... 106
Servicing of Housing Loans .......................................... 106
Collection and Enforcement Procedures ............................... 106
Collection and Foreclosure Process .................................. 107
Servicer Delinquency Experience ..................................... 108
St.George Bank Year 2000 Program ....................................... 109
Prepayment and Yield Considerations .................................... 113
General ............................................................. 113
Prepayments ......................................................... 113
Weighted Average Lives .............................................. 114
Use of Proceeds ........................................................ 120
Legal Aspects of the Housing Loans ..................................... 120
General ............................................................. 120
Nature of Housing Loans as Security ................................. 120
Enforcement of Registered Mortgages ................................. 122
Penalties and Prohibited Fees ....................................... 123
Bankruptcy .......................................................... 124
Environmental ....................................................... 124
Insolvency Considerations ........................................... 125
Tax Treatment of Interest on Australian Housing Loans ............... 125
Consumer Credit Legislation ......................................... 125
United States Federal Income Tax Matters ............................... 126
General ............................................................. 126
Sale of Notes ....................................................... 127
Market Discount ..................................................... 127
Premium ............................................................. 128
Backup Withholding .................................................. 129
Australian Tax Matters ................................................. 129
Payments of Principal, Premiums and Interest ........................ 129
Profit on Sale ...................................................... 130
Goods and Services Tax .............................................. 131
Other Taxes ......................................................... 132
Enforcement of Foreign Judgments in Australia .......................... 133
Exchange Controls and Limitations ...................................... 133
ERISA Considerations ................................................... 134
Legal Investment Considerations ........................................ 135
Available Information .................................................. 135
Ratings of the Notes ................................................... 136
Plan of Distribution ................................................... 136
Underwriting ........................................................ 136
Offering Restrictions ............................................... 138
Listing and General Information ........................................ 139
Listing ............................................................. 139
Authorization ....................................................... 139
Litigation .......................................................... 139
Euroclear and Cedelbank ............................................. 139
Transaction Documents Available for Inspection ...................... 139
Consents to Opinions ................................................ 141
Announcement ........................................................... 141
Legal Matters .......................................................... 141
Glossary ............................................................... 142
Appendix I
Terms and Conditions of the Class A Notes ........................... I-1
</TABLE>
2
<PAGE>
Disclaimers with Respect to Sales to Non-U.S. Investors
This section applies only to the offering of the notes in countries other
than the United States of America. In the section of this prospectus entitled
"Disclaimers with Respect to Sales to Non-U.S. Investors", references to AXA
Trustees Limited are to that company in its capacity as trustee of the Crusade
Global Trust No. 1 of 1999, and not its personal capacity. AXA Trustees Limited
is not responsible or liable for this prospectus in any capacity in the United
States of America. Crusade Management Limited is responsible and liable for this
prospectus in the United States of America.
Other than in the United States of America, no person has taken or will
take any action that would permit a public offer of the notes in any country or
jurisdiction. The notes may be offered non-publicly in other jurisdictions. The
notes may not be offered or sold, directly or indirectly, and neither this
prospectus nor any form of application, advertisement or other offering material
may be issued, distributed or published in any country or jurisdiction, unless
permitted under all applicable laws and regulations. The underwriters have
represented that all offers and sales by them have been in compliance, and will
comply, with all applicable restrictions on offers and sales of the Class A
notes. You should inform yourself about and observe any of these restrictions.
For a description of further restrictions on offers and sales of the notes, see
"Plan of Distribution."
This prospectus does not and is not intended to constitute an offer to sell
or a solicitation of any offer to buy any of the notes by or on behalf of AXA
Trustees Limited in any jurisdiction in which the offer or solicitation is not
authorized or in which the person making the offer or solicitation is not
qualified to do so or to any person to whom it is unlawful to make an offer or
solicitation in such jurisdiction.
For the purposes of the Financial Services Act 1986 of the United Kingdom
and the London Stock Exchange only:
o AXA Trustees Limited accepts responsibility for the
information contained in this prospectus. To the best of the
knowledge and belief of AXA Trustees Limited, which has taken
all reasonable care to ensure that such is the case, the
information contained in this prospectus is in accordance with
the facts and does not omit anything likely to affect the
import of that information.
o St.George Bank Limited accepts responsibility for the
information contained in "Summary - The Housing Loan Pool",
"The Issuer Trustee, St.George Bank and the Manager -
St.George Bank" and "- the Manager", "Description of the
Assets of the Trust", "St.George Residential Loan Program",
"Description of the Class A Notes - Form of the Class A Notes"
and "- The Interest Rate Swaps", except for the description
under the caption "Standby Swap Providers", "The Servicer" and
"St.George Bank Year 2000 Program". To the best of the
knowledge and belief of St.George Bank Limited, which has
taken all reasonable care to ensure that such is the case, the
information contained in those sections is in accordance with
the facts and does not omit anything likely to affect the
import of that information.
o Deutsche Bank AG, Sydney Branch, accepts responsibility for
the information contained in "Description of the Class A Notes
- The Interest Rate Swaps - Standby Swap Providers". To the
best of the knowledge and belief of Deutsche Bank AG, Sydney
Branch, which has taken all reasonable care to ensure that
such is the case, the information contained in that section
3
<PAGE>
is in accordance with the facts and does not omit anything
likely to affect the import of that information.
o Bankers Trust Corporation, New York, accepts responsibility
for the information contained in "Description of the Class A
Notes - The Currency Swap - Currency Swap Provider". To the
best of the knowledge and belief of Bankers Trust Corporation,
which has taken all reasonable care to ensure that such is the
case, the information contained in that section is in
accordance with the facts and does not omit anything likely to
affect the import of that information.
None of St.George Bank Limited, in its individual capacity and as seller,
servicer, fixed-floating rate swap provider and basis swap provider, Crusade
Management Limited, as manager, National Mutual Life Nominees Limited, as
security trustee, Bankers Trust Company, as note trustee, St.George Custodial
Pty Limited, as custodian, Deutsche Bank AG, Sydney Branch, as standby
fixed-floating rate swap provider and standby basis swap provider, Bankers Trust
Corporation, New York, as currency swap provider, Housing Loans Insurance
Corporation Pty Limited and the underwriters: do not accept any responsibility
for any information contained in this prospectus and have not separately
verified the information contained in this prospectus and make no
representation, warranty or undertaking, express or implied, as to the accuracy
or completeness of any information contained in this prospectus or any other
information supplied in connection with the notes except with respect to the
information for which they accept responsibility in the preceding four
paragraphs.
Except as described in the preceding five paragraphs, St. George Bank
Limited, in its individual capacity and as seller, servicer, fixed-floating rate
swap provider and basis swap provider, AXA Trustees Limited, in its personal
capacity and as trustee, Crusade Management Limited, as manager, National Mutual
Life Nominees Limited, as security trustee, Bankers Trust Company, as note
trustee, St. George Custodial Pty Limited, as custodian, Deutsche Bank AG,
Sydney Branch, as standby fixed-floating rate swap provider, and standby basis
swap provider, Bankers Trust Corporation, New York, as currency swap provider,
Housing Loans Insurance Corporation pty Limited and the underwriters do not
recommend that any person should purchase any of the notes and do not accept any
responsibility or make any representation as to the tax consequences of
investing in the notes.
Each person receiving this prospectus acknowledges that he or she has not
relied on the entities listed in the preceding paragraph nor on any person
affiliated with any of them in connection with his or her investigation of the
accuracy of the information in this prospectus or his or her investment
decisions; acknowledges that this prospectus and any other information supplied
in connection with the notes is not intended to provide the basis of any credit
or other evaluation; acknowledges that the underwriters have expressly not
undertaken to review the financial condition or affairs of the trust or any
party named in the prospectus during the life of the notes; should make his or
her own independent investigation of the trust and the notes; and should seek
its own tax, accounting and legal advice as to the consequences of investing in
any of the notes.
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 notes. If such information or representation is given
or received, it must not be relied upon as having been authorized by AXA
Trustees Limited or any of the underwriters.
4
<PAGE>
Neither the delivery of this prospectus nor any sale made in connection
with this prospectus shall, under any circumstances, create any implication
that:
o there has been no material change in the affairs of the trust
or any party named in this prospectus since the date of this
prospectus or the date upon which this prospectus has been
most recently amended or supplemented; or
o any other information supplied in connection with the 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.
AXA Trustees Limited's liability to make payments of interest and principal
on the Class A notes is limited to its right of indemnity from the assets of the
trust. All claims against AXA Trustees Limited in relation to the Class A notes
may only be satisfied out of the assets of the trust and are limited in recourse
to the assets of the trust.
None of the rating agencies have been involved in the preparation of this
prospectus.
5
<PAGE>
Australian Disclaimers
o The notes do not represent deposits or other liabilities of
St.George Bank Limited or associates of St.George Bank
Limited.
o The holding of the notes is subject to investment risk,
including possible delays in repayment and loss of income and
principal invested.
o Neither St.George Bank Limited, any associate of St.George
Bank Limited, AXA Trustees Limited, National Mutual Life
Nominees Limited, Bankers Trust Company, as note trustee, nor
any underwriter in any way stands behind the capital value or
the performance of the notes or the assets of the trust except
to the limited extent provided in the transaction documents
for the trust.
o None of St.George Bank Limited, in its individual capacity and
as seller, servicer, basis swap provider and fixed-floating
rate swap provider, AXA Trustees Limited, Crusade Management
Limited, as manager, National Mutual Life Nominees Limited, as
security trustee, Bankers Trust Company, as note trustee,
St.George Custodial Pty Limited, as custodian, Deutsche Bank
AG, Sydney Branch, as standby fixed-floating rate swap
provider and standby basis swap provider, Bankers Trust
Corporation, New York, as currency swap provider or any of the
underwriters guarantees the payment of interest or the
repayment of principal due on the notes.
o None of the obligations of AXA Trustees Limited, in its
capacity as trustee of the trust, or Crusade Management
Limited, as manager, are guaranteed in any way by St.George
Bank Limited or any associate of St.George Bank Limited or by
AXA Trustees Limited or any associate of AXA Trustees Limited.
6
<PAGE>
Summary
This summary highlights selected information from this document and does
not contain all of the information that you need to consider in making your
investment decision. This summary contains an overview of some of the concepts
and other information to aid your understanding. All of the information
contained in this summary is qualified by the more detailed explanations in
other parts of this prospectus.
Parties to the Transaction
Trust:...................... Crusade Global Trust No.1 of 1999 Issuer
Trustee:.................... AXA Trustees Limited (ACN 004 029 841), in its
capacity as trustee of the Trust
Manager:.................... Crusade Management Limited (ACN 072 715 916),
4-16 Montgomery Street, Kogarah NSW 2217
612-9320-5605
Note Trustee:............... Bankers Trust Company Security
Trustee:.................... National Mutual Life Nominees Limited
(ACN 004 387 133)
Seller:..................... St.George Bank Limited (ACN 055 513 070)
Servicer:................... St.George Bank Limited
Custodian:.................. St.George Custodial Pty Limited (ACN 003 017 411)
Principal Paying Agent:..... Midland Bank plc. Midland Bank plc is expected to
change its name to HSBC Bank plc on
September 27, 1999.
Calculation Agent:.......... Midland Bank plc
Residual Beneficiary:....... Crusade Management Limited
Underwriters:............... Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
J.P. Morgan Securities Inc.
Listing Agent:.............. Credit Suisse First Boston Limited
Redraw Facility Provider:... St.George Bank Limited
Mortgage Insurer:........... Housing Loans Insurance Corporation
Pty Limited (ACN 071 466 334)
Fixed-Floating Rate Swap
Provider:................... St.George Bank Limited
Standby Fixed-Floating Rate
Swap Provider:.............. Deutsche Bank AG, Sydney Branch
Basis Swap Provider:........ St.George Bank Limited
Standby Basis Swap Provider: Deutsche Bank AG, Sydney Branch
Currency Swap Provider:..... Bankers Trust Corporation, New York
Rating Agencies:............ Fitch IBCA (Australia) Pty Limited
Moody's Investors Service, Inc.
Standard & Poor's Ratings Group
7
<PAGE>
<TABLE>
<S> <C>
Structural Diagram
-----------------
SELLER
St. George Bank
Limited
-----------------
|
Payments from the | Equitable assignment
housing loans | of housing loans
\|/
-------------------------------------
| |
| |
| ISSUER TRUSTEE |
| AXA Trustees Limited |
- -------------------- | |
MANAGER | | ------------------------------- |
Crusade Management |------| | | First ranking ----------------------
Limited | | | | | floating charge \| SECURITY TRUSTEE
- -------------------- | | |-------------------------| National Mutual Life
- -------------------- | | | | over the assets /| Nominees Limited
SERVICER | | | | | of the Trust ----------------------
St. George Bank |------| | |
Limited | | | | | Payments from -----------------------
- -------------------- | | Crusade |/ | Mortgage | MORTGAGE INSURER
- -------------------- | | Global |--------------------------| Housing Loan
CUSTODIAN | | | Trust |\ | Insurance | Insurance Corporation
St. George Custodial|------| No. 1 | | Policies | Pty Limited
Pty Limited | | | of | | -----------------------
- -------------------- | | 1999 | | ---------------------
| | | | | RESIDUAL
- -------------------- | | | | \| BENEFICIARY
REDRAW FACILITY | | | |--------------------------| Crusade
PROVIDER | | | | | /| Management Limited
St. George Bank |------| | | ---------------------
Limited | | | | | ---------------------
- -------------------- | | | | Payments on \|
| | |--------------------------| Class B noteholders
- -------------------- | | | | the Class B notes /|
FIXED-FLOATING | | | | | ---------------------
RATE SWAP | | | | | ------------------
PROVIDER |------| | | | |
St. George Bank | | | |--------------------------| Class A Notes ----
Limited | | ------------------------------- | | | |
- -------------------- --------|--------------------|------- ------------------ |
| | Payments | on the | |
| | Class A | notes | |
| | | | |
| | \|/ | |
- -------------------- ----------------- ----------------- | |
STANDBY FIXED- BASIS SWAP CURRENCY SWAP ------------------ |
FLOATING RATE PROVIDER PROVIDER NOTE TRUSTEE |
SWAP PROVIDER St. George Bank Morgan Guaranty Bankers Trust |
Deutsche Bank AG, Limited Trust Company Company |
Sydney Branch ----------------- of New York ------------------ |
- -------------------- | ---------------- |
| | |
| \|/ |
----------------- --------------------- |
STANDBY BASIS PRINCIPAL PAYING |
SWAP PROVIDER AGENT |
Deutsche Bank AG, Midland Bank plc |
Sydney Branch --------------------- |
----------------- | |
\|/ |
------------------ |
THE DEPOSITARY | |
TRUST COMPANY |-----------------------------------------
CLEARING SYSTEM |
------------------
|
\|/
------------------
Class A
Noteholders
------------------
</TABLE>
8
<PAGE>
Summary of the Notes
The issuer trustee will also issue Class B notes collateralized by the same
pool of housing loans. The Class B notes have not been registered in the United
States and are not being offered by this prospectus. The term "notes" will mean
the Class A notes and the Class B notes when used in this prospectus.
<TABLE>
<CAPTION>
Class A-1 Class A-2 Class A-3 Class B
--------- --------- --------- -------
<S> <C> <C> <C> <C>
A$ Equivalent of
Initial Principal Balance US$300,000,000 US$569,000,000 US$125,000,000 US$6,000,000
% of Total: 30.00% 56.90% 12.50% 0.60%
Anticipated Ratings:
Fitch IBCA
(Australia) Pty
Limited AAA AAA AAA AAA
Moody's Investors
Service, Inc. Aaa Aaa Aaa Aa1
Standard & Poor's
Ratings Group AAA AAA AAA AAA
Interest Rate up to and three-month three-month three-month three-month
including the quarterly LIBOR + % LIBOR + % LIBOR + % Australian bank
payment date in bill rate + %
November, 2006:
Interest Rate after three-month three-month three-month three-month
the quarterly payment LIBOR + % LIBOR + % LIBOR + % Australian bank
date in November, 2006: bill rate + %
Interest Accrual
Method: actual/360 actual/365
<CAPTION>
<S> <C>
Quarterly Payment 15th day or, if the 15th day is not a business day,
Dates: then the next business day, unless that business day
falls in the next calendar month, in which case the
quarterly payment date will be the preceding business
day, of each of November, February, May and August,
beginning in November, 1999
<CAPTION>
<S> <C> <C> <C> <C>
Final Scheduled The quarterly The quarterly The quarterly The quarterly
Quarterly payment date payment date payment date payment date
Payment Date* falling in falling falling in falling in
August, 2009 in May, 2021 February, 2030 February, 2030
Clearance/Settlement: DTC/Euroclear/Cedelbank Offered in
Australia only
Cut-Off Date: Close of business, September 9, 1999
Pricing Date: September , 1999
Closing Date: On or about September , 1999
Final Maturity Date: The quarterly payment date falling in February, 2030
</TABLE>
* Assuming that there are no prepayments on the housing loans, that the issuer
trustee is not directed to exercise its right of optional redemption of the
notes and the other modeling assumptions contained in "Prepayment and Yield
Considerations" occur.
9
<PAGE>
Structural Overview
St.George Bank established the Crusade Global Trust Programme pursuant to a
master trust deed dated March 14, 1998 among St.George Bank, Crusade Management
Limited and the issuer trustee. The master trust deed provides the general terms
and structure for securitizations under the program. A supplementary terms
notice among the issuer trustee, St.George Bank, as seller and servicer, Crusade
Management Limited, as manager, St.George Custodial Pty Limited, as custodian,
Bankers Trust Company, as note trustee, and National Mutual Life Nominees
Limited, as security trustee, will set out the specific details of the Crusade
Global Trust No. 1 of 1999 and the notes, which may vary from the terms set
forth in the master trust deed. Each securitization under the program is a
separate transaction with a separate trust. The assets of the Crusade Global
Trust No. 1 of 1999 will not be available to pay the obligations of any other
trust, and the assets of other trusts will not be available to pay the
obligations of the Crusade Global Trust No. 1 of 1999. See "Description of the
Trust."
The Crusade Global Trust No. 1 of 1999 involves the securitization of
housing loans originated by St.George Bank or its predecessors and secured by
mortgages over residential property located in Australia. St.George Bank will
equitably assign the housing loans to the trust, which will in turn issue the
floating rate notes to fund the acquisition of the housing loans.
The issuer trustee will grant a first ranking floating charge over all of
the assets of the trust under the security trust deed in favor of National
Mutual Life Nominees Limited, as security trustee, to secure the trust's payment
obligations to the noteholders and its other creditors. A first ranking floating
charge is a first priority security interest over a class of assets, but does
not attach to specific assets unless or until it crystalizes, which means it
becomes a fixed charge. The charge will crystalize if, among other events, an
event of default occurs under the security trust deed. Once the floating charge
crystalizes, the issuer trustee will no longer be able to dispose of or create
interests in the assets of the trust without the consent of the security
trustee. For a description of floating charges and crystalization see "The
Security Trust Deed - Nature of the Charge".
Payments of interest and principal on the notes will come only from the
housing loans and other assets of the trust. The assets of the parties to the
transaction are not available to meet the payments of interest and principal on
the notes. If there are losses on the housing loans, the trust may not have
sufficient assets to repay the notes.
Credit Enhancements
Payments of interest and principal on the Class A notes will be supported
by the following forms of credit enhancement:
Subordination and Allocation of Losses
The Class B notes will always be subordinated to the Class A-1, A-2 and A-3
notes in their right to receive interest and principal payments. The Class B
notes will bear all losses on the housing loans before the Class A-1, A-2 and
A-3 notes. Any losses allocated to the Class A notes will be allocated pro rata
between the Class A-1, A-2 and A-3 notes. The support provided by the Class B
notes is
10
<PAGE>
intended to enhance the likelihood that the Class A-1, A-2 and A-3 notes will
receive expected quarterly payments of interest and principal. The following
chart describes the initial support provided by the Class B notes:
Class(es) Credit Initial
Support Support
Percentage
A-1, A-2 and B 0.6%
A-3
The initial support percentage in the preceding table is the initial
balance of the Class B notes, as a percentage of the housing loan pool balance
as of the cut-off date.
Mortgage Insurance Policies
Mortgage insurance policies issued by Housing Loans Insurance Corporation
Pty Limited will provide full coverage for all principal due on each of the
housing loans. The mortgage insurance policies will also guarantee timely
receipt of interest and principal payments for a maximum of twenty-four months
in the aggregate for each of the housing loans.
Excess Interest Collections
Any interest collections on the housing loans remaining after payments of
interest on the notes and the trust's expenses will be available to cover any
losses on the housing loans that are not covered by the mortgage insurance
policies.
Liquidity Enhancements
To cover possible liquidity shortfalls in the payment obligations of the
trust, the issuer trustee will have the following forms of liquidity
enhancements:
Principal Draws
The manager must direct the issuer trustee to allocate principal
collections on the housing loans to cover any shortfalls in the interest payment
obligations of the trust on a payment date.
Liquidity Reserve
At the closing date, A$ , representing 0.25% of the initial outstanding
principal balance of the notes, will be deposited into a liquidity account. The
issuer trustee, if directed by the manager, will use the money in the liquidity
account to cover any shortfalls in its payment obligations on any monthly or
quarterly payment date which are not covered by principal draws. The liquidity
reserve amount will be reduced from time to time so that it will equal 0.25% of
the aggregate principal amount outstanding of the housing loans. Any amounts in
the liquidity account in excess of the liquidity reserve amount will be
withdrawn from the liquidity account and treated as a principal collection.
Timely Payment Cover
The mortgage insurance policies guarantee the timely payment of interest
and principal for a maximum of twenty-four months in the aggregate for each of
the housing loans.
Redraws
Under the terms of each variable rate housing loan, a borrower may, at the
discretion of St.George Bank, redraw previously prepaid principal. A borrower
may redraw an amount equal to the difference between the scheduled principal
balance of his or her loan and the current principal balance of the loan.
St.George Bank will be reimbursed for any redraws it advances to borrowers
11
<PAGE>
from principal collections on the housing loans. Thus, the trust will have less
funds available to pay principal to the notes on the next quarterly payment
date, but will have a corresponding greater amount of assets with which to make
future payments. The amount that St.George Bank may advance to a borrower in
respect of a particular housing loan from time to time is limited to
approximately the amount of principal that has been prepaid on that loan at that
time. See "St.George Residential Loan Program" and "Description of the
Transaction Documents - The Redraw Facility".
Limited Substitution
At the direction of the manager, the issuer trustee must use the proceeds
from the repurchase of a housing loan by the seller because of a breach of a
representation or warranty to purchase an eligible substitute housing loan for
inclusion in the assets of the trust, if available.
Hedging Arrangements
To hedge its interest rate and currency exposures, the issuer trustee will
enter into the following hedge arrangements:
o a basis swap to hedge the basis risk between the interest rate on the
housing loans which are subject to a discretionary variable rate of
interest and the floating rate obligations of the trust, which
includes the issuer trustee's payments under the currency swap.
o a fixed-floating rate swap to hedge the basis risk between the
interest rate on the housing loans which are subject to a fixed rate
of interest and the floating rate obligations of the trust, which
includes the issuer trustee's payments under the currency swap.
o a currency swap to hedge the currency risk between the collections on
the housing loans and the amounts received by the issuer trustee under
the basis swap and the fixed-floating rate swap, which are denominated
in Australian dollars, and the obligation of the trust to pay interest
and principal on the Class A notes, which are denominated in U.S.
dollars.
Optional Redemption
The issuer trustee will, if the manager directs it to do so, redeem all of
the notes on the earlier of the quarterly payment date falling in November, 2006
or the quarterly payment date when the current total outstanding principal
balance of the notes, as reduced by principal losses allocated against the
notes, is less than 10% of the total initial principal balance of the notes. If
the issuer trustee redeems the notes, the noteholders will receive a payment
equal to the outstanding principal balance of the notes plus accrued interest,
unless the noteholders consent to receiving the outstanding principal balance of
the notes, as reduced by losses allocated against the notes, plus accrued
interest on the outstanding principal balance of the notes.
12
<PAGE>
The Housing Loan Pool
The housing loan pool will consist of fixed rate and variable rate
residential housing loans secured by mortgages on owner occupied and non-owner
occupied one-to-four family residential properties. The housing loans will have
original terms to stated maturity of no more than 30 years. The pool of housing
loans has the following characteristics:
Selected Housing Loan Pool Data as of the
Close of Business on September 9, 1999
Number of Housing Loans...................................................15,433
Housing Loan Pool Size........................................A$1,544,534,170.38
Average Housing Loan Balance........................................A$100,079.97
Maximum Housing Loan Balance........................................A$493,749.82
Minimum Housing Loan Balance.........................................A$12,127.70
Total Valuation of the Properties.............................A$2,937,423,703.00
Maximum Remaining Term to Maturity in months.................................353
Weighted Average Remaining Term to Maturity in months........................257
Weighted Average Seasoning in months..........................................27
Weighted Average Original Loan-to-Value Ratio.............................67.98%
Weighted Average Current Loan-to-Value Ratio..............................60.39%
Maximum Current Loan-to-Value Ratio.......................................90.09%
The original loan-to-value ratio of a housing loan is calculated by
comparing the initial principal amount of the housing loan to the most recent
valuation of the property that is currently securing the housing loan. Thus, if
collateral has been released from the mortgage securing a housing loan or if the
property securing the housing loan has been revalued, the original loan-to-value
ratio may not reflect the actual loan-to-value ratio at the origination of that
housing loan.
Before the issuance of the notes, housing loans may be added to or removed
from the housing loan pool. New housing loans may also be substituted for
housing loans that are removed from the housing loan pool. This addition,
removal or substitution of housing loans may result in changes in the housing
loan pool characteristics shown in the preceeding table and could affect the
weighted average lives and yields of the notes. The seller will not add, remove
or substitute any housing loans prior to the closing date if this would result
in a change of more than 5% in any of the characteristics of the pool of housing
loans described in this prospectus, unless a revised prospectus is delivered to
prospective investors.
13
<PAGE>
Withholding Tax
Payments of principal and interest on the Class A notes will be reduced by
any applicable withholding taxes. The issuer trustee is not obligated to pay any
additional amounts to the Class A noteholders to cover any withholding taxes.
If the Commonwealth of Australia requires the withholding of amounts from
payment of principal or interest to the Class A noteholders or if the issuer
trustee ceases to receive the total amount of interest payable by borrowers on
the housing loans due to taxes, duties, assessments or other governmental
charges the manager may direct the issuer trustee to redeem all of the notes.
However, Class A noteholders owning 75% of the aggregate outstanding principal
balance of the Class A notes may direct the issuer trustee not to redeem the
Class A notes. See "Description of the Class A Notes - Redemption of the Notes
for Taxation or Other Reasons."
U.S. Tax Status
In the opinion of Mayer, Brown & Platt, special tax counsel for the issuer
trustee, the Class A notes will be characterized as debt for U.S. federal income
tax purposes. Each Class A noteholder, by acceptance of a Class A note, agrees
to treat the notes as indebtedness. See "United States Federal Income Tax
Matters."
Legal Investment
The Class A notes will not constitute "mortgage-related securities" for the
purposes of the Secondary Mortgage Market Enhancement Act of 1984. No
representation is made as to whether the 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 regulatory authorities. You are urged to consult with your own legal
advisors concerning the status of the Class A notes as legal investments for
you. See "Legal Investment Considerations".
ERISA Considerations
In general, the Class A notes will be eligible for purchase by retirement
plans subject to the Employee Retirement Income Security Act. Investors should
consult their counsel with respect to the consequences under the Employee
Retirement Income Security Act and the Internal Revenue Code of the plan's
acquisition and ownership of the certificates.
Book-Entry Registration
Persons acquiring beneficial ownership interests in the Class A notes will
hold their Class A notes through the Depository Trust Company in the United
States or Cedelbank or Euroclear outside of the United States. Transfers within
the Depository Trust Company, Cedelbank or Euroclear will be in accordance with
the usual rules and operating procedures of the relevant system. Crossmarket
transfers between persons holding directly or indirectly through the Depository
Trust Company, on the one hand, and persons holding directly or indirectly
through Cedelbank or Euroclear, on the other hand, will take place in the
Depository Trust Company through the relevant depositories of Cedelbank or
Euroclear.
Collections
The issuer trustee will receive for each monthly and quarterly collection
period the following amounts, which are known as collections:
o payments of interest, principal and fees and prepayments of principal
under the housing loans;
o proceeds from the enforcement of the housing loans and registered
mortgages relating to those housing loans;
o amounts received under mortgage insurance policies;
14
<PAGE>
o amounts received from the seller, servicer or custodian for breaches
of representations or undertakings; and
o interest on amounts in the collection account.
Collections will be allocated between income and principal. Collections
attributable to interest, less some amounts, are known as available income. The
collections attributable to principal, less some amounts, are known as gross
principal collections.
Available income is normally used to pay fees, expenses and interest on the
notes. Gross principal collections are normally used to pay principal on the
notes. However, if there is not enough available income to pay fees, expenses
and interest on the notes, gross principal collections will be treated as income
and applied in the income stream to pay unpaid fees, expenses and interest on
the notes. If there is an excess of available income after payment of fees,
expenses and interest on the notes, the excess income will be used to reimburse
any principal charge offs on the notes.
Interest on the Notes
Interest on the notes is payable quarterly in arrears on each quarterly
payment date. Interest will be paid proportionately between the Class A-1, Class
A-2 and Class A-3 notes. Interest will be paid on the Class B notes only after
the payments of interest on the Class A-1, Class A-2 and Class A-3 notes are
made. Interest on each class of notes is calculated for each interest period as
follows:
o at the note's interest rate;
o on the outstanding principal balance of that note at the beginning of
that interest period; and
o on the basis of the actual number of days in that interest period and
a year of 360 days, or 365 days for the Class B notes.
Principal on the Notes
Principal on the notes will be payable on each quarterly payment date.
Principal will be paid sequentially on each class of notes. Thus, principal will
be paid first on the Class A-1 notes. Principal will only be paid on the Class
A-2 notes after the Class A-1 notes have been repaid in full, and will only be
paid on the Class A-3 notes after the Class A-1 and Class A-2 notes have been
repaid in full. The Class B notes will not receive any principal payments until
all of the Class A notes have been repaid in full. On each quarterly payment
date, the outstanding principal balance of each note will be reduced by the
amount of the principal payment made on that date on that note. The outstanding
principal balance of each note will also be reduced by the amount of principal
losses on the housing loans allocated to that note. If the security trust deed
is enforced after an event of default, the proceeds from the enforcement will be
distributed pro rata among all of the Class A notes, and prior to any
distributions to the Class B notes.
Allocation of Cash Flows
On each quarterly payment date, the issuer trustee will repay principal and
interest to each noteholder to the extent that there are collections received
for those payments on that date. The charts on the next two pages summarize the
flow of payments.
15
<PAGE>
Distribution of Total Available Funds on a Payment Date
Total Available Funds = Available Income + Principal Draws + Liquidity Draws
--------------------------------------------------
Pay to St.George
Bank the Accrued Interest Adjustment
--------------------------------------------------
(arrow down)
--------------------------------------------------
Repay the mortgage insurer any timely
cover payments relating to interest
--------------------------------------------------
(arrow left) (arrow right)
<TABLE>
<CAPTION>
<S> <C>
On monthly payment dates
(other than quarterly payment dates) On quarterly payment dates
----------------------------- ---------------------------------------------------------------
Pay interest owed under the Pay the fixed-floating rate swap provider any break
redraw facility fees received from borrowers or the mortgage insurer
----------------------------- ---------------------------------------------------------------
(arrow down) (arrow down)
----------------------------- ---------------------------------------------------------------
Repay any outstanding
liquidity draws Pay Trust Expenses
-----------------------------
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Pay pro rata between themselves:
o fees under the redraw facility
o fees under the basis swap
o fees under the fixed-floating rate swap
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Pay any unpaid amounts from previous quarterly payment dates
(other than amounts owed to the currency swap provider)
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Pay to the mortgage insurer the greater of:
o zero
o the difference between any unreimbursed overpayments by the
mortgage insurer relating to interest and the aggregage
of amounts distributed to the beneficiary
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Pay pro rata between themselves:
o interest under the redraw facility
o payments under the basis swap or the fixed-
floating rate swap
o any outstanding liquidity draws
o payments under the currency swap relating to interest on
the Class A notes
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Pay any unpaid amounts owing to the currency swap
provider from previous quarterly payment dates
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Pay Interest on the Class B notes
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Apply any Excess Available Income to reimburse in the
following order:
o principal charge offs
o pro rata, Carry Over Class A Charge Offs and Redraw
Charge Offs
o Carry Over Class B Charge Offs
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Repay to the mortgage insurer any unreimbursed overpayments
by the mortgage insurer relating to interest
---------------------------------------------------------------
(arrow down)
---------------------------------------------------------------
Distribute any remaining amounts to the residual
beneficiary
---------------------------------------------------------------
</TABLE>
16
<PAGE>
Distribution of Principal Collections on a Payment Date
Principal Collections = Gross Principal Collections -
Reimbursement of Current Period Redraws -
Any Amount Paid by the Issuer Trustee to Purchase a Substitute Housing Loan
Repay the mortgage insurer for any timely cover payments relating to principal
(arrow down)
Allocate any required principal draw to Total Available Funds
(arrow down)
Retain in the collection account funds to cover any anticipated shortfalls
(arrow left) (arrow right)
On monthly payment dates On quarterly payment dates
(other than quarterly
payment dates)
Repay any principal outstanding under the Repay the seller for any redraws
redraw facility it has funded
(arrow down)
Repay any principal outstanding under
the redraw facility
(arrow down)
Retain the Redraw Retention Amount in
the collection account
(arrow down)
Pay to the currency swap provider
principal to be paid on the Class A-1 Notes
(arrow down)
Pay to the currency swap provider
principal to be paid on the Class A-2 Notes
(arrow down)
Pay to the currency swap provider
principal to be paid on the Class A-3 Notes
(arrow down)
Pay principal on the Class B notes
17
<PAGE>
Risk Factors
The Class A notes are complex securities issued by a foreign entity and
secured by property located in a foreign jurisdiction. You should consider the
following risk factors in deciding whether to purchase the Class A notes.
The notes will be paid only from o The notes are debt obligations of the
the assets of the trust issuer trustee only in its capacity as
trustee of the trust. The notes do not
represent an interest in or obligation
of any of the other parties to the
transaction. The assets of the trust
will be the sole source of payments on
the notes. The issuer trustee's other
assets will only be available to make
payments on the notes if the issuer
trustee is negligent, commits fraud or
in some circumstances where the issuer
trustee fails to comply with an
obligation expressly imposed upon it
under the documents or a written
direction from the manager. Therefore,
if the assets of the trust are
insufficient to pay the interest and
principal on your notes when due, there
will be no other source from which to
receive these payments and you may not
get back your entire investment or the
yield you expected to receive.
You face an additional o Although St.George Bank could have
possibility of loss because the legally assigned the title to the
issuer trustee does not hold housing loans to the issuer trustee,
legal title to the housing loans initially it will assign only equitable
title to the housing loans to the issuer
trustee. The housing loans will be
legally assigned to the issuer trustee
only upon the occurrence of a title
perfection event, as described in
"Description of the Assets of the Trust
- Transfer and Assignment of the Housing
Loans." Because the issuer trustee does
not hold legal title to the housing
loans you will be subject to the
following risks, which may lead to a
failure to receive collections on the
housing loans, delays in receiving the
collections or losses to you:
o The issuer trustee's interest in a
housing loan may be impaired by the
creation or existence of an equal
or higher ranking security interest
over the related mortgaged property
created after the creation of the
issuer trustee's equitable interest
but prior to it acquiring a legal
interest in the housing loans.
18
<PAGE>
o Until a borrower has notice of the
assignment, that borrower is not
bound to make payments under its
housing loan to anyone other than
the seller. Until a borrower
receives notice of the assignment,
any payments the borrower makes
under his or her housing loan to
the seller will validly discharge
the borrower's obligations under
the borrower's housing loan even if
the issuer trustee does not receive
the payments from the seller.
Therefore, if the seller does not
deliver collections to the issuer
trustee, for whatever reason,
neither the issuer trustee nor you
will have any recourse against the
related borrowers for such
collections.
o The issuer trustee may not be able
to initiate any legal proceedings
against a borrower to enforce a
housing loan without the
involvement of the seller.
The seller and servicer may o Before the seller or the servicer remits
commingle collections on the collections to the collection account,
housing loans with their assets the collections may be commingled with
the assets of the seller or servicer. If
the seller or the servicer becomes
insolvent, the issuer trustee may only
be able to claim those collections as an
unsecured creditor of the insolvent
company. This could lead to a failure to
receive the collections on the housing
loans, delays in receiving the
collections, or losses to you.
There is no way to predict the o The rate of principal and interest
actual rate and timing of payments on pools of housing loans
payments on the housing loans varies among pools, and is influenced by
a variety of economic, demographic,
social, tax, legal and other factors,
including prevailing market interest
rates for housing loans and the
particular terms of the housing loans.
Australian housing loans have features
and options that are different from
housing loans in the United States, and
thus will have different rates and
timing of payments from housing loans in
the United States. There is no guarantee
as to the actual rate of prepayment on
the housing loans, or that the actual
rate of prepayments will conform to any
model described in this prospectus. The
rate and timing of principal and
interest payments on the housing loans
will
19
<PAGE>
affect the rate and timing of payments
of principal and interest on your notes.
Unexpected prepayment rates could have
the following negative effects:
o If you bought your notes for more
than their face amount, the yield
on your notes will drop if
principal payments occur at a
faster rate than you expect.
o If you bought your notes for less
than their face amount, the yield
on your notes will drop if
principal payments occur at a
slower rate than you expect.
Losses and delinquent payments o If borrowers fail to make payments of
on the housing loans may affect interest and principal under the housing
the return on your notes loans when due and the credit
enhancement described in this prospectus
is not enough to protect your notes from
the borrowers' failure to pay, then the
issuer trustee may not have enough funds
to make full payments of interest and
principal due on your notes.
Consequently, the yield on your notes
could be lower than you expect and you
could suffer losses.
Enforcement of the housing o Substantial delays could be encountered
loans may cause delays in in connection with the liquidation of a
payment and losses housing loan, which may lead to
shortfalls in payments to you to the
extent those shortfalls are not covered
by a mortgage insurance policy.
o If the proceeds of the sale of a
mortgaged property, net of preservation
and liquidation expenses, are less than
the amount due under the related housing
loan, the issuer trustee may not have
enough funds to make full payments of
interest and principal due to you,
unless the difference is covered under a
mortgage insurance policy.
The Class B notes provide only o The amount of credit enhancement
limited protection against losses provided through the subordination of
the Class B notes to the Class A notes
is limited and could be depleted prior
to the payment in full of the Class A
notes. If the principal amount of the
Class B notes is reduced to zero, you
may suffer losses on your notes.
20
<PAGE>
The mortgage insurance policies o The mortgage insurance policies are
may not be available to cover subject to some exclusions from coverage
losses on the housing loans and rights of termination which are
described in "The Mortgage Insurance
Policies - Requirements and
Restrictions". Therefore, a borrower's
payments that are expected to be covered
by the mortgage insurance policies may
not be covered because of these
exclusions, and the issuer trustee may
not have enough money to make timely and
full payments of principal and interest
on your notes.
You may not be able to resell o The underwriters are not required to
your notes assist you in reselling your notes. A
secondary market for your notes may not
develop. If a secondary market does
develop, it might not continue or might
not be sufficiently liquid to allow you
to resell any of your notes readily or
at the price you desire. The market
value of your notes is likely to
fluctuate, which could result in
significant losses to you.
The termination of any of the o The issuer trustee will exchange the
swaps may subject you to losses interest payments from the fixed rate
from interest rate or currency housing loans for variable rate payments
fluctuations based upon the three-month Australian
bank bill rate. If the fixed-floating
rate swap is terminated or the
fixed-floating rate swap provider fails
to perform its obligations, you will be
exposed to the risk that the floating
rate of interest payable on the notes
will be greater than the discretionary
fixed rate set by the servicer on the
fixed rate housing loans, which may lead
to losses to you.
o The issuer trustee
will exchange the interest payments from
the variable rate housing loans for
variable rate payments based upon the
three-month Australian bank bill rate.
If the basis swap is terminated, the
manager will direct the servicer to set
the interest rate on the variable rate
housing loans at a rate high enough to
cover the payments owed by the trust. If
the rates on the variable rate housing
loans are set above the market interest
rate for similar variable rate housing
loans, the affected borrowers will have
an incentive to refinance their loans
with another institution, which may lead
to higher rates of principal prepayment
than you initially expected, which will
affect the yield on your notes.
o The issuer trustee will receive payments
from the borrowers on the housing loans
in
21
<PAGE>
Australian dollars and make payments to
you in U.S. dollars. The currency swap
provider will exchange Australian
dollars for U.S. dollars pursuant to the
currency swap. If the currency swap
provider fails to perform its obligation
or if the currency swap is terminated,
the issuer trustee might have to
exchange its Australian dollars for U.S.
dollars at an exchange rate that does
not provide sufficient U.S. dollars to
make payments to you in full.
Prepayments during a collection o If a prepayment is received on a housing
period may result in you not loan during a collection period,
receiving your full interest interest on the housing loan will cease
payments to accrue on that portion of the housing
loan that has been prepaid, starting on
the date of prepayment. The amount
prepaid will be invested in investments
that may earn a rate of interest lower
than that paid on the housing loan. If
it is less, the issuer trustee may not
have sufficient funds to pay you the
full amount of interest due to you on
the next quarterly payment date.
Payment holidays may result in o If a borrower prepays principal on his
you not receiving your full or her loan, the borrower is not
interest payments required to make any payments, including
interest payments, until the outstanding
principal balance of the housing loan
plus unpaid interest equals the
scheduled principal balance. If a
significant number of borrowers take
advantage of this feature at the same
time and the liquidity reserve and
principal draws do not provide enough
funds to cover the interest payments on
the housing loans that are not received,
the issuer trustee may not have
sufficient funds to pay you the full
amount of interest on the notes on the
next quarterly payment date.
The proceeds from the o If the security trustee enforces the
enforcement of the security trust security interest over the assets of the
deed may be insufficient trust after an event of default under
to pay amounts due to you the security trust deed, there is no
assurance that the market value of the
assets of the trust will be equal to or
greater than the outstanding principal
and interest due on the notes, or that
the security trustee will be able to
realize the full value of the assets of
the trust. The issuer trustee, the
security trustee, the note trustee, the
swap providers and other service
providers will generally be entitled to
receive the proceeds of any sale of the
assets of the trust, to the extent they
are owed fees and expenses, before you.
22
<PAGE>
Consequently, the proceeds from the sale
of the assets of the trust after an
event of default under the security
trust deed may be insufficient to pay
you principal and interest in full.
If the manager directs the issuer o If the manager directs the issuer
trustee to redeem the notes trustee to redeem the notes earlier as
earlier, you could suffer losses described in "Description of the Class A
and the yield on your notes Notes - Optional Redemption of the
could be lower than expected Notes" and principal charge offs have
occurred, noteholders owning at least
75% of the aggregate outstanding amount
of the notes may consent to receiving an
amount equal to the outstanding
principal amount of the notes, less
principal charge offs, plus accrued
interest. As a result, you may not fully
recover your investment. In addition,
the purchase of the housing loans will
result in the early retirement of your
notes, which will shorten their average
lives and potentially lower the yield on
your notes.
Termination payments relating o If the issuer trustee is required to
to the currency swap may make a termination payment to the
reduce payments to you currency swap provider upon the
termination of the currency swap, the
issuer trustee will make the termination
payment from the assets of the trust and
in priority to payments on the notes.
Thus, if the issuer trustee makes a
termination payment, there may not be
sufficient funds remaining to pay
interest on your notes on the next
quarterly payment date, and the
principal on your notes may not be
repaid in full.
The imposition of a withholding o If a withholding tax is imposed on
tax will reduce payments to you payments of interest on your notes, you
and may lead to an early will not be entitled to receive
redemption of the notes grossed-up amounts to compensate for
such withholding tax. Thus, you will
receive less interest than is scheduled
to be paid on your notes.
o If the option to redeem the notes
affected by a withholding tax is
exercised, you may not be able to
reinvest the redemption payments at a
comparable interest rate.
St.George Bank's ability to set o The interest rates on the variable rate
the interest rate on variable rate housing loans are not tied to an
housing loans may lead to objective interest rate index, but are
increased delinquencies or set at the sole discretion of St.George
prepayments Bank. If St.George Bank increases the
interest rates on the variable rate
housing loans, borrowers may be unable
to make their required payments under
the housing loans,
23
<PAGE>
and accordingly, may become delinquent
or may default on their payments. In
addition, if the interest rates are
raised above market interest rates,
borrowers may refinance their loans with
another lender to obtain a lower
interest rate. This could cause higher
rates of principal prepayment than you
expected and affect the yield on your
notes.
The features of the housing o The features of the housing loans,
loans may change, which could including their interest rates, may be
affect the timing and amount of changed by St.George Bank, either on its
payments to you own initiative or at a borrower's
request. Some of these changes may
include the addition of newly developed
features which are not described in this
prospectus. As a result of these changes
and borrower's payments of principal,
the concentration of housing loans with
specific characteristics is likely to
change over time, which may affect the
timing and amount of payments you
receive.
o If St.George Bank changes the features
of the housing loans, borrowers may
elect to refinance their loan with
another lender to obtain more favorable
features. In addition, the housing loans
included in the trust are not permitted
to have some features. If a borrower
opts to add one of these features to his
or her housing loan, the housing loan
will be removed from the trust. The
refinancing or removal of housing loans
could cause you to experience higher
rates of principal prepayment than you
expected, which could affect the yield
on your notes.
There are limits on the amount o If the interest collections during a
of available liquidity to insure collection period are insufficient to
payments of interest to you cover fees, expenses and the interest
payments due on the notes on the next
payment date, principal collections
collected during the collection period
may be used to cover these amounts. If
principal collections are not sufficient
to cover the shortfall, the issuer
trustee will draw funds from the
liquidity account. In the event that
there is not enough money available
under the liquidity account, you may not
receive a full payment of interest on
that payment date, which will reduce the
yield on your notes.
The use of principal collections o If principal collections are drawn upon
to cover liquidity shortfalls may to cover shortfalls in interest
lead to principal losses collections, and there is
24
<PAGE>
insufficient excess interest
collections in succeeding collection
periods to repay those principal draws,
you may not receive full repayment of
principal on your notes.
A decline in Australian o The Australian economy has been
economic conditions may lead to experiencing a prolonged period of
losses on your notes expansion with relatively low and stable
interest rates and steadily increasing
property values. If the Australian
economy were to experience a downturn,
an increase in interest rates, a fall in
property values or any combination of
these factors, delinquencies or losses
on the housing loans may increase, which
may cause losses on your notes.
Consumer protection laws may o Some of the borrowers may attempt to
affect the timing or amount of make a claim to a court requesting
interest or principal payments to changes in the terms and conditions of
you their housing loans or compensation or
penalties from the seller for breaches
of any legislation relating to consumer
credit. Any changes which allow the
borrower to pay less principal or
interest under his or her housing loan
may delay or decrease the amount of
payments to you.
o In addition, if the issuer trustee
obtains legal title to the housing
loans, the issuer trustee will be
subject to the penalties and
compensation provisions of the
applicable consumer protection laws
instead of the seller. To the extent
that the issuer trustee is unable to
recover any such liabilities under the
consumer protection laws from the
seller, the assets of the trust will be
used to indemnify the issuer trustee
prior to payments to you. This may delay
or decrease the amount of collections
available to make payments to you.
The concentration of housing o If the trust contains a high
loans in specific geographic concentration of housing loans secured
areas may increase the by properties located within a single
possibility of loss on your notes state or region within Australia, any
deterioration in the real estate values
or the economy of any of those states or
regions could result in higher rates of
delinquencies, foreclosures and loss
than expected on the housing loans. In
addition, these states or regions may
experience natural disasters, which may
not be fully insured against and which
may result in property damage and losses
on the housing loans. These events may
in turn have a disproportionate impact
on funds available to the trust, which
could cause you to suffer losses.
25
<PAGE>
The failure of St.George, its o St.George Bank has developed a plan,
affiliates or third parties to be which is described in "St.George Bank
year 2000 computer ready could Year 2000 Program", to address the year
disrupt the distributions on your 2000 issue. St.George Bank cannot
notes guarantee, however, that its efforts to
achieve year 2000 readiness will be
fully effective. Moreover, St.George
Bank cannot guarantee that the
borrowers' banks or any of its
third-party service providers, such as
the issuer trustee, the swap providers,
the paying agents and DTC, will be year
2000 ready. St.George Bank also cannot
assure you that any future developments
in connection with its year 2000
readiness or the readiness of third
parties will be those that have been
anticipated.
o The failure of St.George Bank, its
affiliates or third-parties to become
fully year 2000 ready could disrupt, at
least temporarily, the servicer's
ability to carry out the servicing
duties described in this prospectus,
including the calculation of amounts
distributable to you and the timely
transfer of funds to the issuer trustee
for your benefit. Your investment in the
notes could consequently suffer.
The implementation of the new o From July 1, 2000, a goods and services
goods and services tax in tax will be payable by all entities
Australia is likely to decrease which make taxable supplies in
the funds available to the trust Australia. Although legislation has been
to pay you passed to enact the Goods and Services
Tax, it is not yet certain how the
legislation will be applied to
transactions of the type described by
this prospectus. However, to the extent
that the issuer trustee or entities
providing services to the issuer trustee
are subject to the Goods and Services
Tax in relation to the trust, the issuer
trustee will have less funds available
to meet its obligations, and you may
suffer losses.
You will not receive physical o Your ownership of the notes will be
notes representing your notes, registered electronically through DTC,
which can cause delays in Euroclear and Cedelbank. The lack of
receiving distributions and physical certificates could:
hamper your ability to pledge or
resell your notes o cause you to experience delays in
receiving payments on the notes
because the principal paying agent
will be sending distributions on
the notes to DTC instead of
directly to you;
o limit or prevent you from using
your notes as collateral; and
o hinder your ability to resell the
notes or reduce the price that you
receive for them.
26
<PAGE>
Capitalized Terms
The capitalized terms used in this prospectus, unless defined elsewhere in
this prospectus, have the meanings set forth in the Glossary starting on page
141.
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 in this prospectus, any
translations of Australian dollars into U.S. dollars have been made at a rate of
US$0.6545=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 September 14, 1999. 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.
The Issuer Trustee, St.George Bank and the Manager
The Issuer Trustee
The issuer trustee was incorporated on July 30, 1887 as National Trustees
Executors and Agency Company Australasia Limited under the Companies Statute
1864 of Victoria as a public company. After name changes in 1987 and 1999, AXA
Trustees Limited now operates as a limited liability public company under the
Corporations Law of Australia, with its registered office at Level 15, 447
Collins Street, Melbourne. AXA Trustees Limited's principal business is the
provision of fiduciary, trustee and other commercial services. AXA Trustees
Limited is an authorized trustee corporation and holds a Securities Dealers
Licence No 16424, both under the Corporations Law of Australia.
AXA Trustees Limited has issued 31,127,695 shares as of the date of this
prospectus. There are 29,072,305 with a paid amount of A$1.00, 1,500,000 shares
with a paid amount of A$0.10 and 555,390 shares with a paid amount of A$0.50,
giving a total share capital of A$29,500,000. The issuer trustee has not agreed
to issue any additional shares. The shares are all held by National Mutual Life
Nominees Limited (ACN 004 387 133), a member of the AXA group.
27
<PAGE>
Directors
The directors of the issuer trustee are as follows:
Name Business Address Principal Activities
- ---- ---------------- --------------------
Gregory Mark Armour 16th Floor, 447 Collins Chief Executive, Funds
Street, Melbourne, Victoria Management
3000, Australia
Alan Cowan Level 3, 4 Bank Place, Director
Melbourne, Victoria 3000,
Australia
Warren John Lee 9th Floor, 447 Collins National Operations
Street, Melbourne, Victoria Manager
3000, Australia
Matthew John Walsh Level 28 Rialto, 525 Solicitor
Collins Street, Melbourne,
Victoria 3000, Australia
Elaine Henry OAM The Smith Family, 16 Director
Larkin Street,
Camperdown, New South
Wales 2050, Australia
Matthew John Walsh is a partner of Mallesons Stephen Jaques, Melbourne
office.
St.George Bank
St.George Bank commenced operations as a group of building societies in
1937, and converted into a bank, becoming a public company registered in New
South Wales on July 1, 1992. Following a merger with Advance Bank Australia
Limited in January 1997, St.George Bank is the fifth largest banking group in
Australia in terms of total assets, which, at March 31, 1999, totaled A$44.7
billion with shareholders' equity of A$3.8 billion. St.George Bank's registered
office is 4-16 Montgomery Street, Kogarah, New South Wales. St.George Bank
maintains a World Wide Web site at the address "http://www.stgeorge.com.au".
St.George Bank's primary business is providing retail banking services,
including residential mortgage loans for owner occupied and investment housing
and retail call and term deposits. The Australian banking activities of
St.George Bank come under the regulatory supervision of the Australian
Prudential Regulation Authority. The Reserve Bank of Australia is responsible
for monetary policy and the maintenance of the overall financial system
stability. For a further description of the business operations of St.George
Bank, see "The Servicer."
The Manager
The manager, Crusade Management Limited, is a wholly owned subsidiary of
St.George Bank. Its principal business activity is the management of
securitization trusts established under St.George Bank's Crusade Trust and
Crusade Euro Trust Programmes. The manager's registered office is Level 4, 4-16
Montgomery Street, Kogarah NSW 2217, Australia.
28
<PAGE>
Description of the Trust
St.George Bank Securitisation Trust Programme
St.George Bank established its Securitisation Trust Programme pursuant to a
master trust deed for the purpose of enabling AXA Trustees Limited, as trustee
of each trust established pursuant to the Securitisation Trust Programme, to
invest in pools of assets originated or purchased from time to time by St.George
Bank. The master trust deed provides for the creation of an unlimited number of
trusts. The master trust deed establishes the general framework under which
trusts may be established from time to time. It does not actually establish any
trusts. The Crusade Global Trust No. 1 of 1999 is separate and distinct from any
other trust established under the master trust deed. The assets of the Crusade
Global Trust No. 1 of 1999 are not available to meet the liabilities of any
other trust and the assets of any other trust are not available to meet the
liabilities of the Crusade Global Trust No. 1 of 1999.
Crusade Global Trust No. 1 of 1999
The detailed terms of the Crusade Global Trust No. 1 of 1999 will be as set
out in the master trust deed and the supplementary terms notice. To establish
the trust, the manager and the issuer trustee will execute a notice of creation
of trust.
The supplementary terms notice, which supplements the general framework
under the master trust deed with respect to the trust, does the following:
o specifies the details of the notes;
o establishes the cash flow allocation;
o sets out the various representations and undertakings of the parties
specific to the housing loans, which supplement those in the master
trust deed; and
o amends the master trust deed to the extent necessary to give effect to
the specific aspects of the trust and the issue of the notes.
Description of the Assets of the Trust
Assets of the Trust
The assets of the trust will include the following:
o the pool of housing loans, including all:
o principal payments paid or payable on the housing loans at any
time from and after the cut-off date; and
o interest payments paid or payable on the housing loans after the
closing date;
o rights under the mortgage insurance policies issued by Housing Loans
Insurance Corporation Pty Limited and the individual property
insurance policies covering the mortgaged properties relating to the
housing loans;
o amounts on deposit in the accounts established in connection with the
creation of the trust and the issuance of the notes, including the
collection account, and any instruments in which these amounts are
invested; and
o the issuer trustee's rights under the transaction documents.
29
<PAGE>
The Housing Loans
The housing loans are secured by registered first ranking mortgages on
properties located in Australia. The housing loans are from St.George Bank's
general residential mortgage product pool and have been originated by St.George
Bank in the ordinary course of its business. Each housing loan will be one of
the types of products described in "St.George Bank Residential Loan Program -
St.George Bank's Product Types." Each housing loan may have some or all of the
features described in the "St.George Bank Residential Loan Program - Special
Features of the Housing Loans." The housing loans are either fixed rate or
variable rate loans. Each housing loan is secured by a registered first ranking
mortgage over the related mortgaged property or, if the relevant mortgage is not
a first ranking mortgage, the seller will equitably assign to the issuer trustee
all other prior ranking registered mortgages relating to that housing loan. The
mortgaged properties consist of one-to-four family owner-occupied properties and
one-to-four family non-owner occupied properties, but do not include mobile
homes which are not permanently affixed to the ground, commercial properties or
unimproved land.
Transfer and Assignment of the Housing Loans
On the closing date, the housing loans purchased by the trust will be
specified in a sale notice from St.George Bank, in its capacity as seller of
the housing loans, to the issuer trustee.
The seller will equitably assign the housing loans, the mortgages securing
those housing loans and the mortgage insurance policies and insurance policies
on the mortgaged properties relating to those housing loans to the issuer
trustee pursuant to the sale notice. After this assignment, the issuer trustee
will be entitled to receive collections on the housing loans. If a Title
Perfection Event occurs, the issuer trustee must use the irrevocable power of
attorney granted to it by St.George Bank to take the actions necessary to obtain
legal title to the housing loans.
The seller may in some instances equitably assign a housing loan to the
issuer trustee secured by an "all moneys" mortgage, which may also secure
financial indebtedness that has not been sold to the trust, but is instead
retained by the seller. The issuer trustee will hold the proceeds of enforcement
of the related mortgage, as described in "Legal Aspects of the Housing Loans -
Enforcement of Registered Mortgages", to the extent they exceed the amount
required to repay the housing loan, as bare trustee without any other duties or
obligations, in relation to that other financial indebtedness. The mortgage will
secure the housing loan equitably assigned to the trust in priority to that
other financial indebtedness. If a housing loan is secured on the closing date
by a first mortgage over one property and a second mortgage over a second
property, the seller will assign to the trust both the first and second
mortgages over that second property. The housing loan included in the trust will
then have the benefit of security from both properties ahead of any financial
indebtedness owed to St.George Bank which is secured by the second property.
Representations, Warranties and Eligibility Criteria
The seller will make various representations and warranties to the issuer
trustee as of the closing date, unless another date is specified, with respect
to the housing loans being equitably assigned by it to the issuer trustee,
including that:
o the housing loans are assignable and all consents required for the
assignment have been obtained;
30
<PAGE>
o each housing loan is legally valid, binding and enforceable against
the related borrower(s) in all material respects, except to the extent
that it is affected by laws relating to creditors' rights generally or
doctrines of equity;
o each housing loan is the subject of a mortgage insurance policy;
o each housing loan was originated in the ordinary course of the
seller's business and entered into in compliance in all material
respects with the seller's underwriting and operations procedures, as
agreed upon with the manager;
o at the time each housing loan was entered into and up to and including
the closing date, it complied in all material respects with applicable
laws, including, the Consumer Credit Legislation, if applicable;
o the performance by the seller of its obligations in respect of each
housing loan and related security, including its variation, discharge,
release, administration, servicing and enforcement, up to and
including the closing date, complied in all material respects with
applicable laws including the Consumer Credit Legislation, if
applicable;
o each housing loan is denominated and payable only in Australian
dollars in Australia;
o the loan agreement or terms of the mortgage for each housing loan
includes a clause to the effect that the borrower waives all rights of
set-off as between the borrower and the seller; and
o as of the cut-off date, each housing loan satisfies the following
eligibility criteria:
o it is from the seller's general residential housing loan product
pool;
o it is secured by a mortgage which constitutes a first ranking
mortgage over residential owner-occupied or investment land
situated in capital city metropolitan areas or regional centers
in Australia, which mortgage is or will be registered under the
relevant law relating to the registration, priority or
effectiveness of any mortgage over land in any Australian
jurisdiction. Where a mortgage is not, or will not be when
registered, a first ranking mortgage, the sale notice includes an
offer from the seller to the issuer trustee of all prior ranking
registered mortgages;
o it is secured by a mortgage over a property which has erected on
it a residential dwelling and which is required under the terms
of the mortgage to be covered by general insurance by an insurer
approved in accordance with the transaction documents;
o it has a loan-to-value ratio less than or equal to 95% for owner
occupied properties and 90% for non-owner occupied properties;
o it was not purchased by the seller, but was approved and
originated by the seller in the ordinary course of its business;
o the borrower does not owe more than A$500,000 under the housing
loan;
o the borrower is required to repay such loan within 30 years of
the cut-off date;
31
<PAGE>
o no payment from the borrower is in arrears for more than 30
consecutive days;
o the sale of an equitable interest in the housing loan, or the
sale of an equitable interest in any related mortgage or
guarantee, does not contravene or conflict with any law;
o 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;
o it is on fully amortizing repayment terms;
o it is secured by a mortgage that is covered by the mortgage
insurance policy for 100% of amounts outstanding under such loan,
which policy includes a timely payment cover;
o it is fully drawn;
o it complies in all material respects with applicable laws,
including, if applicable, the Consumer Credit Legislation; and
o it is subject to the terms and conditions of St.George Bank's
Great Australian Home Loan product, its standard variable rate
loan, including loans entitled to a "loyalty" rate due to a home
loan relationship with St.George Bank of 5 years or more, or
loans that bear a fixed rate of interest for up to 5 years as of
the cut-off date.
The issuer trustee has not investigated or made any inquiries regarding the
accuracy of these representations and warranties and has no obligation to do so.
The issuer trustee is entitled to rely entirely upon the representations and
warranties being correct, unless an officer involved in the administration of
the trust has actual notice to the contrary.
Breach of Representations and Warranties
If St.George Bank, the manager or the issuer trustee becomes aware that a
representation or warranty from St.George Bank relating to any housing loan or
mortgage is incorrect within 120 days after the closing date, it must notify the
other parties and the rating agencies within ten business days. If the breach is
not waived or remedied to the satisfaction of the issuer trustee within ten
business days of the notice then, without any action being required by either
party, St.George Bank shall be obligated to repurchase the affected housing loan
and mortgage for an amount equal to its Unpaid Balance.
Upon payment of the Unpaid Balance, the issuer trustee shall cease to have
any interest in the affected housing loan and mortgage and St.George Bank shall
hold both the legal and beneficial interest in such housing loan and mortgage
and be entitled to all interest and fees that are paid in respect of them from,
and including, the date of repurchase.
If the breach of a representation or warranty is discovered later than 120
days from the closing date, the issuer trustee will only have a claim for
damages which will be limited to an amount equal to the Unpaid Balance of that
housing loan at the time St.George Bank pays the damages.
Substitution of Housing Loans
Seller Substitution
The issuer trustee must, at the manager's direction and option, at any time
replace a housing loan which has been repurchased by the seller following a
breach of representation using the funds received from the repurchase to
purchase a substitute
32
<PAGE>
housing loan from the seller. The seller may elect to sell a substitute housing
loan to the issuer trustee, which the issuer trustee shall acquire if the
manager directs it to do so, provided the substitute housing loan satisfies the
following requirements:
o it complies with the eligibility criteria;
o at the time of substitution, the substitute housing loan has a
maturity date no later than the date being 2 years prior to the final
maturity date of the notes;
o the mortgage insurer has confirmed that the substitute housing loan
will be insured under the mortgage insurance policy; and
o the substitution will not adversely affect the rating of the notes.
Other Substitutions
The issuer trustee must, at the manager's direction, at any time:
o replace a housing loan;
o allow a borrower to replace the property securing a housing loan; or
o allow a borrower to refinance a housing loan to purchase a new
property,
provided all of the following conditions are met:
o the same borrower continues to be the borrower under the new housing
loan;
o either the replacement mortgage or the replacement property does not
result in the related housing loan failing to comply with the
eligibility criteria or the refinanced housing loan satisfies the
eligibility criteria, as the case may be;
o any such replacement or refinancing occurs simultaneously with the
release of the previous mortgage, property or housing loan, as the
case may be; and
o the principal outstanding under the related housing loan is, after the
replacement or refinancing, the same as before that replacement or
refinancing.
Selection Criteria
The manager will apply the following criteria, in descending order of
importance, when selecting a substitute housing loan or approving a
substitution:
o the substitute housing loan will have an Unpaid Balance within
A$30,000 of the outgoing housing loan's Unpaid Balance, as determined
at the time of substitution;
o an outgoing housing loan secured by an owner-occupied or non-owner
occupied property will be replaced by another housing loan secured by
an owner-occupied or non-owner occupied property, as the case may be;
o the substitute housing loan will have a current loan-to-value ratio no
more than 5% greater than the outgoing housing loan's current
loan-to-value ratio, as determined at the time of substitution;
o an outgoing housing loan will be replaced by a housing loan with a
mortgage over a property located in the same state or territory;
33
<PAGE>
o an outgoing housing loan will be replaced by an housing loan with a
mortgage over a property with the same or similar postcode; and
o in the case of a selection of substitute housing loan, the substitute
housing loan will have the closest possible original loan amount to
that of the outgoing housing loan.
Other Features of the Housing Loans
The housing loans have the following features.
o Interest is calculated daily and charged in arrears.
o Payments can be on a monthly, bi-weekly or weekly basis. Payments are
made by borrowers using a number of different methods, including cash
payments at branches, checks and in most cases automatic transfer.
o They are governed by the laws of one of the following Australian
States or Territories:
o New South Wales;
o Victoria;
o Western Australia;
o Queensland;
o South Australia;
o Northern Territory;
o Tasmania; or
o the Australian Capital Territory.
Details of the Housing Loan Pool
The information in the following tables set forth in tabular format various
details relating to the housing loans to be sold to the trust on the
closing date. The information is provided as of the close of business on the
cut-off date, September 9, 1999. All amounts have been rounded to the nearest
Australian dollar. The sum in any column may not equal the total indicated due
to rounding.
Note that these details may not reflect the housing loan pool as of the
closing date because the seller may substitute loans proposed for sale with
other eligible housing loans or add additional eligible housing loans. The
seller may do this if, for example, the loans originally selected are repaid
early.
The seller will not add, remove or substitute any housing loans prior to
the closing date if this would result in a change of more than 5% in any of the
characteristics of the pool of housing loans described in this prospectus,
unless a revised prospectus is delivered to prospective investors.
34
<PAGE>
Housing Loan Information
Seasoning Analysis
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Range of months of Balance Outstanding % by Number of % by Balance
Seasoning Number of Loans (A$) Average Balance (A$) Loans Outstanding
- -----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
1 - 12 2,097 252,653,071.16 120,483.10 13.59 16.36
13 - 24 5,317 590,621,509.38 111,081.72 34.45 38.24
25 - 36 3,415 324,357,093.71 94,980.12 22.13 21.00
37 - 48 1,702 149,889,539.28 88,066.71 11.03 9.70
49 - 60 1,501 119,864,801.08 79,856.63 9.73 7.76
61 - 72 1,401 107,148,155.77 76,479.77 9.08 6.94
------ ---------------- ---------- ------ ------
TOTAL 15,433 1,544,534,170.38 100,079.97 100.00 100.00
====== ================ ========== ====== ======
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Pool Profile by Geographic Distribution
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Number of % by Number of % by total
Region Properties Total Valuation (A$) properties valuation
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Australian Capital Territory - Inner City 350 53,779,750.00 2.04 1.83
Australian Capital Territory - Metro 273 38,632,625.00 1.59 1.32
--- ------------- ---- ----
623 92,412,375.00 3.63 3.15
=== ============= ==== ====
New South Wales - Inner City 30 8,477,848.00 0.18 0.29
New South Wales - Metro 8,584 1,785,654,372.00 50.09 60.79
New South Wales - Non-Metro 4,295 584,920,483.00 25.06 19.91
----- -------------- ----- -----
12,909 2,379,052,703.00 75.33 80.99
====== ================ ===== =====
Queensland - Inner City 14 2,594,490.00 0.08 0.09
Queensland -Metro 658 88,232,255.00 3.84 3.00
Queensland -Non-Metro 472 69,412,187.00 2.75 2.36
--- ------------- ---- ----
1,144 160,238,932.00 6.67 5.45
===== ============== ==== ====
South Australia - Inner City 1 120,000.00 0.01 0.00
South Australia - Metro 129 17,796,800.00 0.75 0.61
South Australia - Non-Metro 7 636,436.00 0.04 0.02
- ---------- ---- ----
137 18,553,236.00 0.80 0.63
=== ============= ==== ====
Victoria - Inner City 23 6,037,350.00 0.13 0.21
Victoria - Metro 1,301 180,526,956.00 7.59 6.15
Victoria - Non-Metro 873 81,487,151.00 5.09 2.77
--- ------------- ---- ----
2,197 268,051,457.00 12.81 9.13
===== ============== ===== ====
Western Australia - Inner City 4 818,000.00 0.02 0.03
Western Australia - Metro 120 17,819,500.00 0.70 0.61
Western Australia - Non-Metro 4 477,500.00 0.02 0.02
- ---------- ---- ----
128 19,115,000.00 0.74 0.66
------ ---------------- ------ ------
TOTAL 17,138 2,937,423,703.00 100.00 100.00
====== ================ ====== ======
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
The number of properties is greater than the number of housing loans because
some housing loans are secured by more than one property.
35
<PAGE>
Pool Profile by Balance Outstanding
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Number % by Number of % by Balance
Current Balance (A$) of Loans Balance Outstanding (A$) Average LVR (%) Loans Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
0.01- 50,000.00 2,469 92,017,349.45 35.31 16.00 5.96
50,000.01- 100,000.00 6,660 499,913,151.02 56.58 43.15 32.37
100,000.01- 150,000.00 4,038 488,928,888.16 64.16 26.16 31.66
150,000.01- 200,000.00 1,339 228,812,933.97 64.00 8.68 14.81
200,000.01- 250,000.00 580 128,655,312.24 65.07 3.76 8.33
250,000.01- 300,000.00 204 55,213,052.48 64.56 1.32 3.57
300,000.01- 350,000.00 81 26,303,720.45 63.31 0.52 1.70
350,000.01- 400,000.00 34 12,640,509.94 62.21 0.22 0.82
400,000.01- 450,000.00 23 9,696,951.34 65.45 0.15 0.63
450,000.01- 500,000.00 5 2,352,301.33 62.81 0.03 0.15
------ ---------------- ----- ------ ------
TOTAL 15,433 1,544,534,170.38 56.29 100.00 100.00
====== ================ ===== ====== ======
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
Pool Profile by LVR
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Number Balance Outstanding Average % by Number % by Balance
Current LVR (%) of Loans (A$) LVR (%) % of Loans Outstanding
- ------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
0.01 - 10.00 7 121,357.05 7.61 0.05 0.01
10.01 - 15.00 36 1,193,105.27 14.14 0.23 0.08
15.01 - 20.00 552 23,793,279.58 17.58 3.58 1.54
20.01 - 25.00 729 39,405,959.69 22.50 4.72 2.55
25.01 - 30.00 764 47,352,321.75 27.55 4.95 3.07
30.01 - 35.00 857 63,376,321.25 32.66 5.55 4.10
35.01 - 40.00 947 76,824,674.86 37.52 6.14 4.97
40.01 - 45.00 1,022 98,945,301.00 42.52 6.62 6.41
45.01 - 50.00 1,140 116,344,214.65 47.53 7.39 7.53
50.01 - 55.00 1,121 121,807,015.47 52.50 7.26 7.89
55.01 - 60.00 1,056 120,242,455.14 57.59 6.84 7.79
60.01 - 65.00 1,008 113,916,092.76 62.49 6.53 7.38
65.01 - 70.00 1,190 139,540,145.85 67.57 7.71 9.03
70.01 - 75.00 1,281 151,732,783.82 72.57 8.30 9.82
75.01 - 80.00 1,489 175,743,563.52 77.29 9.65 11.38
80.01 - 85.00 1,271 144,159,127.80 82.49 8.24 9.33
85.01 - 90.00 960 109,738,795.75 87.14 6.22 7.10
90.01 - 95.00 3 297,655.17 90.06 0.02 0.02
------ ---------------- ----- ------ ------
TOTAL 15,433 1,544,534,170.38 56.29 100.00 100.00
====== ================ ===== ====== ======
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
Pool Profile by Year of Maturity
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Number Balance % by Number % by Balance
maturity year of Loans Outstanding (A$) Average LVR (%) of Loans Outstanding
- -----------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
2001 1 34,239.78 18.60 0.01 0.00
2002 11 371,651.43 25.49 0.07 0.02
2003 35 1,775,981.78 32.08 0.23 0.11
2004 57 2,305,931.17 29.60 0.37 0.15
2005 80 3,818,578.42 32.11 0.52 0.25
2006 88 4,909,171.51 36.31 0.57 0.32
2007 188 9,748,273.27 36.98 1.22 0.63
2008 227 12,940,187.55 38.10 1.47 0.84
2009 184 10,877,873.32 40.30 1.19 0.70
2010 151 9,884,989.65 42.79 0.98 0.64
2011 181 11,329,553.40 39.24 1.17 0.73
2012 394 26,630,944.63 45.50 2.55 1.72
2013 362 29,143,166.75 51.27 2.35 1.89
2014 310 23,127,246.92 47.79 2.01 1.50
2015 210 17,010,798.19 48.44 1.36 1.10
2016 264 21,678,114.51 49.46 1.71 1.40
2017 566 52,518,541.87 54.99 3.67 3.40
2018 543 54,079,622.96 56.48 3.52 3.50
2019 1,410 115,036,655.59 55.76 9.14 7.45
2020 1,099 95,834,777.39 52.77 7.12 6.20
2021 1,374 135,788,546.36 55.41 8.90 8.79
2022 2,861 306,517,076.82 59.43 18.54 19.85
2023 3,806 472,809,323.73 62.65 24.66 30.61
2024 477 59,126,516.06 65.63 3.09 3.83
2025 84 7,639,078.58 62.06 0.54 0.49
2026 85 8,715,533.52 58.63 0.55 0.56
2027 200 24,747,450.08 61.50 1.30 1.60
2028 176 24,891,404.56 65.06 1.14 1.61
2029 9 1,242,940.58 57.04 0.06 0.08
------ ---------------- ----- ------ ------
TOTAL 15,433 1,544,534,170.38 56.29 100.00 100.00
====== ================ ===== ====== ======
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
37
<PAGE>
Distribution of Current Coupon Rates
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
range of current Number of Balance % by Number
Outstanding (%) Loans Balance outstanding (A$) Average LVR (%) of Loans Outstanding
- -------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
5.01 - 5.50 4 482,171.40 65.76 0.03 0.03
5.51 - 6.00 2,037 254,562,094.87 59.39 13.20 16.48
6.01 - 6.50 7,308 699,134,206.94 52.71 47.35 45.27
6.51 - 7.00 4,960 485,096,830.90 59.41 32.14 31.41
7.01 - 7.50 492 50,266,652.09 62.07 3.19 3.25
7.51 - 8.00 175 15,719,860.16 56.97 1.13 1.02
8.01 - 8.50 263 23,460,701.65 61.64 1.70 1.52
8.51 - 9.00 143 12,369,257.35 59.40 0.93 0.80
9.01 - 9.50 1 33,476.04 26.35 0.01 0.00
9.51 - 10.00 41 2,859,956.90 46.75 0.27 0.19
10.01 - 10.50 3 203,757.48 49.06 0.02 0.01
10.51 - 11.00 3 225,701.79 61.16 0.02 0.01
11.01 - 11.50 1 48,946.78 81.57 0.01 0.00
11.51 - 12.00 2 70,556.03 36.76 0.01 0.00
------ ---------------- ----- ------ ------
TOTAL 15,433 1,544,534,170.38 56.29 100.00 100.00
====== ================ ===== ====== ======
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
Distribution of Months Remaining to Maturity
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
range of
months
remaining to Number of Balance % by Number of % by Balance
maturity Loans Outstanding (A$) Average LVR (%) Loans Outstanding
- --------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C>
25 - 36 10 349,629.14 34,962.91 0.06 0.02
37 - 48 25 1,165,950.04 46,638.00 0.16 0.08
49 - 60 53 2,280,930.45 43,036.42 0.34 0.15
61 - 72 67 3,194,887.56 47,684.89 0.43 0.21
73 - 84 95 5,015,441.19 52,794.12 0.62 0.32
85 - 96 154 7,936,080.88 51,532.99 1.00 0.51
97 - 108 236 13,123,059.33 55,606.18 1.53 0.85
109 - 120 197 11,797,688.30 59,886.74 1.28 0.76
121 - 132 135 8,196,478.29 60,714.65 0.87 0.53
133 - 144 174 11,198,215.37 64,357.56 1.13 0.73
145 - 156 361 23,552,743.44 65,243.06 2.34 1.52
157 - 168 365 29,592,398.65 81,075.06 2.37 1.92
169 - 180 331 24,445,243.51 73,852.70 2.14 1.58
181 - 192 221 17,688,116.78 80,036.73 1.43 1.15
193 - 204 237 19,378,546.06 81,766.02 1.54 1.25
205 - 216 497 43,878,026.68 88,285.77 3.22 2.84
217 - 228 576 57,037,722.54 99,023.82 3.73 3.69
229 - 240 1,235 103,365,799.02 83,697.00 8.00 6.69
241 - 252 1,108 94,879,201.70 85,631.05 7.18 6.14
253 - 264 1,257 120,368,440.22 95,758.50 8.14 7.79
265 - 276 2,422 250,647,895.49 103,487.98 15.69 16.23
277 - 288 3,807 462,744,836.82 121,551.05 24.67 29.96
289 - 300 1,291 163,090,760.27 126,329.02 8.37 10.56
301 - 312 97 8,843,509.44 91,170.20 0.63 0.57
313 - 324 73 7,475,423.33 102,403.06 0.47 0.48
325 - 336 167 19,772,807.28 118,400.04 1.08 1.28
337 - 348 202 27,075,603.20 134,037.64 1.31 1.75
349 - 360 40 6,438,735.40 160,968.39 0.26 0.42
------ ---------------- ---------- ------ ------
TOTAL 15,433 1,544,534,170.38 100,079.97 100.00 100.00
====== ================ ========== ====== ======
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
39
<PAGE>
St.George Residential Loan Program
Origination Process
The housing loans included in the assets of the trust were originated by
St.George Bank from new loan applications and refinancings of acceptable current
St.George Bank housing loans. St.George Bank sources its housing loans through
its national branch network, the national telemarketing center, St.George
Direct, accredited mortgage brokers, mobile lenders and through the internet.
Approval and Underwriting Process
Each lending officer must pass a formal training program conducted by
St.George Bank to obtain an approval authority limit. The lending officer's
performance and approval authority is constantly monitored and reviewed by
St.George Bank. This ensures that loans are approved by a lending officer with
the proper authority level and that the quality of the underwriting process by
each individual lending officer is maintained.
Housing loans being processed through the credit system will either be
approved or declined by a lending officer or referred to a credit specialist. A
loan will generally be referred to a credit specialist where the lending
officer's delegated authority is exceeded.
All housing loan applications, including the applications relating to the
housing loans included in the assets of the trust, must satisfy St.George Bank's
residential housing loan credit and collection policy and procedures described
in this section. St.George Bank, like other lenders in the Australian
residential housing loan market, does not divide its borrowers into groups of
differing credit quality for the purposes of setting standard interest rates for
its residential housing loans, except in limited situations, such as to retain
existing borrowers or to attract high income individuals. All borrowers must
satisfy St.George Bank's underwriting criteria described in this section.
Borrowers are not charged different rates of interest based on their credit
quality.
The approval process consists of determining the valuation of the proposed
security property, verifying the borrower's details and ensuring these details
satisfy St.George Bank's underwriting criteria. This process is conducted by
St.George Bank. Once it is established that the loan application meets St.George
Bank's credit standards, the loan must be approved by an authorized bank
officer.
The property to be secured is required to be appraised by a valuer from
St.George Bank's approved list of registered valuers if the loan-to-value ratio
of the property is above 80% and in the following circumstances:
o newly constructed homes and other dwellings not previously occupied;
o refinancings from other financial institutions;
o the purchase of vacant land with the commitment to build a house
immediately; or
o if the loan amount exceeds A$250,000 if the related mortgaged property
is located in the Sydney metropolitan area, or A$200,000 if located
elsewhere.
In non-valuation cases, St.George Bank requires a copy of the stamped
contract of sale settlement which confirms the value. In addition, St.George
Bank requires
40
<PAGE>
valuers to be members of the Australian Property Institute. A housing loan may
be secured by more than one property, in which case the combined value of the
properties is considered. The loan-to-value ratio may not exceed 95% for owner
occupied properties or 90% for non-owner occupied properties.
Verification of an applicant's information is central to the approval
process. St.George Bank verifies all income on all loan applications by
procedures such as employment checks, including a review of the applicant's last
three years of employment history, and tax returns. It also conducts credit
checks and enquiries through the Credit Reference Association of Australia in
accordance with current credit criteria. A statement of the applicant's current
assets and liabilities is also obtained.
The prospective borrower must have a satisfactory credit history, stable
employment, evidence of a genuine savings pattern and a minimum 5% deposit plus
costs in genuine savings. Gifts, inheritance and money borrowed from other
sources are not genuine savings and are not considered as part of the 5% deposit
plus costs.
St.George Bank requires all borrowers to satisfy a minimum disposable
income level after all commitments, including allowances for living expenses and
the proposed housing loan, with an allowance for interest rate increases. This
is to ensure that the applicant has the capacity to repay loans from his or her
current income over time.
All borrowers in respect of housing loans are natural persons, corporations
or trusts. Housing loans to corporations and trusts may be secured, if deemed
necessary, by guarantees from directors. Guarantees may also be obtained in
other circumstances.
St.George Bank conducts a review of a sample of approved housing loans on a
monthly basis to ensure individual lending officers maintain all policy
standards. Once a verified application is accepted, St.George Bank provides each
loan applicant with a loan agreement comprised of a loan offer document together
with a general terms and conditions booklet. Upon receipt of acceptance of this
offer from all borrowers under the particular loan, the loan will proceed to
execution of the mortgage documentation and certification of title. When
St.George Bank or its solicitors have received these documents, settlement will
occur. Upon settlement, the mortgage is registered and the documents stored at
St.George Bank's Head Office at Kogarah, Sydney or in interstate branch offices.
A condition of settlement is that the mortgagor establish and maintain full
replacement property insurance on the related property.
St.George Bank's credit policies and approval procedures are subject to
constant review. Improvements in procedures are continuous. Credit policy may
change from time to time due to business conditions and legal or regulatory
changes.
St.George Bank's Product Types
Standard Variable Rate Loan
This type of loan is St.George Bank's traditional standard variable rate
product. There is not a stated or defined explicit link to the interest rates in
the financial markets, although, in general, the standard variable rate does
follow movements in the financial markets. Standard variable rate loans are
convertible to a fixed rate mortgage product at the borrower's request.
An additional subproduct of the standard variable rate loan is the
St.George Bank loyalty loan. Existing and previous St.George Bank home loan
customers with a
41
<PAGE>
St.George Bank home loan relationship of 5 years or more are entitled to a
"loyalty" rate whenever their loan is at the standard variable rate. New
St.George Bank customers and Advance Bank home loan customers are not entitled
to the "loyalty" rate. The "loyalty" discount rate is guaranteed to be 0.25
percentage points below the standard variable rate until January 1, 2006.
St.George Great Australian Home Loan
The St.George Great Australian Home Loan product has a low variable
interest rate which is not linked to, and historically has been lower than,
St.George Bank's standard variable rate. Consistent with the standard variable
rate loan the interest rates set under the St.George Great Australian Home Loan
product have no stated or explicit link to interest rates in the financial
markets. Further, the interest rate of the St.George Great Australian Home Loan
could fluctuate independently of standard variable rates.
The St.George Great Australian Home Loan product is not convertible to a
fixed rate mortgage product without the payment of a switch fee. Additionally,
no interest offset account is available under this product and loan payments may
be made monthly, bi-monthly or weekly and must be made by automatic transfer.
Lump sum payments are permitted under the St.George Great Australian Home Loan
Product at any time without penalty and there is no provision to stop automatic
transfers when payments are made in advance.
Fixed Rate Loan
Some of the housing loans bear a fixed rate of interest for up to 5 years
as of the cut-off date. At the end of that fixed rate period, unless the
interest rate is re-fixed at a rate and for a term agreed between the borrower
and St.George Bank, the loans will automatically convert to the standard
variable rate of interest.
The Services will not allow the interest rate on a fixed rate loan to be
re-fixed at the end of its fixed rate term if it will result in a downgrade or
withdrawal of the rating of the notes.
Special Features of the Housing Loans
Each housing loan may have some or all of the features described in this
section. In addition, during the term of any housing loan, St.George Bank may
agree to change any of the terms of that housing loan from time to time at the
request of the borrower.
Switching Interest Rates
Most housing loans allow the relevant borrower the option to request a
change from a fixed interest rate to a variable interest rate, or vice versa.
The Services will not allow conversion of a loan if it will result in a
downgrade or withdrawal of the rating of the notes. Any variable
rate converting to a fixed rate product will automatically be matched by an
increase in the fixed-floating rate swap to hedge the fixed rate exposure.
Increase Loans
A borrower who is not a St.George Great Australian Home Loan borrower may
apply to St.George Bank to borrow additional funds secured by the existing
mortgage. The proceeds from these "increase" loans may be used by the borrower
for any purpose.
42
<PAGE>
Some of the loans in the housing loan pool as of the cut-off date were
originated as these increase loans. All of these increase loans will be assigned
to the trust, together with each related housing loan, and form part of the
assets of the trust.
Where a borrower seeks to obtain an increase loan with respect to a housing
loan after the cut-off date, and the aggregate of the existing housing loan and
the increase loan meets the eligibility criteria, the increase loan will be
approved and settled by St.George Bank. St. George Bank will provide the funding
for the increase loan which will be secured by the existing mortgage. In the
event, however, that it becomes necessary to enforce the loan or the related
mortgage, the master trust deed requires that any proceeds of that enforcement
be applied in satisfaction of all amounts - actual or contingent - owing under
the housing loan included in the assets of the trust, before any amounts may be
applied in satisfaction of the increase loan.
St.George Bank will provide all funding for that increase loan, which will
be secured by the related mortgage. Under the master trust deed, the servicer
will, at the direction of the manager, in the event of enforcement of a housing
loan, distribute the proceeds to the issuer trustee of all housing loans which
are assets of the trust in priority to any increase loan advanced by St.George
Bank after the cut-off date.
Substitution of Security
A borrower may apply to the servicer to achieve the following:
o substitute a different mortgaged property in place of the existing
security property securing a housing loan;
o add a further mortgage as security for a loan; or
o release a mortgaged property from a mortgage.
If the servicer's credit criteria are satisfied and another property is
substituted for the existing security for the housing loan, the mortgage which
secures the existing housing loan may be discharged without the borrower being
required to repay the housing loan.
If all of the following conditions occur, then the housing loan will remain
in the housing loan pool, secured by the new mortgage:
o a new property subject to a mortgage satisfies the eligibility
criteria;
o the principal outstanding under the housing loan does not increase;
o the purchase of the new property by the borrower occurs simultaneously
with the discharge of the original mortgage; and
o the new property is acceptable to the mortgage insurer.
If any of the following conditions occur, then the Unpaid Balance will be
repaid by the seller and the housing loan will cease to be an asset of the
trust:
o the new property does not satisfy the eligibility criteria;
o the principal outstanding under the housing loan will change
(increase); or
o settlement does not occur simultaneously with discharge.
That payment of the Unpaid Balance will form part of the collections for
the relevant collection period.
43
<PAGE>
Redraw
Each of the variable rate housing loans allows the borrower to redraw
principal repayments made in excess of scheduled principal repayments during the
period in which the relevant housing loan is charged a variable rate of
interest. Redraws must be for at least $2,000 per transaction. Borrowers may
request a redraw at any time, but its availability is always at the discretion
of St.George Bank. The borrower is required to pay a fee to St. George Bank in
connection with a redraw. Currently, St.George Bank does not permit redraws on
fixed rate housing loans. A redraw will not result in the related housing loan
being removed from the trust.
Payment Holiday
The documentation for a housing loan may allow the borrower a payment
holiday where the borrower has prepaid principal, creating a difference between
the outstanding principal balance of the loan and the scheduled amortized
principal balance of the housing loan. The borrower is not required to make any
payments, including payments of interest, until the outstanding principal
balance of the housing loan plus unpaid interest equals the scheduled amortized
principal balance. The failure by the borrower to make payments during a payment
holiday may not necessarily lead the related housing loan to be considered
delinquent.
Early Repayment
A borrower will not incur break fees if an early repayment or partial
prepayment of principal occurs under a variable rate housing loan contract.
However, a borrower may incur break fees if an early repayment or partial
prepayment of principal occurs on a fixed rate housing loan. Any housing loan
approved before November 1, 1996 has a break fee of up to three months' interest
on the portion of principal prepaid on the housing loan. Any housing loan
approved before May 15, 1999 will be subject to an economic break fee equal to a
maximum of:
o 3 months interest, if the housing loan had an original fixed rate term
of 1 to 3 years;
o 4 months interest, if the housing loan had an original fixed rate term
of 4 years; or
o 5 months interest, if the housing loan had an original fixed rate term
of 5 years.
Any housing loan approved on or after May 16, 1999 will not be subject to
these limits on break fees.
Currently, the servicer's policy is not to charge break fees in respect of
a housing loan if prepayments for that housing loan are less than A$5,000 in any
12 month period while the interest rate is fixed. Where break fees are payable,
payment is required upon receipt of the prepayment or discharge. In some
circumstances, the break fees will be capitalized.
Switching to an Investment or Owner-Occupied Housing Loan
A borrower may elect to switch the use of the mortgaged property from
owner-occupied property to investment or vice versa. St.George Bank must ensure
that following any switch the related housing loans in the pool still satisfy
the eligibility criteria. St.George Bank requires notification from the borrower
of a switch and reserves the right to change the interest rate or the fees
charged with respect to the housing loan.
44
<PAGE>
Capitalized Fees
A borrower may request St.George Bank to provide product features under its
housing loan contract without having to pay the usual up-front fee relating to
that product. In those cases, St.George Bank may capitalize the fee, which will
thus constitute part of the principal to be amortized over the life of the
housing loan.
Combination or "Split" Housing Loans
A borrower may elect to split its loan into separate funding portions which
may, among other things, be subject to different types of interest rates. Each
part of the housing loan is effectively a separate loan contract, even though
all the separate loans are all secured by the same mortgage.
If a housing loan is split, each separate loan will remain in the trust as
long as each individual loan matures before the final maturity date of the
notes. If any loan matures after the final maturity date of the notes, that loan
will be removed from the trust and the Unpaid Balance of the loan will be repaid
by St.George Bank. The other segments of the "split" loan which mature before
the final maturity date of the notes will remain in the trust.
Loan Offset
St.George Bank offers borrowers an interest offset product under which the
interest rate accrued on the borrower's deposit account is offset against
interest on the borrower's housing loan on a monthly basis. St.George Bank does
not actually pay interest to the borrower on the loan offset account, but
reduces the amount of interest which is payable by the borrower under its
housing loan. The borrower continues to make its scheduled mortgage payment with
the result that the portion allocated to principal is increased by the amount of
interest offset. St.George Bank will pay to the trust the aggregate of all
interest amounts offset on a monthly basis. These amounts will constitute
Finance Charge Collections and Gross Principal Collections for the relevant
period. The loan offset account must be in the same name as the housing loan.
If at any time there is no basis swap in place, St.George Bank must
ensure that the interest rate applicable to the borrower's deposit account is
such that St.George Bank, as servicer, will not be required, to increase the
threshold rate as described in "Description of the Class A notes - The Interest
Rate Swaps - Threshold Rate".
If, following a Title Perfection Event, the trust obtains legal title to a
housing loan, St.George Bank will no longer be able to offer an interest offset
arrangement for that housing loan. Under the housing loan documentation,
borrowers have waived the right to set off against all deposits held with
St.George Bank.
Additional Features
St.George Bank may from time to time offer additional features in relation
to a housing loan which are not described in the preceding section. However,
before doing so, St.George Bank must satisfy the manager that the additional
features would not affect any mortgage insurance policy covering the housing
loan and would not cause a downgrade or withdrawal of the rating of any notes.
In addition, except for the interest rate and the amount of fees, St.George Bank
cannot change any of the terms of a housing loan without the related borrower's
consent.
45
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The Mortgage Insurance Policies
General
Each housing loan is insured under a mortgage insurance policy by Housing
Loans Insurance Corporation Pty Limited (ACN 071 466 334) of 259 George Street,
Sydney, NSW 2000, Australia. The seller will equitably assign its interest in
each mortgage insurance policy to the issuer trustee on the closing date. The
consent of the mortgage insurer is required for the equitable assignment of the
mortgages and the mortgage insurance policies to the issuer trustee and for the
servicer to service the housing loans. The seller will ensure that this consent
is obtained on or prior to the closing date. This section is a summary of the
general provisions of the mortgage insurance policies.
Coverage
The amount covered by each mortgage insurance policy will be the amount
owed with respect to the related housing loan, including unpaid principal,
accrued interest at any non-default rate up to specified dates, fines, fees,
charges and proper enforcement costs, less all amounts recovered from
enforcement of the mortgage on the related mortgaged property, including sale
proceeds, compensation for compulsory acquisition of the related mortgaged
property and any rents or profits received by the issuer trustee.
Timely Payment Cover
Each mortgage insurance policy also includes a timely payment cover for
losses resulting from the failure of a borrower to pay all or part of a regular
installment payment when due. The loss covered by a timely payment cover is the
amount by which the actual payment, if any, received by the issuer trustee is
less than the amount of the regular payment, calculated at the non-default
interest rate for the housing loan. The timely payment cover on each housing
loan will cover up to an aggregate of 24 monthly payments on that housing loan.
Requirement and Restrictions
There are a number of requirements and restrictions imposed on the insured
under each mortgage insurance policy which may entitle the mortgage insurer to
cancel the mortgage insurance policy or refuse or reduce the amount of a claim
with respect to a housing loan, including:
o the failure to pay any premium when due or within the relevant grace
period;
o the failure to file a claim within time;
o the failure of the servicer to be approved by the mortgage insurer;
o the failure of the housing loan contract to require that the related
mortgaged property to be insured under a general insurance policy;
o an incorrect statement or breach of the duty of disclosure by the
insured in relation to the policy;
o the existence of an encumbrance or other interest which affects or has
priority over the related mortgage;
o the failure to register the related mortgage or to stamp the housing
loan, related mortgage or collateral security;
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o the issuer trustee failing to comply with its reporting obligations;
o the housing loan or related mortgage being materially altered or
modified without the mortgage insurer's consent; and
o the occurrence of other circumstances reducing the insured's rights
under any insured housing loan or related mortgage.
The manager will perform the issuer trustee's obligations under the
mortgage insurance policies on its behalf.
Description of the Mortgage Insurer
The mortgage insurer is owned by GE Capital Australia, which is a wholly
owned subsidiary of GE Capital Services Inc. GE Capital Services Inc, is a
diversified industrial and financial services company with operations in over
100 countries. GE Capital Services Inc, is rated AAA by Fitch IBCA, Aaa by
Moody's and AAA by Standard & Poor's. It has significant lender's mortgage
insurance business around the world, operating in the United States, United
Kingdom, Canada and Australia and has over US$200 billion of loans insured
globally. The mortgage insurer has been given a AAA claims paying rating in its
own right by Fitch IBCA, a Aa1 rating by Moody's and a AAA rating by Standard &
Poor's.
Description of the Class A Notes
General
The issuer trustee will issue the Class A notes on the closing date
pursuant to a direction from the manager to the issuer trustee to issue the
notes and the terms of the master trust deed, the supplementary terms notice and
the note trust deed. The notes will be governed by the laws of New South Wales.
The following summary describes the material terms of the Class A notes. The
summary does not purport to be complete and is subject to the terms and
conditions of the Class A notes, which are attached as appendices to this
prospectus.
Form of the Class A Notes
Book-Entry Registration
The Class A notes will be issued only in permanent book-entry format in
minimum denominations of US$100,000. Unless definitive notes are issued, all
references to actions by the Class A noteholders will refer to actions taken by
DTC upon instructions from its participating organizations and all references in
this prospectus to distributions, notices, reports and statements to Class A
noteholders will refer to distributions, notices, reports and statements to DTC
or its nominee, as the registered noteholder, for distribution to owners of the
Class A notes in accordance with DTC's procedures.
Class A noteholders may hold their interests in the notes through DTC, in
the United States, or Cedelbank or the Euroclear System, in Europe, if they are
participants in those systems, or indirectly through organizations that are
participants in those systems. Cede & Co., as nominee for DTC, will hold the
Class A notes. Cedelbank and Euroclear will hold omnibus positions on behalf of
their respective participants, through customers' securities accounts in Cedel's
and Euroclear's names on the books of their respective depositaries. The
depositaries in turn will hold the positions in customers' securities accounts
in the depositaries' names on the books of DTC.
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DTC has advised the manager and the underwriters that it is:
o a limited-purpose trust company organized under the New York Banking
Law;
o a "banking organization" within the meaning of the New York Banking
Law;
o a member of the Federal Reserve System;
o a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
o a "clearing agency" registered under the provisions of Section 17A of
the Exchange Act.
DTC holds securities for its participants and facilitates the clearance and
settlement among its participants of securities transactions, including
transfers and pledges, in deposited securities through electronic book-entry
changes in its participants' accounts. This eliminates the need for physical
movement of securities. DTC participants include securities brokers and dealers,
banks, trust companies, clearing corporations and other organizations. Indirect
access to the DTC system is also available to others including securities
brokers and dealers, banks, and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly. The
rules applicable to DTC and its participants are on file with the SEC.
Transfers between participants on the DTC system will occur in accordance
with DTC rules. Transfers between participants on the Cedelbank system and
participants on the Euroclear system will occur in accordance with their rules
and operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedelbank
participants or Euroclear participants, on the other, will be effected by DTC in
accordance with DTC rules on behalf of the relevant European international
clearing system by that system's depositary. However, these cross-market
transactions will require delivery of instructions to the relevant European
international clearing system by the counterparty in that 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 its
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.
Cedelbank participants and Euroclear participants may not deliver instructions
directly to their system's depositary.
Because of time-zone differences, credits of securities in Cedelbank or
Euroclear as a result of a transaction with a DTC participant will be made
during the subsequent securities settlement processing, dated the business day
following the DTC settlement date. The credits for any transactions in these
securities settled during this processing will be reported to the relevant
Cedelbank participant or Euroclear participant on that business day. Cash
received in Cedelbank or Euroclear as a result of sales of securities by or
through a Cedelbank participant or a Euroclear participant to a DTC participant
will be received and available on the DTC settlement date.
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However, it will not be available in the relevant Cedelbank or Euroclear cash
account until the business day following settlement in DTC.
Purchases of Class A notes held through the DTC system must be made by or
through DTC participants, which will receive a credit for the Class A notes on
DTC's records. The ownership interest of each actual Class A noteholder is in
turn to be recorded on the DTC participants' and indirect participants' records.
Class A noteholders will not receive written confirmation from DTC of their
purchase. However, noteholders are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the DTC participant or indirect participant through which the
noteholder entered into the transaction. Transfers of ownership interests in the
Class A notes are to be accomplished by entries made on the books of DTC
participants acting on behalf of the Class A noteholders. Class A noteholders
will not receive notes representing their ownership interest in offered notes
unless use of the book-entry system for the Class A notes is discontinued.
To facilitate subsequent transfers, all securities deposited by DTC
participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of securities with DTC and their registration in the name of Cede &
Co. effects no change in beneficial ownership. DTC has no knowledge of the
actual noteholders of the Class A notes; DTC's records reflect only the identity
of the DTC participants to whose accounts the Class A notes are credited, which
may or may not be the actual beneficial owners of the Class A notes. The DTC
participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to DTC participants,
by DTC participants to indirect participants, and by DTC participants and
indirect participants to Class A noteholders will be governed by arrangements
among them and by any statutory or regulatory requirements as may be in effect
from time to time.
Neither DTC nor Cede & Co. will consent or vote on behalf of the notes.
Under its usual procedures, DTC mails an omnibus proxy to the issuer trustee as
soon as possible after the record date, which assigns Cede & Co.'s consenting or
voting rights to those DTC participants to whose accounts the Class A notes are
credited on the record date, identified in a listing attached to the proxy.
Principal and interest payments on the Class A notes will be made to DTC.
DTC's practice is to credit its participants' accounts on the applicable
distribution date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
that distribution date. Standing instructions, customary practices, and any
statutory or regulatory requirements as may be in effect from time to time will
govern payments by DTC participants to Class A noteholders. These payments will
be the responsibility of the DTC participant and not of DTC, the issuer trustee,
the note trustee or the principal paying agent. Payment of principal and
interest to DTC is the responsibility of the trustee, disbursement of the
payments to DTC participants is the responsibility of DTC, and disbursement of
the payments to Class A noteholders is the responsibility of DTC participants
and indirect participants.
DTC may discontinue providing its services as securities depository for the
notes at any time by giving reasonable notice to the principal paying agent.
Under these circumstances, if a successor securities depository is not obtained,
definitive notes are required to be printed and delivered.
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DTC management is aware that some computer applications, systems, and the
like for processing data that are dependent upon calendar dates, including dates
before, on, and after January 1, 2000, may encounter Year 2000 problems. DTC has
informed its participants and other members of the financial community that it
has developed and is implementing a program so that its systems continue to
function appropriately, as the same relate to the timely payment of
distributions to securityholders, book-entry deliveries, and settlement of
trades within DTC. This program includes a technical assessment and a
remediation plan, each of which is complete. Additionally, DTC's plan includes a
testing phase, which it expects to complete within appropriate time frames.
However, DTC's ability to perform properly its services is also dependent
upon other parties, including issuers and their agents, DTC's direct and
indirect participants, third party vendors from whom DTC licenses software and
hardware, and third party vendors on whom DTC relies for information or the
provision of services, including telecommunication and electrical utility
service providers. DTC has informed the manager that it is contacting, and will
continue to contact, third party vendors from whom DTC acquires services to
impress upon them the importance of these services being Year 2000 compliant and
determine the extent of their efforts for Year 2000 remediation and testing of
their services. In addition, DTC is in the process of developing contingency
plans as it deems appropriate.
According to DTC, the foregoing information about DTC has been provided for
informational purposes only and is not intended to serve as a representation,
warranty, or contract modification of any kind.
Cedelbank is incorporated under the laws of Luxembourg as a professional
depository. Cedelbank holds securities for its participating organizations and
facilitates the clearance and settlement of securities transactions between
Cedelbank participants through electronic book-entry changes in accounts of
Cedelbank participants, thereby eliminating the need for physical movement of
notes. Transactions may be settled in Cedelbank in any of 32 currencies,
including U.S. dollars.
Cedelbank participants are financial institutions around the world,
including underwriters, securities brokers and dealers, banks, trust companies,
and clearing corporations. Indirect access to Cedelbank is also available to
others, including banks, brokers, dealers and trust companies that clear through
or maintain a custodial relationship with a Cedelbank participant, either
directly or indirectly.
The Euroclear System was created in 1968 to hold securities for its
participants and to clear and settle transactions between Euroclear participants
through simultaneous electronic book-entry delivery against payment. This
eliminates the need for physical movement of notes. Transactions may be settled
in any of 32 currencies, including U.S. dollars.
The Euroclear System is operated by Morgan Guaranty Trust Company of New
York, Brussels, Belgium office, the Euroclear operator, under contract with
Euroclear Clearance System, Societe Cooperative, a Belgium cooperative
corporation, the Euroclear 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
Euroclear cooperative. The board of the Euroclear cooperative establishes policy
for the Euroclear System.
Euroclear participants include banks, including central banks, securities
brokers and dealers and other professional financial intermediaries. Indirect
access to the
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Euroclear System is also available to other firms that maintain a custodial
relationship with a Euroclear participant, either directly or indirectly.
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. These terms and conditions
govern transfers of securities and cash within the Euroclear System, withdrawal
of securities and cash from the Euroclear System, and receipts of payments for
securities in the Euroclear System. All securities in the Euroclear System are
held on a fungible basis without attribution of specific notes to specific
securities clearance accounts. The Euroclear operator acts under these 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 Class A notes held through Cedelbank or Euroclear will
be credited to the cash accounts of Cedelbank participants or Euroclear
participants in accordance with the relevant system's rules and procedures, to
the extent received by its depositary. These distributions must be reported for
tax purposes in accordance with United States tax laws and regulations.
Cedelbank or the Euroclear operator, as the case may be, will take any other
action permitted to be taken by a Class A noteholder on behalf of a Cedelbank
participant or Euroclear participant only in accordance with its rules and
procedures, and depending on its depositary's ability to effect these actions on
its behalf through DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Class A notes among participants
of DTC, Cedelbank and Euroclear, they are under no obligation to perform or
continue to perform these procedures and these procedures may be discontinued at
any time.
Definitive Notes
Notes issued in definitive form are referred to in this prospectus as
"definitive notes." A class of Class A notes will be issued as definitive notes,
rather than in book entry form to DTC or its nominees, only if one of the
following events occurs:
o the principal paying agent advises the manager in writing that DTC is
no longer willing or able to discharge properly its responsibilities
as depository for the class of notes, and the manager is not able to
locate a qualified successor;
o the issuer trustee, at the direction of the manager, advises the
principal paying agent in writing that it elects to terminate the
book-entry system through DTC; or
o after the occurrence of an event of default, the note trustee, at the
written direction of noteholders holding a majority of the outstanding
principal balance of a class of notes, advises the issuer trustee and
the principal paying agent, that the continuation of a book-entry
system is no longer in the best interest of the noteholders of that
class.
If any of these events occurs, DTC is required to notify all of its
participants of the availability of definitive notes. Each class of Class A
notes will be serially numbered if issued in definitive form.
Definitive notes will be transferable and exchangeable at the offices of
the note registrar, which is initially the principal paying agent located at
HSBC Bank USA,
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Issuer Services, 140 Broadway, 12th Floor, New York, New York 10005-1180, and at
Midland Bank plc, HSBC Issuer Services, Mariner House, Pepys Street, London EC3N
4DA United Kingdom. The note registrar will not impose a service charge for any
registration of transfer or exchange, but may require payment of an amount
sufficient to cover any tax or other governmental charge. The note registrar
will not be required to register the transfer or exchange of definitive notes
within the thirty days preceding a quarterly distribution date for the
definitive notes. Distributions on the Notes
Collections in respect of interest and principal will be received during
each monthly collection period. Collections include the following:
o interest and principal receipts from the housing loans;
o proceeds from enforcement of the housing loans;
o proceeds from claims under the mortgage insurance policies; and
o payments by the seller, the servicer or the custodian relating to
breaches of their representations or undertakings.
The issuer trustee will make some payments on a monthly basis on each
monthly payment date, which will primarily be to the providers of support
facilities to the trust. The issuer trustee will make the majority of its
payments on a quarterly basis on each quarterly payment date, including payments
to noteholders. On each quarterly payment date, the principal paying agent will
distribute principal and interest, if any, to the registered Class A noteholders
as of the related quarterly determination date if the Class A notes are held in
book-entry form, or, if the Class A notes are held in definitive form, the last
day of the prior calendar month.
Key Dates and Periods
The following are the relevant dates and periods for the allocation of
cashflows and their payments.
Monthly Collection Period............. in relation to a monthly payment date,
means the calendar month which precedes
the calendar month in which the monthly
payment date occurs. However, the first
and last monthly collection periods are
as follows:
o first: period from and including
the cut-off date to and including
November 15, 1999
o last: period from but excluding the
last day of the calendar month
preceding the termination date to
and including the termination date
Monthly Determination Date............ The date which is 2 business days
before a monthly payment date
Monthly Payment Date.................. 15th day of each of January, March,
April, June, July, September, October
and December, or, if 15th day is not a
business day, then the next business
day, unless that business day falls in
the next calendar month, in which case
the monthly payment date will be the
preceding business day, beginning in
December, 1999
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Quarterly Collection Period........... in relation to a quarterly payment date,
means the three monthly collection
periods that precede the calendar month
in which the quarterly payment date
falls. However, the first and last
quarterly collection periods are as
follows:
o first: period from and including
the cut-off date to and including
October 31, 1999.
o last: period from but excluding the
last day of the prior quarterly
collection period to and including
the termination date.
Quarterly Determination Date.......... The date which is 2 business days before
a quarterly payment date
Quarterly Payment Date................ 15th day of each of November, February,
May and August, or, if 15th day is not a
business day, then the next business
day, unless that business day falls in
the next calendar month, in which case
the quarterly payment date will be the
preceding business day, beginning in
November, 1999
Example Calendar
The following example calendar for a quarter assumes that all relevant days
are business days:
Monthly Collection Period............. August 1st to August 31st
Monthly Determination Date............ September 13th
Monthly Payment Date.................. September 15th
Monthly Collection Period............. September 1st to September 30th
Monthly Determination Date............ October 13th
Monthly Payment Date.................. October 15th
Monthly Collection Period............. October 1st to October 31st
Quarterly Collection Period........... August 1st to October 31st
Quarterly Determination Date.......... November 13th
Quarterly Payment Date................ November 15th
Interest Period....................... August 15th to November 14th
Calculation of Total Available Funds
On each determination date, the manager will calculate the Available
Income, principal draws and liquidity draws for the immediately preceding
collection period. The sum of those amounts is the Total Available Funds.
Available Income
Available Income for a monthly collection period means the aggregate of:
o the Finance Charge Collections for that collection period, which are:
o the aggregate of all amounts received by or on behalf of the
issuer trustee during that collection period in respect of
interest, fees and other
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amounts in the nature of income payable under or in respect of
the housing loans and related security and other rights with
respect to the housing loans, including:
o amounts on account of interest recovered from the
enforcement of a housing loan;
o any payments by the seller
to the issuer trustee on the repurchase of a housing loan
during that collection period which are attributable to
interest;
o any break fees paid by borrowers under fixed rate housing
loans received during that collection period; and
o any amount paid to the issuer trustee by the seller equal to
the amount of any interest which would be payable by the
seller to a borrower on amounts standing to the credit of
the borrower's loan offset account if interest was payable
on that account, to the extent attributable to interest on
the housing loan;
o all other 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:
o from the seller, the servicer, the manager, the issuer
trustee in its personal capacity, in respect of a
breach in relation to which it is not entitled to be
indemnified out of the assets of the trust, or the
custodian, in respect of any breach of a
representation, warranty or undertaking contained in
the transaction documents; and
o from the seller, the servicer, the indemnifier, the
manager or the custodian, under any obligation under
the transaction documents, to indemnify or reimburse
the issuer trustee for any amount or from the issuer
trustee in its personal capacity under any obligation
under the transaction documents to indemnify the trust,
in each case which the manager determines to be in respect of
interest, fees and other amounts in the nature of income payable
under the housing loans and related security and other rights
with respect thereto; and
o recoveries in the nature of income received, after a Finance
Charge Loss or Principal Loss has arisen, by or on behalf of the
issuer trustee during that collection period;
less:
o governmental charges collected by or on behalf of the issuer
trustee for that collection period; and
o the aggregate of all bank fees and charges due to the servicer or
the seller from time to time as agreed by them and consented to
by the issuer trustee, that consent not to be unreasonably
withheld, and collected by the seller or the servicer during that
collection period;
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plus:
o to the extent not included in Finance Charge Collections:
o any amount received by or on behalf of the issuer 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 the basis swap or the fixed-floating rate swap;
o any interest income received by or on behalf of the issuer trustee
during that collection period in respect of funds credited to the
collection account;
o amounts in the nature of interest otherwise paid by the seller, the
servicer or the manager to the issuer trustee in respect of
collections held by it;
o all other amounts received by or on behalf of the issuer trustee in
respect of the assets of the trust in the nature of income; and
o all amounts received by or on behalf of the issuer trustee in the
nature of interest during that collection period from any provider of
a support facility, other than the redraw facility, under a support
facility, including any amounts received under a mortgage insurance
policy by way of a timely payment cover, and which the manager
determines should be accounted for in respect of a Finance Charge
Loss;
o but excluding any interest credited to a collateral account of a
support facility.
Available Income for a quarterly collection period will be the sum of the
Available Income for the three monthly collection periods included in that
quarterly collection period.
Principal Draws
If the manager determines on any determination date that the Available
Income of the trust for the collection period ending immediately prior to that
determination date is insufficient to meet Total Payments of the trust for that
collection period, then the manager will direct the issuer trustee to apply
Principal Collections collected during that collection period to cover the
Payment Shortfall to the extent available. These principal draws will be
reimbursed out of any Excess Available Income available for this purpose on
subsequent payment dates.
Liquidity Draws
If the manager determines on any determination date that the related
Payment Shortfall, if any, will not be covered fully by a principal draw, the
manager must direct the issuer trustee to make a liquidity draw on the liquidity
account in an amount equal to the lesser of the amount of the shortfall or the
amount remaining in the liquidity account.
Distribution of Total Available Funds
In relation to a collection period, all amounts payable by the issuer
trustee as described in one of the next two subsections, as applicable, on the
payment date relating to that collection period, constitute Total Payments.
Monthly Total Payments
On each monthly payment date, but not a quarterly payment date, based on
the calculations, instructions and directions provided to it by the manager, the
issuer trustee must pay or cause to be paid out of Total Available Funds, in
relation to the
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monthly collection period ending immediately before that monthly payment date,
the following amounts in the following order of priority:
o first, an amount equal to the Accrued Interest Adjustment to the
seller; provided that the total amount of Accrued Interst Adjustments
with respect to any quarterly collection period, except the quarterly
collection period ending in November 2000, shall not exceed an amount
equal to 0.15% multiplied by the aggregate outstanding principal
balance of the housing loans on the first day of that quarterly
collection period multiplied by the actual number of days in that
quarterly collection period divided by 365.
o second, repayment to the mortgage insurer, of any payment in the
nature of income received from a borrower for which the mortgage
insurer previously paid under the related mortgage insurance policy by
way of a timely payment cover;
o third, any interest payable by the issuer trustee under the redraw
facility; and
o fourth, any repayment of a liquidity draw made on or prior to the
previous monthly payment date.
Quarterly Total Payments
On each quarterly payment date, based on the calculations, instructions and
directions provided to it by the manager, the issuer trustee must pay or cause
to be paid out of Total Available Funds, in relation to the quarterly collection
period ending immediately before that quarterly payment date, the following
amounts in the following order of priority:
o first, subject to the first bullet point in "Monthly Total Payments"
above, an amount equal to the Accrued Interest Adjustment to the
seller;
o second, repayment to the mortgage insurer, of any payment in the
nature of income received from a borrower for which the mortgage
insurer previously paid under the related mortgage insurance policy by
way of a timely payment cover;
o third, payment to the fixed-floating rate swap provider under the
fixed-floating rate swap of any break fees received from a borrower or
the mortgage insurer during the quarterly collection period;
o fourth, unless specified later in this paragraph, Trust Expenses which
have been incurred prior to that quarterly payment date and which have
not previously been paid or reimbursed, in the order set out in the
definition of Trust Expenses;
o fifth, pro rata between themselves:
o any fees, including the availability fee, payable by the issuer
trustee under the redraw facility;
o any fees payable by the issuer trustee under the basis swap; and
o any fees payable by the issuer trustee under the fixed-floating
rate swap;
o sixth, any amounts that would have been payable under this paragraph,
other than under the last bullet point of this section, on any
previous quarterly
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payment date, if there had been sufficient Total Available Funds,
which have not been paid by the issuer trustee, in the order they
would have been paid under that prior application of funds as
described in this section;
o seventh, payments to the mortgage insurer of the positive difference,
if any, between any overpayments by the mortgage insurer of amounts
in respect of interest, for which the mortgage insurer has not been
previously reimbursed, and the aggregate of the Excess Distributions
paid to the beneficiary on previous quarterly payment dates.
o eighth, pro rata between themselves:
o any interest payable by the issuer trustee under the redraw
facility;
o any amounts payable by the issuer trustee under the basis swap or
the fixed-floating rate swap not included in the preceding
clauses;
o any repayment of a liquidity draw made on or prior to the
previous payment date;
o the payment to the currency swap provider of the A$ Class A
Interest Amount at that date, which is thereafter to be applied
to payments of interest on the Class A notes;
o ninth, any amounts that would have been payable under the next
clause, on any previous quarterly payment date, if there had been
sufficient Total Available Funds, which have not been paid by the
issuer trustee;
o tenth, the payment of the interest on the Class B notes; and
o eleventh, payment to the mortgage insurer of an amount equal to any
overpayment by the mortgage insurer of amounts in respect of
interest, for which the mortgage insurer has not previously been
reimbursed.
The issuer trustee shall only make a payment described in any of the
preceding clauses 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.
Trust Expenses
Trust Expenses are, in relation to a collection period, in the following
order of priority:
o first, taxes payable in relation to the trust for that collection
period;
o second, any expenses relating to the trust for that collection period
which are not already covered in the following seven clauses;
o third, pro rata, the issuer trustee's fee, the security trustee's fee
and the note trustee's fee for that collection period;
o fourth, the servicer's fee for that collection period;
o fifth, the manager's fee for that collection period;
o sixth, the custodian's fee for that collection period;
o seventh, pro rata, any fee or expenses payable to the principal paying
agent, any other paying agent or the calculation agent under the
agency agreement;
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o eighth, any costs, charges or expenses, other than fees, incurred by,
and any liabilities owing under any indemnity granted to, the
underwriters, the manager, the security trustee, the servicer, the
note trustee, a paying agent or the calculation agent in relation to
the trust under the transaction documents, for that collection period;
and
o ninth, any amounts payable by the issuer trustee to the currency swap
provider upon the termination of the currency swap.
Interest on the Notes
Calculation of Interest Payable on the Notes
Up to, and including, the quarterly payment date falling in November,
2006, the interest rate for the Class A-1 notes for the related Interest Period
will be equal to LIBOR on the quarterly determination date immediately prior to
the start of that Interest Period plus %. If the issuer trustee has not redeemed
all of the Class A-1 notes by the quarterly payment date falling in November,
2006, then the interest rate for each related Interest Period commencing on or
after that date will be equal to LIBOR on the related quarterly determination
date plus %. The interest rate on the Class A-1 notes for the first Interest
Period will be determined on September , 1999.
Up to, and including, the quarterly payment date falling in November, 2006,
the interest rate for the Class A-2 notes for the related Interest Period will
be equal to LIBOR on the quarterly determination date immediately prior to the
start of that Interest Period plus %. If the issuer trustee has not redeemed all
of the Class A-2 notes by the quarterly payment date falling in November, 2006,
then the interest rate for each related Interest Period commencing on or after
that date will be equal to LIBOR on the related quarterly determination date
plus %. The interest rate on the Class A-2 notes for the first Interest Period
will be determined on September , 1999.
Up to, and including, the quarterly payment date falling in November, 2006,
the interest rate for the Class A-3 notes for the related Interest Period will
be equal to LIBOR on the quarterly determination date immediately prior to the
start of that Interest Period plus %. If the issuer trustee has not redeemed all
of the Class A-3 notes by the quarterly payment date falling in November, 2006,
then the interest rate for each related Interest Period commencing on or after
that date will be equal to LIBOR on the related quarterly determination date
plus %. The interest rate on the Class A-3 notes for the first Interest Period
will be determined on September , 1999.
The interest rate for the Class B notes for a particular Interest Period
will be equal to the Three Month Bank Bill Rate on the quarterly determination
date immediately prior to the start of that Interest Period plus %. The
interest rate on the Class B notes for the first Interest Period will be
determined on September , 1999.
With respect to any payment date, interest on the notes will be calculated
as the product of:
o the outstanding principal balance 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;
o the interest rate for such class of notes for that Interest Period;
and
o a fraction, the numerator of which is the actual number of days in
that Interest Period and the denominator of which is 360 days for the
Class A notes, or 365 days for the Class B notes.
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A note will stop earning interest on any date on which the Stated Amount of
the note is zero or, if the Stated Amount of the note is not zero on the due
date for redemption of the note, then on the due date for redemption, unless
payment of principal is improperly withheld or refused, following which the note
will continue to earn interest until the later of the date on which the note
trustee or principal paying agent receives the moneys in respect of the notes
and notifies the holders of that receipt or the date on which the Stated Amount
of the note has been reduced to zero.
A note will begin earning interest again from and including any date on
which its Stated Amount becomes greater than zero.
Calculation of LIBOR
On the second banking day in London and New York before the beginning of
each Interest Period, the calculation agent will determine LIBOR for the next
Interest Period.
Excess Available Income
General
On each quarterly determination date, the manager must determine the
amount, if any, by which the Total Available Funds for the quarterly collection
period ending immediately prior to that quarterly determination date exceed the
Total Payments for that same quarterly collection period.
Distribution of Excess Available Income
On each quarterly determination date, the manager must apply any Excess
Available Income for the related quarterly collection period in the following
order of priority:
o first, to reimburse all Principal Charge Offs for that quarterly
collection period;
o second, pro rata between themselves, based on the Redraw Principal
Outstanding and the A$ Equivalent of the Stated Amount of the Class A
notes:
o to pay the currency swap provider the A$ Equivalent of any
Carryover Class A Charge Offs; and
o to repay the redraw facility, as a reduction of, and to the
extent of, any Carryover Redraw Charge Offs;
o third, to repay all principal draws which have not been repaid as of
that quarterly payment date;
o fourth, as a payment to the Class B noteholders in or towards
reinstating the Stated Amount of the Class B notes to the extent of
any Carryover Class B Charge Offs;
o fifth, at the direction of the manager, to pay the residual
beneficiary any remaining Excess Available Income.
The issuer trustee shall make a payment described in the preceding clauses
only if the manager directs it in writing to do so and only 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.
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Any amount applied pursuant to the first five clauses above will be treated
as Principal Collections.
Once distributed to the residual beneficiary, any Excess Available Income
will not be available to the issuer trustee to meet its obligations in respect
of the trust in subsequent periods unless there has been a manifest error in the
relevant calculation of the amount distributed to the residual beneficiary. The
issuer trustee will not be entitled or required to accumulate any surplus funds
as security for any future payments on the notes.
Gross Principal Collections
On each determination date, the manager must determine Gross Principal
Collections for the collection period ending immediately prior to that
determination date. Gross Principal Collections are the sum of:
o all amounts received by or on behalf of the issuer trustee from or on
behalf of borrowers under the housing loans in accordance with the
terms of the housing loans during that collection period in respect of
principal, including principal prepayments;
o all other amounts received by or on behalf of the issuer trustee under
or in respect of principal under the housing loans and related
security and other rights with respect thereto during that collection
period, including:
o amounts on account of principal recovered from the enforcement of
a housing loan, other than under a mortgage insurance policy; and
o any payments by the seller to the issuer trustee on the
repurchase of a housing loan under the master trust deed during
that collection period which are attributable to principal;
o any amount paid to the issuer trustee by the seller equal to the
amount of any interest which would be payable by the seller to a
borrower on a housing loan on amounts standing to the credit of
the borrower's loan offset account if interest was payable on
that account to the extent attributable to principal on the
housing loan.
o all amounts received by or on behalf of the issuer trustee during that
collection period from the mortgage insurer, pursuant to a mortgage
insurance policy, or any provider of a support facility, other than
the currency swap, under the related support facility and which the
manager determines should be accounted for in respect of a Principal
Loss;
o all amounts received by or on behalf of the issuer trustee during that
collection period:
o from the seller, the servicer, the manager, AXA Trustees Limited,
in its personal capacity, or the custodian in respect of any
breach of a representation, warranty or undertaking contained in
the transaction documents, and in the case of AXA Trustees
Limited and the manager, in respect of a breach of which it is
not entitled to be indemnified out of the assets of the trust;
and
o from the seller, the servicer, the indemnifier, the manager or
the custodian under any obligation under the transaction
documents to
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indemnify or reimburse the issuer trustee for any amount or from
AXA Trustees Limited, in its personal capacity, under any
obligation under the transaction documents to indemnify the
trust,
in each case, which the manager determines to be in respect of
principal payable under the housing loans and related mortgages;
o 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 assets of the trust, including the A$ Equivalent of any amount
received by the issuer trustee on the issue of the notes which was not
used to purchase a housing loan, and which the manager determines is
surplus to the requirements of the trust;
o any amount of Excess Available Income to be applied to pay a Principal
Charge Off or a carryover charge off on a note;
o any amount of Excess Available Income to be applied to repay Principal
Draws made on a previous payment date; and
o any amount released from the liquidity account because of a reduction
in the liquidity reserve amount.
On the closing date, the sum of the A$ Equivalent of the total initial
outstanding principal amount of the Class A notes and the total initial
outstanding principal amount of the Class B 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 will be
passed through to noteholders on the first quarterly payment date.
Principal Collections for a collection period means:
o the Gross Principal Collections for that collection period; less
o any amounts deducted by or paid to the seller in that collection
period to reimburse redraws funded by the seller for which the seller
has not previously been reimbursed; less
o any amounts paid by the issuer trustee to replace a housing loan.
Principal Distributions
Monthly
On any monthly payment date in accordance with the calculations,
instructions and directions provided to it by the manager, the issuer trustee
must distribute or cause to be distributed out of Principal Collections, in
relation to the monthly collection period ending immediately before that monthly
payment date, the following amounts in the following order of priority:
o first, repayment to the mortgage insurer of any payment in the nature
of principal received from a borrower for which the mortgage insurer
previously paid under the relevant mortgage insurance policy by way of
a timely payment cover;
o second, to allocate to Total Available Funds any principal draw;
o third, to retain in the collection account as a provision such amount
as the manager determines is appropriate to make for any anticipated
shortfalls in
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Total Payments on the following monthly payment date or
quarterly payment date; and
o fourth, subject to the limits described under "Description of the
Transaction Documents - The Redraw Facility", to repay all Redraw
Principal Outstanding under the redraw facility on the payment date.
Quarterly
On each quarterly payment date, and in accordance with the calculations,
instructions and directions provided to it by the manager, the issuer trustee
must distribute or cause to be distributed out of Principal Collections, in
relation to the quarterly collection period ending immediately before that
quarterly payment date, the following amounts in the following order of
priority:
o first, repayment to the mortgage insurer of any payment in the nature
of principal received from a borrower for which the mortgage insurer
previously paid under the relevant mortgage insurance policy by way of
a timely payment cover;
o second, to allocate to Total Available Funds any principal
draws;
o third, to retain in the collection account as a provision,
such amount as the manager determines is appropriate to make
up for any anticipated shortfalls in Total Payments on the
following monthly payment date or quarterly payment date;
o fourth, subject to the limits described under "Description of
the Transaction Documents - The Redraw Facility", to repay any
redraws provided by the seller in relation to housing loans to
the extent that it has not previously been reimbursed in
relation to those redraws;
o fifth, to repay all Redraw Principal Outstanding under the
redraw facility on that payment date;
o sixth, to retain in the collection account as a provision to
reimburse further redraws an amount equal to the Redraw
Retention Amount for the next quarterly collection period;
o seventh, as a payment to the currency swap provider under the
confirmation relating to the Class A-1 notes, an amount equal
to the lesser of:
o the remaining amount available for distribution; and
o the A$ Equivalent of outstanding principal balance of
all Class A-1 notes,
which is thereafter to be applied as payments of principal
on the Class A-1 notes;
o eighth, as a payment, to the currency swap provider under the
confirmation relating to the Class A-2 notes, of an amount
equal to the lesser of:
o the remaining amount available for distribution; and
o the A$ Equivalent of outstanding principal balance of
all Class A-2 notes, and
which is thereafter to be applied as payments of principal
on the Class A-2 notes;
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o ninth, as a payment, to the currency swap provider under the
confirmation relating to the Class A-3 notes, of an amount
equal to the lesser of:
o the remaining amount available for distribution; and
o the A$ Equivalent of outstanding principal balance of all
Class A-3 notes,
which is thereafter applied as payments of principal on the
Class A-3 notes; and
the Class B, an amount equal to the lesser of:
o tenth, as a payment to the Class B noteholders of principal on
the Class B notes, an mount equal to the lesser of:
o the remaining amount available for distribution; and
o the outstanding principal balance of all Class B notes,
o eleventh, on the business day immediately following the date
on which all Secured Moneys are fully and finally repaid, and
only after payment of all amounts referred to in the preceding
clauses, the issuer trustee must pay remaining Principal
Collections to the seller in reduction of the principal
outstanding under the loan from the seller to the issuer
trustee, if any, for the purchase of the housing loans, as a
full and final settlement of the obligations of the issuer
trustee under that loan.
The issuer trustee shall only make a payment under any of the first ten
bullet points above if the manager directs it in writing to do so and only to
the extent that any Principal Collections remain from which to make the payment
after amounts with priority to that payment have been distributed.
Redraws
The seller, after receiving confirmation that it may do so from the
manager, may make redraws to borrowers under the housing loans. The issuer
trustee and the manager irrevocably authorize the seller to deduct from Gross
Principal Collections to reimburse itself for any redraw for which it has not
previously been reimbursed.
On each quarterly determination date the manager shall determine an
amount, not to exceed 2% of the outstanding principal balance of the notes,
which it reasonably anticipates will be required in the following quarterly
collection period to fund further redraws under housing loans in addition to any
prepayments of principal that it anticipates will be received from borrowers
during that quarterly collection period. The manager shall on the day of such
determination advise the issuer trustee of the amount so determined.
In addition to the seller's right of reimbursement, the issuer trustee
shall, on each business day it receives a direction from the manager to do so,
reimburse the seller for redraws made on or before that business day for which
it has not yet received reimbursements but only to the extent of the aggregate
of:
o the Redraw Retention Amount for that quarterly collection
period to the extent it has been funded; and
o any amount which the manager is entitled to direct the issuer
trustee to draw under the redraw facility at that time.
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If the manager determines on any business day that there is a Redraw
Shortfall, the manager may on that date direct the issuer trustee in writing to
make a drawing under the redraw facility on that business day or any other
business day equal to the amount which the issuer trustee is permitted to draw
under the terms of the redraw facility at that time.
Application of Principal
Charge Offs Allocating Liquidation Loss
On each quarterly determination date, the manager must determine the
following, in relation to the aggregate of all Liquidation Losses arising during
the related quarterly collection period:
o the amount of those Liquidation Losses which are Finance
Charge Losses; and
o the amount of those Liquidation Losses which are Principal
Losses.
The characterization of Liquidation Losses will be made on the basis that all
amounts recovered from the enforcement of housing loans actually received by or
on behalf of the issuer trustee are applied first against interest, fees and
other enforcement expenses, other than expenses related to property restoration,
relating to that housing loan, and then against the principal outstanding on the
housing loan and expenses related to property restoration relating to that
housing loan.
Insurance Claims
If, on any monthly determination date, the manager determines that
there has been a Liquidation Loss in relation to a housing loan during the
immediately preceding monthly collection period, the manager shall direct the
servicer, promptly, and in any event so that the claim is made within the time
limit specified in the relevant mortgage insurance policy without the amount of
the claim becoming liable to be reduced by reason of delay, to make a claim
under that mortgage insurance policy if it has not already done so. The manager
will use its best efforts to ensure that the servicer promptly makes any claims
required by way of a timely payment cover in accordance with the terms of the
servicing agreement.
Upon receipt of any amount under a claim, the 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 the amount is attributable to principal.
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 the
following:
o the maximum amount available under the mortgage insurance
policy has been exhausted;
o the mortgage insurance policy has been terminated in respect
of that housing loan;
o the mortgage insurer is entitled to reduce the amount of the
claim;
o or the mortgage insurer defaults in payment of a claim;
then a Mortgage Shortfall will arise if:
o the total amount recovered and recoverable under the mortgage
insurance policy attributable to principal; plus
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o any damages or other amounts payable by the seller or the
servicer under or in respect of the master trust deed, the
supplementary terms notice or the servicing agreement relating
to the housing loan which the manager determines to be on
account of principal;
is insufficient to meet the full amount of the Principal Loss.
The aggregate amount of all Mortgage Shortfalls for a collection
period will be applied to reduce the Stated Amounts of the notes as described in
the following subsection.
Principal Charge Offs
If the Principal Charge Offs for any quarterly collection period exceed
the Excess Available Income calculated on the quarterly determination date for
that quarterly collection period, the manager must do the following, on and with
effect from the quarterly payment date immediately following the end of the
quarterly collection period:
o reduce pro rata as between themselves the Stated Amount of the
Class B notes by the amount of that excess until the Stated
Amount of the Class B notes is zero; and
o if the Stated Amount of the Class B notes is zero and any
amount of that excess has not been applied under the preceding
paragraph, reduce pro rata as between the Class A notes and
the redraw facility with respect to the balance of that
excess:
o pro rata as between each of the Class A notes, the
Stated Amount of each of the Class A notes, until the
Stated Amount of that Class A note is zero; and
o the Redraw Principal Outstanding under the redraw
facility, applied against draws under the redraw
facility in reverse chronological order of their
drawdown dates, until the Redraw Principal
Outstanding is zero.
Payments into US$ Account
The principal paying agent shall open and maintain a US$ account into
which the currency swap provider shall deposit amounts denominated in US$. The
issuer trustee shall direct the currency swap provider to pay all amounts
denominated in US$ payable to the issuer trustee by the currency swap provider
under the currency swap into the US$ account or to the principal paying agent on
behalf of the issuer trustee. If any of the issuer trustee, the manager or the
servicer receives any amount denominated in US$ from the currency swap provider
under the currency swap, they will also promptly pay that amount to the credit
of the US$ account. Payments out of US$ Account
Payments out of US$ Account
The principal paying agent, on behalf of the issuer trustee and acting
at the direction of the manager, will distribute the following amounts from the
US$ account in accordance with the note trust deed and the agency agreement on
each payment date pro rata between the relevant notes and to the extent payments
relating to the following amounts were made to the currency swap provider:
o interest on the Class A-1 notes, the Class A-2 notes and the
Class A-3 notes;
o reinstating the Stated Amount of the Class A notes to the
extent of Carryover Class A Charge Offs;
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o principal on the Class A-1 notes, until their outstanding
principal balance is reduced to zero;
o principal on the Class A-2 notes, until their outstanding
principal balance is reduced to zero; and
o principal on the Class A-3 notes, until their outstanding
principal balance is reduced to zero.
The Interest Rate Swaps
Fixed-Floating Rate Swap
The issuer trustee will enter into a swap governed by an ISDA Master
Agreement, as amended by a supplementary schedule and confirmed by a written
confirmation, with the fixed-floating rate swap provider and the standby
fixed-floating rate swap provider to hedge the basis risk between the interest
rate on the fixed rate housing loans and the floating rate obligations of the
trust, including the interest due on the notes. The fixed-floating rate swap
will cover the housing loans which bear a fixed rate of interest as of the
cut-off date and those variable rate housing loans which at a later date convert
to a fixed rate of interest. The obligations of the fixed-floating rate swap
provider are supported by the standby fixed-floating rate swap provider.
The issuer trustee will pay the fixed-floating rate swap provider on
each quarterly payment date an amount equal to the sum of the principal balance
of each of the housing loans, including housing loans that are delinquent, which
is subject to a fixed rate of interest at the beginning of the quarterly
collection period immediately preceding that quarterly payment date, multiplied
by the weighted average of those fixed rates of interest at the beginning of
that quarterly collection period times the actual number of days in the
quarterly collection period divided by 365. The issuer trustee will also pay the
fixed-floating rate swap provider all break fees from borrowers with fixed rate
loans received during the related quarterly collection period.
The issuer trustee will receive from the fixed-floating rate swap
provider an amount equal to the principal balance of each of the housing loans
which is subject to a fixed rate of interest at the beginning of the quarterly
collection period immediately preceding that quarterly payment date multiplied
by the Three Month Bank Bill Rate plus a fixed margin. The margin is fixed for
the term of the swap and will be set based on the obligations of the trust. The
terms of the fixed-floating rate swap allow for netting of swap payments for
transactions under the one confirmation.
The fixed-floating rate swap, including the obligations of the standby
fixed-floating rate swap provider, commences on the date specified in the
relevant confirmation and terminates on the final maturity date of the notes,
unless terminated earlier in accordance with the fixed-floating rate swap.
Basis Swap
The issuer trustee will enter into a swap governed by an ISDA Master
Agreement, as amended by a supplementary schedule and confirmed by a written
confirmation, with the basis swap provider and the standby basis swap provider
to hedge the basis risk between the discretionary interest rate applicable on
the variable rate housing loans and the floating rate obligations of the trust
to the currency swap provider. The basis swap will cover the housing loans which
bear a variable rate of interest as of the cut-off date and those fixed rate
housing loans which at a later date convert to a variable rate of interest.
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The issuer trustee will pay the basis swap provider on each quarterly
payment date an amount based on the applicable daily weighted average of the
variable rate on those housing loans which are subject to a variable rate of
interest and receive from the basis swap provider the applicable Three Month
Bank Bill Rate plus a fixed margin. The margin is fixed for the term of the swap
and will be set based on the obligations of the trust. The terms of the basis
swap allow for netting of swap payments for transactions under the one
confirmation.
The basis swap commences on the date specified in the relevant
confirmation and terminates on the date 364 days later unless the basis swap
provider extends the swap in accordance with the terms of the basis swap. The
obligations of the standby basis swap provider commence on the same day as the
basis swap and terminate 364 days later, unless extended by the standby basis
swap provider in accordance with the basis swap, with the consent of the basis
rate swap provider.
Application of Increased Interest
After the interest rates on the notes increase after the quarterly
payment date in November, 2006, the manager must not direct the issuer trustee
to enter into or extend a swap confirmation unless the manager is of the opinion
that the amounts payable by the relevant swap provider to the issuer trustee in
relation to that confirmation are calculated with reference to that increased
interest rate.
Standby Arrangement
If a swap provider is obligated to make a payment under a swap and the
relevant standby swap provider receives notice from the manager requiring the
standby swap provider to make the required payment, the standby swap provider
will make the standby payment specified in the notice.
The standby basis swap provider is only obligated to make one payment
relating to the basis swap. After that payment, the basis swap will be
terminated. The standby fixed-floating rate swap provider is obligated to make
all the remaining payments under the fixed-floating rate swap that the
fixed-floating rate swap provider fails to make.
Threshold Rate
If at any time the basis swap is terminated, the manager must, on the
earlier of three business days after the termination and the determination date
immediately following the termination, calculate the threshold rate as of that
date and notify the issuer trustee, the servicer and the seller of the threshold
rate on the relevant payment date. The threshold rate means, at any time, 0.25%
per annum plus the minimum rate of interest that must be set on all of the
housing loans, where permitted under the related loan agreements, which will be
sufficient, assuming that all of the parties to the transaction documents and
the housing loans comply with their obligations under the transaction documents
and the housing loans, when aggregated with the income produced by the rate of
interest on all other housing loans, to ensure that the issuer trustee will have
sufficient collections to enable it to meet all of the obligations of the trust,
including the repayment of any principal draws. The manager must also set the
rate on the housing loans, where permitted under the related loan agreement, at
the threshold rate for each successive determination date for so long as the
basis swap has not been replaced by a similar interest hedge, or until the
issuer trustee and manager agree that the interest rate on the variable rate
housing loans no longer needs to be set at the threshold rate, and that does not
result in a downgrading of the notes.
If the servicer is notified by the manager of the threshold rate, it
will, not more than seven business days after termination of the basis swap,
ensure that the interest
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rate payable on each variable rate housing loan is set at a rate not less than
the threshold rate, and will promptly notify the relevant borrowers of the
change in accordance with the housing loans.
BASIS SWAP DOWNGRADE
If either:
o the standby basis swap provider's rating falls below:
o a long term rating of AA- and a short term credit rating of A-1+ by
Standard & Poor's;
o a short term credit rating by Moody's of Prime-1; or
o a short term rating by Fitch of F1+; or
o the standby basis swap provided does not extend its obligations under the
basis swap and the basis swap provider receives notice from the manager
that any rating agency proposes to, or has, reduced the rating assigned to
the notes,
o the basis swap provider is required, at its cost, to do one of the
following:
o deposit a cash collateral amount into a cash collateral account;
o replace the standby basis swap provider with a party that has a rating
greater than or equal to A-1+ by Standard & Poor's, F1+ by Fitch and who is
suitably rated so that its appointment as standby basis swap provider does
not result in a downgrade of the notes by Moody's;
o replace itself as basis swap provider with a party whose appointment has
been confirmed in writing by each rating agency as not resulting in a note
downgrade and who the standby basis swap provider has approved in writing;
or
o enter into an arrangement which each rating agency confirms in writing will
reverse or avoid any note downgrade,
o provided that where the standby basis swap provider or the notes have been
or will be downgraded by Standard & Poor's, and the basis swap provider has
a rating of less than long term A- and short term A-1 by Standard & Poor's,
no cash collateralisation is allowed.
o If the basis swap provider, where required to do so, does not comply with
the above within the relevant time limit set out below, the standby basis
swap provider, at its cost, must do so.
o In the case of a standby swap provider downgrade, where the standby swap
provider is downgraded to a rating of less than long term A- and short term
A-1 by Standard & Poor's, short term Prime-2 by Moody's, or short term F1
by Fitch, the relevant time limit is 5 business days. In the case of any
other standby swap provider downgrade, the relevant time limit is 30
business days.
o In the case of a note downgrade, where the swap provider has a long term
rating by Standard & Poor's of less than A- and a short term rating by
Standard & Poor's of less than A-1 then, the relevant time limit is 5
business days, otherwise the time limit is 30 business days.
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INTEREST RATE SWAP DOWNGRADES
Where the standby interest rate swap provider's rating falls below:
o a long term rating of AA- and a short term credit rating of A-1+ by
Standard & Poor's;
o a long term credit rating by Moody's of less than A2; or
o a short term rating by Fitch of less than F1+;
o the interest rate swap provider is required, at its own cost, to do one of
the following:
o deposit a cash collateral amount into a cash collateral account;
o replace the standby interest rate swap provider with a party that has a
rating greater than or equal to A-1+ by Standard & Poor's, F1+ by Fitch and
who is suitably rated so that its appointment as standby interest rate swap
provider does not result in a downgrade of the notes by Moody's;
o replace itself as interest rate swap provider with a party whose
appointment has been confirmed, in writing, by each rating agency as not
resulting in a note downgrade and who the standby interest swap provider
has approved in writing; or
o enter into an arrangement which each relevant rating agency confirms, in
writing, will reverse or avoid any note downgrade,
o provided that where the standby interest rate swap provider has been
downgraded by Standard & Poor's, and the interest rate swap provider has a
rated at less than long term A-1 and less than short term A-1 by Standard &
Poor's, no cash collateralisation is allowed.
o If the interest rate swap provider, where required to do so, does not
comply with the above, within the relevant time limit set out below, the
standby interest rate swap provider must, at its cost, do so.
o Where the standby swap provider is downgraded to a rating of less than long
term A- and short term A-1 by Standard & Poor's, less than long term A3 by
Moody's, or less than short term F1 by Fitch, the relevant time limit is 5
business days. Otherwise, the relevant time limit is 30 business days.
Swap Collateral Account
If a swap provider or standby swap provider provides cash collateral
to the issuer trustee, the manager must direct the issuer trustee, and the
issuer trustee must, as soon as is practicable:
o establish and maintain in the name of the issuer trustee a
swap collateral account with an Approved Bank having a
short-term credit rating of A-1+ from Standard & Poor's
and Fl+ from Fitch IBCA and who is suitably rated by Moody's
such that the deposit does not cause a downgrade or
withdrawal of the rating of any notes, or which otherwise
satisfies the requirements of the rating agencies; and
o the swap provider on the standby swap provider must deposit
the cash collateral in the swap collateral account.
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The issuer trustee may only make withdrawals from the swap collateral
account upon the direction of the manager and only for the purpose of:
o entering into a substitute swap;
o refunding to that swap provider the amount of any reduction in
the swap collateral amount, but only if the ratings of the
notes are not thereby withdrawn or reduced;
o withdrawing any amount which has been incorrectly deposited
into the swap collateral account;
o paying financial institutions duty, bank accounts debit tax or
equivalent taxes payable in respect of the swap collateral
account; or
o funding the amount of any payment due to be made by that swap
provider under the relevant swap following the failure by that
swap provider to make that payment.
Standby Swap Fees
The standby swap providers will receive a standby swap fee. These fees
accrue from day to day and are payable quarterly in arrears on each quarterly
payment date.
Indemnity
Each swap provider agrees to indemnify the standby swap providers
against any loss, charge, liability or expense that the standby swap providers
may sustain or incur as a direct or indirect consequence of the relevant swap
provider's failure to comply with its obligations under a swap, or the manager
requiring that standby swap provider to make a payment under the swap.
Standby Swap Providers
The standby fixed-floating rate swap provider and standby basis swap
provider will be Deutsche Bank AG, Sydney Branch. In Australia, Deutsche Bank
AG, Sydney Branch, is registered as a foreign company with Australian Registered
Body Number 064 165 162. Deutsche Bank AG has had a presence in Australia since
1973 and was granted an Australian banking license under the Banking Act 1959 in
1986 through its subsidiary, Deutsche Bank Australia Limited. Deutsche Bank AG
was granted an Authority to Carry on Banking Business in Australia under the
Banking Act 1959 and commenced operations in Sydney and Melbourne on July 1,
1994. Simultaneously, Deutsche Bank Australia Limited relinquished its banking
licence, with operations continuing through the new branch and various non-bank
subsidiaries. Deutsche Bank AG, Sydney Branch, is a full branch of Deutsche Bank
AG and not a separate legal entity. The branch has full access to the capital of
Deutsche Bank AG. The long term unsecured senior debt of Deutsche Bank AG has
been assigned a rating of AA by Fitch IBCA, AA by Standard & Poor's and Aa3 by
Moody's.
The Currency Swap
Collections on the housing loans and under the basis swap and the
fixed-floating rate swap will be denominated in Australian dollars. However, the
payment obligations of the issuer trustee on the notes are denominated in United
States dollars. To hedge its currency exposure, the issuer trustee will enter
into a swap agreement with the currency swap provider.
The currency swap comprises three distinct swap transactions, relating
to the Class A-1 notes, the Class A-2 notes and the Class A-3 notes,
respectively. The three
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swap transactions are separate and several, which means, for example, that any
termination of one of them does not necessarily give rise to a right to
terminate the other. The currency swap will be governed by a standard form ISDA
Master Agreement, as amended by a supplementary schedule and confirmed by three
written confirmations, one relating to each class of Class A notes.
Under the currency swap, the issuer trustee will pay to the currency
swap provider on each quarterly payment date an amount in Australian dollars
equal to that portion of Principal Collections and Excess Available Income, if
any, to be paid to the noteholders as a payment of principal on the Class A
notes as described in "Description of the Class A Notes - Payments of Principal
on the Notes," and the currency swap provider is required to pay to, or at the
direction of, the issuer trustee an amount denominated in United States dollars
which is equivalent to such Australian dollar payment. The equivalent United
States dollar payment will be calculated using an exchange rate of
US$__=A$1.00, which is fixed for the term of the currency swap.
In addition, under the currency swap on each quarterly payment date the
issuer trustee will pay to the currency swap provider the A$ Class A Interest
Amount and the currency swap provider will pay to the principal paying agent an
amount equal to the interest payable in US$ to the Class A noteholders.
If on any quarterly payment date, the issuer trustee does not or is
unable to make the full floating rate payment, the US$ floating rate payment to
be made by the currency swap provider on such quarterly payment date will be
reduced by the same proportion as the reduction in the payment from the issuer
trustee.
The purchase price for the notes will be paid by investors in United
States dollars, but the consideration for the purchase by the issuer trustee of
equitable title
to the housing loans will be in Australian dollars. On the closing date, the
issuer trustee will pay to the currency swap provider the net proceeds of the
issue of the notes in United States dollars. In return the issuer trustee will
be paid by the currency swap provider the A$ Equivalent of that United States
dollar amount.
Termination by the Currency Swap Provider
The currency swap provider shall have the right to terminate the
currency swap in the following circumstances:
o If the issuer trustee fails to make a payment under the
currency swap within ten business days of its due date;
o An Insolvency Event with respect to the issuer trustee occurs
or the issuer trustee merges into another entity without that
entity properly assuming responsibility for the obligations of
the issuer trustee under the currency swap;
o If due to a change in law it becomes illegal for the issuer
trustee to make or receive payments or comply with any other
material provision of the currency swap, the currency swap
requires such party to make 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 or withdrawal of the rating of the notes. If those
efforts are not successful, then the currency swap provider
will have the right to terminate the currency swap. These
provisions relating to termination following an illegality
have
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been modified so that they are not triggered by the
introduction of certain exchange controls by any Australian
government body; or
o The currency swap provider has the limited right to terminate
where, due to an action of a taxing authority or a change in
tax law, it is required to gross-up payments or receive
payments from which amounts have been withheld, but only if
all of the notes will be redeemed at their outstanding
principal balance or, if the noteholders have so agreed, at
their Stated Amount, plus, in each case, accrued interest.
Termination by the Issuer Trustee
There are a number of circumstances in which the issuer trustee has the
right to terminate the currency swap. In each of these cases it is only
permitted to exercise that right with the prior written consent of the note
trustee.
o Where the currency swap provider fails to make a payment under
the currency swap within ten business days of its due date or
the currency swap provider becomes insolvent or merges into
another entity without that entity properly assuming
responsibility for the obligation of the currency swap
provider under the currency swap;
o If due to a change in law it becomes illegal for the
currency swap provider to make or receive payments or comply
with any other material provision of the currency swap, the
currency swap requires such party to make 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 or withdrawal of
the rating of the notes. If those efforts are not successful,
then the issuer trustee 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;
o If the issuer trustee becomes obligated to make a withholding
or deduction in respect of the Class A notes and the Class A
notes are redeemed as a result; or
o If the currency swap provider breaches any obligation to
deposit cash collateral with the issuer trustee or novate or
enter into another arrangement required by the rating
agencies in accordance with the currency swap in the event it
is downgraded.
The issuer trustee may only terminate the currency swap with the prior
written consent of the note trustee. Each party may terminate the currency swap
only after consulting with the other party as to the timing of the termination.
The issuer trustee
will exercise such right to terminate at the direction of the manager. The
currency swap provider acknowledges that the issuer trustee has appointed the
manager as manager of the trust and may exercise or satisfy any of the issuer
trustee's rights or obligations under the currency swap including entering into
and monitoring transactions and executing confirmations.
Downgrade of the Currency Swap Provider
CURRENT SWAP DOWNGRADE
If, as a result of the withdrawal or downgrade of its credit rating by any of
the relevant rating agencies, the currency swap provider does not have either a
long term credit rating of at least AA- by Standard & Poor's or a short term
credit rating of at
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least A-1+ by Standard & Poor's, and a long term credit
rating of at least A2 by Moody's and a long term rating of at least AA- by
Fitch, and, in the case of Moody's or Fitch, such a downgrade would, except for
this clause adversely affect the rating of the notes, the currency swap provider
shall within:
o 30 Business Days of a downgrade of its long term credit rating by Standard
& Poor's to not lower than A- together with a downgrade of its short term
credit rating by Standard & Poor's to not lower than A-1, or the downgrade
of its long term credit rating by Moody's to not lower than A3, or a
downgrade of its long term credit rating by Fitch to not lower than A-; or
o 5 Business Days of any other such withdrawal or downgrade,
or, in either case, such greater period as is agreed to in writing by the
relevant rating agency, at its cost and at its election:
o in the situation described in bullet point one above only, lodge a cash
collateral amount in US$ with an Approved Bank outside Australia; or
o enter into an agreement novating the currency swap to a replacement
counterparty proposed by any of the currency swap provider, the issuer
trustee or the manager, if any, and which each rating agency has confirmed
will result in there not being a withdrawal or downgrade of any credit
rating assigned by it to the notes; or
o enter into such other arrangement which each rating agency has confirmed
will result in there not being a withdrawal or downgrade of any credit
rating assigned by it to the notes.
o In this section, Approved Bank means a bank which has a short-term rating
of at lease A-1+ from Standard & Poor's, P-1 from Moody's and F1+ from
Fitch IBCA.
Termination Payments
On the date of termination of the currency swap, a termination payment
will be due from the issuer trustee to the currency swap provider or from the
currency swap provider to the issuer trustee. The termination of a currency swap
is an event of default under the security trust deed unless the currency swap is
terminated by the currency swap provider as a result of a call exercised by the
issuer trustee in respect of the Class A 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 provider 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 the Currency Swap
If the currency swap is terminated, the issuer trustee must, at the
direction of the manager, enter into one or more replacement currency swaps
which replace the currency swap, but only on the condition that:
o the termination payment, if any, which is payable by the
issuer trustee to the currency swap provider on termination of
the currency swap will be paid in full when due in accordance
with the supplementary terms notice and the currency swap;
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o the ratings assigned to the Class A notes are not adversely
affected; and
o the liability of the issuer trustee under that replacement
currency swap is limited to at least the same extent that its
liability is limited under the currency swap.
If the preceding conditions are satisfied, the issuer trustee must, at
the direction of the manager, enter into the replacement currency swap, and if
it does so it must direct the provider of the replacement currency swap to pay
any up-front premium to enter into the replacement currency swap due to the
issuer trustee directly to the currency swap provider in satisfaction of and to
the extent of the issuer trustee's obligation to pay the termination payment to
the currency swap provider. To the extent that such premium is not greater than
or equal to the termination payment, the balance must be paid by the issuer
trustee as a Trust Expense.
Currency Swap Provider
The currency swap provider will be Bankers Trust Corporation, unless
Bankers Trust Corporation elects to novate the currency swap as described in
"Novation of the Currency Swap" below. Bankers Trust Corporation is a bank
holding company, incorporated under the laws of the State of New York in 1965.
Bankers Trust Corporation's principal executive offices are located at 130
Liberty Street, New York, New York 10006 and its telephone number is
(212)250-2500. Bankers Trust Corporation has a long term rating of AA- from
Fitch IBCA, A1 from Moody's and AA- from Standard & Poor's, and a short term
rating of A-1+ from Standard & Poor's.
On June 4, 1999, Deutsche Bank AG acquired all of the outstanding
shares of common stock of Bankers Trust Corporation from its shareholders at a
price of U.S.$93.00 per share. Bankers Trust Corporation was merged with a
wholly-owned subsidiary of Deutsche Bank AG, with Bankers Trust Corporation as
the surviving entity. In connection with the acquisition, Bankers Trust
Corporation has substantially changed the scope and nature of its business
activities to conform to Deutsche Bank AG's management structure. As part of
this process, Bankers Trust Corporation has transferred and will continue to
transfer certain entities and financial assets and liabilities to Deutsche Bank
AG and its affiliates. The consideration received and to be received for these
transactions was and will be the fair market value of the financial assets and
liabilities at and on the date of transfer.
The following table sets forth certain unaudited selected financial
data for Bankers Trust Corporation and its consolidated subsidiaries for the
periods and as of the dates indicated:
Unaudited Consolidated Income Statement Data (in U.S.$ millions)
<TABLE>
<CAPTION>
Six months ended June 30,
-------------------------
1999 1998
---- ----
<S> <C> <C>
Net interest revenue................................ 497 768
Total non-interest revenue.......................... 1,257 2,413
Net income (loss)................................... (1,808) 386
</TABLE>
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Unaudited Consolidated Balance Sheet Data (in U.S. $ millions)
<TABLE>
<CAPTION>
As of June 30, 1999
-------------------
<S> <C>
Total assets*...................................... 91,953
Total long-term debt and mandatorily redeemable
capital securities................................. 15,225
Total stockholders' equity......................... 4,003
</TABLE>
* Total assets includes $57,685 million of cash and due from banks,
interest-bearing deposits with banks, federal funds sold, securities purchased
under resale agreements, securities borrowed, trading assets and securities
available for sale.
Bankers Trust Corporation currently files periodic reports with the
Securities and Exchange Commission pursuant to the Exchange Act. The summary
selected financial data and other information regarding Bankers Trust
Corporation in the preceding table has been drawn from the unaudited
consolidated financial statements of Bankers Trust Corporation at and for the
three and six month periods ended June 30, 1999, set forth on pages 2 through 7
of Bankers Trust Corporation's Quarterly Report of Form 10-Q for the quarterly
period ended June 30, 1999, as filed with the Securities and Exchange
Commission. This limited information does not provide a complete picture of the
financial condition of Bankers Trust Corporation. For additional material
financial and other information with respect to Bankers Trust Corporation,
please refer to the Form 10-Q. Due to the significant ongoing structural
changes being made at Bankers Trust Corporation, including the sale or transfer
of substantial financial assets, the data presented in the preceding table will
not be indicative of the results of operations or financial condition of Bankers
Trust Corporation for any period or dates subsequent to June 30, 1999.
On June 18, 1999, Deutsche Bank AG announced that it had agreed to sell
Bankers Trust Australia Limited, a wholly-owned subsidiary of Bankers Trust
Corporation, for a price of approximately U.S.$1.4 billion. This closing of the
sale occurred on August 31, 1999, and is not reflected in the numbers presented
in the preceding table. As of June 30, 1999, Bankers Trust Australia Limited
had total assets of approximately U.S.$10.6 billion.
Novation of the Currency Swap
Bankers Trust Corporation may at any time novate (a form of legal
transfer) its rights and obligations under the currency swap, without the prior
consent of any other party, to any affiliate of Deutsche Bank AG, provided
that:
(a) the new currency swap provider is obligated to file periodic
reports with the Securities and Exchange Commission pursuant to the Exchange
Act;
(b) the new currency swap provided provides a legal opinion to the
issuer trustee that the currency swap, as novated, is valid, binding and
enforceable, subject to equitable doctrines and creditor's rights generally; and
(c) the rating agencies confirm that the novation will not cause a
reduction or withdrawal of the ratings of the Class A notes.
The manager will, if required pursuant to the Exchange Act, file a copy
of any amended currency swap or replacement currency swap agreement with the
Securities and Exchange Commission.
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Withholding or Tax Deductions
All payments in respect of the notes will be made without withholding
or tax deduction for, or on account of, any present or future taxes, duties or
charges of whatever nature unless the issuer trustee or any paying agent is
required by applicable law to make any such payment in respect of the 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 agents, as the case may be, shall make such payment
after such withholding or deduction has been made, it 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 obligated to make any
additional payments to holders of the notes with respect to that withholding or
deduction.
Redemption of the Notes for Taxation or Other Reasons
If the manager satisfies the issuer trustee and the note trustee,
immediately prior to giving the notice to the noteholders as described in this
section, that either:
o on the next quarterly payment date the issuer trustee would be
required to deduct or withhold from any payment of principal
or interest in respect of the notes or the currency swap 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
o 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;
then the issuer trustee must, when so directed by the manager, at the manager's
option, provided that the issuer trustee will be in a position on such payment
date to discharge, and the manager 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 equal with
such class, redeem all, but not some, of such class at their outstanding
principal balance, or at the option of the holders of 75% of the aggregate
outstanding principal balance of such class, at their Stated Amount, together,
in each case, with accrued interest to the date of redemption on any subsequent
quarterly payment date. Noteholders must be given notice of a redemption not
more than 60 nor less than 45 days prior to the date of redemption. The holders
of 75% of the aggregate outstanding principal balance of a class of notes may
elect, in accordance with the terms of the note trust deed, and the note trustee
shall notify the issuer trustee and the manager, that they do not require the
issuer trustee to redeem their class of notes in the circumstances described in
this section. All amounts ranking prior to or equal with respect to a class of
notes must be redeemed concurrently with such class.
Redemption of the Notes upon an Event of Default
If an event of default occurs under the security trust deed while the
Class A notes or Class B notes are outstanding, the security trustee may,
subject in some circumstances to the prior written consent of the Noteholder
Mortgagees in accordance with the provisions of the security trust deed, and
will, if so directed by the Noteholder Mortgagees where they are the only Voting
Mortgagees, or, otherwise by a resolution of 75% of the Voting Mortgagees,
enforce the security created by the
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security trust deed. That enforcement can include the sale of some or all of the
housing loans. If the trust terminates while notes are outstanding, St.George
Bank has a right of first refusal to acquire the housing loans. 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
"Description of the Transaction Documents - The Security Trust Deed."
Optional Redemption of the Notes
At the manager's direction, the issuer trustee must purchase or redeem
all of the notes by repaying the outstanding principal balance, or, if the
noteholders owning at least 75% of the aggregate outstanding amount of the notes
so agree, the Stated Amount, of the notes, together, in each case, with accrued
interest to, but excluding, the date of repurchase or redemption, on any
quarterly payment date falling on or after the earlier of:
o the quarterly payment date on which the total Stated Amount of
all notes is equal to or less than 10% of the total initial
outstanding principal balance of the notes; and
o the quarterly payment date falling in November, 2006;
provided that the manager certifies to the issuer trustee and the note trustee
that the issuer trustee will be in a position on this quarterly payment date to
discharge all its liabilities in respect of the notes, at their outstanding
principal balance or their Stated Amount if so agreed by the specified
percentage of noteholders, and any amounts which would be required under the
Security Trust Deed to be paid in priority to or equal with the notes if the
security for the notes were being enforced. The manager, on behalf of the issuer
trustee, will give not more than 60 nor less than 45 days' notice to noteholders
of this redemption in accordance with the applicable conditions of the notes.
Final Maturity Date
The issuer trustee must pay the Stated Amount in relation to each note
on or by the final maturity date relating to that note. The failure of the
issuer trustee to pay the Stated Amount within ten business days of the due date
for payment, or within any other applicable grace period agreed upon with the
Mortgages, will be an event of default under the security trust deed.
Final Redemption of the Notes
Each note will be finally redeemed, and the obligations of the issuer
trustee with respect to the payment of the principal amount of that note will be
finally discharged, upon the first to occur of:
o the date on which the outstanding principal balance of the
note is reduced to zero;
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o the date upon which the relevant noteholder renounces in
writing all of its rights to any amounts payable under or in
respect of that note;
o the date on which all amounts received by the note trustee
with respect to the enforcement of the security trust deed are
paid to the principal paying agent;
o the payment date immediately following the date on which the
issuer trustee completes a sale and realization of all of
the assets of the trust in accordance with the master trust
deed and the supplementary terms notice; and
o the final maturity date of the notes.
Termination of the Trust
Termination Events
The trust shall continue until, and shall terminate on the later of: o
its Termination Date;
o the date on which the assets of the trust have been sold or
realized upon, which shall be within 180 days after the
Termination Date so far as reasonably practicable and
reasonably commercially viable; and
o the date on which the issuer trustee ceases to hold any
housing loans or mortgages in relation to the trust.
Realization of Trust Assets
On the occurrence of a Termination Date, subject to St.George Bank's
right of first refusal, the issuer trustee, in consultation with the manager or
the beneficiary, to the extent that either has title to the assets of the
trust, must sell and realize the assets of the trust within 180 days. During the
180-day period, performing housing loans may not be sold for less than their
Unpaid Balance, and non-performing housing loans may not be sold for less than
the fair market value of such housing loans and their related security, as
agreed upon by the issuer trustee, based on appropriate expert advice, and the
seller; provided that 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 outstanding principal amount of
the notes. The servicer will determine whether a housing loan is performing or
non-performing.
Seller's Right of First Refusal
As soon as practical after the Termination Date of the trust, the
manager will direct the issuer trustee to offer, by written notice to St.George
Bank, irrevocably to extinguish in favor of St.George Bank, or if the issuer
trustee has perfected its title, to equitably assign to St.George Bank, its
entire right, title and interest in and to the housing loans for their Unpaid
Balance, for performing housing loans, and their fair market value, for
non-performing housing loans; provided that, if the fair market value of a
housing loan is less than its Unpaid Balance, the sale requires the consent of
the holders of 75% of the aggregate outstanding principal amount of the notes.
The issuer trustee is not entitled to sell any housing loans unless
St.George Bank has failed to accept the offer within 180 days after the
occurrence of the Termination Date by paying to the issuer trustee the purchase
price. St.George Bank must pay all
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costs and expenses relating to the repurchase of any housing loans. If St.George
Bank does not accept the offer within 180 days, the costs and expenses relating
to the sale of the housing loans will be a Trust Expense. Distribution of
Proceeds from Realization of Trust Assets
After deducting expenses, the 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 in "Distribution of
Total Available Funds" and "Principal Distributions", and in accordance with any
directions given to it by the manager. If all of the notes have been fully
redeemed and the trust's other creditors have been paid in full, the issuer
trustee shall distribute the assets of the trust to the residual beneficiary.
Prescription
A note will be void in its entirety if not surrendered for payment
within ten years of the relevant date in respect of any payment on the note, the
effect of which would be to reduce the Stated Amount of such note to zero. The
relevant date is 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 and
notice to that effect is duly given in accordance with the terms of the relevant
note. After the date on which a note becomes void in its entirety, no claim may
be made in respect of it.
Voting and Consent of Noteholders
The note trust deed contains provisions for each class of noteholders
to consider any matter affecting their interests. In general, the holders of a
majority of the aggregate outstanding principal balance of a class of notes may
take or consent to any action permitted to be taken by such class of noteholders
under the note trust deed. Notwithstanding the foregoing, the consent of holders
of 75% of the aggregate outstanding principal balance of a class of notes shall
be required to accomplish the following:
o direct the note trustee to direct the security trustee to
enforce the security under the security trust deed;
o override any waiver by the note trustee of a breach of any
provisions of the transaction documents or an event of default
under the security trust deed;
o removal of the current note trustee or appointment of a new
note trustee; and
o approve the costs and expenses of the note trustee incurred in
enforcing rights under, or prosecuting lawsuits related to,
the transaction documents for which the note trustee is
entitled to be indemnified.
The Class A-1 noteholders, the Class A-2 noteholders and the Class A-3
noteholders will be treated as a single class for voting.
The note trust deed contains provisions limiting the powers of the
Class B noteholders. For example, the document limits their ability to request
or direct the note trustee to take any action that would be materially
prejudicial to the interests of the Class A noteholders. In most circumstances,
the note trust deed imposes no such
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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 outstanding principal balance of a
class of noteholders shall be binding on all noteholders of such class, both
present and future.
Reports to Noteholders
On each quarterly determination date, the manager will, in respect of
the collection period ending before that determination date, deliver to the
principal paying agent, the note trustee and the issuer trustee, a noteholder's
report containing the following information:
o the outstanding principal balance and the Stated Amount of
each class of notes;
o the interest payments and principal distributions on each
class of notes;
o the Available Income;
o the Total Available Funds;
o the aggregate of all redraws made during that quarterly
collection period;
o the Redraw Shortfall, if any;
o the Payment Shortfall, if any;
o the principal draw, if any, for that quarterly collection
period, together with all principal draws made before the
start of that quarterly collection period and not repaid;
o the liquidity draw, if any, for that quarterly collection
period, together with all liquidity draws made before the
start of that quarterly collection period and not repaid;
o the Gross Principal Collections;
o the Principal Collections;
o the Liquidity Shortfall, if any;
o the remaining Liquidity Shortfall, if any;
o the Principal Charge Off, if any;
o the bond factor for each class of notes, which with respect to
a class of notes, means the aggregate of the outstanding
principal balance of the class of notes less all principal
payments on that class of notes to be made on the next
quarterly payment date, divided by the aggregate initial
outstanding principal balance for all of that class of notes;
o the Class A Charge Offs, the Class B Charge Offs and the
Redraw Charge Offs, if any;
o all carryover charge offs on the redraw facility on the notes,
if any;
o if required, the threshold rate at that quarterly
determination date;
o the interest rates on the notes for the related Interest
Period;
o scheduled and unscheduled payments of principal on the housing
loans;
o aggregate outstanding principal balance of the fixed rate
housing loans and the aggregate principal balance of the
variable rate housing loans; and
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o delinquency and loss statistics with respect to the housing
loans.
Unless and until definitive notes are issued, 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.
Unless and until definitive notes are issued, periodic and annual
unaudited reports containing information concerning the trust and the Class A
notes will be prepared by the manager and sent to DTC. DTC and its participants
will make such reports available to holders of interests in the 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 notes are in book-entry form. Upon the issuance of fully registered,
certificated 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 manager will file with the SEC
such periodic reports as are required under the Exchange Act, and the rules and
regulations of the SEC thereunder. However, in accordance with the Exchange Act
and the rules and regulations of the SEC thereunder, the manager expects that
the obligation to file such reports will be terminated following the end of
September 2000.
Description of the Transaction Documents
The following summary describes the material terms of the transaction
documents. The summary does not purport to be complete and is subject to the
provisions of the transaction documents. All of the transaction documents,
except for the currency swap and the note trust deed, are governed by the laws
of New South Wales, Australia. The currency swap is governed by the laws of the
State of New York. The note trust deed is governed by the laws of New South
Wales, Australia and the administration of the trust is governed by English law.
A copy of the master trust deed and the servicing agreement and a form of each
of the other transaction documents have been filed as exhibits to the
registration statement of which this prospectus is a part.
Trust Accounts
The issuer trustee will establish and maintain the collection account
and the liquidity account with an Approved Bank. The collection account and
liquidity account will initially be established with Australia & New Zealand
Banking Group Limited, which has a short term rating of F1+ from Fitch IBCA, P-1
from Moody's and A-1+ from Standard & Poor's at its office at Level 2, 570
Church Street, Richmond, Victoria 3121. Each bank account shall be opened by the
issuer trustee in its name and in its capacity as trustee of the trust. These
accounts will not be used for any purpose other than for the trust. These
accounts will be interest bearing accounts.
The manager shall have the discretion and duty to recommend to the
issuer trustee, in writing, 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 assets of the
trust shall be effected and when and how the same should be effected. Each
investment of moneys on deposit in the trust's accounts shall be in Authorized
Investments that will mature not later than the business day preceding the
applicable payment date.
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Liquidity Reserve
Liquidity Reserve Amount
On the closing date, the issuer trustee, at the direction of the
manager, will establish the liquidity reserve in an amount equal to A$ in the
liquidity account. The amount of the liquidity reserve will be reduced each
quarterly determination date to an amount equal to 0.25% of the aggregate Unpaid
Balance of the housing loans as the manager determines from time to time. To the
extent that the liquidity reserve amount decreases as a consequence of a
decrease in the aggregate Unpaid Balance of the housing loans, the manager may
direct the issuer trustee to withdraw from the liquidity account an amount not
exceeding the excess of the credit balance of the liquidity account over the
liquidity reserve. Any funds withdrawn from the liquidity account in these
circumstances will be treated as a Gross Principal Collection.
Liquidity Account
The manager shall not direct the issuer trustee to, and the issuer
trustee shall not, make any withdrawal from the liquidity account except for the
following purposes:
o to make or fund a liquidity draw as described in "Description
of the Class A Notes - Liquidity Draws";
o to transfer the credit balance of the liquidity account in
accordance with the master trust deed if the account is held
by a bank which ceases to be an Approved Bank;
o to pay financial institutions duty, bank accounts debit tax or
equivalent taxes payable in respect of the liquidity account;
o to the extent that the credit balance of the liquidity account
exceeds the liquidity reserve, to distribute that excess as a
Gross Principal Collection; and
o to distribute on the final maturity date of the notes or on
the date on which the notes are fully and finally redeemed or
repurchased the credit balance of the liquidity account as a
Principal Collection.
Liquidity Draws
If on any monthly determination date the manager determines that there
is a Liquidity Shortfall, the manager must direct the issuer trustee to make a
draw on the liquidity reserve on or before the relevant monthly payment date
equal to the lesser of the Liquidity Shortfall and the balance of the liquidity
account.
The issuer trustee must, if so directed by the manager, make that
liquidity draw and cause the proceeds of such liquidity draw to be deposited or
transferred into the collection account on or before the relevant monthly
payment date. This amount will be distributed in the manner described in
"Description of the Class A Notes - Liquidity Draws."
The issuer trustee must repay outstanding liquidity draws on each
monthly payment date and quarterly payment date out of Total Available Funds, to
the extent they are available, as described in "Description of the Class A Notes
Distribution of Total Available Funds."
Modifications
The issuer trustee, the manager and the servicer, with respect to the
master trust deed and the supplementary terms notice, or the note trustee, with
respect to the note trust deed or any other transaction document, may by way of
supplemental deed alter,
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add to or modify the master trust deed, the supplementary terms notice, the note
trust deed or any other transaction document so long as such alteration,
addition or modification was effected upon consent of the noteholders or
residual beneficiary as described in the following paragraph in the case of the
master trust deed or supplementary terms notice or is:
o to correct a manifest error or ambiguity or is of a formal,
technical or administrative nature only;
o necessary to comply with the provisions of any law or
regulation or with the requirements of any Australian
governmental agency;
o appropriate or expedient as a consequence of an amendment to
any law or regulation or altered requirements of the
government of any jurisdiction, any department, commission,
office of any government or any corporation owned or
controlled by any government, 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 Crusade Securitisation Programme trusts;
o any modification, except a basic terms modification of, or
waiver or authorization of any breach or proposed breach of
the Class A 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 A noteholders. A
"basic terms modification" is any modification which serves to
alter, add, or modify the terms and conditions of such class
of 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 noteholders as a
whole or the class of noteholders. A basic terms modification
requires the sanction of Class A noteholders holding at least
75% of the aggregate outstanding principal balance of the
Class A notes. A similar sanction is required in relation to
any modification to the date of maturity of the class of
notes, or a modification which would have the effect of
postponing any day for payment of interest in respect of the
class of notes, reducing or canceling the amount of principal
payable in respect of the class of notes or the rate of
interest applicable to the class of notes or altering the
percentage of the aggregate outstanding principal balance
required to consent to any action or altering the currency of
payment of the class of notes or an alteration of the date or
priority of redemption of the class of notes; or
o 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 manager's reasonable opinion, to an allocation of
expenses.
Except for an alteration, addition or modification as described in the
preceding section, where in the reasonable opinion of the issuer trustee a
proposed alteration, addition or modification to the master trust deed, the
supplementary terms notice and
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the note trust deed is prejudicial or likely to be prejudicial to the interests
of the noteholders or a class of noteholders or the residual beneficiary, 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 outstanding
principal balance of the relevant class or classes of notes or with the prior
written consent of the residual beneficiary, as the case may be.
The Issuer Trustee
The issuer trustee is appointed as trustee of the trust on the terms
set out in the master trust deed and the supplementary terms notice.
The issuer trustee has all the rights, powers and discretions over and
in respect of the assets of the trust in accordance with the transaction
documents provided that it will take no action or omit to take an action without
the direction of the manager, that could reasonably be expected to adversely
affect the ratings of the notes. The manager is required to give to the issuer
trustee all directions necessary to give effect to its recommendations and
proposals, and the issuer trustee is not required to take any action unless it
receives a direction from the manager.
The issuer trustee must act honestly and in good faith and comply with
all relevant material laws in performance of its duties and in exercising its
discretions under the master trust deed, 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 and to 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.
Under the master trust deed, each noteholder and the residual
beneficiary acknowledges that:
o the noteholder cannot require the issuer trustee to owe to the
noteholder, or to act in a manner consistent with, any
fiduciary obligation in any capacity;
o the issuer trustee has no duty, and is under no obligation, to
investigate whether a Manager's Default, a Servicer Transfer
Event or a Title Perfection Event has occurred in relation to
the trust other than where it has actual notice;
o the issuer trustee is required to provide the notices referred
to in the master trust deed in respect of a determination of a
Material Adverse Effect only if it is actually aware of the
facts giving rise to the Material Adverse Effect; and
o in making any such determination, the issuer trustee will seek
and rely on advice given to it by its advisers in a manner
contemplated by the master trust deed;
o in the absence of actual knowledge to the contrary, the issuer
trustee is entitled to rely conclusively on, and is not
required to investigate any notice, report, certificate,
calculation or representation of or by the seller, servicer or
manager.
The issuer trustee will be considered to have knowledge or notice of or
be aware of any matter or thing if the issuer 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 issuer trustee who have day-to-day
responsibility for the administration of the trust.
Annual Compliance Statement
The manager, on behalf of the issuer trustee, will deliver to the note
trustee annually a written statement as to the fulfillment of the issuer
trustee's obligations under the transaction documents.
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
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 equal to 0.032% per
annum of the aggregate outstanding principal balance of the housing loans on the
first day of each quarterly collection period, payable in arrears on the related
quarterly payment date.
If the issuer trustee is required at any time to undertake duties which
relate to the enforcement of the terms of any transaction document by the issuer
trustee upon a default by any other party under the terms of that transaction
document, the issuer trustee is entitled to such additional remuneration as may
be agreed between the issuer trustee and the manager or, failing agreement, such
amount as is determined by a merchant bank (acting as an expert and not as an
arbitrator) selected by the issuer trustee. The determination of such merchant
bank shall be conclusive and binding on the manager and the issuer trustee so
far as the law allows.
The issuer trustee will 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, but not general overhead costs and expenses. These
expenses will be Trust Expenses.
Removal of the Issuer Trustee
The issuer trustee is required to retire as trustee after a direction
from the manager in writing following an Issuer Trustee's Default.
A direction given by the manager requiring the issuer trustee to retire
must specify a date for the retirement of the issuer trustee which is no less
than six months from the date of the direction. Alternatively, the manager may
pay to the issuer trustee an amount equal to the fees that the issuer trustee
would earn for that 6 month period in lieu of that notice. The costs of the
issuer trustee, to the extent that they are properly and reasonably incurred,
will be paid out of the assets of the trust as a Trust Expense.
The issuer trustee will bear the reasonable costs of its removal if the
issuer trustee does not resign as directed and the manager is required to remove
it following an event under the first four bullet points in the definition of
Issuer Trustee's Default. The issuer trustee will indemnify the manager and the
trust for these costs. These costs are not payable out of the assets of the
trust.
The manager, subject to giving prior notice to the rating agencies, is
entitled to appoint a replacement statutory trustee on removal or retirement of
the issuer trustee if that appointment will not in the reasonable opinion of the
manager materially prejudice the interests of noteholders. Until the appointment
is completed the manager must act as issuer trustee and will be entitled to the
issuer trustee's fee for the period it so acts as issuer trustee.
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Voluntary Retirement of the Issuer Trustee
The issuer trustee may resign on giving to the manager, with a copy to
the rating agencies, not less than three months' notice in writing, or such
other period as the 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 manager, or who may be the 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 three months' notice period,
the manager shall act as trustee until a successor trustee is appointed.
Limitation of the Issuer Trustee's Liability
The issuer trustee will not be liable personally for any losses, costs,
liabilities or claims arising from the failure to pay moneys on the due date for
payment to any noteholders, the residual beneficiary, the manager or any other
person or for any loss howsoever caused in respect of the trust or to any
noteholder, the residual beneficiary, the manager or any other person, except to
the extent caused by the fraud, negligence or Default on the issuer trustee's
part, or on the part of the officers and employees of the issuer trustee or any
of its agents or delegates in respect of whom the issuer trustee is liable.
The issuer trustee acts as trustee and issues the notes only in its
capacity as trustee of the trust and in no other capacity. A liability arising
under or in connection with the transaction documents or the trust can be
enforced against the issuer trustee only to the extent to which it can be
satisfied out of the assets of the trust which are available to satisfy the
right of the issuer trustee to be exonerated or indemnified for the liability.
Subject to the following sentence, 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 master trust deed, the notes, the conditions or the
trust. The limitation will 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 exoneration or indemnification out of the assets of the
trust as a result of the issuer trustee's fraud, negligence or Default.
The master trust deed also contains other provisions which regulate the
issuer trustee's liability to noteholders, other creditors and the residual
beneficiary. These include, but are not limited to, the following:
o Subject to the master trust deed, 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 manager of its discretions, or for
acting on any instructions or directions given to it.
o The issuer trustee is not liable for any event associated with
the retirement of the manager, a Servicer Transfer Event or a
Title Perfection Event.
o The issuer trustee is not liable for any act, omission or
default of the manager, the servicer, the currency swap
provider, the custodian, the note trustee, the principal
paying agent or any of their successors or assigns, in
relation to their respective duties or obligations under the
transaction documents, or any other person's failure to carry
out an agreement with the issuer trustee with respect to the
trust.
The foregoing provisions do not apply to the extent that the relevant
act is caused by the issuer trustee's fraud, negligence or Default.
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Rights of Indemnity of Issuer Trustee
The issuer trustee will be indemnified out of the assets of the trust
against all losses and liabilities properly incurred by the issuer trustee in
performing any of its duties or exercising any of its powers under the
transaction documents in relation to the trust except for fraud, negligence or
Default.
The issuer trustee is indemnified out of the assets of the trust
against certain payments it may be liable to make under any Consumer Credit
Legislation. The servicer also indemnifies the issuer trustee in relation to
such payments and the issuer trustee is required to first call on the indemnity
from the servicer before calling on the indemnity from the assets of the trust.
The issuer trustee is also indemnified by St.George Bank under a deed of
indemnity against any action, loss, cost, damage or expense arising out of any
actions relating to any incorrect, misleading or deceptive statements in this
prospectus, the offer of the notes so far as it relates to any incorrect,
misleading or deceptive statements in the prospectus or a failure by St.George
Bank in relation to the due diligence procedures agreed with the issuer trustee.
The Manager
Powers
The manager will have full and complete powers of management of the
trust, including the administration and servicing of the assets which are not
serviced by the servicer, borrowings and other liabilities of the trust and the
operation of the trust.
The issuer trustee has no duty to supervise the manager in the
performance of its functions and duties, or the exercise of its discretions.
The manager has the absolute discretion to recommend Authorized
Investments to the issuer trustee and direct the issuer trustee in relation to
those Authorized Investments.
Delegation
The manager may, in carrying out and performing its duties and
obligations contained in the master trust deed, delegate to any of the manager's
officers and employees, all acts, matters and things, whether or not requiring
or involving the 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 manager thinks fit.
Manager's Fees, Expenses and Indemnification
The manager is entitled to a quarterly fee for each quarterly
collection period equal to 0.09% per annum of the aggregate outstanding
principal balance of housing loans on the first day of each quarterly collection
period payable in arrears on the related quarterly payment date.
The manager will be indemnified out of the assets of the trust for any
liability, cost or expense properly incurred by it in its capacity as manager of
the trust other than general overhead costs and expenses.
Removal or Retirement of the Manager
The manager shall retire as trust manager if the issuer trustee so
directs in writing following a Manager's Default. The manager shall bear the
costs of its removal after a Manager's Default. The manager has agreed to
indemnify the issuer trustee and the trust for those costs.
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The manager may resign on giving to the issuer trustee and the note
trustee, with a copy to the rating agencies, not less than 120 days, or another
period as the manager and the issuer trustee may agree, notice in writing of its
intention to do so.
On retirement or removal of the manager, the issuer trustee may appoint
another manager on such terms as the issuer trustee sees fit, including the
amount of the manager's fee, provided the appointment will not have an adverse
effect on the rating of the notes. Until a replacement manager is appointed, the
manager must continue as manager. If a replacement manager is not appointed
within 120 days of the issuer trustee electing to appoint a new manager, the
issuer trustee will be the new manager.
Limitation of Manager's Liability
The principal limitations on the manager's liability are set out in
full in the master trust deed. These include the following limitations:
o the manager will be indemnified out of the trust in respect of
any liability, cost or expense properly incurred by it in its
capacity as manager of the trust; and
o subject to the master trust deed, the 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 manager or on
whom the 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 manager, except to the extent of
losses, costs, claims or damages caused or contributed to by
the breach of its obligations under any transaction documents.
The Note Trustee
Bankers Trust Company will serve as the note trustee. Bankers Trust
Company is a New York State chartered bank and an indirect wholly owned
subsidiary of Deutsche Bank AG. The corporate trust office of the note trustee
responsible for the administration of the trust is located at 1 Appold Street,
Broadgate, London EC2A 2HE, United Kingdom. The note trustee will be entitled to
execute any of its trusts or powers under the note trust deed either directly or
through agents or attorneys providing that the use of such agent does not have
an adverse effect on the ratings of the Class A notes. The note trustee and
every other person properly appointed by it under the note trust deed will be
entitled to indemnification from the assets of the trust against all loss,
liability, expense, costs, damages, actions, proceedings, claims and demands
incurred by, or made against, the note trustee in connection with its execution
of the trusts under the note trust deed, provided that the indemnification will
not extend to any loss, liability or expense arising from any fraud, negligence,
default or breach of trust by the note trustee or any other person properly
appointed by the note trustee.
The note trustee will at all times be a corporation or association,
organized and doing business under the laws of the United States of America, any
individual state or the District of Columbia, authorized under those laws to
exercise corporate trust powers, having a combined capital of U.S.$50,000,000,
as set forth in its most recent published annual report of condition, and
subject to supervision or examination by federal or state authority. The note
trustee may also, if permitted by the Securities and Exchange Commission, be
organized under the laws of a jurisdiction other than
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the United States, provided that it is authorized under such laws to exercise
corporate trust powers and is subject to examination by authority of such
jurisdictions substantially equivalent to the supervision or examination
applicable to a trustee in the United States.
The note trustee may resign after giving three months' written notice
to the issuer trustee, the manager, the security trustee and each rating agency.
The issuer trustee may also remove the note trustee in the following
circumstances:
o if the note trustee becomes insolvent;
o if the note trustee ceases its business;
o if the note trustee fails to comply with any of its
obligations under any transaction document and the issuer
trustee determines that this failure has had, or if continued,
will have, a Material Adverse Effect, and if capable of
remedy, the note trustee does not remedy this failure within
14 days after the earlier of the following:
o the note trustee becoming aware of this failure; and
o receipt by the note trustee of written notice with
respect to this failure from either the issuer
trustee or the manager; or
o if the note trustee fails to satisfy any obligation imposed on
it under the Trust Indenture Act of 1939 with respect to the
trust or the note trust deed.
The note trustee is an affiliate of the standby basis swap provider,
the standby fixed-floating rate swap provider, the currency swap provider and
one of the underwriters. If there is an event of default under the Class A
notes, the note trustee may be required to resign by virtue of its obligations
under the Trust Indenture Act. In addition, holders of 75% of the aggregate
outstanding principal balance of the Class A notes may require the issuer
trustee to remove the 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 notes.
The Security Trust Deed General
National Mutual Life Nominees Limited of Level 2, 65 Southbank
Boulevard, South Melbourne, Victoria, Australia will be the security trustee.
National Mutual Life Nominees Limited's principal activities are the provision
of services as trustee, executors, administrators, attorneys and agents and
other fiduciary services. The issuer trustee will grant a first ranking floating
charge, registered with the Australian Securities and Investments Commission,
over all of the trust assets in favor of the security trustee. The floating
charge will secure the issuer trustee's obligations to the noteholders, the
manager, the security trustee, the servicer, the note trustee, the underwriters,
each paying agent, the seller with respect to the Accrued Interest Adjustment
and redraws, and each provider of a support facility, but with respect to the
mortgage insurer, only in respect of all payments by way of a timely payment
cover under the mortgage insurance policies. These secured parties are
collectively known as the Mortgagees.
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Nature of the Charge
A company may not deal with its assets over which it has granted a
fixed charge without the consent of the relevant mortgagee. Fixed charges are
usually given over real property, marketable securities and other assets which
will not be dealt with by the company.
A floating charge, like that created by the security trust deed, does
not attach to specific assets but instead "floats" over a class of assets which
may change from time to time. The company granting the floating charge may deal
with those assets and 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 company's business. The issuer trustee has agreed not to dispose
of or create interests in the assets of the trust subject to the floating charge
except in the ordinary course of its business and the manager has agreed not to
direct the issuer trustee to take any such actions. If the issuer trustee
disposes of any of the trust assets, including any housing loan, in the ordinary
course of its business, the person acquiring the property will take it free of
the floating charge. The floating charge granted over the trust assets will
crystallize, which means it becomes a fixed charge, upon the occurrence of
specific events set out in the security trust deed, including notice to the
issuer trustee following an event of default under the security trust deed. On
crystallization of the floating charge, the issuer trustee may not deal with the
assets of the trust without the consent of the security trustee.
The Security Trustee
The security trustee is appointed to act as trustee on behalf of the
Mortgagees and holds the benefit of the charge over the trust assets in trust
for each Mortgagee on the terms and conditions 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 noteholders, as determined by the noteholders or the note
trustee acting on their behalf. In addition, the security trustee must give
priority to the interests of the Class A noteholders if, in the security
trustee's opinion, there is a conflict between the interests of Class A
noteholders and the interests of the Class B noteholders or other Mortgagees.
Duties and Liabilities of the Security Trustee
The security trust deed contains a range of provisions regulating the
scope of the security trustee's duties and liabilities. These include the
following: o The security trustee is not responsible for the adequacy or
enforceability of the security trust deed or other transaction documents.
o The security trustee is not required to monitor compliance by
the issuer trustee or manager with the transaction documents
or their other activities.
o Unless required by a transaction document, the security
trustee need not give Mortgagees information concerning the
issuer trustee which comes into the possession of the security
trustee.
o The security trustee has no duties or responsibilities except
those expressly set out in the security trust deed or any
collateral security.
o Any action taken by the security trustee under the security
trust deed or any collateral security binds all the
Mortgagees.
o 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
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associates may engage in any kind of business with the issuer
trustee, the 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.
Events of Default
Each of the following is an event of default under the security trust deed:
o the issuer trustee fails to pay:
o any interest within ten business days of the
quarterly payment date on which the interest was due
to be paid to noteholders; or
o any other amount owing to a Mortgagee 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 Class A
noteholder, with the note trustee;
o the issuer trustee fails to perform or observe any other
provisions, other than the obligations already referred to in
this section, of a transaction document where such failure
will have a material and adverse effect on the amount or
timing of any payment to be made to any noteholder, and that
default is not remedied within 30 days after written notice
from the security trustee requiring the failure to be
remedied;
o an Insolvency Event occurs relating to the issuer trustee, in
its capacity as trustee of the trust;
o the charge created by the security trust deed is not or ceases
to be a first ranking charge over the assets of the trust, or
any other obligation of the issuer trustee, other than as
mandatorily preferred by law, ranks ahead of or equal with any
of the moneys secured by the security trust deed;
o any security interest over the trust assets is enforced;
o all or any part of any transaction document, other than the
basis swap, the redraw facility or the currency swap, in
respect of a termination because of an action of a taxing
authority or a change in tax law, 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 basis swap, the standby basis swap, the redraw
facility or the currency swap; or
o without the prior consent of the security trustee, that
consent being subject in accordance with the terms of the
security trust deed to the prior written consent of the
Noteholder Mortgagees,
o 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;
o the trust is held or is conceded by the issuer
trustee not to have been constituted or to have been
imperfectly constituted; or
o 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.
Where the security trustee has notified the rating agencies, obtained the
written consent of the relevant Noteholder Mortgagees and, in its reasonable
opinion,
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considers that it would not be materially prejudicial to the interests of the
Mortgagees, it may elect not to treat an event that would otherwise be an event
of default as not being an event of default for the purpose of the security
trust deed. Unless the security trustee has made such an election and providing
that the security trustee is actually aware of the occurrence of an event of
default, the security trustee must promptly convene a meeting of the Voting
Mortgagees which it shall seek at directions from the Voting Mortgagees by way
of extraordinary resolution of Voting Mortgages regarding the action it should
take as a result of that event of default.
Meetings of Voting Mortgagees
The security trust deed contains provisions for convening meetings of
the Voting Mortgagees to enable the Voting Mortgagees to direct or consent to
the security trustee taking or not taking certain actions under the security
trust deed, including directing the security trustee to enforce the security
trust deed. Voting Mortgagees are:
o the Noteholder Mortgagees alone for as long as amounts
outstanding under the notes are 75% or more of the Secured
Moneys, and
o otherwise, the note trustee, acting on behalf of the Class A
noteholders, and each other Mortgagee.
Neither the security trustee nor the manager may call a meeting of
Voting Mortgagees while the Noteholder Mortgagees are the only Voting Mortgagees
unless the Noteholder Mortgagees otherwise consent.
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 under the security trust deed.
Voting Procedures
Every question submitted to a meeting of Voting Mortgagees shall be
decided in the first instance by a show of hands. If a show of hands results in
a tie, 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. A representative is, in the case of any
noteholder, a person or body corporate appointed as a proxy for that noteholder.
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 Class A 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 every US$100 or its
equivalent, but not part thereof, of the Secured Moneys that he holds or in
which he is a representative.
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. Enforcement of the Charge
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 a written resolution signed by all of the
Voting Mortgagees is required to direct the security trustee to do any or all of
the following:
o declare the charge to be enforceable;
o declare all Secured Moneys immediately due and payable;
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o convert the floating charge to a fixed charge over any or all
of the trust assets; or
o appoint a receiver over the trust assets or itself exercise
the powers that a receiver would otherwise have under the
security trust deed.
If the Noteholder Mortgagees are the only Voting Mortgagees, they 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, including enforcing the charge.
Any consent or direction of the note trustee and the Class B
noteholders, when they are the only Voting Mortgagees, requires the approval of
noteholders representing greater than 50% of the outstanding principal balance
of the notes. 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.
The Note Trustee as Voting Mortgagee
The note trustee may, without the consent of the noteholders, determine
that any condition, event or act which with the giving of notice, lapse of time
or the issue of a certificate would constitute an event of default under the
security trust deed shall not, or shall not subject to specified conditions, be
treated as such. The note trustee shall not exercise any of these powers in
contravention of any express direction given in writing by holders representing
at least 75% of the aggregate outstanding principal balance of the Class A
notes. Any such modification, waiver, authorization or determination shall be
binding on the Class A noteholders and, unless the note trustee agrees
otherwise, any such modification shall be notified by the manager on behalf of
the issuer trustee to the noteholders as specified in the transaction documents
as soon as practicable thereafter.
If an event of default under the security trust deed occurs and is
continuing, the note trustee shall deliver to each Class A 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 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 relevant class of Class A noteholders.
The rights, remedies and discretion of the Class A noteholders under
the security trust deed, 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 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 Class A noteholders without
inquiry about compliance with the note trust deed.
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
or any notes unless directed or requested to do so in writing by the holders of
at least 75% of the aggregate outstanding principal balance 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.
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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:
o 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 equal with the Class A notes; or
o 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 the preceding paragraph.
Limitations of Actions by the Security 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.
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.
If the security trustee convenes a meeting of the Voting Mortgagees, or
is required by an Extraordinary Resolution to take any action under the security
trust deed, and advises the Voting Mortgagees that it will not act in relation
to the enforcement of the security trust deed unless it is personally
indemnified by the Voting Mortgagees to its reasonable satisfaction against all
actions, proceedings, claims and demands to which it may render itself liable,
and all costs, charges, damages and expenses which it may incur in relation to
the enforcement of the security trust deed and is put in funds to the extent to
which it may become liable, including costs and expenses, and the Voting
Mortgagees refuse to grant the requested indemnity, and put the issuer trustee
in funds, then the security trustee is not obliged to act in relation to that
enforcement under the security trust deed. In those circumstances, the Voting
Mortgagees may exercise such of those powers conferred on them by the security
trust deed as they determine by Extraordinary Resolution.
The security trustee will not 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 secured moneys or relating in any way to the mortgaged
property or 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, except
for the fraud, negligence or breach of trust of the security trustee.
Priorities under the Security Trust Deed
The proceeds from the enforcement of the security trust deed are to be
applied in the order of priority set forth in this subsection, subject to any
other priority which may be required by statute or law. Certain federal taxes,
unpaid wages, long service
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leave, annual leave and similar employee benefits and certain auditor's fees, if
any, will be paid prior to the Mortgagees. Subject to the foregoing, the
proceeds from enforcement of the security trust deed will be distributed as
follows:
o first, to pay pro rata:
o any fees and other expenses due to the security
trustee, the note trustee or the principal paying
agent;
o any unpaid fees and paid expenses incurred in
relation to the operation and administration of the
trust, including the issuer trustee's fees and
expenses; and
o the receiver's remuneration;
o second, 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;
o third, to pay unpaid Accrued Interest Adjustment due to the
seller;
o fourth, repayment to the mortgage insurer of money previously
paid under a mortgage insurance policy by way of a timely
payment cover, but only to the extent that funds are received
from the related borrower;
o fifth, to pay to the fixed-floating rate swap provider under
the fixed-floating rate swap any break fees received by or on
behalf of the issuer trustee from a borrower or the mortgage
insurer and which have not previously been paid to the
fixed-floating rate swap provider;
o sixth, to pay, pro rata:
o monetary liabilities of the issuer trustee to all
providers of support facilities, other than the
currency swap provider;
o monetary liabilities of the issuer trustee to the
Class A noteholders;
o unreimbursed redraws, to the seller; and
o all monetary liabilities of the issuer trustee to the
currency swap provider under a confirmation relating
to Class A notes, but without double-counting above;
o seventh, any monetary liabilities of the issuer trustee to
Class B noteholders;
o eighth, to pay pro rata any amounts not covered in this
section owing to any Mortgagee under any transaction document;
o ninth, to pay all monies owing to the mortgage insurer and not
paid above;
o tenth, 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
o eleventh, 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
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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.
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. Any claims of the noteholders remaining after
realization of the security and application of the proceeds as aforesaid shall,
except in limited circumstances, be extinguished.
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 receive a quarterly fee in the amount agreed
from time to time by the issuer trustee, the security trustee and the manager.
Indemnification
The issuer trustee has agreed to indemnify the security trustee from
and against all losses, costs, liabilities, expenses and damages arising out of
or in connection with the transaction documents, except to the extent that they
result from the fraud, negligence or breach of trust on the part of the security
trustee.
Retirement and Removal of the Security Trustee
The security trustee may retire on three months' notice in writing to
the issuer trustee, the manager, the note trustee and the rating agencies if a
successor security trustee is appointed.
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 remove the security trustee at any time and the
manager may remove the security trustee if:
o an Insolvency Event occurs in relation to the security trustee
in its personal capacity;
o the security trustee ceases business;
o the security trustee fails to comply with any of its
obligations under any transaction document and such action has
had, or, if continued will have, a Material Adverse Effect,
and, if capable of remedy, that failure is not remedied within
14 days after the earlier of:
o the security trustee's having become actually aware,
by virtue of the actual awareness of the officers or
employees of the security trustee who have day-to-day
responsibility for the administration of the security
trust, of that failure; and
o the security trustee's having received written notice
with respect thereto from the manager; or
o there occurs a change in the control of the security trustee
from that existing on the date of the security trust deed,
unless approved by the manager.
Upon notice of resignation or removal of the security trustee, the
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
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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 St.George Bank or its affiliates. If no
person can be found to act as security trustee, the Voting Mortgagees may elect
a Voting Mortgagee to act as security trustee.
Any resignation or removal of the security trustee and appointment of a
successor will not become effective until the rating agencies approve the
appointment and confirm that it will not cause a downgrade, qualification or
withdrawal of the ratings of the notes.
Amendment
The issuer trustee and the security trustee may, following at least ten
business days written notice to the rating agencies and with the written
approval of the manager and the Noteholder Mortgagees, amend the security trust
deed to, among other things, correct a manifest error or ambiguity or which in
the opinion of the security trustee is necessary to comply with the provisions
of any law or regulation. If the amendment is prejudicial or likely to be
prejudicial to the interests of the Mortgagees or a class of Mortgagees, an
Extraordinary Resolution of the Voting Mortgagees is required.
The Redraw Facility
Redraws
If the seller consents to a redraw, it will transmit funds in the
amount of the redraw to the borrower. The seller is entitled to be reimbursed
for the amount of any redraws on any of the housing loans which it pays to
borrowers:
o first, from Gross Principal Collections available at the time
the redraw is made;
o second, from any available Redraw Retention Amount; and
o third, from drawings under the redraw facility agreement, to
the extent that it is available.
The seller will be reimbursed for redraws from Gross Principal
Collections in priority to principal payments on the notes.
The Redraw Facility Agreement
Under the redraw facility agreement, the redraw facility provider
agrees to make advances to the issuer trustee for the purpose of reimbursing
redraws made by the seller to the extent that Gross Principal Collections and
the available Redraw Retention Amount are insufficient to fund redraws. Under
the redraw facility, the redraw facility provider agrees to make advances to the
issuer trustee up to the redraw limit. The redraw limit is equal to 2% of the
aggregate Stated Amount of the notes, as adjusted by the manager on each
anniversary of the redraw facility agreement or any other amount as agreed
between the redraw facility provider, the issuer trustee and the manager. At the
closing date, the redraw limit is expected to be A$31,725,420. 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 notes then outstanding. The initial term of the redraw facility is 364 days.
The redraw facility provider may cancel all or part of the redraw limit at any
time immediately on giving notice to the issuer trustee and the manager.
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Drawing on the Redraw Facility
A drawing may be made under the redraw facility only for the purpose of
funding a Redraw Shortfall or to repay a previous draw under the redraw
facility. If at any time during the term of the redraw facility, the manager
determines that there is a Redraw Shortfall, it may direct the issuer trustee to
draw down on the redraw facility for an amount equal to the lesser of:
o the Redraw Shortfall; and
o the redraw limit less the greater of zero and the total
principal amount of all outstanding draws under the redraw
facility, less the total Carryover Redraw
Charge Offs, provided that for the purpose of this
calculation, it is assumed that all draws under the redraw
facility due to be repaid on or before the date of the
drawdown have been repaid.
Conditions Precedent to Drawing
The obligations of the redraw facility provider to make available each
draw under the redraw facility are subject to the conditions precedent that:
o there is currently no event of default under the redraw
facility; and
o the representations and warranties by the issuer trustee in
the redraw facility agreement are true as of 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
current facts and circumstances.
Availability Fee
An availability fee accrues daily from the date of the redraw facility
agreement at a rate of 0.10% per annum on an amount equal to the redraw limit,
less outstanding Redraw Advances, less Carryover Redraw Charge Offs. The
availability fee is payable on each quarterly 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.
Interest
With respect to any draws under the redraw facility made by the redraw
facility provider, interest 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 One
Month Bank Bill Rate plus a margin, calculated on the basis of the actual number
of days elapsed since the advance and a year of 365 days. The margin will be
0.30% per annum, unless the draw has been outstanding twelve months or more,
at which time the margin will be 0.40% per annum for that draw. The interest
shall be payable on each payment date and on termination of the redraw facility.
To the extent any interest is not paid on a payment date, the amount of the
unpaid interest will be capitalized and interest will accrue on any such unpaid
interest from that payment date.
Repayment of Draws on the Redraw Facility
The issuer trustee shall, at the direction of the manager, repay
unreimbursed draws under the redraw facility 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 draw on the following payment date.
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Events of Default under the Redraw Facility Agreement
It is an event of default under the redraw facility agreement if:
o an amount is available for payment to the redraw facility
provider under the redraw facility agreement, and the issuer
trustee does not pay that amount within 10 business days of
its due date;
o an Insolvency Event occurs in relation to the trust;
o 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;
o the Termination Date occurs in relation to the trust; or
o an event of default under 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.
Consequences of an Event of Default
At any time after an event of default under the redraw facility
agreement, the redraw facility provider may do all or any of the following:
o declare all moneys actually or contingently owing under the
redraw facility agreement immediately due and payable; and
o cancel the redraw limit.
Termination
The redraw facility will terminate on the earliest of the following:
o the date on which the notes are redeemed in full;
o the date on which the redraw facility provider declares the
redraw facility agreement terminated following an event of
default under the redraw facility agreement;
o the date on which the issuer trustee enters into a replacement
redraw facility;
o the date on which Crusade Management Limited retires or is
removed as manager;
o the date on which the issuer trustee has canceled all of the
redraw limit;
o the date which is one year after the final maturity date of
the notes;
o the date on which the redraw limit is canceled in full by the
redraw facility provider; and
o 364 days from the date of the redraw facility agreement,
unless the redraw facility provider has agreed to extend the
term of the redraw facility in accordance with the terms of
the redraw facility.
The Servicing Agreement
Servicing of Housing Loans
The servicer is required to administer the housing loans in the
following manner:
o in accordance with the servicing agreement;
o in accordance with St.George Bank's procedures manual and
policies as they apply to those housing loans from time to
time; and
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o with the same degree of diligence and care expected of an
appropriately qualified servicer of similar financial
products.
In performing any services under the servicing agreement the servicer
shall take into account whether its performance of such services does or does
not have any Material Adverse Effect. The servicer's actions in servicing the
housing loans in accordance with the relevant procedures manual are binding on
the issuer trustee. 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.
Powers
Subject to the standards for servicing set forth in the preceding
section, the servicer has the express power, among other things:
o 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;
o to waive any right in respect of the housing loans and
mortgages in the ordinary course of servicing the housing
loans and mortgages; and
o to extend the maturity date of a housing loan beyond 30 years
from the date of origination when required to do so by law or
a government agency. These extensions are not subject to the
requirement that the action not have a Material Adverse
Effect.
Undertakings by the Servicer
The servicer has undertaken, among other things, the following:
o 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 borrowers of the issuer trustee's interests,
registering transfers, delivering documents to the issuer
trustee and taking other action required to perfect title or
which the issuer trustee requires it to do.
o To collect all moneys due under those housing loans and
related mortgages and pay them into the collection account not
later than the time St.George Bank would be required to do so.
o 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.
o To 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 manager when each such claim is made.
o 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
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rank before or equal with the related 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 related 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
servicer's procedures manual or its ordinary course of
business.
o 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 a Material Adverse Effect.
o It will set the interest rate on the housing loans in
accordance with the requirements of the supplementary terms
notice.
o It will give notice in writing to the issuer trustee and the
rating agencies if it becomes aware of the occurrence of any
Servicer Transfer Event.
o 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.
o It will notify the issuer trustee and the manager of any event
which it reasonably believes is likely to have a Material
Adverse Effect promptly after becoming aware of such event;
and the manager of anything else which the manager reasonably
requires regarding any proposed modification to any housing
loan or related mortgage.
o It will provide information reasonably requested by the issuer
trustee or the manager, with respect to all matters relating
to the trust and the assets of the trust, and the issuer
trustee or the 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 housing loan
agreements, mortgages, certificates of title and other
documents related to the housing loans.
Undertakings by the Seller
The St.George Bank, in its capacity as seller, has undertaken, among
other things, the following under the servicing agreement:
o 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 any housing loan or mortgage in
order to perform or comply with its obligations under the
servicing agreement; and will comply with all laws in
connection with its ownership of any housing loans and
mortgages where failure to do so would have a Material Adverse
Effect.
o 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
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of a mortgage insurance policy to the extent those rights
relate to a housing loan and the mortgage.
o 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 equal 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 seller's procedures manual or its ordinary
course of business.
o 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 a Material Adverse Effect.
o 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 the servicer. If the order is due to the servicer
breaching any applicable law, then the servicer 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 the servicer's external auditors.
Collections
The servicer will receive collections on the housing loans from
borrowers in its general collection account. The servicer shall deposit any
collections in its possession or control into the collection account within two
business days following its receipt of the collections, less any amount for
taxes payable in relation to the collections or any amount the servicer may
retain under the supplementary terms notice.
Servicing Compensation and Expenses
The servicer will receive a fee for servicing the housing loans equal
to the product of 0.40% per annum and the aggregate outstanding principal of the
housing loans on the first day of each quarterly collection period. This fee
will be payable in arrears on the quarterly payment date following the end of
the quarterly collection period.
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 a housing loan or its related mortgaged property 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.
Liability of the Servicer
The servicer fully indemnifies the issuer trustee against all losses,
liabilities, costs and expenses incurred as a result of the failure by the
servicer to perform its duties under the servicing agreement or any action or
conduct undertaken or not taken by
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the servicer, including as a consequence of a Servicer Transfer Event. The
servicer may rely upon any statement by the issuer trustee or the manager that
any action or inaction on its part is reasonably likely to, or will, have a
Material 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
manager that the action or inaction is not reasonably likely to, or will not
have, a Material Adverse Effect.
Removal, Resignation and Replacement of the Servicer
The issuer trustee must terminate the servicer's appointment if the
issuer trustee determines that any of the following Servicer Transfer Events
occurs:
o the servicer suffers an Insolvency Event;
o the servicer fails to pay any amount within ten business days
of receipt of a notice to do so;
o 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, a Material Adverse Effect, as determined
by the issuer trustee and that failure is not remedied within
the earlier of 30 days after the servicer becomes aware of
that failure and receipt of a notice from either the issuer
trustee or the manager;
o 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 45 days after notice from the issuer
trustee, and the issuer trustee determines that breach would
have a Material Adverse Effect; or
o it becomes unlawful for the servicer to perform the services
under the servicing agreement.
The servicer will indemnify the issuer trustee against any losses, liabilities,
costs and expenses resulting from a Servicer Transfer Event.
Resignation
The servicer may voluntarily resign after giving 120 days' notice to
the rating agencies, the manager and the issuer trustee.
Replacement of the Servicer
The manager and the issuer trustee shall use reasonable efforts to find
an eligible successor servicer. Until a successor servicer is appointed, the
servicer must continue to act as the servicer and will be paid the servicing
fee. If an eligible successor servicer is not appointed by the expiration of the
120-day notice period, the issuer trustee itself will act as servicer and be
entitled to the servicing fee.
Termination of Servicing Agreement
The servicing agreement will terminate on the earlier of:
o the date on which the servicing agreement is terminated
pursuant to a Servicer Transfer Event;
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o the date which is one month after the notes have been redeemed
in full in accordance with the transaction documents and the
issuer trustee ceases to have any obligation to any creditor
in relation to any trust;
o the date on which the issuer trustee replaces the servicer
with a successor servicer; and
o the date on which the servicer is replaced after resigning.
Amendment
The servicer and the issuer trustee may amend the servicing agreement
in writing after giving prior notice of the proposed amendment to the rating
agencies and the rating agencies have confirmed that the amendment will not
result in an adverse effect on the rating of any notes.
The Custodian Agreement
Document Custody
The custodian is responsible for custody of the title documents for
each mortgaged property, including the loan agreement, mortgage document and
certificate of title for the housing loans on behalf of the issuer trustee,
exercising the degree of diligence and care expected of an appropriately
qualified custodian of documents and in accordance with the custodial procedures
approved in advance by the issuer trustee, the manager and the rating agencies.
The custodian's duties and responsibilities include:
o holding each title document in accordance with the custodial
procedures as if the title documents were beneficially owned
by the custodian;
o ensuring that each title document is capable of identification
and kept in a security packet in a security vault separate
from other documents held by the custodian for other persons;
and
o maintaining in safe custody a record of the physical movement
of the title documents.
In performing its services, the custodian must consider if its acts or
omissions will have any Material Adverse Effect.
The custodian undertakes, among other things:
o to comply with applicable laws where the failure to do so
would have a Material Adverse Effect;
o comply with the mortgage insurance policies;
o provide information and access relating to its custodial
services if required by the issuer trustee, the manager or the
servicer; and ensure that the premises holding the documents
are appropriately insured for fire and public risks.
Audit
The custodian will be audited by an independent auditor 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.
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Compensation of the Custodian
The custodian will receive a fee based on the aggregate outstanding
principal of the housing loans on the first day of each quarterly collection
period. This fee will be payable in arrears on the quarterly payment date
following the end of the quarterly collection period.
Indemnity
The custodian also indemnifies the issuer trustee against all losses,
liabilities, costs and expenses incurred by the issuer trustee as a result of a
breach by the custodian of its obligations under the custodian agreement. This
indemnity is limited to the extent further described in the custodian agreement.
Under the deed of indemnity, St.George Bank also indemnifies the issuer trustee
in respect of all liability arising as a result of a breach by the custodian of
its obligations under the custodian agreement and any money payable under the
custodian agreement which is not recoverable from the custodian.
Removal and Retirement of the Custodian
The issuer trustee may terminate the custodian's appointment if the
issuer trustee determines that:
o the custodian has suffered an Insolvency Event;
o if the custodian is a related company of the seller, either
o the long-term rating of the seller falls below:
o BBB from Fitch IBCA; or
o Baa2 from Moody's, or
o BBB from Standard & Poor's; or
o a Title Perfection Event has occurred;
o the custodian has failed to comply with the custodial
procedures or any of its other obligations under any other
transaction document and such action has had, or if continued
will have, a Material Adverse Effect and, if capable of
remedy, the custodian does not remedy that failure within 30
days after the earlier of the custodian becoming aware of that
failure and receipt of a notice from either the issuer trustee
or the manager;
o any representation, warranty or certification made by the
custodian is incorrect when made and is not waived by the
issuer trustee, or if capable of remedy, is not remedied to
the issuer trustee's reasonable satisfaction within 45 days
after notice from the issuer trustee, and the issuer trustee
determines that breach will or may have a Material Adverse
Effect;
o it has become unlawful for the custodian to perform its
custodial services;
o a Servicer Transfer Event has occurred; or
o the custodian has not complied with the requirements of the
custodian agreement to the satisfaction of its auditor and a
further audit also results in an adverse finding by the
auditor.
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The custodian will indemnify the issuer trustee against any losses,
liabilities, costs and expenses resulting from its termination. If the custodian
is removed, it must deliver at its expense the title documents and all other
documents and records relating to the housing loans to, or at the direction of
the issuer trustee. If the custodian has not done so within ten business days of
the date of termination or such longer period as the issuer trustee in its
reasonable discretion permits, the issuer trustee must, with the assistance of
the manager, enter the premises where the title documents are kept, take
possession of and remove the title documents. The issuer trustee may, to the
extent that it has information available to it to do so, lodge caveats in
respect of the housing loans and related mortgages for which it does not hold
the title documents. A caveat is a notice which is put on the relevant land
title register to provide notice of a party's interest in the property.
The Seller Loan Agreement
The value of the housing loan pool as of the cut-off date, and the
consideration payable by the issuer trustee to the seller for the housing loans,
is A$ . If the net proceeds received by the issuer trustee from the
issuance of the notes is less than the purchase price for the housing loans,
the seller will lend the balance of the consideration to the issuer trustee.
This loan will not bear interest and will not have the benefit of the security
trust deed. The issuer trustee will be required to repay any outstanding
principal under the loan, if any, after the Secured Moneys have been fully and
finally paid, to the extent that moneys are available to pay that principal, as
a full and final settlement of the obligations of the issuer trustee under the
loan.
The Servicer
Servicing of Housing Loans
Under the servicing agreement, St.George Bank will be appointed as the
initial servicer of the housing loans. The day to day servicing of the housing
loans will be performed by the servicer at St.George Bank's head office in
Kogarah and at St.George Bank's retail branches and telephone banking and
marketing centers. Servicing procedures include managing customer inquiries,
monitoring compliance with the loan features and rights applicable to these
loans, and the arrears management of overdue loans. 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. See "Description of the Transaction Documents - The Servicing
Agreement."
Collection and Enforcement Procedures
Pursuant to the terms of the housing loans, borrowers must make the
minimum repayment due under the terms and conditions of the housing loans, on or
before each monthly installment due date. St.George Bank credits repayments to
an individual housing loan on the date of its receipt. Interest is accrued daily
on the balance outstanding after close of business and charged monthly to each
relevant loan account.
When a housing loan is 15 days delinquent, it is identified in the
mortgage service system and transferred to the collection system. The collection
system identifies all accounts which are overdue and provides detailed lists of
those loans for action and follow-up.
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The collection system allocates overdue loans to designated collection
officers within St.George Bank. The loans that have been delinquent longer are
allocated to the more experienced collection officers.
Actions taken by the bank in relation to delinquent accounts will vary
depending on the following elements and, if applicable, with the input of the
mortgage insurer:
o arrears history;
o equity in the property; and
o arrangements made with the borrower to meet overdue payments.
If satisfactory arrangements cannot be made to rectify a delinquent
housing loan, St.George Bank will issue legal notices and institute recovery
action by enforcing the mortgage security. Collection officers, under legal
assistance, manage this process and pursue many sources of recovery including
the following:
o guarantees;
o government assistance schemes;
o mortgagee sale; and
o claims on mortgage insurance.
It should be noted that St.George Bank reports all actions that it
takes on overdue housing loans to the mortgage insurer in accordance with the
terms of the mortgage insurance policies.
Collection and Foreclosure Process
When a loan is 15 days delinquent, a computer generated letter is sent
to the borrower advising of the situation and requesting that payment be made to
rectify the situation. When an account reaches 30 days delinquent, a second
letter is sent to the borrower. After a housing loan is 30 days delinquent, any
written contact is also followed up by a telephone call.
When a loan reaches 60 days delinquent, a default notice is sent
advising the borrower if the matter is not rectified within a period of 31 days,
the bank is entitled to commence enforcement proceedings without further notice.
Usually a statement of claim will be issued to a borrower on an account which is
91 days delinquent. At 120 days delinquent, the bank applies for judgement in a
Supreme Court. Generally at 150 days delinquent, the bank applies for a writ of
possession and by 170 days the sheriff sets an eviction date. Appraisals and
valuations are ordered and a reserve price is set for sale via auction or
private treaty. In most instances if the account continues to be in arrears, an
offer on the property would be sought and accepted and the property settled.
These time frames assume that the borrower has either taken no action or has not
honored any commitments made in relation to the delinquency.
It should also be noted that the mortgagee's ability to exercise its
power of sale on the mortgaged property is dependent upon the statutory
restrictions of the relevant state or territory as to notice requirements. In
addition, there may be factors outside the control of the mortgagee such as
whether the mortgagor contests the sale and the market conditions at the time of
sale. These issues may affect the length of time between the decision of the
mortgagee to exercise its power of sale and final completion of the sale.
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Under St.George Bank's housing loan product specifications, variable
rate of interest loans enable a borrower to have a payment holiday where the
borrower has made excess payments. The excess payments are the difference
between the total amount paid by the borrower and the amount of the minimum
payments required. In accordance with the product specification, if a borrower
with excess payments fails to make some or all of a minimum payment, the
servicer will apply the excess payments against that missed payment. As such,
the relevant housing loan will not be considered delinquent until such time as
when the amount of missed payments is greater than the excess payments.
The arrears and security enforcement procedures may change over time as
a result of business change, or legislative and regulatory changes.
Servicer Delinquency Experience
In January 1997, St.George Bank merged with the Advance Bank Group to
form the fifth largest banking group in Australia. Prior to this time,
delinquency data was separately reported by each banking organization.
Consequently, the following tables summarize delinquency and foreclosure
experience, respectively, for loans serviced by St.George Bank prior to and
after the merger. All loans in the securitised pool that were settled prior to
September 1997 were originated by St.George Bank.
Table 1 summarizes the delinquency and foreclosure experience of loans
originated by St.George Bank. Table 2 summarizes the combined experience of
St.George Bank loans and loans acquired in the merger with Advance Bank. Both
tables express the number of delinquent loans at period end as a percentage of
the total number of loans serviced.
Table 1: St.George Bank One-to-Four-Family Residential Loans
<TABLE>
<CAPTION>
March September March September March September March
31, 1994 30, 1994 31, 1995 30, 1995 31, 1996 30, 1996 31, 1997
---------- ---------- ---------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Portfolio At:
Outstanding Balance (A$000's) 9,226,192 9,630,713 9,981,940 10,442,786 10,695,313 11,131,152 11,690,990
---------- ---------- ---------- ----------- ----------- ----------- -----------
Number of Loans Outstanding 147,104 151,488 156,258 165,301 168,417 170,980 175,368
---------- ---------- ---------- ----------- ----------- ----------- -----------
Percentage of Delinquent Loans:
30 to 59 days 1.15% 0.81% 0.92% 0.91% 1.14% 1.34% 1.20%
60 to 89 days 0.46% 0.34% 0.31% 0.34% 0.41% 0.53% 0.49%
90 to 119 days 0.20% 0.15% 0.13% 0.14% 0.21% 0.18% 0.24%
120 days or more 0.28% 0.21% 0.23% 0.24% 0.33% 0.33% 0.45%
---------- ---------- ---------- ----------- ----------- ----------- -----------
Total Delinquencies 2.09% 1.51% 1.59% 1.63% 2.09% 2.38% 2.38%
Foreclosures 0.03% 0.04% 0.03% 0.03% 0.05% 0.06% 0.04%
---------- ---------- ---------- ----------- ----------- ----------- -----------
Total Delinquencies and
Foreclosures 2.12% 1.55% 1.62% 1.66% 2.14% 2.44% 2.42%
---------- ---------- ---------- ----------- ----------- ----------- -----------
Period Ending:
Loan Losses as a % of Total
Outstanding Balance* N/A** N/A** N/A** N/A** 0.000% 0.004% 0.001%
---------- ---------- ---------- ----------- ----------- ----------- -----------
---------- ---------- ---------- ----------- ----------- ----------- -----------
</TABLE>
*Loan losses for each period were annualized and are expressed as a percentage
of the average outstanding balance for the period.
**Loan loss information is not available prior to the 6 month period ending
March 1996.
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Table 2: St.George Bank One-to-Four-Family Residential Loans
<TABLE>
<CAPTION>
September March September March June
30, 1997 31, 1998 30, 1998 31, 1999 30, 1999
----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Portfolio At:
Outstanding Balance (A$000's) 25,718,747 26,092,849 27,166,041 27,220,578 27,700,955
----------- ----------- ----------- ----------- -----------
Number of Loans Outstanding 361,621 363,694 368,913 366,810 365,513
% of Loans Delinquent:
30 to 59 days 1.12% 1.26% 1.01% 1.31% 1.10%
60 to 89 days 0.31% 0.37% 0.27% 0.33% 0.36%
90 to 119 days 0.21% 0.23% 0.21% 0.17% 0.20%
120 days or more 0.27% 0.29% 0.19% 0.19% 0.19%
----------- ----------- ----------- ----------- -----------
Total Delinquencies 1.91% 2.15% 1.68% 2.00% 1.85%
Foreclosures 0.05% 0.05% 0.06% 0.04% 0.03%
----------- ----------- ----------- ----------- -----------
Total Delinquencies and
Foreclosures 1.96% 2.20% 1.74% 2.04% 1.88%
----------- ----------- ----------- ----------- -----------
Period Ending:
Loan Losses as a % of Total
Outstanding Balance* 0.006% 0.006% 0.006% 0.003% 0.003%
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
</TABLE>
*Loan losses for each period were annualized and are expressed as a percentage
of the average outstanding balance for the period.
There can be no assurance that the delinquency and foreclosure
experience with respect to the housing loans comprising the housing loan pool
will correspond to the delinquency and foreclosure experience of the servicer's
mortgage portfolio set forth in the foregoing table. Indeed, the statistics
shown in the preceding table represent the delinquency and foreclosure
experience for the total one-to-four-family residential mortgage portfolios for
each of the years presented, whereas the aggregate delinquency and foreclosure
experience on the housing loans will depend on the results obtained over the
life of the housing loan pool. In addition, the foregoing statistics include
mortgage loans with a variety of payment and other characteristics that may not
correspond to those of the housing loans. Moreover, if the one-to-four-family
real estate market should experience an overall decline in property values such
that the principal balances of the housing loans comprising the housing loan
pool become equal to or greater than the value of the related mortgaged
properties, the actual rates of delinquencies and foreclosures could be
significantly higher than those previously experienced by the servicer. In
addition, adverse economic conditions, which may or may not affect real property
values, may affect the timely payment by borrowers of scheduled payments of
principal and interest on the housing loans and, accordingly, the rates of
delinquencies, foreclosures, bankruptcies and losses with respect to the housing
loan pool. You should note that Australia experienced a period of relatively low
and stable interest rates during the period covered in the preceding tables. If
interest rates were to rise, it is likely that the rate of delinquencies and
foreclosures would increase.
St.George Bank Year 2000 Program
St.George Bank's Year 2000 Efforts
St.George Bank, as well as all the parties to the transaction
documents, are faced with the task of addressing the Year 2000 issue. The Year
2000 issue is the result of computer programs being written using two digits
rather than four to define the
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applicable year and other programming techniques which limit date calculations
or assign special meanings to some dates. Any of St.George Bank's computer
systems or any computer systems of the other parties to the transaction
documents that have date sensitive software or microprocessors may recognize a
date using "00" as the year 1900 rather than the year 2000. This could result in
a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to account for payments on
the housing loans, process transactions, send bills or operate servicing or
collection facilities. In addition, the Year 2000 issue could affect the ability
of borrowers to receive bills for payments on the housing loans sent by
St.George Bank or make payments on these bills. In addition, if the issuer
trustee or those vendors on whom it relies does not have a computer system that
is Year 2000 compliant by the year 2000, the issuer trustee's ability to make
distributions on the notes may be materially and adversely affected. In
addition, a substantial part of St.George Bank's operations and service delivery
to partners and customers could be rendered inoperable if public utility
services fail.
Under the direction of St.George Bank's Chief Executive Officer, with
sponsorship by the Chief General Manager Information Technology, an initial
assessment of Year 2000 compliance of St.George Bank's systems commenced in the
middle of 1996. Following a report to St.George Bank's board of directors, the
directors requested that a formal program structure be formed and overseen by a
Year 2000 Steering Committee, chaired by St.George Bank's Chief Executive
Officer. A Year 2000 program office has been established to centrally drive and
guide all projects within the Year 2000 program across the full breadth of the
St.George Bank group. The program office monitors progress of Year 2000
initiatives and reports monthly to the Year 2000 Steering Committee.
The Chief Executive Officer is kept informed of project progress and
updates are provided, on a regular basis, to St.George Bank's Board and
St.George Bank's Audit Committee.
The Year 2000 Program is divided into five key areas:
1. Critical Applications;
2. IT Infrastructure;
3. Business Units;
4. Property; and
5. Contingency Planning.
The internal audit of St.George Bank's program is complemented by
St.George Bank's external auditors as well as independent consultants to ensure
both the timeliness and the quality of work. St.George Bank provides regular
updates to regulatory authorities such as the Australian Stock Exchange and the
Australian Prudential Regulation Authority.
St.George Bank's approach to achieving compliance of its systems and
services is to take reasonable steps to satisfy itself that its systems and
services will not be materially affected by the year 2000 date change. This
includes pursuing from third parties on whom St.George Bank is critically
dependent, statements of compliance relating to their systems and services.
The St.George Bank Year 2000 Program has approximately 210 personnel
employed either as full-time employees or contractors. More staff from other
divisions of St.George Bank are also involved in Year 2000 work as commissioned
by the Program.
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State of Readiness
The three preliminary phases, assessment, audit and inventory, were
completed during 1997 and 1998. Remediation of critical St.George Bank
applications was largely completed in October 1998 and finalized during March
1999. This included preliminary testing with a variety of year 2000 dates which
were inserted into St.George Bank's IT systems and software. Compliance testing
in a year 2000 environment was completed on schedule on July 31, 1999.
Regression testing to take account of further changes introduced by the
integration resulting from the merger of St.George Bank with Advance Bank and
Bank SA is scheduled for completion by September 30, 1999.
As of August 25, 1999, progress in each of the five key areas is as
follows:
1. Critical Applications.
All target critical applications have achieved compliance.
2. IT Infrastructure, including all mainframe, networking, internal
telecommunications, server and desktop based systems:
o all mainframe and associated components have achieved
compliance;
o all communications management equipment has achieved
compliance;
o all network services have achieved compliance;
o roll out of a standard operating environment desktop is in
progress, scheduled for completion by the third quarter of
1999; and
o systems platform testing has been completed as part of the
compliance testing of applications.
3. Business Units.
Within St.George Bank's business units, the Year 2000 Program
investigated the following major categories of inventory:
o Business services supplied by external vendors:
The process for obtaining compliance statements from all
vendors providing critical external services was completed in
January 1999. Service vendors who have not been able to
provide acceptable evidence of compliance are being monitored
and pursued. St.George Bank is either replacing service
vendors who continue to provide unsatisfactory responses or
developing appropriate contingency plans for such service
vendors where suitable alternate service suppliers are not
available.
o Major Customers:
All commercial exposures greater than A$1,000,000 and Treasury
customers have been surveyed to determine their level of Year
2000 readiness. To date, 98% of these customers have provided
a response that is satisfactory to St.George Bank.
Customers that have not satisfied St.George Bank of their
compliance status will be contacted and reviewed. Should the
client not have satisfied St.George Bank of its compliance
status, action will be commenced to limit activity or remove
the company from the customer list until an acceptable level
of risk can be attained.
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References to St.George Bank being "satisfied" as regards
customer compliance are based wholly on a review of answers to
questionnaires or materials published by that party. St.George
Bank has not conducted a Year 2000 audit of such parties and
is not certifying their preparedness.
4. Property.
St.George Bank currently occupies leased and owned premises in each
Australian state and territory. Remediation and testing work on these buildings
is complete.
5. Contingency Planning.
Critical business processes were identified and impact assessed in
terms of business closure, liquidity, external factors, occupational health and
safety, operations, customers, counterparties, litigation, reputation and
regulation categories. Contingency plans are completed for critical processes
with high risk of failure.
Contingency plans are completed for buildings over 5,000 square meters
in size with complex building systems, which are critical to the continuity of
St.George Bank's operations, such as those which house core computer systems,
and building services where major tenants are located. The plans take into
account building systems and utilities dependencies.
Contingency plans are completed for IT infrastructure and applications.
Contingency strategies include:
o Full test of disaster recovery test;
o Operating branches off line;
o Retain batch file inputs; and
o Ensure suitable disaster recovery and development testing
environments are available.
The following additional activities are scheduled for the second half
of 1999:
o Ongoing maintenance of contingency planning activities in
conjunction with changing risk assessment; and
o Appropriate rehearsal of contingency plans.
Development of Year 2000 transition management plan including:
o Establishment of command centre;
o Integration of contingency plans with ongoing risk mitigation
work; and
o Testing systems over the date change weekend.
IT Moratorium
A freeze on changes to St.George Bank's IT environments, such as
software, hardware and networks, has been imposed from October 1, 1999 to
January 15, 2000. In addition, clearing systems are subject to an Australian
Payments Clearing Association mandated freeze. Both these actions are intended
to minimize and manage the risk of Year 2000 errors being re-introduced to the
IT environment.
Interbank Testing
St.George Bank participated in the testing of electronic payments
clearing systems with nominated external testing partners as requested by the
Australian Payments Clearing Association on behalf of the Australian Prudential
Regulatory Authority.
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St.George Bank has successfully completed the five designated "test streams"
with nominated industry partners. A further period of "Preservation Testing" has
been scheduled for August and September 1999 by the Australian Payments Clearing
Association.
Purchasing Policy and New Systems Development
All activities relating to the acquisition or construction of new IT
systems are governed by corporate policy requiring that any such new items are
Year 2000 compliant at the time of their deployment into production.
Year 2000 Information and Readiness Disclosure Act
The information in this section is intended to be a "Year 2000
Readiness Disclosure" as that term is defined in the Year 2000 Information and
Readiness Disclosure Act.
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 notes under
the stated assumptions and is not a prediction of the prepayment rate that might
actually be experienced.
General
The rate of principal payments and aggregate amount of distributions on
the notes and the yield to maturity of the notes will relate 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 the seller. Subject, in the case of fixed rate housing loans, to the payment
of applicable fees, the housing loans may be prepaid by the mortgagors at any
time.
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 early distributions of principal
amounts on the notes. Prepayments of principal may occur in the following
situations:
o refinancing by mortgagors with other financiers;
o receipt by the issuer trustee of enforcement proceeds due to a
mortgagor having defaulted on its housing loan;
o receipt by the issuer trustee of insurance proceeds in
relation to a claim under a mortgage insurance policy in
respect of a housing loan;
o repurchase by the seller as a result of a breach by it of
certain representations, less the principal balance of any
related substituted loan, if any;
o receipt by the trust of any net amount attributable to
principal from another trust established under the master
trust deed with respect to the substitution of a housing loan;
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o repurchase of the housing loans as a result of an optional
termination or a redemption for taxation or other reasons;
o receipt of proceeds of enforcement of the security trust deed
prior to the final maturity date of the notes; or
o receipt of proceeds of the sale of housing loans if the trust
is terminated while notes are outstanding, for example, if
required by law, and the housing loans are then either
o repurchased by St.George Bank under its right of
first refusal; or
o sold to a third party.
The prepayment amounts described above are reduced by:
o principal draws;
o repayment of redraw advances; and
o the Redraw Retention Amount retained in the
collection account.
Since the rate of payment of principal of the housing loans cannot be
predicted and will depend on future events and a variety of factors, no
assurance can be given to you as to this rate of payment or the rate of
principal prepayments. The extent to which the yield to maturity of any note may
vary from the anticipated yield will depend upon the following factors:
o the degree to which a note is purchased at a discount or
premium; and
o the degree to which the timing of payments on the note is
sensitive to prepayments, liquidations and purchases of the
housing loans.
A wide variety of factors, including economic conditions, the
availability of alternative financing and homeowner mobility may affect the
trust's prepayment experience with respect to the housing loans. In particular,
under Australian law, unlike the law of the United States, interest on loans
used to purchase a principal place of residence is not ordinarily deductible for
taxation purposes.
Weighted Average Lives
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 the note is reduced to zero.
Usually, greater than anticipated principal prepayments will increase
the yield on notes purchased at a discount and will decrease the yield on notes
purchased at a premium. The effect on your yield due to principal prepayments
occurring at a rate that is faster or slower than the rate you anticipated will
not be entirely offset by a subsequent similar reduction or increase,
respectively, in the rate of principal payments. The amount and timing of
delinquencies and defaults on the housing loans and the recoveries, if any, on
defaulted housing loans and foreclosed properties will also affect the weighted
average life of the notes.
The following tables are based on a constant prepayment rate model.
Constant prepayment rate represents an assumed constant rate of prepayment each
month, expressed as a per annum percentage of the principal balance of the pool
of mortgage
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loans for that month. Constant prepayment rate 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 in your pool. Neither of the seller nor the manager believes that
any existing statistics of which it is aware provide a reliable basis for
noteholders to predict the amount or timing of receipt of housing loan
prepayments.
The following tables are based upon the assumptions in the following
paragraph, and not upon the actual characteristics of the housing loans. Any
discrepancies between characteristics of the actual housing loans and the
assumed housing loans may have an effect upon the percentages of the principal
balances outstanding and weighted average lives of the notes set forth in the
tables. Furthermore, since these discrepancies exist, principal payments on the
notes may be made earlier or later than the tables indicate.
For the purpose of the following tables, it is assumed that:
o the housing loan pool consists of fully-amortizing housing
loans having the following approximate characteristics:
<TABLE>
<CAPTION>
Initial Remaining
Principal Interest Original Term Term to
Pool Amount Rate to Maturity Maturity
Number A$ % in Months in Months
------ -------------- -------- ------------- ----------
<S> <C> <C> <C> <C>
1 44,352,472.23 6.70 125 95
2 98,608,564.04 6.49 187 158
3 243,131,649.09 6.50 259 222
4 287,825,862.90 6.54 299 258
5 840,438,858.22 6.42 301 284
6 71,913,953.65 6.49 360 334
Total 1,586,271,360.13
</TABLE>
o the cut-off date is the close of business on August 17, 1999;
o the closing date for the notes is September 22, 1999;
o payments on the notes are made on the quarterly payment date,
regardless of the day on which payment actually occurs,
commencing in November 1999 and are made in accordance with
the priorities described in this prospectus;
o the housing loans' prepayment rates are equal to the
respective percentages of constant prepayment rate indicated
in the tables;
o the scheduled monthly payments of principal and interest on
the housing loans will be timely delivered on the first day of
each month, except in the month of August, in which case,
payments are calculated based on a pro rata share of one
month's collections, assuming a start date of the close of
business August 17, 1999, with no defaults;
o there are no redraws, substitutions or payment holidays with
respect to the housing loans;
o there are no releases from the liquidity reserve;
o all prepayments are prepayments in full received on the last
day of each month and include 30 days' interest on the
prepayment;
o principal collections are distributed according to the rules
of distribution set forth in this prospectus;
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o all payments under the swaps are made as scheduled;
o the manager does not direct the issuer trustee to exercise its
right of optional redemption of the notes, except with respect
to the line titled "Weighted Average Life - To Call (Years)";
and
o the exchange rate is US$0.6304=A$1.00.
It is not likely that the housing loans will pay at any assumed
constant prepayment rate to maturity or that all housing loans will prepay at
the same rate. In addition, the diverse remaining terms to maturity of the
housing loans could produce slower or faster distributions of principal than
indicated in the tables at the assumed constant prepayment rate 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 in this section. You are urged to make your investment decisions on a
basis that includes your determination as to anticipated prepayment rates under
a variety of the assumptions discussed in this prospectus as well as other
relevant assumptions.
In the following tables, the percentages have been rounded to the
nearest whole number and the weighted average life of a class of notes is
determined by the following three step process:
o multiplying the amount of each payment of principal thereof by
the number of years from the date of issuance to the related
payment date,
o summing the results, and
o dividing the sum by the aggregate distributions of principal
referred to in the first clause above and rounding to two
decimal places.
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<PAGE>
Percent of Initial Principal Outstanding at the Following Percentages
of Constant Prepayment Rate
Class A-1 Notes
<TABLE>
<CAPTION>
Date 0% 20% 22% 25% 30% 35%
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Initial Percent....... 100 100 100 100 100 100
11/15/99............... 98 84 82 80 75 71
11/15/00............... 90 14 6 0 0 0
11/15/01............... 81 0 0 0 0 0
11/15/02............... 71 0 0 0 0 0
11/15/03............... 61 0 0 0 0 0
11/15/04............... 50 0 0 0 0 0
11/15/05............... 39 0 0 0 0 0
11/15/06............... 26 0 0 0 0 0
11/15/07............... 14 0 0 0 0 0
11/15/08............... 1 0 0 0 0 0
11/15/09............... 0 0 0 0 0 0
11/15/10............... 0 0 0 0 0 0
11/15/11............... 0 0 0 0 0 0
11/15/12............... 0 0 0 0 0 0
11/15/13............... 0 0 0 0 0 0
11/15/14............... 0 0 0 0 0 0
11/15/15............... 0 0 0 0 0 0
11/15/16............... 0 0 0 0 0 0
11/15/17............... 0 0 0 0 0 0
11/15/18............... 0 0 0 0 0 0
11/15/19............... 0 0 0 0 0 0
11/15/20............... 0 0 0 0 0 0
11/15/21............... 0 0 0 0 0 0
11/15/22............... 0 0 0 0 0 0
11/15/23............... 0 0 0 0 0 0
11/15/24............... 0 0 0 0 0 0
11/15/25............... 0 0 0 0 0 0
11/15/26............... 0 0 0 0 0 0
Weighted Average Life--
To Call (Years) 4.79 0.74 0.68 0.61 0.51 0.44
To Maturity (Years) 5.10 0.74 0.68 0.61 0.51 0.44
</TABLE>
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<PAGE>
Percent of Initial Principal Outstanding at the Following Percentages
of Constant Prepayment Rate
Class A-2 Notes
<TABLE>
<CAPTION>
Date 0% 20% 22% 25% 30% 35%
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Initial Percent........ 100 100 100 100 100 100
11/15/99............... 100 100 100 100 100 100
11/15/00............... 100 100 100 98 88 79
11/15/01............... 100 78 73 65 53 41
11/15/02............... 100 56 49 41 28 17
11/15/03............... 100 38 32 23 12 2
11/15/04............... 100 24 18 10 0 0
11/15/05............... 100 13 8 1 0 0
11/15/06............... 100 4 0 0 0 0
11/15/07............... 100 0 0 0 0 0
11/15/08............... 100 0 0 0 0 0
11/15/09............... 94 0 0 0 0 0
11/15/10............... 86 0 0 0 0 0
11/15/11............... 78 0 0 0 0 0
11/15/12............... 70 0 0 0 0 0
11/15/13............... 62 0 0 0 0 0
11/15/14............... 54 0 0 0 0 0
11/15/15............... 45 0 0 0 0 0
11/15/16............... 35 0 0 0 0 0
11/15/17............... 25 0 0 0 0 0
11/15/18............... 16 0 0 0 0 0
11/15/19............... 7 0 0 0 0 0
11/15/20............... 0 0 0 0 0 0
11/15/21............... 0 0 0 0 0 0
11/15/22............... 0 0 0 0 0 0
11/15/23............... 0 0 0 0 0 0
11/15/24............... 0 0 0 0 0 0
11/15/25............... 0 0 0 0 0 0
11/15/26............... 0 0 0 0 0 0
Weighted Average Life--
To Call (Years) 7.15 3.88 3.56 3.14 2.60 2.19
To Maturity (Years) 15.49 3.90 3.56 3.14 2.60 2.19
</TABLE>
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<PAGE>
Percent of Initial Principal Outstanding at the Following Percentages
of Constant Prepayment Rate
Class A-3 Notes
<TABLE>
<CAPTION>
Date 0% 20% 22% 25% 30% 35%
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Initial Percent....... 100 100 100 100 100 100
11/15/99............... 100 100 100 100 100 100
11/15/00............... 100 100 100 100 100 100
11/15/01............... 100 100 100 100 100 100
11/15/02............... 100 100 100 100 100 100
11/15/03............... 100 100 100 100 100 100
11/15/04............... 100 100 100 100 100 68
11/15/05............... 100 100 100 100 67 40
11/15/06............... 100 100 99 74 43 23
11/15/07............... 100 90 72 51 27 13
11/15/08............... 100 67 52 35 16 6
11/15/09............... 100 50 37 23 9 2
11/15/10............... 100 36 26 15 4 0
11/15/11............... 100 25 17 9 1 0
11/15/12............... 100 17 11 5 0 0
11/15/13............... 100 11 7 2 0 0
11/15/14............... 100 7 3 0 0 0
11/15/15............... 100 3 1 0 0 0
11/15/16............... 100 1 0 0 0 0
11/15/17............... 100 0 0 0 0 0
11/15/18............... 100 0 0 0 0 0
11/15/19............... 100 0 0 0 0 0
11/15/20............... 91 0 0 0 0 0
11/15/21............... 56 0 0 0 0 0
11/15/22............... 21 0 0 0 0 0
11/15/23............... 4 0 0 0 0 0
11/15/24............... 2 0 0 0 0 0
11/15/25............... 0 0 0 0 0 0
11/15/26............... 0 0 0 0 0 0
Weighted Average Life--
To Call (Years) 7.15 7.15 7.15 7.06 5.83 5.05
To Maturity (Years) 22.49 10.87 10.01 8.90 7.42 6.28
</TABLE>
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Use of Proceeds
The net proceeds from the sale of the Class A notes, after being
exchanged pursuant to the currency swap, will amount to A$ and will be used by
the issuer trustee to acquire from the seller equitable title to the housing
loans and related mortgages.
Legal Aspects of the Housing Loans
The following discussion is a summary of the material legal aspects of
Australian retail housing loans and mortgages. It is not an exhaustive analysis
of the relevant law. Some of the legal aspects are governed by the law of the
applicable State or Territory. Laws may differ between States and Territories.
The summary does not reflect the laws of any particular jurisdiction or cover
all relevant laws of all jurisdictions in which a mortgaged property may be
situated, although it reflects the material aspects of the laws of New South
Wales, without referring to any specific legislation of that State.
General
There are two parties to a mortgage. The first party is the mortgagor,
who is either the borrower and homeowner or, where the relevant loan is
guaranteed and the guarantee is secured by a mortgage, the guarantor. The
mortgagor grants the mortgage over their property. The second party is the
mortgagee, who is the lender. 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. If the housing loan is not secured by a first
ranking mortgage the seller will equitably assign to the issuer trustee all
prior ranking registered mortgages in relation to that housing loan. Each
borrower under the housing loans is prohibited under its loan documents from
creating another mortgage or other security interest over the relevant mortgaged
property without the consent of St.George Bank.
Nature of Housing Loans as Security
There are a number of different forms of title to land in Australia.
The most common form of title in Australia is "Torrens title." Only land which
is Torrens title land may be used to secure housing loans, and thus constitute
mortgaged property.
"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, registered easements and other
dealings to which it is subject. The certificate is conclusive evidence, except
in limited circumstances, such as fraud, of the matters stated in it.
Some Torrens title property securing housing loans and thus comprised
in the mortgaged property, will be "strata title" or "urban leasehold."
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Strata title
"Strata title" was developed to enable 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 apartment unit. 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 a "body corporate" for
the benefit of the individual proprietors. All proprietors are members of the
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.
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 an apartment 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 title
known as urban leasehold. Mortgaged property in that jurisdiction comprises a
Crown lease and developments on the land are subject to the terms of that lease.
Any such lease:
o 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
o where it involves residential property, is 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.
Leasehold property may become subject to native title claims. Native
title has only quite recently been recognized 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 would 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.
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 some issues involved in taking
security over land.
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Under Torrens title, registration of a mortgage using the prescribed
form executed by the mortgagor is required in order for the mortgagee to obtain
both 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 or registered title. However, registration does not transfer title in the
property and 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 creditor or proposed creditor 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 his or her debt, a discharge executed by
the mortgagee is lodged with the relevant registrar by the mortgagor or the
mortgagee and the mortgage is noted as having been released.
St.George Bank as Mortgagee
St.George Bank is, and until a Title Perfection Event occurs intends to
remain, the registered mortgagee of all the mortgages. The 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 St.George Bank, as servicer, 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 St.George
Bank, to be registered as mortgagee of the mortgages. Until that registration is
achieved, the issuer trustee or the manager is entitled, but not obligated, to
lodge caveats on the register publicly to notify its interest in the mortgages.
Enforcement of Registered Mortgages
Subject to the discussion in this section, if a borrower defaults under
a housing loan the loan documents provide that all moneys under the housing 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:
o 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.
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o The mortgagee may, in limited circumstances, lease the property to
third parties.
o The mortgagee may foreclose on the property. Under foreclosure
procedures, the mortgage extinguishes 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.
o The mortgagee may appoint a receiver to deal with income from the
property or exercise other rights delegated to the receiver by the
mortgagee. A receiver is the agent of the mortgagor and so, unlike
when the mortgagee enters possession of property, in theory the
mortgagee is not liable for the receiver's acts or as occupier of the
property. In practice, however, the receiver will require indemnities
from the mortgagee that appoints it.
o 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 in registered mortgages under
the relevant Torrens title legislation. The Torrens title legislation
prescribes certain 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 the
absolute owner of the property.
A mortgagee's ability to call in 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 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 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.
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Bankruptcy
The insolvency of a natural person is governed by the provisions of the
Bankruptcy Act 1966 of Australia, 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, or file a
claim, in the bankruptcy proceeding as an unsecured creditor in a number of
circumstances, 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:
o the disposition was made to defraud creditors; or
o the disposition was made by an insolvent debtor within 6 months of the
petition for bankruptcy and that disposition 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:
o 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;
o within a prescribed period prior to the commencement of the winding up
of the company; and
o when 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 takes 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
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pre-existing mortgages. To the extent that the issuer trustee or a receiver
appointed on its behalf incurs any such liabilities, it will be entitled to be
indemnified out of the assets of the trust.
Insolvency Considerations
The current transaction is designed to mitigate insolvency risk. For
example, the equitable assignment of the housing loans by St.George Bank to the
issuer trustee should ensure that the housing loans are not assets available to
the liquidator or creditors of St.George Bank in the event of an insolvency of
St.George Bank. 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 "Description of the Transaction Documents - Security
Trust Deed - Enforcement of the Charge". 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. The proceeds of enforcement of the security trust
deed are to be applied by the security trustee as set out in "Description of the
Transaction Documents - The Security Trust Deed - Priorities under the Security
Trust Deed." If the proceeds from enforcement of the security trust deed are not
sufficient to redeem the Class A notes in full, some or all of the Class A
noteholders will incur a loss.
Tax Treatment of Interest on 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 loans and other non-capital expenditures
relating to non-owner occupied properties that generate taxable income are
generally allowable as tax deductions.
Consumer Credit Legislation
Under the Consumer Credit Legislation a borrower has the right to apply to
a court to do the following, among other things:
o vary the terms of a housing loan on the grounds of hardship or that it
is an unjust contract or that its material terms were not disclosed;
o reduce or cancel any interest rate payable on a housing loan if the
interest rate is changed in a way which is unconscionable;
o have certain provisions of a housing loan which are in breach of the
legislation declared unenforceable;
o obtain an order for a civil penalty against the seller, the amount of
which may be set off against any amount payable by the borrower under
the applicable housing loan; or
o obtain restitution or compensation from the seller in relation to
breaches of the Consumer Credit Legislation in relation to a housing
loan.
The issuer trustee will become liable for compliance with the Consumer
Credit Legislation if it acquires legal title to the housing loans. It will take
this legal title
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subject to any breaches of the Consumer Credit Legislation by the seller. In
particular, once the issuer trustee acquires legal title it may become liable to
orders of the type referred to in the last two bullet points listed above in
relation to breaches of the Consumer Credit Legislation. Any order under the
Consumer Credit Legislation 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
to you under the notes. The seller has indemnified the issuer trustee against
any loss the issuer trustee may incur as a result of a failure by the seller to
comply with the Consumer Credit Legislation in respect of a mortgage.
United States Federal Income Tax Matters
Overview
The following is a summary of all material United States federal income tax
consequences of the purchase, ownership and disposition of the Class A notes by
investors who are subject to United States federal income tax. This summary is
based upon current provisions of the Internal Revenue Code of 1986, as amended,
proposed, temporary and final Treasury regulations under the Code, and published
rulings and court decisions, all of which are subject to change, possibly
retroactively, or to a different interpretation at a later date by a court or by
the IRS. The parts of this summary which relate to matters of law or legal
conclusions represent the opinion of Mayer, Brown & Platt, special United States
federal tax counsel for the seller, and are as qualified in this summary. We
have not sought and will not seek any rulings from the IRS about any of the
United States federal income tax consequences we discuss, and we cannot assure
you that the IRS will not take contrary positions.
Mayer, Brown & Platt has prepared or reviewed the statements under the
heading "United States Federal Income Tax Matters" and is of the opinion that
these statements discuss all material United States federal income tax
consequences to investors generally of the purchase, ownership and disposition
of the Class A notes. However, the following discussion does not discuss and
Mayer, Brown & Platt is unable to opine as to the unique tax consequences of the
purchase, ownership and disposition of the Class A notes by investors that are
given special treatment under the United States federal income tax laws,
including:
o banks and thrifts;
o insurance companies;
o regulated investment companies;
o dealers in securities;
o investors that will hold the notes as a position in a "straddle" for
tax purposes or as a part of a "synthetic security," "conversion
transaction" or other integrated investment comprised of the notes and
one or more other investments;
o foreign investors;
o trusts and estates; and
o pass-through entities, the equity holders of which are any of the
foregoing.
Additionally, the discussion regarding the Class A notes is limited to the
United States federal income tax consequences to the initial investors and not
to a purchaser
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in the secondary market and to investors who will hold the Class A notes as
"capital assets" within the meaning of Section 1221 of the Code.
It is suggested that prospective investors consult their own tax advisors
about the United States federal, state, local, foreign and any other tax
consequences to them of the purchase, ownership and disposition of the Class A
notes, including the advisability of making any election discussed under "Market
Discount".
The issuer trustee will be reimbursed for any United States federal income
taxes imposed on it in its capacity as trustee of the trust out of the assets of
the trust. Also, based on the representation of the manager that the trust does
not and will not have an office in the United States, and that the trust is not
conducting, and will not conduct any activities in the United States, other than
in connection with its issuance of the Class A notes, in the opinion of Mayer,
Brown & Platt, the issuer trustee will not be subject to United States federal
income tax.
General
Mayer, Brown & Platt is of the opinion that you will be required to report
interest income on the Class A notes you hold in accord with your method of
accounting.
Sale of Notes
Mayer, Brown & Platt is of the opinion that if you sell a Class A note, you
will recognize gain or loss equal to the difference between the amount realized
on the sale, other than amounts attributable to, and taxable as, accrued
interest, and your adjusted tax basis in the Class A note. Your adjusted tax
basis in a note will equal your cost for the Class A note, decreased by any
amortized premium and any payments other than interest made on the Class A note
and increased by any market discount or original issue discount included in your
income. Any gain or loss will generally be a capital gain or loss, other than
amounts representing accrued interest or market discount, and will be long-term
capital gain or loss if the Class A note was held as a capital asset for more
than one year. In the case of an individual taxpayer, the maximum long-term
capital gains tax rate is lower than the maximum ordinary income tax rate. Any
capital losses realized may be deducted by a corporate taxpayer only to the
extent of capital gains and by an individual taxpayer only to the extent of
capital gains plus $3,000 of other U.S. income.
Market Discount
In the opinion of Mayer, Brown & Platt, you will be considered to have
acquired a Class A note at a "market discount" to the extent the remaining
principal amount of the note exceeds your tax basis in the note, unless the
excess does not exceed a prescribed de minimis amount. If the excess exceeds the
de minimis amount, you will be subject to the market discount rules of Sections
1276 and 1278 of the Code with regard to the note.
In the case of a sale or other disposition of a Class A note subject to the
market discount rules, Section 1276 of the Code requires that gain, if any, from
the sale or disposition be treated as ordinary income to the extent the gain
represents market discount accrued during the period the note was held by you,
reduced by the amount of accrued market discount previously included in income.
In the case of a partial principal payment of a Class A note subject to the
market discount rules, Section 1276 of the Code requires that the payment be
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included in ordinary income to the extent the payment does not exceed the
market discount accrued during the period the note was held by you, 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 with principal payable in two or more installments, such as the
Class A notes, the manner in which market discount is to be accrued will be
described in Treasury regulations not yet issued. Until these Treasury
regulations are issued, you should follow the explanatory conference committee
Report to the Tax Reform Act of 1986 for your accrual of market discount. This
Conference Committee Report indicates that holders of these obligations may
elect to accrue market discount either on the basis of a constant interest rate
or as follows:
o for those obligations that have original issue discount, market
discount shall be deemed to accrue in proportion to the accrual of
original issue discount for any accrual period; and
o for those obligations which do not have original issue discount, 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 at the beginning of the accrual
period.
Under Section 1277 of the Code, if you incur or continue debt that is used
to purchase a Class A note subject to the market discount rules, and the
interest paid or accrued on this debt in any taxable year exceeds the interest
and original issue discount currently includible in income on the note,
deduction of this excess interest must be deferred to the extent of the market
discount allocable to the taxable year. The deferred portion of any interest
expense will generally be deductible when the market discount is included in
income upon the sale, repayment, or other disposition of the indebtedness.
Section 1278 of the Code allows a taxpayer to make an election to include
market discount in gross income currently. If an election is made, the
previously described rules of Sections 1276 and 1277 of the Code will not apply
to the taxpayer.
Due to the complexity of the market discount rules, we suggest that you
consult your tax advisors as to the applicability and operation of these rules.
Premium
In the opinion of Mayer, Brown & Platt, you will generally be considered to
have acquired a Class A note at a premium if your tax basis in the note exceeds
the remaining principal amount of the note. In that event, if you hold a Class A
note as a capital asset, you may amortize the premium as an offset to interest
income under Section 171 of the Code, with corresponding reductions in your tax
basis in the note if you have made an election under Section 171 of the Code.
Generally, any amortization is on a constant yield basis. However, in the case
of bonds with principal payable in two or more installments, like the Class A
notes, the previously discussed conference report, which indicates a
Congressional intent that amortization be in accordance with the rules that will
apply to the accrual of market discount on these obligations.
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Backup Withholding
Mayer, Brown & Platt is of the opinion that, backup withholding taxes will
be imposed on payments to you at the rate of 31% on interest paid, and original
issue discount accrued, if any, on the Class A notes if, upon issuance, you fail
to supply the manager or its broker with a certified statement, under penalties
of perjury, containing your name, address, correct taxpayer identification
number, and a statement that you are not required to pay backup withholding.
Exempt investors, such as corporations, tax-exempt organizations, qualified
pension and profit sharing trusts, individual retirement accounts or
non-resident aliens who provide certification of their status as non-resident
are not subject to backup withholding. Information returns will be sent annually
to the IRS by the manager and to you stating the amount of interest paid,
original issue discount accrued, if any, and the amount of tax withheld from
payments on the Class A notes. We suggest that you consult your tax advisors
about your eligibility for, and the procedure for obtaining, exemption from
backup withholding.
Recently, the Treasury Department issued new regulations which modify the
backup withholding and information reporting rules described in this section.
The new regulations will generally be effective for payments made after December
31, 2000, subject to transition rules. We suggest that you consult your own tax
advisors regarding these new regulations.
Australian Tax Matters
The following statements with respect to Australian taxation are the
material tax consequences to the United States Class A noteholders of holding
Class A notes and are based on advice received by the manager. It is suggested
that purchasers of Class A 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 notes.
Payments of Principal, Premiums and Interest
Under existing Australian tax law, non-resident holders of 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, are not subject to Australian income tax on payments
of interest or amounts in the nature of interest, other than interest
withholding tax, which is currently 10%, on interest or amounts in the nature of
interest paid on the 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 Income Tax Assessment Act 1936 of the
Commonwealth of Australia, an exemption from Australian interest withholding tax
applies provided all prescribed conditions are met.
These conditions are:
o the issuer trustee is a company that is a resident of Australia when
it issues the notes and when interest, as defined in section 128A
(1AB) of the Income Tax Assessment Act, is paid; and
o the notes, or a global bond or note or interests in such a global bond
or note, were issued in a manner which satisfied the public offer test
as prescribed under section 128F of the Income Tax Assessment Act.
The issuer trustee will seek to issue the Class A notes and interests in
any global Class A note in a way that will satisfy the public offer test and
otherwise meet the
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requirements of section 128F of the Income Tax Assessment Act including by
listing the Class A notes.
The public offer test will not be satisfied if the issuer trustee knew or
had reasonable grounds to suspect that the Class A notes were being or would
later be acquired directly or indirectly by an associate of the issuer trustee
within the meaning of that section, other than in the capacity of a dealer,
manager or underwriter in relation to the placement of a note. "Associate" for
these purposes is widely defined and means, generally speaking, in relation to
an issuer acting in the capacity of a trustee, the beneficiaries of the trust.
Thus the relevant associates of the issuer trustee in the present case will be
the manager as the residual beneficiary of the trust and the associates of the
manager and the other beneficiaries of the trust, if any, from time to time.
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 of the Income Tax Assessment Act, which, as
discussed, would be an associate of the residual beneficiary, if, at the time of
the payment, the issuer trustee knows, or has reasonable grounds to suspect,
that the person is an associate.
If, for any reason, the interest paid by the issuer trustee is not exempt
from interest withholding tax, the treaty titled "Convention for the Avoidance
of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on
Income" between the United States and Australia may apply. This treaty provides
that interest which has its source in Australia, and to which a United States
resident, as defined in the treaty and who is entitled to the benefit of the
treaty, is beneficially entitled, may be taxed in Australia, but that any tax
charged shall not exceed 10% of the gross amount of interest. However, this
provision will not apply where the indebtedness giving rise to the interest
entitlement is effectively connected with:
o the United States resident beneficial owner's permanent establishment,
at or through which it carries on business in Australia; or
o the United States resident beneficial owner's fixed base, situated in
Australia, from which it performs personal services.
Profit on Sale
Under existing Australian law, non-resident holders of notes will not be
subject to Australian income tax on profits derived from the sale or disposal of
the notes provided that:
o the notes are not held as part of a business carried on, at or through
a permanent establishment in Australia; and
o the profits do not have an Australian source.
The source of any profit on the disposal of notes will depend on the
factual circumstances of the actual disposal. Where the 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 a business carried on, at or through a permanent
establishment in Australia, 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 notes as interest for withholding tax purposes
and which
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amounts are not covered by the exemption conditions in section 128F of the
Income Tax Assessment Act. These rules can apply when:
o notes are sold for any amount in excess of their issue price prior to
maturity to a purchaser who is either a resident who does not acquire
the notes in the course of carrying on business in the country outside
Australia at or through a permanent establishment in that country or a
non-resident that acquires the notes in the course of carrying on a
business in Australia at or through a permanent establishment in
Australia; or
o notes are sold to an Australian resident in connection with a "washing
arrangement" as defined in the Income Tax Assessment Act.
Goods and Services Tax
From July 1, 2000, a goods and services tax will be payable by all entities
which make taxable supplies in Australia. If an entity, such as the issuer
trustee, makes any taxable supplies on or after July 1, 2000, it will have to
pay goods and services tax equal to 1/11th of the total amount received for the
supply. However, on the basis of the current goods and services tax legislation,
it is likely that the issue of the Class A notes and the payment of interest or
principal on the Class A notes to you will not be taxable supplies.
If the supply is
o "goods and services tax free," the issuer trustee does not pay a goods
and services tax on the supply and can obtain goods and services tax
credits for goods and services taxes paid on things acquired to make
the supply; or
o "input taxed," which includes financial supplies, the issuer trustee
does not pay a goods and services tax on the supply, but is not
entitled to goods and services tax credits for goods and services tax
paid on things acquired to make the supply.
Services provided to the issuer trustee will be a mixture of taxable and
input taxed supplies for goods and services tax purposes. If a supply is
taxable, the supplier has the primary obligation to account for goods and
services tax in respect of that supply and must rely on a contractual provision
to recoup that goods and services tax from the issuer trustee. It is not
possible at this stage to identify which services supplied to the issuer trustee
will be taxable supplies. However, under the supplementary terms notice, certain
fees paid by the issuer trustee, namely the manager's fee, the issuer trustee's
fee, the security trustee's fee and the servicer's fee, will only be able to be
increased by reference to the supplier's goods and services tax liability, if
any, if:
o the issuer trustee, the manager and the recipient of the relevant fee
agree, which agreement shall not be unreasonably withheld; and
o the increase will not result in the downgrading or withdrawal of the
rating of any notes.
If other fees payable by the issuer trustee are treated as the
consideration for a taxable supply under the goods and services tax legislation
or otherwise may be increased by reference to the relevant supplier's goods and
services tax liability, the issuer trustee may not be entitled to an input tax
credit for that increase and the Trust Expenses will increase, resulting in a
decrease in the funds available to the trust to pay you.
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The goods and services tax may increase the cost of repairing or replacing
damaged properties offered as security for housing loans. However, it is a
condition of St.George Bank's loan contract and mortgage documentation that the
borrower must maintain full replacement value property insurance at all times
during the loan term.
The goods and services tax legislation, in certain circumstances, treats
the issuer trustee as making a taxable supply if it enforces security by selling
the mortgaged property and applying the proceeds of sale to satisfy the housing
loan. The issuer trustee will have to account for goods and services tax out of
the sale proceeds, with the result that the remaining sale proceeds may be
insufficient to cover the unpaid balance of the related loan. However, the
general position is that a sale of residential property is an input taxed supply
for goods and services tax purposes and so the enforced sale of property which
secures the housing loans will generally not be treated as a taxable supply
under these provisions. As an exception, the issuer trustee may still have to
account for goods and services tax out of the proceeds of sale recovered when a
housing loan is enforced where the borrower is an enterprise which is registered
for goods and services tax purposes, uses the mortgaged property as an asset of
its enterprise and any of the following are relevant:
o the property is no longer being used as a residence; or
o the property is used as commercial residential premises such as a
hostel or boarding house; or
o the borrower is the first vendor of the property - the borrower built
the property; or
o the mortgaged property has not been used predominantly as a residence.
Because the issuer trustee is an insured party under the mortgage insurance
policies, it may have to account for goods and services tax in respect of any
claim payment received. However, under the current draft of the goods and
services tax legislation, where the claim payment is made in respect of an
insurance policy on which the insured was not entitled to a goods and services
tax credit on the premium payable, the insured does not have to account for
goods and services tax in respect of the claim payment.
Any reduction as a result of goods and services tax in the amount recovered
by the issuer trustee when enforcing the housing loans will decrease the funds
available to the trust to pay you to the extent not covered by the mortgage
insurance policies. The extent to which the issuer trustee is able to recover an
amount on account of the goods and services tax, if any, payable on the proceeds
of sale in the circumstances described in this section, will depend on the terms
of the related mortgage insurance policy.
Other Taxes
No stamp, issue, registration or similar taxes are payable in Australia in
connection with the issue of the Class A notes. Furthermore, a transfer of, or
agreement to transfer, notes executed outside of Australia will not be subject
to Australian stamp duty.
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Enforcement of Foreign Judgments in Australia
Crusade Management Limited 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 Crusade Management Limited in respect of a 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 Crusade Management Limited 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:
o the proceedings in New York State or United States Federal Court, as
applicable, involved a denial of the principles of natural justice;
o the judgment is contrary to the public policy of the relevant
Australian jurisdiction;
o the judgment was obtained by fraud or duress or was based on a clear
mistake of fact;
o the judgment is a penal or revenue judgment; or
o 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. Crusade Management Limited 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 proceeding
arising out of this offering. Crusade Management Limited has appointed CT
Corporation System, 1633 Broadway, New York, New York 10019, as its agent upon
whom process may be served in any such action.
All of the directors and executive officers of Crusade Management Limited,
and certain experts named in this prospectus, 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 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. Crusade Management
Limited has been advised by its Australian counsel Allen Allen & Hemsley, that,
based on the restrictions discussed in this section, 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, which may change in
the future, payments by an Australian resident to, or on behalf of the following
payees may only be made with Reserve Bank of Australia approval:
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o the Government of Iraq or its agencies or nationals;
o the authorities of the Federal Republic of Yugoslavia (Serbia and
Montenegro); or
o the Government of Libya or any public authority or controlled entity
of the Government of Libya.
ERISA Considerations
Subject to the considerations discussed in this section, the notes are
eligible for purchase by employee benefit plans.
Section 406 of the Employee Retirement Income Security Act and Section 4975
of the Code prohibit a pension, profit-sharing or other employee benefit plan,
as well as individual retirement accounts and certain types of Keogh Plans from
engaging in certain transactions with persons that are "parties in interest"
under ERISA or "disqualified persons" under the Code with respect to these
Benefit Plans. A violation of these "prohibited transaction" rules may result in
an excise tax or other penalties and liabilities under ERISA and the Code for
these 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.
Some transactions involving the purchase, holding or transfer of the notes
might be deemed to constitute prohibited transactions under ERISA and the Code
if assets of the trust were deemed to be assets of a Benefit Plan. Under a
regulation issued by the United States Department of Labor, the assets of the
trust 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
trust and none of the exceptions contained in the regulation is applicable. An
equity interest is defined under the 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, at the time of their initial issuance
that the notes should be treated as debt without substantial equity features for
purposes of the regulation and that the notes do not constitute equity interests
in the trust for purposes of the regulation. The debt characterization of the
notes could change after their initial issuance if the trust incurs losses.
However, without regard to whether the notes are treated as an equity
interest for these purposes, the acquisition or holding of the notes by or on
behalf of a Benefit Plan could be considered to give rise to a prohibited
transaction if the trust, the issuer trustee, the servicer, the manager, the
note trustee, the seller or the security trustee is or becomes a party in
interest or a disqualified person with respect to these Benefit Plans. 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 a note. Included among these exemptions are:
o Prohibited Transaction Class Exemption 96-23, regarding transactions
effected by "in-house asset managers";
o Prohibited Transaction Class Exemption 90-1, regarding investments by
insurance company pooled separate accounts;
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o Prohibited Transaction Class Exemption 95-60, regarding transactions
effected by "insurance company general accounts";
o Prohibited Transaction Class Exemption 91-38, regarding investments by
bank collective investment funds; and
o Prohibited Transaction Class Exemption 84-14, regarding transactions
effected by "qualified professional asset managers."
By your acquisition of a note, you shall be deemed to represent and warrant
that your purchase and holding of the 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.
If you are a plan fiduciary considering the purchase of any of the notes,
you should consult your tax and legal advisors regarding whether the assets of
the Trust would be considered plan assets, the possibility of exemptive relief
from the prohibited transaction rules and other issues and their potential
consequences.
Legal Investment Considerations
The Class A notes will not constitute "mortgage related securities" for
purposes of the Secondary Mortgage Market Enhancement Act of 1984, because the
originator of the housing loans was not subject to United States state or
federal regulatory authority. Accordingly, some U.S. institutions with legal
authority to invest in comparably rated securities based on such housing loans
may not be legally authorized to invest in the Class A notes. No representation
is made as to whether the 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 any regulatory authorities. You are urged to consult with your counsel
concerning the status of the Class A notes as legal investments for you.
Available Information
Crusade Management Limited, as manager, has filed with the SEC a
registration statement under the Securities Act with respect to the Class A
notes offered pursuant to this prospectus. For further information, reference
should be 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 SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the SEC'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, including any amendments or exhibits, may be obtained from the Public
Reference Section of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. The SEC 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 SEC at the
address "http://www.sec.gov."
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Ratings of the Notes
The issuance of the Class A-1, Class A-2 and Class A-3 notes will be
conditioned on obtaining a rating of "AAA" by Standard & Poor's, "Aaa" by
Moody's and "AAA" by Fitch IBCA. The issuance of the Class B notes will be
conditioned on obtaining a rating of "AAA" by Standard & Poor's, "Aa1" by
Moody's and "AAA" by Fitch IBCA. You should independently evaluate the security
ratings of each class of notes from similar ratings on other types of
securities. A security rating is not a recommendation to buy, sell or hold
securities. A rating does not address the market price or suitability of the
notes for you. A rating may be subject to revision or withdrawal at any time by
the rating agencies. 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 of the notes. The ratings of the Class A 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 interest collections after payment of interest on the
notes and the trust's expenses, the mortgage insurance policies, the
availability of the Liquidity Facility, the creditworthiness of the swap
providers and the mortgage insurer and the foreign currency rating of Australia.
The Commonwealth of Australia's current local currency long term debt rating is
"AAA" by Standard & Poor's, "Aaa" by Moody's and "AAA" by Fitch IBCA. 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. None of the rating agencies have been involved in the preparation
of this prospectus.
Plan of Distribution
Underwriting
Under the terms and subject to the conditions contained in the underwriting
agreement among St.George Bank, the issuer trustee and the manager, the issuer
trustee has agreed to sell to the underwriters, for whom Credit Suisse First
Boston Corporation is acting as representative, the following respective
principal amounts of the Class A notes:
<TABLE>
<CAPTION>
Principal Principal Principal
Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3
Notes Notes Notes
Underwriter (US$) (US$) (US$)
----------- ----------- ----------- -----------
<S> <C> <C> <C>
Credit Suisse First Boston Corporation .... $ $ $
Deutsche Bank Securities Inc............... $ $ $
J.P. Morgan Securities Inc................. $ $ $
----------- ----------- -----------
Total...................................... $ $ $
----------- ----------- -----------
</TABLE>
The underwriting agreement provides that the underwriters are obligated to
purchase all of the Class A notes if any are purchased.
The underwriters propose to offer the Class A notes initially at the public
offering prices on the cover page of this prospectus and to selling group
members at
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the price less a concession not in excess of the respective amounts set forth in
the following table, expressed as a percentage of the relative principal
balance. The underwriters and selling group members may reallow a discount not
in excess of the respective amounts set forth in the following table to other
broker/dealers. After the initial public offering, the public offering price and
concessions and discounts to broker/dealers may be changed by the representative
of the underwriters.
Selling Reallowance
Class Concessions Discount
- ----- ----------- ----------
A-1............... % %
A-2............... % %
A-3............... % %
---------- ---------
St.George Bank estimates that the out-of-pocket expenses for this offering
will be approximately $ .
Credit Suisse First Boston Corporation has informed St.George Bank and the
manager that the underwriters do not expect discretionary sales by them to
exceed 5% of the principal balance of the Class A notes.
St.George Bank and the manager have agreed to indemnify the underwriters
against civil liabilities under the Securities Act, or contribute to payments
which the underwriters may be required to make in that respect.
The representative, on behalf of the underwriters, may engage in
over-allotment, stabilizing transactions, syndicate covering transactions and
penalty bids in accordance with Regulation M under the Exchange Act.
o Over-allotment involves syndicate sales in excess of the offering
size, which creates a syndicate short position;
o Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified
maximum;
o Syndicate covering transactions involve purchases of the Class A notes
in the open market after the distribution has been completed in order
to cover syndicate short positions;
o Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when the Class A notes originally sold by a
syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions.
Stabilizing transactions, syndicate covering transactions and penalty bids
may cause the price of the Class A notes to be higher than it would otherwise be
in the absence of these transactions. These transactions, if commenced, may be
discontinued at any time.
In the ordinary course of its business, some of the underwriters and some
of their affiliates have in the past and may in the future engage in commercial
and investment banking activities with St.George Bank and its affiliates. In
addition, one
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of the underwriters, Deutsche Bank Securities Inc., is affiliated with the note
trustee, Bankers Trust Company, and the currency swap provider, Bankers Trust
Corporation, New York.
Offering Restrictions
United Kingdom
Each underwriter has severally represented and agreed with the issuer
trustee that:
o it has not offered or sold and will not offer or sell any Class A
notes to persons in the United Kingdom prior to admission of the Class
A notes to listing in accordance with Part IV of 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 business 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;
o 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 Class A notes in, from or otherwise involving the United
Kingdom; and
o 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
issue of the Class A 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 Class A 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. Each
underwriter has severally represented and agreed that in connection with the
initial distribution of the Class A notes it:
o has not, directly or indirectly, offered for subscription or purchase
or issue invitations to subscribe for or buy nor has it sold, the
Class A notes;
o will not, directly or indirectly, offer for subscription or purchase
or issued invitations to subscribe for or buy nor will it sell the
Class A notes; and
o 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 any of the
following:
o actually known by the underwriters, without an obligation on the
underwriters to make any inquiry, to be a resident of Australia for
the purposes of section 128F of the Tax Act; or
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o an associate of Crusade Management Limited within the meaning of that
section, which includes associates of St. George Bank, other than in
the capacity of a dealer or underwriter in relation to a placement of
the notes, as identified on a list provided by St.George Bank.
Listing and General Information
Listing
An application has been made to the London Stock Exchange Limited to admit
the Class A-1, Class A-2 and Class A-3 notes to the Official List. This
prospectus, including Appendix I, constitutes listing particulars with regard to
the issuer trustee and the Class A-1, Class A-2 and Class A-3 notes, in
accordance with the listing rules made under Part IV of the Financial Services
Act. Copies of the prospectus have been delivered to the Registrar of Companies
in England and Wales for registration in accordance with Section 149 of the
Financial Services Act.
The listing of the Class A 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 Class A notes on the London Stock
Exchange will be granted on or about September, 1999, subject to the issuance of
the Class A notes. The Class A notes will be issued in the form of one or more
book-entry notes.
Authorization
The issuer trustee has obtained all necessary consents, approvals and
authorizations in connection with the issue and performance of the Class A
notes. The issue of the Class A notes has been authorized by the resolutions of
the board of directors of AXA Trustees Limited passed on September 13, 1999.
Litigation
The issuer trustee is not, and has not been, involved in any litigation
or arbitration proceedings that may have, or have had during the twelve months
preceding the date of this prospectus, a significant effect on its financial
position nor, so far as it is aware, are any such litigation or arbitration
proceedings pending or threatened.
Euroclear and Cedelbank
The Class A notes have been accepted for clearance through Euroclear and
Cedelbank with the following CUSIP numbers, common codes and ISINs for each
class of notes:
Common
CUSIP Code ISIN
-------- -------- ------
Class A-1...............
Class A-2...............
Class A-3...............
Transaction Documents Available for Inspection
You may inspect copies of the following transaction documents during normal
business hours on any weekday, excluding Saturdays, Sundays and public holidays,
at the offices of Midland Bank plc, HSBC Issuer Services, Mariner House, Pepys
Street, London EC3N 4DA United Kingdom, during the period of fourteen days from
the date of this prospectus:
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o the Constitution of the issuer trustee;
o the Master Trust Deed among St.George Bank, the issuer trustee and the
manager, dated March 14, 1998;
o the Servicing Agreement among the issuer trustee, the manager and the
servicer, dated March 19, 1998;
o the Custodian Agreement among the issuer trustee, the manager and the
custodian, dated March 19, 1998;
o the Deed of Indemnity between St.George Bank, the issuer trustee, the
manager and the custodian, dated March 19, 1998;
o the following, which, prior to the closing date, will be in draft
form:
o the Supplementary Terms Notice among the issuer trustee, the
manager, the security trustee, the note trustee, the seller, the
servicer and the custodian, dated on or about September __, 1999;
o the Security Trust Deed among the issuer trustee, the manager,
the security trustee and the note trustee, dated on or about
September __, 1999;
o the Note Trust Deed among the issuer trustee, the manager and the
note trustee, dated on or about September __, 1999;
o the Agency Agreement among the issuer trustee, the manager the
note trustee, the principal paying agent and the calculation
agent, dated on or about September __, 1999;
o the Redraw Facility Agreement among the issuer trustee, the
manager and the redraw facility provider, dated on or about
September __, 1999;
o the basis swap among the issuer trustee, the manager, the basis
swap provider and the standby basis swap provider, together with
the related schedule and confirmation, dated on or about
September __, 1999;
o the fixed-floating rate swap among the issuer trustee, the
manager, the fixed-floating rate swap provider and the standby
fixed-floating rate swap provider, together with the related
schedule and confirmation dated on or about September __, 1999;
o the currency swap between the issuer trustee and the currency
swap provider, together with the related schedule and
confirmations, dated on or about September __, 1999;
o the mortgage insurance policy among St.George Bank, the issuer
trustee and Housing Loans Insurance Corporation Pty Limited,
dated on or about September __, 1999;
o the powers of attorney from St.George Bank, dated on or about
September __, 1999;
o the Seller Loan Agreement among the issuer trustee, the manager
and the seller, dated on or about September __, 1999; and
o the Underwriting Agreement among St.George Bank, the manager, the
issuer trustee and the underwriters, dated on or about
September __, 1999.
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Consents to Opinions
Mayer, Brown & Platt has given and not withdrawn its written consent to the
inclusion in this prospectus of its opinion in the form and context in which it
is included on pages and and has authorized the content of its opinion for the
purposes of section 152(1)(e) of the Financial Services Act.
Allen Allen & Hemsley has given and not withdrawn its written consent to
the inclusion in the prospectus of its opinion in the form and context in which
it is included on pages ___, ___, and ___ and has authorized the content of its
opinion for the purposes of section 152(1)(e) of the Financial Services Act.
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:
o the Class A notes will initially be issued in the form of
book-entry notes and will be held by Cede & Co., as nominee of
DTC;
o in connection with the issue, DTC will confer rights in the Class
A notes to the noteholders and will record the existence of those
rights; and
o as a result of the issue of the Class A notes in this manner,
these rights will be created.
Legal Matters
Mayer, Brown & Platt, New York, New York, will pass upon some legal matters
with respect to the Class A notes, including the material U.S. federal income
tax matters, for St.George Bank and Crusade Management Limited. Allen Allen &
Hemsley, Sydney, Australia, will pass upon some legal matters, including the
material Australian tax matters, with respect to the Class A notes for St.George
Bank and Crusade Management Limited. Brown & Wood LLP will pass upon some legal
matters with respect to the Class A notes for the underwriters.
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Glossary
A$ Class A Interest Amount........ means, for any quarterly payment date, the
aggregate sum of the amount for each class of
Class A notes in Australian dollars, which
is calculated for each class of Class A
notes:
o on a daily basis at the applicable rate
set out in the currency swap relating to
that class of Class A notes, which
shall be AUD-BBR-BBSW, as defined in the
Definitions of the International Swaps
and Derivatives Association, Inc., as of
the first day of the Interest Period
ending on, but excluding, that payment
date with a designated maturity of 90
days, or, in the case of the first
Interest Period, 60 days, plus a margin;
o on the A$ Equivalent of the aggregate of
the outstanding principal balances of
that class of Class A notes as of the
first day of the Interest Period ending
on, but excluding, that payment date;
and
o on the basis of the actual number of
days in that Interest 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
rate of exchange set forth in the currency
swap for the exchange of United States
dollars for Australian dollars.
Accrued Interest Adjustment....... means the amount equal to any interest and
fees accrued on the housing loans up to, but
excluding, the closing date and which were
unpaid as of the close of business on the
closing date.
Approved Bank..................... means:
o a bank, including St.George Bank, which
has a short-term rating of at least F1+
from Fitch IBCA, P-1 from Moody's, and
A-1+ from Standard & Poor's; or
o a bank, including St.George Bank, which
has a short-term rating of at least F1+
from Fitch IBCA, P-1 from Moody's and
A-1 from Standard & Poor's, provided
that the total value of deposits held by
the bank in relation to a trust does not
exceed twenty percent of the sum of the
aggregate of the Stated Amounts of the
notes.
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Authorized Investments...............consist of the following:
o cash on hand or at an Approved Bank;
o bonds, debentures, stock or treasury
bills of any government of an Australian
jurisdiction;
o debentures or stock of any public
statutory body constituted under the law
of any Australian jurisdiction where the
repayment of the principal is secured
and the interest payable on the security
is guaranteed by the government of an
Australian jurisdiction;
o notes or other securities of any
government of an Australian
jurisdiction;
o deposits with, or certificates of
deposit, whether negotiable, convertible
or otherwise, of, an Approved Bank;
o 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 an Approved
Bank;
o securities which are "mortgage-backed
securities" within the meaning of both
the Duties Act, 1997 of New South Wales
and the Truster Act, 1958 of Victoria;
o any other assets of a class of assets
that are both:
o prescribed for the purposes of
sub-paragraph (d) of the definition
of a "prescribed property" in the
Duties Act, 1997 of New South Wales
or are otherwise included within
the definition of "pool of
mortgages" in that act, and
o 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.
As used in this definition, expressions will
be construed and, if necessary, read down so
that the notes in relation to the trust
constitute "mortgage-backed securities" for
the purposes of both the Duties Act, 1997 of
New South Wales and the Stamps Act, 1958 of
Victoria.
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Each of the investments in the first, third,
fourth, fifth, sixth, seventh and eighth
bullet points outlined above must have a long
term rating of AAA or a short term rating of
A-1+, as the case may be, from Standard &
Poor's, a long term rating of Aaa or a short
term rating of P-1, as the case may be, from
Moody's and a long term rating of AAA or a
short term rating of F1+, as the case may be,
from Fitch IBCA. Each of the investments must
mature no later than the next quarterly
payment date following its acquisition. Each
investment must be denominated in Australian
dollars. Each investment must be of a type
which does not adversely affect the risk
weighting expected to be attributed to the
notes by the Bank of England and must be held
by, or in the name of, the issuer trustee or
its nominee.
Available Income.................. see page 52.
Benefit Plan...................... means a pension, profit-sharing or other
employee benefit plan, as well as individual
retirement accounts and certain types of
Keogh Plans.
Business Day...................... in relation to the note trust deed, the
agency agreement, any Class A note and any
US$ payments under the currency swap, means:
o any day, other than a Saturday, Sunday
or public holiday, on which banks are
open for business in London, New York
City and Sydney; and
in relation to any other transaction
documents and A$ payments means:
o any day, other than a Saturday, Sunday
or public holiday, on which banks are
open for business in Sydney.
Carryover Class A Charge Offs..... means, on any quarterly 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 quarterly determination
date which have not been reinstated as
described in this prospectus.
Carryover Class B Charge Offs..... means, on any quarterly 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 quarterly determination
date which have not been reinstated as
described in this prospectus.
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Carryover Redraw Charge Offs...... means, on any quarterly determination date in
relation to the redraw facility, the
aggregate of Redraw Charge Offs prior to that
quarterly determination date which have not
been reinstated as described in this
prospectus.
Class A Charge Off................ means a Principal Charge Off allocated
against the Class A notes.
Class B Charge Off................ means a Principal Charge Off allocated
against the Class B notes.
Consumer Credit Legislation....... means any legislation relating to consumer
credit, including the Credit Act of any
Australian jurisdiction, the Consumer Credit
Code (NSW) 1996 and any other equivalent
legislation of any Australian jurisdiction.
Default........................... means a failure by the issuer trustee to
comply with:
o an obligation which is expressly imposed
on it by the terms of a transaction
document; or
o a written direction given by the manager
in accordance with a transaction
document and in terms which are
consistent with the requirements of the
transaction documents in circumstances
where the transaction documents require
or contemplate that the issuer trustee
will comply with that direction;
in each case within any period of time
specified in, or contemplated by, the
relevant transaction document for such
compliance. However, it will not be a Default
if the issuer trustee does not comply with an
obligation or direction where the note
trustee or the security trustee directs the
issuer trustee not to comply with that
obligation or direction.
Excess Available Income........... see page 58.
Extraordinary Resolution.......... means 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 a written resolution signed by all
of the Voting Mortgagees.
Finance Charge Collections........ see page 52.
Finance Charge Loss............... means, with respect to any housing loan,
Liquidation Losses which are attributable to
interest, fees and expenses in relation to
the housing loan.
Gross Principal Collections....... see page 58.
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Insolvency Event.................. means with respect to the issuer trustee, in
its personal capacity and as trustee of the
trust, the manager, the servicer, St.George
Bank or the custodian, the happening of any
of the following events:
o except for the purpose of a solvent
reconstruction or amalgamation:
o 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:
o the winding up, dissolution or
administration of the relevant
corporation; or
o 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;
o and is not dismissed, ceased
or withdrawn within 15
business days;
o 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;
o 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;
o 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
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o anything analogous to an event referred
to in the four preceding paragraphs or
having a substantially similar effect
occurs with respect to the relevant
corporation.
Interest Period................... in relation to a quarterly payment date,
means the period from and including the
preceding quarterly payment date to but
excluding the applicable quarterly payment
date. However, the first and last interest
periods are as follows:
o first: the period from and including the
closing date to but excluding the first
quarterly payment date;
o last: if the notes are fully retired
upon redemption in full, the period from
and including the quarterly payment date
preceding the date on which the notes
are redeemed in full to but excluding
the day on which the notes are redeemed
in full. If the notes are not fully
retired upon redemption in full and
payment of principal is improperly
refused, the last interest period will
end on the date on which the note
trustee or principal paying agent
receives the moneys in
respect of the notes and notifies the
holders of that receipt or the date on
which the outstanding principal balance
of the note, less charge offs, has been
reduced to zero; provided that interest
on that note shall thereafter begin to
accrue from and including any date on
which the outstanding principal balance
of that note, less charge offs, becomes
greater than zero.
Issuer Trustee's Default.......... means:
o an Insolvency Event has occurred and is
continuing in relation to the issuer
trustee in its personal capacity;
o any action is taken in relation to the
issuer trustee in its personal capacity
which causes the rating of any notes to
be downgraded or withdrawn;
o the issuer trustee, or any employee or
officer of the issuer trustee, breaches
any obligation or duty imposed on the
issuer trustee under any transaction
document in relation to the trust where
the manager reasonably believes it may
have a Material Adverse Effect and the
issuer trustee fails or neglects after
30 days' notice from the manager to
remedy that breach;
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o the issuer trustee merges or
consolidates with another entity without
ensuring that the resulting merged or
consolidated entity assumes the issuer
trustee's obligations under the
transaction documents; or
o there is a change in effective control
of the issuer trustee from that existing
on the date of the master trust deed to
a competitor unless approved by the
manager. A competitor is a bank or
financial institution that carries on
certain businesses that are the same as,
or substantially similar to or in
competition with, a business conducted
by the seller.
LIBOR............................. means:
o the rate applicable to any Interest
Period for three-month or, in the case
of the first Interest Period, two-month,
deposits in U.S. dollars which appears
on the Telerate Page 3750 as of 11:00
a.m., London time, on the determination
date; or
o 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 calculation
agent had specified "USD-LIBOR-Reference
Banks" as the applicable Floating Rate
Option under the Definitions of the
International Swaps and Derivatives
Association, Inc.
Liquidation Losses............... means, with respect to any housing loan for a
collection period, the amount, if any, by
which the Unpaid Balance of a liquidated
housing loan, together with the enforcement
expenses relating to the housing loan,
exceeds all amounts recovered from the
enforcement of the housing loan and the
related mortgage, excluding proceeds of a
mortgage insurance policy.
Liquidity Shortfall............... means, for any determination date, the excess
of the Payment Shortfall over the amount
available for a principal draw.
Manager's Default................. means:
o the 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;
o an Insolvency Event has occurred and is
continuing in relation to the manager;
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o the manager breaches any obligation or
duty imposed on the manager under the
master trust deed, any other transaction
document or any other deed, agreement or
arrangement entered into by the manager
under the master trust deed in relation
to the trust, the issuer trustee
reasonably believes that such breach has
a Material Adverse Effect and the breach
is not remedied within 30 days' notice
being given by the issuer trustee to the
manager, except in the case of reliance
by the manager on the information
provided by, or action taken by, the
servicer, or if the manager has not
received information from the servicer
which the manager requires to comply
with the obligation or duty; or
o a representation, warranty or statement
by or on behalf of the 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 reasonable satisfaction
within 90 days after notice from the
issuer trustee where, as determined by
the issuer trustee, it has a Material
Adverse Effect.
Material Adverse Effect........... means an event which will materially and
adversely affect the amount or the timing of
a payment to a noteholder.
Mortgage Shortfall................ see page 63.
Mortgagees........................ see page 86.
Noteholder Mortgagees............. means the Class B noteholders and the note
trustee, on behalf of the Class A
noteholders.
One Month Bank Bill Rate.......... on any date means the rate:
o calculated by taking the simple average
of the rates quoted on the Reuters
Screen BBSW Page at approximately 10:00
a.m., Sydney time, on each of that date
and the preceding two business days for
each BBSW 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 30 days;
o eliminating the highest and lowest mean
rates;
o taking the average of the remaining mean
rates; and
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o if necessary, rounding the resultant
figure upwards to four decimal places.
If on any day fewer than five BBSW Reference
Banks have quoted rates on the Reuters Screen
BBSW Page, the rate for that day shall be
calculated as above by taking the rates
otherwise quoted by five of the BBSW
Reference Banks on application by the parties
for such a bill of the same tenor. If in
respect of any day the rate for that day
cannot be determined in accordance with the
foregoing procedures, then the rate for that
day shall mean such rate as is agreed between
the manager and the issuer trustee with
regard to comparable indices then available,
except that, on the first reset date, as
defined in the redraw facility, of any draw
under the redraw facility and the two
business days preceding that reset date the
One Month Bank Bill Rate shall be an
interpolated rate calculated with reference
to the tenor of the relevant period from that
reset date to, but not including, the next
reset date.
Payment Shortfall................. means, for any determination date, the excess
of Total Payments over Available Income.
Principal Charge Off.............. means, with respect to a collection period,
the aggregate amount of Mortgage Shortfalls
for that collection period.
Principal Collections............. see page 60.
Principal Loss.................... for a collection period means, with respect
to any housing loan, Liquidation Losses which
are attributable to principal in relation to
the housing loan.
Redraw Charge Off................. means a Principal Charge Off allocated
against the Redraw Principal Outstanding.
Redraw Principal Outstanding...... means, at any time, the total principal
amount of all outstanding Redraw Advances at
that time, less the Carryover Redraw Charge
Offs at that time.
Redraw Retention Amount........... means, for any quarterly collection period,
the amount determined by the manager on the
preceding quarterly determination date, as
described in "Description of the Class A
Notes - Redraws", on page 62.
Redraw Shortfall.................. means the amount by which Gross Principal
Collections and the available Redraw
Retention Amount are insufficient to fund
redraws.
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Secured Moneys.................... means all money which the issuer trustee is
or at any time may become actually or
contingently liable to pay to or for the
account of any Mortgagee for any reason
whatever under or in connection with a
transaction document.
Servicer Transfer Event........... see page 99.
Stated Amount..................... means for any note on a quarterly payment
date:
o the initial outstanding principal
balance of the note; less;
o the aggregate of all principal payments
previously made on the note; less
o any carryover charge offs on the note;
less
o principal to be paid on the note on the
next quarterly payment date; less
o Principal Charge Offs to be applied
against the note on the next quarterly
payment date; plus
o any Excess Available Income to be
applied to reinstating any carryover
charge offs on the note.
Termination Date.................. with respect to the trust shall be the
earlier to occur of:
o the date which is 80 years after the
date of creation of the trust;
o the termination of the trust under
statute or general law;
o full and final enforcement by the
security trustee of its rights under the
security trust deed after the occurrence
of an event of default under the
security trust deed; or
o at any time after all creditors of the
trust have been repaid in full, the
business day immediately following that
date.
Three Month Bank Bill Rate........ on any date means the rate:
o calculated by taking the simple average
of the rates quoted on the Reuters
Screen BBSW Page at approximately 10:00
a.m., Sydney time, on each of that date
and the preceding two business days for
each BBSW 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
tenor of 90 days
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<PAGE>
or, where the relevant date is the
first day of the first Interest Period,
60 days;
o eliminating the highest and lowest mean
rates;
o taking the average of the remaining mean
rates; and
o if necessary, rounding the resultant
figure upwards to four decimal places.
If on any of the days fewer than five BBSW
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
BBSW Reference Banks on application by the
parties for such a bill of the same tenor. If
in respect of any day the rate for that date
cannot be determined in accordance with the
foregoing procedures, then the rate for that
day shall mean such rate as is agreed between
the manager and St.George Bank having regard
to comparable indices then available.
Title Perfection Event ........... means any of the following:
o the seller ceases to have a long term
credit rating of at least "BBB" from
Fitch IBCA, "Baa2" from Moody's, or
"BBB" from Standard & Poor's;
o an Insolvency Event occurs with respect
to the seller;
o St.George Bank fails to transfer
collections to the issuer trustee within
the time required under the servicing
agreement;
o if the seller is also the servicer, a
Servicer Transfer Event occurs;
o if the seller is also the redraw
facility provider, a breach of its
obligations, undertakings or
representations under the redraw
facility if such breach will have a
Material Adverse Effect; or
o the seller breaches any representation,
warranty, covenant or undertaking in any
transaction document which is not
remedied within thirty days of the
earlier of the seller becoming aware of
or receiving notice of the breach.
Total Available Funds............. means the sum of Available Income, principal
draws and liquidity draws.
Total Payments.................... means all amounts payable by the issuer
trustee on a payment date, as described on
page 54.
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<PAGE>
Trust Expenses.................... see page 56.
Unpaid Balance.................... means the unpaid principal amount of the
housing loan plus the unpaid amount of all
finance charges, interest payments and other
amounts accrued on or payable under or in
connection with the housing loan or the
related mortgage.
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 agreed
to by the calculation agent and the currency
swap provider - at approximately 11:00 a.m.,
London time, on the quarterly determination
date to prime banks in the London interbank
market for a period of three months or, in
the case of the first Interest Period, two
months, commencing on the first day of the
Interest Period and in a Representative
Amount, as defined in the Definitions of the
International Swaps and Derivatives
Association, Inc. The calculation agent 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 calculation agent
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and the currency swap provider, at
approximately 11:00 a.m., New York City time,
on that quarterly determination date for
loans in U.S. dollars to leading European
banks for a period of three months or, in the
case of the first Interest Period, two
months, commencing on the first day of the
Interest Period and in a Representative
Amount. If no such rates are available in New
York City, then the rate for such Interest
Period shall be the most recently determined
rate in accordance with this paragraph.
Voting Mortgagees................. see page 89.
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APPENDIX I
Terms and Conditions of the Class A Notes
This Appendix I constitutes an integral part of this prospectus.
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 in definitive form. 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.
Paragraphs in italics are included by way of explanation only, and do not
constitute part of the terms and conditions of the Class A Notes.
The issue of US$994,000,000 Class A Mortgage Backed Pass Through Floating
Rate Notes (comprising US$300,000,000 Class A-1 Notes due 2030 (the "Class A-1
Notes"), US$569,000,000 Class A-2 Notes due 2030 (the "Class A-2 Notes") and
US$125,000,000 Class A-3 Notes due 2030 (the "Class A-3 Notes") (each a "Class"
and together, the "Class A Notes") and A$[*] Class B Mortgage Backed Pass
Through Floating Rate Notes due 2030 (the "Class B Notes" and, together with the
Class A Notes, the "Notes")) by AXA Trustees Limited, in its capacity as trustee
of the Crusade Global Trust No. 1 of 1999 (the "Trust") (in such capacity, the
"Issuer"), was authorised by a resolution of the Board of Directors of the
Issuer passed on 13 September 1999. These Notes are (a) issued subject to a
Master Trust Deed (the "Master Trust Deed") dated 14 March 1998 between the
Issuer, Crusade Management Limited (in such capacity, the "Manager" and, in the
capacity of residual beneficiary under the Trust, the "Residual Beneficiary")
and St.George Bank Limited ("St.George"), a Supplementary Terms Notice (the
"Supplementary Terms Notice") dated [*] September 1999 between (among others)
the Issuer, Bankers Trust Company (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 together with the holders for the
time being of the Class B Notes (the "Class B Noteholders") the "Noteholders")
and the Manager, and these terms and conditions (the "Conditions"); (b)
constituted by a note trust deed dated the Closing Date (as defined in Condition
4(a) below) (the "Note Trust Deed") between the Issuer, the Manager and the Note
Trustee; and (c) secured by a Security Trust Deed (the "Security Trust Deed")
dated [*] September 1999 between the Issuer, the Manager, the Note Trustee and
National Mutual Life Nominees Limited (ACN 004 387 133) (the security trustee
for the time being referred to as the "Security Trustee").
The statements set out below include summaries of, and are subject to the
detailed provisions of, the Master Trust Deed, the Supplementary Terms 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 the Closing Date between the
Issuer, the Manager, the Note Trustee and Midland Bank plc as Principal Paying
Agent (the "Principal Paying Agent", which expression includes its successors as
Principal Paying Agent under the Agency Agreement) and Midland Bank plc, as
calculation agent (the "Calculation Agent", which expression includes its
successors as Calculation Agent under the Agency Agreement), and under which
further paying agents may be
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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 Calculation Agent
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 Supplementary Terms Notice, the Security Trust Deed, the Note
Trust Deed, the Agency Agreement, the Servicing Agreement dated 19 March 1998
and made between the Issuer, the Manager and St.George as servicer (together
with any substitute or successor, the "Servicer"), the Custodian Agreement (the
"Custodian Agreement") dated 19 March 1998 and made between the Issuer, the
Manager and St.George Custodial Pty Ltd as custodian (together with any
substitute or successor, the "Custodian") and the Indemnity (the "Indemnity")
dated 19 March 1998 between St.George as indemnifier (in such capacity, the
"Indemnifier"), the Manager, the Custodian and the Issuer (together with the
agreements with respect to the Basis Swap, the Fixed-Floating Rate Swap and the
Currency Swap (as each such term is defined below), those documents the
"Relevant Documents" and certain other transaction documents defined as such in
the Supplementary Terms 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 Midland Bank plc, HSBC
Issuer Services, Mariner House, Pepys Street, London EC3N 4DA United Kingdom.
In connection with the issue of the Class A Notes, the Issuer has entered
into an ISDA (defined below) master interest rate exchange agreement dated the
Closing Date with St.George (the "Basis Swap Provider") and Deutsche Bank AG,
Sydney Branch, as standby basis swap provider (the "Standby Basis Swap
Provider") together with a confirmation relating thereto dated the Closing Date
(the "Basis Swap"). The Issuer has also entered into an ISDA master interest
rate exchange agreement dated the Closing Date with St.George (the
"Fixed-Floating Rate Swap Provider") and Deutsche Bank AG, Sydney Branch, as
standby fixed-floating rate swap provider (the "Standby Fixed-Floating Rate Swap
Provider") together with a confirmation relating thereto dated the Closing
Date (the "Fixed-Floating Rate Swap"). The Issuer has also entered into an ISDA
master currency exchange agreement dated the Closing Date with Bankers Trust
Corporation, New York (the "Currency Swap Provider" and, together with the Basis
Swap Provider, the Standby Basis Swap Provider, the Fixed-Floating Rate Swap
Provider and the Standby Fixed-Floating Rate Swap Provider, the "Swap
Providers") together with three confirmations relating thereto dated the Closing
Date in respect of three distinct swap transactions relating to each of the
Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes (each a "Currency
Swap" and together the "Currency Swaps").
Class A Book-entry Notes will also bear the following legend: "This
book-entry note is a global note for the purposes of section 128F(10) of the
Income Tax Assessment Act 1936 of the Commonwealth of Australia".
Summary of Priorities
This section contains a summary of the effect of the main provisions of
Conditions 4 and 5 and should not be relied upon as a substitute for a detailed
reading of Conditions 4 and 5. In particular, any category of payment or
payments listed below at a certain level of priority may also have an internal
order of priorities. Capitalised
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terms in this section have the same meaning given in the Supplementary Terms
Notice (unless otherwise defined in these Conditions).
Total Available Funds are distributed on a monthly basis to pay the Accrued
Interest Adjustment, to make certain repayments to the Mortgage Insurer, to pay
interest on the Redraw Facility and to pay certain amounts with respect to
drawings made under liquidity facilities (including Liquidity Draws from the
Liquidity Account) available to the Issuer. On a quarterly basis, Total
Available Funds is distributed first, to pay the Accrued Interest Adjustment;
second, to make certain payments to the Mortgage Insurer; third to make payments
of recovered break costs to the Swap Provider under the Fixed-Floating Rate
Swap; fourth, to cover certain fees and expenses of the Trust; fifth, to pay
fees due under the Redraw Facility, the Basis Swap and the Fixed-Floating Rate
Swap; sixth, to pay such fees and expenses, and certain other amounts (including
interest on the Class A Notes), that are overdue; seventh, to pay interest under
the Redraw Facility and the Class A Notes, to pay certain amounts due under the
Basis Swap and the Fixed-Floating Rate Swap and to repay any outstanding
Liquidity Draws; and eighth, to pay interest due under the Class B Notes. After
these quarterly distributions, the remaining available income is used to cover
any current principal shortfalls on the Purchased Receivables, followed by
principal amounts overdue with respect to the Class A Notes and amounts overdue
with respect to the Redraw Facility. Any outstanding Principal Draws are then
repaid and then any principal overdue on the Class B Notes. Finally, any income
remaining after all prior distributions is distributed to the Beneficiary.
Available principal is distributed on a monthly basis, first, to make
certain payments to the Mortgage Insurer; second, to cover any shortfalls in
available income (by means of a Principal Draw); third, to provide for any
anticipated shortfalls in available income on the next Payment Date; and fourth,
to repay principal under the Redraw Facility. On a quarterly basis, available
principal is distributed first, to make certain payments to the Mortgage
Insurer; second, to make Principal Draws; third, to provide for any anticipated
shortfalls in available income on the next Payment Date; fourth, to pay certain
amounts in relation to Redraws; fifth, to provide for any anticipated Redraws
during the next Quarterly Collection Period; sixth, to pay principal under the
Class A Notes; and seventh, to pay principal under the Class B Notes.
In all circumstances, the Noteholders take priority to the Beneficiary.
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.
Each Class of 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
Cedelbank, societe anonyme ("Cedelbank"), may hold interests in the Book-Entry
Notes on behalf of persons who have accounts with Euroclear and Cedelbank
through accounts maintained in the names of Euroclear or Cedelbank, or in the
names of their respective depositories, with DTC.
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If the Issuer 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 and Midland Bank plc,
acting as note registrar (the "Note Registrar") may require to complete, execute
and deliver such Definitive Notes. In such circumstances, the Issuer 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 and the Class B
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 will rank pari passu
and rateably without any preference or priority among themselves.
The Class A Notes are issued subject to the Master Trust Deed and the
Supplementary Terms 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
both before and after enforcement of the security and in respect of principal
and interest (as set out in Conditions 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 to purchase an equitable interest in certain housing loans
(the "Loans") and certain related mortgages (the "Mortgages") from St.George as
an approved seller (the "Approved Seller").
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 (including
following enforcement of the Security Trust Deed) may be insufficient to pay all
amounts due to the Noteholders. Save in certain limited circumstances the other
assets of the Issuer will not be available for payment of any shortfall arising
and all claims in respect of such shortfall shall be extinguished (see further
Condition 15). None of the Servicer, the Manager, St.George, the Note Trustee,
the Security Trustee, the Swap Providers or the Note Managers (as defined in the
Supplementary Terms Notice) has any obligation to any Noteholder for payment of
any amount by the Issuer in respect of the Notes.
The Note Trust Deed contains provisions requiring the Note Trustee to have
regard to the interests of Class A Noteholders as regards all the powers,
trusts, authorities, duties and discretions of the Note Trustee (except where
expressly provided otherwise).
The Security Trust Deed contains provisions requiring the Security Trustee,
subject to the other provisions of the Security Trust Deed, to give priority to
the interests of the Class A Noteholders, if there is a conflict between the
interest of such Noteholders and any other Voting Mortgagee (as defined below).
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3. Covenants of the Issuer
So long as any of the Class A Notes remains outstanding, the Issuer has
made certain covenants for the benefit of the Class A Noteholders which are set
out in the Master Trust Deed.
These covenants include the following.
(a) The Issuer shall act continuously as trustee of the Trust until the
Trust is terminated as provided by the Master Trust Deed or the Issuer
has retired or been removed from office in the manner provided under
the Master Trust Deed.
(b) The Issuer shall:
(i) act honestly and in good faith and comply with all relevant
material laws 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 the Master Trust Deed, having regard to the
interests of the Class A Noteholders, the Class B Noteholders,
the Beneficiary and other Creditors of the Trust in accordance
with its obligations under the relevant Transaction Documents;
(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 Manager keeps, accounting records which
correctly record and explain all amounts paid and received by the
Issuer;
(v) keep the Trust separate from each other trust which is
constituted under the Master Trust Deed and from its own assets
and account for assets and liabilities of the Trust separately
from those of other trusts constituted under the Master Trust
Deed and from its own assets and liabilities;
(vi) do everything and take all such actions which are necessary
(including obtaining all appropriate Authorisations which relate
to it as trustee of the Trust and taking all actions necessary to
assist the Manager to obtain all other 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
under the Master Trust Deed;
(vii) not, as Issuer, engage in any business or activity in respect of
the Trust except as contemplated or required by the Transaction
Documents;
(viii) except as contemplated or required by the Transaction
Documents, maintain an independent and arm's length relationship
with its related bodies corporate in relation to dealings
affecting the Trust;
(ix) except as contemplated or required by the Transaction Documents,
not, in respect of the Trust, guarantee or become obligated for
the debts of
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any other entity or hold out its credit as being available to
settle the obligations of others;
(x) comply with the rules and regulations of the London Stock
Exchange Limited (the "London Stock Exchange"); and
(xi) within 45 days of notice from the Manager to do so, remove any of
its agents or delegates that breaches any obligation imposed on
the Issuer under the Master Trust Deed or any other Transaction
Document where the Manager believes it will have a Material
Adverse Effect.
(c) Except as provided in any Transaction Document (and other than the
charge given to the Security Trustee), the Issuer shall not, nor shall
it permit any of its officers to, sell, mortgage, charge or otherwise
encumber or part with possession of any assets of the Trust (the
"Trust Assets").
(d) The Issuer shall duly observe and perform the covenants and
obligations of the Master Trust Deed and will be personally liable to
the Servicer, the Noteholders, the Beneficiary, the Note Managers or
any other Creditors only if it is guilty of negligence, fraud or
Default (as defined in Condition 15). The Issuer is not responsible
for the acts or omissions of its agents or delegates (including
persons referred to in clause 17.6 of the Master Trust Deed) selected
by the Issuer in good faith using reasonable care except where the
Issuer expressly instructs the agent or delegate to do or omit to do
the relevant act, if the Issuer is aware of the default and does not
take the action available to it under the Transaction Documents to
address the act or omission or where the Transaction Documents
expressly provide that the Issuer is so liable.
(e) The Issuer will open and operate certain bank accounts in accordance
with the Master Trust Deed and the Supplementary Terms Notice.
(f) Subject to the Master Trust Deed and any Transaction Document to which
it is a party, the Issuer shall act on all directions given to it by
the Manager in accordance with the terms of the Master Trust Deed.
(g) The Issuer 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 [*] September 1999 or such later date as may be agreed
between the Issuer and the Note 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 arrears on the 15th day of November in respect of the
period from (and including) the Closing Date and ending on (but excluding)
15 November 1999 (the "first Quarterly Payment Date") and thereafter on
each 15 February, 15 May, 15 August and 15 November (each such date a
"Quarterly Payment Date"). 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 Day, unless it would thereby fall into
the next calendar month, in which case the due date shall be brought
forward to the immediately preceding Business Day. The
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final Quarterly Payment Date for a Class of Notes will be the earlier of
the Final Maturity Date for that Class of Notes and the Payment Date on
which the Notes are redeemed in full.
"Business Day" in this Condition 4 and in Conditions 5 and 9 below means
any day other than a Saturday, Sunday or public holiday on which banks are
open for business in London, New York City and Sydney.
The period beginning on (and including) the Closing Date and ending on (but
excluding) the first Quarterly Payment Date, and each successive period
beginning on (and including) a Quarterly Payment Date and ending on (but
excluding) the next Quarterly 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
in that Interest Period and a 360 day year.
Interest shall cease to accrue on any Class A Note for the period from (and
including):
(i) the date on which the Stated Amount (as defined in Condition 5(a)) of
that Class A Note is reduced to zero (provided that interest shall
thereafter begin to accrue from (and including) any date on which the
Stated Amount of the Class A Note becomes greater than zero); or
(ii) if the Stated Amount of the Class A Note on the due date for
redemption is not zero, the due date for redemption of the Class A
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 Class A Note at the
rate from time to time applicable to the Class A Notes until the
later of:
(A) the date on which 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
Condition 12; and
(B) the Stated Amount of that Class A Note has been reduced to zero,
providing that interest shall thereafter begin to accrue from
(and including) any date on which the Stated Amount of that
Class A Note becomes greater than zero.
(b) Interest Rate The rate of interest applicable from time to time to a Class
(the "Interest Rate") will be determined by the Calculation Agent on the
basis of the following paragraphs.
On the second Business Day before the beginning of each Interest Period
(each an "Interest Determination Date"), the Calculation Agent 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 (or, in the case of the
first Interest Period two-month) deposits in US dollars which appears on
the Telerate Page 3750 as of 11.00 am, 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
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Issuer and Calculation Agent 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 agreed to by the Calculation Agent and the Currency Swap
Provider) 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 (or, in the case of the first Interest Period, two
months) commencing on the first day of the Interest Period and in a
Representative Amount (as defined in the ISDA Definitions). The Calculation
Agent 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 two major banks in New York City, selected by the Calculation
Agent and the Currency Swap Provider, 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 (or in the case of the
first Interest Period two months) commencing on the first day of the
Interest Period and in a Representative Amount. If no such rates are
available in New York City, then the rate for such Interest Period shall be
the most recently determined rate in accordance with this paragraph.
Where used in this Condition 4(b), Business Day means any day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in London and New York City.
The Interest Rate applicable to the Class A Notes for such Interest Period
shall be the aggregate of (i) the interest rate or arithmetic mean as
determined by the Calculation Agent; and (ii) the margin of [*]% (the
"Class A-1 Margin") in relation to the Class A-1 Notes, [*]% (the "Class
A-2 Margin") in relation to the Class A-2 Notes and [*]% (the "Class A-3
Margin") in relation to the Class A-3 Notes.
If the Issuer has not redeemed all of:
(i) the Class A-1 Notes on or before the Quarterly Payment Date falling
in November, 2006, the Class A-1 Margin will increase to [*]% for
the period from (and including) that date until (but excluding) the
date on which the Class A-1 Notes are redeemed in full in accordance
with these conditions;
(ii) the Class A-2 Notes on or before the Quarterly Payment Dated falling
in November, 2006, the Class A-2 Margin will increase to [*]% for the
period from (and including) that date until (but excluding) the date
on which the Class A-2 Notes are redeemed in full in accordance with
these conditions; or
(iii) the Class A-3 Notes on or before the Quarterly Payment Date falling
in November, 2006, the Class A-3 Margin will increase to [*] % for
the period from (and including) that date until (but excluding) the
date on which the Class A-3 Notes are redeemed in full in accordance
with these conditions.
There is no maximum or minimum Interest Rate.
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(c) Determination of Interest Rate and Calculation of Interest
The Calculation Agent 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 relevant Class of Class A Notes to the Invested
Amount (as defined in Condition 5(a)) of that 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
Calculation Agent shall (in the absence of manifest error) be final and
binding upon all parties.
(d) Notification and Publication of Interest Rate and Interest The Calculation
Agent will cause the Interest Rate and the Interest applicable to each
Class A Note for each Interest Period and the relevant Quarterly Payment
Date to be notified to the Issuer, the Manager, the Note Trustee and the
Paying Agents and, for so long as the Class A Notes are listed on the
Official List of the London Stock Exchange, the London Stock Exchange will
cause the same to be published in accordance with Condition 12 on or as
soon as possible after the date of commencement of the relevant Interest
Period. The Interest, Interest Rate and the relevant Quarterly 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 Manager
If the Calculation Agent at any time for any reason does not determine the
relevant Interest Rate or calculate the Interest for a Class A Note, the
Manager shall do so and each such determination or calculation shall be
deemed to have been made by the Calculation Agent. In doing so, the Manager
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 reasonably
considers to be fair and reasonable in all the circumstances.
(f) Calculation Agent
The Issuer will procure that, so long as any of the Class A Notes remains
outstanding, there will, at all times, be a Calculation Agent. The Issuer,
or the Manager with the consent of the Issuer (such consent not to be
unreasonably withheld), reserves the right at any time to terminate the
appointment of the Calculation Agent. 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 Calculation Agent, or if the appointment of the
Calculation Agent is terminated, the Issuer will, with the approval of the
Note Trustee, appoint a successor Calculation Agent to act as such in its
place, provided that neither the resignation nor removal of the Calculation
Agent shall take effect until a successor approved by the Note Trustee has
been appointed.
(g) Income distribution
On each Quarterly Payment Date, and based on the calculations, instructions
and directions provided to it by the Manager, the Issuer must pay or cause
to be paid out of Total Available Funds, in relation to the Quarterly
Collection Period
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(defined below) ending immediately before that Quarterly Payment Date,
the following amounts in the following order of priority:
(i) first, an amount equal to any Accrued Interest Adjustment required
to be paid to the Approved Seller; provided that the total amount of
the Interest Adjustments with respect to any Quarterly Collection
Period (other than the Quarterly Collection Period ending on 15
November 2000) shall not exceed an amount equal to 0.15% multiplied
by the aggregate Housing Loan Principal of the Purchased Receivables
on the first day of that Quarterly Collection Period multiplied by
actual the number of days in that Quarterly Collection Period
divided by 365;
(ii) second, repayment to the Mortgage Insurer, of any payment in the
nature of income received from a Borrower under a Loan for which
that Mortgage Insurer previously paid under the relevant Mortgage
Insurance Policy by way of Timely Payment Cover;
(iii) third, payment to the Fixed-Floating Swap Provider under the Fixed-
Floating Rate Swap of any Break Payments received by or on behalf of
the Issuer from a Borrower or Mortgage Insurer during the Quarterly
Collection Period;
(iv) fourth (unless specified later in this paragraph (g)), Trust
Expenses which have been incurred prior to that Quarterly Payment
Date and which have not previously been paid or reimbursed under an
application of this paragraph (g) (in the order of priority set out
in the definition of "Trust Expenses" as more fully described in the
Supplementary Terms Notice);
(v) fifth, pari passu and ratably as between themselves:
(A) any fees payable by the Issuer under the Redraw Facility dated
the Closing Date between the Issuer, the Manager and St.George
(the "Redraw Facility"); and
(B) any fees payable by the Issuer under the Basis Swap and the
Fixed-Floating Rate Swap;
(vi) sixth, without duplication, any amount that would have been payable
under this paragraph (other than under sub-paragraph (ix)) on any
previous Quarterly Payment Date, if there had been sufficient Total
Available Funds, which have not been paid by the Issuer and in the
order they would have been paid under that prior application of
this clause;
(vii) seventh, payment to the Mortgager Insurer of an amount equal to the
greater of the following:
(A) zero, and
(B) the difference between any overpayment by the Mortgage Insurer
of amounts in respect to income (for which the Mortgage Insurer
has not previously been reimbursed) and the aggregate of the
Excess Distributions paid to the Beneficiary on previous
Quarterly Payment Dates under clause 5(e).
(viii) eighth, pari passu and ratably as between themselves:
(A) any interest payable by the Issuer under the Redraw Facility;
(B) any amounts payable by the Issuer under the Basis Swap and the
Fixed-Floating Rate Swap not included in (iii) or (v) above;
(C) any repayment of a Liquidity Draw made on or prior to the
previous Monthly Payment Date; and
(D) the payment to the Currency Swap Provider under a Confirmation
relating to the Class A Notes of the A$ Class A Interest
Amount at that date (which is thereafter to be applied to
payments of Interest on the Class A Notes);
(ix) ninth, any amounts that would have been payable under sub-paragraph
(g)(ix) on any previous Quarterly Payment Date, if there had been
sufficient Total Available Funds, which have not been paid by the
Issuer;
(ix) tenth, payment to the Class B Noteholders of the Class B Interest
amount as at the date on the Class B Notes; and
(xi) eleventh, payment to the Morgage Insurer of an amount equal to any
overpayment by the Mortgage Insurer of amounts in respect of income
(for which the Mortgage Insurer has not previously been reimbursed).
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The Issuer shall only make a payment under any of the above sub-paragraphs
if it is directed in writing by the Manager to do so and only 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.
The Issuer is also required to make certain payments out of Total Available
Funds on each Monthly Payment Date (as defined below) as more fully
described in the Supplementary Terms Notice.
Capitalised terms in this paragraph (g) have the same meaning given in the
Supplementary Terms Notice unless otherwise defined in this document.
5. Redemption and Purchase
Capitalised terms in this Condition 5 have the same meaning given in the
Supplementary Terms Notice unless otherwise defined in this document.
(a) Mandatory Redemption in part from Principal Collections and apportionment
of Principal Collections between the Class A Notes and the Class B Notes
The Class A Notes shall be subject to mandatory redemption in part on any
Quarterly Payment Date if on that date there are any Principal Collections
(as defined below) available to be distributed in relation to such 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 Quarterly Payment Date shall be the amount available for
payment as set out in Condition 5(b) on the day which is two Business Days
prior to the Quarterly Payment Date (the "Quarterly Determination Date")
divided by the aggregate Invested Amount of all Class A Notes, multiplied
by the Invested Amount of that Note, 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 and not to be reinstated on the next Quarterly Payment
Date, or to be charged off on the Quarterly Payment Date, as described in
Condition 5(c) (that reduced amount being the "Stated Amount" of that Class
A Note).
Notice of amounts to be redeemed will be provided by the Manager to the
Issuer, the Calculation Agent, the Principal Paying Agent and the Note
Trustee.
Following notification of the amount to be redeemed for each Quarterly
Payment Date, the Manager will determine the Bond Factor for each Class of
the Class A Notes as of such Quarterly Payment Date and will notify the
Issuer, the Calculation Agent, the Principal Paying Agent and the Note
Trustee of this amount and shall cause the Bond Factor to be published
pursuant to Condition 12.
The "Bond Factor" for any Class of the Class A Notes as of any Quarterly
Payment Date will be equal to the ratio, expressed as a percentage (rounded
to six decimal places), equal to the aggregate Invested Amounts of the
Class A Notes of that Class as of the preceding Quarterly Determination
Date, less all Class A Principal Payments to be made on the next Quarterly
Payment Date, divided by the aggregate Initial Invested Amount of the
Class A Notes of that Class.
The "Class A Invested Amount" of a Class A Note on any Quarterly
Determination Date is equal to its Initial Invested Amount minus the
aggregate of the Principal Payments made in respect of that Class A Note on
or before that Quarterly Determination Date.
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"Cut-Off Date" means, in respect of all Loans and Mortgages, [*] 1999.
"Initial Invested Amount" means, in relation to a Class A Note, its initial
Invested Amount.
"Monthly Collection Period" means, in relation to a Monthly Payment Date,
the calendar month which precedes the month in which the Monthly Payment
Date occurs. The first Monthly Collection Period is the period from (but
including) the Cut-Off Date to (and including) 15 November 1999. The last
Monthly Collection Period is the period from (but excluding) the last day
of the calendar month that precedes the date on which the Trust is
terminated under clause 3.5 of the Master Trust Deed to (and including)
that date.
"Monthly Payment Date" means, in relation to a Monthly Collection Period,
the 15th day of the calendar month that follows that Monthly Collection
Period, provided that, if any such 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 that day falls in the next calendar month, in which
case the Monthly Payment Date will be the preceding Business Day.
"Principal Collections" means, in respect of a Monthly Collection Period or
Quarterly Collection Period (each, a "Collection Period") and as
applicable on any Determination Date, the aggregate of:
(i) all amounts received by or on behalf of the Issuer from or on behalf
of the borrowers under each Loan purchased by the Issuer and in
which the Issuer has an interest (a "Purchased Receivable") during
that Collection Period in respect of principal, in accordance with
the terms of the Purchased Receivables, including principal
prepayments;
(ii) all other amounts received by or on behalf of the Issuer under or
in respect of principal under the Purchased Receivables and the
related Receivable Rights during that Collection Period including:
(A) any Liquidation Proceeds on account of principal;
(B) any payments by the Approved Seller to the Issuer on the
repurchase of a Purchased Receivable as more fully described
in the Master Trust Deed during that Collection Period
which are attributable to principal; and
(C) any amount received by the Issuer from the Approved Seller as
more fully described in clause 5.21 of the Supplementary Terms
Notice with respect to that Collection Period attributable to
principal;
(iii) all amounts received by or on behalf of the Issuer during that
Collection Period from any provider of a Support Facility (other
than the Currency Swap but including the Mortgage Insurance Policy)
as more fully described in that Support Facility and which the
Manager determines should be accounted for in respect of a
Liquidation Loss for that Collection Period;
(iv) all amounts received by or on behalf of the Issuer during that
Collection Period:
(A) from the Approved Seller, in respect of any breach of a
representation, warranty or undertaking of the Approved Seller
contained in the Master Trust Deed or this Supplementary Terms
Notice;
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(B) from the Approved Seller under any obligation of the Approved Seller
as more fully described in the Master Trust Deed or this
Supplementary Terms Notice to indemnify or reimburse the Issuer for
any amount;
(C) from the Servicer, in respect of any breach of any representation,
warranty or undertaking of the Servicer contained in the Servicing
Agreement;
(D) from the Servicer under any obligation of the Servicer as more fully
described in the Servicing Agreement to indemnify or reimburse the
Issuer for any amount;
(E) from the Custodian in respect of any breach of a representation,
warranty or undertaking of the Custodian contained in the Custodian
Agreement;
(F) from the Custodian under any obligation of the Custodian as more
fully described in the Custodian Agreement to indemnify or reimburse
the Issuer for any amount;
(G) from the Indemnifier as more fully described in the Indemnity in
respect of any losses arising from a breach by the Custodian of its
obligations contained in the Custodian Agreement;
(H) from the Issuer in its personal capacity in respect of any breach
of a representation, warranty or undertaking of the Issuer in
respect of which it is not entitled to be indemnified out of the
Assets of the Trust;
(I) from the Issuer in its personal capacity under any obligation of
the Issuer as more fully described in the Transaction Documents to
indemnify or reimburse the Trust for any amount;
(J) from the Manager in respect of any breach of a representation,
warranty or undertaking of the Manager contained in the Transaction
Documents of which it is not entitled to be indemnified out of the
Assets of the Trust; and
(K) from the Manager under any obligation of the Manager as more fully
described in the Transaction Documents to indemnify or reimburse the
Trust for any amount,
in each case, which are determined by the Manager to be in respect of
principal payable under the Purchased Receivables and the related
Receivable Rights;
(v) any amounts in the nature of principal received by or on behalf of
the Issuer during that Collection Period pursuant to the sale of any
Asset (including the A$ Equivalent of any amount received by the
Issuer on the issue of the Notes which was not used to purchase a
Purchased Receivable or Purchased Receivable Security, and which the
Manager determines is surplus to the requirements of the Trust);
(vi) any amount of Excess Available Income to be applied to pay a
Principal Charge Off or a Carryover Charge Off;
(vii) any Excess Available Income to be applied as more fully described
in clause 5.2 of the Supplementary Terms Notice to Principal
Draws made on a previous Payment Date; and
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(viii) any funds withdrawn, by the Issuer from the Liquidity Account in
accordance with clause 5.7(c)(iv) of the Supplementary Terms Notice,
less any amounts deducted by or paid to the Approved Seller to reimburse
Redraws funded by the Approved Seller for which the Approved Seller has not
previously been reimbursed and any amounts paid by the Issuer to replace a
Receivable of the Trust as further described in section 8 of the
Supplementary Terms Notice.
"Quarterly Collection Period" means, in relation to a Quarterly Payment
Date, the 3 Monthly Collection Periods that precede the calendar month in
which the Quarterly Payment Date occurs, save that the first Quarterly
Collection Period is the period from (and including) the Cut-Off Date to
(and including) 15 November 1999. The last Quarterly Collection Period ends
on (and includes) the date on which the Trust is terminated.
(b) Principal Distributions on Notes
On each Quarterly Payment Date, and in accordance with the calculations,
instructions and directions provided to it by the Manager, the Issuer must
distribute or cause to be distributed out of Principal Collections, in
relation to the Quarterly Collection Period ending immediately before that
Quarterly Payment Date, the following amounts in the following order of
priority:
(i) first, repayment to the Mortgage Insurer, of any payment in the
nature of principal received from an Obligor for which the Mortgage
Insurer previously paid under the Mortgage Insurance Policy by
way of timely payment cover;
(ii) second, to allocate to Total Available Funds any Principal Draws
calculated as more fully described in clause 5.6 of the
Supplementary Terms Notice;
(iii) third, to retain in the Collection Account as a provision such
amount as the Manager determines is appropriate to make for any
anticipated shortfalls in payments as more fully described in clause
5.1 of the Supplementary Terms Notice on the following Monthly
Payment Date or Quarterly Payment Date;
(iv) fourth, to repay any Redraws provided by the Approved Seller in
relation to Loans as more fully described in clause 5.5 of the
Supplementary Terms Notice to the extent that it has not previously
been reimbursed in relation to those Redraws;
(v) fifth, to repay all Redraw Principal Outstanding under the Redraw
Facility Agreement on that Quarterly Payment Date;
(vi) sixth, to retain in the Collection Account as a provision to
reimburse further Redraws an amount equal to the Redraw Retention
Amount for the next Quarterly Collection Period;
(vii) seventh, as a payment to the Currency Swap Provider under the
Confirmation relating to the Class A-1 Notes, of an amount equal
to the lesser of:
(A) the amount available for distribution under this sub-paragraph
(vii) after all payments which have priority under this
paragraph (b); and
(B) the A$ Equivalent of the Class A Invested Amounts for all
Class A-1 Notes (which is thereafter to be applied to payments
of principal on the Class A-1 Notes);
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(viii) eighth, as a payment to the Currency Swap Provider under the
Confirmation relating to the Class A-2 Notes, of an amount equal to
the lesser of:
(A) the amount available for distribution under this sub-paragraph
(viii) after all payments which have priority under this
paragraph (b); and
(B) the A$ Equivalent of the Class A Invested Amounts for all Class
A-2 Notes (which is thereafter to be applied to payments of
principal on the Class A-2 Notes);
(ix) ninth, as a payment to the Currency Swap Provider under the
Confirmation relating to the Class A-3 Notes, of an amount equal to
the lesser of:
(A) the amount available for distribution under this sub-paragraph
(ix) after all payments which have priority under this
paragraph (b); and
(B) the A$ Equivalent of the Class A Invested Amounts for all
Class A-3 Notes (which is thereafter to be applied to payments
of principal on the Class A-3 Notes); and
(x) tenth, only if the Class A Invested Amount for all Class A Notes has
been reduced to zero, as a payment to the Class B Noteholders, of an
amount equal to the lesser of:
(A) the amount available for distribution under this sub-paragraph
(o) after all payments which have priority under this paragraph
(b); and
(B) the Class B Invested Amounts in respect of all Class B Notes;
(which is thereafter to be applied to payments of principal on the
Class B Notes).
The Issuer shall only make a payment under any of sub-paragraphs (i) to (o)
above inclusive if it is directed in writing to do so by the Manager and
only to the extent that any Principal Collections remain from which to make
the payment after amounts with priority to that payment have been
distributed.
The Issuer is also required to make certain payments out of Principal
Collections (including allocating Principal Draws to Total Available Funds)
on each Monthly Payment Date in accordance with the Supplementary Terms
Notice.
(c) General
No amount of principal will be paid to a Noteholder in excess of the
Invested Amount applicable to the Notes held by that Noteholder.
(d) Excess Available Income - Reimbursement of Charge Offs and Principal
Draw
(i) General
On each Quarterly Determination Date, the Manager must determine,
for a Quarterly Collection Period, the amount (if any) by which the
Total Available Funds for the Quarterly Collection Period exceeds
the Total Payments for the Quarterly Collection Period ("Excess
Available Income").
(ii) Distribution of Excess Available Income
(A) On each Quarterly Determination Date, the Manager must apply
any Excess Available Income for the Quarterly Collection
Period relating to that Quarterly Determination Date in the
following order of priority:
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(1) first, the Excess Available Income must be applied in
payment of all Principal Charge Offs for that Quarterly
Collection Period;
(2) second, the balance of the Excess Available Income (after
application under sub-paragraph (1) above) must be applied
pari passu and rateably between themselves (based on the
Principal Outstanding and the A$ Equivalent of the Stated
Amount of the Class A Notes):
(a) as a payment to the Currency Swap Provider under a
Confirmation relating to the Class A Notes, of the
A$ Equivalent of any Carryover Class A Charge Offs;
and
(b) as a repayment under the Redraw Facility, as a
reduction of, and to the extent of, the Carryover
Redraw Charge Offs;
(3) third, the balance of the Excess Available Income (after
application under sub-paragraphs (1) and (2)) must be
applied to all Principal Draws which have not been repaid
as at that Quarterly Payment Date; and
(4) fourth, the balance of the Excess Available Income (after
application under sub-paragraphs (1) to (3) (inclusive))
must be applied in or towards reinstating the Stated
Amount of the Class B Notes to the extent of any Carryover
Class B Charge Offs.
Any amount applied pursuant to sub-paragraphs (1) to (4)
(inclusive) above will be treated as Principal Collections
to the extent of that application and in the case of
amounts paid under sub-paragraph (2) or (4) will be paid
on the Quarterly Payment Date following that Quarterly
Determination Date. The Issuer shall only make a payment
under paragraph (A) above if it is directed to do so by
the Manager and only 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.
(e) Excess Distribution
The Issuer must at the written direction of the Manager pay any
Excess Distribution for a Quarterly Collection Period to the
Beneficiary on the relevant Quarterly Payment Date. The Issuer may
not recover any Excess Distributions from the Beneficiary once they
are paid to the Beneficiary except where there has been a manifest
error in the relevant calculation of the Excess Distributions.
(f) US$ Account
The Issuer shall direct the Currency Swap Provider to pay all
amounts denominated in US$ payable to the Issuer by the Currency
Swap Provider under the Currency Swap into the US$ Account or to the
Principal Paying Agent under the Agency Agreement on behalf of the
Issuer.
The Issuer shall, on the direction of the Manager, or shall require
that the Paying Agent on its behalf, pay all amounts credited to the
US$ Account by the Currency Swap Provider as follows, and in
accordance with the Note Trust Deed and the Agency Agreement:
(i) amounts credited under Conditions 4(h)(vi) and 4(h)(vii)(D),
pari passu in relation to Class A Notes as payments of Interest
on those Class A Notes;
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(ii) amounts credited under Condition 5(d)(ii)(A)(2)(a), 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;
(iii) amounts credited under Condition 5(b)(vii), pari passu to Class
A-1 Noteholders as Class A Principal Payments on the Class A-1
Notes until the Class A Invested Amounts of the Class A-1 Notes
have been reduced to zero;
(iv) amounts credited under Condition 5(b)(viii), pari passu to Class
A-2 Noteholders as Class A Principal payments on the Class A-2
Notes until the Class A Invested Amounts of the Class A-2 Notes
have been reduced to zero; and
(v) amounts credited under Condition 5(b)(ix), pari passu to Class
A-3 Noteholders as Class A Principal payments on the Class A-3
Notes until the Class A Invested Amounts of the Class A-3 Notes
have been reduced to zero.
(g) Charge Offs
If the Principal Charge Offs for any Quarterly Collection Period exceed the
Excess Available Income calculated on the Quarterly Determination Date for
that Quarterly Collection Period, the Manager must, on and with effect from
the Quarterly Payment Date immediately following the end of the Quarterly
Collection Period:
(i) reduce pari passu and rateably as between themselves the Class B
Stated Amount of each of the Class B Notes by 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 the Class A Notes and the Redraw Facility with respect to
the balance of that excess
(A) rateably as between each of the Class A Notes, the Class A Stated
Amount on each of the Class A Notes until the Class A Stated
Amount of that Class A Note is zero; and
(B) the Redraw Principal Outstanding under the Redraw Facility,
applied to Redraw Advances (as defined in the Redraw Facility) in
reverse chronological order of their Drawdown dates, until the
Redraw Principal Outstanding (as defined in the Redraw Facility
Agreement) is zero.
(h) Calculation of Principal Payments and Stated Amount On (or as soon as
practicable after) each Quarterly Determination Date, the Manager shall
calculate the amount of principal to be repaid in respect of each Class A
Note, as the case may be, due on the Payment Date next following that
Quarterly Determination Date; (B) the Stated Amount and Invested Amount of
each Note on the first day of the next following Interest Period (after
deducting any principal due to be made on the next Quarterly Payment Date);
and (C) the Bond Factor for each Class on each Quarterly Determination Date
in respect of the Collection Period ending before that Quarterly
Determination Date.
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The Manager will notify the Issuer, the Note Trustee, the Principal Paying
Agent and the Calculation Agent and (for so long as the Notes are listed on
the London Stock Exchange) the London Stock Exchange by not later than (or
as soon as practicable after) the Quarterly Determination Date immediately
preceding the relevant Quarterly Payment Date of each such determination
and will immediately cause details of each of those determinations to be
published in accordance with Condition 12 by one Business Day before the
relevant Payment Date. 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 Condition 12.
If the Manager does not at any time for any reason determine a Principal
Payment, the Invested Amount or the Stated Amount applicable to Class A
Notes in accordance with this paragraph, the Principal Payment, Invested
Amount and the Stated Amount shall be determined by the Calculation Agent
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 Manager.
(i) Call
The Issuer must, when so directed by the Manager (at the Manager's option),
purchase or redeem all, but not some only, of the Class A Notes by repaying
the Invested Amount, or, if the Class A Noteholders by Extraordinary
Resolution so agree, the Stated Amount, of the Class A Notes, together with
accrued interest to (but excluding) the date of repurchase or redemption,
on any Quarterly Payment Date falling on or after the earlier of:
(i) the Quarterly Payment Date on which the Total Stated Amount of all
Notes is equal to or less than 10% of the total Initial Invested
Amount of all Notes; and
(ii) in the case of:
(A) Class A-1 Notes, the Quarterly Payment Date falling in November,
2006;
(B) Class A-2 Notes, the Quarterly Payment Date falling in November,
2006; or
(C) Class A-3 Notes, the Quarterly Payment Date falling in November,
2006,
provided that the Issuer will be in a position on such Quarterly Payment
Date to discharge (and the Manager so certifies to the Issuer and the Note
Trustee upon which the Issuer and the Note Trustee will rely conclusively)
all its liabilities in respect of the Class A Notes (at their Invested
Amount or their Stated Amount if so agreed by the Noteholders) and any
amounts which would be required under the Security Trust Deed to be paid in
priority or pari passu with the Class A Notes if the security for the Notes
were being enforced.
The Issuer will give not more than 60 nor less than 45 days' notice to the
Class A Noteholders of a repurchase under this Condition in accordance with
Condition 12.
(j) Redemption for Taxation or Other Reasons
If the Manager satisfies the Issuer and the Note Trustee immediately prior
to giving the notice referred to below that either (i) on the next
Quarterly Payment Date the Issuer would be required to deduct or withhold
from any payment of
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principal or interest in respect of the Class A Notes or the Currency Swap
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 any of the Loans for a
Collection Period ceases to be receivable (whether or not actually
received) by the Issuer during such Collection Period, the Issuer must,
when so directed by the Manager, at the Manager's option (provided that the
Issuer will be in a position on such Quarterly Payment Date to discharge
(and the Manager will so certify to the Issuer and the Note Trustee) all
its liabilities in respect of the Class A Notes (at their Invested Amount
or if the Noteholders will have agreed by Extraordinary Resolution and will
have so notified the Issuer and the Manager not less than 21 days before
such Quarterly Payment Date, at their Stated Amount) and any amounts which
would be required under the Security Trust Deed to be paid in priority or
pari passu with the Class A Notes if the security for the Class A Notes
were being enforced), having given not more than 60 nor less than 45 days'
notice to the Class A Noteholders in accordance with Condition 12, redeem
all, but not some only, of the Class A Notes at their Invested Amount (or,
if the Class A Noteholders by Extraordinary Resolution have so agreed, at
their Stated Amount) together with accrued interest to (but excluding) the
date of redemption on any subsequent Payment Date, provided that the Class
A Noteholders may by Extraordinary Resolution elect, and shall notify the
Issuer and the Manager not less than 21 days before the next Quarterly
Payment Date following the receipt of notice of such proposed redemption,
that they do not require the Issuer to redeem the Class A Notes.
(k) Redemption on Final Maturity
If not otherwise redeemed, the Class A Notes will be redeemed at their
Stated Amount on the Quarterly Payment Date falling in February, 2030.
(l) Cancellation
All Class A Notes redeemed in full pursuant to the above provisions will be
cancelled forthwith, and may not be resold or reissued.
(m) 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 Manager on behalf of the Issuer 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; and
(iii) that the Issuer will be in a position to discharge all its
liabilities in respect of the relevant Class A Notes and 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, the Note Trustee and the holders of those Class A Notes.
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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 to the Paying Agent
on the applicable Payment Date or Final 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, with respect to
Class A Notes registered on the Record Date in the name of the nominee of
the Clearing Agency (initially such Clearing Agency to be DTC and 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 Midland Bank PLC at its office at
Mariner House, Pepys Street, London EC3N 4DA United Kingdom.
(c) Paying Agents
The Issuer (or the Manager on its behalf with the consent of the Issuer,
such consent not to be unreasonably withheld), 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 the City of London and 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 Condition
12.
(d) Payment 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 unless that day falls in the
next calendar month, in which case the due date will be the preceding
Business Day and the holder of that Class A Note 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 at which the
Class A Note is presented for payment is situated and, in the case of
payment by transfer to a US dollar account, in New York City and prior to
the 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.
(e) 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 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 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 whatever nature. In that event the Issuer
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 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 on it
the effect of which would be to reduce the Stated Amount (in the case of final
maturity, if applicable) or the Invested 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 by the Principal Paying Agent
in accordance with Condition 12.
9. Events of Default
Each of the following is an Event of Default (whether or not it is within
the control of the Issuer).
(a) The Issuer fails to pay any Interest Entitlement within 10 Business
Days of the Quarterly Payment Date on which the Interest Entitlement
was due to be paid, together with all interest accrued and payable on
that Interest Entitlement or any other Secured Moneys, within 10
Business Days of the due date for payment (or within any applicable
grace period agreed with the Mortgagees, or where the Mortgagee is a
Noteholder, with the Note Trustee, to whom the Secured Moneys relate).
(b) The Issuer fails to perform or observe any other provisions (other
than an obligation referred to in paragraph (a)) of this deed or a
Trust Document where such failure will have a Material Adverse Effect
and that default (if in the opinion of the Security Trustee capable of
remedy) is not remedied within 30 days after written notice (or such
longer period as may be specified in the notice) from the Security
Trustee requiring the failure to be remedied.
(c) Any of the following events occur in relation to the Issuer:
(i) 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
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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; or
(2) entering into an arrangement, compromise or composition
with or assignment for the benefit of its creditors or
a class of them, and is not dismissed, ceased or
withdrawn within 15 Business Days; or
(B) The Issuer 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
(ii) the Issuer 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 only in relation to
another trust of which it is the trustee);
(iii) 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
Trustee where this occurs in relation to another trust of which
the Issuer is the trustee);
(iv) anything analogous to an event referred to in paragraphs (i) to
(iii) (inclusive) or having substantially similar effect occurs
with respect to the Issuer.
(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 (other than as mandatorily preferred by law) ranks ahead of
or pari passu with any of the Secured Moneys.
(e) Any Security Interest over the Trust Assets is enforced.
(f) All or any part of any Trust Document (other than the Basis Swap, the
Redraw Facility Agreement or, where the Currency Swap is terminated by
the provider of the Currency Swap as a result of a call exercised by
the Trustee under Condition 5(j), the Currency Swap) 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 Trust Document (other than the Basis Swap,
the Redraw Facility or, where the Currency Swap is terminated by the
provider of the Currency Swap as a result of a call exercised by the
Trustee under Condition 5(j), the Currency Swap) where that event has
or will have a Material Adverse Effect.
(g) Without the prior consent of the Security Trustee (such consent being
subject to the Note Trustee's prior written consent):
(i) the Trust is wound up, or the Issuer 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 not to have been
constituted or to have been imperfectly constituted; or
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(iii) unless another trustee is contemporaneously and immediately
appointed to the Trust under the Trust Documents, the Issuer
ceases to be authorised under the Trust to hold the property of
the Trust in its name and to perform its obligations under the
Trust 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.
10. Enforcement
At any time after an Event of Default occurs, the Security Trustee shall
(subject to being appropriately indemnified), if so directed by (a) the
Noteholder Mortgagees (as defined in the Security Trust Deed) alone, where the
Noteholder Mortgagees are the only Voting Mortgagees, or otherwise (b) an
"Extraordinary Resolution of the Voting Mortgagees" (being 75% of votes capable
of being cast by Voting Mortgagees present 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 Class A Noteholders,
but not, unless the Note Trustee has become bound to take steps and/or proceed
under the Security Trust Deed and fails to do so within a reasonable period of
time and such failure is continuing, the Class A Noteholders themselves),
declare the Class A Notes immediately due and payable and declare the security
to be enforceable. If an Extraordinary Resolution of Voting Mortgagees referred
to above elects not to direct the Security Trustee to enforce the Security Trust
Deed, in circumstances where the Security Trustee could enforce, the Noteholder
Mortgagee may nevertheless and the Note Trustee as Noteholder Mortgagee, 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 Noteholder Mortgagees; and
(b) at any other time:
(i) the Note Trustee, acting on behalf of the Class A Noteholders
under the Note Trust Deed and the Security Trust Deed; and
(ii) each other Mortgagee under the Security Trust Deed (other than
the Class A Noteholders).
Any reference to the Noteholder Mortgagees while they are the only Voting
Mortgagees, or where their consent is required under the Security Trust Deed in
relation to a direction or act of the Security Trustee, means Noteholder
Mortgagees representing more than 50% of the aggregate Invested Amount of the
Class A Notes and the Class B Notes.
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 Noteholder Mortgagees where they are the only Voting Mortgagees
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
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contained in or given pursuant to any Extraordinary Resolution of the Voting
Mortgagees in accordance with the Security Trust Deed.
No Class A 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.
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:
o 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 ranking in priority to or pari passu with the Class A Notes; or
o 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 (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 to discharge in
full in due course all the amounts referred to in paragraph (i).
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 or any third party in respect of
the Issuer 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.
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 by Noteholders holding at least
75% of the aggregate Invested Amount of Class A Notes 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.
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 to enforce the performance of any of the
provisions of the Security Trust Deed, the Class A Notes (including these Class
A Conditions).
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
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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 of enforcement 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, 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 the 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 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.
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 Issuer 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
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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.
All consents and approvals in these Conditions are to be given in writing.
13. Meetings of Voting Mortgagees and Meetings of Class A Noteholders;
Modifications; Consents; Waiver
The Security Trust Deed contains provisions for convening meetings of the
Voting Mortgagees to, among other things, 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.
The Note Trust Deed contains provisions for convening meetings of Class A
Noteholders to consider any matter affecting their interests, including the
directing of the Note Trustee to direct the Security Trustee to enforce the
security under the Security Trust Deed, or the sanctioning by Extraordinary
Resolution of the Class A Noteholders of a modification of the Class A Notes
(including these Class A Conditions) or the provisions of any of the Transaction
Documents, provided that no modification of certain terms including, among other
things, the date of maturity of the Class A Notes, or a modification which would
have the effect of altering the amount of interest payable in respect of a Class
A Note or modification of the method of calculation of the interest payable or
of the date 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
altering the majority required to pass an Extraordinary Resolution or altering
the currency of payment of any Class A Notes or an alteration of the date or
priority of payment of interest on, or redemption of, the Class A Notes or an
election to receive the Stated Amount of the Notes instead of the Invested
Amount in the event of a call under Condition 5(i) or 5(j) (any such
modification being referred to below as a "Basic Terms Modification") shall be
effective except that, if the Note Trustee is of the opinion that such a Basic
Terms Modification is being proposed by the Issuer as a result of, or in order
to avoid, an Event of Default, such Basic Terms Modification may be sanctioned
by Extraordinary Resolution of the Class A Noteholders as described below. An
Extraordinary Resolution passed by the Class A Noteholders shall be binding on
all Class A Noteholders. The vote required for an Extraordinary Resolution shall
be Class A Noteholders holding notes which represent 75% of outstanding
principal balance of the Class A Notes.
The Note Trust Deed permits the Note Trustee, the Manager and the Issuer
to, following the giving of not less than 10 Business Days' notice to each
Designated Rating Agency, alter, add to or modify, by way of supplemental deed,
the Note Trust Deed (including the meeting and amendment provisions), the
Conditions (subject to
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the proviso more fully described in clause 37.2 of the Note Trust Deed or any
other terms of that deed or the Conditions to which it refers) or any
Transaction Document so long as that alteration, addition or modification is:
o to correct a manifest error or ambiguity or is of a formal, technical
or administrative nature only;
o 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 Agency;
o in the opinion of the Note Trustee appropriate or expedient as a
consequence of a change to any law or regulation or a change in the
requirements of any Government Agency (including, but not limited to,
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
o in the opinion of the Note Trustee not materially prejudicial to the
interests of the Class A Noteholders as a whole,
and is undertaken in a manner and to the extent, permitted by the
Transaction Documents.
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 above, is materially prejudicial or likely to be materially
prejudicial to the interests of Class A Noteholders as a whole or any Class of
Class A Noteholders, the Note Trustee, the Manager and the Issuer may make that
alteration, addition or modification only if sanctioned in writing by holders of
at least 75% of the aggregate Invested Amount of the Class A Notes.
The Note Trustee may also, in accordance with the Note Trust Deed and
without the consent of the Class A Noteholders (but not in contravention of an
Extraordinary Resolution), waive or authorise any breach or proposed breach of
the Class A Notes (including these Class A Conditions) or any Transaction
Document or 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 A Noteholders and,
if, but only if, the Note Trustee so requires, any such modification shall be
notified to the Class A Noteholders in accordance with Condition 12 as soon as
practicable.
The Manager shall distribute to all Class A Noteholders and the Designated
Rating Agencies a copy of any amendments made in accordance with the procedure
described in that clause 19 of the Note Trust Deed and under the relevant
Condition 12 as soon as reasonably practicable after the amendment has been
made.
Any amendment made will be binding on Noteholders and shall conform to the
requirements of the TIA as then in effect so long as the Note Trust Deed shall
be qualified under the TIA.
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14. Indemnification and Exoneration of the Note Trustee and the Security
Trustee
(a) The Note Trust Deed and the Security Trust Deed contain provisions for
the indemnification of the Note Trustee and the Security Trustee
(respectively) and for their relief from responsibility, including
provisions relieving them from taking proceedings to realise the
security and to obtain repayment of the Class A Notes unless
indemnified to their satisfaction. Each of the Note Trustee and the
Security Trustee is entitled to enter into business transactions with
the Issuer and/or any other party to the Transaction Documents without
accounting for any profit resulting from such transactions. Except in
the case of negligence, fraud or breach of trust (in the case of the
Security Trustee) or negligence, fraud, default or breach of trust (in
the case of the Note Trustee), 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 if prudently chosen in accordance with the
Transaction Documents.
(b) Where the Note Trustee is required to express an opinion or make a
determination or calculation under the Transaction Documents, the Note
Trustee may appoint or engage such independent advisers as the Note
Trustee reasonably requires to assist in the giving of that opinion or
the making of that determination or calculation and any reasonable
costs and expenses payable to those advisers will be reimbursed to the
Note Trustee by the Issuer or if another person is expressly stated in
the relevant provision in a Transaction Document, that person.
15. Limitation of Liability of the Issuer
(a) General
Clause 30 of the Master Trust Deed applies to the obligations and
liabilities of the Issuer in relation to the Class A Notes.
(b) Liability of Issuer limited to its right of indemnity
(i) The Issuer enters into the Transaction Documents and issues the Notes
only in its capacity as trustee of the Trust and in no other capacity
(except where the Transaction Documents provide otherwise). Subject to
paragraph (iii) below, a liability arising under or in connection with
the Transaction Documents or the Trust can be enforced against the
Issuer only to the extent to which it can be satisfied out of the
assets and property of the Trust which are available to satisfy the
right of the Issuer to be exonerated or indemnified for the liability.
This limitation of the Issuer's liability applies despite any other
provision of the Transaction Documents and extends to all liabilities
and obligations of the Issuer in any way connected with any
representation, warranty, conduct, omission, agreement or transaction
related to the Transaction Documents or the Trust.
(ii) Subject to paragraph (iii) below, no person (including any Relevant
Party) may take action against the Issuer in any capacity other than
as trustee of the Trust or seek the appointment of a receiver (except
under the Security
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Trust Deed), or a liquidator, an administrator or any similar person
to the Issuer or prove in any liquidation, administration or
arrangements of or affecting the Issuer.
(iii) The provisions of this Condition 15 shall not apply to any obligation
or liability of the Issuer 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's indemnification or exoneration
out of the assets of the Trust as a result of the Issuer's fraud,
negligence or Default.
(iv) It is acknowledged that the Relevant Parties are responsible under the
Transaction Documents for performing a variety of obligations relating
to the Trust. No act or omission of the Issuer (including any related
failure to satisfy its obligations under the Transaction Documents)
will be considered fraud, negligence or Default of the Issuer for the
purpose of 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 person who has been delegated or appointed by
the Issuer in accordance with the Transaction Documents to fulfil its
obligations relating to the Trust or by any other act or omission of a
Relevant Party or any such person.
(v) In exercising their powers under the Transaction Documents, each of
the Issuer, the Security Trustee and the Noteholders must ensure that
no attorney, agent, delegate, receiver or receiver and manager
appointed by it in accordance with a Transaction Document has
authority to act on behalf of the Issuer in a way which exposes the
Issuer to any personal liability and no act or omission of any such
person will be considered fraud, negligence or Default of the Issuer
for the purpose of paragraph (iii).
(vi) In this Condition 15, "Relevant Parties" means each of the Manager,
the Servicer, the Calculation Agent, each Paying Agent, the Note
Trustee, the Custodian, the Basis Swap Provider, the Standby Basis
Swap Provider, the Fixed-Floating Rate Swap Provider, the Standby
Fixed-Floating Rate Swap Provider and the Currency Swap Provider.
(vii)In this Condition 15, "Default" means a failure by the Issuer to
comply with an obligation which is expressly imposed on it by the
terms of a Transaction Document or a written direction given by the
Manager in accordance with a Transaction Document (and in terms which
are consistent with the requirements of the Transaction Documents) in
circumstances where the Transaction Documents require or contemplate
that the Issuer will comply with that direction; in each case within
any period of time specified in, or contemplated by, the relevant
Transaction Document for such compliance. However, it will not be the
Default of the Issuer if the Issuer does not comply with an obligation
or direction where the Note Trustee or the Security Trustee directs
the Issuer not to comply with that obligation or direction.
(viii) Nothing in this clause limits the obligations expressly imposed on
the Issuer under the Transaction Documents.
16. Governing Law
The Class A Notes and the Relevant Documents are governed by, and shall be
construed in accordance with, the laws of New South Wales, Australia
(except for the Currency Swap which is governed by New York law and the
Note Trust
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Deed). The Note Trust Deed is governed by the laws of New South Wales,
Australia, and the administration of the trust constituted thereunder is
governed by English law.
Summary of Provisions Relating to the Class A Notes While in Book Entry Form
Each Class of 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$994,000,000 (comprising US$300,000,000 in the case
of Class A-1 Notes, US$569,000,000 in the case of Class A-2 Notes, and
US$125,000,000 in the case of Class A-3 Notes). 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
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 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 will be discharged by
payment to the registered holder of the Book-Entry Class A Note in respect of
each amount so paid.
(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 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 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 A 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:
(i) the Principal Paying Agent advises the Manager in writing that the
Clearing Agency is no longer willing or able properly to discharge its
responsibilities
I-30
<PAGE>
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;
(ii) the Issuer, at the direction of the Manager (at the 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
(iii) after the occurrence of an Event of Default, the Class A Note Owners
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 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 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 by the Clearing Agency, and the delivery by the
Clearing Agency of the relevant registration instructions to the Issuer, the
Issuer shall execute and procure the Principal Paying Agent to authenticate the
Definitive Notes in accordance with the instructions of the Clearing Agency.
(b) 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.
(c) 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.
I-31
<PAGE>
[This page intentionally left blank]
<PAGE>
CRUSADE GLOBAL TRUST NO. 1 OF 1999
[GRAPHIC]
Until December __, 1999 all dealers that effect transactions in these
securities, whether or not participating in this offering, may be required to
deliver a prospectus. This is in addition to the dealer's obligation to deliver
a prospectus when acting as an underwriter and with respect to unsold allotments
or subscriptions.
<PAGE>
PART II
Information Not Required in Prospectus
Item 13. Other Expenses of Issuance and Distribution*
The following table sets forth the estimated expenses (expressed in U.S.
dollars based on an exchange rate of US$0.65 = A$1.00)) in connection with
the issuance and distribution of the notes being registered under this
registration statement, other than underwriting discounts and commissions:
SEC Registration Fee..................................... $276,332
Printing and Engraving................................... $125,000
Legal Fees and Expenses.................................. $442,500
Trustee Fees and Expenses................................ $153,000
Rating Agency Fees....................................... $285,000
Accounting Fees & Expenses............................... $128,000
Miscellaneous............................................ $ 82,500
----------
Total.................................................... $1,492,332
==========
- ---------
* 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
II-1
<PAGE>
(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
(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 following information relates to securities of the registrant issued or
sold by the registrant, or for which it has acted as manager with respect to,
that were not registered under the Securities Act:
1. The registrant was incorporated on February 2, 1996. Five fully paid
shares of A$1.00 each were allotted to St.George Bank on February 21,
1996.
2. The registrant acted as manager with respect to the following:
<TABLE>
<CAPTION>
Crusade Trust Crusade Euro Trust Crusade Euro Trust Crusade Auto Trust
No 1 of 1997 No 1 of 1998 No 2 of 1998 No 1 of 1999
------------------------ ------------------------ ------------------------ ------------------------
<S> <C> <C> <C> <C>
Date.............. August 1, 1997 March 19, 1998 September 29, 1998 August 27, 1999
Amount............ A$500 million US$500 million US$325 million A$571 million
Type.............. Mortgage Backed Mortgage Backed Mortgage Backed Auto Receivable Backed
Floating Rate Notes Floating Rate Notes Floating Rate Notes Floating Rate Notes
Class A Notes $A500m Class A Notes US$496m Class A Notes US$314m Class A1 A$128.45m
Class B Notes US$4m Class B Notes US$11m Class A2 A$200m
Class A3 A$196.81m
Class B A$20.4m
Class C A$12.42m
Exemption 100% domestic issue, not 100% European issue, not 100% European issue, 100% domestic issue, not
from offered in the USA. offered in the USA. not offered in the USA. offered in the USA
Registration......
Principal Bankers Trust Australia Deutsche Morgan Deutsche Bank, BT Alex Macquarie Bank Limited
Underwriters...... Limited Grenfell, BT Alex Brown Brown International, Deutsche Bank AG,
International, UBS Warburg Dillon Read Sydney Branch,
Limited St.George Bank Limited
Underwriting A$1,500,000 US$741,000 US$619,000 A$856,505
Fees.............
Offering BBSW + 23 basis points Class A: LIBOR + 18 Class A: LIBOR + 20 Class A1 BBSW + 17
Price............. basis points basis points basis points
Class B: LIBOR + 30 Class B: LIBOR + 45 Class A2 BBSW + 26
basis points basis points basis points
Class A3 BBSW + 36
basis points
Class B (subject to
Confidentiality
Agreement)
Class C (subject to
Confidentiality
Agreement)
Weighted 3.85 years 3.5 years 3.6 years Class A1 0.47 years
Average Life Class A2 1.28 years
to Call.......... Class A3 2.56 years
Class B 3.25 years
Class C 3.25 years
</TABLE>
II-2
<PAGE>
Item 16. Exhibits and Financial Statement Schedules.
<TABLE>
<CAPTION>
<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 Supplementary Terms Notice.*
4.3 Form of the Security Trust Deed.*
4.4 Form of the Note Trust Deed.*
4.5 Form of Agency Agreement.*
5.1 Opinion of Mayer, Brown & Platt as to legality of the 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 Custodian Agreement.*
10.3 Deed of Indemnity.*
10.4 Form of the Redraw Facility Agreement.
10.5 Form of the Basis Swap.
10.6 Form of the Fixed-Floating Rate Swap.
10.7 Form of the Cross Currency Swap.
10.8 Form of Seller Loan Agreement.*
10.9 Form of the Mortgage Insurance Policy.*
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 Note Trustee.*
99.1 Opinion of Allen Allen & Hemsley as to Enforceability of U.S.
Judgments under Australian Law.
</TABLE>
- ----------
* Previously filed.
II-3
<PAGE>
Item 17. Undertakings.
The undersigned registrant hereby undertakes that 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
of 1933 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.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 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 Securities Act
of 1933 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 Securities
Act of 1933 and will be governed by the final adjudication of such issue.
II-4
<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. 3 to
the Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Sydney, Australia, on the 15th day of
September 1999.
Crusade Management Limited
By: /s/ Michael Harold See Bowan
----------------------------
Name: Michael Harold See Bowan
Title: Secretary
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 3 to the Registration Statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
* /s/ Gregory Michael Bartlett
- ------------------------------
Gregory Michael Bartlett Principal Executive Officer September 15, 1999
* /s/<S> Steven George McKerihan
- ------------------------------
Steven George McKerihan Principal Financial Officer September 15, 1999
* /s/ Steven George McKerihan
- ------------------------------
Steven George McKerihan Principal Accounting Officer September 15, 1999
* /s/ Gregory Michael Bartlett
- ------------------------------
Gregory Michael Bartlett Director September 15, 1999
/s/ Steven George McKerihan
- -----------------------------
Steven George McKerihan Director September 15, 1999
*/s/ Michael Bowan
- ------------------------------
By: Michael Bowan
Attorney-in-fact
</TABLE>
II-5
<PAGE>
Signature of Agent for Service of Process
Pursuant to the requirements of the Securities Act of 1933, the undersigned
hereby certifies that it is the agent for service of process in the United
States of the registrant with respect to the Registration Statement and signs
this Amendment No. 3 to the Registration Statement solely in such capacity.
/s/ Stefanie McDonald
-----------------------------------
Name: Stefanie McDonald
Address: CT Corporation System
111 Eighth Avenue
13th Floor
New York, New York 10011
Telephone: (212) 590-9100
II-6
<PAGE>
<TABLE>
<CAPTION>
Sequential
Exhibit Page
No. Description of Exhibit Number
- ------- ------------------------------------------------------------- -------
<S> <C> <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 Supplementary Terms Notice.* -----
4.3 Form of the Security Trust Deed.* -----
4.4 Form of the Note Trust Deed.* -----
4.5 Form of Agency Agreement.* -----
5.1 Opinion of Mayer, Brown & Platt as to legality of the 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 Custodian Agreement.* -----
10.3 Deed of Indemnity.* -----
10.4 Form of the Redraw Facility Agreement. -----
10.5 Form of the Basis Swap. -----
10.6 Form of Fixed-Floating Rate Swap. -----
10.7 Form of the Cross Currency Swap. -----
10.8 Form of Seller Loan Agreement.* -----
10.9 Form of the Mortgage Insurance Policy.* -----
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 Note Trustee.* -----
99.1 Opinion of Allen Allen & Hemsley as to Enforceability of
U.S. Judgments under Australian Law. -----
</TABLE>
- ----------
* Previously filed.
<PAGE>
U.S.$994,000,000
CRUSADE MANAGEMENT LIMITED
CRUSADE GLOBAL TRUST NO. 1 OF 1999
U.S.$300,000,000 Class A-1 Mortgage Backed Floating Rate Notes
U.S.$569,000,000 Class A-2 Mortgage Backed Floating Rate Notes
U.S.$125,000,000 Class A-3 Mortgage Backed Floating Rate Notes
FORM OF UNDERWRITING AGREEMENT
September __, 1999
Credit Suisse First Boston Corporation
As Representative of the Several Underwriters,
Eleven Madison Avenue
New York, New York 10010-3629
Dear Sirs:
1. Introductory. AXA Trustees Limited (ACN 004 029 841), a limited liability
public company under the Corporations Law of Victoria, Australia in its
capacity as trustee of the Crusade Global Trust No. 1 of 1999 (the "Issuer
Trustee") at the direction of Crusade Management Limited (CAN 072 715 916), as
manager (the "Trust Manager") of Crusade Global Trust No. 1 of 1999 (the
"Trust") proposes to sell to the several Underwriters listed in Schedule I
hereto (the "Underwriters"), for whom you are acting as representative (the
"Representative"), U.S.$300,000,000 principal amount of Class A-1 Mortgage
Backed Floating Rate Notes (the "Class A-1 Notes"), U.S.$569,000,000 principal
amount of Class A-2 Mortgage Backed Floating Rate Notes (the "Class A-2
Notes") and U.S.$125,000,00 principal amount of Class A-3 Mortgage Backed
Floating Rate Notes (the "Class A-3 Notes" and together with the Class A-1
Notes and the Class A-2 Notes, the "Notes") issued by 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 St.George Bank Limited
(ACN 055 513 070) ("St.George") including all monies at any time paid or
payable thereon or in respect thereof from, on and after September __, 1999
(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
Collection Account and the rights of the Issuer Trustee under the Basic
Documents. The Trust will be created pursuant to the Master Trust Deed, dated
March 14, 1998 (the "Master Trust Deed") and a supplementary terms notice, to
be dated September __, 1999 (the "Supplementary Terms Notice"), each among the
Issuer Trustee, St.George and the Trust Manager, which sets forth specific
provisions regarding the Trust and details the provisions of the Notes. The
Note Trust Deed, dated September __, 1999 (the "Note Trust Deed") by and among
the Issuer Trustee, the Trust Manager and Bankers Trust Company (the "Note
Trustee") provides for the issuance and registration of the Notes in
accordance with the terms and conditions attached thereto. St.George will act
as seller and as servicer (the "Servicer") of the
<PAGE>
Housing Loans. The Trust Manager and St.George are each a "St.George Party"
and collectively are referred to herein as the "St.George 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 each of the
Master Trust Deed, the Supplementary Terms Notice, the Servicing Agreement,
the Notes, the Security Trust Deed, the Note Trust Deed, the Fixed-Floating
Rate Swap, the Currency Swap, the Basis Swap, and the Agency Agreement which
is or is to be entered into by any of the St.George 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
(as defined hereinafter).
In this Agreement, a reference to the Issuer Trustee is a reference
to the Issuer Trustee in its capacity as trustee of the 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 St.George Parties and the Issuer Trustee hereby agree with the
several Underwriters named on Schedule I as follows:
2. Representations and Warranties of the Issuer Trustee and the St.George
Parties.
I. The Issuer Trustee represents and warrants to each Underwriter that:
(a) Since June 30, 1999, 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, 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.
(b) The Issuer Trustee is a corporation duly incorporated and
existing under the laws of Victoria; it is lawfully qualified and
holds all Authorisations (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 any
requirements which affect the operations of business or the Trust or
the Issuer Trustee's obligations under the Basic Documents to which
it is a party and no other thing is required to be done by the Issuer
Trustee (including without limitation the making of any filing or
registration) in order to issue the Notes or to
2
<PAGE>
execute and act as required by each Basic Document to which it is to
be a party, 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.
(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, 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 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. Each of the Basic Documents to which
the Issuer Trustee is a party have been duly authorized by the Issuer
Trustee party thereto, and, when executed and delivered by the Issuer
Trustee and each of 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, (i)
its Constitution or (ii) any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Issuer
Trustee is a party or by which it or any of its properties is bound,
except in the case of (ii) for violations and defaults which
individually and in the aggregate would not have a material adverse
effect on the transactions contemplated herein or on 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 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
Constitution of the Issuer Trustee or any applicable law or statute
or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Issuer Trustee, or any of its
properties; and, to the knowledge of the Issuer Trustee, 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.
3
<PAGE>
(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 Trust is or may be the subject,
which will have an impact on the transactions contemplated by this
Agreement.
(g) The representations and warranties of the Issuer Trustee
contained in the Basic Documents are true and correct in all material
respects.
(h) KPMG LLP ("KPMG") are independent public accountants with respect
to the Issuer Trustee within the standards established by the
American Institute of Certified Public Accountants.
(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 20 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 the 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 to be issued to persons other than
residents of the United States of America 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 all reasonable inquiries 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") and compliance by the
Underwriters with clause 11 hereto, 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 the Issuer Trustee 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, other than
with respect to a Title Perfection Event, to which it is to be a
party and payments under the Notes.
4
<PAGE>
(m) The Notes and the obligations of the Issuer Trustee under the
Note Trust Deed will be secured (pursuant to the Security Trust Deed)
by a first floating charge over the assets of the Trust.
(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 Issuer Trustee's Default (as defined in
the Prospectus).
II. The St.George parties, jointly and severally, represent and warrants to
each Underwriter and the Issuer Trustee 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 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.
(b) The Registration Statement (No. 333-84977) on Form S-11 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. 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
rules and regulations of the Commission thereunder 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 in or
omissions from the Registration Statement or the Prospectus based
upon written information furnished to the Trust Manager by any
Underwriter through the Representative specifically for use therein,
it being understood and agreed that the only such information is that
described as such in Section 7(b).
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(c) Except as described in the Prospectus, since the respective dates
as of which information is given in the Registration Statement and
the Prospectus, there has been no material adverse change, nor any
development involving a prospective material adverse change, in the
condition (financial or other), business, properties, stockholders'
equity or results of operations of any St.George Party taken as a
whole.
(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 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 each of the St.George Parties.
(f) The Basic Documents to which any St.George party is a party have
been duly authorized by the applicable St.George Party, 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 each St.George Party which is a party
thereto and each of the other parties thereto, each of the Basic
Documents to which any St.George Party is a party will constitute a
legal, valid and binding obligation of each such St.George Party,
enforceable against each such St.George Party 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) Neither St.George Party is, nor with the giving of notice or
lapse of time or both would be, in violation of or in default under,
(i) its Constitution or (ii) 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 in the
case of (ii) 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 each St.George Party 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 each St.George Party is a
party or by which such St.George Party is bound or to which any of
the property or assets of such St.George Party is subject, nor
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will any such action result in any violation of the provisions of the
Constitution of such St.George Party or any applicable law or statute
or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over each St.George Party, 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 each St.George Party 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) Except as disclosed in the Prospectus, there are no legal or
governmental investigations, actions, suits or proceedings pending
or, to the knowledge of either St.George Party, threatened against or
affecting either St.George Party or its properties or, to which
either St.George Party is or may be a party or to which each
St.George Party or any property of a St.George Party is or may be the
subject; 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, in each case, which will have an impact on the
transactions contemplated by this Agreement.
(i) The representations and warranties of each St.George Party
contained in the Basic Documents are true and correct in all material
respects.
(j) KPMG are independent public accountants with respect to each
St.George Party within the meaning of the standards established by
the American Institute of Certified Public Accountants.
(k) Each St.George Party owns, possesses or has obtained all
Authorisations (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 perform its obligations under this Agreement
and the Basic Documents, and neither St.George Party has received any
actual notice of any proceeding relating to revocation or
modification of any such Authorisation, license, permit, certificate,
consent, order, approval or other authorization; and each St.George
Party is in compliance with all laws and regulations necessary for
the performance of its obligations under this Agreement and the Basic
Documents.
(l) To the knowledge of any St.George Party, no event has occurred
which would entitle either St.George Party to direct the Issuer
Trustee to retire as trustee of the Trust under clause 20 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
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(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) Neither St.George Party has 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 either
St.George Party 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 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 either St.George Parties' obligations under the
agreements to which it is to be a party and the Notes.
(p) 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 a Manager's Default (as defined in the
Prospectus).
(q) Since June 30, 1999 there has been no material adverse change or
any development involving a prospective material adverse change in
the condition (financial or otherwise) of the St.George Parties; and
(r) As of the Closing Date, St.George will have transferred to the
Issuer Trustee a valid equitable assignment of each related Housing
Loan offered for sale by it to the Issuer Trustee.
3. Purchase, Sale and Delivery of Notes. On the basis of the representations,
warranties and agreements contained herein, but subject to the terms and
conditions herein set forth, the Issuer Trustee, at the direction of the Trust
Manager, agrees to sell the Notes to the Underwriters, and the Underwriters
agree, severally and not jointly, to purchase from the Issuer Trustee at a
purchase price of ___% of the principal amount of the Class A-1 Notes, ___% of
the principal amount of the Class A-2 Notes and ___% of the principal amount
of the Class A-3 Notes (which amount shall be net of the commissions payable
to the Underwriters) the respective principal amount of each class of Notes
set forth opposite the names of the Underwriters in Schedule A hereto.
The Issuer Trustee will deliver against payment of the purchase price
the Notes in the form of one or more permanent Global Notes in definitive form
(the "Global Notes") deposited with the Note Trustee as custodian for The
Depository Trust Company (the "DTC") and
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registered in the name of Cede & Co., as nominee for DTC. Interests in any
permanent Global Notes will be held only in book-entry form through DTC,
except in the limited circumstances described in the Prospectus. Payment for
the Notes shall be made by the Underwriters in Federal (same day) funds by
official bank check or checks or wire transfer to an account at a bank
acceptable to Credit Suisse First Boston Corporation ("CSFBC") drawn to the
order of the Currency Swap Provider at the office of Mayer, Brown & Platt,
1675 Broadway, New York, New York 10019 not later than 10:00 A.M., New York
City time, on September __, 1999, or at such other time not later than seven
full business days thereafter as CSFBC and the Trust Manager determine, such
time being herein referred to as the "Closing Date," against delivery to the
Note Trustee as custodian for DTC of the Global Notes representing all of the
Notes. The Global Notes will be made available for checking at the above
office at least 24 hours prior to the Closing Date.
4. Offering by Underwriters. The St.George Parties and the Issuer Trustee
understand that the several Underwriters propose to offer the Notes for sale
to the public as set forth in the Prospectus.
5. Certain Agreements of the Issuer Trustee and the St.George Parties.
I. The St.George Parties, jointly and severally, covenant and agree with each
of the several Underwriters as follows:
(a) The Trust Manager will file the Prospectus with the Commission
pursuant to and in accordance with subparagraph (1) of Rule 424(b) by
the second business day following the execution and delivery of this
Agreement. The Trust Manager will advise CSFBC promptly of any such
filing pursuant to Rule 424(b).
(b) The Trust Manager will advise CSFBC promptly of any proposal to
amend or supplement the Registration Statement as filed or the
related Prospectus and will not effect such amendment or
supplementation without CSFBC's consent; and the Trust Manager will
also advise CSFBC promptly of the institution by the Commission of
any stop order proceedings in respect of the Registration Statement
and will use its best efforts to prevent the issuance of any such
stop order and to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act in connection with
sales by any Underwriter or dealer, any event occurs 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 to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary at any time to amend the Prospectus to comply with the
Securities Act, the Trust Manager will promptly notify CSFBC of such
event and will promptly prepare and file with the Commission, at its
own expense, an amendment or supplement which will correct such
statement or omission or an amendment which will effect such
compliance. Neither CSFBC's consent to, nor the Underwriters'
delivery
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<PAGE>
of, any such amendment or supplement shall constitute a waiver of
any of the conditions set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Trust Manager will make generally available
to its securityholders an earnings statement covering a period of at
least 12 months beginning after the effective date of the
Registration Statement which will satisfy the provisions of Section
11(a) of the Securities Act. For the purpose of the preceding
sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such
effective date, except that, if such fourth fiscal quarter is the
last quarter of the Trust's fiscal year, "Availability Date" means
the 90th day after the end of such fourth fiscal quarter.
(e) The Trust Manager will furnish to the Representative copies of
each Registration Statement (3 of which will be signed and will
include all exhibits), each related preliminary prospectus, and, so
long as a prospectus relating to the Notes is required to be
delivered under the Securities Act in connection with sales by any
Underwriter or dealer, the Prospectus and all amendments and
supplements to such documents, in each case in such reasonable
quantities as CSFBC requests. The Prospectus shall be so furnished on
or prior to 3:00 P.M., New York time, on the business day following
the later of the execution and delivery of this Agreement or the
effective time of the Registration Statement. All other documents
shall be so furnished as soon as available. The Trust Manager will
pay the expenses of printing and distributing to the Underwriters all
such documents.
(f) The Trust Manager will arrange for the qualification of the Notes
for sale and the determination of their eligibility for investment
under the laws of such jurisdictions as CSFBC designates and will
continue such qualifications in effect so long as required for the
distribution.
(g) So long as the Notes are outstanding, the Trust Manager will
furnish to the Representative (i) copies of each certificate, the
annual statements of compliance and the annual independent certified
public accountant's audit report on the financial statements
furnished to the Issuer Trustee or the Note Trustee pursuant to the
Basic Documents by first class mail as soon as practicable after such
statements and reports are furnished to the Issuer Trustee or the
Note Trustee, (ii) copies of each amendment to any of the Basic
Documents, (iii) on each Determination Date or as soon thereafter as
practicable, the Bond Factor as of the related Record Date shall be
available to the Representative on Bloomberg and Reuters, (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 Representative may reasonably
request.
(h) 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
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action by the Trust Manager, the Trust Manager shall use its best
efforts to furnish such documents and take any other such action.
(i) The Issuer Trustee or the Trust Manager on its behalf will list
the Notes on the London Stock Exchange and 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 Representative,
decide.
(j) The Trust Manager will 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 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.
(k) The Trust Manager will assist the Representative in making
arrangements with DTC, Euroclear and Cedelbank concerning the issue
of the Notes and related matters.
(l) The Trust Manager 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 Notes not being assigned
the ratings referred to in Section 6(n) below.
(m) St.George Bank will pay all expenses incident to the performance
of its obligations under this Agreement, for any filing fees and
other expenses (including fees and disbursements of underwriters'
counsel and issuers' counsel) incurred in connection with
qualification of the Notes for sale under the laws of such
jurisdictions as CSFBC designates and the printing of memoranda
relating thereto, for any fees charged by the independent
accountants, for any fees charged by the rating agencies for the
rating of the Notes, for any travel expenses of any of the St.George
Parties' officers and employees and any other expenses of either
St.George Party in connection with attending or hosting meetings with
prospective purchasers of the Notes and for expenses incurred in
distributing preliminary prospectuses and the Prospectus (including
any amendments and supplements thereto) to the Underwriters.
(n) St.George Bank will indemnify and hold harmless the Underwriters
against any documentary, stamp or similar issue tax, including any
interest and penalties, on the creation, issue and sale of the Notes
and on the execution and delivery of this Agreement. All payments to
be made by the Issuer Trustee and the St.George Parties hereunder
shall be made without withholding or deduction for or on account of
any present or future taxes, duties or governmental charges
whatsoever unless the Trust Manager is compelled by law to deduct or
withhold such taxes, duties or charges. In that event, the Trust
Manager shall pay such additional amounts as may be necessary in
order that the net amounts received after such withholding or
deduction shall equal the amounts that would have been received if no
withholding or deduction had been made.
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(o) Neither St.George Party will offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with
the Commission a registration statement under the Securities Act
relating to debt or asset-backed securities, or publicly disclose the
intention to make any such offer, sale, pledge, disposition or
filing, without the prior written consent of CSFBC for a period
beginning at the date of this Agreement and ending at the later of
the Closing Date or the lifting of trading restrictions by the
Representative.
II. The Issuer Trustee covenants and agrees with each of the several
Underwriters as follows:
(a) The Issuer Trustee will 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 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.
(c) The Issuer Trustee will use all reasonable efforts 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 required to be executed by the
Issuer Trustee not executed on the date hereof on or before the
Closing Date, and (ii) the Issuer Trustee will assist the
Representative to make arrangements with DTC, Euroclear and Cedelbank
concerning the issue of the Notes and related matters.
(d) The Issuer Trustee will procure or cause to be procured that the
charges created by or contained in the Security Trust Deed are
registered within all applicable time limits in all appropriate
registers.
(e) The Issuer Trustee will perform all its obligations under, and
subject to, 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.
(f) 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 Notes not being
assigned the ratings referred to in Section 6(n) below.
(g) The Issuer Trustee will not prior to or on the Closing Date amend
the terms of any Basic Document to which it is a party nor execute
any of the Basic Documents to which it is a party other than in the
agreed form without the consent of the Representative.
6. Conditions of the Obligations of the Underwriters. The obligations of the
several Underwriters to purchase and pay for the Notes on the Closing Date
will be subject to the accuracy of the representations and warranties on the
part of the St.George Parties and the Issuer Trustee herein, to the accuracy
of the statements of officers of the St.George Parties and the Issuer Trustee
made pursuant to the provisions hereof, to the performance of the St.George
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Parties and the Issuer Trustee of their obligations hereunder and to the
following additional conditions precedent:
(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 or on
such later date to which you have consented; 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.I.(a) hereof; and all requests for
additional information shall have been complied with to the
satisfaction of the Representative. If the Trust Manager has elected
to rely on Rule 430A, all price-related information previously
omitted from the effective Registration Statement pursuant to such
Rule 430A shall have been transmitted to the Commission for filing
pursuant to Rule 424(b) within the prescribed time period, and prior
to the Closing Date the Trust Manager shall have provided evidence
satisfactory to the Representative of such timely filing, or a
post-effective amendment providing such information shall have been
promptly filed and declared effective in accordance with the
requirements of Rule 430A;
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event
involving a prospective change, in the condition (financial or
other), business, properties or results of operations of any of the
St.George Parties, the Issuer Trustee or any Swap Party and their
respective subsidiaries taken as one enterprise which, in the
judgment of a majority in interest of the Underwriters including the
Representative, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the public offering or the
sale of and payment for the Notes; (ii) any downgrading in the rating
of any debt securities of any of the Trust Manager, St.George, the
Issuer Trustee or any Swap Party by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule
436(g) under the Securities Act), or any public announcement that any
such organization has under surveillance or review its rating of the
Notes or any debt securities of any of the Trust Manager, St.George,
the Issuer Trustee or any Swap Party (other than an announcement with
positive implications of a possible upgrading, and no implication of
a possible downgrading, of such rating); (iii) any material
suspension or material limitation of trading in securities generally
on the New York Stock Exchange, the London Stock Exchange or any
other exchange on which the Notes are listed, or any setting of
minimum prices for trading on such exchange, or any suspension of
trading of any securities of any of the Trust Manager, St.George, the
Issuer Trustee or any Swap Party on any exchange or in the
over-the-counter market; (iv) any banking moratorium declared by U.S.
Federal, New York, London, England or Australia authorities; or (v)
any outbreak or escalation of major hostilities in which the United
States, London, England or Australia is involved, any declaration of
war by Congress or any other substantial national or international
calamity or emergency if, in the judgment of a majority in interest
of the Underwriters including the Representative, the effect of any
such outbreak,
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<PAGE>
escalation, declaration, calamity or emergency makes it impractical
or inadvisable to proceed with completion of the public offering or
the sale of and payment for the Notes.
(c) The Representative shall have received a certificate, dated such
Closing Date, of the managing director, director or any chief general
manager of each St.George Party and of an authorized officer of the
Issuer Trustee (as to paragraphs (i) and (ii) below only) in which
such officers, to the best of their knowledge after reasonable
investigation, shall state that: (i) the representations and
warranties of such entity in this Agreement are true and correct;
(ii) such entity has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to such Closing Date; (iii) in the case of the Trust Manager,
no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; and (iv)
subsequent to the date of the most recent financial statements
supplied by the St.George Parties to the Underwriters or the
Representative on behalf of the Underwriters, there has been no
material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or
other), business, properties or results of operations of such entity
and its subsidiaries taken as a whole except as set forth in or
contemplated by the Prospectus or as described in such certificate.
(d) Allen Allen & Hemsley, Australian counsel for St.George, the
Trust Manager and the Servicer, shall have furnished to the
Representative their written opinion, dated the Closing Date, in form
and substance satisfactory to the Representative, and such counsel
shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters, a copy
of which opinion is attached hereto as Exhibit A.
(e) Allen Allen & Hemsley, Australian tax counsel for St.George, the
Trust Manager and the Servicer, shall have furnished to the
Representative their written opinion, dated the Closing Date, in form
and substance satisfactory to the Representative, and such counsel
shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters, a copy
of which opinion is attached hereto as Exhibit B.
(f) The Representative shall have received two letters, one dated the
date hereof and one dated the Closing Date, of KPMG confirming that
they are independent public accountants within the standards
established by the American Institute of Certified Public Accountants
and stating to the effect that:
(1) in their opinion the financial statements and schedules
examined by them and included in the Registration Statement and
in the Form 8-K of referred to in the Registration Statement
with respect to Bankers Trust Corporation, as currency swap
provider, comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the
related published Rules and Regulations;
(2) on the basis of a reading of the latest available interim
financial statements of Bankers Trust Corporation, inquiries of
officials of Bankers Trust Corporation who have responsibility
for financial and accounting matters and other specified
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procedures, nothing came to their attention that caused them to
believe that the unaudited financial statements included in the
Registration Statement do not comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and the related published Rules and Regulations
or any material modifications should be made to such unaudited
financial statements for them to be in conformity with generally
accepted accounting principles;
(3) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial
information contained in the Registration Statement (in each
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of the St.George Parties and their
subsidiaries subject to the internal controls of such parties'
accounting system or are derived directly from such records by
analysis or computation or from the collateral tape containing
the description of the Housing Loans) with the results obtained
from inquiries, a reading of such general accounting records and
collateral tape and other procedures specified in such letter
and have found such dollar amounts, percentages and other
financial information to be in agreement with such results,
except as otherwise specified in such letter.
(g) The Representative 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 Representative 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.
(h) Mayer Brown & Platt, United States counsel for the St.George
Parties and the Issuer Trustee, shall have furnished to the
Representative their written opinion, dated the Closing Date, in form
and substance satisfactory to the Representative, and such counsel
shall have received such papers and information as they may
reasonably request to enable them to pass upon such matters, to the
effect that:
(1) The Note Trust Deed has been duly qualified under the Trust
Indenture Act;
(2) To such counsel's knowledge, there are no material
contracts, indentures, or other documents of a character
required to be described or referred to under either the
Registration Statement or the Final Prospectus or to be filed as
exhibits to the Registration Statement other than those
described or referred to therein or filed or incorporated by
reference as exhibits thereto;
(3) The Trust is not and, after giving effect to the offering
and sale of the Notes and the application of the proceeds
thereof as described in the Prospectus, will not be an
"investment company" as defined in the Investment Company Act of
1940;
(4) No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required
for the consummation of
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the transactions contemplated by this Agreement in connection
with the issuance or sale of the Notes by the Issuer Trustee,
except such as have been obtained and made under the Securities
Act and the Trust Indenture Act and such as may be required
under state securities laws;
(5) the Registration Statement was filed and was declared
effective under the Securities Act as of the date and time
specified in such opinion, the Prospectus either was filed with
the Commission pursuant to the subparagraph of Rule 424(b)
specified in such opinion on the date specified therein or was
included in the Registration Statement, and, to the best of the
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement or any part thereof
has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities
Act, and each Registration Statement and the Prospectus, and
each amendment or supplement thereto, as of their respective
effective or issue dates, complied as to form in all material
respects with the requirements of the Securities Act, the Trust
Indenture Act and the Rules and Regulations; such counsel have
no reason to believe that any part of the Registration Statement
or any amendment thereto, as of its effective date or as of such
Closing Date, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Prospectus or any amendment or supplement
thereto, as of its issue date or as of such Closing Date,
contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; the descriptions in the
Registration Statement and Prospectus of statutes, legal and
governmental proceedings and contracts and other documents are
accurate and fairly present the information required to be
shown; and such counsel do not know of any legal or governmental
proceedings required to be described in the Registration
Statement or the Prospectus which are not described as required
or of any contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements
or other financial data contained in the Registration Statement
or the Prospectus;
(6) The statements in the Prospectus under the Captions
"Description of the Class A Notes" and "Description of the
Transaction Documents", insofar as they purport to summarize
certain terms of the Notes and the applicable Basic Documents,
constitute a fair summary of the provisions purported to be
summarized; and
(7) This Agreement represents a legal valid and binding
obligation of each of St.George, the Trust Manager and the
Issuer Trustee.
(i) Mayer Brown & Platt, United States federal income tax counsel for
the St.George Parties and the Issuer Trustee, shall have furnished to
the Representative their written
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opinion, dated the Closing Date, in form and substance satisfactory
to the Representative, a copy of which opinion is attached hereto as
Exhibit C.
(j) Mallesons Stephen Jaques, counsel for the Issuer Trustee, shall
have furnished to the Representative their written opinion, dated the
Closing Date, in form and substance satisfactory to the
Representative, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass
upon such matters, a copy of which opinion is attached hereto as
Exhibit D.
(k) Brown & Wood LLP, counsel for the Note Trustee, shall have
furnished to the Representative their written opinion, dated the
Closing Date, in form and substance satisfactory to the
Representative, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass
upon such matters, a copy of which is attached hereto as Exhibit E.
(l) Counsel to the Fixed-Floating Rate Swap Provider, the Standby
Fixed-Floating Rate Swap Provider, the Basis Swap Provider, the
Standby Basis Swap Provider and the Currency Swap Provider shall have
furnished to the Representative and the St.George Parties their
written opinion in form and substance satisfactory to the
Representative, copies of which opinions will be attached hereto as
Exhibit F.
(m) 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.
(n) At the Closing Date, each Class of 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 IBCA") and "Aaa" by Moody's Investors Service, Inc.
("Moody's" and together with Standard and Poor's and Fitch IBCA, the
"Rating Agencies") as evidenced by letters from the Rating Agencies.
(o) The execution and delivery by all parties thereto of the Basic
Documents on or prior to the Closing Date.
(p) The London Stock Exchange shall have agreed on or prior to the
Closing Date to list the Notes.
(q) On or prior to the Closing Date the St.George Parties and the
Issuer Trustee shall have furnished to the Representative such
further certificates and documents as the Representative shall
reasonably request.
7. Indemnification and Contribution.
(a) Each of St.George and the Trust Manager, jointly and severally, agrees to
indemnify and hold harmless each Underwriter and the Issuer Trustee, its
partners, directors and officers and each person, if any, who controls such
Underwriter within the meaning of Section 15 of the Securities Act, against
any losses, claims, damages or liabilities, joint or several, to which such
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Underwriter or the Issuer Trustee may become subject, under the Securities Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement thereto
(other than the information contained under the heading "The Currency Swap
Provider"), or any related preliminary prospectus, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other
expenses reasonably incurred by such Underwriter or the Issuer Trustee in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
neither St.George nor the Trust Manager will be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to St.George or the Trust Manager by any
Underwriter through the Representative specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (b)
below.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless St.George, the Issuer Trustee and the Trust Manager, its partners,
its directors and officers and each person, if any, who controls such company
within the meaning of Section 15 of the Securities Act, against any losses,
claims, damages or liabilities to which such company may become subject, under
the Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Trust Manager by such Underwriter through the Representative
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by St.George, the Issuer Trustee or the Trust Manager in
connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred, it being understood and
agreed that the only such information furnished by any Underwriter consists of
the following information in the Prospectus furnished on behalf of each
Underwriter: (i) the concession and reallowance figures appearing in the third
paragraph under the caption "Plan of Distribution" and (ii) the information
contained in the fifth and seventh paragraphs under the caption "Plan of
Distribution".
(c) Promptly after receipt by an indemnified party under this Section (c) of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise
than under subsection (a) or (b) above. In case any such action is brought
against any indemnified party and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other
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indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with
the defense thereof other than reasonable costs of investigation. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened action in respect of
which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
(i) includes an unconditional release of such indemnified party from all
liability on any claims that are the subject matter of such action and (ii)
does not include a statement as to, or an admission of, fault, culpability or
a failure to act by or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages
or liabilities referred to in subsection (a) or (b) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
St.George Parties and the Issuer Trustee on the one hand and the Underwriters
on the other from the offering of the Notes or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the St.George Parties and the Issuer
Trustee on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the St.George Parties and the Issuer Trustee on
the one hand and the Underwriters on the other shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the St.George Parties and the Issuer Trustee bear to the
total underwriting discounts and commissions received by the Underwriters. The
relative fault 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 St.George Parties and the Issuer Trustee or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The
amount paid by an indemnified party as a result of the losses, claims, damages
or liabilities referred to in the first sentence of this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall 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 which 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 in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
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(e) The obligations of the St.George Parties and the Issuer Trustee under this
Section shall be in addition to any liability which the St.George Parties and
the Issuer Trustee may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls any Underwriter within
the meaning of the Securities Act; and the obligations of the Underwriters
under this Section shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each director of the St.George Parties or the Issuer Trustee,
to each officer of the St.George Parties or the Issuer Trustee who has signed
the Registration Statement and to each person, if any, who controls the
St.George Parties or the Issuer Trustee within the meaning of the Securities
Act.
(f) To the extent that any payment of damages by St.George Bank 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.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Notes hereunder on the Closing Date and the
aggregate principal amount of Notes that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
principal amount of Notes that the Underwriters are obligated to purchase on
such Closing Date, CSFBC may make arrangements satisfactory to the Trust
Manager for the purchase of such Notes by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Notes that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate principal amount
of Notes with respect to which such default or defaults occur exceeds 10% of
the total principal amount of Notes that the Underwriters are obligated to
purchase on such Closing Date and arrangements satisfactory to CSFBC and the
Trust Manager for the purchase of such Notes by other persons are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter or the Trust Manager,
except as provided in Section 9. As used in this Agreement, the term
"Underwriter" includes any person substituted for an Underwriter under this
Section. Nothing herein will relieve a defaulting Underwriter from liability
for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of
the St.George Parties, the Issuer Trustee or their respective officers and of
the several Underwriters set forth in or made pursuant to this Agreement will
remain in full force and effect, regardless of any investigation, or statement
as to the results thereof, made by or on behalf of any Underwriter, the
St.George Parties, the Issuer Trustee or any of their respective
representatives, officers or directors or any controlling person, and will
survive delivery of and payment for the Notes. If this Agreement is terminated
pursuant to Section 8 or if for any reason the purchase of the Notes by the
Underwriters is not consummated, the St.George Parties, jointly and severally,
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of the St.George Parties,
the Issuer Trustee and the Underwriters pursuant to Section 7 shall remain in
effect, and if any Notes have been purchased hereunder the representations and
warranties in Section 2 and all obligations under Section 5 shall also remain
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in effect. If the purchase of the Notes by the Underwriters is not consummated
for any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in clause
(iii), (iv) or (v) of Section 6(b), the St.George Parties, jointly and
severally, will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Notes.
10. 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:
(1) 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,
(2) 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
(3) 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 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 the Trust Manager or
St.George identified on Annex A hereto or as otherwise notified
in writing by the Trust Manager or St.George to the Underwriters
from time to time.
(b) Each Underwriter (severally, not jointly) undertakes in
connection with the Notes subject to the "public offer test" under
Section 128F of the Tax Act and governed by this Agreement that the
issue of such Notes resulted from:
(i) 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
(ii) its offer of such 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
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Euroclear System ("Euroclear"), Cedelbank or The Depository
Trust Company will confer rights in such Notes under Global
Notes. Each Underwriter will provide the Issuer Trustee (within
five Business Days of the offer of such 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.
(iii) Each Underwriter acknowledges that no representation is made
by the Issuer Trustee or any St.George Party that any
action has been or will be taken in any jurisdiction
outside the United States 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
securities laws 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.
(iv) It has not offered or sold and will not offer or sell any
Notes to persons in the United Kingdom prior to admission
of the Notes to listing in accordance with Part IV of the
Financial Services Act 1986 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, as amended, of the Financial Services
Act.
(v) 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 Notes in, from or
otherwise involving the United Kingdom.
(vi) In connection with the Notes, 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 issue
of the 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 the Listing Rules, to a person who is of a
kind described in Article 11(e) of the Financial Services
Act 1986 (Investment Advertisements)
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(Exemptions) Order 1996 (as amended) or is a person to
whom the document may otherwise lawfully be issued or
passed on.
11. 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 and
property of the Trust which are available to satisfy the right of the Issuer
Trustee to be exonerated or 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 Section 11 shall not apply to any obligation
or liability of the Issuer Trustee to the extent that it is not satisfied
because under a Basic Document or by operation of law there is a reduction in
the extent of the Issuer Trustee's indemnification or exoneration out of the
assets of the Trust as a result of the Issuer Trustee's fraud, negligence or
Default (as defined in the Master Trust Deed).
It is acknowledged that the Trust Manager, the Servicer, the
Custodian, the Currency Swap Providers, the Redraw Facility Provider, the Swap
Providers, the Standby Swap Providers, the Note Trustee, the Principal Paying
Agent, the other Paying Agents, the Calculation Agent 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 Default (as defined in the Master
Trust Agreement) 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 has been delegated or
appointed by the Issuer Trustee in accordance with the Transaction Documents
(as defined in the Master Trust Deed) to fulfil its obligations relating to
the Trust or by any other act or omission of a Relevant Party or by any other
such person.
12. Consent to Jurisdiction; Appointment of Agent to Accept Service of
Process.
Each of the St.George Parties and the Issuer Trustee hereby submits
to the non-exclusive jurisdiction of the Federal and state courts in the
Borough of Manhattan in The City of New York in any suit or proceeding arising
out of or relating to this Agreement or the transactions contemplated hereby.
Each of the St.George Parties and the Issuer Trustee irrevocably appoints
[Insert name and address of authorized agent], as its authorized agent in the
Borough of
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Manhattan in The City of New York upon which process may be served in any such
suit or proceeding, and agrees that service of process upon such agent, and
written notice of said service to it by the person serving the same to the
address provided in Section 16, shall be deemed in every respect effective
service of process upon it in any such suit or proceeding. Each of the
St.George Parties and the Issuer Trustee further agrees to take any and all
action as may be necessary to maintain such designation and appointment of
such agent in full force and effect for so long as the Notes remain
outstanding.
The obligation of any of the St.George Parties or the Issuer Trustee
in respect of any sum due to any Underwriter shall, notwithstanding any
judgment in a currency other than United States dollars, not be discharged
until the first business day, following receipt by such Underwriter of any sum
adjudged to be so due in such other currency, on which (and only to the extent
that) such Underwriter may in accordance with normal banking procedures
purchase United States dollars with such other currency; if the United States
dollars so purchased are less than the sum originally due to such Underwriter
hereunder, each of the St.George Parties and the Issuer Trustee agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify such
Underwriter against such loss.
13. Foreign Taxes. All payments to be made by the Issuer Trustee and the
St.George Parties hereunder shall be made without withholding or deduction for
or on account of any present or future taxes, duties or governmental charges
whatsoever unless the Trust Manager is compelled by law to deduct or withhold
such taxes, duties or charges. In that event, the Trust Manager shall pay such
additional amounts as may be necessary in order that the net amounts received
after such withholding or deduction shall equal the amounts that would have
been received if no withholding or deduction had been made.
14. Waiver of Immunities. To the extent that any of the Issuer Trustee and the
St.George Parties or any of their properties, assets or revenues may have or
may hereafter become entitled to, or have attributed to it, any right of
immunity, on the grounds of sovereignty or otherwise, form any legal action,
suit or proceeding, from the giving of any relief in any respect thereof, from
setoff or counterclaim, from the jurisdiction of any court, from service of
process, from attachment upon or prior to judgment, from attachment in aid of
execution of judgment, or from execution of judgment, or other legal process
or proceeding for the giving of any relief or for the enforcement of any
judgment, in any jurisdiction in which proceedings may at any time be
commenced, with respect to its obligations, liabilities or any other matter
under or arising out of or in connection this Agreement, the Issuer Trustee
and the St.George Parties, as applicable, hereby irrevocably and
unconditionally waives, and agrees not to plead or claim, any such immunity
and consents to such relief and enforcement.
15. Judgment Currency. If any judgment or order in any legal proceeding
against any of the Issuer Trustee and the St.George Parties is given or made
for any amount due hereunder and such judgment or order is expressed and paid
in a currency (the "Judgment Currency") other than United States dollars and
there is any variation as between (i) the rate of exchange (the "Judgment
Rate") at which the United States dollar amount is converted into Judgment
Currency for the purpose of such judgment or order, and (ii) the rate of
exchange (the "Market Rate") at which the person to whom such amounts is paid
(the "Payee") is able to purchase United States dollars with the amount of the
Judgment Currency actually received by the holder, then the
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difference, expressed in United States dollars, between such amount calculated
at the Judgment Rate and such amount calculated at the Market Rate shall be
indemnified (a) if negative by the Issuer Trustee and the St.George Parties,
as applicable, to the Payee and (b) if positive by the Payee to the Issuer
Trustee and the St.George Parties, as applicable. The foregoing indemnity
shall constitute a separate and independent obligation of the Issuer Trustee,
the Trust Manager and St.George or the Payee, as the case may be, and shall
continue in full force and effect notwithstanding any such judgment or order
as aforesaid. The term "rate or exchange" shall include any premiums and costs
of exchange payable in connection with the purchase of, or conversion into,
the relevant currency.
16. Notices. All communications hereunder will be in writing and, if sent to
the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representative at Eleven Madison Avenue, New York, N.Y. 10010-3629,
Attention: Investment Banking Department--Transactions Advisory Group; if sent
to the Trust Manager will be mailed, delivered or telegraphed and confirmed to
the Trust Manager at c/o ________________ (Facsimile No. ___________),
Attention: _____________; if sent to the Issuer Trustee, mailed, delivered or
telegraphed and confirmed to the Issuer Trustee at c/o __________________
(Facsimile No. _________), Attention: ______________; and if sent to
St.George, mailed, delivered or telegraphed and confirmed to St.George at
______________ (Facsimile No. __________), Attention: __________; provided,
however, that any notice to an Underwriter pursuant to Section 7 will be
mailed, delivered or telegraphed and confirmed to such Underwriter.
17. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
18. Representation of Underwriters. The Representative will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representative will be binding upon all the
Underwriters.
19. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
20. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
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If the foregoing is in accordance with the Representative's
understanding of our agreement, kindly sign and return the enclosed
counterparts hereof, whereupon it will become a binding agreement between the
parties listed below in accordance with its terms.
Very truly yours,
CRUSADE MANAGEMENT LIMITED
By:
------------------------------
Name:
Title:
AXA TRUSTEES LIMITED
By:
------------------------------
Name:
Title:
ST.GEORGE BANK LIMITED
By:
------------------------------
Name:
Title:
26
<PAGE>
The foregoing Underwriting Agreement is hereby
confirmed and accepted as of the day first above
written
Credit Suisse First Boston Corporation
CREDIT SUISSE FIRST BOSTON CORPORATION
By:
-------------------------------
Name:
Title:
Acting on behalf
of itself as the Representative of
the several Underwriters
27
<PAGE>
SCHEDULE A
Underwriter PRINCIPAL AMOUNT OF CLASS A-1
NOTES TO BE PURCHASED
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
J.P. Morgan Securities Inc.
Total................... $
Underwriter PRINCIPAL AMOUNT OF CLASS A-2
NOTES TO BE PURCHASED
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
J.P. Morgan Securities Inc.
Total................... $
Underwriter PRINCIPAL AMOUNT OF CLASS A-3
NOTES TO BE PURCHASED
Credit Suisse First Boston Corporation
Deutsche Bank Securities Inc.
J.P. Morgan Securities Inc.
Total................... $
28
<PAGE>
15 September 1999
Crusade Management Limited
4-16 Montgomery Street
Kogarah NSW 2217
Dear Sirs
CRUSADE GLOBAL TRUST NO. 1 OF 1999
We have acted for Crusade Management Pty Limited (CML) in connection with the
Crusade Global Trust No. 1 of 1999 (the Trust) to be constituted under the
Master Trust Deed (the Master Trust Deed) dated 14 March 1998 between AXA
Trustees Limited (formerly National Mutual Trustees Limited) (the Trustee) and
CML.
Definitions in the Prospectus (defined below) apply in this opinion but Relevant
Jurisdiction means the Commonwealth of Australia or New South Wales. No
assumption or qualification in this opinion limits any other assumption or
qualification in it.
1. Documents
We have examined the following draft documents:
(a) the Master Trust Deed;
(b) the Notice of Creation of Trust for the Trust;
(c) the Supplementary Terms Notice;
(d) the Note Trust Deed between CML, the Trustee, the Note Trustee
HSBC Issuer Services and the Security Trustee;
(e) the Note Issue Direction for the Trust;
(f) the Agency Agreement between, among others, CML, the Trustee; and
(g) a copy of the Prospectus which forms part of the Registration
Statement on Form S-11 filed by CML with the Securities and
Exchange Commission (the Commission) under the US Securities
Act of 1933 as amended, relating to the offer and sale of
the Class A Notes by the Trustee (the Prospectus).
<PAGE>
15 September 1999 Crusade Management Limited Allen Allen & Hemsley
- --------------------------------------------------------------------------------
2. Assumption
For the purposes of giving this opinion we have assumed that where a
document has been submitted to us in draft form it will be executed in
the form of that draft.
3. Qualifications
Our opinion is subject to the following qualifications.
(a) We express no opinion as to any laws other than the laws of each
Relevant Jurisdiction as in force at the date of this opinion
and, in particular we express no opinion as to the laws of
England or the United States.
(b) Our opinion is subject to the explanations and qualifications set
forth under the caption "Australian Tax Matters" in the
Prospectus.
4. Opinion
Based on the assumptions and subject to the qualifications set out
above we are of the opinion that while the section entitled "Australian
Tax Matters" in the Prospectus does not purport to discuss all possible
Australian tax ramifications of the purchase, ownership, and
disposition of the Class A Notes, we hereby adopt and confirm the
opinions set forth in the Prospectus under the heading "Australian Tax
Matters" which discuss the material Australian income tax consequences
of the purchase ownership and disposition of the Notes. There can be no
assurance, however, that the tax conclusions presented in that section
will not be successfully challenged by the Australian Taxation Office,
or significantly altered by new legislation, changes in Australian
Taxation Office positions or judicial decisions, any of which
challenges or alterations may be applied retroactively with respect to
completed transactions.
We consent to the filing of this letter as an exhibit to the
Registration Statement on Form S-11 filed with the Prospectus and to
the references to this firm under the heading "Australian Tax Matters",
"Enforcement of Foreign Judgments in Australia" and "Legal Matters" in
the Prospectus, without admitting that we are "experts" within the
meaning of the Securities Act of 1933 of the rules and regulations of
the Commission issued under that Act with respect to any part of the
Registration Statement, including this exhibit.
Yours faithfully
/s/ Andrew Jinks
- ------------------------
Andrew Jinks
Partner
[email protected]
Tel (02) 9230 4925
- --------------------------------------------------------------------------------
Page 2 of 2
<PAGE>
ALLEN ALLEN & HEMSLEY
ALLENS
ARTHUR ROBINSON
GROUP
REDRAW FACILITY AGREEMENT
- -------------------------------------------------------------------
AXA TRUSTEES LIMITED
(Trustee)
ST.GEORGE BANK LIMITED
(Redraw Facility Provider)
CRUSADE MANAGEMENT LIMITED
(Manager)
Crusade Global Trust No. 1 of 1999
ALLEN ALLEN & HEMSLEY
The Chifley Tower
2 Chifley Square
Sydney NSW 2000
Australia
Tel 61 2 9230 4000
Fax 61 2 9230 5333
(C) Copyright Allen Allen & Hemsley 1999
<PAGE>
REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION 1
1.1 Definitions 1
1.2 Master Trust Deed definitions 4
1.3 Interpretation 4
1.4 Determination, statement and certificate
sufficient evidence 4
1.5 Transaction Document 4
1.6 Limited to Trust 4
1.7 Trustee as trustee 5
1.8 Knowledge of Trustee 5
2. PURPOSE 5
3. DRAWINGS 5
3.1 Redraw Advance 5
3.2 Making of Redraw Advances 6
4. FEES 6
4.1 Availability fee 6
4.2 Draw Margin 6
4.3 Capitalisation 8
4.4 GST 8
5. CANCELLATION OF REDRAW LIMIT 8
5.1 During Term 8
5.2 At end of Term 8
5.3 Cancellation by Redraw Facility Provider 8
5.4 Rollover Term renewal 8
6. REPAYMENT 8
6.1 Repayment of Redraw Advances 8
6.2 Final repayment 9
7. PREPAYMENTS 9
Page (i)
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
7.1 Voluntary prepayments 9
7.2 Draw Margin 9
7.3 Limitation on prepayments 9
8. PAYMENTS 9
8.1 Manner 9
8.2 Payment to be made on Business Day 10
8.3 Appropriation where insufficient moneys available 10
9. CHANGES IN LAW 10
9.1 Additional payments 10
9.2 Minimisation 11
9.3 Survival 11
10. CONDITIONS PRECEDENT 11
10.1 Conditions precedent to initial Drawdown
Notice 11
10.2 Conditions precedent to each Redraw Advance 12
11. REPRESENTATIONS AND WARRANTIES 12
11.1 Representations and warranties 12
11.2 Reliance on representations and warranties 13
12. UNDERTAKINGS 13
12.1 General undertakings 13
12.2 Undertakings relating to Trust 14
12.3 Term of undertakings 14
13. EVENTS OF DEFAULT 14
13.1 Events of Default 14
13.2 Consequences 15
14. CONTROL ACCOUNTS 15
15. WAIVERS, REMEDIES CUMULATIVE 15
16. SEVERABILITY OF PROVISIONS 15
Page (ii)
<PAGE>
REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
17. SURVIVAL OF REPRESENTATIONS 16
18. INDEMNITY AND REIMBURSEMENT OBLIGATION 16
19. MORATORIUM LEGISLATION 16
20. CONSENTS AND OPINIONS 16
21. ASSIGNMENTS 16
22. NOTICES 17
23. AUTHORISED SIGNATORIES 17
24. GOVERNING LAW AND JURISDICTION 17
25. COUNTERPARTS 17
26. ACKNOWLEDGEMENT BY TRUSTEE 18
27. LIMITED RECOURSE 18
27.1 General 18
27.2 Liability of Trustee limited to its right to
indemnity 18
27.3 Unrestricted remedies 19
27.4 Restricted remedies 19
28. REDRAW FACILITY PROVIDER'S OBLIGATIONS 20
29. SUCCESSOR TRUSTEE 20
ANNEXURE A 22
DRAWDOWN NOTICE 22
Page (iii)
<PAGE>
REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
DATE 1999
- -------------
PARTIES
- -------------
1. AXA TRUSTEES LIMITED (ACN 004 029 841) of Level 2, 65 Southbank
Boulevard, South Melbourne, Victoria 3205 in its capacity as trustee of
the Crusade Global Trust No. 1 of 1999 (the TRUSTEE);
2. ST.GEORGE BANK LIMITED (ACN 055 513 070) incorporated in New South Wales
of 4-16 Montgomery Street, Kogarah, New South Wales 2217 (the REDRAW
FACILITY PROVIDER); and
3. CRUSADE MANAGEMENT LIMITED (ACN 072 715 916) incorporated in the
Australian Capital Territory of 4-16 Montgomery Street, Kogarah, New
South Wales 2217 (the MANAGER).
RECITALS
- -------------
A The Trustee is the trustee of the Crusade Global Trust No. 1 of 1999 and
proposes to issue Notes pursuant to the Master Trust Deed.
B The Manager has arranged for the Redraw Facility Provider to provide the
Trustee with the Redraw Facility under which loans of up to 2% of the
sum of the aggregate of the Stated Amounts of the Notes may be made
available to the Trustee.
C The Redraw Facility Provider has agreed to provide the Redraw Facility
to the Trustee on the terms and conditions contained in this agreement.
- --------------------------------------------------------------------------------
IT IS AGREED as follows.
1. DEFINITIONS AND INTERPRETATION
- ----------------------------------------------------------------
1.1 DEFINITIONS
In this agreement the following definitions apply unless the context
requires otherwise, or unless otherwise defined.
AVAILABLE REDRAW AMOUNT means at any time the greater of:
(a) the Redraw Limit at that time less the Redraw Principal
Outstanding at that time; and
(b) zero.
DRAWDOWN DATE means, in relation to a Redraw Advance, the date on which
the Redraw Advance is or is to be made under this agreement in
accordance with the Drawdown Notice.
DRAWDOWN NOTICE means a notice under clause 3.1.
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
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EVENT OF DEFAULT means any of the events specified in clause 13.
FINAL REPAYMENT DATE means the Final Maturity Date.
MASTER TRUST DEED means the deed entitled "Master Trust Deed" between,
among others, the Trustee and the Manager dated 14 March 1998.
NOTICE OF CREATION OF TRUST means the Notice of Creation of Trust dated
on or before the date of this agreement issued under the Master Trust
Deed in relation to the Trust.
ONE MONTH BANK BILL RATE on any date means the rate calculated by taking
the simple average of the rates quoted on the Reuters Screen BBSW Page
at approximately 10.00am, Sydney time, on each of that date and the
preceding two Business Days (each a CALCULATION DAY) 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 30 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 Calculation Day fewer than five
Reference Banks have quoted rates on the Reuters Screen BBSW Page, the
rate for that Calculation Day 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
Calculation Day the rate for that date cannot be determined in
accordance with the foregoing procedures then the rate for that
Calculation Day shall mean such rate as is agreed between the Manager
and the Trustee having regard to comparable indices then available,
PROVIDED THAT on the first Reset Date of any Redraw Advance and the two
Business Days preceding that Reset Date the ONE MONTH BANK BILL Rate
shall be an interpolated rate calculated with reference to the tenor of
the period from that Reset Date to (but not including) the next Reset
Date.
REDRAW ADVANCE means any advance made or to be made under this
agreement.
REDRAW FACILITY means the redraw facility provided by the Redraw
Facility Provider under this agreement.
REDRAW LIMIT means 2% of the sum of the aggregate of the Stated Amounts
of the Class A Notes and Class B Notes (as adjusted by the Manager on
each anniversary of this agreement) or any other amount as agreed in
writing between the Redraw Facility Provider, the Trustee and the
Manager, as reduced or cancelled under this agreement, provided that the
Redraw Limit may not be increased unless the Designated Rating Agency
for each Class of Notes has confirmed in writing that the increase would
not result in a downgrading of the rating given to any Note of the
relevant Class or the withdrawal of the rating of any Note of the
relevant Class.
REDRAW PRINCIPAL OUTSTANDING means, at any time, the total principal
amount of all outstanding Redraw Advances at that time less the
Carryover Redraw Charge Offs at that time.
REFERENCE BANK has the meaning given in the 1991 ISDA Definitions.
Page 2
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
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RESET DATE means in relation to a Redraw Advance:
(a) the Drawdown Date for that Redraw Advance; and
(b) each Payment Date while that Redraw Advance is outstanding.
ROLLOVER TERM means:
(a) the period from the date of this agreement to the date which is
364 days after the date of this agreement; but
(b) if the Redraw Facility Provider has agreed to extend the term of
this agreement in accordance with clause 5.4, the period from
the commencement of that extended term to the date which is 364
days after the date of that commencement, in each case subject
to clause 5.4.
SUPPLEMENTARY TERMS NOTICE means the Supplementary Terms Notice issued
by the Manager on or about the date of this agreement under the Master
Trust Deed.
TERM means the period commencing on the date of this agreement and
expiring on the earlier of:
(a) the date on which the Notes are redeemed in full in accordance
with the Master Trust Deed and the Supplementary Terms Notice;
(b) the date declared by the Redraw Facility Provider under clause
13.2;
(c) the date on which the Trustee enters into a redraw facility, to
replace this agreement with any person to enable it to fund
Redraw Shortfalls;
(d) the date on which Crusade Management Limited retires or is
removed as Manager under the Master Trust Deed;
(e) the date on which the Redraw Limit is cancelled in full by the
Trustee under clause 5.1;
(f) the date which is one year after the Final Maturity Date;
(g) the date on which the Redraw Limit is cancelled in full by the
Redraw Facility Provider under clause 5.3; and
(h) the expiry of the Rollover Term.
TRUST means the Crusade Global Trust No. 1 of 1999 constituted under the
Master Trust Deed on the terms of the Supplementary Terms Notice.
TRUST DOCUMENT means:
(a) this agreement;
(b) the Master Trust Deed;
(c) the Notice of Creation of Trust;
(d) the Supplementary Terms Notice;
(e) the Custodian Agreement;
(f) the Security Trust Deed;
(g) the Servicing Agreement;
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
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(h) the Note Trust Deed;
(i) the Agency Agreement; and
(j) the Support Facilities.
TRUSTEE means the trustee of the Trust at the date of this agreement or
any person which becomes a successor trustee under clause 20 of the
Master Trust Deed.
1.2 MASTER TRUST DEED DEFINITIONS
Words and expressions which are defined in the Master Trust Deed (as
amended by the Supplementary Terms Notice) and the Supplementary Terms
Notice (including in each case by reference to another agreement) have
the same meanings when used in this agreement, unless the context
otherwise requires or unless otherwise defined in this agreement.
1.3 INTERPRETATION
Clause 1.2 of the Master Trust Deed applies to this agreement as if set
out in full, except that references to THIS DEED are references to THIS
AGREEMENT 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 Redraw Facility Provider; and
(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.
1.4 DETERMINATION, STATEMENT AND CERTIFICATE SUFFICIENT EVIDENCE
Except where otherwise provided in this agreement any determination,
statement or certificate by the Redraw Facility Provider or an
Authorised Signatory of the Redraw Facility Provider provided for in
this agreement is sufficient evidence unless proven wrong.
1.5 TRANSACTION DOCUMENT
This agreement is a TRANSACTION DOCUMENT for the purposes of the Master
Trust Deed.
1.6 LIMITED TO TRUST
The rights and obligations of the parties under this agreement relate
only to the Trust, and do not relate to any other Trust (as defined in
the Master Trust Deed). Without limitation, the Redraw Facility Provider
has no obligation under this agreement to provide financial
accommodation to the Trustee as trustee of any other such Trust.
Page 4
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
1.7 TRUSTEE AS TRUSTEE
In this agreement, 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 and in no other capacity; and
(b) a reference to the undertaking, property, assets, business or
money of the Trustee is a reference to the undertaking,
property, assets, business or money of the Trustee in its
capacity referred to in paragraph (a).
1.8 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.
2. PURPOSE
- ----------------------------------------------------------------
The Manager directs the Trustee to, and the Trustee shall, apply the
proceeds of each Redraw Advance to fund Redraw Shortfalls in relation to
the Trust by paying it to the Approved Seller or to repay a previous
Redraw Advance in accordance with clause 3.2(a) of this agreement and
clause 5.5 of the Supplementary Terms Notice, and for no other purpose.
3. DRAWINGS
- ----------------------------------------------------------------
3.1 REDRAW ADVANCE
(a) Subject to this agreement, if at any time during the Term the
Manager determines that there is a Redraw Shortfall, the Manager
may direct the Trustee to request a Redraw Advance by giving to
the Trustee a duly completed but unsigned Drawdown Notice by no
later than 10 am on the Business Day following the Determination
Date on which the Redraw Shortfall is determined.
(b) A Drawdown Notice must be:
(i) in writing;
(ii) in or substantially in the form of Annexure A; and
(iii) signed by the Trustee.
The Trustee must sign and return the Drawdown Notice to the
Manager by no later than 2 pm on the Business Day following
the Determination Date on which the Redraw Shortfall is
determined for delivery to the Redraw Facility Provider.
Page 5
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
(c) The amount requested in a Drawdown Notice must be the lesser of:
(i) the relevant Redraw Shortfall; and
(ii) the Available Redraw Amount at that time (but assuming
the repayment of all Redraw Advances due to be repaid on
or before the relevant Drawdown Date).
(d) A Drawdown Notice may specify that the Drawdown Date is to be
the same date as the Drawdown Notice only if:
(i) the Drawdown Notice is given to the Redraw Facility
Provider in accordance with this agreement before 10am
on that date; and
(ii) the Redraw Advance is payable no earlier than 2pm on
that date.
3.2 MAKING OF REDRAW ADVANCES
(a) Subject to the terms of this agreement, a Redraw Advance
requested in a Drawdown Notice shall be made available by the
Redraw Facility Provider paying the proceeds of that Redraw
Advance to the Approved Seller.
(b) The Redraw Facility Provider is not obliged to provide a Redraw
Advance if as a result the aggregate of Redraw Principal
Outstanding and the Carryover Redraw Charge Offs would exceed
the Redraw Limit.
4. FEES
- ----------------------------------------------------------------
4.1 AVAILABILITY FEE
(a) An availability fee accrues at 0.10% per annum on the daily
amount of the Available Redraw Amount (if any) due from day to
day from the date of this agreement.
(b) The availability fee is calculated on the actual number of days
elapsed and a year of 365 days.
(c) The Manager must direct the Trustee to, and the Trustee shall,
pay to the Redraw Facility Provider any accrued availability fee
in arrears on:
(i) each Quarterly Payment Date; and
(ii) at the end of the Term.
4.2 DRAW MARGIN
(a) A draw margin accrues due from day to day on the daily amount of
each Redraw Advance at the following rates:
(i) the sum of 0.30% per annum and the One Month Bank Bill
Rate calculated as of the Reset Date immediately before
that
Page 6
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
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date, if the Redraw Advance has been outstanding for
less than 12 months; and
(ii) the sum of 0.40% per annum and the One Month Bank Bill
Rate calculated as of the Reset Date immediately before
that date, if the Redraw Advance has been outstanding
for 12 months or more.
(b) Each draw margin is calculated on the actual number of days
elapsed and a year of 365 days.
(c) The Manager must direct the Trustee to, and the Trustee shall,
pay to the Redraw Facility Provider any accrued draw margin in
arrears on:
(i) each Payment Date; and
(ii) at the end of the Term.
(d) The One Month Bank Bill Rate as at any date will be the One
Month Bank Bill Rate determined:
(i) if that date is a Payment Date, on that Payment Date;
and
(ii) on any other date, on the Payment Date immediately
preceding that date.
4.3 CAPITALISATION
Any draw margin payable under this clause 4 which is not paid when due
will immediately be capitalised. The draw margin is payable on any
capitalised amount at the rate and in the manner referred to in this
clause 4.
4.4 GST
Neither the Availability Fee nor the draw margin specified in this
clause 4 are to be increased by reference to any goods and services tax
unless:
(a) the Trustee, the Manager and the Redraw Facility Provider
otherwise agree (that agreement not to be unreasonably
withheld); and
(b) the increase will not result in a downgrading or withdrawal of
the rating of any Notes.
5. CANCELLATION OF REDRAW LIMIT
- ----------------------------------------------------------------
5.1 DURING TERM
(a) On giving not less than 5 Business Days irrevocable notice to
the Redraw Facility Provider the Trustee:
(i) may, in its absolute discretion and with no obligation
to do so; or
(ii) must, at the direction of the Manager,
cancel all or part of the Redraw Limit during the Term.
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
(b) A partial cancellation must be in a minimum of A$250,000 and a
whole multiple of A$50,000 unless the Redraw Facility Provider
agrees otherwise.
5.2 AT END OF TERM
At the close of business (Sydney time) on the last day of the Term the
Redraw Limit will be cancelled.
5.3 CANCELLATION BY REDRAW FACILITY PROVIDER
(a) The Redraw Facility Provider may cancel all or part of the
Redraw Limit during the Term immediately on giving notice to the
Trustee and the Manager. The Redraw Limit shall be reduced by
the amount of that cancellation on that notice.
(b) On each Payment Date following that cancellation, the Trustee
shall pay to the Redraw Facility Provider the lesser of:
(i) an amount equal to the Redraw Principal Outstanding at
that Payment Date less the Redraw Limit at that Payment
Date (if positive); and
(ii) any amount available for distribution to the Redraw
Facility Provider under clauses 5.1(c)(v) and 5.4(a)(v)
of the Supplementary Terms Notice.
(c) Repayments under paragraph (b) will be applied against Redraw
Advances in chronological order of their Drawdown Dates.
(d) This clause does not affect the Redraw Facility Provider's
rights under clause 13 of this agreement or under clause
5.2(a)(ii)(B) of the Supplementary Terms Notice.
5.4 ROLLOVER TERM RENEWAL
If the Rollover Term will expire before the Final Repayment Date, then
not later than 90 days before the expiry of the Rollover Term, the
Redraw Facility Provider will notify the Trustee as to whether it will
or will not renew the Redraw Facility for 364 days (unless the Final
Repayment Date falls before the end of those 364 days, in which case the
renewal will apply up until the Final Repayment Date) commencing on the
date the notice of renewal is given. If the Redraw Facility Provider
fails to provide such notice, it will be deemed NOT to have renewed the
Redraw Facility.
6. REPAYMENT
- ----------------------------------------------------------------
6.1 REPAYMENT OF REDRAW ADVANCES
The Trustee shall, at the direction of the Manager, repay the Redraw
Principal Outstanding on each Payment Date, to the extent that amounts
are available for that purpose under clause 5.4(a)(iii) of the
Supplementary Terms Notice. Those repayments will be applied against
Redraw Advances in chronological order of their Drawdown Dates.
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
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6.2 FINAL REPAYMENT
If following the Final Repayment Date, any Redraw Principal Outstanding
or Carryover Redraw Charge Off or interest thereon has not been repaid
after the distribution of all Assets of the Trust in accordance with the
Supplementary Terms Notice, that Redraw Principal Outstanding or
Carryover Redraw Charge Off or interest and any other amounts due
hereunder will be cancelled and the Trustee will have no further
obligation to pay that amount under this agreement.
7. PREPAYMENTS
- ----------------------------------------------------------------
7.1 VOLUNTARY PREPAYMENTS
Subject to clause 7.3, if directed by the Manager, the Trustee must
prepay all or part of the Redraw Principal Outstanding with the consent
of the Redraw Facility Provider and on at least 5 Business Days' notice.
The Trustee shall prepay in accordance with that notice.
7.2 DRAW MARGIN
When the Trustee prepays any amount of the Redraw Principal Outstanding,
it shall also pay any draw margin accrued on that amount.
7.3 LIMITATION ON PREPAYMENTS
The Trustee may not, and the Manager must not direct the Trustee to,
prepay all or any part of the Redraw Principal Outstanding except as set
out in this agreement and in accordance with the Supplementary Terms
Notice and the Security Trust Deed.
8. PAYMENTS
- ----------------------------------------------------------------
8.1 MANNER
The Trustee shall make all payments under this agreement:
(a) by cheque, electronic funds transfer or other agreed methods,
provided to the Redraw Facility Provider at its address for
service of notices or by transfer of immediately available funds
to the account specified by the Redraw Facility Provider and, in
either case, by 4.00 pm (local time) on the due date; and
(b) without set-off, counterclaim or other deduction, except any
compulsory deduction for Tax; and
(c) in accordance with, and only at the directions of the Manager,
Master Trust Deed, the Security Trust Deed and the Supplementary
Terms Notice.
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
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8.2 PAYMENT TO BE MADE ON BUSINESS DAY
If any payment is due on a day which is not a Business Day, the due date
will be the next Business Day.
8.3 APPROPRIATION WHERE INSUFFICIENT MONEYS AVAILABLE
The Redraw Facility Provider may appropriate amounts it receives as
between principal, interest and other amounts then payable as it sees
fit. This will override any appropriation made by the Trustee.
9. CHANGES IN LAW
- ----------------------------------------------------------------
9.1 ADDITIONAL PAYMENTS
Whenever the Redraw Facility Provider determines that:
(a) the effective cost to the Redraw Facility Provider of making,
funding or maintaining any Redraw Advance or the Redraw Limit is
increased in any way;
(b) any amount paid or payable to the Redraw Facility Provider or
received or receivable by the Redraw Facility Provider, or the
effective return to the Redraw Facility Provider, under or in
respect of this agreement is reduced in any way;
(c) the return of the Redraw Facility Provider on the capital which
is or becomes directly or indirectly allocated by the Redraw
Facility Provider to any Redraw Advance or the Redraw Limit is
reduced in any way; or
(d) to the extent any relevant law, official directive or request
relates to or affects the Redraw Limit, any Redraw Advance or
this agreement, the overall return on capital of the Redraw
Facility Provider or any of its holding companies is reduced in
any way,
as a result of any change in, any making of or any change in the
interpretation or application by any Government Agency of, any law,
official directive or request in each case, after the date of this
agreement, then:
(e) (when it has calculated the effect of the above and the amount
to be charged to the Trustee under this clause) the Redraw
Facility Provider shall promptly notify the Manager and the
Trustee; and
(f) on the following Payment Date from time to time the Trustee
shall, subject to the Supplementary Terms Notice, pay for the
account of the Redraw Facility Provider the amount, absent
manifest error, certified by an Authorised Signatory of the
Redraw Facility Provider to be necessary to compensate the
Redraw Facility Provider for the increased cost or the reduction
(from the date of the notice).
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
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Without limiting the above in any way, this clause applies:
(g) to any law, official directive or request with respect to Tax
(other than any Tax on the net income of any person) or reserve,
redraw, capital adequacy, special deposit or similar
requirements;
(h) to official directives or requests which do not have the force
of law where it is the practice of responsible bankers or
financial institutions in the country concerned to comply with
them; and
(i) where the increased cost or the reduction arises because the
Redraw Facility Provider is restricted in its capacity to enter
other transactions, is required to make a payment, or forgoes or
earns reduced interest or other return on any capital or on any
sum calculated by reference in any way to the amount of any
Redraw Advance, the Redraw Limit or to any other amount paid or
payable or received or receivable under this agreement or
allocates capital to any such sum.
9.2 MINIMISATION
(a) (NO DEFENCE) If the Redraw Facility Provider has acted in good
faith it will not be a defence that any cost, reduction or
payment referred to in this clause could have been avoided.
(b) (MINIMISATION) The Redraw Facility Provider shall use reasonable
endeavours to minimise any cost, reduction or payment referred
to in this clause.
9.3 SURVIVAL
This clause survives the repayment of any relevant Redraw Advance and
the termination of this agreement.
10. CONDITIONS PRECEDENT
- ----------------------------------------------------------------
10.1 CONDITIONS PRECEDENT TO INITIAL DRAWDOWN NOTICE
The right of the Trustee to give the initial Drawdown Notice and the
obligations of the Redraw Facility Provider under this agreement are
subject to the condition precedent that the Redraw Facility Provider
receives all of the following in form and substance satisfactory to the
Redraw Facility Provider:
(a) (TRUST DOCUMENTS) from the Manager a certified copy of each duly
executed and (where relevant) stamped Trust Document;
(b) (MASTER TRUST DEED CONDITIONS PRECEDENT) from the Manager
evidence that the conditions precedent referred to in clause 6
of the Master Trust Deed have been satisfied;
(c) (SECURITY TRUST DEED) from the Manager evidence that the
Security Trust Deed has been or will be registered with each
relevant
Page 11
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
Government Agency free from all prior Security Interests and
third party rights and interests; and
(d) (NOTES) evidence that the Notes have been issued.
10.2 CONDITIONS PRECEDENT TO EACH REDRAW ADVANCE
The obligations of the Redraw Facility Provider to make available each
Redraw Advance are subject to the further conditions precedent that:
(a) (NO DEFAULT) no Event of Default subsists at the date of the
relevant Drawdown Notice and the relevant Drawdown Date or will
result from the provision of the Redraw Advance; and
(b) (REPRESENTATIONS TRUE) the representations and warranties by the
Trustee in this agreement 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.
11. REPRESENTATIONS AND WARRANTIES
- ----------------------------------------------------------------
11.1 REPRESENTATIONS AND WARRANTIES
The Trustee (in its capacity as trustee of the Trust) makes the
following representations and warranties (so far as they relate to the
Trust).
(a) (DOCUMENTS BINDING) This agreement constitutes (or will, when
executed and delivered, constitute) its legal, valid and binding
obligations (subject to laws generally affecting creditors'
rights and to general principles of equity).
(b) (TRANSACTIONS PERMITTED) The execution of this agreement did not
and will not contravene any applicable law or authorisation
which affects the Trustee in its capacity as trustee of the
Trust.
(c) (EVENT OF DEFAULT) It has no actual knowledge of any Event of
Default having occurred which has not been remedied or waived in
writing.
(d) (OTHER DEFAULT) It has no actual knowledge of any default by it
or the Manager under either:
(i) the Master Trust Deed; or
(ii) any law, authorisation, agreement or obligation
applicable to the Assets of the Trust,
which has not been remedied or waived in writing.
(e) (TRUST) The Trust has been validly created and is in existence
at the date of this agreement.
(f) (SOLE TRUSTEE) It is the sole trustee of the Trust at the date
of this agreement.
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
(g) (REMOVAL) No notice has been given to it and to its knowledge no
resolution has been passed or direction or notice has been
given, removing it as trustee of the Trust.
11.2 RELIANCE ON REPRESENTATIONS AND WARRANTIES
The Trustee acknowledges that the Redraw Facility Provider has entered
into the Trust Documents in reliance on the representations and
warranties in this clause.
12. UNDERTAKINGS
- --------------------------------------------------------------------------------
12.1 GENERAL UNDERTAKINGS
Each of the Trustee and the Manager undertake to the Redraw Facility
Provider as follows in relation to the Trust, except to the extent that
the Redraw Facility Provider consents.
(a) (AUTHORISATIONS) It will ensure that each Authorisation (which,
in the case of the Trustee, is limited to any Authorisation
relating to the Trustee in its capacity as trustee of the Trust
and not to the Trust generally) required for:
(i) the execution, delivery and performance by it of the
Trust Documents to which it is expressed to be a party
and the transactions contemplated by those documents;
(ii) the validity and enforceability of those documents; and
(iii) the carrying on by it of its business as now conducted
or contemplated,
is obtained and promptly renewed and maintained in full force
and effect. It will pay all applicable fees for them. It will
provide copies promptly to the Redraw Facility Provider when
they are obtained or renewed.
(b) (NEGATIVE PLEDGE) It will not create or allow to exist a
Security Interest over the Assets of the Trust other than:
(i) under the Trust Documents; or
(ii) a lien arising by operation of law in the ordinary
course of day-to-day trading and not securing
indebtedness in respect of financial accommodation where
it duly pays the indebtedness secured by that lien other
than indebtedness contested in good faith.
(c) (COMPLY WITH OBLIGATIONS) It will duly and punctually comply
with its obligations under the Trust Documents.
(d) (NOTICE TO REDRAW FACILITY PROVIDER) It will notify the Redraw
Facility Provider as soon as it becomes actually aware of:
(i) any Event of Default; and
13
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
(ii) any proposal by a Government Agency to acquire
compulsorily any Assets of the Trust.
12.2 UNDERTAKINGS RELATING TO TRUST
Each of the Trustee, as trustee of the Trust, and the Manager severally
undertakes to the Redraw Facility Provider as follows, except to the
extent that the Redraw Facility Provider consents.
(a) (AMENDMENT TO MASTER TRUST DEED) It will not consent to any
amendment to the Master Trust Deed, the Supplementary Terms
Notice or any other Trust Document which would change:
(i) the basis upon which the amount of any Redraw Advance to
be made is calculated;
(ii) Clause 5.5(e) of the Supplementary Terms Notice; or
(iii) the basis of calculation or order of application of any
amount to be paid or applied under clause 5 of the
Supplementary Terms Notice unless the change would not
be adverse to the Redraw Facility Provider.
(b) (RESETTLEMENT) It will not take any action that will result in a
resettlement, setting aside or transfer of any asset of the
Trust other than a transfer which complies with the Master Trust
Deed, the Supplementary Terms Notice and the other Trust
Documents.
(c) (NO ADDITIONAL TRUSTEE) It will act continuously as trustee or
manager (as the case may be) of the Trust in accordance with the
Master Trust Deed until the Trust has been terminated or until
it has retired or been removed in accordance with the Master
Trust Deed.
12.3 TERM OF UNDERTAKINGS
Each undertaking in this clause continues from the date of this
agreement until all moneys actually or contingently owing under this
agreement are fully and finally repaid or cease to be outstanding.
13. EVENTS OF DEFAULT
- --------------------------------------------------------------------------------
13.1 EVENTS OF DEFAULT
Each of the following is an Event of Default (whether or not it is in
the control of the Trustee).
(a) (PAYMENTS) An amount is available for payment under this
agreement under clause 6 and the Trustee does not pay that
amount within 10 Business Days of its due date.
(b) (INSOLVENCY EVENT) An Insolvency Event occurs:
(i) in relation to the Trust (as if it was a RELEVANT
CORPORATION for the purposes of the definition of
INSOLVENCY EVENT); or
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
(ii) in relation to the Trustee, and a successor trustee of
the Trust is not appointed within 30 days of that
Insolvency Event.
(c) (TERMINATION DATE) The Termination Date occurs in relation to
the Trust.
(d) (ENFORCEMENT OF SECURITY TRUST DEED) 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).
13.2 CONSEQUENCES
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:
(a) subject to the Trust Documents, by notice to the Trustee and the
Manager declare all moneys actually or contingently owing under
this agreement immediately due and payable, and the Trustee will
immediately pay the Redraw Principal Outstanding together with
accrued interest and fees and all such other moneys; and
(b) by notice to the Trustee and the Manager cancel the Redraw Limit
with effect from any date specified in that notice.
14. CONTROL ACCOUNTS
- --------------------------------------------------------------------------------
The accounts kept by the Redraw Facility Provider constitute sufficient
evidence, unless proven wrong, of the amount at any time due from the
Trustee under this agreement.
15. WAIVERS, REMEDIES CUMULATIVE
- --------------------------------------------------------------------------------
(a) No failure to exercise and no delay in exercising any right,
power or remedy under this agreement operates as a waiver. Nor
does any single or partial exercise of any right, power or
remedy preclude any other or further exercise of that or any
other right, power or remedy.
(b) The rights, powers and remedies provided to the Redraw Facility
Provider in this agreement are in addition to, and do not
exclude or limit, any right, power or remedy provided by law.
16. SEVERABILITY OF PROVISIONS
- --------------------------------------------------------------------------------
Any provision of this agreement 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 agreement nor affect the validity or
enforceability of that provision in any other jurisdiction.
15
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
17. SURVIVAL OF REPRESENTATIONS
- --------------------------------------------------------------------------------
All representations and warranties in this agreement survive the
execution and delivery of this agreement and the provision of advances
and accommodation.
18. INDEMNITY AND REIMBURSEMENT OBLIGATION
- --------------------------------------------------------------------------------
Unless stated otherwise, each indemnity, reimbursement or similar
obligation in this agreement:
(a) is a continuing obligation;
(b) is a separate and independent obligation;
(c) is payable on demand; and
(d) survives termination or discharge of this agreement.
19. MORATORIUM LEGISLATION
- --------------------------------------------------------------------------------
To the full extent permitted by law all legislation which at any time
directly or indirectly:
(a) lessens, varies or affects in favour of the Trustee any
obligation under a Trust Document; or
(b) delays, prevents or prejudicially affects the exercise by the
Redraw Facility Provider of any right, power or remedy conferred
by this agreement,
is excluded from this agreement.
20. CONSENTS AND OPINIONS
- --------------------------------------------------------------------------------
Except where expressly stated the Redraw Facility Provider may give or
withhold, or give conditionally, approvals and consents, may be
satisfied or unsatisfied, may form opinions, and may exercise its
rights, powers and remedies, at its absolute discretion.
21. ASSIGNMENTS
- --------------------------------------------------------------------------------
Neither party may assign or transfer any of its rights or obligations
under this agreement without the prior written consent of the other
party or if the rating of the Notes would be withdrawn or reduced as a
result of the assignment, except for the creation of a charge by the
Trustee under the Security Trust Deed.
16
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
22. NOTICES
- --------------------------------------------------------------------------------
All notices, requests, demands, consents, approvals, agreements or other
communications to or by a party to this agreement:
(a) must be in writing;
(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 this agreement or to any other
address which it may have notified the sender;
(ii) (in the case of facsimile transmission) on receipt of a
transmission report confirming successful transmission;
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,
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.
23. AUTHORISED SIGNATORIES
- --------------------------------------------------------------------------------
The Trustee irrevocably authorises the Redraw Facility Provider to rely
on a certificate by persons purporting to be its directors and/or
secretaries as to the identity and signatures of its Authorised
Signatories. The Trustee warrants that those persons have been
authorised to give notices and communications under or in connection
with this agreement.
24. GOVERNING LAW AND JURISDICTION
- --------------------------------------------------------------------------------
This agreement is governed by the laws of New South Wales. The Trustee
submits to the non-exclusive jurisdiction of courts exercising
jurisdiction there.
25. COUNTERPARTS
- --------------------------------------------------------------------------------
This agreement may be executed in any number of counterparts. All
counterparts together will be taken to constitute one instrument.
17
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
26. ACKNOWLEDGEMENT BY TRUSTEE
- --------------------------------------------------------------------------------
The Trustee confirms that:
(a) it has not entered into this agreement in reliance on, or as a
result of, any statement or conduct of any kind of or on behalf
of the Redraw Facility Provider (including any advice, warranty,
representation or undertaking); and
(b) the Redraw Facility Provider is not obliged to do anything
(including disclose anything or give advice),
except as expressly set out in this agreement.
27. LIMITED RECOURSE
- --------------------------------------------------------------------------------
27.1 GENERAL
Clause 30 of the Master Trust Deed applies to the obligations and
liabilities of the Trustee and the Manager under this agreement.
27.2 LIABILITY OF TRUSTEE LIMITED TO ITS RIGHT TO INDEMNITY
(a) The Trustee enters into this agreement only in its capacity as
trustee of the Trust and in no other capacity (except where the
Transaction Documents provide otherwise). Subject to paragraph
(c) below, a liability arising under or in connection with this
agreement or the Trust can be enforced against the Trustee only
to the extent to which it can be satisfied out of the assets and
property of the Trust which are available to satisfy the right
of the Trustee to be exonerated or indemnified for the
liability. This limitation of the Trustee's liability applies
despite any other provision of this agreement 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 agreement or the Trust.
(b) Subject to paragraph (c) below, no person (including any
Relevant Party) may take action against 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 27.2 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 or exoneration out of the Assets of
the Trust as a result of the Trustee's fraud, negligence, or
Default.
(d) It is acknowledged that the Relevant Parties are responsible
under this agreement or the other Transaction Documents for
performing a variety of obligations relating to the Trust. No
act or omission of the
18
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
Trustee (including any related failure to satisfy its
obligations under this agreement) will be considered fraud,
negligence or Default of the Trustee for the purpose of
paragraph (c) above to the extent to which the act or omission
was caused or contributed to by any failure by any Relevant
Party or any person who has been delegated or appointed by the
Trustee in accordance with the Transaction Documents to fulfil
its obligations relating to the Trust or by any other act or
omission of a Relevant Party or any such person.
(e) In exercising their powers under the Transaction Documents, each
of the Trustee, the Security Trustee and the Noteholders must
ensure that no attorney, agent, delegate, receiver or receiver
and manager appointed by it in accordance with this agreement or
any other Transaction Documents 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 Default of the Trustee
for the purpose of paragraph (c) above.
(f) In this clause, RELEVANT PARTIES means each of the Manager, the
Servicer, the Custodian, the Calculation Agent, each Paying
Agent, the Note Trustee and the provider of any Support
Facility.
(g) Nothing in this clause limits the obligations expressly imposed
on the Trustee under the Transaction Documents.
27.3 UNRESTRICTED REMEDIES
Nothing in clause 27.2 limits the Redraw Facility Provider in:
(a) obtaining an injunction or other order to restrain any breach of
this agreement by any party;
(b) obtaining declaratory relief; or
(c) in relation to its rights under the Security Trust Deed.
27.4 RESTRICTED REMEDIES
Except as provided in clause 27.3, the Redraw Facility Provider shall
not:
(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;
19
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REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
(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 the Redraw Facility
Provider waives its rights to make those applications and take those
proceedings.
28. REDRAW FACILITY PROVIDER'S OBLIGATIONS
- --------------------------------------------------------------------------------
The Trustee shall have no recourse to the Redraw Facility Provider in
relation to this agreement beyond its terms, and the Redraw Facility
Provider's obligations under this agreement are separate from, and
independent to, any obligations the Redraw Facility Provider may have to
the Trustee for any other reason (including under any other Trust
Document).
29. SUCCESSOR TRUSTEE
- --------------------------------------------------------------------------------
The Redraw Facility Provider shall do all things reasonably necessary to
enable any successor Trustee appointed under clause 20 of the Master
Trust Deed to become the Trustee under this agreement.
EXECUTED in Sydney.
Each attorney executing this agreement states that he or she has no notice of,
alteration to, or revocation or suspension of, his or her power of attorney.
SIGNED by )
AXA TRUSTEES LIMITED )
(ACN 004 029 841) )
by its attorney under Power of Attorney )
dated )
in the presence of: )
----------------------------------
Signature
- ------------------------------------------- ----------------------------------
Witness Print name
- -------------------------------------------
Print name
20
<PAGE>
REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
SIGNED on behalf of )
ST.GEORGE BANK LIMITED )
by its attorney under Power of )
Attorney dated )
in the presence of: )
-----------------------------------------
Signature
- ------------------------------------ -----------------------------------------
Witness Print name
- ------------------------------------
Print name
SIGNED on behalf of )
CRUSADE MANAGEMENT )
LIMITED )
)
by its attorney under Power of )
Attorney dated )
in the presence of: )
-----------------------------------------
Signature
- ------------------------------------ -----------------------------------------
Witness Print name
- ------------------------------------
Print name
21
<PAGE>
REDRAW FACILITY AGREEMENT ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
ANNEXURE A
DRAWDOWN NOTICE
- --------------------------------------------------------------------------------
To: St.George Bank Limited
REDRAW FACILITY AGREEMENT - DRAWDOWN NOTICE NO. [*]
We refer to the Redraw Facility Agreement dated [*] 1999 (the FACILITY
AGREEMENT).
Under clause 3.1 of the Redraw Facility Agreement we give you irrevocable notice
as follows:
(1) we wish to draw on [*] (the DRAWDOWN DATE); [NOTE: DATE IS TO BE A
BUSINESS DAY.]
(2) the principal amount of the Redraw Advance is A$[*]; [NOTE: AMOUNT TO
COMPLY WITH THE LIMITS IN CLAUSE 3.]
(3) we request that the proceeds be remitted to account number [*] at [*];
[NOTE: THE ACCOUNT(S) TO BE COMPLETED ONLY IF FUNDS NOT REQUIRED IN REPAYMENT OF
ANY PREVIOUS REDRAW ADVANCE(S).]
(4) to the best of our knowledge and, relying on the information provided by
the Manager, the proceeds of the advance will be used for the purposes
contemplated in the Facility Agreement;
(5) to the best of our knowledge and relying on the information provided by
the Manager, no Event of Default under the Facility Agreement, and no
Event of Default as defined in the Security Trust Deed, remains
unremedied or has not been waived in writing or will result from the
drawing; and
(6) all representations and warranties under clause 11 of the Facility
Agreement are true as though they had been made at the date of this
Drawdown Notice and the Drawdown Date specified above in respect of the
facts and circumstances then subsisting.
Definitions in the Facility Agreement apply in this Drawdown Notice.
AXA TRUSTEES LIMITED
By: [Authorised Signatory]
DATED
Verified by Crusade Management Limited
By: [Authorised Signatory]
Dated
22
<PAGE>
<PAGE>
Exhibit 10.5
(Multicurrency--Cross Border)
ISDA(Registered)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of September 1999
St. George Bank Limited
(ACN 055 513 070) ("Party A") Crusade Management Limited
and AXA Trustees Limited (ACN 004 387 133) (ACN 072 715 916) ("Manager")
as trustee of Crusade Global Trust and Deutsche Bank AG, Sydney
No. 1 OJ 1999 (Party B") (ARBN 064 165 162) ("DBAG")
- ------------------------------------------ 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 of 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 Indemnifiable 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.
2
<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 organisation 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 party 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 or 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.
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 in 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 in 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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"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.
St. George Bank Limited AXA Trustees Limited
- ------------------------------ ----------------------------------------
(Name of Party) (Name of Party)
By: By:
-------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
Crusade Management Limited Deutsche Bank AG, Sydney
- ------------------------------ ----------------------------------------
(Name of Party) (Name of Party)
By: By:
-------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
18
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ISDA SCHEDULE TO THE MASTER AGREEMENT FOR INTEREST RATE SWAP
- --------------------------------------------------------------------------------
ST.GEORGE BANK LIMITED
AXA TRUSTEES LIMITED AS TRUSTEE OF THE CRUSADE GLOBAL TRUST NO. 1 OF 1999
CRUSADE MANAGEMENT LIMITED
DEUTSCHE BANK AG, SYDNEY
ALLEN ALLEN & HEMSLEY
ALLENS
ARTHUR ROBINSON
GROUP
<PAGE>
ALLEN ALLEN & HEMSLEY
The Chifley Tower
2 Chifley Square
Sydney NSW 2000
Australia
Tel 61 2 9230 4000
Fax 61 2 9230 5333
(C) Copyright Allen Allen & Hemsley 1999
2
<PAGE>
ISDA SCHEDULE TO THE MASTER AGREEMENT FOR
INTEREST RATE SWAP ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
DATE
- ----
PARTIES
- -------
1. ST.GEORGE BANK LIMITED (ACN 055 513 070) (PARTY A)
2. AXA TRUSTEES LIMITED (ACN 004 387 133) as trustee of CRUSADE GLOBAL TRUST
NO. 1 OF 1999 (PARTY B)
3. CRUSADE MANAGEMENT LIMITED (ACN 072 715 916) (MANAGER) and
4. DEUTSCHE BANK AG, SYDNEY (ARBN 064 165 162) (DBAG)
- --------------------------------------------------------------------------------
PART 1. TERMINATION PROVISIONS
(a) SPECIFIED ENTITY is not applicable in relation to Party A or Party B:
(b) Sections 5(a)(ii), (iii), (iv), (v), (vi), (viii), 5(b)(ii), (iii) and (iv)
will not apply to Party A and Party B.
(c) The BANKRUPTCY provisions of Section 5(a)(vii) are replaced by "An
Insolvency Event has occurred in respect of the Party A, Party B or DBAG".
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, Party B, the Manager and
DBAG 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.
(d) Section 5(a)(i) is amended to replace THIRD with TENTH and the following
sentence is added:
Even if DBAG makes a payment under this Agreement, a failure by Party
A to remedy, within the period stipulated in this subclause 5(a)(i),
its failure to make that payment or delivery by the due date shall
still constitute an Event of Default.
For the avoidance of doubt, but without limiting section 17, Party B is not
obliged to pay any amount attributable to any Break Payment which is due
by, but not received from, an Obligor or any Loan Offset Interest Amount
which is due by, but not received from, the Approved Seller, and the
failure by Party B to pay that amount shall not be an Event of Default.
(e) The AUTOMATIC EARLY TERMINATION provision of Section 6(a): (j)
will not apply to Party A
will not apply to Party B
1
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ISDA SCHEDULE TO THE MASTER AGREEMENT FOR
INTEREST RATE SWAP ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
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 this 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.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement, neither Party A nor Party B is required to make any payment if
this Agreement is terminated and section 6(e) shall not apply.
(g) There is no TERMINATION CURRENCY.
(h) An ADDITIONAL TERMINATION EVENT set out in Part 5(q) of this Schedule, will
apply.
In the TRANSFER provision of Section 7, 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).
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.
PART 2. TAX REPRESENTATIONS
(a) PAYER TAX REPRESENTATIONS.
For the purpose of Section 3(e) of this Agreement each of Party A, Party B
and DBAG will 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) of this Agreement;
(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) of this Agreement; and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement,
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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, each of Party A and
Party B represents that it is an Australian resident and does not derive
the payments under this Agreement in whole or in part in carrying on
business in a country outside Australia at or through a permanent
establishment of itself in that country.
(c) 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 (including DBAG)
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 receipt (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.
Paragraph (iv) shall not apply to payments to be made by Party B.
PART 3. AGREEMENT TO DELIVER DOCUMENTS
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.
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PART 4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this Agreement:
Address for notices or communications to Party A:
Address: Level 12, 55 Market Street, Sydney NSW 2000
Attention: Middle Office Compliance Manager
Facsimile No: (02) 9320 5589 Telephone No: (02) 9320 5526
Address for notices or communications to Party B:
Address: Level 2, 65 Southbank Boulevard,
South Melbourne, Victoria 3205
Attention: Philip Maddox
Facsimile No: (03) 9694 6462 Telephone No: (03) 9694 6509
Address for notices or communications to the Manager:
Address: Level 12, 55 Market Street, Sydney NSW 2000
Attention: Middle Office Compliance Manager
Facsimile No: (02) 9320 5589 Telephone No: (02) 9320 5526
Address for notices or communications to DBAG:
Address: Level 18, 225 George Street, Sydney NSW 2000
Attention: Glenn McDowell
Facsimile No: (02) 9258 3632
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: None.
Party B appoints as its Process Agent: None.
DBAG appoints as its Process Agent: None
(c) OFFICES. The provisions of Section 10(a) will not apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
DBAG is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is the Manager unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(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. Credit Support Provider means:
In relation to Party A: DBAG
In relation to Party B: Nil.
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(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws in force in New South Wales and section 13(b)(i)
is deleted and replaced with the following:
each party submits to the non-exclusive jurisdiction of the courts of New
South Wales and Court of Appeal from them.
(i) NETTING OF PAYMENTS. Sub-paragraph (ii) of Section 2(c) of this Agreement
will apply to net Transactions 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 of this Agreement.
For the purpose of Section 3(c), each of Party A and Party B are deemed not
to have any Affiliates.
PART 5. OTHER PROVISIONS
(a) ISDA DEFINITIONS: This Agreement, each Confirmation and each Transaction
are subject to the 1991 ISDA Definitions (as supplemented by the 1998
Supplement to the 1991 ISDA Definitions (each Published by the
International Swap and Derivatives Association, Inc.) (the "ISDA
DEFINITIONS"), and will be governed in all respects by and 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
incorporation by reference in, and shall be deemed to be part of this
Agreement and each Confirmation.
(b) 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.
(c) In section 2(a)(ii), after freely transferable funds add free of any
set-off, counterclaim, deduction or withholding (except as expressly
provided in this Agreement).
(d) 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 obligations under Section 2(a)(i) of this Agreement and
has no future payment obligations, whether absolute or contingent
under Section 2(a)(i).
(e) For the purpose of Section 2(b) of this Agreement, CHANGE OF ACCOUNT,
any new account so designated shall be in the same tax jurisdiction as
the original account.
(f) 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.
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(g) 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 equitable 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 Trust Deed) permitted under
the Security Trust Deed, as far as Party B is aware, those assets
are free from all other Security Interests
(h) In Section 3(c)
(i) delete the words AGENCY OR OFFICIAL; and
(ii) in the third line, insert "materially" before the word "affect".
(i) In section 4 add a new paragraph as follows:
(f) CONTRACTING AS PRINCIPAL. Party A and DBAG 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.
(j) In Section 6(d)(i), in the last line, insert in the absence of
manifest error after the word EVIDENCE.
(k) 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.
(l) 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
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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.
(m) Any reference to a:
(i) SWAP TRANSACTION in the 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 ISDA Definitions.
(n) The SEPTEMBER 1992 AUSTRALIAN ADDENDUM NO. 10 - (AS
AMENDED IN MARCH 1994) NETTING TO SCHEDULE TO MASTER
AGREEMENT OF INTERNATIONAL SWAPS AND DERIVATIVES
ASSOCIATION, INC. is 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.
(o) TRUST DEED means the Master Trust Deed dated 14 March 1998 as amended by
the Crusade Global Trust No. 1 of 1999 Supplementary Terms Notice dated [*]
1999 between Party B, Party A and the Manager (the SUPPLEMENTARY TERMS
NOTICE), and each of the following expressions shall have the meanings
given to them in the Trust Deed and the Supplementary Terms Notice:
APPROVED BANK
BREAK PAYMENT
CLASS A NOTES
DESIGNATED RATING AGENCY
FIXED RATE LOAN
HOUSING LOAN PRINCIPAL
INSOLVENCY EVENT
MASTER TRUST DEED
NOTE
OBLIGOR
PAYMENT DATE
PURCHASED RECEIVABLE
SECURITY TRUST DEED
SERVICER
TRUST
(p) TRUST DEED: The Parties acknowledge and agree that for the purposes of the
Trust Deed, this Agreement is an HEDGE AGREEMENT and Party A and DBAG are
SUPPORT FACILITY PROVIDERS.
(q) Agreement by DBAG to act as Standby Interest Rate Swap Provider:
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A new section 15 is added as follows:
15. STANDBY INTEREST RATE SWAP PROVIDER
(a) For the purpose of this clause 15 the following additional definitions
apply:
ACCEPTABLE ARRANGEMENT means an arrangement which each relevant
Designated Rating Agency has confirmed in writing will result in the
avoidance or reversal of any Note Downgrade.
ACCEPTABLE RATING means, at any time, that Party A's long term rating
from S&P is not below A- and its short term rating from S&P is not
below A-1.
APPROVED BANK means a Bank which has a short-term rating of at least
A-1+ (S&P), P-1 (Moody's) and F1+ (Fitch IBCA).
CR means the amount calculated in accordance with the following
formula:
CR = MTM + VB
where
MTM means the mark-to-market value of the Swap. Party A must mark the
swap to market and post collateral on a weekly basis, with a cure
period of 3 Business Days. The mark-to-market value should reflect the
higher of 2 bids from counterparties that will be eligible and willing
to provide the swap in the absence of Party A.
VB means the volatility buffer, being the relevant percentage
calculated from the table below:
VOLATILITY BUFFER
COUNTERPARTY MATURITIES UP TO MATURITIES UP TO MATURITIES MORE
RATING 5 YEARS 10 YEARS THAN 10 YEARS
A+ 1.05 1.75 3.0
A 1.35 2.45 4.5
A- 1.5 3.15 6.0
DOWNGRADE means DBAG's rating by a Designated Rating Agency has been
withdrawn or reduced resulting in DBAG having:
(i) a long term rating of less than AA- by S&P and a short term
credit rating of less than A-1+ by S&P;
(ii) a long term credit rating by Moody's of less than A2; or
(iii) a short term rating of less than F1+ by Fitch IBCA.
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MAJOR DBAG DOWNGRADe means a DBAG Downgrade resulting in DBAG having:
(i) a long term credit rating by S&P of less than A- and a short term
credit rating by S&P of less than A-1;
(ii) a long term credit rating by Moody's of less than A3; or
(iii) a short term credit rating by Fitch IBCA of less than F1.
MINOR DBAG DOWNGRADE means any DBAG Downgrade which is not a Major
DBAG Downgrade.
NOTE DOWNGRADE means any actual or proposed withdrawal or downgrade of
the ratings assigned to any Class of Notes by a Designated Rating
Agency which results or would result in any rating assigned to that
Class of Notes being less than that stipulated in clause 4.2(f) of the
Supplementary Terms Notice.
REPLACEMENT PROVIDER means:
(i) where Party A notifies DBAG that it elects to replace itself as
Interest Rate Swap Provider, then a Replacement Swap Provider; or
(ii) where Party A notifies DBAG that it elects to replace DBAG as
Standby Interest Rate Swap Provider, then a Replacement Standby
Interest Rate Swap Provider
REPLACEMENT STANDBY SWAP PROVIDER means a party that has agreed to
replace DBAG as Standby Interest Rate Swap Provider and has a rating
greater than or equal to:
(i) A-1+ by S&P;
(ii) F1+ by Fitch IBCA; and
(iii) who is suitably rated such that its appointment as Standby
Interest Rate Swap Provider does not result in a Note Downgrade
by Moody's.
REPLACEMENT SWAP PROVIDER means a party that has agreed to replace
Party A as Interest Rate Swap Provider, and the appointment of which
each Designated Rating Agency has confirmed, in writing, will not
result in a Note Downgrade and which DBAG has approved in writing
(which approval will not be unreasonably withheld).
(b) DBAG agrees that if Party A is obliged to make a payment under a
Confirmation that DBAG has accepted or countersigned and DBAG receives
notice from the Manager requiring DBAG to make that payment, DBAG will
comply with that notice by making the payment specified in the notice.
The Manager must give this notice to DBAG no later than 2.00pm on the
Payment Date.
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(c) DBAG shall make such payment in full, without any set off,
counterclaim or exercise of any similar right or defence, other than
any netting permitted under this Agreement.
(d) If DBAG receives a notice under clause 15(b) on or before 2.00 pm
(Sydney time) on a Business Day, it will make the payment specified in
that notice not later than 4.00 pm on that Business Day. If it
receives a notice after 2.00 pm (Sydney time) on a Business Day it
will make the payment not later than 4.00 pm on the next Business Day.
(e) DBAG's obligations under this clause 15 with respect to a Confirmation
commence on the Effective Date (specified in such Confirmation) and
terminate on the earlier of the Final Maturity Date and the date on
which the Confirmation is otherwise terminated in accordance with its
terms.
(f) If, at any time, DBAG is Downgraded and the downgrade constitutes a
Minor DBAG Downgrade, Party A shall, within 30 days (or such greater
period as agreed by the relevant Designated Rating Agency), comply
with clause 15(h).
(g) If at any time DBAG is Downgraded and the downgrade constitutes a
Major DBAG Downgrade, Party A shall, within 5 Business Days (or such
greater period as agreed by the relevant Designated Rating Agency)
comply with clause 15(h).
(h) Subject to clause 15(i), where Party A is required to comply with this
clause 15(h) it shall, at its cost, and at its election do one of the
following:
(i) (CASH COLLATERALISE) deposit into a Swap Collateral Account and
maintain in the Swap Collateral Account (whilst the relevant
downgrade subsists) sufficient funds to ensure that the amount
standing to the credit of the Swap Collateral
Account is equal to the greater of the following (the CASH
COLLATERAL AMOUNT):
(A) zero;
(B) CR; and
(C) an amount acceptable to Moody's and Fitch IBCA and
sufficient to ensure that the ratings given to the Notes by
Moody's and Fitch IBCA are not adversely affected and that
any Note Downgrade is avoided or reversed (as the case may
be);
(ii) (NOVATE) enter into an agreement novating this Agreement to a
Replacement Provider proposed by any of Party A, Party B or the
Manager which each Designated Rating Agency has confirmed will
not result in a withdrawal or downgrade of any credit rating
assigned, by it, to the Notes; or
(iii) (OTHER ARRANGEMENTS) enter into or procure entry into any
Acceptable Arrangement.
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(i) Notwithstanding anything to the contrary in this clause 15, where
either a Downgrade as described in paragraph (i) of the definition of
Downgrade, or a Note Downgrade by S & P, has occurred, a party
entitled to elect a course of action under this clause 15 may only
elect to cash collateralise under clause (j) (i) if Party A has an
Acceptable Rating.
(j) Where Party A is required to comply with clause 15(h) and fails to do
so within the relevant time, DBAG shall, subject to clause 15(i),
either:
(i) deposit into, and maintain in, a Swap Collateral Account the Cash
Collateral Amount in accordance with clause 15(h)(i);
(ii) procure, at its cost, a Replacement Provider and pay the costs of
novating the relevant obligations to that Replacement Provider in
accordance with clause 15(h)(ii); or
(iii) at its cost, enter into or procure entry into an Acceptable
Arrangement in accordance with clause 15(h)(iii).
(k) Where either DBAG or Party A procures a Replacement Provider in
accordance with clause 15(h)(ii) or 15(j)(ii), each party to this
Agreement shall do all things necessary to novate the relevant
obligations to the Replacement Provider.
(l) If, at any time, DBAG's obligations under this Agreement are novated
in accordance with clause 15(h)(ii) or 15(j)(ii) or any Acceptable
Arrangement is entered into in accordance with clause 15(h)(iii) or
15(j)(iii) which results in DBAG being replaced as Standby Interest
Rate Swap Provider, DBAG shall be immediately entitled to any cash
collateral amount which it has deposited in the Swap Collateral
Account.
(m) If the Manager becomes actually aware of the occurrence of a DBAG
Downgrade, the Manager shall notify Party A, DBAG or both of the
occurrence of such a reduction.
(n) Where Party B has not established a Swap Collateral Account and either
Party A or DBAG is required to deposit monies into a Swap Collateral
Account, the Manager must direct Party B to establish, as soon as is
practicable, and maintain, in the name of Party B an account with an
Approved Bank which account, shall be, for the purposes of this clause
15 the SWAP COLLATERAL ACCOUNT.
(o) All interest on the Swap Collateral Account will accrue and be payable
[monthly] to the party which provides the relevant Cash Collateral
Amount.
(p) Party B may only make withdrawals from the Swap Collateral Account if
directed to do so by the Manager and then only for the purpose of:
(i) novating obligations under this Agreement in accordance with
clause 15(h)(ii) or 15(j)(ii) or entering into any other
Acceptable Arrangement in accordance with 15(h)(iii) or
15(j)(iii);
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(ii) refunding to Party A or DBAG (whichever provided the relevant
Cash Collateral Amount) the amount of any reduction in the Swap
Collateral Amount, from time to time and providing the Designated
Rating Agencies have confirmed, in writing, that such refund will
not result in a Note Downgrade;
(iii) withdrawing any amount which has been incorrectly deposited into
the Swap Collateral Account;
(iv) paying financial institutions duty, bank accounts debit tax or
other equivalent Taxes payable in respect of the Swap 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.
(q) DBAG's obligations under this clause 15 shall:
(i) survive the termination of this Agreement; and
(ii) terminate upon Party A complying with its obligations (if any)
under clause 15(h) or DBAG complying with its obligations under
clause 15(j).
(r) Where :
(i) Party A fails to comply with clause 15(h); and
(ii) DBAG fails to comply with clause 15(j),
this shall constitute an Additional Termination Event and Party A
shall be the Affected Party for this purpose.
(s) In consideration of DBAG agreeing to act as Standby Interest Rate Swap
Provider, Party B agrees to pay to DBAG quarterly in arrears a fee
that accrues from day to day and is calculated at the rate of 0.0425%
per annum of the Housing Loan Principal of all Fixed Rate Loans on the
relevant day. This fee is payable on each Payment Date, subject to
(and to the extent that funds are available under) the cashflow
allocation methodology in the Supplementary Terms Notice.
(t) None of the above fees in this clause 15 are to be increased by
reference to any applicable goods and services tax unless:
(i) the parties to this Agreement agree (that agreement not to be
unreasonably withheld); and
(ii) the increase will not result in a Note Downgrade.
(u) In consideration of DBAG agreeing, at the request of Party A, to act
as Standby Interest Rate Swap Provider, Party A agrees to indemnify
DBAG on demand against any loss, charge, liability or expense that
DBAG may sustain or incur as a direct or indirect consequence of Party
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A failing to comply with its obligations under this Agreement, or the
Manager requiring DBAG to make a payment under this Agreement.
(v) A new section 16 is added as follows:
16. Trustee provisions
(a) Each party other than Party B acknowledges and agrees that
Party B has entered into this Agreement in its capacity as
trustee of the Trust and in no other capacity. Clauses
1.2(p) and 30.16 of the Master Trust Deed apply to this
Agreement as if set out in full, with references to Deed
being construed as references to Agreement. Clause 16 of the
Security Trust Deed shall apply to govern Party A's priority
to money received from the sale of Trust Assets or other
enforcement of the Charge under the Security Trust Deed
(each as defined in the Security Trust Deed).
(b) Nothing in paragraph (a) limits Party A in:
(i) obtaining an injunction or other order to restrain any
breach of this agreement by Party B;
(ii) obtaining declaratory relief; or
(iii) in relation to its rights under the Security Trust
Deed.
(c) Except as provided in paragraphs (a) and (b), Party A shall
not:
(i) (JUDGMENT) obtain a judgment for the payment of money
or damages by Party B
(ii) (STATUTORY DEMAND) issue any demand under s459E(1) of
the Corporations Law (or any analogous provision under
any other law) against Party B;
(iii) (WINDING UP) apply for the winding up or dissolution
of Party B;
(iv) (EXECUTION) levy or enforce any distress or other
execution to, on or against any assets of Party B;
(v) (COURT APPOINTED RECEIVER) apply for the appointment by
a court of a receiver to any of the assets of Party B;
(vi) (SET-OFF OR COUNTERCLAIM) exercise or seek to exercise
any set-off or counterclaim against Party B; or
(vii) (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 rights to make those applications and take those
proceedings.
(w) A new section 17 is added as follows:
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17. Break Payments
(a) Party B shall pay Break Payments which it receives to
Party A in accordance with 5.1(c) of the Supplementary
Terms Notice, to the extent that amounts are available
to make that payment.
(b) Subject to paragraphs (c) and (d), if Party A in any
capacity (including in its capacity as Servicer) waives
or reduces the amount of any Break Payment otherwise
due from an Obligor, each of Party A and DBAG agree
that Party B's obligation under paragraph (a) is
reduced in respect of the Break Payment so waived or to
the extent of the reduction of the Break Payment (as
the case may be).
(c) Provided that DBAG has not been required to make any
payment under section 15(a), DBAG Party A and Party B
agree that (unless Party A otherwise notifies DBAG and
Party B in writing) Party A will waive all Break
Payments otherwise payable by an Obligor if the total
principal prepayments by that Obligor under the
relevant Purchased Receivable (excluding scheduled
principal repayments) does not exceed $5,000 in any
calendar year.
(d) If DBAG has been required to make a payment under
section 15(a), Party A must not waive or reduce the
amount of any Break Payment without the prior consent
of DBAG
IN WITNESS WHEREOF the parties have executed this schedule on the respective
dates specified below with effect from the date specified on the first page of
this document.
ST.GEORGE BANK LIMITED
By: By:
------------------------------------ --------------------------------
Name: Name:
------------------------------------ ------------------------------
Title: Title:
------------------------------------ -----------------------------
Date: Date:
------------------------------------ ------------------------------
14
<PAGE>
ISDA SCHEDULE TO THE MASTER AGREEMENT FOR
INTEREST RATE SWAP ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
AXA TRUSTEES LIMITED
By: By:
------------------------------------ --------------------------------
Name: Name:
------------------------------------ ------------------------------
Title: Title:
------------------------------------ -----------------------------
Date: Date:
------------------------------------ ------------------------------
CRUSADE MANAGEMENT LIMITED
By: By:
------------------------------------ --------------------------------
Name: Name:
------------------------------------ --------------------------------
Title: Title:
------------------------------------ --------------------------------
Date: Date:
------------------------------------ --------------------------------
DEUTSCHE BANK AG, SYDNEY
By: By:
------------------------------------ --------------------------------
Name: Name:
------------------------------------ ------------------------------
Title: Title:
------------------------------------ -----------------------------
Date: Date:
------------------------------------ ------------------------------
15
<PAGE>
To: AXA Trustees Limited as trustee of the Crusade Global Trust
No 1 of 1999
Attention: Philip Maddox
Copy to: Deutsche Bank AG, Sydney
Attention: Glenn McDowell
Copy to: Crusade Management Limited
Attention: Roger Desmarchelier
From: St.George Bank Limited
Date: XXXX
Subject: CONFIRMATION OF INTEREST RATE SWAP
Reference No: Crusade Global Trust. Issue No. 1 of 1999
The purpose of this letter is to confirm the terms and conditions of the
Transaction entered into between us on the Trade Date specified below (the
"Transaction"). This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
supplemented by the 1998 Supplement) (each as published by the International
Swap and Derivatives Association, Inc) or in the Trust Deed (as defined in the
master Agreement) are incorporated in this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to, the
Master Agreement dated XXX 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.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: In the case of the Floating Rate Payer
on each Quarterly Payment Date equal
to the Housing Loan Principal for all
Purchased Receivables minus the Housing
Loan Principal for all Floating Rate Loans
as calculated on the first day of
<PAGE>
the calendar quarter to which that Quarterly
Payment Date relates.
Trade Date: [22] September 1999.
Effective Date: [22] September 1999.
Final Maturity Date: XXXX
Reset Dates: The Effective Date and then each Mortgage
Rate Payment Date / Floating Rate
Payment Date.
Quarterly Payment 15th days of November, February, May and
August.
Dates:
MORTGAGE RATE AMOUNTS
Mortgage Rate: At a Reset Date, the Mortgage Rate is the
weighted average fixed rate of interest at
that Reset Date applicable to the Fixed
Rate Loans.
Mortgage Rate Payer: AXA Trustees Limited as trustee of the
Crusade Global Trust No. 1 of 1999 ("Party
B").
Mortgage Rate Each Quarterly Payment Date, up to and
Payer Payment including the last Quarterly Payment Date.
Dates: The first Payment Date will be 15th
November 1999. This is subject to
adjustment in accordance with the Modified
Following Business Day Convention.
Mortgage Rate All Finance Charge Collections (as defined
Payments: in the Supplementary Terms Notice) in
relation to the Fixed Rate Loans for the
relevant quarter, excluding Finance Charge
Collections specified in paragraphs
(b)(ii) - (ix) inclusive and (c), provided
that Party B is not obliged to pay any
amount which is attributable to any Break
Payment which is due by,
<PAGE>
but not received from, an Obligor or any
Loan Offset Interest Amount which is due
by, but not received from, an Obligor or
any Loan Offset Interest Amount which is
due by, but not received from, the
Approved Seller, and the failure by Party
B to pay that amount will not be an Event
of Default.
Mortgage Rate Day Actual / 365 (fixed).
Count Fraction:
Designated Not applicable.
Maturity:
Spread: Nil.
FLOATING AMOUNTS
Floating Rate: AUD-BBR-BBSW, based on the average rate for
the relevant Reset Date and the 2
immediately preceding business days.
Floating Rate St.George Bank Limited ("Party A").
Payer:
Floating Rate Each Quarterly Payment Date, up to and
Payment Dates: including the last Quarterly Payment Date.
The first Payment Date will be 15th
November 1999. This is subject to
adjustment in accordance with the Modified
Following Business Day Convention.
Floating Rate (Floating Rate +Spread) x Notional Amount x
Payment: number of days in the relevant quarter/365.
Floating Rate Each Floating Rate Payment Date.
Reset Dates:
Floating Rate Day Actual / 365 (fixed).
Count Fraction:
Designated Maturity: 90 days (except for the first period in
which case the Designated Maturity is [60]
days).
Spread: 1.67% p.a.
Netting of Applicable.
Payments:
<PAGE>
Compounding: Inapplicable.
Business Days: Sydney.
Calculation Agents: Crusade Management Limited.
PAYMENTS TO THE FLOATING RATE PAYER
Account for St.George Bank Limited
Payment in AUD: St.George Bank Limited
Level 12, 55 Market St
Sydney, NSW 2000
Swift Code: SGBL AU 25
Sort Code: RTGS-MM
BSB: 112-601
PAYMENTS TO THE MORTGAGE RATE PAYER
Account for AXA Trustees Limited ATF
Payment in AUD: The Crusade Global Trust No 1 of 1999.
Account CrusadeEuro
St.George Bank Limited,
Sydney Treasury Branch.
<PAGE>
PAYMENTS TO DBAG (as Standby Basis Swap provider) (IF APPLICABLE)
Account for Deutsche Bank AG, Sydney
Payment in AUD: XXXX
The office of the Mortgage Rate Payer for the Swap Transaction is Melbourne,
and the Office of the Floating Rate Payer for the Swap Transaction is Syndey.
PLEASE NOTIFY US IMMEDIATELY SHOULD THE PARTICULARS OF THIS CONFIRMATION NOT
BE IN ACCORDANCE WITH YOUR UNDERSTANDING.
PLEASE QUOTE OUR REFERENCE ON ALL CORRESPONDENCE.
Regards,
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the enclosed copy of this confirmation and returning it
to us.
Confirmed as of date first written:
For and on behalf of
DEUTSCHE BANK AG, SYDNEY
- ------------------------------------- ---------------------------------------
Name: Name:
Title: Title
Confirmed as of date first written:
For and on behalf of
AXA TRUSTEES LIMITED
(as trustee of the Crusade Global Trust No. 1 of 1999)
- ------------------------------------- ---------------------------------------
Name: Name:
Title: Title
<PAGE>
Exhibit 10.6
(Multicurrency--Cross Border)
ISDA(Registered)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of September 1999
St. George Bank Limited
(ACN 055 513 070) ("Party A") Crusade Management Limited
and AXA Trustees Limited (ACN 004 387 133) (ACN 072 715 916) ("Manager")
as trustee of Crusade Global Trust and Deutsche Bank AG, Sydney
No. 1 OJ 1999 ("Party B") (ARBN 064 165 162) ("DBAG")
- ----------------------------------------- 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 of 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 Indemnifiable 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.
2
<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 organisation 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)).
3
<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 party 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
6
<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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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 or 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.
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 in 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 in 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
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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.
St. George Bank Limited AXA Trustees Limited
- ------------------------------ ----------------------------------------
(Name of Party) (Name of Party)
By: By:
-------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
Crusade Management Limited Deutsche Bank AG, Sydney
- ------------------------------ ----------------------------------------
(Name of Party) (Name of Party)
By: By:
-------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
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ISDA SCHEDULE TO THE MASTER
AGREEMENT FOR BASIS SWAP
- ----------------------------
ST.GEORGE BANK LIMITED
AXA TRUSTEES LIMITED AS TRUSTEE OF ALLEN ALLEN & HEMSLEY
THE CRUSADE GLOBAL TRUST NO. 1 OF 1999 ALLENS
ARTHUR ROBINSON
CRUSADE MANAGEMENT LIMITED GROUPS
DEUTSCHE BANK AG, SYDNEY
ALLEN ALLEN & HEMSLEY
The Chifley Tower
2 Chifley Square
Sydney NSW 2000
Australia
Tel 61 2 9230 4000
Fax 61 2 9230 5333
(C) Copyright Allen Allen & Hemsley 1999
<PAGE>
Exhibit 10.6
[LOGO]
ISDA SCHEDULE TO THE MASTER AGREEMENT FOR
BASIS SWAP ALLEN ALLEN & HEMSLEY
- --------------------------------------------------------------------------------
DATE
- --------
PARTIES
- --------
1.
ST.GEORGE BANK LIMITED (ACN 055 513 070) (PARTY A)
2.
AXA TRUSTEES LIMITED (ACN 004 387 133) as trustee of THE CRUSADE
GLOBAL TRUST NO. 1 OF 1999 (PARTY B)
3.
CRUSADE MANAGEMENT LIMITED (ACN 072 715 916) (MANAGER)
4.
DEUTSCHE BANK AG, SYDNEY (ARBN 064 165 162) (DBAG)
- --------------------------------------------------------------------------------
PART 1. TERMINATION PROVISIONS
(h) SPECIFIED ENTITY is not applicable in relation to Party A or Party B:
(i) Sections 5(a)(ii), (iii), (iv), (v), (vi), (viii), 5(b)(ii), (iii) and (iv)
will not apply to Party A and Party B.
(j) The BANKRUPTCY provisions of Section 5(a)(vii) are replaced by "An
Insolvency Event has occurred in respect of the Party A, Party B or DBAG".
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, Party B, the Manager and
DBAG 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.
(k) Section 5(a)(i) is amended to replace "third" with "tenth" and the
following sentence is added:
Even if DBAG makes a payment under this Agreement, a failure by Party
A to remedy, within the period stipulated in this subclause 5(a)(i),
its failure to make that payment or delivery by the due date shall
still constitute an Event of Default.
For the avoidance of doubt Party B is not obliged to pay any amount
attributable to any Break Payment which is due by, but not received from,
an Obligor or any Loan Offset Interest Amount which is due by, but not
received from, the Approved Seller, and the failure by Party B to pay that
amount shall not be an Event of Default.
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(l) The AUTOMATIC EARLY TERMINATION provision of Section 6(a):
will not apply to Party A
will not apply to 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 this 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.
(m) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement, neither Party A nor Party B is required to make any payment if
this Agreement is terminated and section 6(e) shall not apply.
(n) There is no TERMINATION CURRENCY.
(o) An ADDITIONAL TERMINATION EVENT set out in Part 5(q) of this Schedule, will
apply.
In the TRANSFER provision of Section 7, 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).
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.
PART 2. TAX REPRESENTATIONS
(a) PAYER TAX REPRESENTATIONS.
For the purpose of Section 3(e) of this Agreement each of Party A, Party B
and DBAG will 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) or 6(d)(ii) 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) of this Agreement;
(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
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ISDA SCHEDULE TO THE MASTER AGREEMENT FOR
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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, each of Party A and
Party B represents that it is an Australian resident and does not derive
the payments under this Agreement in whole or in part in carrying on
business in a country outside Australia at or through a permanent
establishment of itself in that country.
(c) 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 (including DBAG)
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 receipt (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.
Paragraph (iv) shall not apply to payments to be made by Party B.
PART 3. AGREEMENT TO DELIVER DOCUMENTS
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.
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ISDA SCHEDULE TO THE MASTER AGREEMENT FOR
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PART 4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this Agreement:
Address for notices or communications to Party A:
Address: Level 12, 55 Market Street, Sydney NSW 200
Attention: Middle Office Compliance Manager
Facsimile No: (02) 9320 5589 Telephone No: (02) 9320 5526
Address for notices or communications to Party B:
Address: Level 2, 65 Southbank Boulevard, South Melbourne, Victoria
3205
Attention: Philip Maddox
Facsimile No: (03) 9694 6462
Telephone No: (03) 9694 6509
Address for notices or communications to the Manager:
Address: Level 12, 55 Market Street, Sydney NSW 2000
Attention: Middle Office Compliance Manager
Facsimile No: (02) 9320 5589 Telephone No: (02) 9320 5526
Address for notices or communications to DBAG:
Address: Level 18, 225 George Street, Sydney NSW 2000
Attention: Glenn McDowell
Facsimile No: (02) 9258 3632
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: None.
Party B appoints as its Process Agent: None.
DBAG appoints as its Process Agent: None
(c) OFFICES. The provisions of Section 10(a) will not apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
DBAG is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is the Manager unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(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. Credit Support Provider means:
In relation to Party A: DBAG
In relation to Party B: Nil.
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(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws in force in New South Wales and section 13(b)(i)
is deleted and replaced with the following:
each party submits to the non-exclusive jurisdiction of the courts of New
South Wales and Court of Appeal from them.
(i) NETTING OF PAYMENTS. Sub-paragraph (ii) of Section 2(c) of this Agreement
will apply to net Transactions 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 of this Agreement.
For the purpose of Section 3(c), each of Party A and Party B are deemed not
to have any Affiliates.
PART 5. OTHER PROVISIONS
(a) ISDA DEFINITIONS: This Agreement, each Confirmation and each Transaction
are subject to the 1991 ISDA Definitions (as supplemented by the 1998
Supplement to the 1991 ISDA Definitions (each Published by the
International Swaps and Derivatives Association, Inc.) (the "ISDA
DEFINITIONS"), and will be governed in all respects by and 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
incorporation by reference in, and shall be deemed to be part of this
Agreement and each Confirmation.
(b) 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.
(c) In section 2(a)(ii), after freely transferable funds add free of any
set-off, counterclaim, deduction or withholding (except as expressly
provided in this Agreement).
(d) 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
obligations under Section 2(a)(i) of this Agreement and has no future
payment obligations, whether absolute or contingent under Section
2(a)(i).
(e) For the purpose of Section 2(b) of this Agreement, CHANGE OF ACCOUNT, any
new account so designated shall be in the same tax jurisdiction as the
original account.
(f) 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
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ISDA SCHEDULE TO THE MASTER AGREEMENT FOR
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the assets of the Trust (other than as provided in the Security
Trust Deed), in the case of Party B.
(g) 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 equitable 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 Trust Deed) permitted under the
Security Trust Deed, as far as Party B is aware, those assets are
free from all other Security Interests
(h) In Section 3(c)
(i) delete the words AGENCY OR OFFICIAL; and
(ii) in the third line, insert "materially" before the word AFFECT.
(i) In section 4 add a new paragraph as follows:
(f) CONTRACTING AS PRINCIPAL. Party A and DBAG 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.
(j) In Section 6(d)(i), in the last line, insert IN THE ABSENCE OF MANIFEST
ERROR after the word EVIDENCE.
(k) 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.
(l) (j) 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.
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(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.
(m) Any reference to a:
(i) SWAP TRANSACTION in the 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
ISDA Definitions.
(n) The SEPTEMBER 1992 AUSTRALIAN ADDENDUM NO. 10 - (AS AMENDED IN MARCH 1994)
NETTING TO SCHEDULE TO MASTER AGREEMENT OF INTERNATIONAL SWAPS AND
DERIVATIVES ASSOCIATION, INC. is 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.
(o) TRUST DEED means the Master Trust Deed dated 14 March 1998 as amended by
the Crusade Global Trust No. 1 of 1999 Supplementary Terms Notice dated [*]
1999 between Party B, Party A and the Manager, and each of the following
expressions shall have the meanings given to them in the Trust Deed:
APPROVED BANK
DESIGNATED RATING AGENCY
FLOATING RATE LOAN
HOUSING LOAN PRINCIPAL
INSOLVENCY EVENT
MASTER TRUST DEED
NOTE
PAYMENT DATE
PURCHASED RECEIVABLE
SECURITY TRUST DEED
TRUST
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(p) TRUST DEED: The Parties acknowledge and agree that for the purposes of the
Trust Deed, this Agreement is an HEDGE AGREEMENT and Party A and DBAG are
SUPPORT FACILITY PROVIDERS.
(q) Agreement by DBAG to act as Standby Basis Swap Provider:
A new section 15 is added as follows:
15. STANDBY BASIS SWAP PROVIDER
(a) For the purpose of this clause 15 the following additional definitions
apply: (b)
ACCEPTABLE ARRANGEMENT means an arrangement which each relevant
Designated Rating Agency has confirmed, in writing will result in the
avoidance or reversal of any Note Downgrade.
ACCEPTABLE RATING means, at any time, that Party A's long term rating
from S&P is not below A- and its short term rating from S&P is not
below A-1.
APPROVED BANK means a Bank which has a short-term rating of at least
A-1+ (S&P), P-1 (Moody's) and F1+ (Fitch IBCA).
CR means the amount calculated in accordance with the following
formula:
CR = MTM + VB
where
MTM means the mark-to-market value of the Swap. Party A must
mark the swap to market and post collateral on a weekly basis,
with a cure period of 3 Business Days. The mark-to-market
value should reflect the higher of 2 bids from counterparties
that will be eligible and willing to provide the swap in the
absence of Party A.
VB means the volatility buffer, being the relevant percentage
calculated from the table below:
VOLATILITY BUFFER
COUNTERPARTY MATURITIES UP TO MATURITIES UP TO MATURITIES MORE
RATING 5 YEARS 10 YEARS THAN 10 YEARS
A+ 1.05 1.75 3.0
A 1.35 2.45 4.5
A- 1.5 3.15 6.0
DOWNGRADE means DBAG's rating by a Designated Rating Agency has been
withdrawn or reduced resulting in DBAG having:
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(i) a long term rating of less than AA- by S&P and a short term
credit rating of less than A-1+ by S&P;
(ii) a short term credit rating by Moody's of less than Prime-1; or
(iii) a short term rating of less than F1+ by Fitch IBCA.
MAJOR DBAG DOWNGRADe means a DBAG Downgrade resulting in DBAG having:
(i) a long term credit rating by S&P of less than A- and a short
term credit rating by S&P of less than A-1;
(ii) a short term credit rating by Moody's of less than Prime-2; or
(iii) a short term credit rating by Fitch IBCA of less than F1.
MINOR DBAG DOWNGRADE means any DBAG Downgrade which is not a Major
DBAG Downgrade.
NOTE DOWNGRADE means any actual or proposed withdrawal or downgrade of
the ratings assigned to any Class of Notes by a Designated Rating
Agency which results or would result in any rating assigned to that
Class of Notes being less than that stipulated in clause 4.2(f) of the
Supplementary Terms Notice.
REPLACEMENT PROVIDER means:
(i) where Party A notifies DBAG that it elects to replace itself as
Basis Swap Provider, then a Replacement Swap Provider; or
(ii) where Party A notifies DBAG that it elects to replace DBAG as
Standby Basis Swap Provider, then a Replacement Standby Swap
Provider.
REPLACEMENT STANDBY SWAP PROVIDER means a party that has agreed to
replace DBAG as Standby Basis Swap Provider and has a rating greater
than or equal to:
(i) A-1+ by S&P;
(ii) F1+ by Fitch IBCA; and
(iii) who is suitably rated such that its appointment as standby swap
provider does not result in a Note Downgrade by Moody's.
REPLACEMENT SWAP PROVIDER means a party that has agreed to replace
Party A as Basis Swap Provider, and the appointment of which each
Designated Rating Agency has confirmed, in writing, will not result in
a Note Downgrade and which DBAG has approved in writing (which
approval will not be unreasonably withheld).
TIME STIPULATED means:
(i) where Party A has an Acceptable Rating, within 30 Business Days;
and
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(ii) where Party A does not have an Acceptable rating, within 5
Business Days.
(b) DBAG agrees that if Party A is obliged to make a payment under a
Confirmation that DBAG has accepted or countersigned and DBAG receives
notice from the Manager requiring DBAG to make that payment, DBAG will
comply with that notice by making the payment specified in the notice. The
Manager must give this notice to DBAG no later than 2.00 pm on the Payment
Date.
(c) DBAG shall be obliged to make only one payment in respect of any one
Confirmation.
(d) DBAG shall make such payment in full, without any set off, counterclaim or
exercise of any similar right or defence, other than any netting permitted
under this Agreement.
(e) If DBAG receives a notice under clause 15(b) on or before 2.00 pm (Sydney
time) on a Business Day, it will make the payment, subject to clause 15(c),
specified in that notice not later than 4.00 pm on that Business Day. If it
receives a notice after 2.00 pm (Sydney time) on a Business Day it will
make the payment, subject to clause 15(c), not later than 4.00 pm on the
next Business Day.
(f)
(i) DBAG's obligations under this clause 15 with respect to a
Confirmation commence on the Effective Date (specified in
such Confirmation) and terminate on the earlier of the date
364 days after the Effective Date (the EXPIRY DATE) and the
date of the payment by DBAG under this clause 15 with respect
to such Confirmation.
(ii) If DBAG desires to extend the period for which it is obliged
to make a payment under clause 15(b) beyond an Expiry Date
and for a further period of 364 days, it shall give notice of
that desire to Party A no later than 104 days before the
Expiry Date. Unless Party A confirms that it will not agree
to such extension before the date which is 90 days before the
Expiry Date, Party A shall be deemed to have consented to the
extension.
(iii) Not later than 90 days before the Expiry Date, DBAG must, after
receiving the consent of Party A under clause 15(f)(ii), notify
Party A, Party B and the Manager (with a copy to the Designated
Rating Agencies) that it extends the period for which it is
obliged to make a payment under clause 15(b) until 364 days from
the date of that notice. DBAG may make further extensions of the
Expiry Date in accordance with this clause.
(g) If, at any time, DBAG is Downgraded and the downgrade constitutes a Minor
DBAG Downgrade, Party A shall, within 30 days (or such greater
10
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period as agreed by the relevant Designated Rating Agency), comply
with clause 15(j).
(h) If at any time DBAG is Downgraded and the downgrade constitutes a Major
DBAG Downgrade, Party A shall, within 5 Business Days (or such greater
period as agreed by the relevant Designated Rating Agency) comply with
clause 15(j).
(i) If DBAG does not extend its obligations under this Agreement under clause
15(f) and Party A receives notice from the Manager of a Note Downgrade,
Party A shall, within the Time Stipulated after that notice comply with
clause 15(j).
(j) Subject to clause 15(k), where Party A is required to comply with this
clause 15(j) it shall, at its cost, and at its election do one of the
following:
(i) (CASH COLLATERALISE) deposit into a Swap Collateral Account and
maintain in the Swap Collateral Account (whilst the relevant downgrade
subsists) sufficient funds to ensure that the amount standing to the
credit of the Swap Collateral Account is equal to the greater of the
following (the CASH COLLATERAL AMOUNT):
(A) zero;
(B) CR; and
(C) an amount acceptable to Moody's and Fitch IBCA and sufficient to
ensure that the ratings given to the Notes by Moody's and Fitch
IBCA are not adversely affected and that any Note Downgrade is
avoided or reversed (as the case may be);
(ii) (NOVATE) enter into an agreement novating this Agreement to a
Replacement Provider proposed by any of Party A, Party B or
the Manager which each Designated Rating Agency has confirmed
will not result in a withdrawal or downgrade of any credit
rating assigned, by it, to the Notes; or
(iii) (OTHER ARRANGEMENTS) enter into or procure entry into any Acceptable
Arrangement.
(k) Notwithstanding anything to the contrary in this clause 15, where a
Downgrade as described in paragraph (i) of the definition of
Downgrade, or a Note has occurred, a party entitled to elect a
course of action under this clause 15 may only elect to cash
collateralise under clause 15 (j) (i) if Party A has an Acceptable
Rating.
(l) Where Party A is required to comply with clause 15(j) and fails to do so
within the relevant time, DBAG shall, subject to clause 15(k), either:
(i) deposit into, and maintain in, a Swap Collateral Account the Cash
Collateral Amount in accordance with clause 15(j)(i);
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(ii) procure, at its cost, a Replacement Provider and pay the costs of
novating the relevant obligations to that Replacement Provider in
accordance with clause 15(j)(ii); or
(iii) at its cost, enter into or procure entry into an Acceptable
Arrangement in accordance with clause 15(j)(iii).
(m) Where either DBAG or Party A procures a Replacement Provider in
accordance with clause 15(j)(ii) or clause 15(l)(ii), each party to this
Agreement shall do all things necessary to novate the relevant
obligations to the Replacement Provider.
(n) If, at any time, DBAG's obligations under this Agreement are novated in
accordance with clause 15(j)(ii) or clause 15(l)(ii) or any Acceptable
Arrangement is entered into in accordance with clause 15(j)(iii) or
clause 15(l)(iii) which results in DBAG being replaced as standby swap
provider, DBAG shall be immediately entitled to any cash collateral
amount which it has deposited in the Swap Collateral Account.
(o) If the Manager becomes actually aware of the occurrence of a DBAG
Downgrade, the Manager shall notify Party A, DBAG or both of the
occurrence of such a reduction.
(p) Where Party B has not established a Swap Collateral Account and either
Party A or DBAG is required to deposit monies into a Swap Collateral
Account, the Manager must direct Party B to establish, as soon as is
practicable, and maintain, in the name of Party B an account with an
Approved Bank which account shall be, for the purposes of this clause 15
the SWAP COLLATERAL ACCOUNT.
(q) All interest on the Swap Collateral Account will accrue and be payable
[monthly] to the party which provides the relevant Cash Collateral
Amount.
(r) Party B may only make withdrawals from the Swap Collateral Account if
directed to do so by the Manager and then only for the purpose of:
(i) novating obligations under this Agreement in accordance with clause
15(j)(ii) or clause 15(l)(ii) or entering into any other Acceptable
Arrangement in accordance with 15(j)(iii) or clause 15(l)(iii);
(ii) refunding to Party A or DBAG (whichever provided the relevant Cash
Collateral Amount) the amount of any reduction in the Swap
Collateral Amount, from time to time and providing the Designated
Rating Agencies have confirmed, in writing, that such refund will
not result in a Note Downgrade;
(iii) withdrawing any amount which has been incorrectly deposited into
the Swap Collateral Account;
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(iv) paying financial institutions duty, bank accounts debit tax or
other equivalent Taxes payable in respect of the Swap 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.
(s) DBAG's obligations under this clause 15 shall:
(i) survive the termination of this Agreement; and
(ii) terminate upon Party A complying with its obligations (if any)
under clause 15(j) or DBAG complying with its obligations under
clause 15(l).
(t) Where:
(i) Party A fails to comply with clause 15(j); and
(ii) DBAG fails to comply with clause 15(l),
this shall constitute an Additional Termination Event and Party A
shall be the Affected Party for this purpose.
(u) In consideration of DBAG agreeing to act as Standby Basis Swap Provider,
Party B agrees to pay to DBAG quarterly in arrears a fee that accrues
from day to day and is calculated at the rate of $25,000 per annum. This
fee is payable on each Payment Date, subject to (and to the extent that
funds are available under) the cashflow allocation methodology in the
Supplementary Terms Notice.
(v) None of the above fees in this clause 15 are to be increased by
reference to any applicable goods and services tax unless:
(i) the parties to this Agreement agree (that agreement not to be
unreasonably withheld); and
(ii) the increase will not result in a Note Downgrade.
(w) In consideration of DBAG agreeing, at the request of Party A, to
act as Standby Basis Swap Provider, Party A agrees to indemnify
DBAG on demand against any loss, charge, liability or expense that
DBAG may sustain or incur as a direct or indirect consequence of
Party A failing to comply with its obligations under this
Agreement, or the Manager requiring DBAG to make a payment under
this Agreement.
A new section 16 is added as follows:
16. Trustee provisions
(a) Each party other than Party B acknowledges and agrees
that Party B has entered into this Agreement in its
capacity as trustee of the Trust and in no other
capacity. Clauses 1.2(p) and 30.16 of the Master Trust
Deed apply to this Agreement as if set out in full,
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with references to Deed being construed as
references to Agreement. Clause 16 of the Security
Trust Deed shall apply to govern Party A's priority
to money received from the sale of Trust Assets or
other enforcement of the Charge under the Security
Trust Deed (each as defined in the Security Trust
Deed).
(b) Nothing in paragraph (a) limits Party A in:
(i) obtaining an injunction or other order to restrain
any breach of this agreement by Party B;
(ii) obtaining declaratory relief; or
(iii) in relation to its rights under the Security Trust
Deed.
(c) Except as provided in paragraphs (a) and (b), Party A
shall not:
(i) (JUDGMENT) obtain a judgment for the payment of
money or damages by Party B
(ii) (STATUTORY DEMAND) issue any demand under s459E(1)
of the Corporations Law (or any analogous provision
under any other law) against Party B;
(iii) (WINDING UP) apply for the winding up or
dissolution of Party B;
(iv) (EXECUTION) levy or enforce any distress or other
execution to, on or against any assets of Party B;
(v) (COURT APPOINTED RECEIVER) apply for the appointment
by a court of a receiver to any of the assets of
Party B;
(vi) (SET-OFF OR COUNTERCLAIM) exercise or seek to
exercise any set-off or counterclaim against Party
B; or
(vii) (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 rights to make those applications and
take those proceedings.
IN WITNESS WHEREOF the parties have executed this schedule on the respective
dates specified below with effect from the date specified on the first page of
this document.
14
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- --------------------------------------------------------------------------------
ST.GEORGE BANK LIMITED
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- -----------------------------
Title: Title:
------------------------------- ----------------------------
Date: Date:
-------------------------------- ----------------------------
AXA TRUSTEES LIMITED
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- -----------------------------
Title: Title:
------------------------------- ----------------------------
Date: Date:
-------------------------------- ----------------------------
CRUSADE MANAGEMENT LIMITED
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- -----------------------------
Title: Title:
------------------------------- ----------------------------
Date: Date:
-------------------------------- ----------------------------
15
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ISDA SCHEDULE TO THE MASTER AGREEMENT FOR
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DEUTSCHE BANK AG, SYDNEY
By: By:
--------------------------------- ------------------------------
Name: Name:
------------------------------- -----------------------------
Title: Title:
------------------------------- ----------------------------
Date: Date:
-------------------------------- ----------------------------
16
<PAGE>
To: AXA Trustees Limited as trustee of the Crusade Global Trust
No 1 of 1999
Attention: Philip Maddox
Copy to: Deutsche Bank AG, Sydney
Attention: Glenn McDowell
Copy to: Crusade Management Limited
Attention: Roger Desmarchelier
From: St.George Bank Limited
Date: XXXX
Subject: CONFIRMATION OF BASIS SWAP
Reference No: Crusade Global Trust. Issue No. 1 of 1999
The purpose of this letter is to confirm the terms and conditions of the
Transaction entered into between us on the Trade Date specified below (the
"Transaction"). This letter constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
supplemented by the 1998 Supplement) (each as published by the International
Swap and Derivatives Association, Inc) or in the Trust Deed (as defined in the
master Agreement) are incorporated in this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to, the Master
Agreement dated XXX 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.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: In the case of the Floating Rate Payer,
on each Quarterly Payment Date equal
to the Housing Loan Principal for all
Purchased Receivables minus the Housing Loan
Principal for all Fixed Rate Loans as
calculated on the first day of the
<PAGE>
calendar quarter to which that Quarterly
Payment Date relates.
Trade Date: [22] September 1999.
Effective Date: [22] September 1999.
Termination Date: [22] September 2000 (subject to adjustment
in accordance with the Modified Following
Business Day Convention). The Transaction
may be renewed for a further 364 days with
the agreement of the parties.
Reset Dates: The Effective Date and then each Mortgage
Rate Payment Date / Floating Rate Payment
Date.
Quarterly Payment 15th days of November, February, May and
Dates: August.
MORTGAGE RATE AMOUNTS
Mortgage Rate: At a Reset Date, the Mortgage Rate is the
variable mortgage rate then applicable to
the Floating Rate Loans as set by the
Servicer.
Mortgage Rate Payer: AXA Trustees Limited as trustee of the
Crusade Global Trust No. 1 of 1999 ("Party
B").
Mortgage Rate Each Quarterly Payment Date, up to and
Payer Payment including the last Quarterly Payment Date on
Dates: or prior to the Termination Date. The first
Payment Date will be 15th November 1999.
This is subject to adjustment in accordance
with the Modified Following Business Day
Convention.
Mortgage Rate All Finance Charge Collections (as defined
Payments: in the Supplementary Terms Notice),
<PAGE>
other than Finance Charge Collections for
Fixed Rate Loans and excluding Finance
Charge Collections specified in paragraphs
(b)(ii) - (ix) inclusive and (c), provided
that Party B is not obliged to pay any
amount which is attributable to any Break
Payment which is due by, but not received
from, on Obligor or any Loan Offset Interest
Amount which is due by, but not received
from, the Approved Seller, and the failure
by Party Bto pay that amount will not be an
Event of Default.
Mortgage Rate Day Actual / 365 (fixed).
Count Fraction:
Designated 90 days (except for the Initial Calculation
Maturity: Period in which case the Designated Maturity
is 60 days).
Spread: Nil.
<PAGE>
FLOATING AMOUNTS
Floating Rate: AUD-BBR-BBSW (based on the average rate for
the relevant Reset Date and the 2
immediately proceeding business days).
Floating Rate St.George Bank Limited ("Party A").
Payer:
Floating Rate Each Quarterly Payment Date, up to and
Payment Dates: including the last Quarterly Payment Date,
on or prior to the Termination Date. The
first Payment Date will be 15th November
1999. This is subject to adjustment in
accordance with the Modified Following
Business Day Convention.
Floating Rate (Floating Rate + Spread) x Notional Amount
Payment x number of days in the relevant quarter
/ 365.
Floating Rate Each Floating Rate Payment Date.
Reset Dates:
Floating Rate Day Actual / 365 (fixed).
Count Fraction:
Designated 90 days (except for the first period in
Maturity: which case the Designated Maturity is 60
days).
Spread: 1.67% p.a.
Netting of Applicable.
Payments:
Compounding: Inapplicable.
Business Days: Sydney.
Calculation Agents: Crusade Management Limited.
PAYMENTS TO THE FLOATING RATE PAYER
Account for St.George Bank Limited
Payment in AUD: St.George Bank Limited
Level 12, 55 Market St
Sydney, NSW 2000
Swift Code: SGBL AU 25
<PAGE>
Sort Code: RTGS-MM
BSB: 112-601
<PAGE>
PAYMENTS TO THE MORTGAGE RATE PAYER
Account for AXA Trustees Limited ATF
Payment in AUD: The Crusade Global Trust No 1 of 1999
Account CrusadeEuro
St.George Bank Limited, Sydney Treasury
Branch.
PAYMENTS TO DBAG (as Standby Basis Swap provider) (IF APPLICABLE)
Account for Deutsche Bank AG Sydney
Payment in AUD: XXXX
The office of the Mortgage Rate Payer for the Swap Transaction is Melbourne, and
the Office of the Floating Rate Payer for the Swap Transaction is Sydney.
PLEASE NOTIFY US IMMEDIATELY SHOULD THE PARTICULARS OF THIS CONFIRMATION NOT BE
IN ACCORDANCE WITH YOUR UNDERSTANDING.
PLEASE QUOTE OUR REFERENCE ON ALL CORRESPONDENCE.
Regards,
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the enclosed copy of this confirmation and returning it
to us.
Confirmed as of date first written:
For and on behalf of
DEUTSCHE BANK AG, SYDNEY
.............................................. ................................
Name: Name:
Title: Title
Confirmed as of date first written:
For and on behalf of
AXA TRUSTEES LIMITED
(as trustee of the Crusade Global Trust No. 1 of 1999)
.............................................. ................................
Name: Name:
Title: Title
<PAGE>
Exhibit 10.7
(Multicurrency--Cross Border)
ISDA(Registered)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of September 1999
AXA Trusteed Limited (ALN 004 029 841)
in its capacity as trustee of the
Crusade Global Trust No.11999
Bankers Trust Corporation ("Party B") and Crusade Management
New York ("Party A") Limited "Manager"
- ----------------------------------- 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 of 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 Indemnifiable 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.
2
<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 organisation 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 party 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 or 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.
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.
11
<PAGE>
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
12
<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 in 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 in 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
13
<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.
14
<PAGE>
"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.
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.
Bankers Trust Corporation,
New York AXA Trustees Limited
- ------------------------------ ----------------------------------------
(Name of Party) (Name of Party)
By: By:
-------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
Crusade Management Limited
----------------------------------------
(Name of Party)
By:
-------------------------
Name:
Title:
Date:
18
<PAGE>
ISDA
International Swaps and Derivatives Association, Inc.
SCHEDULE
to the
Master Agreement
Dated as of
Between
Bankers Trust Corporation, New York ("Party A")
and
AXA Trustees Limited (ACN 004 029 841) in its capacity as trustee
of the Crusade Global Trust No. 1 1999 ("Party B")
and
Crusade Management Limited (ACN 072 715 916) ("Manager")
Part 1
Termination Provisions
(a) "Specified Entity" is not applicable in relation to Party A and Party B.
(b) "Specified Transaction" will have the meaning set forth in Section 14.
(c) (i) Sections 5(a)(ii), (iii), (iv), (v), (vi), 5(b)(iii) and (iv) will not
apply to Party A or Party B.
(ii) Replace Section 5(a)(i) with:
"(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 10:00am on the tenth
Local Business Day after the due date;"
(iii) Section 5(b)(ii) will not apply to Party A as the Affected Party
(subject to Part 5(m)(iii) of this Schedule).
(d) The "Bankruptcy" provisions of Section 5(a)(vii) are replaced by "An
Insolvency Event has occurred in respect of Party A or Party B". 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
- --------------------------------------------------------------------------------
Page 1
<PAGE>
its personal capacity will not constitute an Event of Default provided that
within thirty Business Days of that occurrence, Party A, Party B and the
Manager 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, and Party A and Party B agree to execute such a
novation agreement in standard ISDA form.
(e) The "Automatic Early Termination" provisions of Section 6(a):
will not apply to Party A.
will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation (as amended by Part 5(q)(ii)) will apply; and
(ii) the Second Method will apply.
(g) "Termination Currency" means United States Dollars.
(h) "Additional Termination Event" means:
(i) Party B must, at the direction of the Manager, terminate this
Agreement if it becomes obliged to make a withholding or deduction in
respect of any Notes and the Notes are redeemed as a result (and Party
B is the Affected Party);
(ii) Party B must, at the direction of the Manager, terminate this
Agreement if Party A breaches Part 5(z) (and Party A is the Affected
Party).
Part 2
Tax Representations
(a) Payer Tax Representations
For the purpose of Section 3(e) of the Agreement, Party A and Party B will
make the following representations:
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 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); and
(ii) 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) of the Agreement by reason of
material prejudice to its legal or commercial position.
(b) Payee Tax Representations
- --------------------------------------------------------------------------------
Page 2
<PAGE>
For the purpose of Section 3(f) of this Agreement:
Party A makes the following representation:
None
Party B makes the following representation:
It is an Australian resident and does not derive the payments under this
Agreement in part or in whole in carrying on business in a country outside
Australia at or through a permanent establishment of itself in that
country.
Part 3
Agreement to Deliver Documents
For the purposes of Section 4(a)(i) and (ii) of this Agreement:
(a) Party A agrees to provide to St.George and the Manager, , at any time on
the request of the Manager, any information required to be provided for the
purposes of periodic filings made by the Trust Manager with the Securities
and Exchange Commission; and
(b) in addition, each party further agrees to deliver the following documents
as applicable in accordance with the following:
<TABLE>
<CAPTION>
- ------------------------ ------------------------------- ------------------------ ------------------
Party required to Document Date by which to be Covered by
deliver delivered section 3(d)
representations
- ------------------------ ------------------------------- ------------------------ ------------------
<S> <C> <C> <C>
Party B and the Manager a list of authorised On execution and yes
signatories for the party and delivery of this
evidence satisfactory in form Agreement or any
and substance to the other relevant Confirmation
party of the authority of the and when the list is
authorised signatories of the updated and at any
party to execute this time on the request of
Agreement and each the other party.
Confirmation on behalf of
Party B
- ------------------------ ------------------------------- ------------------------ ------------------
</TABLE>
- --------------------------------------------------------------------------------
Page 3
<PAGE>
<TABLE>
<CAPTION>
- ------------------------ ------------------------------- ------------------------ ------------------
<S> <C> <C> <C>
Party B a United States Internal Upon (A) the earlier yes
Revenue Service Form W-8 of: (1) the first
BEN, or any successor form Payment Date; (2)
promptly upon
reasonable demand by
Party A; and
(3)learning that any
United States Internal
Revenue Service Form
W-8 BEN previously
provided by Party B has
become obsolete or
incorrect; and (B)prior
to the first Payment
Date every three
calendar years
thereafter.
- ------------------------ ------------------------------- ------------------------ ------------------
Party A Party A shall deliver On execution and yes
evidence satisfactory in form delivery of this
and substance to the other Agreement or any
party of the authority of the relevant
signatories of the party to Confirmation.
create this Agreement and
each confirmation on behalf
of Party A (including, but
not limited to, at the
request of Party B, an
incumbency certificate or
a Power or Attorney)
- ------------------------ ------------------------------- ------------------------ ------------------
Party B Legal opinions as to the Before the entering yes
validity and enforceability into of any
of the obligations of Party B Transaction.
and the Manager under this
Agreement, the Trust Deed,
the Security Trust Deed and
the Notes in form and
substance and issued by legal
counsel reasonably acceptable
to Party A
- ------------------------ ------------------------------- ------------------------ ------------------
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
- ------------------------ ------------------------------- ------------------------ ------------------
<S> <C> <C> <C>
Manager Copies of the Trust Deed and On execution and Yes
Security Trust Deed certified delivery of this
to be true copies by two Agreement
authorised signatories of the
Manager
- ------------------------ ------------------------------- ------------------------ ------------------
</TABLE>
Part 4
Miscellaneous
(a) Address for Notices: For the purpose of Section 12(a) of this Agreement:
Address for Notices to Party A:
Attention: Bankers Trust Corporation
Address: Bankers Trust Corporation
C/o Deutsche Bank AG
New York Legal Department
1301 Avenue of the Americas
8th Floor
New York
New York 10019
Facsimile: (212) 469 5656
Telex: N/A
Address for Notices to Party B:
Level 2, 65 Southbank Boulevard, South Melbourne, Victoria, 3205
Attention: Philip Maddox
Telephone: (03) 9694 6509
Facsimile: (03) 9694 6462
Telex: N/A
Address for Notice to Manager:
Level 12, 55 Market Street, Sydney NSW 2000
Attention: Middle Office Compliance Manager
Telephone: (03) 9320 5526
Facsimile: (03) 9320 5589
Telex: N/A
(b) Process Agent: For the purposes of Section 13(c) of this Agreement: Party A
appoints as its Process Agent: Not Applicable Party B appoints as its
Process Agent: CT Corporation
111 Eighth Avenue
13th Floor
New York NY 10011
Phone: 212 590 9100
Fax: 212 590 9190
(c) Offices: The provisions of Section 10(a) will apply to this Agreement.
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<PAGE>
(d) Multibranch Party: For the purposes of Section 10(c) of this Agreement:
Party A is not a multibranch Party.
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) In relation to Party A: Nil
(ii) In relation to Party B: Security Trust Deed.
(g) Credit Support Provider:
(i) In relation to Party A: Any party appointed under Part 5(z)(ii)(B).
(ii) In relation to Party B: Nil
(h) Governing Law: This Agreement will be governed by and construed in
accordance with New York law.
(i) Netting of Payments: Sub-paragraph (ii) of Section 2(c) of this Agreement
will apply.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement. For the purposes of Section 3(c), neither Party A nor Party B is
deemed to have any Affiliates.
Part 5
Other Provisions
(a) 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."
(b) In Section 2(a)(ii), after "freely transferable funds" and "free of any
set-off, counterclaim, deduction or withholding (except as expressly
provided in this Agreement).
(c) Insert new Sections 2(a)(iv) and 2(a)(v) 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) of this Agreement 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; and
(2) the Security Trust Deed has become, and remains at that time,
enforceable.
then Party A's obligation to make the Party A Payment to Party B shall
be subject to the condition precedent (which shall be an "applicable
condition precedent" for the purpose of Section 2(a)(iii)(3)) that
Party A first receives either:
(3) the Party B Payment; or
(4) confirmation from Party B's bank that it holds irrevocable
instructions to effect payment of the Payment B Payment and that
cleared funds are available to make that payment."
(d) 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."
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<PAGE>
(e) 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";
(f) 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. Party B will have no
obligation to pay any amount to Party A under Section 2(d)(ii), and may
make any payment under or in connection with this Agreement net of any
deduction or withholding referred to in Section 2(d)(i).
(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
the assets of the Trust (other than as provided in the Security Trust
Deed), in the case of Party B.
(h) 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 equitable 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 Trust Deed, as far as Party B is aware, those
assets are free from all other Security Interests.
(i) 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."
(j) Confirmations. For the purposes of Section 9(e)(ii) Party B (either itself
or through the Manager) will, on or promptly after the relevant Trade Date,
send Party A a Confirmation confirming that Transaction and Party A must
promptly then confirm the accuracy of or request the correction of such
Confirmation. Notwithstanding the provisions of Section 9(e)(ii), each
Confirmation in respect of a 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 enforcement of any Swap Transaction.
(k) Section 5(b)(i) (Illegality) is amended by adding the following paragraph
at the end:
"this sub paragraph (i) does not apply to the imposition by the Australian
government or any agency of the Australian government of any exchange
control restrictions or prohibitions ("exchange controls"). For the
avoidance of doubt:
(vi) exchange controls do not constitute an Illegality or Event of Default
or Termination Event under this Agreement, and do not entitle a party
to terminate a Transaction or otherwise refuse to make any payments it
is obliged to make under a Transaction"; and
- --------------------------------------------------------------------------------
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<PAGE>
(ii) Delivery by Party B of Australian dollar amounts required to be paid
by it under any relevant Confirmation to the bank account specified in
that confirmation will constitute proper payment of those amounts by
Party B and Party A's obligations under this Agreement will be
unaffected by any such exchange controls.
(l) Section 6 is amended by replacing "20 days" in line 3 with "10 Local
Business Days", and deleting the words "all outstanding Transactions" where
they appear and inserting instead of words "the Relevant Swap Transaction".
(m) 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: 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 Trust Deed and
the Supplementary Terms 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
the Note Trustee.
(iii) Party A's limited rights in relation to Tax Event:
Notwithstanding Part 1(c)(iii) of this Schedule, Party
A may designate an Early Termination Date if it is an
Affected Party following a Tax Event but only if all
Notes will be redeemed at their Invested Amount (or, if
the Noteholders by Extraordinary Resolution have so
agreed, at their Stated Amount) together with accrued
interest to (but excluding) the date of redemption.
(iv) 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
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 Notes".
(n) 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.
(o) 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.
(p) 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.
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<PAGE>
(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."
(q) Section 14 of the Agreement is modified as follows :
(i) New definitions are inserted as follows:
"Future Obligations" means 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).
"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.
"Trust Deed" means that the Master Trust Deed dated 14 March 1998 and
the Crusade Global Trust No. 1 of 1999 Supplementary Terms Notice
dated on or about the date of this Agreement ("Supplementary Terms
Notice") between Party B St George Bank Limited and the Manager, and
each of the following expressions has the meanings given to them in
the Trust Deed.
"Associate"
"Class A Notes"
"Class B Notes"
"Conditions"
"Currency Swap"
"Designated Rating Agency"
"Extraordinary Resolution"
"Insolvency Event"
"Invested Amount"
"Mortgaged Property"
"Note"
"Note Trustee"
"Purchased Receivables"
"Security Trust Deed"
"Stated Amount"
"Trust"
"Trust Expense"
(ii) 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
Documentation with respect to the obligations of such party.
Each quotation will, at the option of the party making the
determination, be
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<PAGE>
determined as either:
(1) the amount, if any, that would be paid to such party (expressed
as a negative number) or any 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") that would have the effect of
preserving for such party the economic equivalent of the Future
Obligations of both parties; or
(2) the present value (calculated using commercially reasonable
discount rates) of the difference or the differences on each
Scheduled Payment Date that would have occurred after the Early
Termination Date between (a) the Future Obligations of the other
party to the Terminated Transaction or Termination Transactions
and (b) the obligations that a quoting Reference Market-maker
would have under a transaction ("Replacement Transaction") that
would preserve for the party making the determination that
party's Future Obligations, with such present value being
positive if (a) is greater than (b) and negative if (a) is less
than (b).
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 it's 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 god
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."
(r) Trust Deed and Security Trust Deed: The parties acknowledge and agree and
for the purposes of the Trust Deed and Security Trust Deed
(a) all Transactions under this Agreement are "Hedge Agreements";
(b) Party A is a "Support Facility Provider",
(s) ISDA Definitions: This Agreement, each Confirmation and each Transaction
are subject to the 1991 ISDA Definitions and the 1998 Supplement to the
1991 ISDA Definitions (as published by the International Swap Dealers
Association, Inc.) (the "ISDA Definitions"), and ill 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.
(t) 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;
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<PAGE>
(iii) the other provisions of the Master Agreement;
(iv) the ISDA Definitions.
(u) Any reference to a:
(i) "Swap Transaction" in the 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 purposes of interpreting the
1991 ISDA Definitions.
(v) New clauses 15, 16, 17 and 18 are added as follows:
"15. Trustee provisions
(a) Each party acknowledges and agrees that Party B enters into
this Agreement in its capacity as trustee of the Trust and
in no other capacity. Clause 16 of the Security Trust Deed
applies to govern Party A's priority to monies received from
the sale of trust Assets or other enforcement of the Charge
under the Security Trust Deed (each as defined in the
Security Trust Deed). Clauses 1.2(p) and 30.13 of the Trust
Deed apply to this Agreement as if set out in full, with
references to Deed being construed as references to
Agreement.
(b) Nothing in paragraph (a) limits Party A in:
(i) obtaining an injunction or other order to restrain any
breach of this Agreement by Party B;
(ii) obtaining declaratory relief; or
(iii) in relation to its rights under the Security Trust
Deed.
(c) Except as provided in paragraphs (a) and (b), Party A shall
not
(i) (judgment) obtain a judgment for the payment of money
or damages by Party B
(ii) (statutory demand) issue any demand under s459E(1) of
the Corporations Law (or any analogous provision under
any other law) against Party B;
(iii) (winding up) apply for the winding up or dissolution
of Party B;
(iv) (execution) levy or enforce any distress or other
execution to, on, or against any assets of Party B;
(v) (court appointed receiver) apply for the appointment by
a court of a receiver to any of the assets of Party B;
(vi) (set-off or counterclaim) exercise or seek to exercise
any set-off or counterclaim against Party B; or
(vii) (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 rights to make those applications and take those
proceedings.
16. Segregation:
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<PAGE>
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 does 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 under the Security Trust Deed. Without limiting the
generality of the foregoing, the provisions of this
Agreement have effect separately and severally in respect of
each Relevant Swap Transaction and are 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 Event of Default or
Termination Event in respect of any other Relevant Swap
Transaction.
17. Replacement Currency Swap
(a) If this Agreement is terminated, Party B must, at the
direction of the Manager, enter into one or more currency
swaps which replace the Transactions under this Agreement
(collectively a "Replacement Currency Swap") but only on the
following conditions:
(k) 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 Supplementary
Terms Notice and this Agreement;
(ii) the Designated Ratings Agencies confirm that the
Replacement Currency Swap will not cause a reduction or
withdrawal of the ratings of the Notes; and
(iii) the liability of Party B under the Replacement
Currency Swap is limited to at least the same extent
that its liability is limited under this Agreement.
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(b) If the conditions in Section 17(a) are satisfied, Party B
must, at the direction of the Manager, enter into the
Replacement Currency Swap and if it does so it must direct
the Replacement Currency Swap provider 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 17(a) and to the extent
that such premium is not greater than or equal to the
Settlement Amount, the balance must be satisfied by Party B
as a Trust Expense.
(c) If the conditions in Section 17(a) are satisfied and Party B
has entered into the Replacement Currency Swap, Party B must
direct Party A to pay any Settlement Amount payable by Party
A to Party B on termination of this Agreement directly to
the Replacement Currency Swap provider as payment and to the
extent of any premium payable by Party B to enter into the
Replacement Currency Swap, in satisfaction of and to the
extent of Party A's obligation to pay that part of the
Settlement Amount to Party B.
18. Novation
Party A may at any time novate its obligations under this
Agreement to any Associate of Deutsche Bank AG (the "New
Counterparty") provided that:
(a) the New Counterparty is obligated to file periodic reports
with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934;
(b) the New Counterparty provides a legal opinion to Party B
that this Agreement, as novated, is valid, binding and
enforceable (subject to equitable doctrines and creditor's
right generally); and
(c) the Designated Ratings Agencies confirm that the New
Counterparty will not cause a reduction or withdrawal of the
ratings of the Notes.
Party B and the Manager will execute all such documents as are
reasonably necessary to give effect to that novation."
(w) Telephone recording: Each party:
(l) 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
(ii) agrees to obtain any necessary consent of and give notice of such
recording to such personnel of it and its Affiliates.
(x) Relationship Between Parties: Each party will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent
a written agreement between the parties that expressly imposes affirmative
obligations to the contrary for the Transaction):-
(a) Non-Reliance. It is acting for its own account (or, in the case of
Party B, as trustee of the Trust), 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
judgement and upon advise from such advisers 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. No communication (written or oral) received
from the other party shall be deemed to be an assurance or guarantee
as to the expected results of that Transaction.
(b) Assessment and Understanding. It is capable of assessing the merits of
and
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<PAGE>
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks
of that Transaction. It is also capable of assuming, and assumes, the
risks of that Transaction.
(y) Appointment of Manager: Party A acknowledges that under the Trust Deed
Party B has appointed the Manager as manager of the Trust with the powers
set out in and upon and subject to the terms of, the Trust Deed.
Accordingly, subject to the terms of the Trust Deed, the Manager:
(i) may arrange, enter into, and monitor Transactions, execute
Confirmations and exercise all other rights and powers of Party B
under this Agreement; and
(ii) without limiting the generality of the foregoing, the Manager shall,
issue and receive, on behalf of Party B all notices, Confirmations,
certificates and other communications to or by Party A under this
Agreement.
(z) Ratings Downgrade:
(i) If, as a result of the withdrawal or downgrade of its credit
rating by a Designated Rating Agency, Party A does not have
either a long term credit rating of at least AA- by S&P or a
short term credit rating of at least A-1+ by S&P, and a long term
credit rating of at least A2 by Moody's or a long term rating of
at least AA- by Fitch (and, in the case of Moody's or Fitch, such
a downgrade would, except for this clause adversely affect the
rating of the Notes), Party A shall within:
(A) 30 Business Days of a downgrade of its long term credit
rating by S&P to not lower than A- together with a downgrade
of its short term credit rating by S&P to not lower than
A-1, or the downgrade of its long term credit rating by
Moody's to not lower than A3, or a downgrade of its long
term credit rating by Fitch IBCA to not lower than A-;
5 Business Days of any other such withdrawal or downgrade
and for the avoidance of doubt, if Party A's long term
credit rating by S&P is not lower than A- and Party A's
short term credit rating by S&P is not lower than A-1, and
in each case Party A's long term credit rating by Moody's is
not lower than
(B) A3 and its long term credit rating by Fitch IBCA is not
lower than A- then paragraph (A) above shall apply and not
this paragraph (B),
(or, in either case, such greater period as is agreed to in
writing by the relevant Designated Rating Agency) at its cost
alone and at its election:
(C) (in the case of paragraph (i)(A) only) lodge cash collateral
in US$ with an Approved Bank outside Australia in an amount
equivalent to the Cash Collateral Amount as defined in
paragraph (z)(ii)(A) below. This collateral must be lodged
with an entity that each Designated Rating Agency confirms
will not affect the rating of the Notes. Any interest earned
on it is payable to Party A. Party A will pay any costs
associated with lodgment of the collateral; or
(D) at the cost of Party A, enter into an agreement novating
this Agreement to a replacement counterparty proposed by any
of Party A, Party B or the Manager (if any) and which each
Designated Rating Agency has confirmed will result in there
not being a withdrawal or downgrade of any credit rating,
assigned by it, to the Notes; or
(E) enter into such other arrangements which each Designated
Rating Agency has confirmed will result in there not being a
withdrawal or downgrade of any credit rating assigned by it
to the Notes.
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(ii) For the purpose of this paragraph (z):
(A) the Cash Collateral Amount shall be an amount equal to the
greater of the following:
(1) zero;
(2) CRR; and
(3) an amount acceptable to Moody's and Fitch and
sufficient to maintain the credit rating assigned to
the Notes by Moody's and Fitch immediately prior to the
review of Party A's credit rating; and
(B) Approved Bank means a Bank which has a short- term rating of
at least A-1+ (S&P), P-1 (Moody's) and F1+ (Fitch IBCA).
(iii) For the purpose of paragraph (ii)(A), the formula for
calculating CCR is as follows.
CCR = CR x 1.030
where
CR means MTM + VB
MTM means the mark-to-market value of the swap. Party A will have
to mark the swap to market and post collateral on a weekly basis,
with a cure period of 3 days. The mark-to-market value should
reflect the higher of 2 bids from counterparties that will be
eligible and willing to provide the swap in the absence of Party
A.
VB means the volatility buffer, being the relevant percentage
calculated from the following table:
Volatility Buffer (%)
Counterparty Maturities up Maturities up Maturities more
rating to 5 years to 10 years than 10 years
A+ 1.05 1.75 3.0
A 1.35 2.45 4.5
A- 1.5 3.15 6.0
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Page 15
<PAGE>
[Bankers Trust Corporation Letterhead]
[ ] September 1999
National Mutual Trustees Limited
c/o Crusade Management Limited
Level 12
55 Market Street
SYDNEY NSW 2000
Attention: Middle Office Compliance Manager
Facsimile No: (02) 9320 5589
Dear Sir/Madam
AUD/USD CROSS CURRENCY SWAP TRANSACTION FOR CLASS [A1] NOTES: - OUR
REFERENCE [ ]
The purpose of this letter is to confirm the terms and conditions of the
Transaction entered into between us on the Trade Date specified below. This
letter constitutes a "Confirmation" as referred to in the Master Agreement
specified below.
The definitions and provisions contained in the 1991 ISDA Definitions and the
1998 Supplement to the 1991 ISDA Definitions (as published by the International
Swap Dealers Association, Inc.) are incorporated into this Confirmation. In the
event of any inconsistency between those definitions and provisions and this
Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to the
ISDA Master Agreement dated on or before [*] September 1999 as amended
and supplemented from time to time between you, us and Crusade
Management Limited (the Agreement). All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
2. Terms defined in the Trust Deed and the Supplementary Terms Notice
(each as defined in the Agreement) have the same meanings when used in
this Confirmation.
3. The terms of the particular Transaction to which this Confirmation
relates are as follows:
TRADE DATE : Pricing Date
EFFECTIVE DATE : Closing Date
TERMINATION DATE : Final Quarterly Payment Date
Subject to adjustment in accordance with the Modified Following
Business Day Convention
- --------------------------------------------------------------------------------
Page 1
<PAGE>
PARTY A
FLOATING AMOUNTS:
FLOATING RATE PAYER : Bankers Trust Corporation, New
York
("Party A")
PARTY A FLOATING AMOUNT : IA x FR x Actual/360, where:
IA is the aggregate
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; and
FR is the Party A Floating Rate
Option plus the Party A Spread
Provided that, if on any Floating Rate Payer Payment Date, the Manager
determines, in accordance with Clause 5 of the Supplementary Terms Notice (as
specified in a notice from the Manager to Party A on the relevant Quarterly
Determination Date), that there are insufficient funds available for Party B to
pay the Party B Floating Amount in full, then the Party A Floating Amount
otherwise due on such Floating Rate Payer Payment Date shall be reduced by the
same proportion as the reduction in the A$ Class [A1] Interest Amount.
FLOATING RATE PAYER : Each Quarterly Payment Date up
PAYMENT DATES to and including the last
Quarterly Payment Date
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
PARTY A FLOATING RATE OPTION : USD-LIBOR-BBA
DESIGNATED MATURITY : 3 months (except for the initial
Calculation Period in which case
the Designated Maturity is [2
months])
PARTY A SPREAD : The Margin for Class [A1] Notes
FLOATING RATE DAY COUNT FRACTION : Actual/360
PERIOD END DATES : Each Quarterly Payment Date
RESET DATES : The first day of each Interest
Period
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Page 2
<PAGE>
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
BUSINESS DAYS : Sydney, London, New York
PARTY B
FLOATING AMOUNTS:
FLOATING RATE PAYER : National Mutual Trustees Limited
as Trustee of Crusade Global
Trust No. 1 of 1999 ("Party B")
PARTY B FLOATING AMOUNT : The A$ Class [A1] A Interest
Amount
Provided that, if on any Floating Rate Payer Payment Date, the Manager
determines, in accordance with Clause 5 of the Supplementary Terms Notice (as
specified in a notice from the Manager to Party B on the immediately preceding
Quarterly Determination Date), that there are insufficient funds available for
Party B to pay the Party B Floating Amount in full, then the Party B Floating
Amount payable on such Floating Rate Payer Payment Date shall be an amount equal
to the lesser AUD amount specified in such notice.
FLOATING RATE PAYER : Each Quarterly Payment Date up
PAYMENT DATES to and including the last
Quarterly Payment Date
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
PARTY B FLOATING RATE OPTION : AUD-BBR-BBSW (based on the
average rate for the Reset Date
and the 2 immediately preceding
Business Days)
DESIGNATED MATURITY : 90 days (except for the initial
Calculation Period in which case
the Designated Maturity is [60]
days)
PARTY B SPREAD : [*]% for all Calculation
Periods.
FLOATING RATE DAY COUNT FRACTION : Actual/365 (fixed)
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Page 3
<PAGE>
PERIOD END DATES : Each Quarterly Payment Date
RESET DATES : The first day of each Interest
Period
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
BUSINESS DAYS : Sydney
INITIAL EXCHANGE:
INITIAL EXCHANGE DATE : Closing Date
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
PARTY A : An amount in AUD equal to the
INITIAL EXCHANGE AMOUNT aggregate Initial Invested
Amounts for all Class [A1]
Notes on the Closing Date
divided by the exchange rate of
USD [*] (AUD [*])
PARTY B : The aggregate Initial Invested
INITIAL EXCHANGE AMOUNT Amounts for all Class [A1] Notes
on the Closing Date (USD [*])
INSTALMENT EXCHANGE:
INSTALMENT EXCHANGE DATE : Each Quarterly Payment Date
PARTY A INSTALMENT EXCHANGE AMOUNT : An amount in USD equal to the
USD amounts paid to Party A,
pursuant to clauses 5.4(c)(viii)
and 5.2(a)(ii)(A) of the
Supplementary Terms Notice, paid
on the relevant Instalment
Exchange Date divided by the
exchange rate of USD [*]
PARTY B INSTALMENT EXCHANGE AMOUNT : The AUD amounts due to Party A,
pursuant to clauses 5.4(c)(viii)
and 5.2(a)(ii)(A) of the
Supplementary
- --------------------------------------------------------------------------------
Page 4
<PAGE>
Terms Notice, paid on the
relevant Instalment Exchange
Date divided by the exchange
rate of USD [*]
PARTY B INSTALMENT EXCHANGE AMOUNT : The AUD amounts due to Party A,
pursuant to clauses 5.4(c)(viii)
and 5.2(a)(ii)(A) of the
Supplementary Terms Notice, paid
on the relevant Instalment
Exchange Date.
FINAL EXCHANGE : NONE
CALCULATION AGENT : Party A
ACCOUNT DETAILS:
Payments to Bankers Trust Corporation, New York
Account Name: Bankers Trust Corporation, New York
Account Number: [*]
Account Held at: [*]
BSB Number: [*]
Payments to National Mutual Trustees Limited as trustee of Crusade
Global Trust No. 1 of 1999
Currency : USD
Pay to : [*]
Favour of : [*]
Account no. : [*]
For credit to : [*]
Account no. : [*]
Attention: : [*]
Currency : AUD
To: : St George Bank Limited
Level 12, 55 Market Street
Sydney, NSW, 2000
Swift Code : [*]
Sort Code : [*]
BSB: : [*]
- --------------------------------------------------------------------------------
Page 5
<PAGE>
OFFICES: : The Office of Party A is:
Bankers Trust Corporation, New
York [*]
: The Office of Party B is:
c/- Crusade Management Limited
Level 12
55 Market Street
Sydney, NSW, 2000
This message will be the only form of Confirmation dispatched by us. Please
execute and return it to us by facsimile immediately, and send a hard copy of
the original to us by courier.
Yours faithfully,
for and on behalf of
BANKERS TRUST CORPORATION, NEW YORK
By: By:
---------------------------- --------------------------
Name: Name:
Title: Title:
Date: Date:
Confirmed as of the date first written
NATIONAL MUTUAL TRUSTEES LIMITED AS TRUSTEE OF
CRUSADE GLOBAL TRUST NO. 1 OF 1999
By: By:
---------------------------- --------------------------
Name: Name:
Title: Title:
Date: Date:
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Page 6
<PAGE>
15 September 1999
Crusade Management Limited
4-16 Montgomery Street
Kogarah NSW 2217
Dear Sirs
CRUSADE GLOBAL TRUST NO. 1 OF 1999
We have acted for Crusade Management Pty Limited (CML) in connection with the
Crusade Global Trust No. 1 of 1999 (the Trust) to be constituted under the
Master Trust Deed (the Master Trust Deed) dated 14 March 1998 between AXA
Trustees Limited (formerly National Mutual Trustees Limited) (the Trustee) and
CML.
Definitions in the Prospectus which forms a part of the Registration Statement
on Form S-11 filed by CML with the Securities and Exchange Commission under the
US Securities Act of 1933 as amended and relating to the offer and sale of the
Class A Notes by the Trustee (the Prospectus) apply in this opinion. Relevant
Jurisdiction means the Commonwealth of Australia or New South Wales. No
assumption or qualification in this opinion limits any other assumption or
qualification in it.
1. Documents
We have examined a copy of the Prospectus.
2. Assumption
For the purposes of giving this opinion we have assumed that where a
document has been submitted to us in draft form it will be executed in
the form of that draft.
3. Qualifications
Our opinion is subject to the following qualification that we express
no opinion as to any laws other than the laws of each Relevant
Jurisdiction as in
<PAGE>
15 September 1999 Crusade Management Limited Allen Allen & Hemsley
- --------------------------------------------------------------------------------
force at the date of this opinion and, in particular we express no
opinion as to the laws of England or the United States.
4. Opinion
Based on the assumptions and subject to the qualifications set out
above (which, except where expressly stated, apply equally to each of
the opinions below) we are of the following opinion.
(a) Any final and conclusive judgment of a court of the State of New
York, USA, or the United States Federal Court having jurisdiction
recognised by a the Relevant Jurisdiction, in respect of an
obligation under a Class A Note, which is for a fixed sum of
money, would be enforceable by action in the courts of each
Relevant Jurisdiction without a re-examination of the merits of
the issues determined by the proceedings in the New York court
unless:
(i) the proceedings in the New York State court or the United
States Federal Court, as applicable, involved a denial of
the principles or natural justice;
(ii) the judgment is contrary to the public policy of the
Relevant Jurisdiction;
(iii) the judgment was obtained by fraud or duress or was based
on a clear mistake of fact;
(iv) the judgment is a penal or revenue judgment; or
(v) there has been a prior judgment in another court between
the same parties concerning the same issues as are dealt
with in the judgment or the New York State Court or the
United States Federal Court (as applicable).
In particular, actions in a Relevant Jurisdiction (including as
original actions or as actions to enforce judgments of a United
States court) relating to civil liabilities predicated on Federal
securities laws of the United States may not be enforceable in a
Relevant Jurisdiction.
(b) A judgment by a court in a Relevant Jurisdiction may be given in
some cases only in Australian dollars.
We consent to the filing of this letter as an exhibit to the Registration
Statement on Form S-11 filed with the Prospectus, without admitting that we are
"experts" within the meaning of the Securities Act of 1933 of the rules and
regulations of the Commission issued under that Act with respect of any part of
the Registration Statement, including this exhibit.
Yours faithfully
/s/ Allen Allen & Hemsley
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