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Crusade Global Trust No. 2 of 2006 - Lenders Mortgage Insurance Policy
LENDERS' MORTGAGE INSURANCE PROVISIONSbetweenPerpetual Trustees Consolidated Limited inits capacity as trustee of the CrusadeGlobal Trust No. 2 of 2006andPMI Mortgage Insurance LtdABN 70 000 511 071andSt.George Bank LimitedABN 92 055 513 070MASTER AGREEMENT NUMBER: G02740906DATE OF ISSUE: 18 September 2006 PMI LENDERS' MORTGAGE INSURANCE1. The insurance Agreement is between You and Us...............................41A Disclosures, representations, acts and omissions...........................42. We rely on statements from You..............................................43. If requirements are not met.................................................53A Obligations................................................................64. Consumer Credit Code........................................................65. What types of insurance do We provide?......................................66. Entering into the Agreement and the once-only fee...........................67. Management of Insured Mortgage and Loan Account.............................78. Assignment of this Agreement................................................79. What if the Borrower requires more money?...................................710. Construction and Improvement Loans.........................................811. Securing and protecting the loan...........................................912. Protecting Your rights....................................................1013. Protecting the Mortgaged Property.........................................1114. Action following default by the Borrower..................................1215. How and when to claim for Loss............................................1316. How is Your claim for Loss calculated?....................................1417. You give Us Your rights after We pay a claim..............................1718. After a claim is made.....................................................1719. Termination of the Agreement..............................................1720. Notices, reports and Applications.........................................1821. Meaning of words..........................................................1922. Assignments Related to Securitisation.....................................2523. Servicer as Mortgage Manager..............................................26 Page 2 of 33 24. Payment of Once-only Fee..................................................2725. Trustee Provisions........................................................2726. Governing Law.............................................................28 Page 3 of 33 PMI LENDERS' MORTGAGE INSURANCE PROVISIONSSOME WORDS USED IN THE AGREEMENT HAVE SPECIFIED MEANINGS WHICH ARE LISTED INCLAUSE 21- --------------------------------------------------------------------------------1. THE INSURANCE AGREEMENT IS BETWEEN YOU AND USThe Lenders' Mortgage Insurance Agreement ("the Agreement") is a contract ofinsurance between You and Us. It relates to the mortgages described in Exhibit Ato this Agreement.We agree to insure You against Loss on each Insured Mortgage on the terms setout in the Agreement upon payment of the once-only fee.The Agreement consists of: o this document and any exhibits, schedules and attachments to it; and o the details in the Schedule relating to the Lenders' Mortgage Insurance Advice.- --------------------------------------------------------------------------------1A DISCLOSURES, REPRESENTATIONS, ACTS AND OMISSIONSFor the purposes of the Agreement any disclosure, non-disclosure orrepresentation, the doing of any act or thing, the omission to do any act orthing and the receipt of any moneys by any Loan Originator, Mortgage Manager,the Insured Lender or the Trustee shall be deemed to be the disclosure,non-disclosure or representation, the doing of the act or thing, the omission todo the act or thing and the receipt of the moneys by the Insured Lender or theTrustee.- --------------------------------------------------------------------------------2. WE RELY ON STATEMENTS FROM YOUThe Insured Lender warrants that: o the particulars and statements in the Application are true and correct; o the Insured Mortgages meet the Eligibility Criteria; and o the Loan Amount is originated according to and in compliance with the Insured Lender's loan policy at the time of origination.You acknowledge that We rely on the particulars and statements in theApplication in deciding whether to provide You insurance.For the purpose of the Agreement any Loan Originator involved in theestablishment of the Insured Mortgage is agreed to be Your agent and the Insured Lender will be responsible for any non-disclosure or misrepresentationarising from information provided by or through such person. DUTY OF DISCLOSUREBefore You enter into a contract of insurance with Us, You have a duty, underthe Insurance Contracts Act 1984, to disclose to Us every matter that Youknow, or could reasonably be expected to know, is relevant to Our decisionwhether to accept the risk of the insurance and, if so, on what terms.You have the same duty to disclose those matters to Us before You renew,extend, vary or reinstate a contract of insurance.Your duty however does not require disclosure of a matter: o that diminishes the risk to be undertaken by Us; or o that is of common knowledge; or o that We know or, in the ordinary course of Our business, ought to know; or o as to which compliance with Your duty is waived by Us. NON-DISCLOSUREIf You fail to comply with Your duty of disclosure, We may be entitled toreduce Our liability under the Agreement in respect of a claim or may cancelthe Agreement.If Your non-disclosure is fraudulent, We may also have the option of avoidingthe contract from its beginning.When You have made a statement which was in fact untrue but was made on thebasis of a reasonable belief that You held based on information provided bythe Borrower, the statement will not be taken to be a misrepresentation.- --------------------------------------------------------------------------------3. IF REQUIREMENTS ARE NOT METIf any of the requirements or obligations of the Insured Lender or the Trusteeor both under the Agreement are not met, then to the extent not prohibited bythe Insurance Contracts Act 1984: o We may refuse to pay a claim; or o We may reduce the amount of the claim by the amount which in Our opinion reasonably represents the extent to which Our interests have been prejudiced by Your failure to meet any such requirement; or Page 5 of 33 o We may cancel the Agreement.- --------------------------------------------------------------------------------3A OBLIGATIONSAn obligation or requirement imposed on the Trustee under the Agreement willbe taken by Us to be performed or discharged by the Trustee to the extent thatit is performed or discharged by either or both of the Insured Lender or theMortgage Manager.- --------------------------------------------------------------------------------4. CONSUMER CREDIT CODEThe Consumer Credit Code may apply to the Insured Mortgage.You are insured for Loss resulting from: o a Credit Tribunal or Court ordering postponement of enforcement proceedings under Section 88 of the Consumer Credit Code; or o a change to the Insured Mortgage or Loan Account or both in a manner set out in Section 66 of the Consumer Credit Code: o agreed to by You with Our prior written consent; or o ordered by a Credit Tribunal or Court under Section 68 of the Consumer Credit Code.You are not insured for Loss resulting from a Credit Tribunal or Court: o reopening an unjust Insured Mortgage, Collateral Security or Loan Account under Section 70 of the Consumer Credit Code. o annulling or reducing any unconscionable interest rate change, fee or charge under Section 72 of the Consumer Credit Code.- --------------------------------------------------------------------------------5. WHAT TYPES OF INSURANCE DO WE PROVIDE?The Advice states the insurance You have. 100% INSURANCEYou have 100% insurance. In the event of a claim You are reimbursed for YourLoss calculated in accordance with the Agreement.- --------------------------------------------------------------------------------6. ENTERING INTO THE AGREEMENT AND THE ONCE-ONLY FEEYou pay a once-only fee. This fee is calculated on the Loan Amount. You willalso have to pay any applicable stamp duty, GST, any additional governmentduties, levies or charges, where applicable. Page 6 of 33 You must on or prior to the Closing Date pay to Us the once-only fee, GST andany additional government duties, levies or charges, where applicable (in suchamount as agreed between Us and St.George Bank Limited prior to the ClosingDate). Until the once-only fee, GST and any additional government duties,levies or charges, where applicable, is received by Us the Agreement does notcome into force. If the once-only fee is not received by Us on or before theClosing Date the Agreement does not come into force at all.- --------------------------------------------------------------------------------7. MANAGEMENT OF INSURED MORTGAGE AND LOAN ACCOUNTEach Insured Mortgage and each Loan Account must be administered and managedby You or a Mortgage Manager.Any Mortgage Manager is agreed to be Your agent.Any Mortgage Manager must be approved by Us in writing.We may require You to appoint or replace a Mortgage Manager to administer andmanage the Insured Mortgage and the Loan Account in the following situations: o insolvency, liquidation, receivership or statutory management of You or any existing Mortgage Manager; or o if, after consultation with You, We are of the reasonable opinion that the administration or management of the Insured Mortgage is not being conducted satisfactorily.- --------------------------------------------------------------------------------8. ASSIGNMENT OF THIS AGREEMENTYou may assign Your rights under the Agreement to someone else only if: o You have Our prior written consent; or o It is pursuant to a substitution of the Trustee under the transaction documents for the Series Trust; or o We have notified You in writing that You may do so without Our consent.Within 30 days of any assignment You must notify Us in writing and pay to Usany applicable fee.- --------------------------------------------------------------------------------9. WHAT IF THE BORROWER REQUIRES MORE MONEY?Before the advance of funds secured by the Insured Mortgage additional to theLoan Amount ("a further advance") Our prior written consent is required. Page 7 of 33 An additional fee, Including GST where applicable, is payable before a furtheradvance is insured. The Insured Lender will also have to pay any additionalgovernment duties, levies or charges where applicable.However, You need not seek Our prior consent to a further advance if: o LOAN REDRAW o the Borrower's payments are equal to or in advance of the Scheduled Instalments; and o the Borrower only redraws up to the amount by which the Scheduled Instalments have been exceeded.In this case such a further advance is insured and no additional fee ispayable.- --------------------------------------------------------------------------------10. CONSTRUCTION AND IMPROVEMENT LOANSIf the purpose of the Insured Mortgage or any part of the Insured Mortgage isfor Improvements to the Mortgaged Property, then We are not obliged to pay aclaim unless: o BEFORE THE INITIAL LOAN ADVANCE o the Borrower has entered a fixed price contract accepted by the Insured Lender; and o all necessary consents and approvals from relevant statutory and other authorities are held and are current; and o DURING CONSTRUCTION o if the Loan Amount is advanced progressively, the progress advances do not exceed increases in the value of the Mortgaged Property confirmed by inspection certificates from a Valuer instructed by the Insured Lender; and o the Improvements are completed within twelve months of the Initial Loan Advance; and o an amount of the principal is retained by the Insured Lender to ensure that the Improvements can be completed in accordance with the plans and specifications incorporated within the fixed price building contract accepted by the Insured Lender; and o BEFORE THE FINAL LOAN ADVANCE o A final inspection certificate from a Valuer is provided confirming that the completion of Improvements is in accordance with the plans and specifications; and Page 8 of 33 o a certificate is issued by each relevant authority certifying that the Improvements comply with approvals issued by the authority before the Final Loan Advance is made. COST OVERRUNSCost Overruns must be paid immediately they are identified and prior to anyfurther progress payments being paid.Cost Overruns (including, without limitation any Cost Overruns attributablewholly or partly to the introduction of GST and any GST component of the CostOverruns) are not insured.We may decline to meet a claim under the Agreement until the Improvements forwhich the Insured Mortgage was made have been completed.If the Insured Lender does not retain sufficient funds to complete theImprovements, We will deduct from any claim under the Agreement an amountequal to the additional amount required to complete the Improvements asassessed by a Valuer instructed by Us.- --------------------------------------------------------------------------------11. SECURING AND PROTECTING THE LOANThe Insured Mortgage must be an enforceable registered mortgage over realestate property in Australia. You are not insured if the mortgage is notenforceable.You must follow the procedures of a prudent lender in preparing, administeringand managing the Insured Mortgage, any Collateral Security and the LoanAccount.The Insured Mortgage must be either: o a first mortgage; or o a second or lower ranking mortgage. Where the Insured Mortgage is a second or a lower ranking mortgage the following conditions must be met: o St. George Bank Limited must be the first mortgagee of all prior ranking mortgages; and o all prior ranking mortgages must be equitably assigned to the Trustee on the Closing Date (or such other date as St.George Bank Limited and We agree). Page 9 of 33 Where the Agreement insures more than one mortgage, the mortgages must becross collateralised. VALUATIONSA Valuation which forms part of the Application to Us must: o be at Your instruction; and o expressly acknowledge that We may rely on it; and o be in a form acceptable to Us. VARIATIONSVariations to the Insured Mortgage or Loan Account or both can only be madewith Our prior written consent.Some examples are: o capitalisation or deferment of instalments o partial discharge, release or substitution of security o change of the Borrower or any Guarantor o conversion of principal and interest loans to or from interest only loans o variation to the Expiry Date of the loan.- --------------------------------------------------------------------------------12. PROTECTING YOUR RIGHTSDuring the whole term of the Agreement You must protect Your rights under YourSecurity Interest and in particular: o Your right to take action to recover the Loan Account must continue to exist; and o Your right to take action to recover the Loan Account must not be deferred except with Our written consent; and o there must be no Security Interest over the Mortgaged Property which takes priority over the Insured Mortgage or those We consent to in writing and other than a first mortgage where the conditions in clause 11 have been met and any Permitted Prior Security Interests in relation to the Insured Mortgage; and o all the terms of the Insured Mortgage and every Collateral Security must continue to be enforceable; Page 10 of 33 o You must give Us when requested notice in writing of the discharge in whole of the Insured Mortgage and any Collateral Security within thirty (30) days of such discharge occurring.- --------------------------------------------------------------------------------13. PROTECTING THE MORTGAGED PROPERTYYou and the Insured Lender must do everything reasonable to ensure that theInsured Lender's interest in the Mortgaged Property is protected.If You or any of Your officers responsible for the administration of the LoanAccount becomes actually aware:(A) that the Mortgaged Property is defective, damaged, has been vacated or is contaminated, You or the Insured Lender must tell us immediately; and(B) that the condition of the Mortgaged Property has deteriorated in a material respect, You or the Insured Lender must do everything reasonable and which You or the Insured Lender is permitted to do under the Loan or the Mortgage to restore the Mortgaged Property (without any obligation on You to expend any money on such restoration). PROPERTY INSURANCEIt must be a term of the relevant Loan or Mortgage that the Borrower isrequired to ensure that during the whole term of the Agreement that theMortgaged Property is insured for its full insurable value against thestandard perils normally covered in a general insurance policy on areplacement and reinstatement basis. Your interest as mortgagee must be noted. PROPERTY DAMAGEIf the Mortgaged Property suffers any damage or destruction (except reasonablewear and tear), You must ensure that all proceeds of any insurance which Youreceive and which is available to restore that damage or destruction (in wholeor in part) is so applied. This does not limit Your ability to expend anyother money towards restoration as You see fit.We will meet a claim under the Agreement only when the Mortgaged Property hasbeen restored.The costs of restoration are not insured under this Agreement.However if the purpose of the Insured Mortgage or any part of the InsuredMortgage is for Improvements to the Mortgaged Property We will meet a Page 11 of 33 claim under the Agreement only when the Improvements have been completed. CONTAMINATIONIf there is Contamination of the Mortgaged Property We will meet a claim underthe Agreement only when the Contaminant has been removed and the MortgagedProperty is cleaned up and restored as nearly as possible to its condition atthe date of commencement of the insurance.The costs of removal, clean up and restoration arising from Contamination arenot insured under the Agreement.- --------------------------------------------------------------------------------14. ACTION FOLLOWING DEFAULT BY THE BORROWERIn the event of default by the Borrower You, or the Mortgage Manager on Yourbehalf, must follow the procedures of a prudent lender in administering andmanaging the Insured Mortgage, any Collateral Security and the Loan Account. FIRST REPORTING TO USAny of the following events must be reported to Us in writing within 14 days: o the total amount due and unpaid under the Insured Mortgage or Loan Account or both is equal to or exceeds the total of ninety (90) days arrears, being four (4) scheduled monthly instalments; or o the Loan Amount is not repaid at the expiry of the Loan Term; or o You take possession of the Mortgaged Property; or o You become aware: o there has been a default under a mortgage over the Mortgaged Property other than the Insured Mortgage; or o another mortgagee intends to sell or has sold the Mortgaged Property; or o an Application for winding up or administration or a petition for bankruptcy has been or is to be lodged in relation to the Borrower or any Guarantor; or o any meeting of the members or shareholders of the Borrower or any Guarantor is convened for the purpose of considering any resolution to wind up that Borrower or Guarantor or to put it under administration; or Page 12 of 33 o the Borrower or any Guarantor has assigned its estate for the benefit of creditors generally; or o a receiver or manager has been appointed to the Borrower or any Guarantor; or o the Borrower intends to sell the Mortgaged Property in circumstances where a claim under the Agreement is likely to result; or o there has been or will be any other default under the terms of the Insured Mortgage or Loan Account; or o of any material event or circumstance relating to the Mortgaged Property or any Collateral Security or both arising after the date of commencement of the Agreement. FURTHER REPORTSAt monthly or longer intervals nominated by Us, the Insured Lender or MortgageManager must provide Us with updated written reports and any documents aboutor affecting any reported default or event. CONSULTATION WITH USYou must continue to consult with Us following a default by the Borrower orany Guarantor.If the Mortgaged Property is placed for sale You must: o provide Us with a Valuation which will be no more than 60 days old at the proposed date of sale; and o give Us 14 days notice of an intended sale; and o inform Us of any reasonable offers; and o seek Our consent prior to accepting a sale price which will result in a claim. RENTS OR OTHER AMOUNTS RECEIVEDAny rents or profits or other amounts You receive relating to the MortgagedProperty or any Collateral Security are to be credited to the Loan Account.- --------------------------------------------------------------------------------15. HOW AND WHEN TO CLAIM FOR LOSSA claim for Loss may be submitted: o when the sale of the Mortgaged Property has been sold and settled; or Page 13 of 33 o when We ask before the Mortgaged Property is sold; or o when the mortgagee under a prior mortgage has completed the sale of the Mortgaged Property.The claim should be lodged within 30 days from the earlier of:- o the Settlement Date; or o a request from Us.In support of the claim We must be provided with all documents and informationWe reasonably require.Any payment of a claim which We pay in full to You is a full and finaldischarge of Our liability under the Agreement. Payment of a claim to theInsured Lender shall be a full and final discharge of any liability to pay aclaim to the Trustee and payment of a claim to the Trustee shall be a full andfinal discharge of any liability to pay a claim to the Insured Lender.At Our discretion We may pay a claim before the Mortgaged Property has beensold.Within fourteen (14) days of receipt by Us of the complete claim documentationIncluding all documentation and information reasonably required by Us We willassess the claim and pay the amount recoverable under this Agreement.- --------------------------------------------------------------------------------16. HOW IS YOUR CLAIM FOR LOSS CALCULATED?The Loss is the amount owing less the amount recovered as defined below:- --------------------------------------------------------------------------------AMOUNT OWING IS THE TOTAL OF:- -------------------------------------------------------------------------------- o BALANCE OF THE LOAN ACCOUNT AT THE SETTLEMENT DATE; AND o INTEREST ON THE BALANCE OF THE LOAN ACCOUNT FROM THE SETTLEMENT DATE TO THE DATE OF CLAIM TO A MAXIMUM OF 30 DAYS; AND o COSTS INCURRED ON SALE OF THE MORTGAGED PROPERTY WHICH INCLUDE: o costs properly incurred for insurance premiums, rates, land tax (calculated on a single holding basis) and other statutory charges on the Mortgaged Property; and o reasonable and necessary legal fees and disbursements incurred in enforcing or protecting Your rights under the Insured Mortgage; and o reasonable agent's commission, advertising costs, Valuation costs and other costs relating to the sale of the Mortgaged Property; and o reasonable and necessary costs incurred in maintaining (but not restoring) the Mortgaged Property, however total costs in excess of- -------------------------------------------------------------------------------- Page 14 of 33 - -------------------------------------------------------------------------------- $1,500 can be included only with Our prior written consent to incur them; and o any GST incurred on the sale or transfer of the Mortgaged Property to a third party in or towards the satisfaction of any debt that the Borrower owed under the Loan Account, and any GST is properly incurred in respect of any of the costs, fees, disbursements or commissions specifically identified under this section headed "Costs incurred on the sale of the Mortgaged Property which include." o any amounts applied with Our prior written consent to discharge a Security Interest having priority over the Insured Mortgage.- --------------------------------------------------------------------------------AMOUNT OWING DOES NOT INCLUDE:- -------------------------------------------------------------------------------- o Interest charged in advance; and o Default rate interest; and o Early Repayment Fees; and o Break Funding Costs; and o Higher rate interest payable because of failure to make prompt payment;and o Fines, fees or charges debited to the Loan Account; and o Costs of restoration following damage to or destruction of the Mortgaged Property; and o Costs of removal, clean up and restoration arising from Contamination of the Mortgaged Property; and o Additional funds advanced to the Borrower without Our written consent other than any loan redraws in accordance with clause 9; and o Amounts paid in addition to the Loan Amount to complete Improvements; and o Cost Overruns; and o Any civil or criminal penalties imposed under legislation Including the Consumer Credit Code. o- --------------------------------------------------------------------------------AMOUNT RECOVERED IS THE TOTAL OF:- -------------------------------------------------------------------------------- o THE GROSS PROCEEDS OF SALE OF THE MORTGAGED PROPERTY; AND o THE FOLLOWING IF NOT ALREADY APPLIED TO THE CREDIT OF THE LOAN ACCOUNT: o compensation received for any part of the Mortgaged Property or any Collateral Security that has been resumed or compulsorily acquired; and o all rents collected and other profits received relating to the- -------------------------------------------------------------------------------- Page 15 of 33 - -------------------------------------------------------------------------------- Mortgaged Property or any Collateral Security; and o any sums received under any insurance policy relating to the Mortgaged Property not applied to restoration of the Mortgaged Property following damage or destruction but only to the extent you are entitled to apply those sums to the credit of the Loan Account; and o all amounts recovered from the exercise of Your rights relating to any Collateral Security; and o any other amount received relating to the Insured Mortgage or any Collateral Security Including any amounts received from the Borrower, any Guarantor, or prior mortgagee. o any amount incurred by You in respect of GST relating to the Mortgaged Property or any Collateral Security to the extent for which You are entitled to claim an Input Tax Credit.- -------------------------------------------------------------------------------- REDUCTIONSWhere You have made a claim and Your Loss has been increased due to Yourconsent, without Our written approval, to: o the creation of any lease, licence, easement, restriction or other notification affecting the Mortgaged Property; or o an increase in or acceleration of the payment obligation of the Borrower under any Security Interest having priority over the Insured Mortgage; thenWe may reduce the amount payable to You by that increased Loss.Where We pay any claim the amount of that payment will be less the amount ofany GST Input Tax Credit or reduced Input Tax Credit (together "Input TaxCredits") that are or may be made available to You by reason of any taxablesupply made in connection with the exercise of Your rights under or inconnection with the Mortgaged Property and in respect of which the payment ismade. If the payment is not made in respect of any particular taxable supply,then the payment shall be reduced by such amount as in Our opinion reflectsthe Input Tax Credits that would have been available if the payment had beenapplied in connection with the exercise of Your rights under or in connectionwith the Mortgaged Property or for the provision of any services in connectionwith the exercise of such rightsWhere Your Loss ha...
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