This Preliminary Information Memorandum and the information contained herein is subject to completion and/or amendment which may be material, without notice. Under no circumstances will this Preliminary Information Memorandum constitute an offer to sell or the solicitation of an offer to buy nor will there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The definitive terms of the transaction described in this Preliminary Information Memorandum will be described in the final version of this Information Memorandum. This Preliminary Information Memorandum may not be distributed to persons ther than persons to whom it may be distributed lawfully in accordance with all applicable securities laws. PRELIMINARY INFORMATION MEMORANDUM RAMS MORTGAGE SECURITIES PTY LIMITED (ABN 30 094 753 349) a limited liability company incorporated under the laws of Australia in its capacity as trustee of the RAMS MORTGAGE SECURITIES TRUST in respect of Series 2006-1 Class of Notes Initial Principal Outstanding per Note Issue Price Final Maturity Date 8581602_8 Class A Notes Class AB Notes Class B Notes A$500,000 A$500,000 A$500,000 100% 100% 100% 14 October 2038 14 October 2038 14 October 2038 Expected ratings: • Standard & Poor’s (Australia) Pty Limited AAA AAA AA • Moody’s Investors Service Aaa Aa1 Aa2 Manager RAMS Home Loans Pty Ltd (ABN 67 053 725 741) Dealers The Royal Bank of Scotland plc (ABN 30 101 464 528) National Australia Bank Limited (ABN 12 004 044 937) 22 September 2006 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 NOTES ONLY LIABILITIES OF THE ISSUER The Notes issued by RAMS Mortgage Securities Pty Limited (“RMS”) in its capacity as trustee of the RAMS Mortgage Securities Trust (“Trust”) (in that capacity, the “Issuer”) in respect of Series 2006-1 (“Series”) do not represent deposits or other liabilities of The Royal Bank of Scotland plc or National Australia Bank Limited (the “Dealers”) or RAMS Home Loans Pty Ltd (ABN 67 053 725 741) (“Manager”, which expression also includes any other person which may from time to time be bound to the terms of the Management Agreement) or any affiliate of the Manager or a Dealer, nor does the Manager or a Dealer, any affiliate of the Manager or a Dealer or the ultimate parent company of the Manager or a Dealer in any way stand behind the capital value or the performance (or both) of the Notes. The holding of Notes is subject to investment risk, including possible delays in repayment and loss of income and principal invested. None of the Issuer, the Manager, Receivables Servicing Pty Limited (ABN 16 056 216 203) (“Servicer”), J.P. Morgan Trust Australia Limited in its capacity as security trustee of the Security Trust in respect of the Series (“Security Trustee”), J.P. Morgan Trust Australia Limited in its personal capacity (“Registered Note Paying Agent”, “Registered Note Registrar, “Standby Trustee”, “Standby Servicer” and “Standby Manager”), any Dealer or any associate of any of them, in any way stands behind the capital value or performance (or both) of the Notes except to the limited extent provided in the Transaction Documents for the Series. None of the Manager, the Issuer, the Registered Note Paying Agent, the Registered Note Registrar, the Standby Trustee, the Standby Servicer, the Standby Manager, the Servicer, the Security Trustee or any Dealer (each a “Party”) nor any associate of any of them, guarantees the payment of interest or the repayment of principal due on the Notes or the obligations of the Issuer except to the limited extent provided in the Transaction Documents for the Series. None of the obligations of the Issuer are guaranteed in any way by either the Manager or a Dealer or any associate of the Manager or a Dealer. Page 2 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 CONTENTS 1 Important Notice 4 2 Program Overview 9 3 Description of the Notes 25 4 Certain Special Considerations 28 5 Assets of the Program 40 6 Credit Support 52 7 Cashflow Allocation Methodology 53 8 RAMS Residential Loan Program 64 9 The Parties to the Program 87 10 Transaction Structure 90 11 Taxation Considerations 105 12 Selling Restrictions 111 13 Transaction Documents 116 14 Glossary of Terms 117 Page 3 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 1 Important Notice 1.1 Purpose This Information Memorandum (“Information Memorandum”) has been prepared solely in connection with the RAMS Mortgage Securities Trust in respect of Series 2006-1. This Information Memorandum has been prepared for distribution only to persons whose ordinary business includes the buying and selling of securities (whether as principal or agent) and on the express understanding that the information it contains will be regarded and treated as strictly confidential. Its contents may not be reproduced or used in whole or in part for any purpose other than for assisting prospective investors to understand some of the features of the Notes. It is not intended for, and should not be distributed to, any other person without the express written permission of the Manager. This Information Memorandum is not intended to provide the sole basis of any credit or other evaluation and it does not constitute a recommendation, offer or invitation to purchase any Notes by any person. Capitalised terms not otherwise defined in this Information Memorandum where first used have the meaning given to them in Section 1 (“Important Notice”), Section 2 (“Program Overview”), Section 13 (“Transaction Documents”) and Section 14 (“Glossary of Terms”). 1.2 Responsibility for Information Contained in Information Memorandum This Preliminary Information Memorandum has been prepared by the Manager based on information available to it and the facts and circumstances existing as at 22 September 2006 being the date of its preparation (“Preparation Date”). The Dealers have not authorised, caused the issue of, or have (and expressly disclaim) any responsibility for, or made any statement in, any part of this Information Memorandum. To the best of the Manager’s information and knowledge, the contents of this Information Memorandum are correct as at the Preparation Date. None of the Issuer, the Manager or any Dealer or any other person has any obligation to the Holders to update this Information Memorandum after the Preparation Date having regard to information which becomes available, or facts and circumstances which come to exist, after the Preparation Date. No representation or warranty, express or implied, as to the accuracy or completeness of, or any errors or omissions in, any information, statement, opinion or forecast contained in this Information Memorandum is made by any of the Issuer, the Manager, the Security Trustee or any Dealer or any other party named in this Information Memorandum. The Security Trustee has had no involvement in the preparation of any part of this Information Memorandum. The Security Trustee expressly disclaims and take no responsibility for any part of this Information Memorandum. The Security Trustee makes no statement in this Information Memorandum and has not authorised or caused the issue of it. Page 4 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 1.3 Reliance on Information Memorandum Any prospective Holder contemplating the purchase of Notes should make, and shall be taken to have made, its own independent investigation of the financial condition and affairs, and its own appraisal of the creditworthiness of the Issuer. Neither the delivery of this Information Memorandum nor any purchase of Notes made hereunder shall, under any circumstance, create any implication that there has been no change in the affairs of the Issuer or any other person referred to in this Information Memorandum since the Preparation Date. Each potential purchaser should determine for itself whether to purchase or otherwise acquire any of the Notes described in this Information Memorandum, based on such documentation and information as it shall deem appropriate at the time. This Information Memorandum is not intended to be and does not constitute, a recommendation by the Manager, RMS, the Security Trustee or the Dealers that any person subscribe for or purchase any Notes. 1.4 Authorised Information or Material No person has been authorised to give any information or to make any representation not contained in this Information Memorandum or any documents incorporated by reference in accordance with Section 1.7 (“Documents Incorporated by Reference”). Accordingly, if any such information or representation is given or made to a potential purchaser of Notes, it must not be relied upon as having been authorised by or on behalf of the Issuer, the Manager, the Servicer, the Security Trustee or any Dealer. 1.5 Disclosure Each of the Issuer, the Manager and each Dealer discloses that it, its subsidiaries, directors and employees: 1.6 (a) may have pecuniary or other interests in the Notes and they may also have interests pursuant to other arrangements; and (b) will receive fees, brokerage and commissions, and may act as principal in any dealing in the Notes. Information Memorandum a Summary of Terms This Information Memorandum contains only a summary of the terms and conditions of the Series and should not be relied upon by intending purchasers. If there is any inconsistency between this Information Memorandum and the transaction documents set out in Section 13 (“Transaction Documents”) in respect of the Series, the Transaction Documents should be regarded as containing the definitive information. With the approval of the Manager, a copy of the Transaction Documents for the Series may be inspected by prospective purchasers or holders of Notes in respect of the Series at the office of the Manager on a confidential basis, by prior arrangement during normal business hours. Page 5 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 1.7 Documents Incorporated by Reference The following documents are incorporated in, and deemed to form part of, this Information Memorandum: (a) all amendments and supplements to this Information Memorandum prepared by the Manager from time to time; and (b) all documents stated by the Manager to be incorporated in this Information Memorandum by reference, including without limitation: (i) the most recently available financial statements of the Issuer and any interim financial statements (whether audited or unaudited) of the Issuer published subsequent to such audited financial statements; and (ii) any announcements by the Current Rating Agencies in respect of the Notes (including in relation to changes in the credit rating of the Notes). To the extent that anything contained in a subsequent document which is or is deemed to be incorporated in this Information Memorandum by reference supersedes any earlier statement, that earlier statement shall be deemed to be modified or superseded for the purposes of this Information Memorandum. Copies of all documents incorporated by reference herein may be inspected, without charge, by appointment with the Manager at its offices during normal business hours. 1.8 No Disclosure under Corporations Act This Information Memorandum is not a “Product Disclosure Statement” for the purposes of the Corporations Act and is not required to be lodged with the Australian Securities and Investments Commission. Accordingly, a person may not (directly or indirectly) offer for subscription or purchase or issue invitations to subscribe for or buy or sell the Notes, or distribute this Information Memorandum in the Commonwealth of Australia, its territories or possessions (“Australia”) or to any resident of Australia, except if: (a) the amount payable by the transferee in relation to the relevant Notes is A$500,000 or more or if the offer or invitation to the transferee is otherwise an offer or invitation that does not require disclosure to investors in accordance with Part 6D.2 or Part 7.9 of the Corporations Act; (b) the offer or invitation does not constitute an offer to a “retail client” under Chapter 7 of the Corporations Act; (c) the offer or invitation is not an offer to the public for the purposes of Section 82 of the Corporations Act; and (d) the offer or invitation complies with any other applicable laws. The distribution of this Information Memorandum and the offer or sale of Notes may be restricted by law in certain jurisdictions. No representation is made that this document may be lawfully distributed, or that Notes may be lawfully offered, in compliance with any applicable registration or other requirements in any such jurisdiction, or pursuant to Page 6 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 an exemption available under them, or assume any responsibility for facilitating any such distribution or offering. In particular, no action has been taken by the relevant parties which would permit a public offering of Notes or distribution of this Information Memorandum in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Information Memorandum nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Information Memorandum or any Notes come must inform themselves about, and observe, any such restrictions. This is described in more detail in Section 12 (“Selling Restrictions”). 1.9 Notes limited recourse instruments The Notes issued by the Issuer are limited recourse instruments and are issued only in respect of the Trust and the Series. The rights of each holder of Notes to take action with respect to any amounts owing to it by the Issuer is limited to the Assets of the Trust comprising the Series in the manner prescribed by the Trust Deed, the Deed of Charge and the Series Supplement. This limitation shall not apply to any obligation or liability of the Issuer to the extent that it is not satisfied because, under the Trust Deed or the Series Supplement or by operation of law, there is a reduction in the extent of the Issuer’s indemnification out of the Assets of the Trust comprising the Series as a result of the Issuer’s fraud, negligence or wilful default. See Section 10.10 (“Limited Recourse and Limited Liability”) for further information on the Issuer’s limited liability. 1.10 Series Segregation Except to the extent disclosed in the Transaction Documents in respect of the Series, the assets of the Series are not available in any circumstances to meet any obligations of the Issuer in respect of any Other Series and if, upon enforcement or realisation of the Deed of Charge for the Series, sufficient funds are not realised to discharge in full the obligations of the Issuer in respect of the Series, no further claims may be made against the Issuer in respect of such obligations and no claims may be made against any of its assets in respect of any Other Series. The Issuer is not permitted to commingle any Assets in respect of the Series with Assets in respect of any Other Series. 1.11 Rating Agencies Any reference in this Information Memorandum to the credit ratings of various parties and the Notes is not a recommendation to buy, sell or hold Notes. The credit rating is subject to revision, suspension or withdrawal at any time by the relevant rating agency. No rating agency has been involved in the preparation of this Information Memorandum. 1.12 Selling Restrictions The distribution of this Information Memorandum and the offer or sale of Notes may be restricted by law in certain jurisdictions. The Parties do not represent that this document may be lawfully distributed, or that any Notes may be lawfully offered, in compliance with any application, registration or other requirement in any such jurisdiction, or pursuant to an exemption available thereunder, or assume any responsibility for facilitating any such distribution or offering. In particular, no Page 7 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 action has been taken by the Parties which would permit a public offering of any Notes or distribution of this Information Memorandum in any jurisdiction where action for that purpose is required. Accordingly, no Notes may be offered or sold, directly or indirectly, and neither this Information Memorandum nor any advertisement or other offering material may be distributed or published in any jurisdiction, except under circumstances that will result in compliance with any applicable laws and regulations. Persons into whose possession this Information Memorandum or any Notes come must inform themselves about, and observe, any such restrictions. In particular, there are restrictions on the distribution of this Information Memorandum and the offer and sale of Notes in certain jurisdictions set out in Section 12 (“Selling Restrictions”). This Information Memorandum has been prepared on a confidential basis for institutions whose ordinary business includes the buying or selling of securities. This Information Memorandum is not intended for, and should not be distributed to, any other person. Its contents are for assisting potential investors to understand some of the features of the Notes and may not be reproduced or used in whole or in part for any purpose other than in connection with the issue of the Notes, nor given to any other person without the express written permission of the Manager. Page 8 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 2 Program Overview The following is only a brief summary of the terms and conditions of the Notes. Prospective investors should read this summary in conjunction with the whole of this Information Memorandum and the Transaction Documents. 2.1 Structure Diagram A diagram of the structure of the transaction is set out in below. Debtors Receivables RAMS Mortgage Corporation Limited Settlement Facility Sale of Receivables Receivables Servicing Pty Limited Existing RMS Term Trusts Sale of Receivables Servicer Sale of Receivables Manager RAMS Mortgage Securities Trust RAMS Home Loans Pty Ltd Charge J.P. Morgan Trust Australia Limited Mortgage Insurers Other Series Assets Series 2006-1 Assets Interest Rate Swap Liquidity Noteholders Class A Noteholders Class AB Noteholders Class B Noteholders National Australia Bank Limited Interest Rate Swap Provider Other Series Noteholders Page 9 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 2.2 The RAMS Mortgage Securities Trust The Trust is a special purpose trust established for the purpose of enabling RMS, as trustee of the Trust, to issue Notes and to apply the proceeds of those Notes to invest in Assets (which includes Mortgage Loans). The Trust is a single trust and no series constitutes a separate trust. RAMS Home Loans Pty Limited established the “RAMS Mortgage Securities Trust” in December 2004 for the purpose of enabling RMS, as trustee of Trust in respect of various series, to issue debt instruments and to apply the proceeds of those debt instruments to invest in assets originated from time to time by RAMS Home Loans Pty Limited. The Trust Deed establishes the RAMS Mortgage Securities Trust and establishes the general framework under which series may be established from time to time. Only one trust is established under the Trust Deed and no further trusts may be established under the Trust Deed, however an unlimited number of series may be established under the Trust Deed. Each series is not a separate and distinct trust fund but rather a separate security structure enabling different debt instruments to be issued having recourse to specific pools of assets. The series supplement for a series sets out the specific provisions of the relevant series and the debt instruments to be issued in respect of that series. Multiple classes of debt instruments may be issued by the Issuer in relation to each series that differ amongst themselves as to, among other things, currency of denomination and payment, priority of repayment and credit risk. Series 2006-1 Series 2006-1 is the fifth series established under the Trust Deed. The Series was established under the Notice of Creation of Security Trust and the Deed of Charge each dated [ ] 2006. The specific terms of the Series are set out in the Series Supplement. The Series Supplement sets out (among other things) various representations and undertakings of the parties which relate to the Mortgage Loans and Approved Mortgages (in addition to those contained in the Trust Deed) and amends the Trust Deed to the extent necessary to give effect to the specific aspects of the Series and the issue of the Notes. The Series Supplement also sets out the cashflow allocation methodology for the Series. The Trust Deed and the Series Supplement should therefore be read together when determining the rights, powers and obligations of the Issuer, the Manager and the Seller in relation to the Series. Transaction Overview This Information Memorandum relates solely to the Notes to be issued by the Issuer in its capacity as trustee of the Trust in respect of the Series. The Notes will be secured primarily against a pool of Mortgage Loans and Approved Mortgages acquired by the Issuer under the Receivables Acquisition and Servicing Agreement either directly in respect of the Series or which have been acquired by an Page 10 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 Other Series and subsequently Redesignated to the Series. The Security Trustee, on behalf of the holders of the Notes, has direct recourse to those Mortgage Loans and Approved Mortgages under the Trust Deed and the Deed of Charge. The proceeds from the issue of the Notes will be used to fund the acquisition by the Issuer of certain Mortgage Loans and Approved Mortgages and to fund the Pre-funding Amount (if applicable), the Cash Deposit and a reserve for future Redraws and Further Advances. The rights of the Issuer with respect to the Mortgage Loans and Approved Mortgages, under any Lender’s Mortgage Insurance Contracts that relate to those Mortgage Loans and the rights of the Issuer under the Transaction Documents constitute the “Assets” of the Trust. The Assets are charged to the Security Trustee for the benefit of the Noteholders as well as other secured creditors of the Series in accordance with the Trust Deed and the Deed of Charge. The charge constituted under the Deed of Charge is a first ranking fixed and floating charge over all of the Assets and undertakings of the Issuer with respect to the Series. The Issuer, the Manager and the Servicer are required to maintain systems and records such that the Mortgage Loans and Approved Mortgages or other Authorised Investments against which the Notes are secured are identified as Secured Property. For a more detailed explanation of the transaction, see Section 10 (“Transaction Structure”). Receivables and Related Securities The Mortgage Loans and Approved Mortgages which will comprise Assets of the Series were initially originated in the name of RAMS Mortgage Corporation Limited (ABN 67 065 912 932) (“RMC” and “Seller”) and sold to the Issuer under the Receivables Acquisition and Servicing Agreement either directly in respect of the Series or to an Other Series and subsequently Redesignated to the Series. All Mortgage Loans have been (or will be, as applicable) advanced and all Approved Mortgages entered into by the Seller in the ordinary course of its business. On the Issue Date, the Issuer will obtain will equitable title to the Mortgage Loans and Approved Mortgages, any additional Collateral Security, the Seller’s rights under any general insurance policies on the mortgaged properties and the Seller’s rights under each Lender’s Mortgage Insurance Contract relating to those Mortgage Loans and Approved Mortgages. After obtaining such equitable title, the Issuer will be entitled to receive collections on the purchased Mortgage Loans. For a more detailed explanation of the Mortgage Loans and Approved Mortgages origination process, see Section 8 (“RAMS Residential Loan Program”). Page 11 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 2.3 General information Issuer RAMS Mortgage Securities Pty Limited (ABN 30 094 753 349) as trustee of the Trust in respect of Series 2006-1. Trust RAMS Mortgage Securities Trust. Manager RAMS Home Loans Pty Limited (ABN 67 053 725 741). Security Trustee J.P. Morgan Trust Australia Limited (ABN 49 050 294 052). Registered Note Registrar J.P. Morgan Trust Australia Limited (ABN 49 050 294 052). Registered Note Paying Agent J.P. Morgan Trust Australia Limited (ABN 49 050 294 052). Standby Manager J.P. Morgan Trust Australia Limited (ABN 49 050 294 052). Standby Servicer J.P. Morgan Trust Australia Limited (ABN 49 050 294 052). Standby Trustee J.P. Morgan Trust Australia Limited (ABN 49 050 294 052). Custodian J.P. Morgan Trust Australia Limited (ABN 49 050 294 052). Seller RAMS Mortgage Corporation Limited (ABN 48 065 912 932). Servicer Receivables Servicing Pty Limited (ABN 16 056 216 203). Servicer’s Delegate UCS Credit Services Pty Limited (ABN 62 093 494 369) (“UCS”), a wholly owned subsidiary of Unisys Corporation. Interest Rate Swap Provider National Australia Bank Limited (ABN 12 004 044 937). Mortgage Insurers Genworth Financial Mortgage Insurance Pty Limited (ABN 60 106 974 305); GE Mortgage Insurance Pty Limited (Formerly Housing Loans Insurance Corporation Pty Ltd); and PMI Mortgage Insurance Ltd (ABN 70 000 511 071). Dealers The Royal Bank of Scotland plc (ABN 30 101 464 528); and National Australia Bank Limited (ABN 12 004 044 937). 2.4 Residual Income Unitholder RAMS Home Loans Pty Limited (ABN 67 053 725 741) (one unit). Residual Capital Unitholders Better Servicing Pty Limited (ACN 101 259 376) (one unit); and Current Rating Agencies Standard & Poor’s (Australia) Pty Ltd (ABN 62 007 324 852); and RAMS Home Loans Pty Limited (ABN 67 053 725 741) (nine units). Moody’s Investors Service Pty Ltd (ABN 61 003 399 657). Principal Characteristics of the Notes Aggregate principal Class A Notes A$[ ] Page 12 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 amount of Notes: Class AB Notes Class B Notes A$[ ] A$[ ] Liquidity Notes: Liquidity Notes may be issued up to 10% of the aggregate of the Principal Outstanding of the Notes (or more subject to the Issuer receiving confirmation from the Current Rating Agencies that this will not result in an Adverse Rating Effect). Nature of Notes: The Notes are multi-class, mortgage backed, pass through, secured, limited recourse, amortising floating rate debt instruments. The Class A Notes, the Class AB Notes, the Class B Notes and the Liquidity Notes (if any) are issued with the benefit of the Trust Deed and the Series Supplement. Currency of Denomination and Payment: Class A Notes - Australian dollars Class AB Notes - Australian dollars Class B Notes - Australian dollars Denomination: The Notes will be issued in the following denominations: (a) Class A Notes - minimum A$500,000 (and in multiples of A$50,000); (b) Class AB Notes - minimum A$500,000 (and in multiples of A$50,000); and (c) Class B Notes - minimum A$500,000 (and in multiples of A$50,000). The Notes will be issued in registered form. Form of Notes The Class A Notes, the Class AB Notes, the Class B Notes and the Liquidity Notes (if any) will be constituted by and represented by an inscription in the Register of Holders. Issue Price: Class A Notes 100% of the initial Principal Outstanding Class AB Notes 100% of the initial Principal Outstanding Class B Notes 100% of the initial Principal Outstanding Ratings: (a) (b) Class A Notes: • AAA by Standard & Poor’s (Australia) Pty Limited; and • Aaa by Moody’s Investors Service; and Class AB Notes: Page 13 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 (c) • AAA by Standard & Poor’s (Australia) Pty Limited; and • Aa1 by Moody’s Investors Service; and Class B Notes: • AA by Standard & Poor’s (Australia) Pty Limited; and • Aa2 by Moody’s Investors Service . A security rating is not a recommendation to buy, sell or hold securities and may be subject to suspension, reduction, qualification or withdrawal at any time by the assigning rating agency. A suspension, reduction, qualification or withdrawal of the rating assigned to any Class of Notes may adversely affect the market price of the affected Notes. The ratings assigned to each Class of the Notes do not address the expected schedules of principal repayments, only that principal will be received no later than the relevant Final Maturity Date. The Current Rating Agencies have not been involved in the preparation of this Information Memorandum. Pre-funding: 2.5 Pre-funding is applicable. Payment Dates and Periods for the Trust Issue Date: [ ] 2006 (or such later date as may be agreed by the Issuer and the Dealers). Rate Set Date: The Interest Rate for each Class of Notes in respect of a Payment Period will be set on the relevant Rate Set Date for that Class of Notes. The Rate Set Date is the first day of each Payment Period. Determination Date: The day which is 4 Business Days before each Payment Date. The first Determination Date will be 8 November 2006. Collection Period: The period from (and including) each Determination Date to (but excluding) the next Determination Date. The first Collection Period will begin on (and include) the Issue Date and end on (but exclude) the first Determination Date. Payment Dates: The 14th day of each month and the Final Maturity Date or, if that day is not a Business Day, the next Business Day, except where such day falls in the following month or is the Final Maturity Date in which case it will be the immediately Page 14 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 preceding Business Day. The first Payment Date will be 14 November 2006. Payment Period: Each period commencing on (and including) a Payment Date and ending on (but excluding) the next Payment Date. The first Payment Period in respect of a Note will be the period commencing on (and including) the Issue Date and ending on (but excluding) the first Payment Date. The last Payment Period will be the period commencing on (and including) the Payment Date immediately preceding the Final Maturity Date and ending on (and including) the Final Maturity Date Final Maturity Date: Class A Notes ………...……….14 October 2038 Class AB Notes .........................14 October 2038 Class B Notes …………………14 October 2038 2.6 Call Dates of the Notes Call Dates: The Issuer must, if so directed by the Manager (and at the Manager’s discretion), redeem the Notes on the earlier of: (a) the Payment Date falling in October 2011; or (b) the date on which the aggregate of the Principal Outstanding of the Notes is less than 20% of the Principal Outstanding of all Notes on the Issue Date, and, in either case, on each following Payment Date (the “Call Date”). Pursuant to the Series Supplement, the Issuer may redeem all, but not some only, of the Notes and the Liquidity Notes (if any) on a Call Date at the Principal Outstanding of those Notes and Liquidity Notes (if any) as applicable on the date on which the redemption is to take place, together with accrued interest (if any) thereon. The Issuer will provide Noteholders with at least 20 Business Days’ notice of its intention to redeem the Notes and the Liquidity Notes (if any) on a Call Date. 2.7 Interest on the Notes Interest will be paid to the Noteholders in the order of priority described in Section 7.9 (“Distribution of Total Available Income”). Basis of calculation: Class A Notes:………... Class AB Notes ............. Class B Notes:………... Floating-rate Notes Floating-rate Notes Floating-rate Notes Page 15 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 Interest Rate: The Interest Rate in respect of a Class of Notes and for a Payment Period will be equal to the BBSW Rate on the relevant Rate Set Date plus in each case the applicable Class Margin (or, for each Payment Period commencing on the first Call Date and where the Notes are not redeemed in full on that Call Date, the applicable Enhanced Class Margin) for that Class of Notes for that Payment Period. The interest rates and certain other terms for the Liquidity Notes (if any) will be determined at the time of their proposed issue. No interest will be payable on any Class of Notes once the Class of Notes have been redeemed. Class Margin: The Class Margin applicable to the Notes will be: (a) in relation to the Class A Notes, [ ]% per annum; (b) in relation to the Class AB Notes, [ ]% per annum; and (c) in relation to the Class B Notes, [ ]% per annum, provided that, if the Notes have not been redeemed in full on or by the first Call Date, then with effect from the first Call Date, the Class Margin for the Notes will increase to the relevant Enhanced Class Margin. Enhanced Class Margin: The Enhanced Class Margin will be: (a) in relation to the Class A Notes, [ ]% per annum; (b) in relation to the Class AB Notes, [ ]% per annum; and (c) in relation to the Class B Notes, [ ]% per annum. Interest Payments: Interest on the Notes will be payable in arrears on each Payment Date. Calculation of interest on a Payment Date: Interest in respect of each Note will be calculated for each Payment Period based on: (a) the Interest Rate for that Class of Notes for that Payment Period; multiplied by (b) the Principal Outstanding for that Note as at the first day of that Payment Period; multiplied by (c) the number of actual days in that Payment Period, Page 16 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 divided by 365 days, rounded, if necessary, to the nearest cent with 0.5 being rounded up. Unpaid Interest: 2.8 Interest on any unpaid interest accrues daily at the relevant Interest Rate from (and including) the date on which such unpaid interest first became payable until it is paid in full. Repayment of Principal on the Notes Principal Repayments: Principal repayments will be made to Noteholders in the order of priority set out in Section 7.11 (“Distribution of Total Available Principal”) and rounded down to the nearest cent. Payments of principal on the Notes will be made sequentially, first to the Liquidity Notes (if any) until the Principal Outstanding of all Liquidity Notes has been reduced to zero, then to Class A Notes until the Principal Outstanding of all Class A Notes has been reduced to zero, then to the Class AB Notes until the Principal Outstanding of all Class AB Notes has been reduced to zero and then to Class B Notes until the Principal Outstanding of all Class B Notes has been reduced to zero. Payments of principal amongst Class A Notes will be pari passu, payments of principal amongst Class AB Notes will be pari passu and payments of principal amongst Class B Notes will also be pari passu. Pre-funding Amounts: This section applies to the extent that Section 2.4 (“Principal Characteristics of the Notes”) indicates that Pre-funding applies. If the net proceeds of the issue of the Notes exceeds the aggregate of: (a) the amount payable by the Issuer to the Seller or any Other Series on the acquisition of the Receivables on the Issue Date; (b) the Cash Deposit required to be made on the Issue Date; and (c) the amount reserved for Redraws and Further Advances in accordance with Section 7.1 (“Application of Notes”), the excess amount will be the Pre-funding Amount and will be deposited into the Pre-funding Account. Withdrawals from the Pre-funding Account will be made with the consent of the Security Trustee at the written request of the Manager. The Security Trustee will give its consent to any such withdrawal provided it receives a confirmation from each Page 17 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 Current Rating Agency that such withdrawal will not result in an Adverse Rating Effect. The Security Trustee is entitled to accept the authenticity of the Manager’s request and is not required independently to verify whether it has been properly given. The Issuer may, during the Pre-funding Period, use the Prefunding Amount to fund the acquisition of Mortgage Loans and Approved Mortgages as Assets of the Series, to make Redraws and Further Advances in respect of Approved Mortgages, to make payments of Principal Adjustments and for such other purposes as approved by the Issuer and the Security Trustee. If any of the Pre-funding Amount has not been so used during the Pre-funding Period, it will be included in Total Available Principal on the first Payment Date and distributed in accordance with Section 7.11 (“Distribution of Total Available Principal”) Charge Off: 2.9 On any Payment Date, if the aggregate Liquidation Losses for the immediately preceding Collection Period exceeds the amount available to be applied from the Total Available Income towards that shortfall on that Payment Date (in accordance with the cashflow allocation methodology), then any excess will be charged off pari passu and rateably against the Stated Amount of the Class B Notes until the Stated Amount of the Class B Notes is reduced to zero, then pari passu and rateably against the Stated Amount of the Class AB Notes until the Stated Amount of the Class AB Notes is reduced to zero, then pari passu and rateably against the Stated Amount of the Class A Notes and Liquidity Notes (if any) until the Stated Amount of the Class A Notes and the Stated Amount of the Liquidity Notes is reduced to zero. Charge-Offs will be reimbursed to the extent that funds are available for such purpose on succeeding Payment Dates in the manner set out in Section 7.13 (“Reimbursement of Carryover Charge Off”). Redraws and Further Advances Redraws and Further Advances: Under the terms of each Receivable, a Borrower may request the Seller to readvance principal amounts which have previously been prepaid such that the then current balance of the Mortgage Loan after the advance does not exceed the scheduled balance at that time for that Loan. Such readvances are referred to as “Redraws”. A Borrower may also request the Seller to advance additional principal amounts which would cause the then current balance of the relevant Loan to exceed the scheduled balance at that time for that Loan. Such amounts are called “Further Advances”. The Seller is not Page 18 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 obliged by the terms of any Loan to make Redraws or Further Advances. RMS may only fund a Further Advance if, immediately following the provision of such Further Advance: • the aggregate of the Outstanding Loan Balance of all Loans which are at that time in arrears for greater than 60 days is less than 2% of the aggregate of the Outstanding Loan Balance of all Loans; • there are no unreimbursed Charge-offs on the Notes; • during each 12 month period starting on the Issue Date, the aggregate of all Further Advances made in any such period is less than or equal to 3% of the Outstanding Balance of the Notes as at the most recent anniversary of the Issue Date; and • any other requirements that may be imposed by a Current Rating Agency are satisfied. Redraws and Further Advances will first be funded by the Seller, and the Issuer will fund the acquisition of such Redraws and Further Advances from the Seller from Principal Collections held in the RMS Account and, during any Prefunding Period, any Pre-funding Amount. If such amounts are insufficient to fund in full such Redraws and Further Advances provided during a Collection Period, the Issuer may also issue Liquidity Notes as described below. Issue of Liquidity Notes: The Issuer may issue Liquidity Notes and use the proceeds raised to fund the acquisition of Redraws and Further Advances. The amount outstanding in respect of the Liquidity Notes will not exceed 10% of the Principal Outstanding of all Notes unless the Issuer and the Liquidity Noteholder agree and the Manager receives a confirmation from each Current Rating Agency that such issuance will not result in an Adverse Rating Effect. For the avoidance of doubt, the Liquidity Notes are not fungible with the Class A Notes. Any description of the Liquidity Notes is included in this Information Memorandum for the sake of completeness only. This Information Memorandum is not intended to be used for the purpose of or in connection with offers or invitations to subscribe for, purchase or otherwise deal, in the Liquidity Notes. For the avoidance of doubt, the only circumstance in which Liquidity Notes can be issued is to fund the acquisition Page 19 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 of further assets, being the Redraws and Further Advances. 2.10 Liquidity Support Threshold Rate: The Manager must calculate for each Payment Period the minimum rate such that, were all variable rate Loans set at that rate, and taking into account income from Authorised Investments and other sources, the Trust would have sufficient income to pay its expenses as they fall due, such rate being the “Threshold Rate”. If the weighted average interest rate on the variable rate Mortgage Loans as Assets of the Series falls below the Threshold Rate, the Manager must direct the Servicer to reset the interest rate on the variable rate Mortgage Loans such that the weighted average interest rate on the variable rate Mortgage Loans as Assets of the Series is greater than or equal to the Threshold Rate. Principal Draw: If the Issuer determines on any Determination Date that the aggregate of the Interest Collections for the preceding Collection Period and the Accrual Amount for the period commencing on (but excluding) the last day of that Collection Period to but excluding the next Payment Date in respect of the Series are not sufficient to meet the Required Payments on that Payment Date in full (this is called a “Liquidity Shortfall”), then an amount of the Principal Collections held by the Issuer will be applied to meet that shortfall. This is called a Principal Draw. Amounts of Principal Collections used in this way will be reimbursed from Total Available Income to the extent that funds are available in subsequent Payment Periods to do so. Cash Deposit: (a) For Accrual Amounts – on each Determination Date, the Manager must calculate the Accrual Amount for the period commencing on (but excluding) the last day of the preceding Collection Period and ending on (but excluding) the following Payment Date. The Issuer may then use an amount of Principal Collections equal to this Accrual Amount and include it in Total Available Income for the relevant Payment Date; and (b) For Liquidity Shortfalls – if the Interest Collections for a Collection Period plus the Accrual Amount calculated above is not sufficient to meet Required Payments for the relevant Payment Period, then the Issuer may use an amount of Principal Collections to cover the shortfall. The Cash Deposit will be funded from the proceeds of the Page 20 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 issue of the Notes and will be applied to meet any shortfall where the Interest Collections, together with any Principal Draw, are not sufficient to meet the Required Payments in full on a Payment Date. The required balance of the Cash Deposit will, on any date, be an amount equal to 0.50% of the Principal Outstanding of the Notes, provided that once the Principal Outstanding of all Notes is reduced to 20% of the original Principal Outstanding of all Notes, any interest earned on the Cash Deposit must also be retained in the Cash Deposit. Amounts may be released from the Cash Deposit on each Payment Date which occurs prior to the date on which the Principal Outstanding of all Notes is reduced to 20% of the original Principal Outstanding of all Notes provided that, on that Payment Date, the balance of the Cash Deposit is greater than or equal to 0.50% of the Principal Outstanding of Notes on that Payment Date (after taking into account any payment of principal to be made in respect of the Notes on that Payment Date) and would remain so immediately after the release of such amount. Such released amounts will be included in Total Available Principal on each relevant Payment Date and applied in accordance with Section 7.11 (“Distribution of Total Available Principal”). Timely Payment Cover: 2.11 Each Mortgage Loan is covered by a Lender’s Mortgage Insurance Contract which includes Timely Payment Cover in an amount equal to at least twelve monthly instalments of interest (at the non-default interest rate) calculated at the time of the first missed instalment. If there is a Shortfall Adjustment (where there has been insufficient Collections to cover charges of interest, fees and other charges during a Collection Period), then the Manager must instruct the Servicer to make claims on Timely Payment Cover such that the amount of the claims equals or exceeds the Shortfall Adjustment. Credit Support The Notes will have the benefit of credit support as follows: Lender’s Mortgage Insurance Contracts: Each Receivable is covered by a Lender’s Mortgage Insurance Contract. The Mortgage Insurers under the Lender’s Mortgage Insurance Contracts are: • Genworth Financial Mortgage Insurance Pty Limited; • GE Mortgage Insurance Pty Limited (Formerly Housing Loans Insurance Corporation Pty Ltd); and • PMI Mortgage Insurance Ltd. Page 21 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 Each Lender’s Mortgage Insurance Contract provides insurance in respect of any principal loss and, to a limited extent, interest loss, on a Mortgage Loan and the relevant Related Security and a certain period of Timely Payment Cover (which insures the timely payment of the interest component of scheduled mortgage payments by a Borrower). See Section 8.11 (“Insurance Policies”) for further information. The Seller will assign to the Issuer its rights under the Lender’s Mortgage Insurance Contracts to the extent that they relate to the Mortgage Loan and Approved Mortgages. Excess Income: Where claims under a Lender’s Mortgage Insurance Contract are insufficient to cover the whole amount of a loss under a Mortgage Loan and Approved Mortgage, the Issuer will apply amounts of Total Available Income (to the extent it is available) towards the shortfall. Subordination of Class AB Notes and Class B Notes: The rights of the Class B Noteholders to the payment of interest and the repayment of principal are subordinated, both before and after the occurrence of an Event of Default, to the rights of the holders of Class A Notes, the Liquidity Notes (if any) and Class AB Notes to such amounts. The rights of Class AB Noteholders to the payment of principal are subordinated, both before and after the occurrence of an Event of Default, to the holders of Class A Notes and Liquidity Notes to such amounts. The Issuer will make payments of interest and principal in the order of priority set out in Section 7 (“Cashflow Allocation Methodology”). The Issuer will only make a payment to a person under Section 7 (“Cashflow Allocation Methodology”) when the amounts due and payable to persons in the preceding paragraphs of those sections, or those clauses, have been paid in full. The amount payable to any person will only be paid to the extent that the Issuer has sufficient funds available to it at the time to do so, after satisfying in full all of its obligations in respect of prior ranking payments. 2.12 Hedging Interest Rate Swaps: Subject to each Current Rating Agency giving its consent otherwise, the cashflows in relation to Mortgage Loans and Approved Mortgages bearing interest at a fixed rate will be hedged by the Issuer. Existing fixed rate to floating rate swaps in relation to Mortgage Loans and Approved Mortgages bearing interest at a fixed rate will be novated to Page 22 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 the Issuer on the Issue Date. The Seller currently offers Borrowers with floating rate Mortgage Loans and Approved Mortgages the ability to fix the rate of interest payable by a Borrower on a Mortgage Loan for a period of up to five years. The Issuer will enter into Derivative Contracts with appropriately rated counterparties before the commencement of such fixed rate period of a Mortgage Loan to eliminate any interest rate risk resulting from the offer of fixed rate loans. The Issuer must limit the current balance of Mortgage Loans with a fixed rate of interest to an amount not exceeding 15% of the current balance of the portfolio at the time a fixed rate loan is being included in the portfolio. No more than half of the current balance of Loans with a fixed rate of interest will comprise Loans which have a fixed rate of interest for a period of greater than four years remaining at the time of calculation. The Issuer will seek confirmation from each Current Rating Agency that any breach of these limits will not result in an Adverse Rating Effect Rating Affirmation from each Current Rating Agency prior to any relevant fixed rate loan being entered into by the Seller. 2.13 Miscellaneous RMS Account: The Issuer must immediately following the execution of the Series Supplement establish the RMS Account with an Eligible Bank in respect of the Series. Payments into RMS Account: The Series Supplement requires that all payments received by or on behalf of the Issuer be paid into the RMS Account. Listing: The Manager intends to list the Class A Notes, the Class AB Notes and the Class B Notes on the Australian Stock Exchange and has agreed to take all reasonable steps within its power to achieve this by the first Payment Date. Selling Restrictions: The offering, sale and delivery of the Notes and the distribution of this Information Memorandum and other material in relation to the Notes are subject to such restrictions as may apply in any jurisdiction in connection with the offering and sale of the Notes. See Section 12 (“Selling Restrictions”). Governing Law: The Notes and each Transaction Document will be governed by the laws of New South Wales, Australia. Transfer: Notes may be transferred in whole but not in part. Page 23 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 As at the date of this Information Memorandum, the minimum aggregate consideration payable on each transfer of Notes within, to or from Australia must be at least A$500,000 (disregarding amounts lent by the transferor or its associates to the transferee) or the offer or invitation resulting in transfer must not otherwise require disclosure to be made in accordance with Part 6D.2 of the Corporations Act or Part 7.9 of the Corporations Act. Notes that are transferred entirely in a jurisdiction outside of Australia may only be transferred in accordance with the laws of the jurisdiction in which transfer takes place. Notes may be lodged in Austraclear or any other clearing system, in which case all dealings (including transfers) and payments in relation to interests in the Notes so lodged will be governed by regulations of Austraclear or that clearing system. 2.14 Security Charges 2.15 The obligations of the Issuer in respect of the Series are secured by a charge granted by the Issuer over the Assets of the Series in favour of the Security Trustee under the Deed of Charge for the Series and the Trust Deed. Taxes Withholding Tax Other than as specified in the terms and conditions of the Notes, all payments in respect of Notes will be made without set-off or counterclaim and free and clear of, and without deduction for, or on account of, any present or future taxes, levies, duties, charges of any nature imposed, levied, collected, withheld or assessed by, or any taxing authority of, or in, any jurisdiction unless such withholding or deduction is required by law. If withholding or deduction is required by law, the Issuer (or another entity such as the Security Trustee or Registered Note Registrar as the case may be) will account to the relevant authority for the amount required to be withheld or deducted and no additional amounts in respect of such withholding or deduction will be paid to the relevant holder. Other taxes For a brief summary of the material Australian tax consequences see Section 11 (“Taxation Considerations”). However, investors who are in any doubt as to the taxation consequences of investing in Notes should obtain their own taxation advice. Page 24 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 3 Description of the Notes 3.1 General Description of the Notes The Notes constitute debt securities issued by the Issuer in its capacity as trustee of the Trust in respect of the Series. The Issuer’s liability to pay interest and repay principal on the Notes will be limited to the Assets of the Series, except in the case of the Issuer’s fraud, negligence or wilful default. The Notes are issued with the benefit of, and subject to, the Trust Deed, the Series Supplement and the Deed of Charge. 3.2 Interest and Principal on the Notes Interest and principal is payable on the Notes in accordance with Section 7 (“Cashflow Allocation Methodology”). 3.3 Payments Unless otherwise specified in the Transaction Documents in respect of the Series, any amounts payable by the Issuer to a Holder will be paid: 3.4 (a) by cheque, electronic funds transfer or other agreed methods, provided to the payee at its address for service of notices or by transfer of immediately available funds to the account specified by the payee, in either case, by 2:00pm (Sydney time) on the due date; and (b) without set-off, counterclaim or other deduction. Limit on Rights Neither the Trust Deed nor the Deed of Charge of the Series confers any right, power, or authority on the Holders to: (a) take any action, or to direct the Manager or the Issuer to take or refrain from taking any action, with respect to any asset of the Series; or (b) remove the Manager, the Issuer or a Security Trustee; or (c) call or to attend certain meetings (other than under the Trust Deed and Deed of Charge for the Series); or (d) wind up the Trust; or (e) take any other action which would contravene the intent of the Trust Deed. Page 25 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 3.5 Registered Notes Unless otherwise specified in the Series Supplement for the Series, all Notes will be Registered Notes. Creation of Notes Registered Notes will be issued in uncertificated registered form by inscription on the Register of Holders. The obligations of the Issuer under such Notes are constituted upon inscription in the Register of Holders of such Notes in accordance with the Trust Deed and the Series Supplement. Register The Holders of Registered Notes are to be recorded in the Register of Holders. The Register of Holders will be maintained by the Registered Note Registrar. Each Note is a separate debt of the Issuer and may be transferred separately from any other Note. Register Conditions The Register of Holders will be maintained in accordance with the Trust Deed and the Series Supplement. The Notes may be lodged into the Austraclear system by registering Austraclear Limited as the holder of record for custody in accordance with the Austraclear rules. All payments in respect of the Notes lodged into Austraclear will be made to Austraclear Limited, for transfer in accordance with the Austraclear rules. All notices to Holders required of the Issuer in relation to the Notes will be directed to Austraclear Limited. If Notes are lodged into the Austraclear system, Austraclear Limited will become the registered Holder in the Register of Holders. All dealings and payments in relation to those Notes within the Austraclear system will be governed by the Austraclear Limited Regulations. The Notes may also be lodged in an alternative clearing system in which case similar principles will apply. Registered owners The person whose name is inscribed in the Register of Holders as the registered owner of any Registered Note from time to time will be treated by the Issuer as the absolute owner of such Note for all purposes, whether or not any payment in relation to such Note is overdue and the Issuer is not, except as ordered by a court or as required by statute, obliged to take notice of any other claim (whether arising in respect of any trust, equity, security or otherwise) to a Note. Location of Register The Register of Holders will be established and maintained in Sydney or Melbourne. Page 26 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 Transfers Registered Notes may be transferred in whole or in part in accordance with the terms of the Trust Deed. Payments The Registered Note Paying Agent has also agreed to provide paying agency services to RMS in respect of the Notes of the Series. 3.6 Other Forms of Notes The Issuer may issue Notes that are not Registered Notes in respect of the Series, in which case the form of the Notes will be determined in accordance with the Transaction Documents in respect of the Series. Page 27 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 4 Certain Special Considerations An investment in the Notes involves certain risks. The Manager believes that certain aspects of the risk issues described below are some of the principal issues of which Holders should be aware. However, the ability of the Issuer to pay interest or repay principal on the Notes may depend on other factors and prospective Holders should be aware that the credit and risk issues described below are not exhaustive. Prospective Holders should carefully consider the following factors in addition to the matters set out elsewhere in this information memorandum before investing in the Notes. Prospective Holders should review the Transaction Documents and analyse any particular risks for that Series carefully. 4.1 Are the Notes an appropriate investment? The Notes may only be an appropriate investment for those who: 4.2 (a) have the requisite knowledge and experience in financial and business matters to evaluate the merits and risks of an investment in the Notes and the rights attaching to the Notes; (b) are acquiring the Notes for their own account for investment and not with a view to resell, distribute or other dispose of the Notes; (c) understand that there may not be a secondary market for the Notes and they therefore may not be able to transfer the Notes for a substantial period of time, if at all; and (d) are capable of bearing the economic risk of an investment in the Notes for an indefinite period of time. Limited Recourse The Notes are debt obligations of the Issuer as trustee of the Trust and in respect of the Series. They are issued with the benefit of, and subject to the Trust Deed, the Series Supplement and the Deed of Charge in respect of the Series. The Issuer will issue the Notes in its capacity as trustee of the Trust in respect of the Series and will be entitled to be indemnified out of the Assets of the Series for all payments of interest and principal in respect of the Notes. The liability of the Issuer under the Notes is limited to the Assets of the Series. Except in the case of, and to the extent that the Issuer’s right of indemnification against the Assets of the Series is reduced as a result of fraud, negligence or wilful default, no rights may be enforced against the Issuer in its personal capacity by any person and no proceedings may be brought against the Issuer in its personal capacity except to the extent of the Issuer’s right of indemnity and reimbursement out of the Assets of the Series in respect of the Trust. Accordingly, a Holder’s recourse against the Issuer with respect to the Notes is limited to the amount by which the Issuer is indemnified from the Assets of the Series in respect of the Trust. In no circumstances, either before or after the occurrence of an event of default in respect of the Series will the holder of a Note have recourse to the assets of any Other Series. Page 28 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 Upon the occurrence of an Event of Default in respect of the Series, the Security Trustee will be entitled to enforce the Deed of Charge in respect of the Series and apply the Assets of the Series which are charged in favour of the Security Trustee for the benefit of the Secured Creditors of the Series (which term includes the relevant Holders). The Security Trustee may incur costs in enforcing the Deed of Charge, with respect to which the Security Trustee will be entitled to indemnification. Any such indemnification will reduce the amounts available to pay interest on and repay principal of the Notes of the Series. 4.3 Limited Assets The Assets of the Series primarily consist of the Mortgage Loans and related securities held by the Issuer in respect of the Series and the Issuer’s rights under the Transaction Documents for that Series. If the Assets of the Series are not sufficient to make payments of interest or principal on the Series, then payments to Holders will be reduced. The rights of the Secured Creditors as beneficiaries under the applicable Security Trust are restricted. In particular, the Secured Creditors have only limited rights with respect to the direction and removal of the Manager, the Trustee, and the Security Trustee, and the winding up of the Trust. 4.4 Secondary Market Risk There is currently no secondary market for the Notes. There is no assurance that any secondary market will develop or, if one does develop, that it will provide liquidity of investment or will continue for the life of the Notes. No assurance can be given that it will be possible to effect a sale of the Notes, nor can any assurance be given that, if a sale takes place, it will not be at a discount to the acquisition price. 4.5 Timing of Principal Distributions Set out below is a description of some circumstances in which the Issuer may receive early or delayed or no repayments of principal on the Assets of the Series and, as a result of which, the Notes of the Series will repay principal early or later or not at all and accordingly, the holders of the Note of the Series may receive repayments of principal on the Notes of the Series earlier or later than would otherwise have been the case or may not receive repayments of principal at all: (a) the receipt of enforcement proceeds by the Issuer due to a debtor having defaulted on an Asset; (b) if there is an insurance policy in respect of an Asset, the receipt of insurance proceeds by the Issuer in relation to an insurance claim in respect of that Asset; (c) the occurrence of an Event of Default in respect of the Series; and (d) repayment of principal on the first Payment Date to the extent that it continues to be held in the Prefunding Account. Page 29 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 4.6 Delinquency and Default Risk If the Borrowers fail to make payments under the Mortgage Loans that form part of the Assets of the Series when due, there is a possibility that the Issuer may have insufficient funds available to it to make full payments of interest and principal to Holders in respect of the Series. The Issuer’s obligation to pay interest and to repay principal in respect of the Notes of the Series in full is limited by reference to, amongst other things, receipts under or in respect of the relevant Mortgage Loans. In respect of any payments in respect of the Notes of the Series, the Holders must rely on Borrowers making scheduled payments of interest and principal under the Mortgage Loans and on amounts being available under any Lender’s Mortgage Insurance Contracts and, in the case of default the receipt of any enforcement proceeds. A wide variety of factors of a legal, economic, political or other nature could affect the performance of borrowers in making payments of principal and interest under the mortgage loans. In particular, if interest rates increase significantly, borrowers may experience distress and an increase in default rates on the mortgage loans may result. Under Australia’s Consumer Credit Code, among other remedies, a court may order a mortgage loan to be varied on the grounds of hardship. Any such variance may reduce the principal or interest payable under a particular mortgage loan. If a debtor defaults on payments under a Mortgage Loan (including any bullet repayments of principal) and the Servicer, on behalf of the Issuer, enforces the Mortgage Loan and takes possession of the relevant property, many factors may affect the price at which the property is sold and the length of time taken to complete that sale. Any delay or loss incurred in this process may affect the ability of the Issuer to make payments, and the timing of those payments, in respect of the Notes of the Series, notwithstanding any amounts that may be claimed under any mortgage insurance policies. 4.7 Equitable Assignment The Assets of the Series will be assigned to the Issuer by way of sale, transfer or assignment to the Issuer of the Assets by equitable assignment. Unless and until the Issuer perfects its title to such Assets the Issuer might not be able to: (a) take any steps to perfect its title to those Assets; or (b) disclose any information in respect of any sale, transfer or assignment, or give any notice to, or communicate with, any debtor, except in accordance with the agreements relating to the assignment, the Trust Deed and the Series Supplement. Page 30 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 The delay in the notification to a debtor of the assignment of the Assets to the Issuer may have the following consequences: 4.8 (a) until a debtor, guarantor or security provider has notice of the assignment, such person is not bound to make payment to anyone other than the seller and can obtain a valid discharge from the seller; (b) until a debtor, guarantor or security provider has notice of the assignment, rights of set-off or counterclaim may accrue in favour of the debtor, guarantor or security provider against its obligations under the Assets which may result in the Issuer receiving less money than expected from the Assets; (c) for so long as the Issuer holds only an equitable interest in the Assets, the Issuer’s interest in the Assets may become subject to the interests of third parties created after the creation of the Issuer’s equitable interest but prior to it acquiring a legal interest; and (d) for so long as the Issuer holds only an equitable interest in the Assets, the seller must be a party to any legal proceedings against any debtor, guarantor or security provider in relation to the enforcement of any Assets. Deed of Charge Following the enforcement of the Deed of Charge in respect of the Series, the Security Trustee will be required to apply moneys otherwise available for distribution under the Series in the order of priority set out in the Series Supplement. The moneys available to the Security Trustee for distribution may not be sufficient to satisfy in full the claims of all or any of the Secured Creditors of the Series. Neither the Security Trustee nor the Issuer will have any liability to the relevant Secured Creditors in respect of any such deficiency. 4.9 Consumer Credit Code The Consumer Credit Code took effect in all states (except Tasmania) and territories of Australia on 1 November 1996, and in Tasmania on 1 March 1997. Under the Consumer Credit Code, a debtor of a regulated Mortgage Loan may have the right to apply to a court to: (a) vary their Mortgage Loan on the grounds of hardship or that it is an unjust contract; (b) reduce or cancel any interest rate payable on the Mortgage Loan which is unconscionable; (c) have certain provisions of the Mortgage Loan or mortgage which are in breach of the legislation declared unenforceable; or (d) obtain restitution or compensation from the Issuer in relation to any breach of the Consumer Credit Code. Page 31 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 Any such order may affect the timing or amount of principal repayments under the relevant Mortgage Loan which may in turn affect the timing or amount of payment of interest or principal repayments under the Notes. 4.10 Reinvestment If a prepayment is received on an interest bearing Asset during the period between Payment Dates in respect of the Series, interest at the then current interest rate on the Asset will cease to accrue on that part of the Asset prepaid. The Issuer may not be able to invest such funds at the same interest rate. In each case, this may affect the ability of the Issuer to pay interest in full on the applicable Notes. However, this reinvestment risk may be mitigated by the use of hedging arrangements and Principal Draws. 4.11 Enforcement If an Event of Default occurs in respect of the Series while the Notes are outstanding, the Trustee may, in accordance with the provisions of the Trust Deed, enforce the Charge for the Series. That enforcement can include the sale of some or all of the Assets of the Series. There is no guarantee that the Trustee will be able to sell the Assets for their then outstanding principal amount. Accordingly, the Trustee may not be able to realise the full value of the Assets and this may adversely affect the Issuer’s ability to repay all amounts outstanding in relation to the Notes of the Series. 4.12 Termination of Appointment of Servicer or Manager The appointment of the Servicer under the Master Servicer Deed may be terminated in certain circumstances or the Servicer may resign. If the Servicer is removed for any reason or resigns, the Issuer is required to appoint a suitably qualified person as Servicer to assume the responsibility for servicing the Mortgage Loans in accordance with the Transaction Documents. There is no guarantee that such a person will be found who will be willing to service the Mortgage Loans on the terms of the Transaction Documents. The removal or resignation of the Servicer could adversely affect the servicing of the Mortgage Loans and, in particular, could cause a delay or disruption in the collection of amounts due in respect of them. The Security Trustee is required, under the terms of the Master Servicer Deed, to remove the Servicer upon the occurrence of a Servicer Termination Event, and then itself act as the servicer of the Mortgage Loans pending the appointment of an appropriately qualified person to act as Servicer. There is no guarantee that such a person will be found who will be willing to service the Mortgage Loans on the terms of the Transaction Documents. See Section 10.8 (“Master Servicer Deed”) for further details. Similar provisions apply in relation to the Manager. See Section 10.7 (“Master Management Deed”). Page 32 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 4.13 The Servicer’s ability to change the feature of the Mortgage Loans may affect the payment on the Notes The Servicer may initiate certain changes to the Mortgage Loans. Most frequently, the Servicer will change the interest rate applying to a Mortgage Loan. In addition, subject to certain conditions, the Servicer may from time to time offer additional features and/or products with respect to the Mortgage Loans. As a result of such changes, the characteristics of the Mortgage Loans may differ from the characteristics of the Mortgage Loans at any other time. If the Servicer elects to change certain features of the Mortgage Loans, this could result in different rates of principal repayment on the Notes than initially anticipated. 4.14 The Manager is responsible for this Information Memorandum Except in respect of certain limited information, the Manager takes responsibility for the Information Memorandum, not the Issuer. As a result, in the event that a person suffers loss due to any information contained in this Information Memorandum being inaccurate or misleading, or omitting a material matter or thing, that person will not have recourse to the Assets of the Trust. 4.15 The Issuer’s ability to make payment on the Notes may be affected by the inability to make claims under Lender’s Mortgage Insurance Contracts The liability of a Mortgage Insurer is governed by the terms of the relevant Lender’s Mortgage Insurance Contract, which contains certain exclusions that may allow that Mortgage Insurer to reduce a claim or terminate mortgage insurance cover in respect of a Mortgage Loan in certain circumstances. Any such reduction or termination may affect the ability of the Issuer to pay principal and interest on the Notes. The exclusions and conditions differ between the Lender’s Mortgage Insurance Contracts. The rating of the Notes may be adversely affected in the event that a Mortgage Insurer is downgraded by either Current Rating Agency. There is no guarantee that a Mortgage Insurer will promptly make payment under any Lender’s Mortgage Insurance Contract or that the Mortgage Insurer will have the necessary financial capacity to make any such payment at the relevant time. Substantial delays could be encountered in connection with the enforcement of a Mortgage Loan or Related Security and result in shortfalls in distributions to Noteholders to the extent not covered by a Lender’s Mortgage Insurance Contract or if the relevant Mortgage Insurer fails to perform its obligations. Further, enforcement expenses such as legal fees, real estate taxes and maintenance and preservation expenses (to the extent not covered by a Lender’s Mortgage Insurance Contract) will reduce the net amounts recoverable by the Issuer from an enforced Mortgage Loan or Borrower. If any of the properties fail to provide adequate security for the relevant Mortgage Loan, Noteholders could experience a loss to the extent the loss was not covered by a Lender’s Mortgage Insurance Contract or if the relevant Mortgage Insurer failed to perform its obligations under the relevant Lender’s Mortgage Insurance Contract. Page 33 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 4.16 The termination of Interest Rate Swap may affect the payment on the Notes The Issuer will exchange the interest payments from any Mortgage Loan bearing interest at a fixed rate for variable rate payments based on BBSW Rate. If a Interest Rate Swap is terminated or the Interest Rate Swap Provider fails to perform its obligations, Noteholders will be exposed to the risk that the floating rate of interest payable with respect to the Notes will be greater than the fixed rate on the Mortgage Loans bearing interest at a fixed rate. If the Interest Rate Swap terminates before its scheduled termination date, a termination payment by either the Trustee or the Interest Rate Swap Provider may be payable. A termination payment could be substantial. Prior to an Event of Default and enforcement of the Charge, any termination payment owing by the Trustee to the Interest Rate Swap Provider will be payable out of the Assets of the Trust and will have a lower priority than payments of interest on the Notes (if the Trustee has not received the corresponding amount under the Mortgage Loan, the prepayment of which gave rise to the termination of the Interest Rate Swap) or ahead of the payment of interest on the Notes (if the Trustee has received the corresponding amount under the relevant Mortgage Loan). After the enforcement of the Deed of Charge, all amounts owing under the Interest Rate Swap will rank equally with the Class A Notes. 4.17 Breach of Representation or Warranty The Manager will make certain representations and warranties to the Issuer in relation to the Mortgage Loans to be assigned to the Issuer. The Issuer has not investigated or made any enquiries regarding the accuracy of those representations and warranties. The Issuer has recourse against the Manager in respect of any breach of such representations and warranties. 4.18 Mortgage Loan pool characteristics If the Issuer makes any Redraws or Further Advances then: 4.19 (a) the characteristics of the indicative pool may be altered; and (b) the estimated average lives of the Notes may be altered. The geographic concentration of Mortgage Loans may affect the amount that can be realised on the sale of the portfolio Section 5.3 (“Description of the pool of Mortgage Loans”) contains details of the geographic concentration of the Mortgage Loans. To the extent that any such region experiences weaker economic conditions in the future, this may increase the likelihood of Debtors with Mortgage Loans in that region missing scheduled instalments or defaulting on those Mortgage Loans. In such circumstances, the values of properties in that region may also fall, leading to the possibility of a loss in the event of enforcement. Page 34 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 None of the Issuer, the Manager, the Seller or the Servicer can quantify whether there has been a decline in the value of properties since the settlement of the Mortgage Loans or the extent to which there may be a decline in the value of properties in the future. 4.20 The redemption of the Notes on a Call Date may affect the return on the Notes There is no assurance that the Assets of the Series will be sufficient to redeem the Notes on a Call Date or that the Manager will exercise its discretion and direct the Issuer to redeem the Notes on a Call Date. The Manager has the right under the Series Supplement to direct the Issuer to sell Mortgage Loans in order to raise funds to redeem the Notes. However, there is no guarantee that the Mortgage Loans will be able to be sold in order to raise sufficient funds to redeem the Notes on a Call Date. 4.21 Payment holidays may result in Investors not receiving their full interest payments On certain Mortgage Loans, if a Debtor prepays principal on his or her loan, the Servicer may permit the Debtor to skip subsequent payments, including interest payments, until the Outstanding Loan Balance of the Mortgage Loan equals the scheduled balance. If a significant number of Debtors take advantage of this practice at the same time, the Issuer may not have sufficient funds to pay Noteholders the full amount of interest on the Notes on the next Payment Date. 4.22 The expiration of fixed rate interest periods may result in significant repayment increases and hence increased Debtor defaults The fixed rate Mortgage Loans in the mortgage pool have fixed interest rates that are set for a shorter time period (generally not more than 5 years) than the life of the loan (up to 30 years). At the end of the fixed rate period, the loan either converts to a variable rate, or can be refixed for a further period, again generally not for more than 5 years. When the loan converts to a variable rate or a new fixed rate, prevailing interest rates may result in the scheduled repayments increasing significantly in comparison to the repayments required during the fixed rate term just completed. This may increase the likelihood of Debtor delinquencies. 4.23 Because interest accrues on the loans on a simple interest basis, interest payable may be reduced if Debtors pay instalments before scheduled due dates Interest accrues on the Mortgage Loans on a daily simple interest basis, i.e., the amount of interest payable each weekly, bi-weekly or monthly period is based on each daily balance for the period elapsed since interest was last charged to the Debtor. Thus, if a Debtor pays a fixed instalment before its scheduled due date, the portion of the payment allocable to interest for the period since the preceding payment was made may be less than would have been the case had the payment been made as scheduled. 4.24 The Servicer’s ability to set the interest rate on variable rate Mortgage Loans may lead to increased delinquencies or prepayments and affect the yield on the Notes The interest rates on the variable rate Mortgage Loans are not tied to an objective interest rate index, but rather are set at the sole discretion of the Servicer. If the Servicer increases interest rates on these loans, Debtors may be unable to make their required Page 35 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 payments and, accordingly, may become delinquent or may default on their Purchased Mortgage Loans. In addition, if the interest rates are raised above market interest rates, Debtors may refinance their Mortgage Loans with another lender to obtain a lower interest rate. This could cause higher rates of principal prepayment than Noteholders expected which could affect the yield on the Notes. 4.25 Nature of Security Under the Deed of Charge for the Series, the Issuer grants a first ranking fixed and floating charge over all the Assets of the Series in favour of the Security Trustee to secure the payment of moneys owing to the Secured Creditors of the Series. If a company grants a fixed security over any of its assets, those assets may not be dealt with by the company without the consent of the relevant mortgagee. In this way, the security is said to “fix” over the specific assets. Fixed securities are usually given over real property, marketable securities and other assets which will not be dealt with by the Issuer. Unlike fixed securities, floating charges do not attach to specific assets but instead “float” over a class of assets which may change from time to time, allowing the chargor to deal with those assets and to give third party title to those assets free from any encumbrance. The Deed of Charge for the Series provides that the Issuer may not deal with the Assets of the Series subject to the floating charge, except in the ordinary course of its business. It is common in Australia for securitisation vehicles, such as the Trust, to give floating charges rather than fixed charges. The floating charge created by the Deed of Charge may “crystallise” and become a fixed charge over the relevant class of Assets of the Series at the time of crystallisation. Crystallisation will occur automatically following the occurrence of an Event of Default for a Series under the relevant Deed of Charge. 4.26 Ratings The credit ratings of the Notes should be evaluated independently from similar ratings on other types of notes or securities. A credit rating by a Current Rating Agency is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension, qualification or withdrawal at any time by the relevant Current Rating Agency. A revision, suspension, qualification or withdrawal of the credit rating of the Notes of the Series may adversely affect the price of those Notes. In addition, the credit ratings of the Notes do not address the expected timing of principal repayments under the Notes, only that principal will be received no later than the final maturity date for such Notes. 4.27 Goods and Services Tax The goods and services tax in Australia may decrease the funds available to the Trust to make payments on the Notes. A goods and services tax is payable by all entities which make taxable supplies in Australia. Some service providers to the Trust will be subject to the goods and services Page 36 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 tax in respect of such services and will pass on that additional cost to the Trust. The Issuer may also be subject to the goods and services tax on services provided by it. To the extent that the Trust cannot claim a full input tax credit in respect of the GST included in the cost of goods and services acquired by it, it will have less funds available to meet its obligations, and the holders of the Notes may suffer losses. See Section 11 (“Taxation Consequences”) for an outline of GST and the Trust. 4.28 Interest Withholding Tax There will not be any deduction on payments of interest under the Notes on account of Australian interest withholding tax, where the Holder is an Australian resident or a nonresident which derives the interest in carrying on business at or through a permanent establishment in Australia. Interest withholding tax will be deducted on payments of interest to any person who is an Australian resident who derives the interest in carrying on business at or through a permanent establishment outside Australia or a non-resident Holder (other than a nonAustralian resident who derives the interest in carrying on business at or through a permanent establishment in Australia) unless the Notes are offered, and interest is paid from time to time, in a manner which satisfies the exemption from interest withholding tax contained in Section 128F of the Income Tax Assessment Act 1936 (Cth) (see Section 11 (“Taxation Considerations”) for further information). 4.29 Proposed changes to the Basel Capital Accord (“Basel II”) In June 1999, the Basel Committee on Banking Supervision (the “Basel Committee”) issued proposals for reform of the 1988 Capital Accord and proposed a new capital adequacy framework which places enhanced emphasis on market discipline. Following an extensive consultation period on its proposals, the Basel Committee announced on 11 May 2004 that it had achieved consensus on the framework of the “New Basel Capital Accord”. The text of the New Basel Capital Accord was published on 26 June 2004. This text will serve as the basis for national and supra-national rule-making and approval processes to continue and for banking organisations to complete their preparation for the implementation of the New Basel Capital Accord at year end 2006. Consequently, recipients of this Information Memorandum should consult their own advisers as to the consequences to and effect on them of the potential application of the New Basel Capital Accord proposals. 4.30 Low Doc Loans A significant proportion of the Loans in the pool will be Low Doc Loans. In the case of a Low Doc Loans, the borrower declares an income amount but the income is not independently verified. The borrower is required to sign a declaration to the effect that the income declared is true and correct. The loan documentation, declaration and procedures for granting these loan types have all been signed off by competent independent solicitors as being Consumer Credit Code compliant. Page 37 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 The manner by which RMS accepts the borrower’s repayment capacity for these loan types may increase the associated credit risk and investors should consider how the inclusion of these loan types may affect the performance of the Trust. Investors should consider how the inclusion of the Low Doc Loans may affect the performance of the Notes. 4.31 Low Doc No Stated Income Loans A significant proportion of the Loans in the pool will be Low Doc No Stated Income Loans. In the case of Low Doc No Stated Income Loans, the borrower is required to sign a declaration that the loan will not cause hardship. The loan documentation, declaration and procedures for granting these loan types have all been signed off by competent independent solicitors as being Consumer Credit Code compliant. The manner by which RMS accepts the borrower’s repayment capacity for these loan types may increase the associated credit risk and investors should consider how the inclusion of these loan types may affect the performance of the Trust. Investors should consider how the inclusion of the Low Doc No Stated Income Loans may affect the performance of the Notes. 4.32 Australian Anti-Money Laundering and Counter-Terrorism Financing Regime On December 16, 2005 the Australian Government released an exposure draft of the Anti-Money Laundering and Counter-Terrorism Financing Bill (“AML/CTF Bill”) which is intended to replace the current Australian Financial Transactions Reports Act 1988. The AML/CTF Bill proposes a number of significant changes to Australia's antimoney laundering and counter-terrorism financing regulation. Under the AML/CTF Bill, if an entity has not met its obligations under the AML/CTF Bill, that entity will be prohibited from providing a designated service which includes: (a) opening or providing an account, allowing any transaction in relation to an account or receiving instructions to transfer money in and out of the account; (b) issuing, dealing, acquiring, disposing of, cancelling or redeeming a security; and (c) exchanging one currency for another. These obligations will include undertaking customer identification procedures before a designated service is provided and receiving information about international and domestic institutional transfers of funds. Until these obligations have been met an entity will be prohibited from providing funds or services to a party or making any payments on behalf of a party. Page 38 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 If the draft exposure AML/CTF Bill is introduced in its current form, the obligations placed upon an entity could affect the services of an entity or the funds it provides and ultimately may result in a delay or decrease in the amounts received by a Holder of Offered Notes. Page 39 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 5 Assets of the Program 5.1 Assets of each Series The assets of the Series will include the following: 5.2 • a pool of mortgage loans, mortgages and relevant collateral securities originated by the Originator including principal payments paid or payable on the mortgage loans at any time after the applicable cut-off date, interest and fee payments paid or payable on the mortgage loans at any time after the applicable cut-off date; • rights under any Lender’s Mortgage Insurance Contracts relating to the Mortgage Loans; • amounts on deposit in the accounts established in connection with the Series and the issuance of the related notes, including the related collections account, and any Authorised Investments in which these amounts are invested; and • the Issuer’s rights under the Transaction Documents for the Series. Australian Residential Mortgage Loans Generally Australia has a highly competitive market for residential mortgage loans with a diversity of lenders. The largest lenders are banks, with smaller market shares held by mortgage managers, building societies and other lenders. Many lenders offer a diversity of product types. Most common are loans with a variable interest rate set either at the discretion of the lender or by reference to a market benchmark. Fixed interest rate loans are also available. These are not amortising loans that have a fixed interest rate for the life of the loan. Generally, fixed rate loans amortise over a 25- or 30-year life (although the term may be shorter), but have a fixed rate that is set for a shorter period (generally not more than 5 years) and then convert to the standard variable interest rate unless the borrower elects an alternative product type. Interest only loans are also offered, generally with an interest only term of not more than 10 years. Many variable rate loans offer the borrower a variety of features, including the ability to redraw amounts that have been paid in advance of the scheduled loan balance, and the ability to attach to a mortgage offset account such that the interest accrued on such account is offset against interest on the borrower’s mortgage loan at the same interest rate. In many instances the interest rate is discounted to an introductory or “honeymoon” rate for an initial period (often 1 year) and then reverts to the current variable rate. Under most loans, the lender has full recourse to the borrower, and has a claim against the borrower as an unsecured creditor if the proceeds of sale of the property do not cover the full amount owing in respect of the loan. Lenders make extensive use of lender’s mortgage insurance for loans with high loan to value ratios. The general features of RAMS’ Mortgage Loans are discussed in Section 8 (“RAMS Residential Loan Program”). Page 40 RAMS MORTGAGE SECURITIES TRUST Series 2006-1 5.3 Description of the pool of Mortgage Loans The pool will consist of 3,393 Mortgage Loans that have an aggregate outstanding principal balance, as of 30 August 2006, of A$743,733,958.48 . As of 30 August 2006, no Mortgage Loans were delinquent. Lender’s Mortgage Insurance Contracts with respect to the Mortgage Loans will cover defaulted losses equal to 100% of the principal and accrued interest of each loan and reasonable expenses involved in the enforcement of the mortgage. The mortgaged properties that secure the Mortgage Loans are located in the following states and territories of Australia: • New South Wales; • Victoria; • Western Australia; • Queensland; • South Australia; • Tasmania; • the Northern Territory; and • the Australian Capital Territory. Details of the pool of Mortgage Loans The information below sets out certain details relating to the Mortgage Loans to be included in the Series. The information is provided by the Seller as of the close of business on 30 August 2006. The sum in any column may not equal the total indicated due to rounding. Page 41 5.4 Loan portfolio Summary by Product Type Basic Home Loan Number of Loans Better Offset Home Loan Easy Start Investor Sure Home Loan Home Loan Home Loan 257 Smartway Home Loan Smartway Low Doc Smartway No Doc Low Doc Home Loan 833 No Doc Line of Credit Line Of Credit Line Of Credit Home Loan Home Loan Low Doc No Doc 398 81 111 1 291 78 92 814 119 109 209 Current Balance 81,340,866.08 19,522,548.15 64,013,447.93 31,474,053.38 95,542.58 69,310,375.55 12,482,580.03 10,334,733.43 214,001,912.68 179,171,561.96 21,605,752.93 16,535,098.78 23,845,485.00 Original Balance 66,641,051.09 31,779,878.63 225,868,034.41 191,208,793.35 39,501,088.30 84,245,084.50 20,707,003.90 120,000.00 76,524,634.99 15,710,525.60 12,962,607.22 28,241,621.62 20,436,743.38 Max Current Balance 694,311.03 830,760.42 653,207.47 600,340.00 95,542.58 900,000.00 577,760.00 810,000.00 1,000,000.00 1,000,000.00 711,815.61 968,881.75 653,500.00 Max Original Balance 696,000.00 918,136.46 708,000.00 600,000.00 120,000.00 900,000.00 577,760.00 810,000.00 1,000,000.00 1,000,000.00 819,761.38 975,000.00 1,000,000.00 Total Property Value 187,149.10 114,972,130.11 324,770,211.31 307,844,650.25 119,208,672.36 30,604,518.68 23,752,052.22 31,092,063.02 41,697,229.87 29,879,630.66 79,031,611.76 Max Current LVR 95.59 94.84 95.00 95.00 51.05 95.04 80.52 80.00 82.40 80.51 91.31 80.36 80.47 Max Original LVR 95.00 95.00 95.00 95.00 64.12 95.00 80.00 80.00 80.00 80.00 92.31 80.00 80.00 Wtd Ave Current LVR 75.63 73.77 75.32 79.40 51.05 69.50 67.15 50.61 71.88 64.84 66.55 66.13 50.80 Wtd Ave Original LVR 76.85 76.06 76.79 79.95 64.12 72.85 71.25 55.84 73.66 66.72 73.46 72.33 61.23 4.66 14.69 4.64 5.29 61.40 6.92 6.68 3.15 4.21 3.47 3.82 4.83 3.44 29.55 28.50 29.54 29.55 24.87 29.25 29.33 29.78 29.52 29.62 29.49 29.52 29.29 132 123 96 76 60 97 38 9 87 14 20 13 13 30 30 30 30 29 30 30 30 30 30 30 30 30 7.19 7.27 7.02 7.02 7.90 7.25 7.93 7.89 7.58 7.70 7.22 7.99 7.99 Ave Current Balance (%) 204,374.04 241,019.11 249,079.56 283,550.03 95,542.58 238,179.98 160,033.08 112,334.06 256,905.06 220,112.48 181,560.95 151,698.15 114,093.23 Ave Original Balance 211,671.07 255,642.02 259,303.70 286,305.21 120,000.00 262,971.25 201,416.99 140,897.90 271,150.10 234,900.24 237,324.55 187,493.06 189,000.42 Percentage by Balance 10.94% 2.62% 8.61% 4.23% 0.01% 9.32% 1.68% 1.39% 28.77% 24.09% 2.91% 2.22% 3.21% Percentage by Number 11.73% 2.39% 7.57% 3.27% 0.03% 8.58% 2.30% 2.71% 24.55% 23.99% 3.51% 3.21% 6.16% Wtd Ave Seasoning (mths) Wtd Ave Maturity (yrs) Max Seasoning (months) Max Maturity (yrs) Wtd Ave Interest Rate (%) 93,008,851.15 41,020,154.11 5.5 Mortgage Insurers Analysis 1,193 35.16% 233,637,472.94 31.41% Wtd Avg Curr LVR 65.78 HLIC 6 0.18% 1,052,473.56 0.14% 65.59 PMI 2,194 64.66% 509,044,011.98 68.44% 71.51 TOTAL 3,393 100.00% 743,733,958.48 100.00% 69.70 Mortgage Insurer No. of Loans % No of Loans Genworth 5.6 Current Balance % of Balance Current LVR by Current Capital Balance L.V.R 0.00 - 5% No. of Loans 114 % No of Loans 3.36% 5.01 - 10% 52 1.53% 1,869,779.08 0.25% 8.07 10.01 - 15% 53 1.56% 2,975,961.22 0.40% 12.83 15.01 - 20% 51 1.50% 3,731,633.47 0.50% 18.10 20.01 - 25% 74 2.18% 7,694,153.37 1.03% 22.86 25.01 - 30% 69 2.03% 7,738,241.59 1.04% 27.77 30.01 - 35% 100 2.95% 14,540,268.15 1.96% 32.78 35.01 - 40% 102 3.01% 15,181,675.23 2.04% 37.51 40.01 - 45% 109 3.21% 19,398,695.96 2.61% 42.46 45.01 - 50% 143 4.21% 27,428,864.47 3.69% 47.77 50.01 - 55% 164 4.83% 32,558,239.94 4.38% 52.80 55.01 - 60% 175 5.16% 39,666,931.90 5.33% 57.67 60.01 - 65% 194 5.72% 44,664,565.26 6.01% 62.95 65.01 - 70% 391 11.52% 96,323,615.28 12.95% 68.59 70.01 - 75% 193 5.69% 48,134,140.97 6.47% 72.64 75.01 - 80% 962 28.35% 264,761,620.52 35.60% 79.14 80.01 - 85% 120 3.54% 32,087,034.95 4.31% 81.99 85.01 - 90% 186 5.48% 48,333,718.78 6.50% 88.43 90.01 - 95% 138 4.07% 35,270,838.90 4.74% 93.25 3 0.09% 785,435.69 0.11% 95.20 95.01 - 100% TOTAL 3,393 100.00% Current Balance 588,543.75 743,733,958.48 % of Balance 0.08% 100.00% Wtd Avg Curr LVR 3.21 69.70 5.7 Current Balance Distribution No. of Loans % No of Loans % of Balance Wtd Avg Curr LVR 0 - 25000 Loan Size Distribution 162 4.77% 1,296,193.23 0.17% 15.63 25000 - 50,000 146 4.30% 6,083,477.99 0.82% 36.40 50,000 - 75000 170 5.01% 10,678,904.92 1.44% 44.19 75000 - 100,000 208 6.13% 18,798,493.56 2.53% 51.04 100,000 - 125,000 187 5.51% 21,164,516.44 2.85% 55.69 125,000 - 150,000 257 7.57% 35,793,937.32 4.81% 60.03 150,000 - 175,000 271 7.99% 44,340,357.91 5.96% 64.66 175,000 - 200,000 305 8.99% 57,383,759.74 7.72% 67.27 200,000 - 225,000 262 7.72% 55,854,476.07 7.51% 71.72 225,000 - 250,000 271 7.99% 64,442,664.33 8.66% 72.80 250,000 - 275,000 194 5.72% 50,746,543.68 6.82% 74.32 275,000 - 300,000 188 5.54% 54,081,296.28 7.27% 72.58 300,000 - 325,000 164 4.83% 51,326,416.03 6.90% 75.46 325,000 - 350,000 131 3.86% 44,372,005.19 5.97% 72.21 350,000 - 375,000 78 2.30% 28,375,426.50 3.82% 71.01 375,000 - 400,000 86 2.53% 33,525,952.69 4.51% 72.07 400,000 - 425,000 53 1.56% 21,918,942.52 2.95% 69.56 425,000 - 450,000 47 1.39% 20,613,459.37 2.77% 75.32 450,000 - 475,000 27 0.80% 12,483,804.32 1.68% 77.79 475,000 - 500,000 60 1.77% 29,479,300.85 3.96% 73.37 500,000 - 525,000 15 0.44% 7,672,024.27 1.03% 72.23 525,000 - 550,000 18 0.53% 9,718,676.35 1.31% 76.85 550,000 - 575,000 15 0.44% 8,451,859.74 1.14% 75.36 575,000 - 600,000 15 0.44% 8,806,579.01 1.18% 69.63 600,000 - 625,000 11 0.32% 6,729,714.38 0.90% 74.90 625,000 - 650,000 10 0.29% 6,394,952.98 0.86% 74.08 650,000 - 675,000 4 0.12% 2,629,959.03 0.35% 74.27 675,000 - 700,000 8 0.24% 5,508,119.91 0.74% 81.13 700,000 - 725,000 4 0.12% 2,843,422.49 0.38% 75.88 725,000 - 750,000 2 0.06% 1,468,000.00 0.20% 78.29 750,000 + 24 0.71% 20,750,721.38 2.79% 72.09 3,393 100.00% 743,733,958.48 100.00% 69.70 TOTAL Current Balance 44 5.8 Original Balance Distributions No. of Loans % No of Loans % of Balance Wtd Avg Orig LVR 0 - 25000 Loan Size Distribution 23 0.68% 387,557.97 0.05% 49.29 25000 - 50,000 141 4.16% 6,825,668.54 0.84% 45.29 50,000 - 75000 123 3.63% 7,869,266.33 0.97% 55.11 75000 - 100,000 222 6.54% 20,436,386.45 2.51% 56.79 100,000 - 125,000 154 4.54% 17,717,444.59 2.18% 62.97 125,000 - 150,000 270 7.96% 38,073,762.22 4.68% 63.48 150,000 - 175,000 255 7.52% 41,844,915.12 5.14% 68.70 175,000 - 200,000 343 10.11% 65,053,924.17 7.99% 68.61 200,000 - 225,000 256 7.54% 54,908,351.42 6.75% 74.45 225,000 - 250,000 303 8.93% 72,352,915.70 8.89% 74.04 250,000 - 275,000 215 6.34% 56,428,508.85 6.93% 76.08 275,000 - 300,000 214 6.31% 61,808,285.47 7.59% 73.43 300,000 - 325,000 163 4.80% 51,064,234.28 6.27% 76.93 325,000 - 350,000 147 4.33% 49,913,893.11 6.13% 74.64 350,000 - 375,000 90 2.65% 32,754,855.38 4.02% 73.22 375,000 - 400,000 105 3.09% 41,056,782.87 5.04% 70.81 400,000 - 425,000 59 1.74% 24,450,946.99 3.00% 72.69 425,000 - 450,000 54 1.59% 23,761,000.46 2.92% 75.91 450,000 - 475,000 35 1.03% 16,263,585.43 2.00% 76.88 475,000 - 500,000 79 2.33% 38,953,199.45 4.79% 72.40 500,000 - 525,000 13 0.38% 6,688,586.80 0.82% 75.17 525,000 - 550,000 21 0.62% 11,336,871.00 1.39% 76.46 550,000 - 575,000 16 0.47% 9,028,760.00 1.11% 78.74 575,000 - 600,000 23 0.68% 13,603,160.00 1.67% 70.79 600,000 - 625,000 9 0.27% 5,533,000.00 0.68% 79.11 625,000 - 650,000 11 0.32% 7,047,044.38 0.87% 73.04 650,000 - 675,000 4 0.12% 2,638,547.17 0.32% 80.92 675,000 - 700,000 10 0.29% 6,872,075.00 0.84% 78.39 700,000 - 725,000 5 0.15% 3,545,500.00 0.44% 79.41 725,000 - 750,000 3 0.09% 2,236,000.00 0.27% 79.19 750,000 + 27 0.80% 23,492,037.84 2.89% 72.77 3,393 100.00% 813,947,066.99 100.00% 72.14 TOTAL 5.9 Original Balance Owner Status No. of Loans % No of Loans Owner Occupied Owner Status 2,309 68.05% Current Balance 480,862,244.16 % of Balance Wtd Avg Curr LVR 64.66% 68.05 Investment 1,084 31.95% TOTAL 3,393 100.00% 262,871,714.32 35.34% 72.72 743,733,958.48 100.00% 69.70 45 5.10 Current Loan Balance by Geographic Distribution State No. of Loans % No of Loans Current Balance % of Balance Wtd Avg Curr LVR NSW Inner City 0 0 0 0.00% 0 Metro 543 16.00% 138,507,171.42 18.62% 68.58 Non Metro 334 9.84% 69,884,930.60 9.40% 69.69 877 25.85% 208,392,102.02 28.02% 68.95 Inner City 0 0.00% 0 0.00% Metro 64 1.89% 14,806,018.27 1.99% 73.46 Non Metro 0 0.00% 0 0.00% 0 64 1.89% 14,806,018.27 1.99% 73.46 NSW Sub-total ACT ACT Sub-total VIC Inner City 2 0.06% 884,578.13 0.12% 72.82 Metro 589 17.36% 119,633,867.14 16.09% 71.34 Non Metro 104 3.07% 16,639,944.38 2.24% 67.06 695 20.48% 137,158,389.65 18.44% 70.83 VIC sub-total QLD Inner City 2 0.06% 726,400.00 0.10% 80.00 Metro 350 10.32% 74,554,949.76 10.02% 70.61 Non Metro 409 12.05% 84,559,249.41 11.37% 70.11 761 22.43% 159,840,599.17 21.49% 70.38 QLD sub-total WA Inner City 13 0.38% 3,107,603.90 0.42% 65.17 Metro 805 23.73% 186,862,737.65 25.12% 68.88 Non Metro 78 2.30% 14,975,179.04 2.01% 68.47 896 26.41% 204,945,520.59 27.56% 68.80 Inner City 0 0.00% 0 0.00% 0 Metro 66 1.95% 11,769,203.57 1.58% 72.58 Non Metro 6 0.18% 779,490.01 0.10% 69.40 72 2.12% 12,548,693.58 1.69% 72.39 Inner City 0 0.00% 0 0.00% 0 Metro 11 0.32% 2,378,111.92 0.32% 70.58 Non Metro 7 0.21% 1,270,143.48 0.17% 63.46 18 0.53% 3,648,255.40 0.49% 68.10 Inner City 0 0.00% 0 0.00% 0 Metro 8 0.24% 1,949,901.88 0.26% 63.73 WA sub-total SA SA sub-total TAS TAS sub-total NT Non Metro NT sub-total TOTAL 2 0.06% 444,477.92 0.06% 83.07 10 0.29% 2,394,379.80 0.32% 67.32 3,393 100.00% 100.00% 69.70 743,733,958.48 46 5.11 Current Loan Balance by Geographic Distribution - Summary Location Inner City Metro Non Metro TOTAL 5.12 No. of Loans % No of Loans 17 0.50% Current Balance 4,718,582.03 % of Balance 0.63% Wtd Avg Curr LVR 68.89 2,436 71.79% 550,461,961.61 74.01% 69.76 940 27.70% 188,553,414.84 25.35% 69.53 3,393 100.00% 743,733,958.48 100.00% 69.70 Postcode Distribution Postcode 6210 6027 6030 6110 6061 6163 6164 6056 6018 6062 6155 6169 Suburb MANDURAH JOONDALUP CLARKSON KELMSCOTT MALAGA BIBRA LAKE ATWELL MIDLAND GWELUP BASSENDEAN CANNING VALE ROCKINGHAM Current Balance 9,578,318.47 8,008,618.78 6,029,911.04 5,982,467.43 5,322,559.45 5,319,230.89 4,796,453.08 4,570,034.34 4,502,983.61 4,366,945.92 4,329,617.70 4,267,229.98 % of Balance 1.29% 1.08% 0.81% 0.80% 0.72% 0.72% 0.64% 0.61% 0.61% 0.59% 0.58% 0.57% Number 38 30 31 27 22 22 19 18 17 17 21 21 % No of Loans 1.12% 0.88% 0.91% 0.80% 0.65% 0.65% 0.56% 0.53% 0.50% 0.50% 0.62% 0.62% Wtd Avg Curr LVR 68.79 67.63 64.55 76.00 73.41 69.30 73.86 73.45 66.61 76.87 65.49 63.43 13 2153 BAULKHAM HILLS 4,218,739.84 0.57% 12 0.35% 73.32 14 6168 COOLOONGUP 4,192,787.62 0.56% 20 0.59% 68.42 15 4670 BUNDABERG 4,121,870.23 0.55% 26 0.77% 74.99 16 2148 SEVEN HILLS 4,068,791.98 0.55% 16 0.47% 71.93 17 6065 WANGARA 4,061,411.93 0.55% 16 0.47% 70.41 18 2261 LONG JETTY 3,935,576.10 0.53% 17 0.50% 74.37 19 6111 ASHENDON 3,753,072.28 0.50% 17 0.50% 65.83 20 3178 FERNTREE GULLY 3,716,951.27 0.50% 15 0.44% 80.52 644,590,386.54 86.67% 2971 87.56% 69.55 743,733,958.48 100.00% 3,393 100.00% 69.70 Ranking 1 2 3 4 5 6 7 8 9 10 11 12 21 TOTAL All other 47 5.13 Seasoning Analysis Aging % of Balance Wtd Avg Curr LVR 270 7.96% 59,961,015.52 8.06% 67.97 1 to 2 months 460 13.56% 97,447,039.09 13.10% 69.07 2 to 3 months 573 16.89% 129,069,618.49 17.35% 70.30 3 to 4 months 772 22.75% 162,383,921.04 21.83% 69.99 4 to 5 months 633 18.66% 148,073,136.61 19.91% 68.91 5 to 6 months 324 9.55% 75,093,772.23 10.10% 71.45 6 to 7 months 64 1.89% 11,233,895.03 1.51% 69.49 7 to 8 months 60 1.77% 12,236,927.90 1.65% 70.09 8 to 9 months 36 1.06% 7,555,921.10 1.02% 69.03 9 to 10 months 53 1.56% 12,197,618.68 1.64% 71.88 10 to 11 months 12 0.35% 1,877,247.66 0.25% 78.73 11 to 12 months 12 0.35% 3,417,983.80 0.46% 76.58 12 to 13 months 8 0.24% 2,116,337.40 0.28% 62.09 13 to 14 months 10 0.29% 1,958,769.33 0.26% 75.30 14 to 15 months 3 0.09% 413,789.06 0.06% 70.25 15 to 16 months 8 0.24% 1,651,197.53 0.22% 74.16 16 to 17 months 4 0.12% 1,579,738.20 0.21% 78.68 17 to 18 months 2 0.06% 204,004.15 0.03% 88.00 18 to 19 months 5 0.15% 1,007,196.02 0.14% 66.83 19 to 20 months 1 0.03% 34,421.12 0.00% 7.82 20 to 21 months 3 0.09% 510,484.15 0.07% 63.81 21 to 22 months 3 0.09% 1,197.03 0.00% 66.84 22 to 23 months 1 0.03% 24,740.91 0.00% 8.68 23 to 24 months 5 0.15% 300,479.84 0.04% 50.30 24 to 25 months 2 0.06% 270,895.95 0.04% 79.94 25 to 26 months 4 0.12% 618,964.00 0.08% 68.42 26 to 27 months 3 0.09% 301,197.74 0.04% 74.87 27 to 28 months 2 0.06% 785,265.81 0.11% 69.70 28 to 29 months 3 0.09% 854,788.53 0.11% 59.56 Less than 1 month 29 to 30 months Greater than 30 months TOTAL No. of Loans % No of Loans Current Balance 0 0.00% 0 0.00% 0 57 1.68% 10,552,394.56 1.42% 66.09 3,393 100.00% 743,733,958.48 100.0% 69.70 48 5.14 Term to Maturity No. of Loans % No of Loans % of Balance Wtd Avg Curr LVR 1 to 2 years Term to Maturity 0 0.00% 0.00 0.00% 0.00 2 to 3 years 0 0.00% 0.00 0.00% 0.00 3 to 4 years 0 0.00% 0.00 0.00% 0.00 4 to 5 years 0 0.00% 0.00 0.00% 0.00 5 to 6 years 0 0.00% 0.00 0.00% 0.00 6 to 7 years 0 0.00% 0.00 0.00% 0.00 7 to 8 years 1 0.03% 114,157.59 0.02% 28.54 8 to 9 years 1 0.03% 15,685.87 0.00% 36.10 9 to 10 years 5 0.15% 210,764.49 0.03% 21.22 10 to 11 years 1 0.03% 8,876.14 0.00% 12.84 11 to 12 years 0 0.00% 0.00 0.00% 0.00 12 to 13 years 0 0.00% 0.00 0.00% 0.00 13 to 14 years 0 0.00% 0.00 0.00% 0.00 14 to 15 years 7 0.21% 690,844.66 0.09% 37.76 15 to 16 years 4 0.12% 402,262.43 0.05% 35.29 16 to 17 years 2 0.06% 415,718.42 0.06% 59.72 17 to 18 years 0 0.00% 0.00 0.00% 0.00 18 to 19 years 2 0.06% 341,098.07 0.05% 49.23 19 to 20 years 7 0.21% 865,431.33 0.12% 51.18 20 to 21 years 1 0.03% 70,000.00 0.01% 11.65 21 to 22 years 5 0.15% 1,095,234.63 0.15% 69.82 22 to 23 years 12 0.35% 2,423,492.22 0.33% 60.75 23 to 24 years 16 0.47% 1,794,216.47 0.24% 66.11 24 to 25 years 71 2.09% 12,454,408.26 1.67% 67.97 25 to 26 years 14 0.41% 3,210,428.36 0.43% 69.64 26 to 27 years 6 0.18% 1,273,173.59 0.17% 65.58 27 to 28 years 30 0.88% 6,553,652.70 0.88% 70.11 28 to 29 years 43 1.27% 8,087,194.11 1.09% 74.77 29 to 30 years 3,165 93.28% 703,707,319.14 94.62% 69.83 3,393 100.00% 743,733,958.48 100.0% 69.70 TOTAL Current Balance 49 5.15 Fixed Rate Term Distribution No. of Loans % No of Loans % of Balance 0 (Variable) 3,374 99.44% Wtd Avg Curr LVR 739,897,261.18 99.48% 0 to 1 years 1 69.66 0.03% 99,899.34 0.01% 1 to 2 years 90.00 5 0.15% 1,153,665.83 0.16% 77.05 2 to 3 years 6 0.18% 1,230,557.57 0.17% 77.84 3 to 4 years 0 0.00% 0 0.00% 0 4 to 5 years 7 0.21% 1,352,574.56 0.18% 76.09 Greater than 5 years 0 0.00% 0 0.00% 0 3,393 100.00% 100.00% 69.70 Remaining Fixed Rate Term TOTAL 5.16 Current Balance 743,733,958.48 Interest Rate Distribution % of Balance Wtd Avg Curr LVR 0.00 0.00% 0.00 0.00% 0.00 0.00% 0.00 0 0.00% 0.00 0.00% 0.00 5.60 to < 5.70 0 0.00% 0.00 0.00% 0.00 5.70 to < 5.80 0 0.00% 0.00 0.00% 0.00 5.80 to < 5.90 0 0.00% 0.00 0.00% 0.00 5.90 to < 6.00 0 0.00% 0.00 0.00% 0.00 6.00 to < 6.10 0 0.00% 0.00 0.00% 0.00 6.10 to < 6.20 0 0.00% 0.00 0.00% 0.00 6.20 to < 6.30 0 0.00% 0.00 0.00% 0.00 6.30 to < 6.40 0 0.00% 0.00 0.00% 0.00 6.40 to < 6.50 0 0.00% 0.00 0.00% 0.00 6.50 to < 6.60 0 0.00% 0.00 0.00% 0.00 6.60 to < 6.70 0 0.00% 0.00 0.00% 0.00 6.70 to < 6.80 0 0.00% 0.00 0.00% 0.00 6.80to < 6.90 0 0.00% 0.00 0.00% 0.00 6.90 to < 7.00 104 3.07% 30,069,648.45 4.04% 79.35 7.00 to < 7.10 256 7.54% 63,751,600.21 8.57% 75.24 7.10 to < 7.20 415 12.23% 89,611,804.98 12.05% 76.07 7.20 to < 7.30 656 19.33% 166,018,208.72 22.32% 66.77 7.30 to < 7.40 14 0.41% 3,672,215.81 0.49% 72.05 7.40 to < 7.50 56 1.65% 16,630,032.82 2.24% 68.33 7.50 to < 7.60 4 0.12% 548,348.33 0.07% 69.75 7.60 to < 7.70 6 0.18% 739,850.42 0.10% 56.79 7.70 to < 7.80 1,345 39.64% 301,433,520.04 40.53% 69.84 7.80 to < 7.90 169 4.98% 22,778,114.48 3.06% 60.30 7.90 to < 8.00 348 10.26% 43,291,991.26 5.82% 57.05 8.00 to < 8.10 1 0.03% 150,000.00 0.02% 80.00 8.10 to < 8.20 2 0.06% 544,659.97 0.07% 79.80 8.20 to < 8.30 6 0.18% 1,939,381.06 0.26% 70.96 >= 8.30 11 0.32% 2,554,581.93 0.34% 72.60 3,393 100.00% 100.00% 69.70 Interest Rate Distribution No. of Loans %a No of Loans 0 to < 5.4 0 0.00% 5.40 to < 5.50 0 5.50 to < 5.60 TOTAL Current Balance 743,733,958.48 50 5.17 Interest only No. of Loans % number of loans % of Balance Wtd Avg Curr LVR Interest Only Payment Type 1,791 52.79% 398,126,338.76 53.53% 69.75 Principal & Interest 1,602 47.21% 345,607,619.72 46.47% 69.64 TOTAL 3,393 100.00% 743,733,958.48 100.00% 69.70 No. of Loans % number of loans % of Balance Wtd Avg Curr LVR Refinance 1,860 54.82% 348,906,427.56 46.91% 66.27 Purchase 1,533 45.18% 394,827,530.92 53.09% 72.74 TOTAL 3,393 100.00% 743,733,958.48 100.00% 69.70 No. of Loans % number of loans % of Balance Wtd Avg Curr LVR 2,624 77.34% 580,654,514.56 78.07 69.00 Semi-Detached 267 7.87% 50,288,556.45 6.76 70.15 Unit 487 14.35% 109,050,620.23 14.66 73.01 Land 15 0.44% 3,740,267.24 0.50 76.01 3,393 100.00% 100.00% 69.70 5.18 Loan Purpose Loan Purpose 5.19 Current Balance Security Type Security Type Detached TOTAL Current Balance Current Balance 743,733,958.48 51 6 Credit Support 6.1 Introduction The credit enhancement in respect of the Series is intended to enhance the likelihood of full payment of principal and interest due and to decrease the likelihood that noteholders will experience losses. Unless otherwise specified, the credit enhancement for a Class of notes will not provide protection against all risks of loss and will not guarantee repayment of the entire principal balance and accrued interest. If losses occur which exceed the amount covered by any credit enhancement or which are not covered by any credit enhancement, noteholders will bear their allocated share of losses. Types of credit enhancement which apply in respect of the Series include Lender’s Mortgage Insurance Contracts, excess available income and subordination of Notes. 6.2 Lender’s Mortgage Insurance In respect of each Mortgage Loan, the Manager may arrange a Lender’s Mortgage Insurance Contract with a Mortgage Insurer. Broadly, the Lender’s Mortgage Insurance Contracts cover certain losses caused by payment defaults by Borrowers. Amounts covered include all moneys owing under the Loan and Approved Mortgage including interest (with certain limitations), enforcement expenses and certain insurance and maintenance costs. Each policy contains a number of circumstances in which the amount of a claim may be reduced or refused, including: 6.3 (a) failure to supply all information relating to the risk; (b) failure to require the Borrower to comply with the Loan or the Approved Mortgage; (c) breach by the Issuer or the Servicer of the policy; (d) the existence of prior ranking securities not notified to the Mortgage Insurer; and (e) failure to pay the premium within the specified grace period. Excess Available Income Protection may be provided to Holders against any potential losses by the allocation of the excess income. Excess income is generated to the extent the Assets of the relevant series generate more income than is required to meet the expected payments to be made in respect of the Notes of the Series for a given period. 6.4 Subordination of Notes In respect of the Class A Notes, the Class B Notes and the Class AB Notes will be subordinated and will rank behind the Class A Notes in respect of interest and principal both before and after an Event of Default. In respect of the Class AB Notes, the Class B Notes will be subordinated and will rank behind the Class AB Notes in respect of interest and principal both before and after an Event of Default. 7 Cashflow Allocation Methodology 7.1 Application of Notes The Issuer has agreed to use the issue proceeds of any Notes: 7.2 7.3 (a) first, to acquire Mortgage Loans which are represented to be Eligible Receivables and their Approved Mortgages in accordance with the Transaction Documents; (b) second, to deposit an amount equal to the Cash Deposit into the relevant account; (c) third, to deposit an amount into a segregated account with an Eligible Bank, up to a maximum of 3% of the then Aggregate Principal Outstanding of all Notes, to be applied towards meeting Redraws and Further Advances in future periods; and (d) fourth, if Section 2.4 (“Principal Characteristics of the Notes”) states that Prefunding is applicable: (i) as to the balance (“Pre-funding Amount”) depositing that amount into the Pre-funding Account; or (ii) otherwise to be included as Total Available Principal on the next Payment Date. Principal Adjustment (a) As soon as practicable after an acquisition of Loans by the Issuer, the Manager (on behalf of the Issuer) must calculate the Principal Adjustment. (b) To the extent that the Outstanding Loan Balance of the relevant Mortgage Loans is less than the aggregate Purchase Price for such Mortgage Loans, the Manager must ensure that the Seller pays the Principal Adjustment to the Issuer within 3 Business Days of the related Issue Date. Any Principal Adjustments received from the Seller, any Other Series or any other entity will be accounted for in Principal Collections. (c) To the extent that the Outstanding Loan Balance of the relevant Loans is greater than the aggregate Purchase Price for such Loans, the Issuer must pay the Seller the Principal Adjustment as soon as practicable after the related Issue Date. Any Principal Adjustment payable to the Seller, any Other Series or any other entity shall be paid from Collections in accordance with Section 7.5 (“Collection Period Distributions”). Pre-funding Account This section applies if Section 2.4 (“Principal Characteristics of the Notes”) states that Pre-funding is applicable. Withdrawals from the Pre-funding Account may be made at any time during the Pre-funding Period with the consent of the Security Trustee at the written request of the Manager. The Security Trustee has agreed to give its consent to any such withdrawal provided it receives a confirmation from each Current Rating 53 Agency that such withdrawal will not result in an Adverse Rating Effect. The Security Trustee is entitled to accept the authenticity of the Manager’s request and is not required independently to verify whether it has been properly given. The Issuer may use the Pre-funding Amount during the Pre-funding Period to fund the acquisition or Redesignation of Receivables and Related Securities as Assets of the Trust, to make Redraws and Further Advances in respect of Approved Mortgages, to make payments of Principal Adjustments and for such other purposes as approved by the Issuer and the Security Trustee. If any of the Pre-funding Amount has not been so used by the close of business on the last day of the Collection Period immediately before the first Payment Date it will be included in Total Available Principal on the Determination Date immediately preceding the first Payment Date and distributed in accordance with Section 7.11 (“Distribution of Total Available Principal”). 7.4 Collections Collections in respect of the Loans will be received by the Issuer during each Collection Period. Collections means the aggregate of all amounts received by the Issuer in respect of the Mortgage Loans and their Approved Mortgages referable to the Series and includes the Purchase Price received upon the sale or Redesignation of any Mortgage Loan, the proceeds from enforcement of Loans (and their Related Securities), the proceeds from claims under any Lender’s Mortgage Insurance Contract and the proceeds from claims for any breach of a representation, warranty, covenant or undertaking in any Transaction Document. For the avoidance of doubt, Collections includes any Principal Adjustments received by the Issuer and amounts previously retained on an Issue Date under Section 7.1(c) (“Application of Notes”) and on prior Payment Dates under Section 7.11 (“Distribution of Total Available Principal”), but does not include amounts received from any Swap Provider or Other Income (collectively, the “Collections”). 7.5 Collection Period Distributions Prior to an Event of Default and enforcement of the Charge in accordance with the Deed of Charge and the Trust Deed, the Issuer will apply Collections received during the relevant Collection Period towards payment of any of the following amounts when such funds are available from time to time for the relevant purpose: (a) subject to this deed, to fund Redraws and Further Advances on Loans and Approved Mortgages (including in accordance with the Receivables Acquisition and Servicing Agreement); (b) to the extent that there are any Lender’s Mortgage Insurance Contracts in respect of the Series, to the Mortgage Insurers of any amounts received from Borrowers during the Collection Period in relation to Timely Payment Cover previously paid by those Mortgage Insurers (including amounts in the nature of principal, interest and penalty fees or other charges); (c) to each Swap Provider, towards payment of any break costs or any early termination amount in relation to any fixed rate Loans for which the Issuer and 54 each Swap Provider had entered into transactions under a Swap Agreement, to the extent that such amounts have been received from a Borrower; and (d) towards payment of any Principal Adjustment owing by the Issuer to the Seller or any Other Series or entity in accordance with the Transaction Documents, where and on the date that such amounts become due for payment, provided that: (i) with respect to any amounts payable by the Issuer under paragraphs (a), (b) or (d) above, there are sufficient Principal Collections out of which such payments can be made at the relevant time; (ii) the Issuer must not make any payment under this clause from an amount that would constitute part of the Total Available Income for the relevant Collection Period unless the Issuer is satisfied that there will be sufficient Total Available Income on the immediately following Payment Date to make the Required Payments under Section 7.9 (“Distribution of Total Available Income”); and (iii) with respect to any amounts payable by the Issuer under paragraph (c), there are sufficient Interest Collections out of which such payment can be made at the relevant time. The aggregate of such amounts for a Collection Period are the “Collection Period Distributions”. 7.6 Liquidity Shortfall On each Determination Date, the Manager must calculate the Liquidity Shortfall, being the amount by which the Required Payments on the following Payment Date exceed the aggregate of: 7.7 (a) the Interest Collections for the preceding Collection Period; and (b) the estimated Accrual Amount for the period commencing on (but excluding) the last day of the preceding Collection Period to but excluding the following Payment Date. Principal Draw On each Determination Date, the Manager must calculate the Principal Draw, being an amount equal to the lesser of: (a) the aggregate of: (i) the estimated Accrual Amount for the period commencing on (but excluding) the last day of the preceding Collection Period, to but excluding the following Payment Date; and (ii) the Liquidity Shortfall calculated on that Determination Date; and 55 (b) the Principal Collections as calculated on that Determination Date. The Issuer will distribute any Principal Draw in accordance with Section 7.9 (“Distribution of Total Available Income”). 7.8 Cash Deposit Draw If, on any Determination Date prior to the occurrence of an Event of Default and enforcement of the Charge in accordance with the Deed of Charge and the Trust Deed, the Issuer (or the Manager on behalf of the Issuer) determines that the Liquidity Shortfall exceeds: (a) the amount of the Principal Collections for the preceding Collection Period; minus (b) the estimated Accrual Amount for the period commencing on (but excluding) the last day of the preceding Collection Period to (but excluding) the following Payment Date calculated in accordance with Section 7.6 (“Liquidity Shortfall”), then an amount of the Cash Deposit held by the Issuer will be applied on the following Payment Date to meet that shortfall (“Cash Deposit Draw”). The Issuer will distribute any Cash Deposit Draw in accordance with Section 7.9 (“Distribution of Total Available Income”). 7.9 Distribution of Total Available Income On each Payment Date prior to the occurrence of an Event of Default and enforcement of the Charge in accordance with the Deed of Charge and the Trust Deed, the Issuer will make payments from the Total Available Income calculated on the immediately preceding Determination Date in the following order of priority: (a) first, at the Manager’s discretion, up to $10 to the Residual Income Unitholder; (b) second, pari passu and rateably in payment of any fees, any expenses (and, other than in respect of the Issuer, the Manager, any Related Entity of the Issuer or the Manager (other than the Servicer), any other amounts) due to be paid or reimbursed to the following parties in respect of the Series and the Transaction Documents: (i) the Security Trustee; (ii) the Issuer; (iii) the Manager (other than any fees or amounts which the Manager has agreed will be subordinated); (iv) the Custodian; (v) the Registered Note Registrar (if applicable); 56 (vi) the Registered Note Paying Agent (if applicable); (vii) the Standby Trustee; (viii) the Standby Manager; and (ix) the Standby Servicer; (c) third, in payment of any fees of, and any enforcement expenses (other than any fees or amounts which the Servicer has agreed will be subordinated) due to be reimbursed to, the Servicer for the relevant Collection Period; (d) fourth, pari passu and rateably: (i) to pay pari passu and rateably to the Class A Noteholders, the Class A Interest Amount for the Payment Period ending on (but excluding) that Payment Date and any unpaid interest in respect of previous Payment Periods; and (ii) to pay pari passu and rateably to the Liquidity Noteholders (if any), any interest due to such Liquidity Noteholders for the Payment Period ending on (but excluding) that Payment Date and any unpaid interest in respect of previous Payment Periods; (e) fifth, to pay pari passu and rateably to the Class AB Noteholders, the Class AB Interest Amount for the Payment Period ending on (but excluding) that Payment Date, and any unpaid interest in respect of previous Payment Periods; (f) sixth, to pay pari passu and rateably to the Class B Noteholders, the Class B Interest Amount for the Payment Period ending on (but excluding) that Payment Date and any unpaid interest in respect of previous Payment Periods; (g) seventh, in reimbursement of any Principal Draw made on any preceding Payment Date and which remains outstanding; (h) eighth, pari passu and rateably in the reimbursement of any Cash Deposit Draw made on any preceding Payment Date and which remains outstanding; (i) ninth, pari passu and rateably in payment of any fees, any expenses and any other amounts (other than any fees or amounts which the Manager or the Servicer has agreed will be subordinated) due to be paid or reimbursed to the following parties in respect of the Series and the Transaction Documents to the extent not covered in paragraph (b): (i) the Issuer; (ii) the Manager; or (iii) any Related Entity of the Issuer or the Manager (other than the Servicer); 57 (j) tenth, an amount equal to the aggregate of the Liquidation Losses for the immediately preceding Collection Period will be applied to Total Available Principal in accordance with Section 7.10(b) (“Total Available Principal”); (k) eleventh, an amount equal to any Carryover Charge Off from the preceding Payment Date (less any Other Series Receipts) will be applied to Total Available Principal in accordance with Section 7.10(c) (“Total Available Principal”); (l) twelfth, the Tax Shortfall (if any) for the Payment Period; (m) thirteenth, the Tax Amount (if any) for the Payment Period; (n) fourteenth, pari passu and rateably, to each Swap Provider any early termination amount payable by the Issuer in respect of any Swap Agreement (to the extent not paid from Collection Period Distributions); (o) fifteenth, pari passu and rateably, provided the NIM Confirmation Date has occurred, to be deposited in the applicable Other Series RMS Accounts, an amount equal to any Other Series Carryover Charge Off from the preceding Payment Periods; (p) sixteenth, towards paying any subordinated fees owing to the RAMS Home Loans Pty Limited (or any other related entity of RAMS Home Loans Pty Limited); and (q) seventeenth, the balance (if any) to the Residual Income Unitholder pursuant to the terms of the Trust Deed. (The sum of paragraphs (a) to (f) is the “Required Payments” for that Payment Period). The Issuer will only make a payment under any of paragraphs (b) to (q) (inclusive) to the extent to which any amounts available for distribution under this Section 7.9 (“Distribution of Total Available Income”) remain from which to make the payment after all amounts with priority to that payment have been paid in full. 7.10 Total Available Principal The “Total Available Principal” for a Collection Period is the aggregate of the following (each as calculated on the relevant Determination Date): (a) the Principal Collections on that Determination Date; plus (b) any amount applied to the restoration of Liquidation Losses for that Collection Period in accordance with Section 7.9(j) (“Distribution of Total Available Income”); plus (c) any amount applied to the restoration of any Class A Note Carryover Charge Offs, Class AB Note Carryover Charge Offs or Class B Note Carryover Charge Off for that Collection Period in accordance with Section 7.9(k) (“Distribution of Total Available Income”); plus 58 7.11 (d) any excess amounts released from the Cash Deposit, plus, in the case of the last Determination Date, the balance of the Cash Deposit; plus (e) a proportion, as determined by the Manager, of amounts previously retained on the Issue Date under Section 7.1(c) (“Application of Notes”) and on prior Payment Dates under Section 7.11(b) (“Distribution of Total Available Principal”); plus (f) for the Collection Period immediately before the first Payment Date only, any Pre-funding Amount then standing to the credit of the Pre-funding Account; plus (g) any amount deposited into the RMS Account as a result of an Other Series Receipt; minus (h) the amount calculated as the Principal Draw on that Determination Date in accordance with Section 7.7 (“Principal Draw”); plus (i) any amount of Total Available Income to be applied to reimburse any outstanding Principal Draws on the immediately following Payment Date in accordance with Section 7.9(g) (“Distribution of Total Available Income”). Distribution of Total Available Principal On each Payment Date prior to the occurrence of an Event of Default and enforcement of the Charge in accordance with the Deed of Charge and the Trust Deed, the Issuer will make payments from the Total Available Principal in the following order of priority: (a) first, towards payment pari passu and rateably to the Liquidity Noteholders of the Principal Outstanding of the Liquidity Notes, until the then Principal Outstanding of the Liquidity Notes is reduced to zero; (b) secondly, to retain as Principal Collections in the RMS Account, such amount as may be required for any anticipated Redraws or Further Advances (including in accordance with clause 3.9 (“Future Receivables”) the Receivables Acquisition and Servicing Agreement) in future periods (such amount not to exceed 3% of the then Aggregate Class A Note Principal Outstanding); (c) third, pari passu and rateably to the Class A Noteholders (if any), until the Aggregate Principal Outstanding of all Class A Notes has been reduced to zero; (d) fourth, pari passu and rateably to the Class AB Noteholders (if any), until the Aggregate Principal Outstanding of all Class AB Notes has been reduced to zero; and (e) fifth, pari passu and rateably to the Class B Noteholders (if any), until the Aggregate Principal Outstanding of all Class B Notes has been reduced to zero. The Issuer will only make a payment under any of paragraphs (a) to (e) (inclusive) to the extent to which Total Available Principal remains from which to make the payment after all amounts with priority to that payment have been paid in full. 59 7.12 Charge Offs On any Payment Date, if the amount available to be applied in accordance with Section 7.9(j) (“Distribution of Total Available Income”) is less than the amount of the aggregate Liquidation Losses for the immediately preceding Collection Period, the difference is the “Charge Off” for that Payment Date. The Manager must, on that Payment Date, apply the Charge Offs to: (a) pari passu and rateably reduce the Class B Note Stated Amount (if any) of each Class B Note by the amount of the Charge Off until the Class B Note Stated Amount of each Class B Note is reduced to zero (such amount being a “Class B Note Charge Off”); (b) upon the Aggregate Class B Note Stated Amount being reduced to zero as a result of the application of this clause, pari passu and rateably reduce the Class AB Note Stated Amount (if any) of each Class AB Note with respect to the balance of any remaining Charge Off until the Class AB Note Stated Amount of each Class AB Note is reduced to zero (such amount being a “Class AB Note Charge Off”); and (c) upon the Aggregate Class B Note Stated Amount and the Class AB Note Stated Amount being reduced to zero as a result of the application of this clause, reduce pari passu and rateably as between the Class A Notes and the Liquidity Notes with respect to the balance of any remaining Charge Off: (i) pari passu and rateably as between the Class A Notes, the Class A Note Stated Amount of each Class A Note until the Class A Note Stated Amount of each Class A Note is reduced to zero (such amount being a “Class A Note Charge Off”); and (ii) pari passu and rateably as between the Liquidity Notes, the Liquidity Note Stated Amount of each Liquidity Note until the Liquidity Note Stated Amount of each Liquidity Note is reduced to zero (such amount being a “Liquidity Charge Off”). The Issuer agrees to notify each Currency Rating Agency at any time there is a Charge Off. 7.13 Reimbursement of Carryover Charge Off To the extent that, on any Payment Date, an amount is available for allocation under Section 7.9(k) (“Distribution of Total Available Income”) plus any Other Series Receipts that amount must be applied on that Payment Date to reinstate respectively: (a) first, pari passu and rateably: (i) the Aggregate Class A Note Stated Amount until the Aggregate Class A Note Stated Amount has been increased to the Aggregate Class A Note Principal Outstanding; and 60 (ii) 7.14 the Aggregate Liquidity Stated Amount until the Aggregate Liquidity Stated Amount has been increased to the Aggregate Liquidity Principal Outstanding; and (b) second, pari passu and rateably the Aggregate Class AB Stated Amount until the Aggregate Class AB Note Stated Amount has been increased to the Aggregate Class AB Note Principal Outstanding; and (c) third, pari passu and rateably the Aggregate Class B Stated Amount until the Aggregate Class B Note Stated Amount has been increased to the Aggregate Class B Note Principal Outstanding. Application of proceeds following an Event of Default Following the occurrence of an Event of Default and enforcement of the Charge in accordance with the Deed of Charge and the Trust Deed, the Security Trustee must apply all moneys received by it in respect of the Secured Property (including the balances of the Cash Deposit and the Pre-funding Account (if any)) in the following order: (a) first, to each holder of a Security Interest of which the Security Trustee is aware and which has priority over the Charge in relation to the Assets of the Series; (b) second, to pay rateably any remuneration, fees and any liabilities, losses, costs, claims, expenses, actions, damages, demands, charges, stamp duties and other taxes due to the Security Trustee and to pay any other outgoings and liabilities that the Security Trustee has incurred in acting under the Transaction Documents; (c) third, to pay rateably any remuneration, fees and any liabilities, losses, costs, claims, expenses, actions, damages, demands, charges, stamp duties and other taxes due to: (i) the Manager (other than any fees or amounts which the Manager has agreed will be subordinated); (ii) the Issuer; (iii) the Custodian; (iv) the Standby Trustee; (v) the Standby Manager; (vi) the Registered Note Registrar (if applicable); (vii) the Registered Note Paying Agent (if applicable); (viii) the Servicer (other than any fees or amounts which the Servicer has agreed will be subordinated); (ix) the Standby Servicer; and 61 (x) (d) the Receiver; fourth, to pay rateably other outgoings and liabilities that: (i) the Manager (other than any amounts which the Manager has agreed will be subordinated); (ii) the Issuer; (iii) the Custodian; (iv) the Registered Note Paying Agent (if applicable); (v) the Registered Note Registrar (if applicable); (vi) the Servicer (other than any amounts which the Servicer has agreed will be subordinated); (vii) the Standby Trustee; (viii) the Standby Manager; (ix) the Standby Servicer; and (x) the Receiver, have incurred in acting under the Transaction Documents; (e) fifth, pari passu and rateably in payment of all amounts due and payable by the Issuer: (i) in respect of each Liquidity Note; (ii) in respect of each Class A Note; (iii) to any Swap Provider in respect of any Swap (including, without limitation, any termination payments thereunder); (f) sixth, pari passu and rateably in payment of all amounts due and payable by RMS in respect of the Class AB Notes; (g) seventh, pari passu and rateably in payment of all amounts due and payable by the Issuer in respect of each Class B Note; (h) eighth, provided the NIM Confirmation Date has occurred, to the RMS Accounts of any Other Series, towards any Other Series Carryover Charge Off; (i) ninth, towards paying any subordinated fees owing to the RAMS Home Loans Pty Limited (or any other related entity of RAMS Home Loans Pty Limited); and 62 (j) 7.15 tenth, to pay any surplus to the Issuer to be distributed in accordance with the terms of the Trust Deed and this deed. Net Swap Settlement Provided that the Manager is satisfied that the Issuer will have sufficient funds to make any Required Payments on that Payment Date, on each Payment Date, the Issuer (at the direction of the Manager) and the relevant Swap Provider must make a net settlement of any amounts owing with respect to any outstanding Derivative Contract (including, without limitation, with respect to each relevant Swap Agreement) (each a “Net Swap Settlement”). The Net Swap Settlement will be taken into account in accordance with the definition of Interest Collections. 7.16 Claims on Timely Payment Cover If the Manager determines on a Determination Date that the Shortfall Adjustment for the immediately following Payment Date is positive, then the Manager has agreed to as soon as practicable make the appropriate claims on any Timely Payment Cover (if any) such that the aggregate amount of the claims to be made are equal to, or exceed, the amount of the Shortfall Adjustment. 63 8 RAMS Residential Loan Program 8.1 Loan Portfolio The primary purpose of the Trust is to fund the acquisition by the Issuer of Mortgage Loans from the Seller pursuant to the Receivables Acquisition and Servicing Agreement. The Seller will equitably assign to the Issuer the loans and mortgages purchased by the Issuer, any additional collateral security, the Seller’s rights under any Insurance Policies. After the equitable assignment, the Issuer will be entitled to receive collections on the purchased loans. Each Mortgage Loan acquired by the Issuer is an Australian residential mortgage and is secured against the property with full recourse to the Borrower. In addition, the Mortgage Loans are for a maximum term of 30 years and 1 month and are predominantly subject to discretionary, variable interest rates. In respect of the Series, the Mortgage Loans acquired by the Issuer is covered by a Lender’s Mortgage Insurance Contract. Each Lender’s Mortgage Insurance Contract provides insurance in respect of any principal loss or interest loss on a loan and the related mortgage, and a certain period of timely payment cover (which insures the timely payment of the interest component of scheduled mortgage payments by a borrower). 8.2 Title to the loans and mortgages The Issuer will initially hold only equitable title to the Mortgage Loans and Approved Mortgages as the Borrowers will not be notified of the equitable assignment of the Mortgage Loans and Approved Mortgages to the Issuer and the assignment will not be in writing. This is different to holding legal title which would require that the Issuer not only have possession of the mortgage title documents, but also that notices of the assignment of the Mortgage Loans and Approved Mortgages to the Issuer be filed with the land titles offices in the appropriate Australian jurisdictions and that notice of such assignment be given to the Borrowers. The Issuer will take certain steps to protect its interest in, and title to, the Mortgage Loans and Approved Mortgages if and only if a Title Perfection Event (as described below) occurs and at that time will notify the Borrowers of the assignment. Because the Issuer does not hold legal title to the Mortgage Loans and Approved Mortgages, each Holder of the Notes will be subject to the following risks which may lead to a failure to receive collections on the Mortgage Loans and Approved Mortgages and consequently lead a Holder to suffer losses: (a) the Issuer’s interest in the Mortgage Loans and Approved Mortgages may be impaired by the existence of a prior higher or equal ranking security interest over the related mortgaged property or a higher or equal ranking security interest created by or through the Seller as legal holder of the Mortgage Loans and Approved Mortgages after the equitable assignment of the Mortgage Loans and Approved Mortgages to the Issuer, but prior to the Issuer acquiring legal title in the Mortgage Loans and Approved Mortgages; (b) until a Borrower has notice of the assignment of its Mortgage Loans and Approved Mortgages to the Issuer, that Borrower is not required to make payments under its loan to anyone other than the Seller or the Servicer (as 64 defined below) and any such payments made to the Seller or the Servicer will discharge the Borrower’s payment obligations in relation to these amounts. If the Servicer does not deliver Collections to the Issuer, for whatever reason, neither the Issuer nor the applicable Holders will have any recourse against the related Borrowers for such Collections; and (c) 8.3 the Issuer may not be able to initiate any legal proceedings against a Borrower to enforce the Mortgage Loans and Approved Mortgages without the involvement of the Seller. Title Perfection Event A Title Perfection Event is the occurrence of one of the following events: 8.4 (a) the occurrence of an Insolvency Event in respect of the Seller; or (b) the Seller or the Servicer fails to pay collections within 3 Business Days of the due date for payment (except where the Current Rating Agencies agree that the event is not a “Title Perfection Event”). Governing law Each loan and mortgage is subject to the law of the relevant state or territory of Australia in which the relevant mortgaged property is located. 8.5 Origination And Servicing Procedures General RAMS Home Loans Pty Limited (“RHL”) was incorporated on September 16, 1991. RHL originally commenced operations acting as a third party funder, sourcing its loans through a network of up to 20 originators. In 1994, RHL established its own origination business and since that time has acted as manager and originator, to all RAMS programmes. In the same year, RHL established its corporate funding vehicle, RAMS Mortgage Corporation Limited (“RMC”). RMC was incorporated on August 8, 1994, and executed its inaugural securitisation issue in that year. In November 2002, RHL established another funding vehicle, RAMS Mortgage Securities Pty Limited, which acts as the trustee of separate trusts established from time to time. RHL commenced two major outsourcing projects in 2002: (a) Effective 1 November 2002, RHL delegated a limited number of its origination functions, and all of its (also delegated) servicing functions to UCS Credit Services Pty Limited (ABN 62 093 494 369) (“UCS”), a wholly owned subsidiary of Unisys Corporation; and 65 (b) RHL commenced refinement of its origination model. In addition to outsourcing limited origination functions to UCS, RHL has introduced brokers to its panel, and has also established franchising operations with a number of parties. RHL uses only major Australian brokers. In March 2005, RHL reviewed its outsourcing arrangements. As a consequence of this review, RHL re-insourced the origination functions previously delegated to UCS, for new loan applications. RHL has limited the delegation of origination functions to UCS, to performing origination functions for Further Advances.” RHL is privately held, being 100% owned by Tryden Investments Pty Limited. Tryden Investments Pty Limited is in turn 95.8% owned by J. A. Kinghorn & Co Pty Ltd. Origination Procedures The Mortgage Loans and Approved Mortgages forming part of the Assets of the Series which were originated for the Seller have been or will be originated in accordance with the procedures described below. UCS/Originator The originator of record is RHL. Under the Master Mortgage Origination Deed, the Originator has the power to delegate certain of its origination functions to a third party. As part of the Outsourcing Agreement, RHL has also delegated a limited number of its origination functions to UCS. Under the delegation, RHL will continue to perform the majority of origination functions, but has engaged UCS to assist in performing the following functions: • for Further Advances, assessing borrowers’ requests in accordance with the RAMS credit policies and procedures, including forwarding the borrower’s applications to the mortgage insurers on behalf of RHL; • arranging the advances at settlement and for Further Advances; • coordinating the loan and mortgage documentation by the panel solicitors and settlement agents; and • forwarding all security packets containing the title documents to the Custodian. Brokers The Originator has approximately 5000 accredited brokers who can sell the RAMS product. These brokers generally operate as independent brokers under a major aggregator who are responsible for ensuring ongoing regulatory compliance and industry training. There are currently approximately 100 aggregator groups with whom the Originator has a direct relationship. The brokers and aggregators have no authority to approve Loans on behalf of the Originator and the Seller. Rather they are required to submit applications to the Originator for assessment in accordance with the RAMS credit policies. 66 The Originator employs approximately 25 sales account managers that train and accredit new and existing brokers and aggregators on the RAMS product. Franchisees The Originator has established a distribution network of sales offices under which the Originator has appointed licensed distributors (under franchise arrangements) to identify potential borrowers. The licensed distributors will perform certain aspects of the origination process as agent for the Originator. The licensed distributors are not employed by the Originator but are engaged by the Originator to provide loan applications from new and existing borrowers to the Originator. The licensed distributors are required to originate loans in accordance with the RAMS credit policies and procedures and do not currently have authority to approve Loans on behalf of the Originator and the Seller. It is anticipated that the distributors will have a limited ability to approve certain online applications in the future within certain limited guidelines. Initially 52 franchises were offered across Australia. This has been expanded with the addition of 6 additional franchises available. Currently there are 47 distribution agreements in place with a further 6 expected to be awarded by the end of 2006. General Each broker or franchisee appointed by RHL is obligated to observe the same standards for their delegated functions as RHL would be under the Master Mortgage Origination Deed and each of them must ensure that all loans and mortgages originated satisfy the then mortgage parameters. Each broker or franchisee is required to hold a professional indemnity insurance policy providing cover of at least A$5 million (in the case of franchisees) or A$1 million (in the case of brokers) in aggregate (or such other amounts as may be agreed with RHL from time to time). 8.6 Credit Policy And Procedures Each application for a loan is processed in accordance with the RAMS credit policy and procedures manual and in compliance with the Australian consumer and credit legislation. The RAMS credit policy and procedures manual contains the origination and underwriting guidelines that must be followed in the origination of loans under the Master Mortgage Origination Deed and is approved by the board of directors of the Seller, each Current Rating Agency and the Mortgage Insurers. Subject to the provisions of the Master Mortgage Origination Deed, each loan application is assessed and approved or rejected by UCS or RHL in accordance with the RAMS credit policy and procedures manual. A loan application must be rejected: (a) if directed to do so by the Seller; (b) where the loan is to be entered into with funds provided under a warehouse facility, if the relevant warehouse lender has notified the Seller that funds are not 67 available for investment and the Issuer or the relevant warehouse lender has so notified the Originator; (c) if the proposed loan does not comply with the provisions of the Master Mortgage Origination Deed, the relevant procedures manual or the Lender’s Mortgage Insurance Contract that will apply in relation to the loan or the Trust Deed; (d) if the proposed loan (either itself or with others) does not satisfy the requirements of the Current Rating Agencies at that time; (e) if investment in the proposed loan is not consistent with the relevant mortgage parameters (if any) at that time for the relevant debt instruments; or (f) if the Mortgage Insurer does not approve the proposed loan. (g) The principal features of the RAMS credit policy and procedures manual are as follows: (i) Security All loans must be secured by a first registered mortgage over real property which is zoned or used for residential purposes. The title of the property may be either freehold (i.e. owned by the borrower) or crown leasehold (land which is the subject of a lease from the government of the relevant state or territory), provided that the period of the crown lease exceeds the term of the loan by at least 10 years. (ii) Location The majority of properties are properties located in or near metropolitan areas where the population is greater than 4,000. Rural residential properties will be considered as security if they are near capital or regional cities. Any income produced from rural residential properties will not be considered when approving the loan. (iii) Types of Security All loans and mortgages must be secured by a mortgage over one of the following interests in land: (A) “Torrens Title”: this is freehold title, where interests are created by registration in a register maintained by the land titles office of the relevant state or territory. A certificate of title will generally be issued to the proprietor of the land. Entry in the register of a mortgage creates (except in the case of fraud) an indefeasible interest in the land; (B) “Strata Title”: this is a system of title (under Torrens Title) under which land is divided into a number of units. The proprietor has title to a unit of that land and may deal with that 68 unit without restriction. An owners corporation, to which all proprietors are members, will monitor the rules relating to the relevant land; (iv) (C) “Old System”: this is freehold title where interests are created through title deeds which provide evidence of a series of instruments (generally a deed of conveyance) and events (for example, under a will) going back many years. The proprietor of the land establishes ownership by evidence of those instruments and events; (D) “Company Title”: this is an exclusive right conferred by a home unit company to a shareholder to occupy a particular part of a building which the company owns. The shareholder has a contractual right against the home unit company but does not acquire ownership of that part of the building which he or she occupies pursuant to the ownership of the shares; (E) “Crown Lease”: this is any right, power or privilege over, or in connection with land, granted by the Commonwealth, a State or a Territory or an authority of the Commonwealth, a State or a Territory. The lease is granted under statutory law of the Commonwealth, State or Territory for a certain purpose; (F) “Community Title”: Torrens Title, and in certain cases, Crown Leases, can be subdivided under relevant legislation in certain jurisdictions in Australia. The community scheme subdivision is referred to as Community Title but is not an additional form of title. Loan to Value Ratios The following are the guideline ranges for the loan to value ratios (“LVR”) for different loan amounts: Loan Size Range Metropolitan (A$) Loan Size Range Regional (A$) Loan Size Range Other (A$) Up to $650,000 Up to $350,000 Up to $200,000 95% $650,001 - $750,000 $350,001 - $500,000 $200,001 - $250,000 90% $750,001 $1,000,000 $500,001 - $600,000 $250,001 - $300,000 85% $1,000,001 $1,500,000 N/A Above $1,500,000 Above $600,000 N/A Above $300,000 Maximum LVR 80% in consultation with the relevant Mortgage Insurer The above LVR guidelines are reviewed periodically by RAMS in conjunction with the mortgage insurers. 69 (v) Borrower’s Servicing Ability The acceptable level of debt servicing ratio of income to commitments will depend on the borrower’s income level and the amount of net surplus income after payment of all debt and living expense allowance. Serviceability equals income less tax less living allowance divided by total commitments. A ratio of at least 1 to 1 is required. Borrowers are required to have a positive annual cash surplus after deducting all expenses and commitments from annual income. Any deviation for policy requires approval of the relevant mortgage insurer. The ability of the Borrower to service their commitments under a Loan is tested by assuming an interest rate which is 1% higher than the then current interest rate on the Better Offset Home Loan. (vi) Verification of Income and Particulars A credit reference report from Baycorp Advantage (formerly known as Credit Advantage) must be obtained in respect of each potential borrower and/or guarantor before a loan is approved. Baycorp Advantage is an Australian corporation that provides a credit checking facility to major financial institutions and authorized credit providers in Australia and New Zealand that outlines the borrower’s previous inquiries for credit and any historical loan defaults that have occurred involving the borrower in Australia and New Zealand. Proof of income, such as group certificates, a year to date pay slip, the applicant borrower’s most recent tax return or a letter from an employer or accountant is also obtained from the potential borrower before approval of a loan. If the borrower is applying for a Self Certified Loan (as described below under the heading “Product Types”), then the Originator relies on the borrower’s certification of income in the loan application or a letter from an accountant, and no further verification is required. Additionally, a separate statement by the borrower that repayment of the loan will not cause financial hardship is required. However, for Low Doc No Stated Income Loans, a borrower’s income is not required to be stated or verified. (vii) Valuation Except as described below, all properties are valued before a loan is approved. All valuers are required to be members of the Australian Institute of Valuers and Land Economists (“AIVLE”). AIVLE prescribes standards and ethics for its members. In addition, all valuers are required to maintain professional indemnity insurance coverage for at least A$1,000,000. Each valuation is reviewed to investigate matters that may affect the resale value of the property in the future. For all loans 70 processed, the valuation is reviewed for its completeness and compliance with RAMS procedures manuals. It has been agreed with the mortgage insurers that they will underwrite mortgages without requiring a valuation in certain specific circumstances. The criteria for not requiring a valuation includes, but is not limited to, arm’s length purchases with maximum limits as per the table below Location Metropolitan / Category 1 New South Wales, Victoria, Queensland and Western Australia LVR 85% 80% Maximum Loan Amount (A$) $400,000 $500,000 Australian Capital Territory, Northern Territory, South Australia 85% 80% $300,000 $400,000 Tasmania Regional / Category 2 New South Wales, Victoria, Queensland, Australian Capital Territory, Northern Territory, South Australia, Western Australia National/Other – Category 3 Not in LMI Postcodes for Metro/Regional 85% $250,000 85% $300,000 Valuation required The purchase must be through a licensed real estate agent and a contract price agreed in writing no later than 45 days after the loan was approved. All construction loans, loans secured by vacant land, company loans and house and land packages require a valuation. Self Certified Loans are not eligible for valuation waiver and a full valuation is required without exception in respect of all Self Certified Loans. In all cases, the value of a property is determined as the lesser of the valuation and the purchase price of the relevant property, or where no valuation is required, with sole reference to the purchase price of the property. 8.7 Settlement (a) Advances 71 A loan is settled by a firm of solicitors engaged to act for the Seller in the documentation and settlement of a loan (“Panel Solicitor”). In each case, the principal amount of a loan is advanced against delivery of a solicitor’s certificate from the Panel Solicitor which certifies due execution of all documentation in relation to the loan and that the mortgage will be a registered first mortgage in favour of the Seller to secure repayment of the loan. (b) Panel Solicitors and Settlement Agents The loan and mortgage documents are prepared by the Panel Solicitor using standard documentation. The Panel Solicitor checks the execution of the loan and mortgage documentation and attends to stamping, and registration of the mortgage against the title to the property and the delivery of title documents to the Custodian. Under the terms of the Master Mortgage Origination Deed, the Panel Solicitors are required to be sufficiently qualified and maintain professional indemnity insurance coverage of at least A$4,000,000 and fidelity or similar insurance cover of at least A$1,000,000 either in their own right or through a professional association. 8.8 Servicing Procedures (a) RSPL Under the Transaction Documents, Receivables Servicing Pty Limited is appointed as the initial servicer of the Mortgage Loans. The Servicer is obligated to perform its functions in accordance with the RAMS receivables servicing manual and relevant legislation. (i) Delegation of servicing In accordance with the Master Servicer Deed, RSPL has the power to delegate some or all of its duties as Servicer to a third party and has in fact delegated all of its servicing functions to RHL by two deeds dated 19 April 2002 and 3 October 2002. In turn, under an agreement dated 4 October 2002 (“Outsourcing Agreement”), RHL has delegated all its duties as “sub-servicer” to UCS. The Outsourcing Agreement is for seven years. The contract is renewable thereafter upon negotiation between the parties. It should be noted that, under the terms of the Master Servicer Deed, RSPL, as Servicer, remains liable for servicing the Loan Portfolio and the acts and omissions of any delegate, including UCS. The Outsourcing Agreement effectively commenced on 1 November 2002, on which date all key RHL and RSPL employees became 72 permanent UCS employees, and continued to perform their previous roles under their new employer. UCS operates from Unisys’ Australian head office in Rhodes, Sydney. During the terms of the Outsourcing Agreement, RSPL and RHL are obligated to supervise the delegation of all servicing functions in relation to the Loan Portfolio, including responding to customer inquiries, arrears management (including collection and enforcement), loan security substitutions and the provision of redraws and further advances in accordance with RAMS credit policies and procedures. The Outsourcing Agreement obligates UCS to: • report in accordance with RAMS policy and procedure to RSPL to enable it to perform its servicing obligations to the Issuer; • maintain a professional indemnity insurance policy providing coverage of not less than A$40,000,000 in aggregate (or such other amounts as may be agreed with the Manager from time to time), and which policy provides an endorsement for the Manager; • provide authorised representatives of the security trustee or RSPL with immediate access to their premises and documents in the event of a critical failure of a service, including provision of access codes and security passes on a regular basis; • provide assistance to RSPL in the event of termination or at the end of the agreement including provision of key employees to perform the delegated servicing functions after termination; • maintain an appropriate servicer ranking from S&P. An “Above Average” ranking was awarded by S&P in March 2004 and confirmed in July 2005; and • administer the loans in accordance with: o the Master Servicer Deed; o the Issuer’s and Manager’s policies, RAMS policy and procedure and any other procedure manuals as specified by the Servicer or Manager from time to time and which may change from time to time as a result of business changes or legislative and regulatory changes; and o the equivalent degree of diligence and care expected of an appropriately qualified servicer of a similar Loan Portfolio. 73 8.9 Collection And Enforcement Procedures The RAMS credit control and realisation procedures manual contains the actions which are required to be taken if a borrower is in arrears or in default under his or her loan (including the required steps to be taken to enforce repayment of the loan under the laws of each state and territory of Australia) as is approved by the board of directors of the Seller and each Current Rating Agency and the Mortgage Insurers. In summary, the general procedure followed in relation to arrears, defaults and enforcement at the date of this Information Memorandum are: (a) Arrears up to 30 days Each week, an arrears report is run and any Borrowers who are in arrears are identified. If the Borrower has not rectified the arrears within 14 days, then a letter is sent to the Borrower informing it that it is in arrears and asking it to cure the arrears. Collection contact may be made depending on the loan amount and loan type. (b) Arrears between 30 and 90 days If the Mortgage Loan continues to be in arrears past 30 days, the collections officer will maintain regular contact with the borrower and a claim may be made to the relevant Mortgage Insurer under the timely payment cover provisions of the relevant Lender’s Mortgage Insurance Contract. Once the loan is 60 days in arrears, a notice of demand is issued to the Borrower and regular reports are made to the relevant Mortgage Insurer. After a further week, statutory notices for enforcing the relevant Mortgage Loan and Approved Mortgage are issued. (c) Arrears over 90 days If a loan is 90 days in arrears, the relevant Mortgage Insurer is advised, judgment against the borrower is sought and obtained, vacant possession of the relevant property is sought and, if obtained, the property is valued and sold by auction. The claim is then made to the relevant Mortgage Insurer for any shortfall from the sale proceeds. The risk of protracted enforcement proceedings and the sale price being depressed by forced sale is generally avoided by encouraging the borrower to sell the property privately and prepay the loan from the sale proceeds. For self certification of income loans (“Self Certified Loans”) RAMS credit have implemented a stricter approach to the collection and enforcement procedures. For example, earlier collection contact depending on loan amounts, demand notices after 37 days and statutory notices are typically sent to customers from day 40. 74 These procedures are a guide only, as different approaches may be taken depending on the customers attitude, loan LTV and other issues. 8.10 Features Of The Loans (a) Product Types The Seller’s loan products have a wide variety of payment characteristics and the Seller may from time to time offer new products which have not been described in this Information Memorandum and may form part of the Series Assets provided that they comply with the RAMS credit policy and procedures manual and are approved by the Seller, each Current Rating Agency and the Mortgage Insurers. Listed below are the product types which may comprise the Mortgage Loan and Approved Mortgage (correct as at the date of this Information Memorandum): (i) Better Offset Home Loan A mortgage that allows borrowers to make a direct deposit of salary or other income into the mortgage account and has a 100% offset against the mortgage balance. (ii) SmartWay SmartWay is a comprehensive mortgage product that allows customers to access money via debit card with automatic teller machine, eftpos (electronic banking facilities available at major retailers) and giropost (postal banking facilities) access and a cheque book. (iii) Basic A loan with a lower rate which does not provide certain features as standard but which may be accessed by payment of fees as required. (iv) Self Certified Loans This product type is primarily targeted at self-employed applicants. As part of this product type income verification processes as applied to other loan types are not required. Individual applicants who are not self employed or salary or wage earning applicants (or both) may be considered for this product where there is at least one other applicant for that loan who is self-employed or where the LVR is less than or equal to 70%. Although income verification is not undertaken in respect of the application process for Self Certified Loans, a borrower is required to submit to the Seller: 75 (A) (B) a signed mortgage loan application, with a signed statement “borrower self certification - income and affordability” attached to the loan application confirming that the borrower: • can meet the repayments in accordance with the terms of the loan and will not suffer any hardships in doing so; • understands that the Seller has advised the borrower that they should seek independent legal and financial advice on the transaction; and • understand that the Seller is relying on the information in the statement to make an offer of finance; or a letter from the applicant’s regular accountant outlining (each) applicant’s income details and servicing capacity, that the applicant’s income is on a yearly basis and that the applicant can repay the loan without hardship. A full valuation by the Seller’s approved registered valuer is required in all cases. The maximum loan amount will be calculated assuming the lesser of the purchase price or the full valuation. Loan amounts are governed by postcode location and security type as per the below table: Location MAX LVR Maximum Loan Amount (A$) Income stated by Borrower Min Loan amount A$50,000. Max Loan: A$1,000,000 Metropolitan / Category 1 New South Wales, Victoria, 80% $1,000,000 Queensland, Australian Capital Territory, South Australia & Western Australia (Sydney, Melbourne, Brisbane, Canberra, Adelaide & Western Australia) Vacant Land 80% $550,000 New South Wales Vacant Land 80% $500,000 Victoria, Queensland, South Australia, Western Australia & Australian Capital Territory Northern Territory & Tasmania 80% $750,000 Vacant Land 80% $350,000 Northern Territory & Tasmania Regional / Category 2 New South Wales, Victoria, 80% $600,000 Queensland, Australian Capital Territory, South Australia& Western 76 Australia Vacant Land Larger Country Towns / Category 3 80% 80% $300,000 $500,000 The Seller also offers a “Low Doc No Stated Income” loan. This loan does not require financial information or confirmed employment details. The client must also sign the “borrower self-certification - income and affordability” attached to the loan application as described above. These loans have a maximum LVR of less than or equal to 80% and a maximum loan size as per the table below. Location MAX LVR Maximum Loan Amount (A$) No Income stated by Borrower Min Loan amount A$50,000. Max Loan: A$1,000,000 New South Wales, Victoria, 70% $1,000,000 Queensland, Australian Capital 80% $800,000 Territory South Australia & Western Australia 80% $600,000 Vacant Land New South Wales, Victoria, Queensland, Australian Capital Territory, South Australia & Western Australia Vacant Land South Australia, Western Australia, Northern Territory & Tasmania Northern Territory & Tasmania Regional / Category 2 Vacant Land Larger Country Towns / Category 3 70% $500,000 70% $400,000 70% 70% 70% 70% $750,000 $600,000 $400,000 $500,000 Lender’s Mortgage Insurance covers all Self Certified Loans. In addition to the features described above, during the term of any loan, the Originator may change any of the features of such loan from time to time at the request of the borrower. No such change will be made if it results in or is likely to result in a reduction, removal or qualification of the ratings of the Notes or without the approval of the relevant mortgage insurer. (v) Line of Credit This loan has identical features to the SmartWay loan with the exception that the interest only period can be up to 10 years with continual access to the available balance of the approved loan amount. 77 Repayments may not be required if the balance outstanding is less than the scheduled amortization limit. (vi) Easy Start A loan with a lower variable rate for the first 3 years reverting to the RAMS standard variable rate in year 4. (vii) Investor A loan geared towards investors with a lower rate and limited features. Interest only initially for 5 years but can be extended up to a maximum of 10 years. (b) Interest Rate / Fixed Rate Loans The interest rate charged on the loans may be fixed rate, variable rate or a combination of fixed rate and variable rate. A Borrower can elect to fix the interest rate of all or part of a loan for a period up to 5 years at any time during the term of the loan. During a fixed rate period, redraw facilities are suspended and a Borrower ceases to have the ability to prepay amounts additional to the regular repayments in accordance with the Interest Rate Swap under the relevant loan or to vary their regular repayment amount. However, a Borrower may prepay a Mortgage Loan and Approved Mortgage in full during a fixed rate period provided that the Borrower pays any break costs under the associated derivative contract entered into by the Issuer. (c) Interest Only Loans The Seller offers Borrowers the ability to have an interest only loan for an aggregate maximum period of 5 years during the term of the loan for all products except the Line of Credit and Investor that allows 10 years interest only. At the conclusion of the interest only period, the Borrower is obliged to pay interest and make repayments of principal to ensure the loan is fully repaid by the date not later than 30 years and 1 month from the date of the initial advance. (d) Repayments Borrowers may elect to make weekly, fortnightly or monthly repayments on any day. Repayments may be either interest only for a maximum aggregate term of 5 years for all products except the Line of Credit and Investor that allows 10 years interest only, or principal and interest sufficient to repay the loan in full over the remaining term to maturity at the interest rate applying to the loan at the time. If interest rates increase, repayments will be increased to the amount necessary to repay the loan in full over the balance of the loan term at the increased interest rate. If a Borrower has elected to pay increased repayments, and they are greater than their new minimum required repayment, the Borrower’s repayment amount will remain the same. 78 If interest rates decrease, the repayment amount will be recalculated to reflect the then current interest rate. The Borrower is entitled, but is not obliged, to reduce its repayment amount to reflect the recalculation. (e) Redraw Facility At any time (other than during a fixed rate period) if a Borrower has made accelerated or increased repayments, the Borrower may (with the Seller’s consent, which may not be given without the consent of the Manager, which is at the Manager’s absolute discretion) redraw the difference between the actual principal outstanding under the loan and the amount that would have been outstanding if the Borrower had made only the scheduled repayments. The redraw facility may be withdrawn at any time at the option of the Seller. (f) Further Advances A Borrower may request the Seller to provide it with a Further Advance, which is an additional advance under a loan which results in the principal balance of the loan exceeding the amount at the time that the Seller originally entered into the loan or exceeding the scheduled amortization limit. The Seller may only provide a Further Advance with the Issuer’s consent. The Issuer will only give such consent if it will not cause the overall credit quality of the loan portfolio to be reduced, a matter which is the subject of monitoring by each Current Rating Agency. Subject as set out in the previous paragraph, there are two methods by which a Further Advance may be approved: first, at the time of the original drawing under the loan, the Borrower may obtain approval for a greater advance than it originally draws; and, second, if a Borrower requests a Further Advance, the Servicer will re-assess the credit position of the Borrower, will recalculate the Borrower’s debt service coverage ratio, will obtain a new valuation (as required by the relevant Lender’s Mortgage Insurance Contract) of the relevant property and will obtain a new policy of insurance by the relevant Mortgage Insurer under the relevant Lender’s Mortgage Insurance Contract. (g) Substitution of Security A Borrower may apply to the Servicer to: • substitute a different property in place of the existing property securing a loan; • add a further mortgage as security for a loan; or • release a property from a mortgage. If the Seller’s credit criteria are satisfied and another property is substituted for the existing security for the loan, the mortgage which secures the existing loan may be discharged without the Borrower being required to repay the loan and the new mortgage will secure the existing loan. 79 If all of the following conditions are met, the relevant loan may continue to be a Series Asset, secured by the new Mortgage: • the substitute property subject to the mortgage satisfies the then mortgage parameters; • the mortgage over the substitute property is granted by the Borrower simultaneously with the discharge of the original mortgage; and • the substitute property is acceptable to the Mortgage Insurer. If any of the following conditions occur, the outstanding balance of the relevant loan will be repaid by the Seller and the loan will cease to be a Series Asset: 8.11 • the new property does not satisfy the then mortgage parameters; and • the new property is not acceptable to the Mortgage Insurer insuring the loan; or settlement does not occur simultaneously with discharge. Insurance Policies (a) General Housing Each Borrower is required to ensure that each property which is the subject of a mortgage is insured against fire and extraneous perils under an all risks (including storm, tempest, lightning, earthquake, riots, strikes and malicious damage impact and aircraft) insurance policy. The amount of cover is for replacement and reinstatement of the building. The insurer must be authorised under the Insurance Act 1973 (Commonwealth) (as amended). 80 (b) Lender’s mortgage insurance PMI Mortgage Insurance Limited (“PMI”) PMI Mortgage Insurance Ltd (ABN 70 000 511 071) is an Australian public company registered in New South Wales and limited by shares. PMI Mortgage Insurance Ltd’s principal activity is lenders’ mortgage insurance which it has done in Australia since 1965 and in New Zealand since 1988. PMI Mortgage Insurance Ltd’s parent is PMI Mortgage Insurance Australia (Holdings) Pty Ltd, a subsidiary of PMI Mortgage Insurance Co., which is a subsidiary of The PMI Group, Inc. PMI Mortgage Insurance Co. is a leading monoline mortgage insurer in the United States. As of December 31, 2005, the audited financial statements of PMI Mortgage Insurance Ltd had total assets of A$1,079 million and shareholder’s equity of A$604 million. PMI Mortgage Insurance Ltd currently has an insurer financial strength rating by S&P and Fitch Ratings of AA and by Moody’s of Aa2. There is no assurance that the ratings will continue for any given period of time or that they will not be revised or withdrawn entirely by such rating agencies, if, in their judgment, circumstances so warrant. The ratings reflect each respective rating agency’s current assessments of the creditworthiness of PMI Mortgage Insurance Ltd and its ability to pay claims on its policies of insurance. Each insurer financial strength rating of PMI Mortgage Insurance Ltd should be evaluated independently. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any Class of Notes, and such ratings are subject to revision, qualification or withdrawal at any time by the applicable rating agency. Any downward revision, qualification or withdrawal of any of the above ratings may have a material adverse effect on the market prices of the offered notes. PMI Mortgage Insurance Ltd does not guarantee the market prices of the offered notes nor does it guarantee that its insurer financial strength ratings will not be revised, qualified or withdrawn. The business address of PMI Mortgage Insurance Ltd is Level 21, 50 Bridge Street, Sydney, New South Wales, Australia, 2000. Loans insured by Housing Loans Insurance Corporation Housing Loans Insurance Corporation (“HLIC” or the “Statutory Authority”) was a Commonwealth Government statutory authority established under the Housing Loans Insurance Act 1965 (Cth). With effect from 15 December 1997 the Commonwealth Government: (a) transferred to the Commonwealth Government (pursuant to the Housing Loans Insurance Corporation (Transfer of Assets and Abolition) Act 1996) (Cth) the liabilities of the Statutory Authority in relation to contracts of insurance to which the Statutory Authority was a party immediately before that day; 81 (b) established a new corporation, Housing Loans Insurance Corporation Limited (ACN 071 466 334), which has since changed its name to GE Mortgage Insurance Pty Limited (“GEMI”), to manage these contracts of insurance on behalf of the Commonwealth of Australia; and (c) sold that new corporation (including the assets and infrastructure of the Statutory Authority) to GE Capital Australia, which is a wholly owned subsidiary of General Electric Company (“GE”). References in this Information Memorandum to “HLIC” are, with respect to contracts of insurance to which the Statutory Authority was a party on or before 12 December 1997 and which are now vested in the Commonwealth of Australia. Loans insured by the General Electric Group GE Capital Mortgage Insurance Corporation (Australia) Pty Limited (“GEMICO”) commenced operations in March 1998 and was established by GE as a sister company to GEMI. It is also a wholly owned subsidiary of GE Capital Australia. Together GEMI and GEMICO insured all loans between 15 December 1997 and 31 March 2004. On 31 March 2004 the lenders mortgage insurance (“LMI”) businesses (including all of the LMI policies written during such period) of GEMI and GEMICO were transferred to a new entity - GE Mortgage Insurance Company Pty Limited ("Genworth"). The transfer of the LMI policies was made pursuant to two separate schemes under the Insurance Act 1973 (Cth) ("Insurance Act") approved by both APRA and the Federal Court of Australia. One scheme effected the transfer of LMI policies issued by GEMI and the other scheme effected the transfer of LMI policies issued by GEMICO. Upon the completion of the transfer, the then current claims paying ratings for both GEMI and GEMICO (“AA” by S&P and Fitch and “Aa2” by Moody’s) were withdrawn and identical ratings were issued by all three local ratings agencies in respect of Genworth. As at 31 December 2005, Genworth had total assets of A$2,191,669,000 and shareholder’s equity of A$1,304,104,000. Loans insured by the Genworth Financial Group On or about 24 May 2004, Genworth became a wholly owned subsidiary of a newly incorporated and U.S. domiciled entity, Genworth Financial, Inc. (NYSE: GNW). Genworth Financial, Inc. is a leading insurance holding company, serving the lifestyle protection, retirement income, investment and mortgage insurance needs of more than 15 million customers, and has operations in 22 82 countries, including the U.S., Canada, Australia, the U.K. and more than a dozen other European countries. Genworth Financial has its principal lenders mortgage insurance operations in the United States, United Kingdom, Canada, New Zealand and Australia. Genworth Financial, Inc.’s rated mortgage insurance companies have financial strength ratings of “AA” (Very Strong) from S&P, “Aa2” (Excellent) from Moody’s and “AA” (Very Strong) from Fitch. On 25 November 2005 Genworth changed its name to Genworth Financial Mortgage Insurance Pty Limited (ABN 60 106 974 305). The principal place of business of Genworth Financial Mortgage Insurance Pty Limited is Level 23, 259 George Street, Sydney, New South Wales, Australia. (c) Professional Indemnity Insurance Policy The Issuer will have, on and from the date on which a Mortgage Loan becomes part of the Series Assets, the benefit of endorsement under a professional indemnity insurance policy in the name of RAMS Home Loans Pty Limited, taken out with QBE Insurance (Australia) Ltd. The endorsement provides the Issuer with certain coverage in respect of civil penalties which it may become liable to pay as a result of an act, error or omission by the Originator or the Servicer (or either of their employees or agents) arising out of non-compliance with the Consumer Credit Code. The aggregate amount of cover in respect of the endorsement under the Professional Indemnity Insurance Policy is presently limited to A$500,000. The Seller is also endorsed under this policy. 8.12 RHL Representations and Eligibility Criteria RHL represents and warrants to the Issuer that, on the settlement date for a Mortgage Loan (including the making of any Further Advance), the Mortgage Loan complies with the eligibility criteria set out below: (a) (Mortgagee) it is capable of being segregated and identified and the Seller is the mortgagee for an Approved Mortgage with respect to each Loan; (b) (Eligible Borrower) (c) (i) an Insolvency Event has not occurred in relation to the Borrower or if the Borrower is an individual, the Borrower has not been declared a bankrupt or has committed an act of bankruptcy, or has executed a deed of assignment or a deed of arrangement; (ii) the Borrower is ordinarily resident or has its place of business in Australia according to the address specified in the documentation relating to the Loan; and (iii) the Borrower meets the underwriting standards of the Seller; (Registration) the related Approved Mortgage is a registered first mortgage (but may include a registered mortgage other than a first mortgage where the Seller also holds a first mortgage or where no other person holds or is entitled to hold a 83 mortgage which ranks, as between that person and the Seller, equally or in priority over any mortgage held by the Seller), in all cases secured against real property acquired and used for residential purposes; (d) (No default) the Borrower is not in default in respect of any payment which is required to be made in respect of the Loan (other than the initial payment as a result of the establishment of direct debit arrangements); (e) (LVR) the LVR for such Mortgage Loan is less than or equal to 95%; (f) (Low Doc Loans) if the Mortgage Loan relates to a Low Doc Loan, the maximum original loan amount for such Loan was A$1,000,000; (g) (Non Low Doc Loans) the maximum original loan amount for any other loan is A$2,000,000; (h) (Low Doc Loans LVR) if the Mortgage Loan relates to a Low Doc Loan, the LVR is less than or equal to 80%. (i) (serviceability) an assessment of the repayment capacity of each Borrower is made on the basis of an interest rate 1% higher than the Better Offset Home Loan rate; (j) (General Insurance) the Property over which an Approved Mortgage was taken is insured under a general insurance policy, either in the joint names of the Borrower and the Seller (as mortgagee) or in the name of the Borrower with the interest of the Seller as mortgagee noted as at the settlement date for the relevant Mortgage Loan. The policy must provide insurance against damage to the property by fire, storm and tempest, impact, malicious damage and other usual insurance hazards. Such insurance must be provided by a corporation incorporated in Australia which is authorised under the Insurance Act 1973 (Commonwealth) to carry on insurance business including the provision of policies in respect of real property and improvements; (k) (Consumer Credit Code) where such Mortgage Loan is regulated by the Consumer Credit Code, is originated in compliance with the Consumer Credit Code; (l) (Procedures Manual) it has been originated in accordance with the Procedures Manual; (m) (No material amendment) it has not been materially amended since its origination; (n) (Term) it has a maximum term of 30 years and one month from the date of the Loan; (o) (Standard documentation) it is governed by terms and conditions which are in substantially the same form as those contained in the standard documentation of the Seller; 84 (p) (No right of set-off) the Borrower has no right of set-off of the whole or any part of any amount payable or owed to the Seller or to which the Seller is entitled under any document in relation to the Loan towards satisfaction of any obligation which is owed by the Seller under the document; (q) (Payments) the Mortgage Loan requires payment of interest and principal weekly, fortnightly or monthly at a floating rate or at a fixed rate, until the Maturity Date, unless the Loan has an interest only period which is less than or equal to 10 years in which case no principal payments are required during the interest only period; (r) (Obligations) it constitutes legal, valid and binding obligations of the Borrower, enforceable according to its terms (subject only to laws affecting creditors’ rights generally and general principles of equity) and the Borrower has not disputed the amount or validity of the Loan; (s) (Weighted average LTV) the inclusion of such Mortgage Loan as an Asset in respect of the Series would not cause the weighted average LVR of all Mortgage Loans in respect of the Series to exceed 75%; (t) (Properties) the inclusion of such Mortgage Loan as an Asset in respect of the Series would not result in a breach of any of the following portfolio parameters: (i) the percentage of the related Properties with respect to the Mortgage Loans in respect of the Series that are acquired for investment purposes does not exceed 60%; (ii) the percentage of the related Properties with respect to the Mortgage Loans in respect of the Series located in the inner city of Sydney, Melbourne and Brisbane, that being Sydney postal codes 2000 to 2005, Melbourne postal codes 3000 to 3001 and Brisbane postal codes 4000 to 4004, does not exceed 2%; and (iii) the percentage of the related Properties with respect to the Mortgage Loans which are Low Doc Loans does not exceed 65%; and (iv) the percentage of the related Properties with respect to the Mortgage Loans in respect of the Series located in capital cities, in metropolitan areas and major regional centres of Australia, including without limitation the Sunshine Coast and Gold Coast areas exceeds 80%; (u) (Crown Leases) where the related Land the subject of the Approved Mortgage is with respect to a crown lease, the term of that crown lease expires not less than 35 years after the end of any interest only period in respect of the related Loan; (v) (Fixed Rate Loan) to the extent that the related Loan has a fixed rate of interest, it is or will be on its inclusion as an Asset in respect of the Series be the subject of a hedging arrangement which each Current Rating Agency has confirmed will not have an Adverse Rating Effect; 85 (w) (Construction Loan) the Mortgage Loan is not with respect to a Construction Loan; (x) (Currency) the Mortgage Loan is repayable (as to both principal and interest) in Australian Dollars; and (y) (Borrower) the Borrower is a resident of Australia. 86 9 The Parties to the Program 9.1 The Issuer The Issuer is RAMS Mortgage Securities Pty Limited in its capacity as trustee of the Trust and in respect of the Series. RMS was incorporated on 12 November 2000 as, and continues to operate as, a limited liability proprietary company under the Corporations Act 2001 of Australia. The Australian Business Number of the Issuer is 30 094 753 349 and its registered office is at Ground Floor, 44 Bay Street, Ultimo, NSW, 2007, Australia. The principal activities of the Issuer are the acquisition and funding of Mortgage Loans. The Issuer enters into the Transaction Documents and issues the Notes only in its capacity as trustee of the Trust and in respect of the Series and in no other capacity. A liability arising under or in connection with the Trust Deed, any other Transaction Document, the Trust or the Notes is limited to and can be enforced against the Issuer only to the extent to which it can be satisfied out of the Assets of the relevant Series which are available to satisfy the right of the Issuer to be indemnified for the liability. Except as provided in the following sentence, 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 Trust Deed, any other Transaction Document or the Trust. However, the limitation will not apply if there is a reduction in the extent of the Issuer’s indemnification out of the Assets of the Series as a result of the Issuer’s fraud, negligence or wilful default (as defined in the Transaction Documents). The Issuer has 1 ordinary share on issue with a paid amount of A$1.00 per share. The share is held by J.P. Morgan Trust Australia Limited which holds the beneficial interest in it on trust for a discretionary trust whose beneficiaries are charitable institutions. The Issuer has no subsidiary undertakings. No capital has been agreed to be issued. As a result of changes to the Corporations Act of Australia, the Issuer no longer has authorised share capital. The directors of the Issuer are as follows: Name Business Address Principal Activities John Alan Kinghorn 44 Bay Street Ultimo NSW 2007 Company Director Anthony Allan Staley Loronda Downs Sid Smith Lane Lancefield VIC 3435 Company Director and Farmer Melda Kay Donnelly 191 Drummond Street Carlton VIC 3053 Company Director and Consultant 87 9.2 The Seller The Seller is RAMS Mortgage Corporation Limited (“RMC”). RMC was incorporated on 8th August 1994 as, and continues to operate as, a limited liability public company under the Corporations Act of Australia. The Australian Business Number of RMC is 48 065 912 932 and its registered office is Ground Floor, 44 Bay Street, Ultimo, NSW, 2007, Australia. The business of the Seller is in acquiring, administering, collecting, funding and selling Mortgage Loans, raising or procuring financial accommodation under Warehouse Facilities, issuing debt securities, acquiring authorised investments and entering into and exercising rights or performing obligations under contracts and other arrangements of all kinds, including derivative contracts, support facilities and any other incidental or related activity. 9.3 The Manager The Manager is RAMS Home Loans Pty Limited (“RHL”). RHL was incorporated on 16th September 1991 as, and continues to operate as, a limited liability proprietary company under the Corporations Act. The Australian Business Number of RHL is 67 053 725 741 and its registered office is Ground Floor, 44 Bay Street, Ultimo, NSW, 2007 Australia. RHL acts as the manager of the Trust under the Master Management Deed. Under the Master Management Deed, RHL (in its capacity as Manager) takes the steps which are necessary to ensure that the Issuer performs its obligations under the Transaction Documents, or performs those obligations on the Issuer’s behalf. RHL therefore undertakes the day to day activities of the Issuer and makes recommendations from time to time to the board of directors of the Issuer in relation to the acquisition of assets and the issue of Notes. RHL also manages the cashflows of the Issuer and undertakes to report regularly to the Issuer and provide information to its auditors as may be requested from time to time, in relation to such matters. Under the Master Management Deed, the Manager has the ability to retire in its absolute discretion. If the Manager retires and a related entity of RHL is appointed as manager of the RAMS Mortgage Securities Trust in respect of each Series, RHL will guarantee to the Issuer the performance of the obligations by that related entity of the duties that it is required to perform under the Transaction Documents. As part of any such retirement and appointment, the Issuer and the Manager may need to amend the Master Management Deed (and, if applicable, the other relevant Transaction Documents in respect of the Series) in relation to any such retirement and appointment. 9.4 The Originator The Originator of record is RAMS Home Loans Pty Limited. RHL was incorporated on 16th September 1991 as, and continues to operate as, a limited liability proprietary company under the Corporations Act. The Australian Business Number of RHL is 67 88 053 725 741 and its registered office is Ground Floor, 44 Bay Street, Ultimo, NSW, 2007 Australia. RHL commenced its mortgage origination business in 1994 and, since then until recently has acted as sole originator of Mortgage Loans for the Seller. Under the Master Mortgage Origination Deed, RHL is responsible for the origination of Mortgage Loans and (either itself or through its delegates) undertakes or procures all activities and functions in relation to the origination of a Mortgage Loan up to the date of advance of the Mortgage Loan. The origination process is fully described under Section 8 (“RAMS Residential Loan Program”). 9.5 The Servicer The Servicer of record is Receivables Servicing Pty Limited (“RSPL”). RSPL was incorporated on 22nd May 1992 as, and continues to operate as, a limited liability proprietary company under the Corporations Act of Australia. The Australian Business Number of RSPL is 16 056 216 203 and its registered office is Ground Floor, 44 Bay Street, Ultimo, NSW, 2007 Australia. 9.6 The Security Trustee The Security Trustee is J.P. Morgan Trust Australia Limited (“JPMTAL”). JPMTAL is and continues to operate as a limited liability public company under the Corporations Act of Australia. The Australian Business Number of JPMTAL is 49 050 294 052 and its office is Level 35, AAP Centre, 259 George Street, Sydney NSW, 2000, Australia. The business of JPMTAL is the provision of corporate trustee services. JPMorgan Chase & Co. has agreed to sell its global corporate trust services business to The Bank of New York Company Inc. It is expected that this transaction will be completed at some time during October 2006. Once this process is completed the Security Trustee will be become a wholly owned subsidiary of BNY Trust (Australia) Pty Limited. 89 10 Transaction Structure Each Series of Notes will be issued pursuant to the transaction structure described below. 10.1 The Trust The Trust was established at the direction of the Manager to securitise Mortgage Loans. The terms of the Trust are governed by the Trust Deed and the Series Supplement for each Series. The Trust is a common law trust established by the Manager under the laws of New South Wales. The Trust may only act through the Issuer as trustee of the Trust. Accordingly references to actions or obligations of the Issuer refer to such actions or obligations of the Trust. 10.2 Series Segregation The Trust is constituted by the Trust Deed. The assets of the Trust are allocated to separate “Series”, each established by the execution of a “Deed of Charge” and “Series Supplement” for that series by the Trustee in accordance with the Trust Deed. The Series will comprise assets allocated to it by the Issuer and liabilities incurred by the Trustee in respect of the Series (including liabilities under the Notes) will be secured against those assets under the Deed of Charge for that Series. The assets and liabilities of the Series are accounted for separately from those of any Other Series established under the Trust Deed and are not available in any circumstances to meet any obligations of the Trustee in respect of any other series, subject to the cross collateralisation of the excess available income described in Section 6.3 (“Excess Available Income”). If, upon enforcement or realisation of the Deed of Charge, sufficient funds are not realised to discharge in full the obligations of the Issuer in respect of the Series, no further claims may be made against the Issuer in respect of such obligations and no claims may be made against any of its assets. An Event of Default in respect of the series will not constitute an event of default in respect of any Other Series of the Trust. The Series will correspond to the issuance of Notes. New series may be established in securitisation Groups as described below. Mortgage Loans and other Assets may be redesignated from time to time to different series within the Group or other Groups as appropriate to support new issuances of Notes, to effect clean-ups of series or for any other purpose which the Current Rating Agencies confirm will not have an Adverse Rating Effect. 10.3 Groups The series of the Trust may be designated into a particular group (each a “Group”). 90 The fundamental role of the Groups is to provide cross collateralisation between each series within the relevant Group. This will be achieved by the Residual Income Unitholder agreeing to direct that any excess income available to be distributed to it from a Series within the Group must be used to reinstate losses from all Series within that Group. At present, the Series is the only series in its Group. 10.4 The Issuer as Trustee The Issuer is appointed as trustee of the Trust, pursuant to the Trust Deed, on the terms set out in the Trust Deed and the Series Supplement. The Issuer is paid a regular periodic fee (as agreed from time to time between the Issuer and the Manager) in respect of the Series. Duties of the Issuer Under the Trust Deed, the Issuer undertakes to (among other things): (a) not create any security interest over the Assets and undertaking of the Trust except in the manner permitted by the Transaction Documents; (b) not, except in the manner contemplated by the Transaction Documents, transfer or deal with the Assets of the Trust or merge the Assets of the Trust with any other assets of the Issuer (in its personal capacity or in its capacity as trustee of another trust); (c) prepare proper and adequate books of account and lodge its annual returns in accordance with the Corporations Act; and (d) notify the Security Trustee promptly of full details of an Event of Default (as defined below) or an event which will become an Event of Default after becoming aware of it. Powers of the Issuer The Issuer has all the powers in respect of the Trust that it is legally possible for a natural person or corporation to have and as though it were the absolute and beneficial owner of the Assets of the Trust. Such powers include the ability and power to borrow and raise funds (subject to the Transaction Documents) on the security of the Assets of the Trust. The Issuer may delegate its powers and will not be liable for the acts or omissions of any agent or delegate provided that: (a) the Issuer appoints the agent or delegate in good faith and using due care; and (b) the agent or delegate is not a related entity of the Issuer. The Trust Deed contains customary provisions for a document of this type that regulate the performance by the Issuer of its duties and obligations and the protections afforded to the Issuer in doing so. In general, the Issuer’s liability in all circumstances (and the 91 recourse of the Secured Creditors) will be limited to the Assets of the Trust unless the Issuer is fraudulent, negligent or acted in wilful default. Termination The Issuer must immediately retire as trustee of the Trust if: (a) an Insolvency Event occurs with respect to RMS (in its personal capacity); (b) RMS ceases to carry on business; (c) the Issuer is in breach of a material obligation under the Transaction Documents and, where such breach is remediable, the Issuer has not remedied such breach within 90 days of becoming aware of it; or (d) required by law, (each a “Trustee Termination Event”) The Issuer may also retire as trustee of the Trust upon giving 3 months notice in writing to the Unitholders and Secured Creditors. The retirement takes effect on the later to occur of the retirement date specified in the notice and the appointment of a replacement trustee. Standby Trustee If the Issuer’s appointment is terminated due to the occurrence of a Trustee Termination Event then, from the date of termination until the earlier of: (a) the appointment of a replacement trustee; and (b) the retirement of the Standby Trustee (as defined below) under the Master Trust Deed, the Security Trustee (or any other person appointed to act as its agent) must act as standby trustee (“Standby Trustee”) with respect to the Transaction Documents in relation to the Trust upon the terms specified in the Trust Deed and to carry on and conduct its business in accordance with what the Standby Trustee perceives to be the standards of a prudent manager of a company’s business in the mortgage industry. The Standby Trustee (or its agent) will not be responsible for, and will not be liable for, any inability to perform, or deficiency in performing, its duties and obligations as Standby Trustee if the Standby Trustee is unable to perform those duties and obligations: (a) due to the state of affairs of the Issuer, and its books and records, upon its removal; or (b) if the Standby Trustee is unable, after using its reasonable endeavours, to: (i) obtain information and documents; or 92 (ii) obtain access to software or resources, which it requires and which are reasonably necessary for it to perform those duties and obligations. Neither the Standby Trustee nor its agent is liable for any loss, costs, liabilities or expenses arising out of it exercising or failing to exercise any powers or rights, or performing or failing to perform its obligations or duties as Standby Trustee, except where such acts or omissions amount to fraud, negligence or wilful default. 10.5 Loans and Approved Mortgages Assets of the Series to be acquired by the Trust will consist of Mortgage Loans originated by the Originator and which meet certain criteria and parameters approved by the Current Rating Agencies. See Section 8 (“RAMS Residential Loan Program”). In addition, under the Receivables Acquisition and Servicing Agreement, the Seller will represent and warrant (and under the relevant Series Supplement, the Originator will represent and warrant) that each Mortgage Loan to be acquired by the Trust under the Receivables Acquisition and Servicing Agreement is an “Eligible Receivable” as defined in the relevant Series Supplement. 10.6 Security Trustee J.P. Morgan Trust Australia Limited is appointed as Security Trustee on the terms set out in the Trust Deed. The Security Trustee is a professional trustee company and operates as a limited liability public company under the Corporations Act. The Trust Deed contains customary provisions for a document of this type that regulate the performance by the Security Trustee of its duties and obligations and the protections afforded to the Security Trustee in doing so. In addition, it contains provisions which regulate the steps that are to be taken by the Security Trustee upon the occurrence of an Event of Default. In general, if an Event of Default occurs, the Security Trustee must notify the applicable Secured Creditors and will convene a meeting of the Secured Creditors of the Trust to obtain directions as to what actions the Security Trustee should take in respect of the Secured Property (as defined below). Deed of Charge The Holders in respect of the Series have the benefit of a fixed and floating charge over all the Assets of the Series under the Deed of Charge and the Trust Deed. The Security Trustee holds this charge on behalf of the Secured Creditors (including the Holders) pursuant to the Trust Deed and may enforce the charge upon the occurrence of an Event of Default (as defined below). Event of Default An “Event of Default” in respect of a Series occurs when: 93 (a) (Failure to Pay) the Issuer fails to make a payment in accordance with the Transaction Documents within 3 Business Days of its due date for payment provided that a failure by the Issuer to make a payment in full to Noteholders (or any amount which ranks below payments to such Noteholders) will not be an Event of Default for these purposes until any Notes which rank senior to such payments have been redeemed in full; (b) (Insolvency Event) an Insolvency Event occurs in respect of the Issuer; (c) (Illegality) any Transaction Document is terminated or is or becomes void, illegal, unenforceable or of no force or effect, or any party becomes entitled to terminate, rescind or avoid any Transaction Document (except to the extent it is capable of remedy and is remedied within 30 days or it is pursuant to an amendment to that effect which is agreed to by all parties); (d) (non-exercise of indemnity) the Issuer is (for any reason) not entitled to fully exercise the right of indemnity conferred on it under the Trust Deed against the Assets of the Trust to satisfy any liability to a Secured Creditor and the circumstances are not rectified to the reasonable satisfaction of the Security Trustee within 30 days of the Security Trustee requiring the Issuer in writing to rectify them; or (e) (ranking of Charge) the Charge is not or ceases to be a first ranking charge over the Assets of the Series, 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 Money in respect of the Series. The Event of Default for a Series may be different and will be set out in the relevant Series Supplement. Limited recourse to Security Trustee The Security Trustee’s liability under the Transaction Documents is limited to the amount which it receives or recovers from the Issuer under the Trust Deed, subject to such payments, deductions and withholdings by the Security Trustee as are authorised by the Trust Deed. This limitation will not apply to a liability of the Security Trustee to the extent that there is a reduction in the extent of the Security Trustee’s right of indemnity as a result of the Security Trustee’s fraud, gross negligence or wilful default. Fees and indemnities The Issuer, under the Trust Deed, has agreed to pay to the Security Trustee from time to time a fee (as agreed to between the Issuer and the Security Trustee) in respect of the Series. The Issuer must also pay or reimburse the Security Trustee for all costs, charges and expenses incurred by the Security Trustee in connection with its obligations under the Transaction Documents, except to the extent such cost, charge or expense was incurred directly or indirectly as a result of a Security Trustee Default. 94 Application of proceeds following an Event of Default Following the occurrence of an Event of Default and enforcement of the Charge under the Deed of Charge and the Master Trust Deed, the Security Trustee must apply all moneys received by it in respect of the Secured Property in the order described in the Series Supplement. 10.7 Master Management Deed (a) General Under the Master Management Deed, the Issuer appoints the Manager as its exclusive manager to perform the services described in the Master Management Deed on behalf of the Issuer. The Manager is entitled to be paid a fee by the Issuer for performing its duties under the Master Management Deed in respect of the Series. (b) Role of the Manager The Manager, under the Master Management Deed, carries on the day to day administration, supervision and management of the Issuer’s Business and makes recommendations to the Issuer in relation to the Issuer’s Business. The Manager has the power to delegate to its officers and employees all acts, matters and things, whether or not requiring the Manager’s judgment or discretion. The Manager must perform these duties until it retires or is removed in accordance with the Master Management Deed. The Manager’s obligations under the Master Management Deed are, at all times, subject to the power of the board of directors of the Issuer to make decisions and give directions. The board of directors of the Issuer has absolute discretion to refuse to adopt any recommendation made by the Manager. In particular, the Manager makes recommendations in relation to the documentation entered into by the Issuer as trustee of the Trust and the exercise of rights and the performance of obligations under the Transaction Documents. The Master Management Deed contains various provisions relating to the Manager’s exercise of its powers and duties under the Master Management Deed, including provisions entitling the Manager to act on expert advice and to delegate its duties and obligations without being liable for the acts or omissions of any such delegate. (c) Retirement of the Manager The Manager may retire upon giving the Issuer three months notice in writing, or such lesser time as the Manager and the Issuer agree. However, the Manager may not retire unless: (i) it has appointed a replacement manager which is acceptable to the Issuer, the Security Trustee and each Current Rating Agency; and 95 (ii) the replacement manager executes an agreement under which it covenants to act as manager on, substantially, the same terms as the Master Management Deed and for a fee determined on a market basis. If the Manager retires and a related entity of RHL is appointed as manager of the RAMS Mortgage Securities Trust in respect of each Series, RHL will guarantee to the Issuer the performance of the obligations by that related entity of the duties that it is required to perform under the Transaction Documents. As part of any such retirement and appointment, the Issuer and the Manager may need to amend the Master Management Deed (and, if applicable, the other relevant Transaction Documents in respect of the Series) in relation to any such retirement and appointment. (d) Removal of the Manager It is a “Manager Termination Event” if: (i) an Insolvency Event occurs with respect to the Manager; (ii) when required to do so by the Issuer by notice in writing, the Manager fails or neglects within 20 Business Days of receipt of such notice, to carry out or satisfy any material duty imposed on the Manager by the Master Management Deed where such breach has a Material Adverse Effect; or (iii) the Manager fails to calculate the Threshold Rate in the manner required by the Master Management Deed, and that failure is not remedied within 5 Business Days of the Manager receiving notice from the Issuer or the Servicer, advising it of the failure and requesting that the failure be remedied. The Issuer must notify the Security Trustee promptly after it becomes aware of the occurrence of a Manager Termination Event. In that event, the Manager and the Issuer must use their best endeavours to assist the Security Trustee to appoint a person to replace the Manager as manager of the Issuer under the Master Management Deed. (e) Standby Manager If the Security Trustee terminates the Manager’s appointment, then from the date of termination until the earlier of: (i) the appointment of a replacement manager; or (ii) the retirement of the Standby Manager, the Security Trustee must act (or appoint another person to act as its agent) as standby manager (“Standby Manager”) of the Issuer’s Business in accordance 96 with what the Standby Manager perceives to be the standards of a prudent manager of a Issuer’s business in the mortgage industry. The Standby Manager (or its agent) will not be responsible for, and will not be liable for, any inability to perform, or deficiency in performing, its duties and obligations as Standby Manager if the Standby Manager is unable to perform those duties and obligations: (a) due to the state of affairs of the Manager, and its books and records, upon its removal; or (b) of the Standby Manager is unable, after using its reasonable endeavours, to: (i) obtain information and documents; or (ii) obtain access to software or resources under clause 6.6 of Master Management Deed, which it requires and which are reasonably necessary for it to perform those duties and obligations. Neither the Standby Manager nor its agent will be liable for any loss, costs, liabilities or expenses arising out of its exercising or failing to exercise any powers or rights, or performing or failing to perform its obligations or duties as Standby Manager, except where such acts or omissions amount to negligence, gross or wilful breach of duty or contract, wilful default or misconduct, or fraud. 10.8 Master Servicer Deed (a) General The Servicer, the Issuer and the Security Trustee have entered into the Master Servicer Deed under which the Servicer agrees to service the Mortgage Loans in accordance with the requirements of that deed and the relevant Procedures Manuals. The Servicer is entitled to be paid a fee by the Issuer for performing its duties under the Master Servicer Deed in respect of each Series. (b) Role of the Servicer Under the Master Servicer Deed, the Issuer appoints the Servicer to service, manage and administer the Assets of the Trust. The Servicer must manage the Assets in accordance with: (i) the Master Servicer Deed; (ii) the requirements of the Procedures Manuals; (iii) the requirements of any relevant Insurance Policy; and (iv) all written instructions given by the Issuer or a Mortgage Insurer. 97 The Master Servicer Deed requires the Servicer to (among other things) collect mortgage payments, to deposit such collections into the trust bank accounts, to notify the Issuer and the Mortgage Insurer of any default or potential default under a mortgage, to manage each loan or mortgage and take all actions in respect of the Insurance Policies and to promptly service any requests from the Borrower for a Redraw, a Further Advance or a Variation. The Servicer must in addition comply with a number of obligations relating to the keeping of records, reporting and maintaining of computerised data. (c) Retirement of Servicer Except where an Event of Default or Servicer Termination Event has occurred, and is continuing, the Servicer may retire as servicer upon giving to the Issuer 6 months written notice or such lesser time as the Servicer and Issuer agree, provided that the Servicer may not retire unless: (d) (i) it has appointed a replacement Servicer which is acceptable to the Issuer, the Security Trustee and each Current Rating Agency; and (ii) the new servicer executes an agreement under which it covenants to act as servicer on substantially the same terms as the Master Servicer Deed and for a fee determined on a market basis. Removal of Servicer It is a “Servicer Termination Event” if: (i) the Servicer commits a breach of any material covenant or provision of the Master Servicer Deed (as determined in the reasonable opinion of the Issuer) and in the case of a breach that is capable of remedy, such breach is not remedied to the satisfaction of the Security Trustee (the Security Trustee may conclusively rely on the opinion or advice of any legal or other advisers of the Security Trustee or the Issuer in this regard) within 30 days of notice of such breach by the Issuer to the Servicer; (ii) any representation or warranty or agreement by the Servicer in or in connection with the execution, delivery or performance of the Master Servicer Deed is untrue or incorrect in any material respect and either: (C) such inaccuracy is not remedied to the satisfaction of the Security Trustee (the Security Trustee may conclusively rely on the opinion or advice of any legal or other advisers of the Security Trustee or the Issuer in this regard) within 30 days of notice of such inaccuracy by the Issuer to the Servicer; or (D) the Servicer has not paid an amount to the Issuer representing the loss suffered by the Issuer as a result of that inaccuracy (being an amount agreed between the Servicer and the Security Trustee or, failing agreement, by the Issuer’s auditors) within 30 days of notice of such inaccuracy by the Issuer to the Servicer; 98 (iii) the Servicer does not pay to the Issuer any money received on behalf of the Issuer within two Business Days; (iv) an Insolvency Event occurs in respect of the Servicer; (v) the Servicer, without the prior consent of the Issuer, ceases to carry on business or threatens to do so; (vi) the Master Servicer Deed ceases to be in full force and effect or is declared by any court of competent jurisdiction to be void or unenforceable; (vii) one party to the Master Servicer Deed gives to the other party 6 months notice in writing of its intention to terminate the Master Servicer Deed. The Issuer must notify the Security Trustee promptly upon becoming aware of the occurrence of a Servicer Termination Event. (e) Standby Servicer If the Master Servicer Deed is terminated, then from the date of termination until the earlier of: (i) the appointment of a replacement Servicer; or (ii) the retirement of the Standby Servicer, the Security Trustee must act (or appoint another person to act as its agent) as standby servicer (“Standby Servicer”) with respect to the Trust in accordance with what the Standby Servicer perceives to be the standards of a prudent lender in the mortgage industry. 10.9 Receivables Acquisition and Servicing Agreement The Issuer, the Seller, the Servicer and the Manager have entered into the Receivables Acquisition and Servicing Agreement under which the Issuer agrees to acquire the Mortgage Loans which are represented by the Seller to be eligible for purchase in accordance with the requirements of that agreement. If the Seller wishes to sell any Mortgage Loans, it must give a notice to the Issuer offering to sell the Mortgage Loans, which the Issuer may then accept by paying the purchase price to the Seller. Upon delivery of such a notice to the Issuer, the Seller must direct the Borrowers to pay all Collections with respect to the purchased Mortgage Loans to the Servicer. If the Seller or the Servicer receives or recovers any Collections with respect to the purchased Mortgage Loans, each of the Servicer and the Seller holds any such Collections on behalf of the Issuer and has agreed to deposit any such funds to the applicable RMS Account within 1 Business Day of the receipt of such funds. Under the Receivables Acquisition and Servicing Agreement, the Servicer and the Seller make a number of representations and warranties as to their obligations under the 99 Transaction Documents. Upon the occurrence of a Title Perfection Event under the Receivables Acquisition and Servicing Agreement, the Issuer may: (a) cease to make purchases under the Receivables Acquisition and Servicing Agreement; (b) terminate the Receivables Acquisition and Servicing Agreement by giving notice to the Seller (with a copy to the Manager); and (c) exercise any other rights available to it under the Receivables Acquisition and Servicing Agreement. On the Issue Date for the Series, the Seller will equitably assign to the Mortgage Loans, any additional collateral security and any general insurance policies on the mortgaged properties relating to those Mortgage Loans. After the equitable assignment, the Issuer will be entitled to receive collections on the purchased Mortgage Loans. If a Title Perfection Event occurs, unless each Current Rating Agency confirms that a failure to perfect the Issuer’s title to the Mortgage Loans will not result in a reduction, qualification or withdrawal of the credit ratings assigned by them to the Notes in respect of the Series, the Issuer must use the irrevocable power of attorney granted by the Seller in favour of the Issuer to take the actions necessary to protect the Issuer’s interest in, and legal title to, the Mortgage Loans. The Manager, the Servicer and the Seller have agreed to assist the Issuer in taking any necessary actions to obtain legal title to the Mortgage Loans after the occurrence of a Title Perfection Event, including the lodgement of transfers of the mortgages securing the mortgage loans with the appropriate land titles office in each applicable Australian state and territory. 10.10 Limited recourse and limited liability (a) Limited recourse The Issuer’s liability in its capacity as trustee of the Trust in respect of the Series is limited to and can only be enforced against the Issuer to the extent to which it can be satisfied out of Assets of the Series out of which the Issuer is actually indemnified for the liability. However, this limitation does not apply to the extent that the liability is not satisfied because there is a reduction in the extent of the Issuer’s right of indemnity as a result of fraud, negligence or wilful default on the part of the Issuer. No person (including, without limitation, the Secured Creditors) may sue the Issuer in any capacity other than as trustee of the Trust in respect of a Series, including seeking the appointment of a receiver (except in relation to the Assets of the Series), a liquidator, an administrator or any similar person to the Issuer or prove in any liquidation, administration or arrangement of, or affecting, the Issuer (except in relation to the Assets of the Series). The Issuer has the particular role and obligations specifically set out in the Transaction Documents. The Manager and other parties are responsible for different aspects of the operation of the Series and its assets. The Issuer has no liability for any loss, costs, liabilities or expenses arising from the Manager or 100 any other person failing to perform their obligations under or in connection with the Trust except to the extent such loss, cost liability or expense is caused by fraud, negligence or wilful default on the part of the Issuer. (b) Indemnity Subject to this deed and without prejudice to the right of indemnity given by law to trustees generally, the Issuer will be indemnified out of the Assets in respect of the Series against all costs, fees, charges, expenses, loss and liabilities properly incurred by the Issuer in performing any of its duties or exercising any of its powers under this deed or the Transaction Documents in relation to that Series to the extent that the cost, fees, charges, expense, loss or liability has been incurred by the Issuer in connection with the performance of its duties or the exercise of its powers in respect of the Trust and in relation to the Series but this indemnity does not extend to liabilities arising from the Issuer’s fraud, negligence or wilful default. Subject to the preceding paragraph, this deed and the Transaction Documents in respect of the Series, the Issuer is entitled to deal with the Assets in respect of the Series as it reasonably believes necessary to satisfy any cost, expense, loss or liability for which it is entitled under this deed to be indemnified or reimbursed out of the Assets in respect of the Series and for which it may be personally liable or which it has personally incurred. (c) No restriction on action Nothing in this Section is taken to impose any restriction upon the rights of the Residual Capital Unitholders, the Residual Income Unitholders, the Holders, any other Secured Creditors or any other persons in respect of the Trust or the Series to bring an action against RMS for loss or damage suffered by reason of the Issuer’s fraud, negligence or wilful default. (d) Enforcement Limited Notwithstanding any other provision of the Transaction Documents in respect of the Series, each Secured Creditor in respect of the Series is taken to have acknowledged and agreed that: (i) if the actual amount recovered and available (if any) for distribution to that Secured Creditor in accordance with the Deed of Charge in respect of the Series (“Available Amount”) is less than the nominal amount owing to that Secured Creditor (“Nominal Amount”), the payment of the Available Amount constitutes a complete discharge of the Issuer’s liability to that Secured Creditor in connection with the Series; and (ii) the Secured Creditor has no further claim or entitlement to be paid the difference between the Available Amount and the Nominal Amount. 101 However, for the purpose only of determining the amount of the relevant Secured Money, the limit on the liability of RMS under this paragraph shall be disregarded. (e) Series Segregation Subject to paragraph (j), the relevant Secured Property in respect of the Series is not available in any circumstances to meet any obligations of the Issuer in respect of any Other Series and if, upon enforcement or realisation of the Deed of Charge in respect of the Series, sufficient funds are not realised to discharge in full the obligations of the Issuer in respect of the Series, no further claims may be made against the Issuer in respect of such obligations and no claims may be made against any of its assets. (f) Limited recourse Subject to this Section, no person (including, without limitation, the Security Trustee) may sue the Issuer personally or seek the appointment of a liquidator, administrator, receiver (except in relation to the Secured Property in respect of the Series in accordance with the relevant Deed of Charge) or any similar person to the Issuer or prove in any liquidation, administration or arrangement of or affecting the Issuer (except in relation to the Secured Property in respect of the Series in accordance with the relevant Deed of Charge). (g) Application This Section: (h) (i) applies even though any other provision of a Transaction Document in respect of the Series is not made subject to it; and (ii) overrides any other provision of a Transaction Document in respect of the Series which is inconsistent with it. Limitation on the Issuer’ liability The Transaction Documents in respect of the Series apply to the Issuer only in its capacity as trustee of the Trust and in respect of the Series and in no other capacity. Subject to paragraphs (d) and (e), a liability incurred by the Issuer acting in its capacity as trustee of the Trust arising under or in connection with the Transaction Documents and in respect of the Series is limited to and can be enforced against the Issuer only to the extent to which it can be satisfied out of Assets in respect of the Series out of which the Issuer is actually indemnified for the liability (“Indemnified Amount”). This limitation of the Issuer’s liability applies despite any other provision of the Transaction Documents of the Trust or the Series (other than paragraph (j)) 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 this deed or any Transaction Document in respect of the Trust or the Series. 102 (i) Claims against the Issuer The Security Trustee and each Secured Creditor in respect of the Series together with any Receiver, administrator, attorney or other person appointed under this deed or any Transaction Document by the Security Trustee or any Secured Creditors in respect of the Series (“Relevant Person”) and any person entitled to be subrogated to the rights of any Relevant Person shall not: (i) apply for a judgement or take any proceedings for the obtaining of a judgement for the payment of money or damages by the Issuer in any capacity other than as trustee of the Trust or in relation to the Assets in respect of the Series; (ii) apply to wind up or take any proceedings for the winding up of the Issuer; (iii) levy or enforce any duties or other execution or take any proceedings for the levying of or enforcement of any duties or other execution upon or against any property of the Issuer in any capacity other than as trustee of the Trust or in relation to the Assets in respect of the Series; (iv) apply to have a receiver appointed by any court or to take any proceedings for the appointment of a receiver by a court to any of the effects of the Issuer in any capacity other than as trustee of the Trust or in relation to the Assets in respect of the Series; (v) appoint, or agree to the appointment of, any administrator to the Issuer; (vi) exercise or seek to exercise or take any proceedings for the exercise of any right of set-off or counter-payment against the Issuer in any capacity other than as trustee of the Trust or in relation to the Assets in respect of the Series; or (vii) issue any demand under Section 459E(1) of the Corporations Act (or any analogous provision under any other law) against the Issuer, and each Relevant Person, and any persons so entitled to be subrogated, waives its rights in respect of these applications and proceedings. (j) Exclusions The provisions of this Section will not apply to any obligation or liability of the Issuer to the extent that it is not satisfied because under this deed or by operation of law there is a reduction in the extent of the Issuer’s indemnification out of the Assets in respect of the Series as a result of the Issuer’s fraud, negligence or wilful default. 103 (k) Acts or omissions It is acknowledged that the Originator, the Manager, the Registered Note Registrar, the Registered Note Paying Agent, the Custodian and the Servicers and others may be responsible under the other Transaction Documents in relation to the Series for performing a variety of obligations relating to the Trust and the Series. No act or omission of the Issuer (including any related failure to satisfy its obligations or breach of representation and warranty under this deed or any other Transaction Document in respect of a Series) will be considered fraud, negligence or wilful default for the purpose of paragraph (j) to the extent to which the act or omission was caused or contributed to or by any failure by the Originator, the Manager, the Custodian, the Registered Note Registrar, the Registered Note Paying Agent or the Servicer or any other person appointed by the Issuer under any Transaction Document in respect of the Series (other than a person whose acts or omissions the Issuer is liable for in accordance with any Transaction Document in respect of the Series ) to fulfil its obligations relating to the Trust and the Series or by any other act or omission of the Originator, the Manager, the Custodian, the Registered Note Registrar, the Registered Note Paying Agent or the Servicer or any other such person. No attorney, agent, receiver or receiver and manager appointed in accordance with this deed or any other Transaction Document in respect of the Series has authority to act on behalf of the Issuer in a way that exposes the Issuer to any personal liability, and no act or omission of any such person will be considered fraud, negligence or wilful default on the part of the Issuer for the purpose of paragraph (j). The Issuer is not obliged to do anything or refrain from doing anything under or in connection with this deed (including incur a liability) unless the Issuer’s liability is limited in the same manner as set out in this Section. 104 11 Taxation Considerations The following is a summary of the taxation treatment under the Income Tax Assessment Acts of 1936 and 1997 of Australia (together, “Australian Tax Act”), at the date of this Information Memorandum, of payments of interest (as defined in the Australian Tax Act) on the Notes to be issued by the Issuer under the Series and certain other matters. It is not exhaustive and, in particular, does not deal with the position of certain classes of holders of Notes (including, dealers in securities, custodians or other third parties who hold Notes on behalf of any Note holders). Prospective holders of Notes should also be aware that particular terms of issue of any Series of Notes may affect the tax treatment of that and other Series of Notes. The following is a general guide and should be treated with appropriate caution. Prospective holders of Notes who are in any doubt as to their tax position should consult their professional advisers on the tax implications of an investment in the Notes for their particular circumstances. Additional risk factors relating to the taxation treatment of the Issuer under the Australian Tax Act which may impact the Issuer’s ability to repay principal and pay interest on the Notes in a timely manner (or at all) are set out in Section 4 (“Certain Special Considerations”) 1. Interest withholding tax An exemption from Australian interest withholding tax imposed under Division 11A of Part III of the Australian Tax Act (“IWT”) is available, in respect of the Notes issued by the Issuer under Section 128F of the Australian Tax Act if the following conditions are met: (a) the Issuer is a company as defined in Section 128F(9) (which includes certain companies acting as trustee) and a resident of Australia when it issues those Notes and when interest (as defined in Section 128A(1AB) of the Australian Tax Act) is paid. Interest is defined to include amounts in the nature of, or in substitution for, interest and certain other amounts; (b) those Notes are issued in a manner which satisfies the public offer test. There are five principal methods of satisfying the public offer test, the purpose of which is to ensure that lenders in capital markets are aware that the Issuer is offering those Notes for issue. In summary, the five methods are: • offers to 10 or more unrelated financiers or securities dealers; • offers to 100 or more investors; • offers of listed Notes; • offers via publicly available information sources; and • offers to a dealer, manager or underwriter who offers to sell those Notes within 30 days by one of the preceding methods. 105 In addition, the issue of any of those Notes (whether in global form or otherwise) and the offering of interests in any of those Notes by one of these methods should satisfy the public offer test; (c) the Issuer does not know, or have reasonable grounds to suspect, at the time of issue, that those Notes or interests in those Notes were being, or would later be, acquired, directly or indirectly, by an “associate” of the Issuer, except as permitted by Section 128F(5) of the Australian Tax Act; and (d) at the time of the payment of interest, the Issuer does not know, or have reasonable grounds to suspect, that the payee is an “associate” of the Issuer, except as permitted by Section 128F(6) of the Australian Tax Act. Associates Where, as in this case, the Issuer is a trustee of a trust, the entities that are “associates” of the Issuer for the purposes of Section 128F of the Australian Tax Act include: • any entity that benefits, or is capable of benefiting, under the trust (“Beneficiary”), either directly or through any interposed entities; and • any entity that is an “associate” of a Beneficiary. An “associate” of a Beneficiary for these purposes includes (i) a person or entity which holds more than 50% of the voting shares in, or otherwise controls, the Beneficiary, (ii) an entity in which more than 50% of the voting shares are held by, or which is otherwise controlled by, the Beneficiary, (iii) a trustee of a trust where the Beneficiary is capable of benefiting (whether directly or indirectly) under that trust; and (iv) a person or entity who is an “associate” of another person or company which is an “associate” of the Beneficiary under any of the foregoing. However, for the purposes of Sections 128F(5) and (6) of the Australian Tax Act (see paragraphs (c) and (d) above), “associate” does not include: (A) onshore associates (ie Australian resident associates who do not hold the Notes in the course of carrying on business at or through a permanent establishment outside Australia and non-resident associates who hold the Notes in the course of carrying on business at or through a permanent establishment in Australia); or (B) offshore associates (ie Australian resident associates who hold the Notes in the course of carrying on business at or through a permanent establishment outside Australia and non-resident associates who do not hold the Notes in the course of carrying on business through a permanent establishment in Australia) who are acting in the capacity of: (i) in the case of Section 128F(5), a dealer, manager or underwriter in relation to the placement of the relevant Notes or, a clearing house, custodian, funds manager or responsible entity of a registered managed investment scheme; or 106 (ii) in the case of Section 128F(6), a clearing house, paying agent, custodian, funds manager or responsible entity of a registered managed investment scheme. Compliance with Section 128F of the Australian Tax Act The Issuer intends to issue the Notes in a manner which will satisfy the requirements of section 128F of the Australian Tax Act. US, UK, French and Norwegian resident Note holders The Australian government has signed a number of new or amended double tax conventions (“New Treaties”) with the Specified Countries. The New Treaties apply to interest derived by a resident of a Specified Country. The New Treaties effectively prevent IWT applying to interest derived by: • the government of the relevant Specified Country and certain governmental authorities and agencies in the Specified Country; and • certain unrelated banks and financial institutions which substantially derive their profits by carrying on a business of raising and providing finance, which are resident in the Specified Country, by reducing the IWT rate to zero. Under the New Treaties back-to-back loans and economically equivalent arrangements will not obtain the benefit of the reduction in the IWT rate mentioned above and the anti-avoidance provisions in the Australian Tax Act can apply. Specified Countries means the United States, the United Kingdom, France and Norway. The New Treaty for the United States applies to any interest paid on or after 1 July 2003. The New Treaty for the United Kingdom applies to interest paid on or after 1 July 2004. The New Treaties for France and Norway are not yet entered into force nor have dates for their commencement been announced by the Australian, French or Norwegian governments. No payment of additional amounts Despite the fact that the Notes are intended to be issued in a manner which will satisfy the requirements of Section 128F of the Australian Tax Act and unless expressly provided to the contrary in any relevant Pricing Supplement (or another relevant supplement to this Information Memorandum), if the Issuer is at any time compelled or authorised by law to deduct or withhold an amount in respect of any Australian withholding taxes imposed or levied by the Commonwealth of Australia or the State of New South Wales in respect of the Notes, the Issuer is not obliged to pay any additional amounts in respect of such deduction or withholding. 107 2. Other tax matters Under Australian laws as presently in effect: (a) income tax - offshore Note holders - assuming the requirements of Section 128F of the Australian Tax Act are satisfied with respect to the Notes, payment of principal and interest (as defined in Section 128A(1AB) of the Australian Tax Act) to a holder of the Notes, who is a non-resident of Australia and who, during the taxable year, does not hold the Notes in the course of carrying on business at or through a permanent establishment in Australia, will not be subject to Australian income taxes; and (b) income tax - Australian Note holders - Australian residents or non-Australian residents who hold the Notes in the course of carrying on business at or through a permanent establishment in Australia (“Australian Holders”), will be assessable for Australian tax purposes on income either received or accrued due to them in respect of the Notes. Whether income will be recognised on a cash receipts or accruals basis will depend upon the tax status of the particular Note holder and the terms and conditions of the Notes. Special rules apply to the taxation of Australian residents who hold the Notes in the course of carrying on business at or through a permanent establishment outside Australia which vary depending on the country in which that permanent establishment is located; and (c) gains on disposal of Notes - offshore Note holders - a holder of the Notes, who is a non-resident of Australia and who, during the taxable year, does not hold the Notes in the course of carrying on business at or through a permanent establishment in Australia, will not be subject to Australian income tax on gains realised during that year on sale or redemption of the Notes, provided such gains do not have an Australian source. A gain arising on the sale of Notes by a nonAustralian resident holder to another non-Australian resident where the Notes are sold outside Australia and all negotiations are conducted, and documentation executed, outside Australia should not be regarded as having an Australian source; and (d) gains on disposal of Notes - Australian Note holders - Australian Holders will be required to include any gain or loss on disposal of the Notes in their taxable income. Special rules apply to the taxation of Australian residents who hold the Notes in the course of carrying on business at or through a permanent establishment outside Australia which vary depending on the country in which that permanent establishment is located; and (e) deemed interest - there are specific rules that can apply to treat a portion of the purchase price of Notes as interest for IWT purposes when certain Notes originally issued at a discount or with a maturity premium or which do not pay interest at least annually are sold to an Australian resident (who does not acquire them in the course of carrying on business at or through a permanent establishment outside Australia) or a non-resident who acquires them in the course of carrying on business at or through a permanent establishment in Australia. As the Notes are not issued at a discount or with a maturity premium, and pay interest at least annually, these rules should not apply to the Notes. 108 These rules also do not apply in circumstances where the deemed interest would have been exempt under Section 128F of the Australian Tax Act if the Notes had been held to maturity by a non-resident; and (f) death duties - no Notes will be subject to death, estate or succession duties imposed by Australia, or by any political subdivision or authority therein having power to tax, if held at the time of death; and (g) stamp duty and other taxes - no ad valorem stamp, issue, registration or similar taxes are payable in Australia on the issue or transfer of any Notes; and (h) other withholding taxes on payments in respect of Notes - Section 12-140 of Schedule 1 to the Taxation Administration Act 1953 of Australia (“Taxation Administration Act”) imposes a type of withholding tax at the rate of (currently) 46.5% on the payment of interest on certain registered securities unless the relevant payee has quoted an Australian tax file number (“TFN”), (in certain circumstances) an Australian Business Number (“ABN”) or proof of some other exception (as appropriate). Assuming the requirements of Section 128F of the Australian Tax Act are satisfied with respect to the Notes, then the requirements of Section 12-140 do not apply to payments to a holder of Notes in registered form who is not a resident of Australia and not holding those Notes in the course of carrying on business at or through a permanent establishment in Australia. Payments to other classes of holders of Notes in registered form may be subject to a withholding where the holder of those Notes does not quote a TFN, ABN or provide proof of an appropriate exemption (as appropriate); and (i) supply withholding tax - payments in respect of the Notes can be made free and clear of the “supply withholding tax” imposed under Section 12-190 of Schedule 1 to the Taxation Administration Act; and (k) goods and services tax (GST) - neither the issue nor receipt of the Notes will give rise to a liability for GST in Australia on the basis that the supply of Notes will comprise either an input taxed financial supply or (in the case of an offshore subscriber) a GST-free supply. Furthermore, neither the payment of principal or interest by the Issuer, nor the disposal of the Notes, would give rise to any GST liability in Australia; (l) debt/equity rules - Division 974 of the Australian Tax Act contains tests for characterising debt (for all entities) and equity (for companies) for Australian tax purposes, including for the purposes of dividend withholding tax and IWT. The Issuer intends to issue Notes which are to be characterised as “debt interests” for the purposes of the tests contained in Division 974 and the returns paid on the Notes are to be “interest” for the purpose of Section 128F of the Australian Tax Act. Accordingly, Division 974 is unlikely to affect the Australian tax treatment of holders of Notes; 109 (m) additional withholdings from certain payments to non-residents - Section 12-315 of Schedule 1 to the Taxation Administration Act gives the Governor-General power to make regulations requiring withholding from certain payments to non-residents on or after 1 July 2003. However, Section 12-315 expressly provides that the regulations will not apply to interest and other payments which are already subject to the current IWT rules or specifically exempt from those rules. Further, regulations may only be made if the responsible minister is satisfied the specified payments are of a kind that could reasonably relate to assessable income of foreign residents. The regulations promulgated prior to the date of this Information Memorandum are not relevant to any payments in respect of the Notes. Any further regulations also should not apply to repayments of principal under the Notes, as in the absence of any issue discount, such amounts will generally not be reasonably related to assessable income. The possible application of any future regulations to the proceeds of any sale of the Notes will need to be monitored; (n) taxation of foreign exchange gains and losses - Divisions 775 and 960 of the Australian Tax Act contain rules to deal with the taxation consequences of foreign exchange transactions entered into on or after 1 July 2003 (unless a taxpayer elects for them to apply to earlier transactions). As all payments under the Notes will be in Australian dollars, and provided that all the receivables and receipts of the Issuer are in Australian dollars, the rules should not apply to the Issuer or to prospective Noteholders in respect of payments made by the Issuer on the Notes; and (o) taxation of financial arrangements - on 16 December 2005 the Australian Minister for Revenue and Assistant Treasurer issued an exposure draft of proposed new rules for the “Taxation of Financial Arrangements”. It is intended that the new rules (if enacted) would represent a code for the taxation of receipts and payments in relation to financial arrangements. The new division defines financial arrangements and sets out five taxtiming methods. These methods (fair value, accruals, retranslation, realisation and hedging) determine the tax treatment of all financial arrangements covered by the legislation. The exposure draft does not specify the commencement date for the new rules, although the explanatory material released with the exposure draft says that the new rules will apply to financial arrangements acquired after the start date. Taxpayers may also be able to elect for the new rules to apply to all financial arrangements existing at the start date. The proposed measures should not apply to holders of Notes who are non-residents of Australia and who do not hold their Notes in the course of carrying on business at or through a permanent establishment in Australia. The exposure draft does not contain any indication as to how (if at all) the proposed rules are to relate to the imposition of IWT. However, the government has given no indication that it intends the new rules to apply in a manner which overrides the section 128F exemption. It is expected that the government will consult with taxpayers and industry representatives to develop the final legislation. 110 12 Selling Restrictions Each Dealer will enter into the Dealer Agreement with the Issuer in respect of the Notes and may, upon the terms and subject to the conditions contained in the Dealer Agreement, make bids for the Notes and arrange for the Notes to be sold to investors. No action has been taken by the Issuer or the Dealers which would or is intended to permit a public offer of Notes in any country or jurisdiction where action for that purpose is required. Accordingly, the Dealers will undertake that they will not, directly or indirectly, offer or sell any Notes in any country or jurisdiction where action for that purpose is required and neither this Information Memorandum nor any other circular, prospectus, form of application, advertisement or other material may be distributed in or from or published in any country or jurisdiction except under circumstances which will result in compliance with applicable laws and regulations. 12.1 Australia No prospectus or other disclosure document (as defined in the Corporations Act) in relation to the Notes has been or will be lodged with ASIC or ASX. Each Dealer has represented, warranted and agreed that it: (a) has not made or invited, and will not make or invite, an offer of the relevant Notes for issue or sale in Australia (including an offer or invitation which is received by a person in Australia); and (b) has not distributed or published, and will not distribute or publish, the Information Memorandum or any other offering material or advertisement relating to any Notes in Australia, unless: 12.2 (i) the minimum aggregate consideration payable by each offeree or invitee on acceptance of the offer is at least A$500,000 (or its equivalent in an alternate currency) (disregarding monies lent by the offeror or its associates) or more, or the offer does not otherwise require disclosure to investors under Part 6D.2 or Part 7.9 of the Corporations Act; (ii) the offer does not constitute an offer to a “retail client” for the purposes of Chapter 7 of the Corporations Act; and (iii) such action complies with other applicable laws, and directives and does not require any document to be lodged with ASIC. The United States of America The Notes have not been and will not be registered under the United States Securities Act of 1933, as amended (the “Securities Act”), and the Issuer has not been and will not be registered as an investment company under the United States Investment Company Act of 1940, as amended (the “Investment Company Act”). An interest in the Notes may not 111 be held by a “U.S. person” as defined in Regulation S under the Securities Act (“Regulation S”) at any time. 12.3 European Economic Area In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a ‘‘Relevant Member State’’), each Dealer has represented, warranted and agreed that with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State (the ‘‘Relevant Implementation Date’’) it has not made and will not make an offer of Notes to the public in that Relevant Member State except that it may, with effect from and including the Relevant Implementation Date, make an offer of Notes to the public in that Relevant Member State: (a) in (or in Germany, where the offer starts within) the period beginning on the date of publication of a prospectus in relation to those Notes which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and noticed to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive and ending on the date which is 12 months after the date of such publication; (b) at any time to legal entities which are authorised or regulated to operate in the financial markets or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities; (c) at any time to any legal entity which has two or more of (1) an average of at least 250 employees during the last financial year; (2) a total balance sheet of more than €43,000,000 and (3) an annual net turnover of more than €50,000,000, as shown in its last annual or consolidated accounts; or (d) at any time in any other circumstances which do not require the publication by the Issuer of a prospectus pursuant to Article 3 of the Prospectus Directive. For the purposes of this provision, the expression an ‘‘offer of Notes to the public’’ in relation to any Notes in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and the Notes to be offered so as to enable an investor to decide to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State. The expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member State. The expression “European Economic Area” means the European Union, Iceland, Norway and Liechtenstein. The expression “Member State of the European Economic Area” means any Member State of the European Union, Iceland, Norway and Liechtenstein. 112 12.4 The Republic of Ireland Each Dealer has represented and agreed that: 12.5 (a) it has not offered or sold and will not offer or sell any Notes, except in accordance with the provisions of the Prospectus (Directive 2003/71/EC) Regulations 2005 (“Prospectus Regulations”) and the provisions of the Irish Companies Act 1963-2005; (b) it has not and will not offer or sell any Notes other than in compliance with the provisions of the Irish Market Abuse (Directive 2003/6/EU) Regulations 2005; and (c) it will not underwrite the issue or place the Notes otherwise than in accordance with the provisions of the Irish Investment Intermediaries Act 1995 (as amended), including without limitation Section 9, 23 (including any advertising restrictions made under that Section), 50 and 37 (including any codes of conduct issued under that Section) and the provisions of the Irish Investor Compensation Act 1998, including without limitation, Section 21. The United Kingdom In relation to each Class of Notes, each Dealer subscribing for or purchasing such Notes has represented, warranted and undertaken, or will represent, warrant and undertake to the Issuer and each other Dealer (if any) that: 12.6 (a) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) received by it in connection with the issue or sale of any Notes in circumstances in which section 21(1) of the FSMA does not or would not, if the Issuer was not an authorised person, apply to the Issuer; and (b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to any Notes in, from or otherwise involving the United Kingdom. Hong Kong In Hong Kong, interests in the Notes may not be offered or sold by any document other than (i) to persons whose ordinary business is to buy or sell shares or debentures (whether a principal or agent); or (ii) to "professional investors" as defined in the Securities and Futures Ordinance (cap. 571) of Hong Kong and any rules made under that Ordinance; or (iii) in circumstances which do not constitute an offer to the public within the meaning of the Companies Ordinance (cap. 32) of Hong Kong. Unless it is a person permitted to do so under the securities laws of Hong Kong, no person may or shall issue, or have in its possession for the purpose of issue, any advertisement, invitation or document relating to the Notes, whether in Hong Kong or elsewhere, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the Notes 113 which are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" within the meaning of the Securities and Futures Ordinance and any rules made thereunder. The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the Notes. If you are in any doubt about the contents of this document, you should obtain independent professional advice. 12.7 Japan The Notes have not been and will not be registered under the Securities and Exchange Law of Japan (the "Securities and Exchange Law") and, accordingly, each Dealer has agreed and each further Dealer appointed under the Programme will be required to agree that it will not offer or sell any Notes, directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means any person resident in Japan, including any corporation or other entity organised under the laws of Japan), or to others for re-offering or resale, directly or indirectly, in Japan or to a resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with, the Securities and Exchange Law and any other applicable laws, regulations and ministerial guidelines of Japan. 12.8 New Zealand The Issuer does not intend that the Notes be offered for sale or subscription to the public in New Zealand in terms of the Securities Act 1978 of New Zealand. Accordingly, no person may subscribe for, offer, sell or deliver any Notes or distribute any Information Memorandum, advertisement or offering material relating to the Notes in breach of the Securities Act 1978 of New Zealand and, in particular, no person may sell or offer for sale Notes to any member of the public in New Zealand in breach of the Securities Act 1978 of New Zealand. 12.9 Switzerland This Information Memorandum does not constitute a prospectus within the meaning of Article 652A of the Swiss Code of Obligations and Article 1156 et seq. of the Swiss Code of Obligations. The Notes may not be publicly offered or distributed in or from Switzerland, and neither the preliminary Information Memorandum, the final Information Memorandum nor any other offering materials relating to any of the Notes may be publicly distributed in connection with any such offering or distribution. 12.10 Singapore The Information Memorandum has not been registered as a prospectus with the Monetary Authority of Singapore under the Securities and Futures Act, Chapter 289 of Singapore, as amended (the "Securities and Futures Act"). Each Dealer has represented, warranted and agreed that the Notes may not be offered or sold or made the subject of an invitation for subscription or purchase nor may the Information Memorandum or any other document or material in connection with the offer or sale or invitation for subscription or purchase of any Notes be circulated or distributed, whether directly or indirectly, to the 114 public or any member of the public in Singapore other than (a) to an institutional investor or other person falling within Section 274 of the Securities and Futures Act, (b) to a relevant person, or any person pursuant to Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions specified in Section 275 of the Securities and Futures Act, or (c) otherwise than pursuant to, and in accordance with the conditions of, any other applicable provision of the Securities and Futures Act. Each Dealer has further represented, warranted and agreed to notify (whether through the distribution of this Information Memorandum or any other document or material in connection with the offer or sale or invitation for subscription or purchase of any Notes or otherwise) each of the following relevant persons specified in Section 275 of the Securities and Futures Act which has subscribed or purchased Notes from and through that Dealer, namely a person who is: (a) a corporation (which is not an accredited investor) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary is an accredited investor, that shares, debentures and units of shares and debentures of that corporation or the beneficiaries' rights and interest in that trust shall not be transferable for 6 months after that corporation or that trust has acquired the Notes under Section 275 of the Securities and Futures Act except: 12.11 (a) to an institutional investor under Section 274 of the Securities and Futures Act or to a relevant person, or any person pursuant to Section 275(1A) of the Securities and Futures Act, and in accordance with the conditions, specified in Section 275 of the Securities and Futures Act; (b) where no consideration is given for the transfer; or (c) by operation of law. Republic of China The Notes may not be sold or offered in the Republic of China and may only be offered and sold to Republic of China resident investors from outside Taiwan in such a manner as complies with Taiwan securities laws and regulations applicable to such cross border activities. 12.12 General Each Dealer has agreed that it will observe all applicable laws and regulations in any jurisdiction in which it may offer, sell or deliver Notes. 115 13 Transaction Documents The following documents will be available for inspection by Holders and bona fide prospective Holders during business hours at the office of the Manager. However, any person wishing to inspect these documents must first enter into an agreement with the Manager, in a form acceptable to the Manager, not to disclose the contents of these documents without its prior written consent. (a) the Trust Deed (insofar as it applies to the Series); (b) the Definitions Schedule (insofar as it applies to the Series); (c) the Master Management Deed (insofar as it applies to the Series); (d) the Master Servicer Deed (insofar as it applies to the Series); (e) the Receivables Acquisition and Servicing Agreement (insofar as it applies to the Series); (f) each Power of Attorney (insofar as it applies to the Series);; and (g) the Series Supplement; (h) the Charge; and (i) any Derivative Contracts in respect of that Series. 116 14 Glossary of Terms Accrual Amount means for a specified period: (a) the aggregate of fees, interest and charges posted to the Loans during that period; plus (b) the aggregate of fees, interest and charges which were accrued (but remain unposted) on the Loans up to (and including) the last day of that period or up to (but excluding) the date (if any) on which a Loan was sold or Redesignated so that it was no longer an Asset in respect of the Series; minus (c) the aggregate of fees, interest and charges which were accrued (but remain unposted) on the Loans up to (but excluding) the first day of that period or up to (but excluding) the date (if any) on which a Loan was purchased or redesignated so that it became an Asset in respect of the Series. Adjusted Collections means for a Calculation Period: (a) the Collections received during that Calculation Period; minus (b) the Collection Period Distributions for that Calculation Period. Adverse Rating Effect means an effect which either causes or contributes to a downgrading or withdrawal of the rating given to any Notes by a Current Rating Agency in respect of the Series. Agent in the context of the Master Servicer Deed, means a person not employed by the Originator (but engaged by the Originator) who introduces persons who wish to apply for Mortgage Loans to the Originator and who provides information to the Originator in respect of that person. Aggregate Class A Note Principal Outstanding means the Class A Note Principal Outstanding of all Class A Notes. Aggregate Class A Note Stated Amount means the Class A Note Stated Amount of all Class A Notes. Aggregate Class AB Note Principal Outstanding means the Class AB Note Principal Outstanding of all Class AB Notes. Aggregate Class AB Note Stated Amount means the Class AB Note Stated Amount of all Class AB Notes. Aggregate Class B Note Principal Outstanding means the Class B Note Principal Outstanding of all Class B Notes. Aggregate Class B Note Stated Amount means the Class B Note Stated Amount of all Class B Notes. 117 Aggregate Liquidity Note Principal Outstanding means, at any time, the aggregate of the Liquidity Note Principal Outstanding of all Liquidity Notes at that time. Aggregate Liquidity Stated Amount means the Liquidity Note Stated Amount of all Liquidity Notes. Aggregate Principal Outstanding means the sum of the Aggregate Class A Note Principal Outstanding, the Aggregate Class AB Notes Principal Outstanding, the Aggregate Liquidity Note Principal Outstanding and the Aggregate Class B Note Principal Outstanding. Alternate Currency means, in relation to any Notes, a currency other than Australian Dollars specified in the Series Supplement. Approved Corporation means: (a) a person having a Required Credit Rating; or (b) a person which is a wholly owned subsidiary of an entity having a Required Credit Rating, and whose obligations are unconditionally guaranteed by such entity at the relevant time. Approved Mortgage means, in respect of a Series, a mortgage which: (a) (b) is either: (i) a registered first mortgage (or a mortgage which, upon registration, will be a registered first mortgage) over Land situated in any State or Territory of Australia; or (ii) a registered mortgage other than a first mortgage (or a mortgage which, upon registration, will be a registered mortgage other than a first mortgage) over Land situated in any State or Territory of Australia in circumstances where the Seller also holds or will hold a registered first mortgage (or a mortgage which, upon registration, will be a registered first mortgage) over that Land and where no other person holds a mortgage which ranks, as between itself and the Seller, equally or in priority over any mortgage held by the Seller; (iii) (or both); and has the following characteristics: (i) it is granted or transferred, or is to be granted or transferred, to the Issuer; and (ii) secures the repayment of a Mortgage Loan and the payment of interest and all other moneys payable in respect of the Loan and the mortgage; and 118 (iii) if, in respect of a Series, the applicable Series Supplement states that this paragraph applies in respect of that Series, it (and the Loan secured by it) has been approved by a Mortgage Insurer; and (iv) its acquisition or the making of the Mortgage Loan secured by it, has been (or will be) funded by the issue of debt securities (whether or not it was originally funded by a drawing under a warehouse facility); and (v) the Loan secured by it is required to be repaid on or before the maturity date of the Loan (if any); and (vi) the Land over which it is taken is: (A) a residential property; (B) has been approved for residential occupation; or (C) if agreed by each Current Rating Agency (if any) in respect of each Series, is vacant land but has been zoned for residential purposes by the relevant governmental authorities; and (c) complies with the mortgage parameters in effect at the time of acquisition in respect of the Series; and (d) where regulated by the Consumer Credit Code, was originated in compliance with the Consumer Credit Code; and (e) complies with RAMS’ procedures manuals. Assets means, in respect of the Series, the right, title and interest of the Issuer, in its capacity as trustee in respect of the Series, in all assets which are subject to the Deed of Charge in respect of the Series including, without limitation, the following (to the extent to which they relate to the Series): (a) any Mortgage Loans held by the Issuer; (b) cash on hand or at a Bank representing cleared or immediately available funds; (c) Authorised Investments or any other investments; (d) amounts owing to the Issuer by Borrowers; (e) any prepayment of expenditure; (f) any asset originated or acquired by the Issuer in accordance with any Transaction Document in respect of that Series; (g) the benefit of all representations, warranties, undertakings, covenants, indemnities and promises made by any party in favour of the Issuer under the Transaction Documents; 119 (h) other property as identified in writing by the Issuer; and (i) income, or amounts in the nature of income, accrued from investments or other assets referable to the Series to the extent not included in the preceding paragraphs of this definition, provided that the Assets in respect of each Series do not form a separate trust under the Trust Deed. Austraclear means Austraclear Limited (ABN 94 002 060 773) or Austraclear Services Limited (ABN 28 003 284 419) (including, where applicable, the computer based system for holding Notes and recording and settling transaction in those Notes between members of that system maintained by Austraclear). Australian Dollars, $ or A$ means the lawful currency for the time being of the Commonwealth of Australia. Authorisation means any authorisation, approval, consent, licence, permit, franchise, permission, filing, registration, resolution, direction, declaration or exemption from, by or with a governmental agency. Authorised Investments means, in respect of the Series, investments in: (a) (i) stock, bonds, notes or other securities issued by; (ii) securities, deposits or loans secured or guaranteed by; or (iii) deposits or loans secured upon stock, bonds, notes or other securities issued or guaranteed by, the Commonwealth of Australia or any State or Territory of the Commonwealth of Australia and which investments have a Required Credit Rating at the time of the acquisition of such investments by RMS in respect of the Series; (b) certificates of deposit, commercial paper or any other debt security which has a Required Credit Rating in respect of the Series or which is issued by a person which is an Approved Corporation at the time the relevant security is acquired; (c) deposits with, or purchase of bills of exchange, promissory notes, certificates of deposit or other negotiable instruments accepted, drawn or endorsed by, an Approved Corporation at the time of the deposit, loan or purchase; (d) guarantee investment contract with a party which has a Required Credit Rating at the time the Issuer enters into the contract; (e) Mortgage-Backed Securities (as defined in the Duties Act 1997 (NSW)) which have a Required Credit Rating at the time of the investment by the Issuer in them; 120 (f) a chose in action in respect of rights to direct the Reserve Bank of Australia to deliver securities being Authorised Investments (other than under this paragraph (f)) to or to the order of the Issuer; and (g) any other asset which is specified in the Series Supplement as an Authorised Investment for the Series, being, in all cases: (i) an investment which can be converted to Cash on or prior to the immediately succeeding Payment Date; (ii) an investment denominated in Australian Dollars; (iii) an investment held in the name of the Issuer; and (iv) an investment which is designated by the Issuer in the Series Supplement as being referable to a particular Trust referred to in that notice. Bank means a body corporate or other institution authorised to carry on a banking business (including to act as a central bank) in any part of the world. BBSW Rate means on any date, the rate expressed as a percentage per annum for the appropriate period: (a) calculated by taking the rates appearing on the Reuters screen BBSW page at or about 10.10 am (Sydney time) on that day for each bank so quoting (being no fewer than five) as being the mean buying and selling rate for a bill of exchange having a term of 30 days, after eliminating one of the highest and one of the lowest mean rates and taking the average of the remaining mean rates (rounded, if necessary, to the nearest fourth decimal place, and where there is no nearest fourth decimal place, rounded up); or (b) if fewer than five banks quote on the Reuters screen BBSW page, calculated as above by taking the rates otherwise quoted by five banks at or about 10.10a.m. (Sydney time) by five institutions otherwise authorised to quote rates on the Reuters screen BBSW page for a bill of exchange of the same term; or (c) if a rate cannot be determined in accordance with the procedures in (a) or (b), specified in good faith by the Manager at or around that time on that date, having regard, to the extent possible, to comparable indices then available as to the rate otherwise bid and offered for bills of exchange of that term, provided that the BBSW Rate for the first Payment Period will be the rate determined by linear interpolation calculated in accordance with paragraph (a), or, if applicable, paragraph (b), above by reference to the rates for period of 30 days and 60 days. Borrower means, in respect of any Mortgage Loan, the person to whom funds have been advanced or finance has been provided under the relevant Mortgage Loan. 121 Business Day means a day (excluding Saturday, Sunday and any public holiday) on which commercial banks are open for business in Sydney. Cash includes Cheques and the electronic transfer of funds. Calculation Period means: (a) in respect of calculations being made on a Determination Date in respect of a Payment Date, the relevant Collection Period; or (b) on any other day, the period from and including the first day of the Collection Period during which that day falls, to but excluding that day. Call Date means, in respect of all Notes, the earlier of: (a) the Payment Date falling in October 2011; or (b) the Payment Date on which the Aggregate Principal Outstanding of the Notes is less than 20% of the Aggregated Principal Outstanding of all the Notes on the Issue Date, and, in either case, each following Payment Date. Carryover Charge Off means a Class A Note Carryover Charge Off, a Class AB Note Carryover Charge Off, a Liquidity Carryover Charge Off and a Class B Note Carryover Charge Off. Cash Deposit means the deposit described in Section 2.10 (“Liquidity Support”). Cash Deposit Draw has the meaning given to it in Section 7.8 (“Cash Deposit Draw”). Cashflow Allocation Methodology means the methodology specified in Section 7 (“Cashflow Allocation Methodology”). Charge means the charge in the form of the Deed of Charge over all of the Assets in respect of the Series, both present and future, granted to the Security Trustee by the Issuer for the benefit of the Secured Creditors in order to secure its obligations to the Secured Creditors in respect of the Series. Charge Off has the meaning given to that term in Section 7.12 (“Charge Offs”). Cheque means a cheque, bank cheque or payment order. Class in relation to Notes, means all of the Class A Notes, or all of the Class AB Notes, or all of the Class B Notes or all of the Liquidity Notes (if any). Class A Enhanced Margin means the rate percentage per annum notified to Class A Noteholders on or about the Issue Date as the enhanced margin applicable to those Class A Notes. 122 Class A Interest Amount means, in respect of a Class A Note, a Payment Date and the Payment Period ending on (but excluding) that Payment Date, an amount calculated as follows: A = B x C x N 365 where: A = the Class A Interest Amount for that Payment Period; B = the Aggregate Class A Note Principal Outstanding on the first day of that Payment Period after taking into account any payment of principal made in respect of the Class A Notes on that day; C = the Interest Rate for the Class A Notes for that Payment Period; and N = the number of days in that Payment Period, rounded, if necessary, to the nearest cent with 0.5 being rounded up. Class A Margin means the rate percentage per annum notified to Class A Noteholders on or about the Issue Date as the margin applicable to those Class A Notes. Class A Note means a note issued by the Issuer and designated as a Class A Note in the Register of Holders. Class A Note Carryover Charge Off means the aggregate of the Class A Note Carryover Charge Off as at the immediately preceding Payment Date (if any) and the Class A Note Charge Off for the current Payment Date less any amounts to be applied in accordance with Section 7.9(k) (“Distribution of Total Available Income”) on the current Payment Date or any Other Series Receipt to be applied on the current Payment Date to reinstate the Aggregate Class A Note Stated Amount. Class A Note Charge Off has the meaning given to that term in Section 7.12 (“Charge Offs”). Class A Note Principal Outstanding means, on any date and in respect of a Class A Note, the aggregate of any issuance proceeds of that Class A Note less the aggregate of principal payments made on or before that date in relation to that Class A Note. Class A Note Stated Amount means in relation to a Class A Note on any date, an amount equal to the Class A Note Principal Outstanding in respect of that Class A Note less a pro rata share of any Class A Note Carryover Charge Offs at that date (based on the Class A Note Principal Outstanding of each Class A Note). Class A Noteholder means any Holder of a Class A Note. 123 Class AB Enhanced Margin means the rate percentage per annum notified to Class AB Noteholders on or about the Issue Date as the enhanced margin applicable to those Class AB Notes. Class AB Interest Amount means, in respect of a Class AB Note, a Payment Date and the Payment Period ending on (but excluding) that Payment Date, an amount calculated as follows: A = B x C x N 365 where: A = the Class AB Interest Amount for that Payment Period; B = the Aggregate Class AB Note Principal Outstanding on the first day of that Payment Period after taking into account any payment of principal made in respect of the Class AB Notes on that day; C = the Interest Rate for the Class AB Notes for that Payment Period; and N = the number of days in that Payment Period, rounded, if necessary, to the nearest cent with 0.5 being rounded up. Class AB Margin means the rate percentage per annum notified to Class AB Noteholders on or about the Issue Date as the margin applicable to those Class AB Notes. Class AB Note means a note issued by the Issuer and designated as a Class AB Note in the Register of Holders. Class AB Note Carryover Charge Off means the aggregate of the Class AB Note Carryover Charge Off as at the immediately preceding Payment Date (if any) and the Class AB Note Charge Off for the current Payment Date less any amounts to be applied in accordance with Section 7.9(k) (“Distribution of Total Available Income”) on the current Payment Date or any Other Series Receipt to be applied on the current Payment Date to reinstate the Aggregate Class AB Note Stated Amount. Class AB Note Charge Off has the meaning given to that term in Section 7.12 (“Charge Offs”). Class AB Note Principal Outstanding means, on any date and in respect of a Class AB Note, the aggregate of any issuance proceeds of that Class AB Note less the aggregate of principal payments made on or before that date in relation to that Class AB Note. Class AB Note Stated Amount means in relation to a Class AB Note on any date, an amount equal to the Class AB Note Principal Outstanding in respect of that Class AB Note less a pro rata share of any Class AB Note Carryover Charge Offs at that date (based on the Class AB Note Principal Outstanding of each Class AB Note). 124 Class AB Noteholder means any Holder of a Class AB Note. Class B Note means a note issued by the Issuer and designated as a Class B Note in the Register of Holders. Class B Enhanced Margin means the rate percentage per annum notified to Class B Noteholders on or about the Issue Date as the enhanced margin applicable to those Class B Notes. Class B Interest Amount means, in respect of a Class B Note, a Payment Date and the Payment Period ending on (but excluding) that Payment Date, an amount calculated as follows: A = B x C x N 365 where: A = the Class B Interest Amount for that Payment Period; B = the Aggregate Class B Note Principal Outstanding on the first day of that Payment Period after taking into account any payment of principal made in respect of the Class B Notes on that day; C = the Interest Rate for the Class B Notes for that Payment Period; and N = the number of days in that Payment Period, rounded, if necessary, to the nearest cent with 0.5 being rounded up. Class B Margin means the rate percentage per annum notified to Class B Noteholders on or about the Issue Date as the margin applicable to those Class B Notes. Class B Note Carryover Charge Off means the aggregate of the Class B Note Carryover Charge Off as at the immediately preceding Payment Date (if any) and the Class B Note Charge Off for the current Payment Date less any amounts to be applied in accordance with Section 7.9(k) (“Distribution of Total Available Income”) on the current Payment Date or any Other Series Receipt to be applied on the current Payment Date to reinstate the Aggregate Class B Note Stated Amount. Class B Note Charge Off has the meaning given to that term in Section 7.12 (“Charge Offs”). Class B Noteholder means any Holder of a Class B Note. Class B Note Principal Outstanding means, on any date and in respect of a Class B Note, the aggregate of any issuance proceeds of that Class B Note less the aggregate of principal payments made on or before that date in relation to that Class B Note. 125 Class B Note Stated Amount means in relation to a Class B Note on any date, an amount equal to the Class B Note Principal Outstanding in respect of that Class B Note less a pro rata share of the Class B Note Carryover Charge Offs at that date (based on the Class B Note Principal Outstanding of each Class B Note). Class B Note Subscription Agreement means any agreement in respect of the Series in respect of which a person agrees to subscribe for Class B Notes. Closing Date means, in respect of a transfer of Mortgage Loans between any two parties as contemplated under the Trust Deed or the relevant Series Supplement, the date specified as such equivalent term either the Closing Date in the relevant sale document or such other agreement pursuant to which the Mortgage Loans are transferred. Collection Period means each period which commences on (and includes) a Determination Date and ends on (but excludes) the next Determination Date. The first Collection Period commences on (and includes) the Issue Date and ends on (but excludes) the first Determination Date. Collection Period Distributions has the meaning given to that term in Section 7.5 (“Collection Period Distributions”). Collections has the meaning given to it in Section 7.4 (“Collections”). Conditions means in respect of the Series and in relation to the Notes of the Series, the terms and conditions endorsed on or incorporated by reference in the Notes, such terms and conditions being substantially in the form set out in the Series Supplement. Consumer Credit Code means the Consumer Credit Code set out in the Appendix to the Consumer Credit (Queensland) Act 1994 as in force or applied as a law of any jurisdiction of Australia or the provisions of the Code set out in the Appendix to the Consumer Credit (Western Australia) Act 1996 or the provisions of the Code set out in the Appendix to the Consumer Credit Code (Tasmania) Act 1996. Contractors Insurance Policy means an insurance policy provided to the Issuer in respect of claims which the Issuer may make or be subject to whilst any improvements on Land which is the subject of an Approved Mortgage are constructed. Corporations Act means the Corporations Act 2001 (Cwlth). Counterparty means, in respect of the Series, any counterparty with which the Issuer has entered into one or more Derivative Contracts in respect of the Notes or assets of the Series and which is identified in the Series Supplement. Current Rating Agency means in respect of the Series, Standard & Poor’s (Australia) Pty Limited, Moody’s Investors Service Pty Limited and each other rating agency appointed by the Manager to rate or assess the credit of the Notes. Custodian means J.P. Morgan Trust Australia Limited or any other person appointed, from time to time, as custodian under the Trust Deed. 126 Dealer Agreement means the document entitled “RAMS Mortgage Securities Trust Series 2006-1 Dealer Agreement” dated on or about the date of this deed between the Issuer, the Seller, the Manager, the Servicer, The Royal Bank of Scotland plc and National Australia Bank Limited. Deed of Charge means the deed entitled “Deed of Charge - RAMS Mortgage Securities Trust - Series 2006-1” dated on or about the date of this deed between the Issuer and the Security Trustee. Definitions Schedule means the deed entitled “RAMS Mortgage Securities Trust Definitions Schedule” dated 8 December 2004 between RMS and the Security Trustee. Derivative Contract means, in respect of the Series, any interest rate swap, forward rate agreement, cap, floor, collar or other rate or price protection transaction or agreement, any option with respect to any such transaction or agreement, or any combination of such transactions or agreements, other similar arrangements or any other derivative entered into by the Issuer in connection with: (a) the Notes in respect of the Series; or (b) any Asset in respect of the Series. Determination Date means the day which is four Business Days prior to a Payment Date. Eligible Bank means a Bank with the Required Credit Rating. Eligible Receivable means a Mortgage Loan which meets the criteria in Section 8.12 (“RHL Representations and Eligibility Criteria”). Encumbrance means any Security Interest, notice under Section 218 or 255 of the Income Tax Assessment Act 1936 (Cwlth) or Section 260-5 of the Taxation Administration Act 1953 (Cwlth) or under any similar provision of a State, Territory or Commonwealth law or law of New Zealand in favour of any person other than the Security Trustee. Event of Default has, in respect of the Series, the meaning given to it Section 10.6 (“Security Trustee”). Extraordinary Resolution means, with respect to the Series: (a) a resolution passed at a meeting of the Secured Creditors or a class of Secured Creditors of the Series by a majority consisting of not less than 75% of votes cast by the persons present and entitled to vote at a meeting; and (b) a circulating resolution of the relevant Secured Creditors made in accordance with the Trust Deed. Final Maturity Date means 14 October 2038. 127 Further Advance means, any additional provision of financial accommodation made pursuant to the terms of a Loan. General Insurance Policy means any insurance policy in force issued in respect of the property the subject of any Approved Mortgage or Mortgage Loan. Group means two or more Series which are designated as belonging to the same Group of Series in the applicable Deed of Charge and Series Supplement. Guarantee means a guarantee and indemnity provided by a Guarantor to the Issuer in respect of a Borrower’s or a Mortgagor’s obligations under a loan agreement or an Approved Mortgage (and whether or not contained in a loan agreement or a separate document). Guarantor means the person named as such in a Guarantee. Governmental Agency means any government, whether federal, state, territorial or local, and any minister, department, office, commission, delegate, instrumentality, agency, board, authority or organ thereof, whether statutory or otherwise. Holder, in respect of the Series means the person from time to time registered in the Register of Holders as the holder of an Registered Note and includes persons jointly registered. Information Memorandum has the meaning given to such term in Section 1.1 (“Purpose”). Insolvency Event means the happening of any of these events: (a) an application (other than a frivolous or vexatious application or an application which is stayed within 15 Business Days) is made to a court or an order is made that the relevant body corporate be wound up other than for the purposes of a solvent reconstruction or amalgamation; (b) an application is made to a court or an order appointing a liquidator or provisional liquidator in respect of the relevant body corporate, or one of them is appointed, whether or not under an order; (c) a receiver, receiver and manager, liquidator, trustee or similar officer is appointed in respect of any part of the property of the relevant body corporate and such appointment is not remedied within 15 Business Days; (d) an administrator is appointed to the relevant body corporate or any steps are taken for the appointment of an administrator to the relevant body corporate; (e) the relevant body corporate commences negotiations with any one or more of its creditors with a view to the general readjustment or rescheduling of its indebtedness or makes a general assignment for the benefit of or a composition with its creditors; 128 (f) the relevant body corporate is or states that it is unable to pay its debts as and when they fall due or is deemed unable to pay its debts under any applicable legislation (other than as a result of the failure to pay a debt or claim which is the subject of a good faith dispute); or (g) anything analogous or having a substantially similar effect to any of the events specified above happens under the laws of any applicable jurisdiction. Insurance Policy means: (a) (b) in respect of a Receivable, any policy of insurance in force in respect of a Receivable or its Related Security, including: (i) any policy of Lender’s Mortgage Insurance Contract; (ii) any General Insurance Policy; and (iii) any Contractors Insurance Policy in respect of a Mortgage; and any Professional Indemnity Insurance Policy. Interest Collections means, for a given Calculation Period: (a) the Adjusted Collections received during that Calculation Period; minus (b) the Principal Collections for that Calculation Period; plus (c) the Net Swap Settlement (if any) due to the Issuer from any Swap Provider during that Calculation Period (or with respect to a Collection Period, on the Payment Date immediately following the end of that Collection Period); minus (d) the Net Swap Settlement (if any) due to any Swap Provider by the Issuer during that Calculation Period (or with respect to a Collection Period, on the Payment Date immediately following the end of that Collection Period). Interest Rate means, in respect of a Class of Notes and for a Payment Period will be equal to the aggregate of: (a) in respect of the Class A Notes - BBSW Rate; (b) in respect of the Class AB Notes - BBSW Rate; and (c) in respect of the Class B Notes - BBSW Rate, on the relevant Rate Set Date plus in each case the applicable Margin for that Class of Notes for that Payment Period. The Interest Rate in respect of any Liquidity Notes (as the case may be) will be the rate separately agreed between the Issuer and the Liquidity Noteholder (as the case may be) prior to the time of issue of such Notes. 129 Interest Rate Swap means the Derivative Contract dated 20 December 2004 between the Issuer, the Manager and the Interest Rate Swap Provider and any Confirmation under it in respect of the Series. Interest Rate Swap Provider means National Australia Bank Limited or any other swap provider with the Required Credit Rating. Issue Date means [ ] 2006. Land means: (a) land (including tenements and hereditaments corporeal and incorporeal and every estate and interest in it whether vested or contingent, freehold or Crown leasehold, the terms of which lease is expressed to expire not earlier than five years after the maturity of the relevant Mortgage, and whether at law or in equity) wherever situated and including any fixtures to land; and (b) any parcel and any lot, common property and land comprising a parcel within the meaning of the Strata Schemes (Freehold Development) Act 1973 (New South Wales) or the Community Land Development Act 1989 (New South Wales) or any equivalent legislation in any other Australian jurisdiction or in New Zealand. Lender’s Mortgage Insurance Contract means, in relation to a Mortgage Loan, a contract of insurance under which a Mortgage Insurer insures the Issuer (or which has been assigned or novated to the Issuer) against the non-payment by a Borrower or Guarantor of amounts owing in respect of that Loan. Liquidation Loss means, in respect of a Receivable acquired by the Issuer: (a) the total amount owed by the Borrower under that Receivable on the date of enforcement of that Loan (being the Outstanding Loan Balance) together with all expenses relating to enforcement of that Receivable; less (b) the sum of the following: (i) the amount realised by the Issuer on enforcement of that Receivable; (ii) any amount received in respect of the Receivable under any Lender’s Mortgage Insurance Policy; (iii) any amount received by the Issuer from the Seller, Manager, Originator or Servicer in respect of a breach of a representation, warranty or covenant or pursuant to an indemnity, and and calculated after all necessary enforcement action is taken. Liquidity Carryover Charge Off means the aggregate of the Liquidity Note Carryover Charge Off as at the immediately preceding Payment Date (if any) and the Liquidity Note Charge Off for the current Payment Date less any amounts to be applied in accordance with Section 7.9(k) (“Distribution of Total Available Income”) on the current Payment 130 Date or any Other Series Receipt to be applied on the current Payment Date to reinstate the Aggregate Liquidity Note Stated Amount. Liquidity Charge Off has the meaning given to that term in Section 7.12 (“Charge Offs”). Liquidity Noteholder means a Holder of a Liquidity Note. Liquidity Note Principal Outstanding means, on any date and in respect of a Liquidity Note, the initial issuance proceeds of a Note less the aggregate of principal payments made on or before that date in relation to that Liquidity Note. Liquidity Notes means Notes that may be issued under that name by the Issuer, with the consent of each Current Rating Agency, from time to time constituted under this deed. Liquidity Shortfall means the amount determined in accordance with Section 7.6 (“Liquidity Shortfall”). Liquidity Stated Amount means in relation to a Liquidity Note on any date, an amount equal to the Principal Outstanding of that Liquidity Note less any Liquidity Carryover Charge Offs applicable to that Liquidity Note at that date. Low Doc Loan means a loan that was originated without full income verification in respect of the relevant Borrower. LVR means, in relation to a Receivable, the principal amount of that Receivable on its initial settlement date, plus the aggregate principal amount of all Further Advances made in respect of that Receivable, minus any reductions to those principal amounts due to partial reductions in the overall credit limit of the related Borrower, all divided by the most recent valuation of the properties securing that Loan, expressed as a percentage. Manager means RAMS Home Loans Pty Limited (ABN 67 053 725 741) or any other person performing the functions of manager, from time to time, under the Master Management Deed. Margin means: (a) (b) (c) in respect of the Class A Notes: (i) prior to the first Call Date, the Class A Margin; or (ii) on and after the first Call Date, the Class A Enhanced Margin; in respect of the Class AB Notes: (i) prior to the first Call Date, the Class AB Margin; or (ii) on and after the first Call Date, the Class AB Enhanced Margin; and in respect of the Class B Notes: 131 (i) prior to the first Call Date, the Class B Margin; or (ii) on and after the first Call Date, the Class B Enhanced Margin. Master Management Deed means the management deed entitled “RAMS Mortgage Securities Trust Master Management Deed” dated 8 December 2004 between the Issuer, the Manager and the Security Trustee, as amended and replaced from time to time. Master Servicer Deed means a deed entitled “RAMS Mortgage Securities Trust Master Servicer Deed” dated 8 December 2004 between the Issuer and the person or persons specified as the “servicer” in that deed. Mortgage Insurer means, in respect of a Loan, any insurer providing the Lender’s Mortgage Insurance Contract in relation to that Loan. Mortgage Loan means, in respect of the Series, any loan which has been or is to be made by, assigned to, or novated in favour of, the Issuer in relation to, and which form part of the Assets of, the Series, the terms and conditions of which are evidenced, or to be evidenced, in a loan agreement or in an Approved Mortgage. Mortgagor means, with respect to a Mortgage Loan: (a) the relevant Borrower; and (b) where the context requires, the grantor of any security interest created by the Mortgage in relation to the Mortgage Loan. Net Swap Settlement has the meaning given to it in Section 7.15 (“Net Swap Settlement”). Note means each Class A Note, each Class AB Note, each Liquidity Note and each Class B Note (as the context requires). Noteholder means each Holder of a Note. Notice of Creation of Security Trust means the deed entitled “RAMS Mortgage Securities Trust Series 2006-1 Notice of Creation of Security Trust” executed by the Issuer, the Security Trustee and the Manager in accordance with the Trust Deed. Other Income means, in respect of a Payment Period, the aggregate interest earned on Authorised Investments, any interest on the Cash Deposit, any premium received from a replacement Swap Provider in respect of the Swap and any other miscellaneous income received or to be received by the Issuer in relation to the Series during the relevant Payment Period. Other Series means a Series (as that term is defined in the Definitions Schedule) other than the Series 2006-1. 132 Other Series Carryover Charge Off means, in respect of any Other Series in Group 5, any Carryover Charge Off (as defined in the Other Series Series Supplement) for that Other Series. Other Series Charge Off means, in respect of any Other Series in Group 5, any Charge off (as defined in the Other Series Series Supplement) for that Other Series. Other Series Liquidation Loss means, in respect of any Other Series in Group 5, any Liquidation Loss (as defined in the Other Series Series Supplement) for that Other Series. Other Series Receipt means any amounts received from an Other Series RMS Account in respect of Liquidation Losses or Carryover Charge Offs. Other Series RMS Account means, in respect of an Other Series in Group 5, the RMS Account (as defined in the Definitions Schedule) for that Other Series. Other Series Series Supplement means, in respect of an Other Series in Group 5, the Series Supplement (as defined in the Definitions Schedule) for that Series. Outsourcing Agreement has the meaning given to that term in Section 8.8 (“Servicing Procedures”). Outstanding Loan Balance means, on any day and in respect of a Loan which has been acquired or sold by RMS, the outstanding balance of the Loan taking into account all interest, fees, and other charges which have accrued or have been debited on that Loan at the end of the previous day. Party has the meaning given to that term on page 2. Payment Date means the 14th day of each month and the Final Maturity Date or, if that day is not a Business Day, the next Business Day, except where such day falls in the following month or is the Final Maturity Date in which case it will be the immediately preceding Business Day. Payment Period means the period commencing on (and including) a Payment Date and ending on (but excluding) the next Payment Date. The first Payment Period in respect of a Note will be the period commencing on (and including) the Issue Date for the Notes and ending on (but excluding) the first Payment Date. The last Payment Period in respect of the Notes will be the period commencing on (and including) the Payment Date immediately preceding the Final Maturity Date and ending on (and including) the Final Maturity Date. Portfolio Parameters means the parameters set out in paragraph 8.12(t). Potential Event of Default means an event which, with the giving of notice, lapse of time or fulfilment of any condition would become an Event of Default. Power of Attorney means each irrevocable power of attorney which is given by the Seller in favour of the Security Trustee and the Issuer, in its capacity as trustee. 133 Preparation Date has the meaning given to such term in Section 1.2 (“Responsibility for Information Contained in Information Memorandum”). Pre-funding Account means an account (if any) in the name of RMS with an Eligible Bank into which the Pre-funding Amount is deposited. Pre-funding Amount means the amount (if any) deposited into the Pre-funding Account on the Issue Date in accordance with clause 8.1 (“Application of issue proceeds”). Pre-funding Period means the period (if any) from and including the Issue Date, to and including the last day of the Collection Period which immediately precedes the first Payment Date. Principal Adjustment means, in respect of a Receivable which has been acquired or sold by the Issuer, the absolute value of the difference between the Purchase Price for that Receivable specified in the relevant Sale Notice, the Redesignation Notice or Receivables Acquisition and Sale Agreement (as the case may be) and the Outstanding Loan Balance of that Receivable on the applicable Closing Date. Principal Collections means, for a given Calculation Period: (a) the aggregate Collections for that Calculation Period; minus (b) the Accrual Amount for that Calculation Period; minus (c) the Shortfall Adjustment calculated on the immediately preceding Determination Date; minus (d) the aggregate of any amounts paid in accordance with paragraphs (a), (b) and (d) of the definition of Collection Period Distributions during that Calculation Period. If the amount calculated above is a positive number then the amount so calculated will be the Principal Collections for that day. If the amount calculated above is negative, then the Principal Collections are equal to zero. Principal Draw means the amount determined in accordance with Section 7.7 (“Principal Draw”). Principal Outstanding means, on any date and in respect of a Note, the initial issuance proceeds of a Note less the aggregate of principal payments made on or before that date in relation to that Note. Professional Indemnity Insurance Policy means an insurance policy taken out in the name of the Manager and providing an endorsement for the Issuer which covers a breach of professional duty by an act, error or omission of the Originator or the Servicer. Program has the meaning given to such term in Section 1.1 (“Purpose”). 134 Rate Page means Reuters Markets 3000 BBSW page (in the case of BBSW Rate) or, if such page ceases to quote the relevant rate as is selected by the Manager (as applicable) . Rate Set Date means the first date of each Payment Period. Rating Affirmation means, in respect of a Current Rating Agency in respect of the Series and a proposed action, the confirmation by that Current Rating Agency that the proposed action will not have an Adverse Rating Effect in respect of the Series. Receivables Acquisition and Servicing Agreement means the agreement entitled “RAMS Mortgage Securities Trust Receivables Acquisition and Servicing Agreement” dated 8 December 2004 between, amongst others, the Issuer as buyer and the Seller. Redraw means a request made by a Borrower under the terms of a Mortgage Loan for payment to the Borrower of amounts which that Borrower has prepaid under the terms of its Mortgage Loan. Register of Holders means, with respect to Registered Notes of the Series, the register maintained under clause 22 (“Register of Holders”) of the Trust Deed in respect of that Series. Registered Note means each Note specified as such and in respect of which the Issuer’s obligation is recorded in the applicable Register of Holders. Registered Note Paying Agent means J.P. Morgan Trust Australia Limited, who has been appointed as registered note paying agent under the Trust Deed. Registered Note Registrar means J.P. Morgan Trust Australia Limited, who has been appointed as registered note registrar under the Trust Deed. Relevant Secured Creditors means each Class A Noteholder, each Class AB Noteholder, each Class B Noteholder, each Liquidity Noteholder and each Swap Provider. Required Credit Rating means A-1+ (in the case of Standard & Poor’s (Australia) Pty Limited) and P-1 (in the case of Moody’s Investors Service Pty Limited). Required Payments has the meaning given to it in Section 7.9 (“Distribution of Total Available Income”). Residual Capital Unit means, with respect to the Trust, each unit issued by the Issuer to each Residual Capital Unitholder in accordance with the Transaction Documents. Residual Capital Unitholder means, in respect of the Trust, the person or persons identified as such in the Trust Deed. Residual Income Unit means, with respect to the Trust, each unit issued by the Issuer to each Residual Income Unitholder in accordance with the Transaction Documents. 135 Residual Income Unitholder means, in respect of the Trust, the person or persons identified as such in the Trust Deed. Resolution means: (a) a resolution passed at a meeting: (i) on a show of hands, by the required majority or percentage, as the case may be, of persons present and voting, in person or by proxy; or (ii) if a poll is duly demanded, by the persons holding the required majority of the Secured Moneys in respect of a Series (in the case of a meeting of Secured Creditors in respect of that Series) or percentage of the amount outstanding under the Notes in respect of that Series (in the case of a meeting of Note Holders); or (b) where the law allows, a resolution in writing signed by persons holding the required majority of the Secured Moneys in respect of the Series (in the case of a meeting of Secured Creditors in respect of the Series) or percentage of Notes in respect of the Series (in the case of a meeting of Note Holders in respect of that Series). RMC Master Mortgage Origination Deed means the deed entitled “RAMS Programme Master Mortgage Origination Deed” dated 2 October 1997 between the Seller, the Originator and Guardian Trust Australia Limited. RMS Account means, with respect to the Series, the account designated “RAMS Mortgage Securities Trust Series 2006-1 Account” in the name of the Issuer maintained at an Eligible Bank. Secured Creditors means: (a) each other Noteholder in respect of the Series; (b) the Manager, in respect of any accrued and unpaid fees and expenses due to or other amounts due to, or unreimbursed to, it in respect of the Series; (c) the Servicer, in respect of any accrued and unpaid fees and expenses due to, or unreimbursed to, it in respect of the Series (including, without limitation, Enforcement Expenses); (d) the Security Trustee, in respect of any accrued and unpaid fees and expenses or other amounts due to, or unreimbursed to, it in respect of the Series; (e) each Support Facility Provider; and (f) the Issuer, in its personal capacity, in respect of amounts payable to it under the Transaction Documents. Secured Money has the meaning given to it in the Deed of Charge. 136 Security Interest means any bill of sale (as defined in any statute), mortgage, charge, letter of credit, lien, pledge, hypothecation, title retention arrangement, trust or power, as or in effect as security for the payment of a monetary obligation or the observance of any other obligation. Secured Property, in respect of a Series, has the meaning given to that term in the Charge in respect of that Series. Security Trust means the “RAMS Mortgage Securities Trust Series 2006-1 Security Trust” constituted under the Trust Deed and the Deed of Charge. Self Certified Loans has the meaning given to that term in Section 8.9 (“Collection And Enforcement Procedures”). Seller means RAMS Mortgage Corporation Limited, in its capacity as seller under the Receivables Acquisition and Servicing Agreement. Series means the Series 2006-1. Series Supplement means the document entitled “RAMS Mortgage Securities Trust Series 2006-1 Series Supplement” entered into by the Issuer, the Security Trustee and the Manager. Servicer Termination Event means each event as described in the Master Servicer Deed. Shortfall Adjustment means, if the amount calculated in paragraphs (a) to (d) of the definition of Principal Collections is a negative amount, the absolute value of that amount, otherwise zero. Standby Manager means J.P. Morgan Trust Australia Limited, who has been appointed as standby manager under the Master Management Deed. Standby Servicer means J.P. Morgan Trust Australia Limited, who has been appointed as standby servicer under the Master Servicer Deed. Standby Trustee means J.P. Morgan Trust Australia Limited, who has been appointed as standby trustee under the Trust Deed. Support Facilities means each Swap Agreement. Support Facility Provider means, in respect of the Series, the counterparty with which the Issuer has entered into one or more Support Facilities in respect of the Series and which is identified in the Series Supplement given in respect of the Series. Swap means each interest rate transaction that is entered into under a Swap Agreement. Swap Agreement means the ISDA Master Agreement, the Schedule, any credit support annexures and confirmations forming part of it, dated on or about the date of this deed between the Issuer, the Manager and National Australia Bank Limited in respect of the 137 Series and any other ISDA Master Agreement, the Schedule and confirmations forming part of it, entered into between the Issuer, the Manager and a Swap Provider from time to time and which each Current Rating Agency in respect of the Series has previously confirmed in writing will not have an Adverse Rating Effect in respect of the Series. Tax Amount means a proportion, determined by the Manager to be the Series share in respect of a Payment Period, of the amount (if any) of Tax that the Manager reasonably determines will be payable in the future by the Issuer in respect of the Trust and which accrued during that Payment Period. Tax Shortfall means,, a proportion, determined by the Manager to be the Series share in respect of a Payment Period, of the amount (if any) determined by the Manager to be the shortfall between the aggregate Tax Amounts determined by the Manager in respect of previous Payment Dates and the amounts set aside under Sections 7.9(l) and 7.9(m) (“Distribution of Total Available Income”) on previous Payment Dates. Threshold Rate means the minimum rate such that were all variable rate Loans to be set at that rate at that time, the Issuer would have sufficient Interest Collections to enable it to meet all expenses of the Series when due. Timely Payment Cover means amounts paid or to be paid by an insurer under any Lender’s Mortgage Insurance Contract in respect of scheduled instalments which are not paid when due for payment. Title Perfection Event means in respect of the Series: (a) the occurrence of an Insolvency Event in respect of the Seller; or (b) the Seller or the Servicer of the Series fails to pay Collections in accordance with the Transaction Documents for the Series within 3 Business Days of the due date for payment (except where the Current Rating Agencies (if any) in respect of the Series agree within 3 Business Days of receiving notice of such non-payment that the event is not a “Title Perfection Event”). Total Available Income means, on a Determination Date, the aggregate of: (a) the Interest Collections for that Determination Date; (b) any Cash Deposit Draw for that Determination Date; (c) any Principal Draw for that Determination Date; and (d) any Other Income for that Determination Date. Total Available Principal has the meaning given to that term in Section 7.10 (“Total Available Principal”). Transaction Documents mean in respect of a Series: (a) the Trust Deed (insofar as it applies to that Series); 138 (b) the Definitions Schedule (insofar as it applies to that Series); (c) the Master Servicer Deed (insofar as it applies to that Series); (d) any Receivables Acquisition and Servicing Agreement (insofar as it applies to that Series); (e) each Power of Attorney (insofar as it applies to that Series); (f) the Series Supplement in respect of that Series; (g) the Charge in respect of that Series; (h) any Derivative Contracts in respect of that Series; and (i) any other document specified as such in the relevant Series Supplement. Trust Deed means the deed entitled “RAMS Mortgage Securities Trust and Security Trust Deed” dated 8 December 2004 between RMS and the Security Trustee (as amended). Variation means any proposed amendment or alteration by a Borrower or mortgagor to the terms of a Approved Mortgage or Mortgage Loan. Voting Secured Creditor means: (a) if the Aggregate Class A Note Principal Outstanding is greater than zero, the Class A Noteholder; or (b) if the Aggregate Class A Note Principal Outstanding is equal to zero, the Secured Creditor or Secured Creditors ranking the highest in priority for payment as set out in Section 7.14 (“Application of proceeds following an Event of Default”). 139 DIRECTORY Issuer RAMS Mortgage Securities Pty Limited in its capacity as trustee of the RAMS Mortgage Securities Trust in respect of Series 2006-1 ABN 30 094 753 349 Ground Floor 44 Bay Street Ultimo NSW 2007 Manager and Originator RAMS Home Loans Pty Ltd ABN 67 053 725 741 Ground Floor 44 Bay Street Ultimo NSW 2007 Security Trustee, Custodian, Standby Manager, Standby Trustee, Standby Servicer, Registered Note Paying Agent and Registered Note Registrar J.P. Morgan Trust Australia Limited ABN 49 050 294 052 Level 35 AAP Centre 259 George Street Sydney NSW 2000 Dealers The Royal Bank of Scotland plc National Australia Bank Limited Level 26 Level 48 255 George Street Australia Square Tower SYDNEY NSW 2000 264-278 George Street Sydney NSW 2000 Australian law Lead Advisers to Issuer Mallesons Stephen Jaques 1 Farrer Place Sydney NSW 2000 Ph: (02) 9296 2000 Fax: (02) 9296 3999 140