Lead Manager

SECTION 8
ADDITIONAL INFORMATION
occurs then either that party’s current interest in the Group may be redeemed for cash based on the pre-IPO
net tangible assets or the Offer may be withdrawn. Babcock & Brown believe that it is unlikely that these parties
will withdraw.
8.3.3 Employee loan arrangements
BBH has provided Babcock & Brown Executive Stakeholders with loan financing for the acquisition of their interests
in BBH or the Phantom Plan.These loans are generally repaid by salary and bonus sacrifice arrangements with the
relevant Babcock & Brown employee or through the application of distributions from BBH or the Phantom Plan.
The loans are secured against the employee’s interests in BBH Shares or the Phantom Plan, as the case may be.
As part of the termination of the Phantom Plan and the transfer of Babcock & Brown employees’ interests in
BBH to Babcock & Brown and BBIPL, all existing financing arrangements with BBH are to be repaid by
Babcock & Brown employees. Existing salary and bonus sacrifice arrangements are also to be terminated.
Babcock & Brown is arranging a replacement facility with a third party financier to assist Babcock & Brown
employees to refinance their existing financing arrangements with BBH. Babcock & Brown employees will be
obliged to repay their existing financing arrangements with BBH, but only once the alternative facility is in place.
This alternative facility may not be in place until after the IPO.
8.3.4 Post restructuring Babcock & Brown Group structure
The Babcock & Brown Group structure post the restructuring is outlined in Section 2.4. Shareholdings and
Economic Interests in Babcock & Brown are outlined at Section 2.5.
8.3.5 Documentation
All documents required to effect the restructuring of the Babcock & Brown Group required for the purposes of
this Prospectus and the listing of Babcock & Brown on ASX have been executed by the relevant parties and
placed into escrow.These restructuring documents will only be released from escrow, and become effective,
following the satisfaction of certain conditions.These conditions include achieving the minimum subscription
under this Prospectus and receiving the written consents of both the Executive Committee and HVB to the
release of the restructuring documents. Additionally, certain parties have the right to withdraw their documents
from escrow during a brief period following the date of this Prospectus. If this occurs then either that party’s
current interest in the Group may be redeemed for cash based on the pre-IPO net tangible assets or the Offer
may be withdrawn. Babcock & Brown believe that it is unlikely that these parties will withdraw.
8.4 BBIPL RIGHTS AND CONSTITUTION SUMMARY
US Executive Stakeholders will hold their interests in Babcock & Brown through Babcock & Brown
International Pty Limited (BBIPL), the holding company for Babcock & Brown’s operations.The US Executive
Stakeholders will hold their interest at the BBIPL level as direct ownership at the listed company level may have
material adverse tax consequences for US Executive Stakeholders.
The following summary sets out details of the special provisions in the Constitution of BBIPL that regulate the
relationship between:
• Babcock & Brown, which holds a majority shareholding in BBIPL in the form of “A Class” Shares. Babcock
& Brown is the sole holder of A Class Shares
• The various US Executive Stakeholders of Babcock & Brown who will hold redeemable preference shares
in BBIPL (termed “B Class” shares)
The various special provisions in BBIPL’s Constitution are designed to provide an appropriate balance between
the rights of Babcock & Brown and those of the B Class shareholders. An overriding principle in relation to
that balance, however, is that B Class shareholders should not interfere with the ability of Babcock & Brown’s
shareholders to determine issues concerning control of Babcock & Brown and of the Babcock & Brown Group
as a whole.
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