Lead Manager

SECTION 8
ADDITIONAL INFORMATION
8.7 RESTRICTIONS ON SHARE ALLOCATIONS
A subsidiary (Subsidiary) of Babcock & Brown is licensed and regulated in the US by the National Association of
Securities Dealers (NASD). If, either as a result of the Offer or after Babcock & Brown is listed, a person or
entity acquires Shares in Babcock & Brown, the ownership of which results in one person or entity directly or
indirectly owning or controlling 25% or more of the equity or partnership capital of the Subsidiary, the
Subsidiary is obligated to make certain filings with the NASD to reflect this change in ownership.
Accordingly, Babcock & Brown will limit the number of Shares to be issued to any Applicant under the Offer so
as to ensure that this 25% limit is not exceeded.
8.8 RELATED PARTY TRANSACTIONS
Babcock & Brown’s interests in a small number of its investments are obtained under arrangements with entities
(Related Parties) associated with Directors of Babcock & Brown. In these cases the underlying assets are held by
the Related Parties, and the relevant arrangements ensure that Babcock & Brown obtains the full economic
benefit of and interest in the assets. Due to the fact that Babcock & Brown is the economic (although not legal)
holder of these investments, Babcock & Brown in some cases has agreed to guarantee or indemnify certain of the
Related Parties’ liabilities and obligations in connection with their holding of the investments.
In particular, Babcock & Brown has guaranteed a $4.4 million payment obligation of two Related Parties, ESIC
Limited and Adder Securities Pty Ltd, to the Commonwealth Government. However, Babcock & Brown does
not believe that it will be necessary for the Commonwealth Government to call on this guarantee.
8.9 MATERIAL CONTRACTS
8.9.1 Prime Infrastructure Trust
Various Babcock & Brown entities act as responsible entity or trustee for the various trusts that, along with
various related companies, hold the assets of the Prime Infrastructure Group.
Under the terms of Prime Infrastructure Trust (PIT) constitution, Babcock & Brown Investors Services Pty
Limited (BBIS) is entitled to receive from PIT a fee for its services as responsible entity calculated at 2% per
annum of the gross asset value of PIT. BBIS has agreed to receive a fee which is less than the amount it would
be paid under that rate, comprising:
• A base fee component, calculated as
– 0.1% per annum of a set base market capitalisation of $400 million, and
– an additional 1% per annum of the amount by which Prime Infrastructure Group’s market capitalisation
exceeds the set base market capitalisation of $400 million and
• An annual incentive fee component, which is equal to 15% of any excess rate of return of the accumulation
index for Prime Infrastructure Group’s stapled securities over the return of the S&P/ASX 200
Accumulation Index, multiplied by Prime Infrastructure Group’s market capitalisation
During the 14 months ended 30 June 2003, PIT paid BBIS $41,000 for reimbursement of expenses (at cost),
a base fee of $541,000 and an incentive fee of $3.258 million (representing a third of the amount payable).
The final two thirds of the incentive fee for this period are payable over a period of two years conditional on
continued outperformance.
A Babcock & Brown subsidiary, Prime Infrastructure (DBCT) Investor Services Ltd, is also entitled to an annual
fee of 2% of the gross asset value of Prime Infrastructure (DBCT) Trust (PIDT) for acting as trustee of PIDT.
PIDT is wholly owned by PIT. However, Babcock & Brown has waived its entitlement to this fee.
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