BABCOCK & BROWN

Interest Payments (continued)
Deferred Interest
Restrictions on
Babcock & Brown
If an Interest Payment is deferred, interest will accrue on any Outstanding Interest on a daily basis
at a rate equal to the Interest Rate plus 2.00% per annum.
Any Deferred Interest that remains unpaid must be paid on the next Interest Payment Date upon
which no Interest Payment deferral condition applies.
If Babcock & Brown defers payment of interest, it will be prevented from:
• declaring and paying any dividend or making any return of capital or other payment
to its shareholders;
• setting aside any amount of cash or any assets for that purpose; and
• undertaking any arrangement, reconstruction or reorganisation, which would have a material
adverse effect on the value of BBSN,
until the Outstanding Interest is paid in full.
Reset of terms
Reset Date The first Reset Date is 15 November 2010.
Reset of terms
On each Reset Date, Babcock & Brown may change certain terms of BBSN including:
• the next Reset Date, provided that each Reset Date will be no less than 12 months after the
immediately preceding Reset Date and will also be an Interest Payment Date;
• the Exchange Discount;
• the Market Rate (including from a floating rate to a fixed rate);
• the Margin; and
• the Interest Payment Dates.
Holder exit rights
Exit request
Babcock & Brown
action upon receipt
of an Exit Notice
Holders may provide an Exit Notice in relation to:
• a Reset Date;
• a Trigger Event;
• a Change in Control Event; or
• the Maturity Date.
By providing an Exit Notice, the Holder may request:
• Exchange or Repayment (in relation to a Trigger Event); and
• Exchange (in relation to all other events),
of their BBSN on the Realisation Date.
Upon receipt of an Exit Notice, Babcock & Brown must send the Holder a Repayment Notice
specifying whether it will:
• in relation to a Reset Date or a Change in Control Event, Exchange, Repay or Resell (or a
combination of Exchange, Repay and Resell);
• in relation to a Trigger Event:
– to the extent Exchange is requested, Exchange, Repay or Resell (or a combination of
Exchange, Repay and Resell);
– to the extent Repayment is requested, Repay or Resell (or a combination of Repay
and Resell); and
• in relation to the Maturity Date, Exchange or Repay (or a combination of Exchange and Repay),
BBSN the subject of the Exit Notice.
If a Holder does not provide an Exit Notice prior to the Maturity Date, their BBSN will be Repaid
on the Maturity Date.
BABCOCK & BROWN SUBORDINATED NOTES 11