BABCOCK & BROWN

Topic Summary More information
Interest (continued)
Will Interest always • Babcock & Brown may defer Interest Payments on any Interest Payment Appendix B
be paid? Date if any of the following deferral conditions apply: clause 2.3
– Babcock & Brown is insolvent or the Interest Payment would cause
Babcock & Brown to become insolvent; or
– the Interest Payment would cause Babcock & Brown to breach any Sections 3.2.1, 6.1.2, 8.8
legal obligation; or
– the Directors determine that Babcock & Brown does not have
sufficient cash to make the Interest Payment.
• The expected primary source of funds to meet Interest Payments is
interest payments received by Babcock & Brown under the BBIPL
Loan. In certain circumstances BBIPL may be prevented from making
such interest payments.
• Babcock & Brown will notify you if it determines that an Interest
Payment will be deferred.
What happens if • Interest on BBSN is cumulative. Interest will accrue on any deferred Appendix B
Interest Payments interest on a daily basis from and including the relevant Interest Payment clause 2.4
are deferred?
Date up to, but excluding, the date of payment of the Outstanding
Interest at the then applicable Interest Rate plus 2.00% per annum.
Interest on deferred interest compounds on the next Interest
Payment Date.
• If Babcock & Brown defers an Interest Payment, it will be prevented from:
– declaring or 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; or
– 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.
Resetting the terms
What may Babcock • The first Reset Date is 15 November 2010. Appendix B
& Brown do on a • Babcock & Brown may send you a Reset Notice at least 50 Business clauses 3, 5.1(a)
Reset Date?
Days (but not more than six months) before that Reset Date.
The Reset Notice may establish for the following period:
– 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 changing the floating rate to
a fixed rate);
– the Margin; and
– the Interest Payment Dates.
• Babcock & Brown may also Repay some or all BBSN on a Reset Date.
BABCOCK & BROWN SUBORDINATED NOTES 19