BABCOCK & BROWN

Agreement. Under the agreement, the Lead Manager &
Bookrunner agreed to manage the Offer, including the
Bookbuild and Allocation processes for the Offer.
The Lead Manager & Bookrunner has agreed to provide
settlement support for the Offer, subject to the determination
of the number of BBSN to be issued, the Margin, the number
of BBSN to be Allocated to, and the Allocation of BBSN
within, the Broker Firm Offer and Institutional Offer.
Babcock & Brown must pay the Lead Manager &
Bookrunner a management, bookrunner and selling fee of
1.75% of that amount that equals the Issue Price multiplied
by the number of BBSN issued under the Offer.
In addition, Babcock & Brown has agreed to pay the Lead
Manager & Bookrunner a variable incentive fee of up to
0.65% of that amount that equals the Issue Price multiplied
by the number of BBSN issued under the Offer, subject to
achieving certain price and volume thresholds.
Babcock & Brown must pay or reimburse the Lead Manager
& Bookrunner for reasonable costs incurred in respect of the
Offer and all costs payable in relation to ASX’s delivery versus
payment settlement service as soon as reasonably practicable
after a request for payment or reimbursement is made by
the Lead Manager & Bookrunner. The Lead Manager &
Bookrunner is responsible for all fees and commissions due
to any Retail Broker it appoints. Such fees are to be paid from
the fees payable to the Lead Manager & Bookrunner under
the Offer Management Agreement.
Under the Offer Management Agreement, Babcock & Brown
gives certain representations, warranties and undertakings.
Subject to certain exclusions relating to, among other
things, fraud, bad faith, negligence and wilful default by an
indemnified party, Babcock & Brown agrees to keep the
Lead Manager & Bookrunner and certain affiliated parties
indemnified from losses suffered in connection with the Offer.
The Lead Manager & Bookrunner may terminate the Offer
Management Agreement by notice to Babcock & Brown
if one or more of the termination events set out below
occurs before the Settlement Date (although, in the case of
termination events marked with an asterisk, the Lead Manager
& Bookrunner may not terminate the agreement unless it
has reasonable grounds to believe and does believe that (i) the
event has or is likely to have a materially adverse effect on the
success or settlement of the Offer or, the likely price at which
BBSN will trade on ASX; or (ii) the event would give rise to
a material liability of the Lead Manager & Bookrunner under
any applicable law or regulation):
• *
A statement contained in this Prospectus is misleading
or deceptive, or a matter is omitted from this Prospectus.
• *
After successful completion of the Bookbuild process,
there is an adverse change in the assets, liabilities, financial
position or performance, profits, losses or prospects of
the Group.
• *
Babcock & Brown issues or becomes required to issue
a supplementary prospectus in circumstances where the
matter is materially adverse from the point of view of
an investor within the meaning of section 719 of the
Corporations Act.
• *
Trading of Babcock & Brown’s securities on ASX is halted
or quotation of Babcock & Brown’s securities on ASX is
suspended for more than three consecutive business days
or such securities cease to be quoted on ASX.
• There is an outbreak or major escalation of hostilities
involving any one or more of Australia, New Zealand,
the United States, the United Kingdom, any member
of the European Union, Indonesia, North Korea, South
Korea, China or Japan or the declaration by any of these
countries of a national emergency or war or a terrorist
attack is perpetrated involving any of those countries or any
diplomatic, military, commercial or political establishment of
any of those countries elsewhere in the world in each case
the effect of which is such as to make it, in the reasonable
opinion of the Lead Manager & Bookrunner, impracticable
to market the Offer or to enforce contracts
to issue and allot BBSN.
• *
There is introduced, or there is a public announcement
of a proposal to introduce, into the parliament of Australia
or any State of Australia a new law, or the Reserve Bank of
Australia, any federal or state authority of Australia, adopts
or announces a proposal to adopt a new policy (other than a
law or policy which has been announced before the date of
this agreement), any of which does or is likely to prohibit
or regulate the Offer, capital issues or stock markets.
• Babcock & Brown withdraws the Offer.
• *
The due diligence report signed by the due diligence
committee established in relation to the Offer is or
becomes misleading or deceptive.
• *
There is a change in senior management of Babcock
& Brown or in the Board.
• *
Any of the following occur:
– a Director is charged with an indictable offence;
– any regulatory body commences any public action
against a Director in their capacity as a Director, or
announces that it intends to take such action;
BABCOCK & BROWN SUBORDINATED NOTES 73