BABCOCK & BROWN

APPENDIX B – terms of issue
2.5 Payment of Outstanding Interest
The Issuer may pay all or any part of Outstanding Interest on all but not some of BBSN to Holders at any time,
but may only do so on a date other than an Interest Payment Date after giving such notice to ASX as ASX
requires in respect of the record date for payment and the amount to be paid.
2.6 Restrictions on the Issuer
For so long as any Outstanding Interest or Repayment Amount remains due but unpaid or a payment of interest
is deferred under clause 2.3(a) or where a Trigger Event has occurred and for so long as such Trigger Event
subsists, the Issuer must not:
(a) declare or pay any dividend or make any return of capital or other payment to its shareholders in respect
of shares of any class;
(b) set aside any amount of cash or any assets for anything referred to in clause 2.6(a); or
(c) undertake any arrangement, reconstruction or reorganisation between itself and its members or any class
of them, or between itself and its creditors or any class of them, which would have a material adverse effect
on the value of BBSN.
2.7 Calculation of interest
All calculations of interest will be rounded to four decimal places. For the purposes of making any interest
payment in respect of a Holder’s aggregate holding of BBSN, any fraction of a cent will be disregarded.
2.8 Record Dates
Interest is only payable to those persons registered as Holders on the relevant Record Date.
2.9 Deductions
The Issuer may deduct from any interest or other amounts payable to a Holder the amount of any withholding
or other tax, duty or levy which a qualified legal or taxation advisor advises that it is required by law to deduct in
respect of such interest or other amount. If any such deduction has been made and the amount of the deduction
accounted for by the Issuer to the relevant revenue authority and the balance of the interest or other amount
payable has been paid to the Holder concerned, then the full amount payable to such Holder shall be deemed
to have been duly paid and satisfied by the Issuer.
The Issuer shall pay the full amount required to be deducted to the relevant revenue authority within the time
allowed for such payment without incurring penalty under the applicable law and shall, if required by any Holder,
deliver to that Holder a copy of the relevant receipt issued by the revenue authority without unreasonable delay
after it is received by the Issuer.
2.10 No set off
A Holder has no right to set off any amounts owing by it to the Issuer against claims owing by the Issuer
to the Holder.
94 BABCOCK & BROWN SUBORDINATED NOTES