BABCOCK & BROWN

2.11 Method of payment
Any amount which is payable to Holders in respect of BBSN will, unless the Issuer and Holders otherwise agree,
be paid by direct credit into a nominated account at a financial institution offering such a facility for direct credit
of amounts denominated in Australian currency. If a Holder fails to nominate such an account, the amount may
be deposited by the Issuer in a bank account in the Issuer’s name established for the purpose and held by the Issuer
until the Holder nominates an account. An amount so deposited shall be taken to have been duly paid to the
Holder and shall not bear interest. Any interest accruing on any such account shall be paid to the Issuer.
3 Reset of terms
3.1 The Issuer may change terms
(a) Prior to any Reset Date, the Issuer may by notice given to the Holders under clause 3.2 (Reset Notice)
specify or (as applicable) make changes to any or all of the following terms:
(1) 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;
(2) the Exchange Discount;
(3) the Market Rate (including, but not limited to, changes to the basis of calculation of the Market Rate from
a Market Rate based on a Bank Bill Swap Rate to a Fixed Rate or other floating or fixed rate basis or
vice versa);
(4) the Margin; and
(5) the Interest Payment Dates referred to in clause 2.2(b)(1).
(b) These new terms will apply from (and including) the relevant Reset Date until (but excluding) the next Reset
Date. If the Issuer does not change one of the terms set out in clause 3.1(a), or purports to change terms other
than as set out in clause 3.1(a), no change with respect to such term(s) shall be deemed to have occurred and
the relevant term(s) will remain the same as prior to the Reset Date.
3.2 Notification
(a) For any change to terms made under clause 3.1 to be effective, the Reset Notice must be sent to all Holders
no later than 50 Business Days (but no more than six months) immediately preceding the relevant Reset Date.
The non-receipt of a Reset Notice by any Holder or an accidental omission to send a Reset Notice to a
Holder will not invalidate any change under clause 3.1 either in respect of that Holder or generally.
(b) If the Issuer does not send a Reset Notice to Holders, the terms applying as at the relevant Reset Date will
continue and the next Reset Date will be such that the period to the next Reset Date is the same as the period
that has passed from the immediately preceding Reset Date (or in the case of the first Reset Date — the Issue
Date) until the relevant Reset Date (provided that no Reset Date may be later than the Maturity Date).
(c) The Issuer must give notice to all Holders, no later than 50 Business Days (but no more than six months)
immediately preceding the relevant Reset Date, of the Reset Date and of Holders’ rights to give Exit Notices
under clause 4.1. This notice may be included in a Reset Notice.
BABCOCK & BROWN SUBORDINATED NOTES 95