Scheme Booklet and Proxy Form

ASX RELEASE

5 February 2010

PIPE Networks Scheme Booklet and Proxy Form

Further to PIPE Networks Limited’s (ASX:PWK) release to ASX earlier today attached are copies of PIPE Networks’ Scheme Booklet, Proxy Form and record of lodgement of the documents with the Australian Securities & Investments Commission today.

ENDS For more information: Bevan Slattery Managing Director T: 07 3233 9800 [email protected]

Scheme Booklet For a Scheme of Arrangement between PIPE Networks Limited ACN 099 104 122 and the holders of shares in PIPE Networks (other than TPG Telecom Limited) in relation to the proposed acquisition by TPG Telecom Limited of all the shares in PIPE Networks which it does not already own.

THE DIRECTORS UNANIMOUSLY RECOMMEND THAT YOU PVOTE IN FAVOUR OF THE RESOLUTION TO APPROVE THE SCHEME, IN THE ABSENCE OF A SUPERIOR PROPOSAL.

The Independent Expert has concluded that the Scheme is fair and reasonable, and that the Scheme is in the best interests of PIPE Shareholders (other than TPG Telecom Limited) in the absence of a superior proposal.

THIS IS AN IMPORTANT SHAREHOLDER INFORMATION LINE DOCUMENT AND REQUIRES INSIDE AUSTRALIA (TOLLFREE) 1800 646 920 YOUR IMMEDIATE ATTENTION. OUTSIDE AUSTRALIA (NORMAL CHARGES APPLY) +61 2 8280 7071 YOU SHOULD READ THIS DOCUMENT IN ITS ENTIRETY PRIOR TO DECIDING WHETHER OR NOT TO VOTE IN FAVOUR OF THE SCHEME. If you are in FINANCIAL ADVISER LEGAL ADVISER any doubt as to how to deal with this document, please consult your legal or ﬁnancial adviser immediately. If you have recently sold all of your PIPE Shares, please ignore this document. IMPORTANT NOTICES

General hearing to approve the Scheme. Neither to reflect any change in expectations in PIPE Shareholders should read this ASIC nor its officers take any responsibility relation to those statements or any change document in its entirety before making a for the contents of this document. in events, conditions or circumstances decision as to how to vote on the resolution A copy of this document has been lodged on which any such statement is based. to be considered at the Scheme Meeting. with the ASX. Neither the ASX nor any Defined terms If you are in any doubt as to how to deal of its officers takes any responsibility Capitalised terms and certain with this document, please consult your for the contents of this document. abbreviations used in this document legal or financial adviser immediately. The Court has ordered the convening of have the defined meanings set out Purpose of this document the Scheme Meeting pursuant to section in Section 9 of this document. 411(1) of the Corporations Act. The The purpose of this document is to explain Privacy and personal information convening of the Scheme Meeting by the the terms of the Proposal and the manner in Court does not constitute endorsement PIPE Networks, TPG and their respective which the Proposal will be considered and by the Court of, or any expression of share registries may collect personal implemented (if approved), and to provide opinion by the Court on, the Scheme. information in the process of implementing such information as is prescribed or otherwise the Proposal. The personal information may material to the decision of PIPE Shareholders No investment advice include the names, addresses, other contact whether or not to approve the Scheme. The information contained in this document details and details of the shareholdings This document includes the Explanatory does not constitute financial product advice of shareholders, and the names of Statement required by section 412(1) of the and has been prepared without reference individuals appointed by shareholders Corporations Act in relation to the Scheme. to your own investment objectives, financial as proxies, corporate representatives or Responsibility statement situation, taxation position and particular attorneys at the Scheme Meeting. needs. The information in this document Except as outlined below, the information Shareholders who are individuals and should not be relied upon as the sole basis contained in this document has been the other individuals in respect of whom for any investment decision in relation to provided by PIPE Networks and is the personal information is collected as outlined the Scheme or your PIPE Shares. Before responsibility of PIPE Networks. None above have certain rights to access the making any investment decision in relation to of the TPG Indemnified Parties assume personal information collected in relation to the Scheme or your PIPE Shares, including any responsibility for the accuracy or them. Such individuals should contact Link any decision to vote in favour or against the completeness of such information. Market Services Limited on (02) 8280 7454 Scheme, you should consider, with or without (within Australia only) or +61 2 8280 7454 The information contained in Section 5 the assistance of a financial advisor, whether and Annexure E of this document (TPG (International) in the first instance if they wish that decision is appropriate in light of your to request access to that personal information. Information) has been provided by TPG particular needs, objectives and financial and is the responsibility of TPG. None circumstances. If you are in any doubt The personal information is collected for of the PIPE Indemnified Parties assume about what you should do, please consult the primary purpose of implementing any responsibility for the accuracy or your legal or financial adviser immediately. the Proposal. The personal information completeness of the TPG Information. may be disclosed to PIPE Networks’ and Forward looking statements The information in Annexure A of this TPG’s share registries/transfer agents document has been provided by the Certain statements in this document and advisers, to securities brokers and Independent Expert and is the responsibility relate to the future. These forward looking to print and mail service providers. of the Independent Expert. None of the statements involve known and unknown The main consequence of not collecting the PIPE Indemnified Parties or TPG Indemnified risks, uncertainties, assumptions and other personal information outlined above would Parties assume any responsibility for important factors that could cause the actual be that PIPE Networks may be hindered in, the accuracy or completeness of such results, performance or achievements of or prevented from, conducting the Scheme information. The Independent Expert PIPE Networks to be materially different from Meeting and implementing the Proposal. future results, performance or achievements does not assume any responsibility for the Shareholders who appoint an individual expressed or implied by such statements. accuracy or completeness of any information as their proxy, corporate representative Such risks, uncertainties, assumptions and contained in this document other than the or attorney to vote at the Scheme other important factors include, among information contained in Annexure A. Meeting should inform such an individual other things, general economic conditions, of the matters outlined above. ASIC, ASX and the Court exchange rates, interest rates, the regulatory A copy of this document has been environment, competitive pressures, selling No Internet site is part of this document provided to ASIC for the purpose of price and market demand. The forward PIPE Networks and TPG maintain Internet section 411(2) of the Corporations Act looking statements in this document reflect websites. Any references in this document to and registered by ASIC for the purpose of views held only at the date of this document. a website is a textual reference for information section 412(6) of the Corporations Act. Other than as required by law, neither only and does not form part of this document. ASIC has reviewed a copy of this document. PIPE Networks, TPG nor any other person Notice to foreign shareholders PIPE Networks has asked ASIC to provide gives any representation, assurance a statement, in accordance with section or guarantee that the occurrence of This document complies with disclosure 411(17)(b) of the Corporations Act, that the events expressed or implied in requirements in Australia, which may be ASIC has no objection to the Scheme. ASIC’s any forward looking statements in different to those in other countries. policy in relation to statements under section this document will actually occur. Information line 411(17)(b) of the Corporations Act is that Subject to any continuing obligations If you have any questions about your PIPE it will not provide such a statement until under law or the ASX Listing Rules or Shares or any other matter in this document, the Second Court Date. This is because as contemplated by Section 7.17 of this please call the PIPE Shareholder information ASIC will not be in a position to advise document, PIPE Networks, TPG and their line on 1800 646 920 (within Australia the Court until it has had an opportunity respective directors disclaim any obligation only) or +61 2 8280 7071 (International). to observe the entire Scheme process. If or undertaking to disseminate after the Date of document ASIC provides that statement, it will be date of this document any updates or produced to the Court at the time of the Court revisions to any forward looking statements This document is dated 5 February 2010. 2 CONTENTS

Important notices 2 6.3 Effective Date 37 Letter from the Chairman 4 6.4 Record Date 37 Timetable and key dates 6 6.5 Determination of persons entitled Your vote 7 to Scheme Consideration 37 1. Frequently asked questions 8 6.6 Implementation Date 38 2. Key features of the Scheme 12 6.7 Warranty by PIPE Shareholders about 2.1 Overview 12 their PIPE Shares 38 2.2 What you will receive if the Scheme 6.8 Suspension of trading in PIPE shares 38 is implemented 12 6.9 Effect of the Scheme on creditors 38 2.3 Directors’ recommendation 12 6.10 Stamp duty 38 2.4 Independent Expert’s opinion 12 6.11 Key terms of the Implementation Agreement 38 2.5 Key steps to implement the Proposal 6.12 Deed Poll 40 and approvals required 12 7. Additional information 41 2.6 Conditions precedent 13 7.1 PIPE Networks Directors 41 2.7 Exclusivity arrangements 13 7.2 PIPE Networks Directors’ recommendation 41 2.8 Break Fee 13 7.3 Intentions of PIPE Networks Directors 2.9 Taxation implications 13 concerning the business of PIPE Networks 41 2.10 If the Scheme does not proceed 13 2.11 Action to be taken by PIPE Shareholders 13 7.4 Material changes in the financial position 2.12 PIPE Shareholders may sell their PIPE of PIPE Networks 41 Shares on the ASX at any time prior to the 7.5 Capital structure of PIPE Networks 41 suspension of PIPE Shares from trading 13 7.6 Notifiable interests 42 2.13 Further information for PIPE Shareholders 13 7.7 Marketable securities held by 3. Recommendations and matters relevant to your vote 14 PIPE Networks Directors 42 3.1 Directors’ recommendation 14 7.8 Agreements or arrangements with 3.2 Reasons to vote in favour of the Scheme 14 PIPE Networks Directors 42 3.3 Possible reasons not to vote in favour of 7.9 Payments or other benefits to PIPE Networks the Scheme 15 Directors and PIPE Networks executive officers 43 3.4 Other relevant considerations 16 7.10 Interests of Directors in contracts entered 4. Information on PIPE Networks 17 into by TPG 43 4.1 Introduction 17 7.11 No unacceptable circumstance 43 4.2 Corporate structure 19 7.12 Publicly available information 43 4.3 PIPE Networks’ domestic business 20 7.13 Regulatory 43 4.4 PIPE Networks’ international business 21 7.14 Consents and disclaimers 43 4.5 Directors 22 7.15 Independent Expert 44 4.6 Recent PIPE Networks share price performance 24 7.16 Other information material to the making 4.7 Historical financial overview 25 of a decision in relation to the Scheme 44 4.8 Future obligations 27 7.17 Supplementary information 44 4.9 Earnings guidance 28 8. Taxation implications 45 4.10 Underlying assumptions of 8.1 Introduction 45 financial information 28 8.2 Capital Gains Tax (CGT) implications 45 5. Information on TPG 30 8.3 Income tax implications 47 5.1 Introduction 30 5.2 Overview of TPG’s business 30 8.4 Stamp duty 47 5.3 Directors 31 8.5 Goods and Services Tax (GST) 47 5.4 Funding arrangements 32 9. Defined terms 48 5.5 TPG’s intentions for the business, assets Annexure A – Independent Expert’s report and employees of PIPE Networks 34 Annexure B – Implementation Agreement 5.6 Information on PIPE Networks securities 35 Annexure C – Deed Poll 6. Implementation of the Scheme 37 Annexure D – Scheme 6.1 Scheme Meeting 37 Annexure E – Conditions to TPG’s financing 6.2 Second Court Hearing 37 Annexure F – Notice of Scheme Meeting

3 LETTER FROM THE CHAIRMAN

Dear PIPE Shareholder On 11 November 2009, PIPE Networks Limited and TPG Telecom Limited announced that they had entered into an Implementation Agreement under which it is proposed that TPG acquires all of the shares outstanding in PIPE Networks for $6.30 cash for each PIPE Share by way of a scheme of arrangement. This values PIPE Networks’ equity at approximately $373 million.

In light of considerable uncertainty in ﬁnancial and regulatory markets, and in order to protect PIPE Shareholder value, the Directors have explored a number of strategic options for the PIPE Networks business over the past 6 months, including equity and/or debt raising, asset sales, de-mergers, and mergers with strategic players. Notwithstanding this, your Directors believe that the Scheme is likely to deliver greater value and certainty to PIPE Shareholders than other available alternatives.

Your Board unanimously recommends that, in the absence of a Superior Proposal, you vote in favour of the Scheme and approve the Scheme at the Scheme Meeting. Each Director who holds PIPE Shares, or on whose behalf PIPE Shares are held, intends to vote in favour of the Scheme and approve the Scheme in the absence of a Superior Proposal.

In order for the Scheme to proceed, the Scheme requires the approval of PIPE Shareholders. The Scheme Meeting will be convened for this purpose, with the Scheme Meeting commencing at 10.00 am on Friday, 12 March 2010 at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane.

If you wish for the Scheme to proceed, it is important you vote in favour of the Scheme and approve the Scheme.

Your Board’s recommendation that, in the absence of a Superior Proposal, you vote in favour of the Scheme and approve the Scheme is based on a number of important considerations, including the following: s the Proposal will enable PIPE Shareholders to realise in an immediate and certain way, an attractive cash value for PIPE Networks; s the implied value of the Scheme Consideration represents an attractive premium. The Proposal: – offers PIPE Shareholders a price per PIPE Share that is greater than PIPE Networks closing share price at any point since its listing and up to 3 February 20101; – represents a 15% premium to PIPE Networks volume weighted average price over the 3 months period to 3 November 2009 and a 29% premium to PIPE Networks volume weighted average price over the 6 months period to 3 November 2009; and – the implied transaction multiple of 10.1 times prospective EBITDA compares favourably to relevant precedent transactions; s PIPE Networks currently has an obligation outstanding in relation to the construction of PPC-1 which falls due over the coming 6 months. Should the Scheme not proceed and if there are insufﬁcient additional sales to meet this obligation, payment of this obligation will in all likelihood need to be funded by an equity or debt raising by PIPE Networks. For further details regarding this obligation, please refer to Section 4.8 of this document and the Independent Expert’s report included in Annexure A of this document (see section 4.1 of the report); s structural and competitive uncertainty within the Australian telecommunications sector; and s the Independent Expert has concluded that the Scheme is fair and reasonable, and that the Scheme is in the best interests of PIPE Shareholders, other than TPG, in the absence of a superior proposal.

1 Note that PIPE Networks went into a trading halt over the period between 4 November 2009 and 11 November 2009. As such, 3 November 2009 was the last trading day prior to the announcement of the Proposal.

4 Additional information Mr Bevan Slattery and Mr Stephen Baxter, who are both directors of PIPE Networks and together own approximately 27% of outstanding PIPE Shares, have granted TPG call options over a portion of their respective shareholdings which (in addition to the PIPE Shares already owned by TPG) gives TPG a relevant interest in 19.84% of PIPE Shares.

Independent Expert The Independent Expert has concluded that the Scheme is fair and reasonable, and that the Scheme is in the best interests of PIPE Shareholders, other than TPG, in the absence of a superior proposal. The Independent Expert has valued PIPE Networks at between $6.00 and $6.72 per PIPE Share.

Conclusion This document sets out important information regarding the Scheme, including the reasons for your Directors’ recommendation and the Independent Expert’s report. Please read this document in its entirety before making your decision and voting at the Scheme Meeting. I would also encourage you to seek independent ﬁnancial and taxation advice before making any investment decision in relation to your PIPE Shares.

I encourage you to vote at the Scheme Meeting. If you wish for the Scheme to proceed, it is important that you vote in favour of the Scheme and approve the Scheme.

If you have any questions in relation to the Scheme or this document, please contact the PIPE Shareholder information line on 1800 646 920 (within Australia) or +61 2 8280 7071 (International).

Yours sincerely

Roger Clarke Chairman PIPE Networks Limited

5 TIMETABLE AND KEY DATES

EVENT TIME AND DATE

Last time and date by which Proxy Form can be lodged 10.00 am on Wednesday, 10 March 2010

Time and date for determining eligibility to vote at Scheme Meeting 7.00 pm (Sydney time) on Wednesday, 10 March 2010

Scheme Meeting 10.00 am on Friday, 12 March 2010

IF THE SCHEME IS APPROVED BY PIPE SHAREHOLDERS

Court hearing for approval of the Scheme Wednesday, 17 March 2010

Effective Date Wednesday, 17 March 2010

Suspension of trading in PIPE Shares on the ASX Close of trading on Wednesday, 17 March 2010

Record Date – time and date for determining entitlements to Scheme 5.00 pm on Wednesday, 24 March 2010 Consideration under the Scheme

Implementation Date – transfer of PIPE Shares to TPG Wednesday, 31 March 2010

Despatch of cheques for Scheme Consideration Wednesday, 7 April 2010

Termination of ofﬁcial quotation of PIPE Shares on the ASX Close of trading on Wednesday, 7 April 2010 or such later date determined by TPG

Unless otherwise stated, all times referred to in this document are references to time in Brisbane, Australia.

This timetable is indicative only. The actual timetable will depend upon the time at which the conditions precedent to the Scheme are satisﬁed or, if applicable, waived. Those conditions are summarised in Section 6.11 of this document. PIPE Networks has the right to vary the timetable set out above subject to the approval of such variation by TPG, the Court and the ASX where required. Any variation to the timetable set out above will be announced to the ASX and published on PIPE Networks’ website.

6 YOUR VOTE

Scheme Meeting The Scheme Meeting will be held at 10.00 am on Friday, 12 March 2010 at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane. For the Scheme to proceed, it must be approved by a majority in number of PIPE Shareholders present and voting at the Scheme Meeting (in person, by attorney, by proxy or, in the case of corporate shareholders, by corporate representative) and at least 75% of votes cast by PIPE Shareholders entitled to vote at the Scheme Meeting. PIPE Shareholders will be eligible to vote at the Scheme Meeting if they are registered as a shareholder on the Register at 7.00 pm (Sydney time) on Wednesday, 10 March 2010, other than TPG and its Related Entities which will not vote.

What should you do? Read this document and the accompanying notice of Scheme Meeting carefully. If you have any questions, consult your ﬁnancial, legal or other professional adviser or call the PIPE Shareholder information line on 1800 646 920 (within Australia) or +61 2 8280 7071 (International). Your Directors believe the Scheme is a matter of importance for all PIPE Shareholders and therefore urge you to vote on the Scheme.

Entitlement to vote PIPE Shareholders who are registered on the Register at 7.00 pm (Sydney time) on Wednesday, 10 March 2010 may vote at the Scheme Meeting in person, by attorney, by proxy or, in the case of corporate shareholders, by corporate representative.

How to vote in person If you are entitled to vote and wish to do so in person, you should attend the Scheme Meeting to be held at 10.00 am on Friday, 12 March 2010 at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane. Please bring your Proxy Form with you to facilitate admission to the meeting. A body corporate which is a PIPE Shareholder may appoint an individual to act as its corporate representative. The appointment must comply with the requirements of sections 250D and 253B of the Corporations Act. If you are attending as a corporate representative, please bring evidence of your authority.

How to vote by proxy A Proxy Form is included with this document. If you wish to appoint a proxy to attend and vote or attorney at the Scheme Meeting, complete the Proxy Form. Your Proxy Form or appointment of attorney (in the event you wish to appoint an attorney to attend and vote at the Scheme Meeting) must either be: s sent by mail to the PIPE Networks Share Registry (using the reply paid envelope included with this document), addressed, PIPE Networks Limited, C/- Link Market Services Limited, Locked Bag A14, Sydney South, NSW, 1235, Australia; s faxed to (02) 9287 0309 or (07) 3233 9889 from within Australia, or +61 2 9287 0309 or +61 7 3233 9889 from overseas; s lodged online at www.linkmarketservices.com.au; s delivered by hand to Link Market Services Limited, Level 12, 680 George Street, Sydney, NSW, 2000; or s sent to PIPE Networks’ registered ofﬁce at Level 9, PIPE Networks House, 127 Creek Street, Brisbane, QLD, 4000, so that it is received by no later than 10.00 am on Wednesday, 10 March 2010. If an attorney signs a Proxy Form on your behalf, a copy of the authority under which the Proxy Form was signed must be received by the PIPE Networks Share Registry at the same time as the Proxy Form (unless you have already provided a copy of the authority to PIPE Networks). If you complete and return a Proxy Form, you may still attend the meeting in person, revoke the proxy and vote at the meeting.

7 1. FREQUENTLY ASKED QUESTIONS

This document contains detailed information regarding the Scheme. The following Section provides summary answers to some questions you may have and will assist you to locate further detailed information in this document.

THE SCHEME AT A GLANCE

What is the Scheme? The Scheme involves TPG acquiring all of PIPE Networks’ issued shares which it does not already own at $6.30 cash per share by way of a scheme of arrangement. On 11 November 2009, PIPE Networks and TPG announced that they had entered into the Implementation Agreement governing how the Scheme will proceed. A copy of the Implementation Agreement (excluding annexures) is included in Annexure B of this document.

What is a “scheme of arrangement”? A “scheme of arrangement” is a means of implementing an acquisition of shares under the Corporations Act. It requires a vote in favour of the Scheme by certain majorities of shareholders at a meeting of shareholders and also requires Court approval. A detailed description of the Scheme is set out in Section 6 of this document. The terms of the Scheme are set out in full in Annexure D of this document.

What do the Directors recommend? The Directors unanimously recommend that, in the absence of a Superior Proposal, you vote in favour of the Scheme and approve the Scheme at the Scheme Meeting. The Directors unanimously believe that the Scheme is in the best interests of PIPE Shareholders. The reasons for this recommendation and other matters that you may wish to take into consideration are set out in Section 3 of this document.

What are the intentions of the Directors? In the absence of a Superior Proposal, each of the Directors intends to vote in favour of the Scheme and approve the Scheme at the Scheme Meeting in relation to PIPE Shares held by them or on their behalf. The Directors hold 16,969,569 PIPE Shares, representing 28.65% of outstanding PIPE Shares as detailed in Section 7.7 of this document.

What are the reasons to vote in favour The reasons to vote in favour of the Scheme are set out in Section 3.2 of the Scheme? of this document.

What are the possible reasons not to The possible reasons not to vote in favour of the Scheme are set out in vote in favour of the Scheme? Section 3.3 of this document.

What is the Independent Expert’s The Directors engaged Ernst & Young as the Independent Expert to provide conclusion? a report. The Independent Expert has concluded that the Scheme is fair and reasonable, and that the Scheme is in the best interests of PIPE Shareholders (other than TPG) in the absence of a superior proposal. The Independent Expert’s report is included in Annexure A of this document.

What are the prospects of receiving Since the Scheme was announced, no Superior Proposal has emerged. a Superior Proposal? The Directors have no basis for believing that a Superior Proposal will be forthcoming. PIPE Shareholders should note that PIPE Networks has agreed to certain exclusivity and break fee provisions in favour of TPG, which are summarised in Section 6.11 of this document.

What should I do? You should read this document carefully in its entirety and then vote by attending the Scheme Meeting, or by appointing a proxy to vote on your behalf. Full details of who is eligible to vote and how to vote are set out in the “Your vote” Section on page 7 of this document.

8 WHAT YOU WILL RECEIVE UNDER THE SCHEME

What will I receive if the If the Scheme proceeds, PIPE Shareholders will receive $6.30 cash from Scheme proceeds? TPG for each PIPE Share held as at the Record Date.

When will the Scheme Consideration If you hold PIPE Shares on the Record Date, you will be paid your Scheme be paid? Consideration within 5 Business Days after the Implementation Date. If the Scheme is not approved by the required majorities at the Scheme Meeting and by the Court, the Scheme Consideration will not be paid.

How will I be paid for my PIPE Shares? PIPE Networks will despatch a cheque in Australian currency drawn on an Australian bank account by pre-paid post to each PIPE Shareholder’s address, as it appears in the PIPE Networks Share Registry, or by electronic funds transfer (for PIPE Shareholders who have nominated a bank account by written notice to PIPE Networks on or before the Record Date).

How will joint PIPE Shareholders In the case of joint holders of Scheme Shares, the Scheme Consideration be paid for their PIPE Shares? which is paid for by cheque, will be in the names of those joint holders, or by electronic funds transfer (where the joint holders have nominated a bank account by written notice to PIPE Networks on or before the Record Date).

What are the tax consequences Section 8 of this document provides a general outline of the Australian of the Scheme for me? income tax, capital gains tax, GST and stamp duty consequences for PIPE Shareholders who dispose of their PIPE Shares to TPG in accordance with the Scheme. You should consult with your own ﬁnancial/tax adviser regarding the consequences of disposing of your PIPE Shares to TPG in accordance with the Scheme in light of current tax laws and your particular investment circumstances.

Will I have to pay brokerage fees No, you will not have to pay any brokerage or stamp duty in connection with or stamp duty? the Scheme.

9 1. FREQUENTLY ASKED QUESTIONS

VOTING TO APPROVE THE SCHEME

When and where will the Scheme The Scheme Meeting will be held at 10.00 am on Friday, 12 March 2010 Meeting be held? at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane.

Am I entitled to vote at the The Court has determined that the time for determining eligibility to vote Scheme Meeting? at the Scheme Meeting is 7.00 pm (Sydney time) on Wednesday, 10 March 2010. Only those PIPE Shareholders entered on the Register at that time will be entitled to attend and vote at the Scheme Meeting (other than TPG and its Related Entities which must not vote at the Scheme Meeting).

What vote is required to approve For the Scheme to proceed, votes “in favour” must be received: the Scheme? s from a majority in number of PIPE Shareholders who vote at the Scheme Meeting (in person or by proxy); and s in respect of at least 75% of the total number of PIPE Shares voted on the resolution to approve the Scheme. It is also necessary for the Court to approve the Scheme before it can become Effective.

What choices do I have as a As a PIPE Shareholder you have the following choices: PIPE Shareholder? s you can vote in person, by attorney, by proxy or, in the case of corporate shareholders, by corporate representative; s you can elect not to vote at the Scheme Meeting; or s you can sell your PIPE Shares on the ASX. If you sell your PIPE Shares on the ASX you may incur brokerage costs. Provided the Scheme becomes Effective, PIPE Shares are expected to be suspended from trading on the ASX from the close of trading on the Effective Date. Accordingly, you can sell your PIPE Shares on market at any time before the close of trading on the day that the Scheme becomes Effective.

Should I vote? Voting is not compulsory. However, the Directors believe that the Scheme is important to all PIPE Shareholders and the Directors unanimously recommend that, in the absence of a Superior Proposal, you vote in favour of the Scheme and approve the Scheme at the Scheme Meeting.

How do I vote? You may vote in person by attending the Scheme Meeting to be held at 10.00 am on Friday, 12 March 2010 at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane. Alternatively, you may vote by completing and lodging the Proxy Form that is enclosed with this document. The Proxy Form can be lodged in person, by mail or by fax – see page 7 of this document for further details. You can also vote by appointing a body corporate representative (if you are a body corporate) or an attorney. Full details of how to vote and how to lodge the Proxy Form, body corporate representative appointment or power of attorney are set out in the “Your vote” Section on page 7 of this document.

What happens if I do not vote, or I vote The Scheme may not be approved at the Scheme Meeting by the requisite against the Scheme? majorities. If this occurs the Scheme will not proceed, you will not receive the Scheme Consideration, and you will remain a PIPE Shareholder. However, if the Scheme is approved and implemented, your PIPE Shares will be transferred to TPG under the Scheme and you will receive the Scheme Consideration for each PIPE Share you hold on the Record Date. This is so even if you did not vote at all or you voted against the Scheme.

10 What happens if the Scheme is not If the Scheme does not proceed, PIPE Shareholders will retain their PIPE approved at the Scheme Meeting? Shares, PIPE Networks will continue to operate as a stand-alone entity listed on the ASX and PIPE Shareholders will not receive the Scheme Consideration. PIPE Networks will continue to focus on its current business plan and strategy.

What happens if the Scheme is approved If the Scheme is approved at the Scheme Meeting, but is not approved by at the Scheme Meeting, but it is not the Court, PIPE Shareholders will retain their PIPE Shares, PIPE Networks approved by the Court? will continue to operate as a stand-alone entity listed on the ASX and PIPE Shareholders will not receive the Scheme Consideration. PIPE Networks will continue to focus on its current business plan and strategy.

When will the results of the Scheme The results of the Scheme Meeting will be available shortly after the conclusion Meeting be available? of the Scheme Meeting and will be announced to the ASX once available.

OTHER

Can I keep my shares in PIPE Networks? If the Scheme is implemented, PIPE Shares will be transferred to TPG. This is so even if you did not vote at all or you voted against the Scheme.

Who is TPG? TPG is a company listed on the ASX which was formerly known as SP Telemedia Limited. Further information on TPG is set out in Section 5 of this document.

Can I acquire shares in TPG? TPG is listed on the ASX. PIPE Networks makes no recommendation as to whether you should purchase shares in TPG. You should seek independent ﬁnancial and taxation advice before making any investment decision.

Are any other approvals required? The Scheme must be approved by the Court in addition to being approved by the requisite majorities of PIPE Shareholders. If the Scheme is approved by the requisite majorities of PIPE Shareholders at the Scheme Meeting, PIPE Networks will apply to the Court for approval of the Scheme. The Court hearing for approval of the Scheme is expected to be held on Wednesday, 17 March 2010 (although this may change). Further details of the approval process are set out in Section 6.2 of this document. Implementation of the Scheme is subject to certain regulatory approvals, as summarised in Section 6.11 of this document.

Is the Scheme subject to any conditions? Implementation of the Scheme is subject to a number of conditions. These conditions are summarised in Section 6.11 of this document and set out in full in the Implementation Agreement (a copy of which, excluding annexures, is set out in Annexure B of this document).

What happens if a Superior Proposal If a Superior Proposal emerges, the Directors will reconsider their emerges? recommendation in respect of the Scheme and advise PIPE Shareholders of any Superior Proposal and their revised recommendation accordingly.

When will PIPE Shares cease trading Provided the Scheme becomes Effective, PIPE Shares are expected to be on the ASX? suspended from trading on the ASX from the close of trading on the Effective Date (which is currently scheduled to be Wednesday, 17 March 2010).

What if I have other questions? If you have any further questions concerning the Proposal, please consult your ﬁnancial, legal, or other professional adviser or call the PIPE Shareholder information line on 1800 646 920 (within Australia) or +61 2 8280 7071 (International).

11 2. KEY FEATURES OF THE SCHEME

2.1 Overview On 11 November 2009 PIPE Networks and TPG announced the proposed acquisition of PIPE Networks by TPG.

The proposed transaction will be implemented by way of a scheme of arrangement to be approved by PIPE Shareholders. If the Scheme is implemented, PIPE Networks will become a wholly owned subsidiary of TPG and will be delisted from the ASX.

A copy of the Scheme is set out in Annexure D of this document.

2.2 What you will receive if the Scheme is implemented If the Scheme proceeds, PIPE Shareholders will receive $6.30 cash from TPG for each PIPE Share held as at the Record Date.

Under the terms of the Implementation Agreement, the consideration for your PIPE Shares must be provided by TPG to PIPE Networks before 12.00 noon on the Implementation Date. Within 5 Business Days of the Implementation Date, PIPE Networks will pay the Scheme Consideration received from TPG to PIPE Shareholders. This is expected to occur on Wednesday, 7 April 2010.

2.3 Directors’ recommendation The Directors unanimously recommend, in the absence of a Superior Proposal, that you vote in favour of the Scheme and approve the Scheme at the Scheme Meeting.

The reasons for this recommendation and other matters that you may wish to take into consideration are set out in Section 3 of this document.

2.4 Independent Expert’s opinion PIPE Networks appointed Ernst & Young, as an Independent Expert, to prepare a report on the Proposal. That report concludes that the Scheme is fair and reasonable, and that the Scheme is in the best interests of PIPE Shareholders (other than TPG) in the absence of a superior proposal.

The Independent Expert’s report is set out in full in Annexure A of this document.

2.5 Key steps to implement the Proposal and approvals required The key steps to implement the Proposal are as follows: s PIPE Shareholders will vote on whether to approve the Scheme at the Scheme Meeting; s if the required majorities of PIPE Shareholders approve the Scheme, then PIPE Networks will apply to the Court to approve the Scheme at the Second Court Hearing (expected to be held on Wednesday, 17 March 2010); s if all conditions to the Scheme have been satisfied or waived, and the Court approves the Scheme, PIPE Networks will lodge with ASIC an office copy of the Court order approving the Scheme. PIPE Networks intends to lodge this with ASIC on the same date as the Second Court Date (expected to be Wednesday, 17 March 2010); s it is expected that suspension of trading in PIPE Shares on the ASX will occur from the close of trading on the Effective Date; s before 12.00 noon on the Implementation Date, TPG will provide to PIPE Networks all the Scheme Consideration payable in respect of, and on the Implementation Date will acquire, all existing PIPE Shares which it does not already own; s within 5 Business Days of the Implementation Date, PIPE Networks will pay the Scheme Consideration received from TPG to PIPE Shareholders by despatching cheques or making direct deposits to nominated bank accounts (expected tooccur on Wednesday, 7 April 2010); s on a date after the Implementation Date to be determined by TPG, PIPE Networks will apply for termination of the official quotation of PIPE Shares on the ASX and to have itself removed from the official list of the ASX.

Section 6 of this document contains further details of the Scheme, including the approvals required in order for the Scheme to proceed.

12 2.6 Conditions precedent Implementation of the Scheme is subject to a number of conditions precedent which are summarised in Section 6.11 of this document and set out in full in clause 5 of the Implementation Agreement (a copy of which, excluding annexures, is set out in Annexure B of this document).

2.7 Exclusivity arrangements PIPE Networks has agreed in the Implementation Agreement that it will comply with certain restrictions in relation to soliciting alternative proposals or competing transactions with third parties, and responding to approaches by third parties in relation to PIPE Networks.

Further details about these arrangements are set out in Section 6.11 of this document and they are set out in full in clause 12 of the Implementation Agreement.

2.8 Break Fee PIPE Networks has agreed under the Implementation Agreement to pay the Break Fee to TPG in certain circumstances. The Break Fee is $3.7 million.

Further details about the Break Fee are set out in Section 6.11 of this document and the relevant provisions are set out in full in clause 13 of the Implementation Agreement.

2.9 Taxation implications A general guide to the taxation implications of the Proposal is set out in Section 8 of this document. This guide is expressed in general terms and is not intended to provide taxation advice in respect of the particular circumstances of any PIPE Shareholder.

2.10 If the Scheme does not proceed If the Scheme does not proceed, PIPE Shareholders will retain their PIPE Shares, PIPE Networks will continue to operate as a stand-alone entity listed on the ASX and PIPE Shareholders will not receive the Scheme Consideration. PIPE Networks will continue to focus on its current business plan and strategy.

2.11 Action to be taken by PIPE Shareholders You should read this document in its entirety. If you are in any doubt as to how to deal with this document, please consult your legal or ﬁnancial adviser.

Details of your entitlement to vote at the Scheme Meeting and instructions on how to vote are set out in the “Your vote” Section on page 7 of this document and in the notice of Scheme Meeting, which is set out in Annexure F of this document.

2.12 PIPE Shareholders may sell their PIPE Shares on the ASX at any time prior to the suspension of trading of PIPE Shares PIPE Shareholders should take into account that they may sell their PIPE Shares on the ASX at any time prior to the suspension of PIPE Shares from trading if they do not wish to hold them and participate in the Scheme (although normal brokerage and other expenses on sale may be incurred). It is expected that suspension of trading in PIPE Shares on the ASX will occur from close of trading on the Effective Date. This is expected to occur on Wednesday, 17 March 2010.

2.13 Further information for PIPE Shareholders If you have any further questions concerning the Proposal, please consult your ﬁnancial, legal, or other professional adviser or call the PIPE Shareholder information line on 1800 646 920 (within Australia) or +61 2 8280 7071 (International).

13 3. RECOMMENDATIONS AND MATTERS RELEVANT TO YOUR VOTE

3.1 Directors’ recommendation The Directors of PIPE Networks unanimously recommend that, in the absence of a Superior Proposal, you vote in favour of the Scheme and approve the Scheme at the Scheme Meeting. The Directors unanimously believe that, for the reasons set out below, the Scheme is in the best interests of PIPE Shareholders.

In the absence of a Superior Proposal, each of the Directors intends to vote in favour of the Scheme and approve the Scheme at the Scheme Meeting in relation to PIPE Shares held by them or on their behalf. The interests of Directors in PIPE Shares are set out in Section 7.7 of this document.

The Directors believe that the reasons for PIPE Shareholders to vote in favour of the Scheme outweigh the reasons to vote against the Scheme, in the absence of a Superior Proposal. These reasons and other relevant considerations are set out below. You should also read the Independent Expert’s report which is set out in full in Annexure A of this document.

3.2 Reasons to vote in favour of the Scheme The key reasons for the Directors’ recommendation that, in the absence of a Superior Proposal, you vote in favour of the Scheme include the following.

(a) The Scheme Consideration represents an attractive premium to historical PIPE Share prices Under the terms of the Scheme, subject to the Scheme becoming Effective, PIPE Shareholders will receive $6.30 per PIPE Share held on the Record Date. This represents an attractive premium. The Proposal: s offers PIPE Shareholders a price per PIPE Share that is greater than PIPE Networks closing share price at any point since its listing on the ASX on 16 May 2005 and up to 3 February 20102; and s represents a 15% premium to PIPE Networks’ volume weighted average price over the last 3 months period to 3 November 2009 and a 29% premium to PIPE Networks’ volume weighted average price over the last 6 months period to 3 November 2009.

(b) The earnings multiple implied by the Scheme Consideration compares favourably to precedent acquisitions Based on the Enterprise Value3 implied by the Scheme Consideration of $6.30 per PIPE Share, the consideration offered under the Scheme represents an implied multiple of 10.1 times PIPE Networks’ normalised FY10F EBITDA. A detailed explanation of this calculation of the normalised FY10F EBITDA can be found in the Independent Expert’s report included in Annexure A of this document (see section 6.2.1.1 of the report).

2 Note that PIPE Networks went into trading halt over the period between 4 November 2009 and 11 November 2009. As such, 3 November 2009 was the last trading day prior to the announcement of the Proposal. 3 The Enterprise Value assumes a price of $6.30 per PIPE Share, PIPE Shares on issue of 59,221,171, net debt as at 31 December 2009 of $29.7 million (assuming a normalised cash balance as explained in the Independent Expert’s report included in Annexure A of this document (see section 6.2.5 of the report)), PPC-1 obligations as at 31 December 2009 of $51.8 million, surplus cash receivable for IRU and spur sales on PPC-1 as at 31 December 2009 of $10.5 million and investments in shares in listed companies as at the date of the Independent Expert’s report of $10.1 million. Note that accounts as at 31 December 2009 have not been audited but have been formally reviewed by an independent auditor.

14 As the chart below shows, a prospective EBITDA multiple of 10.1 times compares favourably to the valuations observed in a majority of recent comparable transactions.

Comparable transaction multiples to the Proposal

11.0x 10.1x 10.0x

9.0x 8.7x 8.2x 8.0x

6.8x 7.0x

6.0x 5.0x 5.0x

4.0x

EV/EBITDA Year 1 Forward 3.0x

2.0x

1.0x

- x SPT/TPGH iiNet/Westnet TCNZ/Powertel SingTel/Uecomm TPG/PIPE Sources: Independent Expert’s report, Company announcements and presentations

(c) PIPE Shareholders will receive certain and immediate value for their investment PIPE Networks’ share price has been highly volatile over the last 12 to 18 months, driven largely by the uncertainty in capital markets, ﬁnancing risks, and the progress of the PPC-1 project.

The Scheme Consideration of $6.30 cash from TPG for each PIPE Share provides you with certainty of value for your PIPE Shares (subject to the Conditions Precedent being satisﬁed or waived).

(d) The Scheme is in the best interests of PIPE Shareholders and is within the Independent Expert’s valuation range The Independent Expert has concluded that the Scheme is fair and reasonable, and that the Scheme is in the best interests of PIPE Shareholders (other than TPG) in the absence of a superior proposal.

The valuation analysis of the Independent Expert concluded that the fair market value of PIPE Shares is between $6.00 and $6.72 per PIPE Share. In the absence of a superior proposal, the offer of $6.30 per PIPE Share is in the best interests of PIPE Shareholders (excluding TPG).

(e) No Superior Proposal has emerged Since PIPE Networks announced the Proposal on 11 November 2009, no Superior Proposal to acquire PIPE Networks has emerged. The Directors have no basis for believing that a Superior Proposal will be forthcoming.

(f) PIPE Networks’ share price may fall if the Scheme is not implemented If the Scheme is not implemented, the trading price of PIPE Shares will continue to be subject to market volatility, including general stock market movements, general economic conditions and the demand for listed securities. As such, if the Scheme is not implemented, the PIPE Share price may trade below the Scheme Consideration being offered under the Proposal.

(g) No transfer costs No brokerage or stamp duty will be payable on the transfer of your PIPE Shares under this Proposal.

3.3 Possible reasons not to vote in favour of the Scheme Although the Scheme is recommended by your Directors (in the absence of a Superior Proposal), and the Independent Expert has concluded that the Scheme is in the best interests of PIPE Shareholders (other than TPG), factors which may lead you to consider voting against the Scheme include the following.

(a) Scheme Consideration You may hold a different view to the Directors and the Independent Expert and believe that the Scheme Consideration of $6.30 per PIPE Share is inadequate.

15 3. RECOMMENDATIONS AND MATTERS RELEVANT TO YOUR VOTE

(b) Loss of exposure to PIPE Networks’ current and future growth assets TPG is offering to acquire PIPE Shares for $6.30 per share in cash under the Scheme. If the Scheme is implemented, PIPE Shareholders will no longer participate in the future performance of PIPE Networks. This will mean that PIPE Shareholders will not retain any exposure to PIPE Networks’ assets or have the potential to share in the value that could be generated by PIPE Networks in the future through the successful implementation of its strategies.

(c) Loss of inﬂuence over the direction of PIPE Networks If the Scheme is approved and implemented, you will cease to have the right to inﬂuence the future direction of PIPE Networks through your voting rights as a PIPE Shareholder. TPG will have the right to determine the future direction of PIPE Networks following implementation of the Scheme.

(d) Future dividends If the Scheme is implemented, PIPE Shareholders will not have the opportunity to receive future dividends from PIPE Networks.

(e) Tax consequences Implementation of the Scheme may have tax consequences for PIPE Shareholders. A general guide to the taxation implications of the Proposal is set out in Section 8 of this document. This guide is expressed in general terms and individual PIPE Shareholders should seek professional advice regarding the tax consequences applicable to their own circumstances.

(f) A Superior Proposal could potentially emerge It is possible that a more attractive proposal for PIPE Shareholders could materialise in the future, e.g. a takeover bid with a higher offer price than the Scheme Consideration. However, as at the date of this document, your Directors have not received or become aware of any alternative proposal and have no basis for believing that an alternative proposal will be received. 3.4 Other relevant considerations (a) Implications of a failure to approve the Scheme If the Scheme is not approved by PIPE Shareholders or the Court, PIPE Shareholders will retain their PIPE Shares. Under this scenario, and in the absence of a Superior Proposal, the market price for PIPE Shares may fall.

(b) The Scheme may be implemented even if you vote against it You should be aware that even if you do not vote, or vote against the Scheme, the Scheme may still be implemented if it is approved by the requisite majorities of PIPE Shareholders and the Court. If this occurs, your PIPE Shares will be transferred to TPG and you will receive $6.30 cash per PIPE Share even though you did not vote on, or voted against the Scheme.

(c) Conditionality of the Scheme The implementation of the Scheme is subject to a number of conditions, including: s US Department of Homeland Security, the Federal Communications Commission and other regulatory approvals; s no material adverse change or prescribed occurrence occurring in relation to PIPE Networks; and s PIPE Shareholder and Court approvals of the Scheme.

These conditions are summarised in Section 6.11 of this document and set out in full in clause 5 of the Implementation Agreement (a copy of which, excluding annexures, is set out in Annexure B of this document).

(d) Obligations relating to the construction of PPC-1 PIPE Networks currently has an obligation outstanding in relation to the construction of PPC-1 which falls due over the coming 6 months. Should the Scheme not proceed and if there are insufﬁcient additional sales to meet this obligation, payment of this obligation will in all likelihood need to be funded by an equity or debt raising by PIPE Networks. For further details regarding this obligation, please refer to Section 4.8 of this document and the Independent Expert’s report included in Annexure A of this document (see section 4.1 of the report).

(e) Regulatory considerations The Federal Government announced on 7 April 2009 it would establish a new company to invest up to $43 billion over 8 years in building a national broadband network to deliver superfast broadband to Australian homes and workplaces. Following this, the Federal Government has established the NBN Co Limited. The Federal Government has also stated that the NBN will be built in partnership with the private sector. At this stage, the outcome of the NBN remains uncertain. The Federal Government’s proposal in relation to the NBN has resulted in structural and competitive uncertainty within the Australian telecommunications sector in which PIPE Networks operates.

16 4. INFORMATION ON PIPE NETWORKS

4.1 Introduction PIPE Networks was incorporated as IX Services Australia Pty Ltd in December, 2001. The Company formally commenced operations in May 2002, launching its ﬁrst peering/Internet exchange, and is now recognised as Australia’s largest peering provider.

In July 2002, PIPE Networks was granted a Telecommunications Carrier Licence by the Australian Communications Authority as part of the Company’s plans to interconnect each of its Internet exchange locations in the same city via its own fibre optic network. Upon constructing the fibre optic network between its Brisbane Internet exchange locations, PIPE Networks recognised there was substantial demand from corporate and government organisations seeking direct access to dark fibre.

Following strong demand from its customers, PIPE Networks expanded its dark ﬁbre footprint to other capital cities and extended services to corporations and government organisations. PIPE Networks currently owns the third largest metropolitan ﬁbre network in Australia. The Company listed on the ASX on 17 May 2005.

PIPE Networks later decided to expand its operations further by exploring ways to improve Australia’s international communications transmission capacity. On 18 December 2006, PIPE Networks announced the signing of a MOU with Tata Communications Ltd (formerly VSNL International Pte Ltd) to construct a new submarine cable linking Sydney to the key international telecommunications interconnection hub at Guam. The cable was later named PPC-1. Tyco Telecommunications, a business unit of Tyco Electronics, was engaged as the preferred supplier to construct the submarine cable system.

On 8 October 2009, PIPE International, a fully owned subsidiary of PIPE Networks, and Tyco Telecommunications announced that they had completed the PPC-1 cable system.

PIPE Networks share price chart since listing (17 May 2005)4 to 3 February 2010

7.00

18 16 6.00 19 14 17 15 5.00 6 8 9 5 13

4.00 4 12 3 7 $

3.00

2 2.00 11 1 10

1.00

- May-05 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09

PIPE Networks ASX All Ordinaries Index (rebased) ASX 200 Telcos Index (rebased)

4 In the chart the ASX All Ordinaries Index and the ASX 200 Telecommunications Index have been rebased to PIPE Networks’ share price on listing (17 May 2005).

17 4. INFORMATION ON PIPE NETWORKS

The numbers in boxes in the chart above correspond to the numbered announcements made by PIPE Networks, as set out in the table below.

NO. DATE EVENT

1 12 Dec 2005 PIPE Networks launches cost-competitive Multicast Peering Services.

2 3 Aug 2006 PIPE Networks launches ﬁrst national VoIP Peering Network.

3 18 Dec 2006 PIPE Networks signs MOU with Tata Communications Ltd (formerly VSNL International Pte Ltd) to construct a new submarine cable linking Australia to Guam.

4 14 May 2007 PIPE Networks raises $16 million by way of a placement of 5 million PIPE Shares, allowing the Company to take advantage of strategic opportunities including the proposed international ﬁbre network to Guam.

5 9 Aug 2007 The Board selects Tyco Telecommunications as preferred supplier for the submarine cable system.

6 14 Jan 2008 Announcement that sufﬁcient contracts have been signed with keystone customers for the Board to approve the construction of PPC-1.

7 7 Apr 2008 PIPE International (Australia) Pty Ltd signs a MOU with Kordia Group Ltd to build PPC-2 linking Australia and New Zealand.

8 23 Apr 2008 PIPE Networks makes an investment of less than $1 million in Vocus Group Ltd.

9 28 Apr 2008 PIPE Networks raises $26 million by way of a placement of 6.5 million PIPE Shares. The capital raising provides equity funding for capital expenditure requirements of key projects including PIPE Networks’ submarine cable system.

10 1 Dec 2008 Trading halt followed by suspension of securities. PIPE Networks advised that given the delays in the credit approval process, the board of directors of PPC-1 (Bermuda) Ltd decided to withdraw from the proposed arrangement with ﬁnanciers.

11 19 Dec 2008 PIPE International (Australia) Pty Ltd and related companies sign a MOU with Tyco Telecommunications and a key customer to reschedule a number of supplier payments and customer receipts, allowing PPC-1 to proceed as scheduled.

12 9 Feb 2009 PIPE Networks investor presentation including PPC-1 funding update.

13 25 Jun 2009 Earnings guidance conﬁrmed for FY09A. Earnings guidance for the domestic and international businesses provided for FY10F. International business earnings outlook provided for FY11F.

14 8 Oct 2009 PIPE International and Tyco Telecommunications announce that they have completed the PPC-1 cable system.

15 27 Oct 2009 PIPE Networks annual general meeting and upgrade of FY10F earnings guidance.

16 9 Nov 2009 Unconditional placement by PIPE Networks of 2.8 million PIPE Shares to TPG at $6.30 per PIPE Share.

17 11 Nov 2009 Proposal announced.

18 17 Dec 2009 Conﬁrmation of satisfactory completion of due diligence by TPG.

19 18 Dec 2009 TPG confirms that it has entered into a financing agreement with a financier which satisfies the Funding Requirement (as defined in the Implementation Agreement).

Sources: IRESS and Company announcements

18 4.2 Corporate structure The following diagram represents PIPE Networks’ simpliﬁed corporate structure. PIPE Networks can effectively be separated into the following: s Domestic business: PIPE Networks’ domestic business is operated under PIPE Networks Limited and PIPE Transmission Pty Ltd. The primary operation for the domestic business is the provision of dark ﬁbre, telehousing, peering and managed Ethernet services. Further information regarding PIPE Networks’ domestic business is provided in Section 4.3 of this document. s International business: PIPE Networks’ international business operates under PIPE International (Australia) Pty Ltd. The primary operation of the international business is the newly constructed PPC-1 cable. Further information regarding PIPE Networks’ international business is provided in Section 4.4 of this document.

PIPE Networks’ simpliﬁed corporate structure

PIPE Networks Ltd Carrier License No. 101

PIPE International (Australia) Pty Ltd PIPE Transmission Pty Ltd Carrier License No. 241 Wholly-owned subsidiary (100%) Wholly-owned subsidiary (100%)

PPC 1 Ltd (Bermuda) Wholly-owned subsidiary (100%)

PPC1 (US) Inc Wholly-owned subsidiary (100%)

19 4. INFORMATION ON PIPE NETWORKS

4.3 PIPE Networks’ domestic business PIPE Networks’ domestic business generated $48 million in revenues in the ﬁnancial year ended 30 June 2009 and operates in four segments, with WAN5/dark ﬁbre being the largest contributor to revenue.

PIPE Networks’ domestic business revenue by product (FY09A)

Telehousing 12%

Peering 5%

Managed Ethernet 2%

Other WAN <1% 81%

WAN PIPE Networks’ WAN business is its major generator of revenue, contributing 81% of domestic revenues in FY 2009. Dark ﬁbre makes up the bulk of PIPE Networks’ WAN business. Unlike the managed services offered by most carriers, PIPE Networks customers can equip the dark ﬁbre in a manner which best suits the customer’s requirements.

PIPE Networks builds, owns and maintains the optical fibre network used to deliver the dark fibre service. PIPE Networks’ dark fibre network connects to key locations covering over 75 major data centres, 100 Internet and application service providers, 200 Telstra exchanges and 550 buildings. PIPE Networks currently operates approximately 1,400 km of fibre optic-based network, making the network the third largest metropolitan fibre optic network in Australia. PIPE Networks’ dark fibre offering has been used only up to 25.6% of its current capacity up until 31 December 2009, providing significant capacity for growth in the future. The diagrams below illustrate PIPE Networks’ metropolitan dark fibre networks in Sydney, Brisbane and Melbourne.

Sydney Serviced Exchange Areas Brisbane Serviced Exchange Areas Melbourne Serviced Exchange Areas

5 The WAN business line is predominantly made up of dark ﬁbre, but also contains inter-capital connections and data centre interconnections. For the purpose of this document, PIPE Networks’ dark ﬁbre business will be used interchangeably with PIPE Networks’ WAN segment.

20 Telehousing PIPE Networks runs state of the art telehousing and co-location facilities, located in most major capital cities in Australia. The telehousing business contributed 12% of domestic revenues in FY 2009.

PIPE Networks’ telehousing facilities are located in rooms with immediate and high speed access to many telecommunications companies allowing lower cost of access due to reduced distances. PIPE Networks’ telehousing services provide customers with the option to use the data centre capacity as a primary site, backup site or disaster recovery site.

Peering PIPE Networks is Australia’s largest peering provider with 16 Internet exchange locations across 6 cities. PIPE Networks is a Metro Area Internet Exchange in that it has distributed its switching capacity in areas of high customer density in Brisbane, Sydney, Melbourne, Adelaide, Hobart and Canberra. As such, PIPE Networks can connect to customers in buildings other than its main point of presence. The peering segment contributed 5% of domestic revenues in FY 2009.

Managed Ethernet PIPE Networks’ managed Ethernet offering is a Metro Ethernet Forum certiﬁed Ethernet product. The managed Ethernet segment contributed 2% of domestic revenues in FY 2009.

PIPE Networks’ managed Ethernet segment provides standards based Ethernet links that facilitate the delivery of a range of solutions, including: s connecting end users to their service provider; s connecting an office with a data centre, to implement disaster recovery; s connecting multiple offices within the same city or offices spread across multiple cities; and s interconnecting data centres.

The services are available in a range of speeds from 10Mbps up to 10Gbps, to meet the ever-growing demand for bandwidth.

Customers of PIPE Networks’ domestic business The key domestic customers of PIPE Networks include: s ISPs and telecommunications providers, including TPG, Pacnet, AT&T, Powertel, iiNet, Internode, Primus and Netspace; s government agencies, including the New South Wales Department of Environment and Climate Change, Education Queensland, CITEC, Moreton Bay Regional Council and ASIC; and s corporate clients, including IBM, Fujitsu, Bilﬁnger Berger Australia, BlueCare, Deutsche Bank, Macquarie Group, IMC Paciﬁc, the Australian Broadcasting Corporation, WebCentral and AsiaNetcom.

As of 31 December 2009, PIPE Networks’ domestic business had approximately 350 customers.

4.4 PIPE Networks’ international business On 18 December 2006, PIPE Networks announced the signing of a MOU with Tata Communications Ltd (formerly VSNL International Pte Ltd) to construct a new submarine cable linking Sydney to the key international telecommunications interconnection hub at Guam. The cable was later named PPC-1. Tyco Telecommunications, a business unit of Tyco Electronics and an industry pioneer in undersea communications technology, was engaged to construct the submarine cable system.

On 8 October 2009, PIPE International, a fully owned subsidiary of PIPE Networks Limited, and Tyco Telecommunications announced that they have completed the PPC-1 cable system.

The cable has a trunk length of approximately 6,900km and a capacity of 2.56 terabits per second over two ﬁbre pairs and 40 Gbps capability.

The key beneﬁts of PPC-1 include: s provides enhanced connectivity to the region, particularly to Asia and the United States; and s generates increased competition in the Australian undersea cable market, ultimately leading to lower capacity costs.

Foundation customers who can be identiﬁed at this time include Tata (VSNL), Telikom PNG, iiNet and Internode. Other customer contracts and counterparties cannot be disclosed due to conﬁdentiality restrictions.

21 4. INFORMATION ON PIPE NETWORKS

4.5 Directors The Board is comprised of the following members.

Roger Clarke Mr Roger Clarke is the Chairman of the Board and has over 30 years commercial experience Chairman in the investment banking industry, with responsibilities in fund management, banking and corporate ﬁnance. He is also the Chairman of Board of Advice at RBS Morgans Limited, and in this capacity has been involved in a signiﬁcant number of initial public offerings, capital raisings and corporate transactions. Mr Clarke holds a Bachelor of Commerce and is a Chartered Accountant. Mr Clarke is also Chairman of the Company’s Audit and Risk Management Committee. Other Current Directorships Mr Clarke currently serves as a director on the board of the following listed companies: s Tissue Therapies Ltd; and s Trojan Equity Ltd. Former Directorships in the last 3 years Mr Clarke ceased being a listed company director of the following companies within the last 3 years: s Triangle Energy (Global) Ltd, formerly Maverick Energy Ltd.

Bevan Slattery Mr Bevan Slattery is the Chief Executive Officer/Managing Director and co-founder Managing Director and of PIPE Networks. He comes from a background in building successful Australian IT Chief Executive Officer and telecommunication companies and an earlier career in administration in local and state government. Mr Slattery was awarded “Young Entrepreneur of the Year” in the Northern Region finals of the 2006 Ernst & Young Entrepreneur of the Year awards. He holds a Masters in Business Administration from Central Queensland University. In August 2009, Mr Slattery was awarded the ACOMM Telecommunications Ambassador of the Year Award in recognition of his contribution as a visionary in the industry and his personal quest to advance Australia’s access to technology and promote progress in the Telecommunications market. Other Current Directorships Mr Slattery has no other current directorships in listed companies. Former Directorships in the last 3 years Mr Slattery has not ceased any listed company directorships in the past 3 years.

Jason Sinclair Mr Jason Sinclair is the Chief Operating Officer of PIPE Networks and is responsible for Executive Director and the Company’s technical operations, overseeing the delivery of core products and internal Chief Operating Officer provisioning, customer service and quality systems. He has over 12 years industry experience and has held a variety of senior operational roles in leading carriers and ISP’s including Powertel, Pacific Internet and Dodo. He is currently completing his Masters of Business Administration (MBA) at Southern Cross University. Other Current Directorships Mr Sinclair has no other current directorships in listed companies. Former Directorships in the last 3 years Mr Sinclair has not ceased any listed company directorships in the past 3 years.

22 Greg Baynton Mr Greg Baynton is the founder and Managing Director of Orbit Capital, a boutique investment Non-Executive Director and advisory company and holder of Financial Services Licence No. 230327. He comes from a background in merchant banking and Queensland Treasury, and has experience in infrastructure investment, capital raisings, IPOs, pre-IPO funding, corporate structuring and corporate governance. He holds a Bachelor of Business (Accountancy), a Master of Economic Studies (UQ), a Post-graduate Diploma in Applied Finance & Investment (SIA), and a Master of Business Administration (QUT). Mr Baynton is a Fellow of the Australian Institute of Company Directors and an Associate of the Financial Services Institute of Australasia. Mr Baynton is a member of the Company’s Audit and Risk Management Committee. Other Current Directorships Mr Baynton currently serves as a director on the board of the following listed companies: s Lodestone Energy Ltd (formerly Lodestone Exploration Ltd); s Tissue Therapies Ltd; and s Diversa Ltd (formerly Ambri Ltd). Former Directorships in the last 3 years Mr Baynton has not ceased any listed company directorships in the last 3 years.

Stephen Baxter Mr Stephen Baxter’s extensive Internet and telecommunications experience includes the Non-Executive Director establishment of SE Net, a successful Internet company based in Adelaide, South Australia. SE Net grew to be the largest ISP operation in the state with over 33,000 customers and 76 staff at peak. Mr Baxter was awarded “Young Entrepreneur of the Year” in the Northern Region finals of the2006 Ernst & Young Entrepreneur of the Year awards. The award was in recognition of hisefforts in co-founding and building PIPE Networks Limited from a small private Company intoan ASX-listed telecommunications carrier in just 5 years. Mr Baxter was formerly the Chief Technical Officer of PIPE Networks and during his term oversaw technical operations for the Company including the construction of data centres, the inter-capital transmission network, DWDM network builds, VoIP Peering and other projects. In addition Mr Baxter also represented PIPE Networks at various industry forums. Mr Baxter resigned as Chief Technical Officer of PIPE Networks effective 30 June 2008, and continues to serve as a non-executive Director. Other Current Directorships Mr Baxter has no other current directorships in listed companies. Former Directorships in the last 3 years Mr Baxter has not ceased any listed company directorships in the past 3 years.

23 4. INFORMATION ON PIPE NETWORKS

4.6 Recent PIPE Networks share price performance The following chart demonstrates PIPE Networks share price performance over the period commencing 12 months prior to the date of the Proposal and ending on 3 February 2010. The chart demonstrates that PIPE Networks has signiﬁcantly outperformed the Australian All Ordinaries Index and the ASX 200 Telcos Index over this time.

PIPE Networks share price performance for the 12 months prior to the date of the Proposal and up until 3 February 20106

7.00

6 7 9 6.00 5 8 10

5.00

4.00 3 $

3.00 2

2.00 1

1.00

- Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10

PIPE Networks ASX All Ordinaries Index (rebased) ASX 200 Telcos Index (rebased) The numbers in boxes in the chart above correspond to the numbered announcements made by PIPE Networks, as set out in the table below.

NO. DATE EVENT

1 1 Dec 2008 Trading halt followed by suspension of securities. PIPE Networks advised that given the delays in the credit approval process, the board of directors of PPC-1 (Bermuda) Ltd decided to withdraw from the proposed arrangement with financiers. 2 19 Dec 2008 PIPE International (Australia) Pty Ltd and related companies sign a MOU with Tyco Telecommunications and a key customer to reschedule a number of supplier payments and customer receipts, allowing PPC-1 to proceed as scheduled. 3 9 Feb 2009 PIPE Networks investor presentation including PPC-1 funding update. 4 25 Jun 2009 Earnings guidance confirmed for FY09A. Earnings guidance for the domestic and international businesses provided for FY10F. International business earnings outlook provided for FY11F. 5 8 Oct 2009 PIPE International and Tyco Telecommunications announce that they have completed the PPC-1 cable system. 6 27 Oct 2009 PIPE Networks annual general meeting and upgrade of FY10F earnings guidance. 7 9 Nov 2009 Unconditional placement by PIPE Networks of 2.8 million PIPE Shares to TPG at $6.30 per PIPE Share. 8 11 Nov 2009 Proposal announced. 9 17 Dec 2009 Confirmation of satisfactory completion of due diligence by TPG. 10 18 Dec 2009 TPG confirms that it has entered into a financing agreement with a financier which satisfies the Funding Requirement (as defined in the Implementation Agreement). Sources: IRESS and Company announcements

6 In the chart the ASX All Ordinaries Index and the ASX 200 Telecommunications Index have been rebased to 11 November 2008.

24 4.7 Historical ﬁnancial overview Summary ﬁnancial statements Income statement CONSOLIDATED $(,000) REVIEWED7 AUDITED AUDITED 1H10A FY09A FY08A Continuing operations Revenue 46,562 49,680 34,237 Other income 8,879 743 344 Total revenue 55,441 50,423 34,581

Direct costs for providing services (9,716) (14,843) (9,893) Network operating and maintenance costs (2,204) (1,648) (1,206) Marketing and advertising costs (549) (468) (379) Employee beneﬁts expense (5,265) (9,874) (7,050) Depreciation and amortisation expense (4,488) (4,400) (2,937) Finance costs (404) (312) (198) Building and equipment rental costs (278) (604) (530) Corporate and administrative costs (1,125) (1,618) (1,012) Other expenses (1,107) (2,123) (1,198) Proﬁt before income tax 30,305 14,533 10,178

Income tax expense (13,678) (4,060) (2,943) Proﬁt for the period from continuing operations 16,627 10,473 7,235

Discontinued operations Proﬁt (loss) from discontinued operations – 31 (31) Proﬁt for the period 16,627 10,504 7,204

Other Comprehensive Income Net fair value gains on available-for-sale ﬁnancial assets 1,493 – – Total comprehensive income for the period 18,120 10,504 7,204

Proﬁt attributable to: Owners of the parent 16,627 10,504 7,204 Non-controlling interests –––

Total comprehensive income attributable to: Owners of the parent 18,120 10,504 7,204 Non-controlling interests –––

EARNINGS PER SHARE CENTS CENTS CENTS From continuing and discontinued operations: Basic (cents per share) 31.75 19.89 15.63 Diluted (cents per share) 31.75 19.89 15.63

From continuing operations: Basic (cents per share) 31.75 19.83 15.80 Diluted (cents per share) 31.75 19.83 15.80

7 Accounts formally reviewed by an independent auditor.

25 4. INFORMATION ON PIPE NETWORKS

Balance sheet CONSOLIDATED $(,000) REVIEWED8 AUDITED AUDITED 1H10A FY09A FY08A Current assets Cash and cash equivalents 14,796 3,286 22,061 Term deposits – secured – – 5,000 Trade and other receivables 3,971 8,439 3,204 Other assets 23,334 1,284 1,990 Total current assets 42,101 13,009 32,255

Non-current assets Trade and other receivables 2,503 650 1,787 Property, plant and equipment 189,715 143,399 94,086 Intangible assets 35,370 – – Deferred tax assets 1,613 1,396 773 Financial assets 250 250 250 Other assets 2,100 2,705 1,342 Total non-current assets 231,551 148,400 98,238

Total assets 273,652 161,409 130,493

Current liabilities Trade and other payables 6,648 6,640 5,969 Accrued expenses 54,123 1,537 417 Borrowings 39,510 10 133 Prepaid revenue 5,349 13,328 2,878 Current tax liabilities 11,659 762 608 Provisions 739 437 257 Total current liabilities 118,028 22,714 10,262

Non-current liabilities Borrowings 14 38,518 43,000 Prepaid revenue 27,641 5,343 4,698 Deferred tax liabilities 3,092 1,790 645 Provisions 128 103 55 Total non-current liabilities 30,875 45,754 48,398

Total liabilities 148,903 68,468 58,660

Net assets 124,749 92,941 71,833

Equity Issued capital 90,370 72,541 58,376 Reserves 1,604 111 111 Retained proﬁts 32,415 20,289 13,353 Parent interest 124,749 92,941 71,840 Minority interest – – (7) Total equity 124,749 92,941 71,833

8 Accounts formally reviewed by an independent auditor.

26 Discussion of financial information PIPE Networks has historically delivered strong revenue and NPAT growth with FY06A-09A compound annual growth rates of 56% and 55% respectively. PIPE Networks has also delivered a strong EPS9 growth, with FY06A-09A compound annual growth rate of 34%. The Company has maintained its earnings margins with FY09A EBITDA and NPAT margins of 37% and 21% respectively. The growth in earnings has been underpinned by increasing capacity usage on PIPE Networks’ existing dark fibre network and the strong margins sustained as a result of the economies of scale being achieved from the Company’s fixed cost network.

Revenue EBITDA 60 50 20 40 15 30 10

$ million 20 $million 10 5 - - FY06A FY07A FY08A FY09A FY06A FY07A FY08A FY09A

NPAT EPS 25 12 10 20 8 15 6 10

$million 4

2 share per Cents 5 - - FY06A FY07A FY08A FY09A FY06A FY07A FY08A FY09A

Sources: PIPE Networks 2009 Annual Report, 2008 Annual Report and 2007 Annual Report

4.8 Future obligations As can be seen from the balance sheet in Section 4.7 of this document, PIPE Networks had borrowings of approximately $38.5 million as at 30 June 2009. These borrowings are against a secured $40 million multi-option (Commercial Bill) facility from ANZ, with a ﬁxed and ﬂoating charge over the assets of the Company. The facility is reviewed annually and has a 1.5 year term maturing in August 2010, which may be extended by mutual agreement. These borrowings have since increased to approximately $39.5 million as at 31 December 200910. PIPE Networks also incurs a number of operating liabilities including trade and other payables and accrued expenses.

In addition to the above on-balance sheet ﬁnancial and operating liabilities that PIPE Networks takes on in its ordinary course of business, PIPE Networks had approximately $91.1 million in capital commitments as at 30 June 2009. A signiﬁcant portion of these capital commitments were comprised of obligations due with respect to the construction of PPC-111. Now that PPC-1 has been built and launched, this obligation is now considered on-balance sheet. The value of this liability as at 31 December 200910 was $51.8 million.

This PPC-1 obligation is payable primarily to Tyco Telecommunications, the supplier of the PPC-1 cable system, and is due at various times over the coming 6 months. While most of the terms of the MOU with Tyco Telecommunications remain conﬁdential, PIPE Networks can disclose that a number of supplier payments have been rescheduled to align with customer receipts, along with a number of customer receipts being brought forward to more closely align with the timing of supplier payments.

Please refer to the Independent Expert’s report included in Annexure A of this document (see section 4.1 of the report) for further details regarding this PPC-1 obligation.

9 EPS has been calculated on a diluted basis for continuing operations. 10 Accounts as at 31 December 2009 have not been audited but have been formally reviewed by an independent auditor. 11 See notes 22 and 23 of PIPE Networks’ 2009 Annual Report. Note that the capital commitments included amounts payable in USD under the PPC-1 Supply Agreement, converted at the period end exchange rates. The amounts were therefore approximations only and actual amounts paid were and will be subject to spot rates at payment date.

27 4. INFORMATION ON PIPE NETWORKS

While PIPE Networks management continue to strive to generate additional sales on PPC-1, in the event that additional sales have not been made on PPC-1 and any or all of the above outstanding obligation remains due after the next 6 months and the Scheme is not implemented, it will likely be funded from one or more of the following sources: s cash ﬂows from PIPE Networks’ domestic operations; s an equity and/or debt capital raising.

4.9 Earnings guidance PIPE Networks reconﬁrms its FY10F earnings guidance provided to the market for its domestic and international businesses at its Annual General Meeting on 27 October 2009. Management is conﬁdent in delivering strong growth in earnings, underpinned by solid backlog revenue.

Domestic Management expects to deliver solid growth across all domestic product categories. Both EBITDA and NPAT margins are expected to improve as network utilisation improves.

International Following the launch of PPC-1, management expects to post a strong earnings result for the business in FY10F. This result is underpinned by: s PPC-1 project will deliver positive operating cash ﬂow from Year 1; s strong recurring revenue sales opportunity pipeline for FY11F; s FY10F guidance incorporates one off gains on sales of IRUs plus recurring revenue (pro rata basis); and s FY10F guidance represents contracted revenue only.

The following table summarises PIPE Networks’ earnings guidance for FY10F, separated by its domestic and international business units.

PIPE Networks FY10F earnings guidance

DOMESTIC INTERNATIONAL TOTAL BUSINESS $ MILLION $ MILLION $ MILLION

Revenue 59.5 – 63.5 34.5 94.0 – 98.0

EBITDA 26.5 – 28.5 25.0 51.5 – 53.5

NPAT 14.5 – 16.5 7.5 23.0 – 25.0

PIPE Networks FY11F earnings outlook FY11F EBITDA for the international business is expected to be $15.4 million, reﬂecting additional recurring leasing revenue and improvements in operating costs for PPC-1.

PIPE Networks has not yet determined a reasonable forecast for the domestic business in FY11F.

4.10 Underlying assumptions of financial information (a) Overview The financial information presented in this document consists of the historical financial information and the forecast financial information for PIPE Networks that the Board considers relevant for the purposes of the Scheme.

The ﬁnancial information should be read in conjunction with the key assumptions set out in this Section 4.10 and other information contained in this document.

28 (b) Historical ﬁnancial information The historical ﬁnancial information included in this document comprises the income statements for PIPE Networks for FY08A, FY09A and 1H10A and the balance sheets of PIPE Networks as at 30 June 2008, 30 June 2009 and 31 December 2010 as set out in Section 4.7 of this document.

The historical financial information (including for FY 2008 and FY 2009) has been re-presented as a ‘Statement of comprehensive income’ in accordance with the revised AASB 101 ‘Presentation of Financial Statements’. The financial information presented is an extract from the relevant half year and full year financial reports for each period reported and released by PIPE Networks to the ASX.

(c) Forecast financial information The forecast financial information comprises the earnings guidance for PIPE Networks for the financial year ending 30 June 2010, as set out in Section 4.9 of this document. This earnings guidance is consistent with the guidance PIPE Networks provided at its Annual General Meeting on 27 October 2009, and this guidance remains current as at the date of this document.

The forecast ﬁnancial information has been formed with regard to the internal budgeting processes undertaken by management of PIPE Networks. These involve both an analysis of historical market trends, historical ﬁnancial and operational performance combined with an assessment of potential sales pipeline.

This earnings guidance is and was based on the Board’s assessment of the present economic and operating conditions and on a number of best-estimate assumptions regarding future events and actions, which at the date of this document, the Board reasonably expects to take place. These events may or may not take place. The Board believes this earnings guidance was prepared with due care and attention and consider all assumptions to be reasonable when taken as a whole. However, this information is not fact and readers are cautioned not to place undue reliance on the forecast ﬁnancial information.

The earnings guidance above is, by its very nature, subject to a variety of business, economic and competitive risks, uncertainties and unexpected events, many of which are outside the control of PIPE Networks and the Board. Events and circumstances often do not occur as anticipated and therefore actual results are likely to differ from the forecasts in quantum and timing and these differences may be materially positive or negative because the earnings guidance, and the best-estimate assumptions on which it is based, is by its nature subject to signiﬁcant uncertainties and contingencies, many of which are outside the control of PIPE Networks and the Board and are not reliably predictable. Accordingly, PIPE Networks and the Board cannot and do not give any guarantees that the forecasts will be achieved.

(d) Forecast assumptions In preparing the earnings guidance for FY10F, the Board applied the following assumptions: s no significant impact from changes in prevailing economic conditions which could have a material impact on asset values and the collection of revenue during the forecast period; s no material changes in Australian Accounting Standards which may have a material effect on PIPE Networks’ financial results and reported cash flows during the period; s no material changes in the legislative regimes or regulatory environments in which PIPE Networks operates which could have a material impact on asset values and the collection of revenue during the forecast period; s no changes to the corporate rates of taxation and no changes in taxation legislation during the forecast period; s no material adverse change in the competitive environment in which PIPE Networks operates; s retention of key personnel except as set out in this document; s no material business acquisitions or disposals; s no material costs incurred by PIPE Networks as a result of industrial or contractual disputes; s no material amendments to any material agreements regarding PIPE Networks’ business and their continued compliance with the terms of those agreements; s no material foreign exchange movement; s no material disturbances, environmental costs or legal claims; s no change in PIPE Networks’ capital structure; and s PIPE Networks is expecting to realise approximately $1 million in NPAT contribution from its 23.8% ownership of Vocus Group in FY10F.

29 5. INFORMATION ON TPG

5.1 Introduction TPG (formerly known as SP Telemedia Limited) is a leading provider of Internet, voice and data services to residential users, small businesses and large corporate and government customers in Australia. TPG provides these services under the popular ‘TPG’, ‘Soul’ and ‘Chariot’ brands and through one of the largest telecommunications networks operating in Australia.

TPG currently employs approximately 1,150 people in New South Wales, Victoria, Queensland, ACT, South Australia, Western Australia and the Philippines and is headquartered at 65 Waterloo Road, North Ryde, New South Wales, Australia.

TPG listed on ASX in 2001 under its former name of SP Telecommunications Limited (and former ASX code of ‘SOT’). In April 2008, TPG (under its former name of SP Telemedia Limited) merged with TPG Holdings Limited, a company established and formerly controlled by Mr David Teoh (the current Chairman and Chief Executive Ofﬁcer of TPG). The merger brought the ‘Soul’ and ‘TPG’ brands together under the one ASX listed company. TPG changed its name from SP Telemedia Limited to TPG Telecom Limited following its most recent annual general meeting that was held in late November 2009. TPG Shares continue to be quoted on the ASX (under the ASX code of ‘TPM’) and TPG’s market capitalisation as at 1 February 2010 was approximately $1.2 billion.

TPG’s group EBITDA and net profit after tax for the 2009 financial year were $98.5 million and $17.7 million respectively, representing a 296% and 194% increase on the relevant results achieved by the group in the preceding financial year. TPG’s growth is underpinned by broadband subscribers and increases in TPG’s consumer mobile offering which includes transferring customers across from existing Soul plans. Also, as at 31 July 2009 (the date of TPG’s consolidated balance sheet included in its 2009 Annual Report), TPG’s group had total assets of approximately $523.8 million and net assets of approximately $324.8 million

5.2 Overview of TPG’s business TPG’s telecommunications services operate in the areas of: s Internet services, including dialup products, ADSL, ADSL2+ and DSL broadband access, email services, website and domain name hosting; s mobile telephony services; s VoIP (Internet based) telephony services; and s business networking solutions, including fully managed corporate wide area networks, Internet based virtual private networks and data networks.

TPG’s own network infrastructure includes more than 338 DSLAM exchanges and installed microwave and ﬁbre assets, and over 300 points of presence/network access points installed across Australia. Soul Pattinson Telecommunications Pty Ltd, a subsidiary of TPG, is a licensed carrier. TPG is a large reseller of Optus mobile telephony services

Whilst TPG historically has supplied consumer mobile and Internet services through the Soul brand, its current strategy is to market and supply to consumers using the TPG brand through a subsidiary of TPG, TPG Internet Pty Ltd.

As at 31 October 2009, the TPG group had about 417,000 broadband subscribers, 280,000 of which were on TPG owned DSLAMs. Based on ﬁgures stated by the Australian Bureau of Statistics, this represented greater than 9% of the Australian market for DSL services. The broadband services represent the largest proportion of TPG’s consumer revenue but revenue and proﬁt diversity is provided from TPG’s more than 218,000 mobile subscribers, other voice telephony services provided to Australian consumers and the wholesale, corporate and government business.

TPG has a wholesale, corporate and government business which is supplied through its subsidiary companies. It has over 1,200 separate wholesale, corporate and government accounts, and it is the current supplier of the NSW Government core network and a large supplier of WAN services to Centrelink. TPG’s network facilities enable it to provide a wide range of high quality private network services using multi-protocol label switching.

30 5.3 Directors The board of directors of TPG is currently comprised of the following members.

David Teoh David was appointed a director of TPG in 2008. Chairman and Chief Experience, special responsibilities and other directorships Executive Ofﬁcer David was the founder and Managing Director of TPG Holdings Limited, previously one of the largest privately owned Internet businesses in Australia.

Robert D Millner Robert was appointed a director of TPG in 2000 and was Chairman from 2000 to 2008. Non-Executive Director Robert is also currently a member of TPG’s Audit & Risk Committee. Experience, special responsibilities and other directorships Robert is a director of the following companies: Washington H Soul Pattinson and Company Ltd (1984-current), New Hope Corporation Ltd (1995-current), Souls Private Equity Ltd (2004-current), Brickworks Ltd (1997-current), Brickworks Investment Company Ltd (2003-current), Australian Pharmaceutical Industries Ltd (2000-current), Milton Corporation Ltd (1998-current), and Choiseul Investments Ltd (1995-current). Qualiﬁcations F.A.I.C.D.

Denis Ledbury Denis was appointed a director of TPG in 2000 and is currently Chairman of TPG’s Audit & Risk, Non-Executive Director and Remuneration Committees. Experience, special responsibilities and other directorships Denis was the Managing Director of SP Telemedia Limited between 2000 and 2005, and was associated with the NBN group of companies for over 24 years (the last 14 as Chief Executive Ofﬁcer). Denis was also a director of Soul Communications Pty Ltd (2005-2008). Qualiﬁcations B.Bus., A.I.C.D.

Alan J Latimer Alan was appointed a director of TPG in 2008 and is currently a member of TPG’s Remuneration Executive Director Committee. Experience, special responsibilities and other directorships Prior to becoming an Executive Director of TPG, Alan was the Chief Financial Officer of TPG Holdings Limited and a director of Chariot Ltd (2007-2008). He has also previously worked with a number of large international IT and financial companies. Qualifications B.Com, CA, G.A.I.C.D.

Joseph Pang Joseph was appointed a director of TPG in 2008 and is currently a member of TPG’s Audit & Non-Executive Director Risk, and Remuneration Committees. Experience, special responsibilities and other directorships Joseph has worked in financial roles in the UK, Canada and Hong Kong prior to starting his own management and financial consulting service in Australia. Qualifications FCA

31 5. INFORMATION ON TPG

5.4 Funding arrangements If the Scheme becomes Effective, TPG will pay Scheme Participants a cash amount of $6.30 per PIPE Share on the Implementation Date in accordance with the Scheme.

On the basis of the information disclosed to the ASX by PIPE Networks in an Appendix 3B announcement dated 11 December 2009, the maximum amount of cash required to be paid by TPG to Scheme Participants under the Scheme, in aggregate, is $355,453,377.30 (Maximum Scheme Consideration). This amount will be reduced by the amount of any dividend, distribution, return of capital or other entitlement arising in respect of a PIPE Share, the record date for which is after 11 November 2009 (the date of the Implementation Agreement) but on or before the Implementation Date.

TPG will fund the Scheme Consideration and related transaction costs from the following sources: s funds drawn down under debt facilities totalling $380,000,000 with ANZ; s funds raised under the capital raisings outlined in section 5.4(b) and 5.4(c) below; and s TPG’s other cash reserves at the Implementation Date.

TPG has not determined the actual proportion in which funds will be obtained from these sources at the date of this document. As set out below, the total amount of funds available to TPG from these sources is sufﬁcient to pay the Maximum Scheme Consideration and related transaction costs.

(a) ANZ debt facilities TPG has executed a legally binding commitment letter with ANZ dated 18 December 2009 (Commitment Letter), under which ANZ will act as lead arranger, underwriter and book runner in the underwriting of debt facilities of up to $380,000,000 consisting of: s a three year amortising term loan facility of up to $200,000,000 (Facility A); s a three year interest only revolving loan facility of up to $160,000,000 (Facility B); and s a three year revolving multi-option working capital facility of up to $20,000,000 (Facility C), (together the Facilities).

Subject to the satisfaction of certain conditions precedent, Facility A and Facility B will be available for drawing from the date of entering into a binding facility agreement to 5.00 pm on the Implementation Date, provided that the Implementation Date occurs on or before 30 April 2010. Facility A and Facility B are available for the purposes of TPG’s acquisition of PIPE Networks under the Scheme, the repayment of any existing indebtedness of the PIPE Group and to pay related transaction costs. The aggregate amount available under Facility A and Facility B is sufﬁcient to fund the Maximum Scheme Consideration plus transaction costs.

Subject to Facility A and Facility B being drawn down, Facility C will be made available for draw down from the Implementation Date to assist with ongoing working capital requirements of TPG and its wholly owned subsidiaries.

ANZ’s commitment to underwrite the Facilities is subject to the following conditions precedent: s execution of definitive facility and security documentation in a form substantially as set out in the Commitment Letter and otherwise in a form and substance satisfactory to ANZ; s satisfaction of the conditions precedent to first draw down under the Facilities (described below); and s no change in any applicable law or regulation between 18 December 2009 and the date on which all the conditions precedent to the first draw down under the Facilities have been satisfied which prohibits ANZ from underwriting the Facilities and which cannot be reasonably avoided or overcome by ANZ.

As at the date of this document, TPG is not aware of any reason why these conditions precedent (other than certain conditions that are intended to be satisfied concurrently with the first draw down under the Facility A and Facility B on the Implementation Date) will not be satisfied on or before the Second Court Date.

Conditions precedent applicable to the draw down of funds by TPG under the Facilities include: s all conditions precedent to the Implementation Agreement and Scheme have been satisﬁed or waived with the prior written consent of ANZ;

32 s evidence that TPG has raised equity funding (or an acceptable equivalent), which together with any cash reserves available to TPG to be applied to fund the Scheme Consideration, is in a minimum amount of $110,000,000 and that those proceeds will be applied (in addition to the drawings under the Facilities) to fund the Scheme Consideration; s evidence that any financial indebtedness of a member of the TPG group or the PIPE Group (other than certain permitted financial indebtedness) has been, or will be, on the date of first draw down fully and finally repaid; s evidence that any security interest in respect of any assets of a member of the TPG group or the PIPE Group (other than certain permitted security interests) has been, or will be, on the date of first draw down released; s a copy of the proposed form of all documents required under section 260B of the Corporations Act to approve the provision of financial assistance required to be completed by PIPE Networks and its subsidiaries before they lawfully provide security for the Facilities (where approval of such financial assistance is to be obtained in accordance with section 260B following implementation of the Transaction); s the delivery of a certificate of two directors of TPG that to the best of their knowledge and belief having made all due enquiries nothing has occurred, since the date of TPG’s most recent consolidated financial statements, which has had or which would be reasonably likely to have a material adverse effect on the business, assets, revenues, prospects or overall financial condition of the TPG group taken as a whole; and s satisfaction of other conditions (as set out in Annexure E) that are customary for such facilities.

In accordance with clause 5.1(i) of the Implementation Agreement, the Scheme is conditional on the satisfaction or waiver of each condition precedent to the draw down of funds by TPG under the Facilities (other than a condition requiring Court approval of the Scheme). A list of all the conditions precedent to the draw down of funds by TPG under the Facilities is set out in Annexure E.

As at the date of this document, TPG is not aware of any reason why the conditions precedent to first draw down under the Facilities (other than certain conditions that are intended to be satisfied concurrently with the first draw down under the Facilities on the Implementation Date, such as payment of fees and expenses, repayment of indebtedness and the release of security interests) will not be satisfied in time to allow Facility A and Facility B to be drawn down to pay the Maximum Scheme Consideration as and when it is due under the terms of the Scheme. To that end, TPG reasonably expects that the moneys raised from the placement referred to in Section 5.4(b), when aggregated with TPG’s expected cash reserves at the time of draw down, will be sufficient to satisfy the condition precedent to draw down set out above in the second bullet point and will be used to satisfy the condition precedent to draw down set out above in the third bullet point to the extent that condition is not satisfied by funds available under the Facilities. If all conditions precedent to the first draw down under the Facilities are satisfied, then ANZ must provide the funds under the Facilities provided that first draw down will not be permitted after 30 April 2010.

ANZ’s commitment to underwrite the Facilities under the Commitment Letter will terminate in certain events which are customary for commitment letters of this kind. As at the date of this document, TPG is not aware of any circumstances that would give rise to such a termination event.

During the period beginning 8.00 am on the Second Court Date and ending 5.00 pm on the Implementation Date, ANZ’s right to terminate any of the Facilities is restricted to a limited set of events of default (including certain representations and warranties by TPG not being true) which also apply outside that period in addition to other trigger events. These events of default are customary for such facilities. As at the date of this document, TPG is not aware of any circumstances that would lead to an event of default, or that give ANZ a right to terminate any of the Facilities.

TPG expects that, prior to Wednesday, 3 March 2010, it will ﬁnalise its debt facilities, for an amount no less than the amount available under the Facilities, by entering into long form agreements that reﬂect the terms of the Commitment Letter.

(b) Placement by TPG On 4 February 2010, TPG announced to the ASX the ﬁnal terms of a placement to sophisticated and professional investors to raise $65 million through the issue of approximately 41 million new ordinary shares in TPG. Binding commitment letters have been received from the placees for this amount. Settlement of this placement is scheduled to take place on 9 February 2010 and TPG is scheduled to receive the $65 million on that date.

TPG undertook this placement in order to increase liquidity in the trading of its shares and reduce the TPG group’s net debt following the proposed acquisition of PIPE Networks under the Scheme.

33 5. INFORMATION ON TPG

(c) Additional raising from a share purchase plan In addition to the placement outlined above, TPG has announced that it will offer its existing shareholders an opportunity to subscribe for additional shares in TPG (at the same price as the price per TPG Share paid by placees under the placement) under a share purchase plan. Any funds raised from this share purchase plan will also be used to reduce the TPG group’s net debt following the proposed acquisition of PIPE Networks under the Scheme.

5.5 TPG’s intentions for the business, assets and employees of PIPE Networks This Section 5.5 sets out TPG’s intentions in relation to: s the continuation of the business of PIPE Networks; s any major changes to the business of PIPE Networks, including any redeployment of the ﬁxed assets of PIPE Networks; and s the future employment of the present employees of PIPE Networks, if the Scheme is implemented.

The statements of intention made in this Section are based on the information concerning the PIPE Group and the circumstances affecting the business of the PIPE Group that are known to TPG at the date of this document. Final decisions on these matters will only be made in light of all material facts and circumstances at the relevant time if the Scheme is implemented. Accordingly, the statements set out in this Section 5.5 are statements of current intention only, which may change as new information becomes available or circumstances change.

(a) General review of business If the Scheme is implemented, TPG intends to continue the business of the PIPE Group largely in its current form. TPG intends to work with PIPE Networks’ existing management team to provide PIPE Networks with the best prospects of optimising the returns from its business.

In order to achieve these outcomes, TPG intends to undertake a review of PIPE Networks’ business to verify (or to identify any deviation from) TPG’s understanding of the facts, information and circumstances concerning PIPE Networks’ activities, assets and employees as at the date of this document. TPG will then work with PIPE Networks’ management team to determine how to further develop PIPE Networks’ business in order to maximise its operating performance.

While TPG does not have any speciﬁc intentions in relation to this review or its outcomes, the review may identify opportunities to optimise capital requirements and returns and other opportunities to improve the business.

(b) Business integration TPG has no current intention to make major changes to, or dispose of any parts of, the PIPE Networks business, redeploy any of PIPE Networks’ ﬁxed assets or transfer any of TPG’s current businesses or material assets to PIPE Networks.

PIPE Networks and TPG’s existing Australian businesses share some common requirements in terms of infrastructure and operations. Through the integration of these businesses, TPG expects to achieve greater efficiencies and synergy benefits in these general areas over time. TPG does not believe it has a reasonable basis to speculate as to what the value of these efficiencies and synergies is likely to be.

(c) Directors In accordance with the Implementation Agreement, TPG currently intends to nominate persons for the Board to appoint as directors of PIPE Networks on the Effective Date so that the nominees of TPG represent a majority of the Board. PIPE Networks is then required to procure that the Board ensures that all remaining directors on the Board who are not nominees of TPG resign from the Board as soon as practicable after the Scheme Consideration has been paid to the Scheme Participants.

TPG’s nominees have not yet been identiﬁed and their identity will depend on the circumstances at the relevant time.

(d) Employees and incentive plans TPG intends to retain the services of PIPE Networks’ employees, including its senior management and operational management teams. Subject to the operation and strategic review described above, TPG will endeavour to minimise the disruption (if any) to PIPE Networks and its employees. TPG intends that the remuneration arrangements will continue to attract and retain employees. TPG will evaluate the future management and administrative requirements of PIPE Networks following the completion of the general operational review described above. 34 TPG expects there to be significant value and knowledge in the existing staff of PIPE Networks. TPG plans to draw on the management expertise of both its and PIPE Networks’ existing businesses to ensure that the businesses and cultures are integrated and operated effectively following implementation of the Scheme. In particular, TPG intends that Mr Bevan Slattery (current Chief Executive Officer of PIPE Networks) will be responsible for the overall management of the PIPE Networks business in the same or similar manner to which applied prior to the implementation of the Scheme and in accordance with Mr Slattery’s new employment agreement with PIPE Networks (refer to Section 7.8 for further details). Overall, the key operational responsibilities held by PIPE Networks’ management are expected to be largely unchanged, however, final decisions regarding the structure of the TPG and PIPE Networks businesses (including in respect of any potential duplication between existing corporate and administrative functions) will be made following implementation of the Scheme.

TPG understands that PIPE Networks has an employee option plan which is required to be suspended with effect from the Effective Date under the Implementation Agreement. After implementation of the Scheme, TPG intends to review and implement appropriate incentive arrangements for key employees so as to align the interests of PIPE Networks employees with TPG’s.

The remuneration arrangements of employees, the terms of any new incentive plans and the employees who will be entitled to participate in those plans will be determined by TPG after implementation of the Scheme, in consultation with PIPE Networks’ management team.

Except in respect of the employment agreement between PIPE Networks and current PIPE Networks Managing Director, Mr Bevan Slattery dated 11 November 2009, as at the date of this document, no new offers have been made to, and no discussions have taken place with, any of the employees of PIPE Networks in respect of these matters. Further information relating to Mr Slattery’s employment agreement is provided in Section 7.8 of this document.

(e) Removal of PIPE Networks from the official list of the ASX Pursuant to the terms of the Scheme, once the Scheme has been implemented, TPG intends to procure that PIPE Networks apply for termination of the official quotation on ASX of PIPE Shares and apply to have itself removed from the official list of ASX.

(f) Other intentions Other than as set out in this Section 5.5, if the Scheme is implemented, it is TPG’s present intention to: s continue the business of PIPE Networks in substantially the same manner as it is presently conducted; s not make any major changes to the business of PIPE Networks nor redeploy the ﬁxed assets of PIPE Networks; and s continue the employment of the present employees of PIPE Networks.

5.6 Information on PIPE Networks securities (a) TPG’s interest in PIPE Networks As at the date of this document, TPG has a relevant interest in a total of 11,751,876 PIPE Shares as follows: s TPG is the registered holder of 2,800,000 PIPE Shares which were issued to TPG on 9 November 2009 for $6.30 per PIPE Share under a subscription agreement dated 4 November 2009 between PIPE Networks and TPG (Subscription Shares); and s TPG holds call options to acquire 4,475,938 PIPE Shares from each of Bevan Slattery and Stephen Baxter (totalling 8,951,876 PIPE Shares) (Call Option Shares) for $6.30 per PIPE Share granted under an option deed dated 11 November 2009 between TPG, Bevan Slattery and Stephen Baxter (Option Deed) (further details are set out in Section 5.6(c) below).

Accordingly, as at the date of this document, TPG and its Associates have voting power (as deﬁned in section 610 of the Corporations Act) of 19.84% in PIPE Networks. However, TPG has no ability to control the exercise of any voting rights attaching to the 8,951,876 PIPE Shares the subject of the Option Deed.

(b) Acquisitions of PIPE Networks securities by TPG in previous 4 months In the 4 months prior to the date of this document, TPG has provided, or agreed to provide, consideration for PIPE Networks securities in the following instances: s on 4 November 2009 TPG agreed to provide, and on 9 November 2009 TPG provided, $6.30 in cash per PIPE Share for the Subscription Shares; and

35 5. INFORMATION ON TPG

s on 11 November 2009 TPG agreed to provide $6.30 in cash per PIPE Share for the Call Option Shares upon the exercise by TPG of the two call options granted to TPG under the Option Deed. TPG paid $1.00 cash to each of Bevan Slattery and Stephen Baxter as consideration for the call options.

The exercise price of $6.30 per PIPE Share payable by TPG under the Option Deed is reduced by the value of any dividend, distribution, return of capital or other entitlement which Bevan Slattery or Stephen Baxter receive or become entitled to receive in respect of each Call Option Share, the record date for which is after 11 November 2009 (the date of the Option Deed) but on or before the date on which the sale of the Call Option Shares is completed under the Option Deed.

Other than the two instances described above, neither TPG nor any of its Associates has provided, or agreed to provide, consideration for PIPE Networks securities in the four months prior to the date of this document.

(c) Overview of Option Deed Under the terms of the Option Deed, the call options granted by Stephen Baxter and Bevan Slattery can only be exercised by TPG simultaneously and in respect of all of the Call Option Shares. The call options are exercisable at TPG’s discretion from the earliest to occur of: s both the: – Independent Expert has concluded in its ﬁnal report to PIPE Networks (included in Annexure A of this document) that the Scheme is in the best interest of PIPE Shareholders; and – the Court has directed PIPE Networks to convene the Scheme Meeting; s a Competing Transaction is announced or proposed prior to the First Court Date; s if TPG or any of its Related Entities make an unconditional takeover offer for all of the PIPE Shares, commencement of the offer period relating to that takeover offer; and s if TPG or any of its Related Entities make a conditional takeover offer for all of the PIPE Shares, TPG declaring the takeover offer to be free of all defeating conditions, until the latest to occur of: s the date that is 20 Business Days (on which banks are open for general banking business in NSW or Queensland) after the date of the Scheme Meeting; s 28 May 2010; s the date that is 20 Business Days (on which banks are open for general banking business in NSW or Queensland) after a Competing Transaction is announced; and s if TPG, or any of its Related Entities makes a takeover offer in relation to all of the PIPE Shares, the date that is 20 Business Days (on which banks are open for general banking business in NSW or Queensland) after the end of the offer period.

The exercise price of $6.30 cash per PIPE Share payable by TPG for the exercise of the call options is the same as the Scheme Consideration payable by TPG to all PIPE Shareholders in respect of their PIPE Shares if the Scheme becomes Effective. The sale and purchase of the Call Option Shares will take place 3 Business Days (on which banks are open for general banking business in NSW or Queensland) after the call options granted under the Option Deed are exercised.

(d) Pre-Scheme benefits During the 4 months prior to the date of this document, neither TPG nor any of its Associates has given, or offered to give or agreed to give a benefit to another person where the benefit was likely to induce the other person, or an Associate, to vote in favour of the Scheme or to dispose of PIPE Shares and where the benefit was not offered to all PIPE Shareholders.

(e) Beneﬁts to PIPE Networks directors TPG will not be making any payment or giving any beneﬁt to any current member of the Board as compensation or consideration for, or otherwise in connection with, their resignation from the Board, if the Scheme becomes Effective and the Board is accordingly reconstituted other than as required under the relevant person’s employment agreement with PIPE Networks (as to which see Section 7.8 of this document).

36 6. IMPLEMENTATION OF THE SCHEME

All dates referred to in this Section 6 are indicative only. The actual dates on which events referred to in this Section 6 occur will depend upon the time at which the conditions precedent to the Scheme are satisﬁed or, if applicable, waived. Those conditions are summarised in Section 6.11 of this document. PIPE Networks has the right to vary all dates subject to the approval of such variation by TPG, the Court and the ASX where required. Any variation to the dates referred to in this Section 6 will be announced to the ASX and published on PIPE Networks’ website.

6.1 Scheme Meeting In accordance with an order of the Supreme Court of Queensland dated 5 February 2010, PIPE Shareholders will be asked to approve the Scheme at the Scheme Meeting to be held at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane on Friday, 12 March 2010 commencing at 10.00 am. The notice convening the Scheme Meeting is set out in Annexure F of this document.

At the Scheme Meeting, PIPE Shareholders will be asked to consider and, if thought ﬁt, to pass a resolution approving the Scheme. For the acquisition of all PIPE Shares by TPG (which it does not already own) to proceed and the Scheme Consideration to become payable, the Scheme must be approved by a majority in number of PIPE Shareholders voting at the Scheme Meeting (whether in person or by proxy) who must together hold at least 75% of the votes cast on the resolution.

6.2 Second Court Hearing If the Scheme is approved by PIPE Shareholders, and all other conditions to the Scheme (other than approval by the Court) and any other conditions to be imposed by the Court under section 411(6) of the Corporations Act have been satisfied or waived, PIPE Networks will apply to the Court for orders approving the Scheme following the Scheme Meeting (on or around Wednesday, 17 March 2010). Chapter 23 of the Uniform Civil Procedure Rules 1999 (Qld) provides a procedure for PIPE Shareholders to oppose the approval by the Court of the Scheme. Any PIPE Shareholder who wishes to oppose the approval of the Scheme at the Second Court Hearing may do so by filing with the Court and serving on PIPE Networks a notice of appearance in the prescribed form together with any affidavit on which the PIPE Shareholder will seek to rely at the Second Court Hearing. The Second Court Hearing is currently scheduled to occur on Wednesday, 17 March 2010. Any change to this date will be announced through the ASX and notified on PIPE Networks’ website.

6.3 Effective Date If the Court approves the Scheme, PIPE Networks will lodge with ASIC an ofﬁce copy of the Court order approving the Scheme. PIPE Networks intends to lodge this with ASIC on Wednesday, 17 March 2010. The Scheme comes into effect on the date on which PIPE Networks lodges the Court order approving the Scheme with ASIC. This date is referred to in this document as the Effective Date.

6.4 Record Date PIPE Shareholders will be entitled to receive the Scheme Consideration if they are registered as the holders of PIPE Shares on the Record Date. The Record Date is 5.00 pm 5 Business Days after the Effective Date or such other date (after the Effective Date) as PIPE Networks and TPG may agree. The Record Date is currently expected to be 5.00 pm on Wednesday, 24 March 2010.

6.5 Determination of persons entitled to Scheme Consideration (a) Dealings on or prior to the Record Date For the purposes of establishing who Scheme Shareholders are, dealings in PIPE Shares will be recognised by PIPE Networks provided that: s in the case of dealings of the type to be effected on CHESS, the transferee is registered in the Register as the holder of the relevant PIPE Shares by the Record Date; and s in all other cases, registrable transfers or transmission applications in respect of those dealings are received at the PIPE Networks Share Registry by the Record Date.

PIPE Networks may not accept for registration, nor recognise for any purpose, any transfer or transmission application in respect of PIPE Shares received prior to the Record Date not in registrable form.

(b) Dealings in PIPE Shares after the Record Date

37 6. IMPLEMENTATION OF THE SCHEME

PIPE Networks may not accept for registration, nor recognise for any purpose, any transfer or transmission application in respect of PIPE Shares received after the Record Date.

From the Record Date and until registration of TPG in respect of all Scheme Shares, no PIPE Shareholder may deal with PIPE Shares in any way except as set out in the Scheme and any attempt to do so will have no effect.

6.6 Implementation Date The Implementation Date is the date which is 5 Business Days after the Record Date. Before 12.00 noon on the Implementation Date, TPG will pay PIPE Networks the total Scheme Consideration payable for all the Scheme Shares held by the Scheme Shareholders, and on the Implementation Date the Scheme Shares will be transferred to TPG.

Within 5 Business Days of the Implementation Date, PIPE Networks will pay the Scheme Consideration to each Scheme Shareholder for the Scheme Shares held by that Scheme Shareholder. In the case of Scheme Shares held in joint names, the Scheme Consideration will be paid by a cheque forwarded in the names of those joint holders or where the joint holders have nominated a bank account, the amount shall be deposited directly to the nominated bank account of the joint holders.

6.7 Warranty by PIPE Shareholders about their PIPE Shares The effect of clause 8.3 of the Scheme is that all PIPE Shareholders, including those who vote against the Scheme and those who do not vote, will be deemed to have warranted to PIPE Networks in its own right and on behalf of TPG that all their Scheme Shares (including any rights and entitlements attaching to those Scheme Shares) which are transferred to TPG under the Scheme will, at the date they are transferred to TPG, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind and that they have full power and capacity to sell and to transfer such Scheme Shares (including any rights and entitlement attaching to those PIPE Shares) to TPG. If the warranty is breached, PIPE Shareholders may be liable to pay to TPG any amounts paid by TPG to acquire clear title to their PIPE Shares.

6.8 Suspension of trading in PIPE shares It is expected that suspension of trading in PIPE Shares on the ASX will occur from close of trading on the Effective Date. This is expected to occur on Wednesday, 17 March 2010.

On a date after the Implementation Date to be determined by TPG, PIPE Networks will apply for termination of the ofﬁcial quotation of PIPE Shares on the ASX and to have itself removed from the ofﬁcial list of the ASX.

6.9 Effect of the Scheme on creditors The Scheme, if implemented, will not materially prejudice PIPE Networks’ ability to pay its creditors as it involves the purchase of the PIPE Shares rather than PIPE Networks’ underlying assets. No new liability (other than transaction costs) is expected to be incurred by PIPE Networks as a consequence of the implementation of the Scheme.

6.10 Stamp duty PIPE Networks does not expect that any stamp duty will be payable on the transfer of the Scheme Shares to TPG. However, if stamp duty is payable, TPG has an obligation under the Implementation Agreement to pay such stamp duty.

6.11 Key terms of the Implementation Agreement (a) Overview PIPE Networks and TPG entered into the Implementation Agreement on 11 November 2009. Key terms of the Implementation Agreement are summarised below and the agreement, excluding annexures, is set out in Annexure B of this document.

(b) Conditions precedent Implementation of the Scheme is subject to conditions precedent which include the following: s regulatory approvals including from the US Department of Homeland Security, the Federal Communications Commission, ASIC and the ASX (if necessary); s PIPE Shareholders approve the Scheme by the majorities required under section 411(4)(a)(ii) of the Corporations Act;

38 s no restraints or prohibitions issued by any regulatory, judicial or government authority that would prevent the implementation of the Scheme; s no PIPE Material Adverse Event (as defined in the Implementation Agreement) occurs; s no PIPE Prescribed Occurrence (as defined in the Implementation Agreement) occurs; s the PIPE Networks and TPG representations and warranties are true and correct; s all PIPE Options lapsing or expiring; s each and every condition precedent (other than a condition requiring Court approval of the Scheme) to drawdown of TPG’s funding has been satisfied or waived (please refer to Section 5.4 of this document for further details on TPG’s funding conditions); and s on no day between the date of the Implementation Agreement and the Business Day before the Second Court Date is the S&P/ASX 300 Index at the close of trading for the previous 5 trading days 15% or more below its level as at the close of trading on the date of the Implementation Agreement.

All PIPE Options have lapsed or expired. As at the date of this document, PIPE Networks has not identiﬁed the need for approvals from any Regulatory Authority (including ASIC and the ASX) other than the US Department of Homeland Security and the Federal Communications Commission.

(c) No solicitation Until the earlier of the Sunset Date and the date on which the Implementation Agreement is terminated, PIPE Networks has agreed that it will not, and must ensure that its Representatives do not solicit, invite, encourage or initiate any enquiries, negotiations, discussions or proposals, or communicates any intention to do any of those things in relation to, or which may reasonably be expected to lead to, a Competing Transaction.

(d) No talk PIPE Networks has also agreed that it will not, and must ensure that its Representatives do not, until the earlier of the Sunset Date and the date on which the Implementation Agreement is terminated, negotiate or enter into or participate in negotiations or discussions with any person or communicate any intention to do any of those things in relation to, or which may reasonably be expected to lead to, a Competing Transaction or the Proposal not proceeding.

(e) No due diligence Until the earlier of the Sunset Date and the date on which the Implementation Agreement is terminated, PIPE Networks has agreed that it will not, and must ensure that its Representatives do not, in relation to a Competing Transaction, solicit, invite, initiate, encourage or facilitate any party other than TPG to undertake due diligence investigations on, or make available to any other person or permit any other person to receive any non-public information relating to, PIPE Networks, any of its Related Entities or their respective business and operations.

(f) Break Fee Under the Implementation Agreement, PIPE Networks must pay TPG the Break Fee in the following circumstances: s if any Director fails to recommend the Scheme, makes any public statement or takes any action that contradicts his recommendation, qualiﬁes their support of the Proposal or withdraws his or her recommendation, or recommends against the Proposal; s the Court fails to approve the Scheme as a result of a material non-compliance by PIPE Networks with any of its obligations under the Implementation Agreement; s the Effective Date of the Scheme has not occurred prior to the Sunset Date as a consequence of non-compliance by PIPE Networks with any of its obligations under the Implementation Agreement; s a Competing Transaction is announced by the Sunset Date and the Competing Transaction results in a person obtaining Control or, merging or amalgamating with, PIPE Networks within 6 months of it being announced or within 3 months of that Competing Transaction being announced, the Directors recommend it in the absence of a Superior Proposal and no Superior Proposal is subsequently announced by TPG; s by the Sunset Date, a person other than TPG acquires directly or indirectly an interest in all or a substantial part of the business or assets of the PIPE Group; s TPG terminates the Implementation Agreement in circumstances where PIPE Networks is in material breach of a provision of that agreement (subject to limited exceptions) at any time prior to 8.00 am on the Second Court Date, TPG has given notice to PIPE Networks setting out the relevant circumstances of the breach and stating an intention to terminate the

39 6. IMPLEMENTATION OF THE SCHEME

agreement, and the relevant circumstances have continued to exist for 5 Business Days (or any shorter period ending at 8.00 am on the Second Court Date) from the time the notice is given; or s a PIPE Material Adverse Event (as deﬁned in the Implementation Agreement) or a PIPE Prescribed Occurrence (as deﬁned in the Implementation Agreement) occurs and TPG terminates the Implementation Agreement as a result.

The Break Fee will not be payable in the circumstances described under the ﬁrst bullet point in this Section 6.11(f) if the Independent Expert concludes that the Scheme is not in the best interests of PIPE Shareholders and the Scheme does not become Effective by the Sunset Date.

(g) Termination by TPG TPG may terminate the Implementation Agreement at any time prior to 8.00 am on the Second Court Date if: s PIPE Networks is in breach of any representation or warranty that cannot be remedied by PIPE Networks before 8.00 am on the Second Court Date and was of a kind that had it been disclosed to TPG prior to its entry into the Implementation Agreement, it could reasonably be expected to have resulted in TPG either not entering into the Implementation Agreement or entering into it on materially different terms, or the breach amounts or could reasonably be expected to amount to a PIPE Material Adverse Event (as deﬁned in the Implementation Agreement); s a court or other Regulatory Authority has issued an order, decree or ruling or taken other action that restrains or prohibits TPG exercising or enjoying the beneﬁts of any material rights under the Implementation Agreement; or s a Director’s recommendation is withdrawn or the Director makes a public statement indicating their support for the Scheme has been withdrawn.

(h) Termination by PIPE Networks PIPE Networks may terminate the Implementation Agreement at any time before 8.00 am on the Second Court Date if: s TPG is in breach of any representation or warranty that cannot be remedied by TPG before 8.00 am on the Second Court Date and was of a kind that had it been disclosed to PIPE Networks prior to its entry into the Implementation Agreement, it could reasonably be expected to have resulted in PIPE Networks either not entering into the Implementation Agreement or entering into it on materially different terms; or s prior to the date of the Scheme Meeting all Directors have changed or withdrawn their recommendation.

(i) Termination by either party Either party may terminate the Implementation Agreement at any time before 8.00 am on the Second Court Date if: s the Scheme has not been implemented by the Sunset Date other than as a result of a breach by the terminating party; s the defaulting party is in material breach of a provision of the Implementation Agreement (other than a breach of a representation or warranty by that party under the Implementation Agreement) and it remains unremedied after 5 Business Days; s PIPE Shareholders do not approve the Scheme at the Scheme Meeting; s a court or other Regulatory Authority has issued an order, decree or ruling or taken other action that permanently restrains or prohibits the Proposal and that order, decree, ruling or other action has become ﬁnal and cannot be appealed; or s there is a breach or non-fulﬁlment of a Condition Precedent which is in favour of the terminating party and not waived and PIPE Networks and TPG cannot reach agreement as to an alternative way forward after consulting in good faith.

6.12 Deed Poll Under the terms of the Deed Poll, TPG agreed in favour of Scheme Shareholders to perform its obligations to pay the Scheme Consideration under the Scheme and comply with its other obligations under the Scheme.

The Deed Poll may be relied upon by any Scheme Shareholder, despite the fact that they are not a party to it, and if the Scheme becomes Effective, PIPE Networks undertakes in favour of each Scheme Shareholder that it will enforce the Deed Poll against TPG on behalf of and as agent and attorney for the Scheme Shareholders.

The Deed Poll is governed by the laws of Queensland and is set out in full in Annexure C of this document.

40 7. ADDITIONAL INFORMATION

7.1 PIPE Networks Directors The Directors at the date of this document are listed below: s Mr Roger Clarke, Chairman; s Mr Bevan Slattery, Managing Director and Chief Executive Ofﬁcer; s Mr Jason Sinclair, Executive Director and Chief Operating Ofﬁcer; s Mr Greg Baynton, Non-Executive Director; and s Mr Stephen Baxter, Non-Executive Director.

7.2 PIPE Networks Directors’ recommendation The Directors unanimously recommend that, in the absence of a Superior Proposal, you vote in favour of the Scheme and approve the Scheme at the Scheme Meeting. The Directors unanimously believe that, for the reasons set out in Section 3 of this document, the Scheme is in the best interests of PIPE Shareholders.

The Directors believe that the reasons for PIPE Shareholders to vote in favour of the Scheme outweigh the reasons to vote against the Scheme, in the absence of a Superior Proposal. These reasons and other relevant considerations are set out in Section 3 of this document. You should also read the Independent Expert’s report which is set out in full in Annexure A.

7.3 Intentions of PIPE Networks Directors concerning the business of PIPE Networks If the Scheme is implemented, the existing Directors will resign from the Board provided that a proper board is constituted at all times. Accordingly, the existing Directors are not able to make any statements of intentions regarding: (a) the continuation of PIPE Networks business or how the business will be conducted after the implementation of the Scheme; (b) any major changes to the PIPE Networks business, including any redeployment of the ﬁxed assets of PIPE Networks; or (c) the future employment of present PIPE Networks employees.

TPG has provided an outline of its intentions for PIPE Networks’ operations in Section 5.5 of this document.

7.4 Material changes in the financial position of PIPE Networks Within the knowledge of the Directors, the financial position of PIPE Networks has not materially changed since 30 June 2009, being the date of the last balance sheet laid before the Company in general meeting or sent to shareholders in accordance with section 314 or 317 of the Corporations Act, other than as reflected in the half-yearly financial statements to 31 December 2009 which are summarised in Section 4.7 of this document. The financial statements to 31 December 2009 have not been audited but were formally reviewed by an independent auditor.

7.5 Capital structure of PIPE Networks At the date of this document, PIPE Networks has 59,221,171 ordinary shares on issue.

41 7. ADDITIONAL INFORMATION

7.6 Notiﬁable interests As at 6 January 2010, the following persons had notiﬁed PIPE Networks that they had a relevant interest in 5% or more of PIPE Shares.

PERCENTAGE OF PIPE NAME NUMBER OF PIPE SHARES SHARES ON ISSUE

TPG Telecom Limited 11,751,87612 19.84%

Bevan Slattery 8,103,572 13.68%

Stephen Baxter 8,003,572 13.51%

Fisher Funds Management Limited 4,721,813 7.97%

Acorn Capital Limited 3,983,948 6.73%

Source: Orient Capital Pty Ltd and Company announcements

7.7 Marketable securities held by PIPE Networks Directors No marketable securities of PIPE Networks are held by or on behalf of Directors and no such persons are otherwise entitled to such securities as at the date of this document other than as listed below, all of which are held beneﬁcially.

DIRECTOR NUMBER OF PIPE SHARES

Mr Roger Clarke 233,572

Mr Bevan Slattery 8,103,572

Mr Jason Sinclair –

Mr Greg Baynton 628,853

Mr Stephen Baxter 8,003,572

In the absence of a Superior Proposal, each of the Directors intends to vote all PIPE Shares held by them or on their behalf in favour of the Scheme.

No marketable securities of TPG are held by or on behalf of Directors as at the date of this document, other than for 75,000 fully paid ordinary shares in TPG which are owned by Birkdale Holdings (QLD) Pty Ltd as trustee for The Baxter Family Trust of which Stephen Baxter is a beneﬁciary.

7.8 Agreements or arrangements with PIPE Networks Directors Save as set out below, there are no agreements or arrangements made between any Director and any other person, including TPG, in connection with or conditional upon the outcome of the Scheme.

PIPE Networks has agreed to indemnify each Director against liabilities incurred by such Director in connection with the Proposal and the Director’s involvement in the process that resulted in the Proposal, and legal costs reasonably incurred in defending an action for any such liability. PIPE Networks has the right to control any such claim against a Director that could result in a payment being made to that Director under the indemnity.

TPG requested from PIPE Networks the continuing services of Bevan Slattery to PIPE Networks and it accordingly requested that the term of Bevan Slattery’s employment agreement with PIPE Networks be extended. Based on TPG’s intentions for the business and employees of PIPE Networks described in Section 5.5 of this document, PIPE Networks and Bevan Slattery agreed to TPG’s request and have entered into an agreement for Bevan Slattery to continue as Chief Executive Ofﬁcer of PIPE Networks, subject to completion of the acquisition of PIPE Networks by TPG, on terms which are not materially different to Bevan Slattery’s existing terms of employment. The agreement provides for Bevan Slattery to be employed as Chief Executive

12 This number includes the 8,951,876 PIPE Shares which are subject to the Option Deed referred to in Section 5.6.

42 Ofﬁcer of PIPE Networks for a period commencing on the date on which TPG acquires control of PIPE Networks and ending on 31 March 2011 and that, without the prior approval of PIPE Networks, he will not within Australia undertake, carry on or be associated with any business, or part of any business, which is competitive, in whole or part, with any aspect of PIPE Networks’ business which he was directly or indirectly involved in for the maximum period of 12 months following the termination of employment.

7.9 Payments or other benefits to PIPE Networks Directors and PIPE Networks executive officers Save as set out in Section 7.8 of this document and below, it is not proposed that any payment or other benefit will be made or given to any Director, secretary or executive officer of PIPE Networks, or any body corporate related to PIPE Networks, as compensation for loss of, or as consideration for or in connection with, his or her retirement from office as Director, secretary or executive officer of PIPE Networks or a body corporate connected with PIPE Networks.

Mr Robin Khuda, the Chief Financial Ofﬁcer of PIPE Networks, is entitled under his employment contract to a termination payment of 6 months’ salary if a change in control of PIPE Networks takes place by 14 June 2010 and his employment is terminated as a consequence. Such payment would be required to be made if the Scheme is implemented and Mr Khuda’s employment is terminated as a consequence.

7.10 Interests of Directors in contracts entered into by TPG No Director has any interest in a contract entered into by TPG.

7.11 No unacceptable circumstances The Directors believe that the Scheme does not involve any circumstances in relation to the affairs of any member of PIPE Networks that could reasonably be characterised as constituting “unacceptable circumstances” for the purposes of section 657A of the Corporations Act.

7.12 Publicly available information PIPE Networks has been listed on the ASX since 17 May 2005. As such, PIPE Networks is a disclosing entity for the purposes of the Corporations Act and is subject to regular reporting and disclosure obligations. As a company listed on the ASX, PIPE Networks is subject to the ASX Listing Rules which require immediate disclosure to the market of any information of which PIPE Networks is aware which a reasonable person might expect to have a material impact on the price or value of its securities.

ASIC also maintains a record of documents lodged with it by PIPE Networks, and these may be obtained from or inspected at any ofﬁce of ASIC. Information is also available on PIPE Networks’ website at www.pipenetworks.com.

7.13 Regulatory PIPE Networks has made applications for the necessary regulatory approvals by the US Department of Homeland Security and the Federal Communications Commission referred to in Section 6.11(b) of this document. Those applications are in the course of being considered by those Regulatory Authorities.

7.14 Consents and disclaimers (a) Consent to be named The following parties have given and have not, before the time of registration of this document by ASIC, withdrawn their written consent to be named in this document in the form and context in which they are named: s Macquarie Capital Advisers Limited as ﬁnancial adviser to PIPE Networks; s Hacketts DFK as auditor to PIPE Networks; s Clayton Utz as legal adviser to PIPE Networks in respect of Australian law; and s Link Market Services Limited as the PIPE Networks Share Registry.

(b) Consent to be named and to the inclusion of information Ernst & Young has given and has not, before the time of registration of this document by ASIC, withdrawn its written consent to be named as the Independent Expert in this document and to the inclusion of the Independent Expert’s report set out in Annexure A of this document and other statements in this document said to be based on statements made by Ernst & Young, in each case in the form and context in which they appear in this document.

43 7. ADDITIONAL INFORMATION

(c) TPG TPG has given and has not, before the time of registration of this document by ASIC, withdrawn its written consent to the inclusion of the statements set out in Section 5 and Annexure E of this document in the form and context in which those statements appear.

(d) Disclaimers of responsibility Each person named in Sections 7.14(a) and 7.14(b) and 7.14(c) of this document: s does not make, or purport to make, any statement in this document or any statement on which a statement in this document is based other than, in the case of Ernst & Young and TPG, a statement included in this document with the consent of that party; and s to the maximum extent permitted by law, expressly disclaims and takes no responsibility for any part of this document, other than a reference to its name and, in the case of Ernst & Young and TPG, any statement or report which has been included in this document with the consent of that party.

7.15 Independent Expert Ernst & Young has prepared the Independent Expert’s report set out in Annexure A of this document advising as to whether, in its opinion, the Proposal is in the best interests of PIPE Shareholders.

The Independent Expert has concluded that the Scheme is fair and reasonable, and that the Scheme is in the best interests of PIPE Shareholders (other than TPG) in the absence of a superior proposal.

Ernst & Young will be paid a fee of $120,000 (excluding GST and expenses) in relation to the preparation of its report.

7.16 Other information material to the making of a decision in relation to the Scheme Except as set out in this document, there is no other information material to the making of a decision in relation to the Scheme, being information that is within the knowledge of any Director, or any director of any Related Entity of PIPE Networks, which has not previously been disclosed to PIPE Shareholders.

7.17 Supplementary information PIPE Networks will issue a supplementary document to this document if it becomes aware of any of the following between the date of lodgement of this document for registration by ASIC and the Effective Date: s a material statement in this document is false or misleading; s a material omission from this document; s a signiﬁcant change affecting a matter included in this document; or s a signiﬁcant new matter has arisen and it would have been required to be included in this document if it had arisen before the date of lodgement of this document for registration by ASIC.

44 8. TAXATION IMPLICATIONS

8.1 Introduction The following is an outline of the Australian tax consequences that will generally apply for PIPE Shareholders who dispose of their PIPE Shares under the Scheme. It does not take into account the speciﬁc circumstances of any particular PIPE Shareholder.

This outline reﬂects the current provisions of the Income Tax Assessment Act 1936 (Cth) and the Income Tax Assessment Act 1997 (Cth) (the Tax Law) and the regulations made under those Acts, taking into account currently proposed amendments and the Company’s understanding of the current administrative practices of the Australian Taxation Ofﬁce. This outline does not otherwise take into account or anticipate changes in the law, whether by way of judicial decision or legislative action, nor does it take into account tax legislation of countries apart from Australia.

The information contained in this outline is of a general nature only. It does not constitute tax advice and should not be relied upon as such.

You are advised to consult your own independent tax adviser regarding the consequences of acquiring, holding or disposing of PIPE Shares in light of the Tax Law and your particular investment circumstances.

8.2 Capital Gains Tax (CGT) implications (a) General The following discussion applies to you if you hold your PIPE Shares on capital account for investment purposes.

(b) Calculation of a capital gain or loss If the Scheme is approved, you will dispose of your PIPE Shares for tax purposes as a result of the implementation of the Scheme. The disposal will be a CGT event (CGT Event A1). The CGT event will happen on the Implementation Date.

The tax implications for you from the disposal of your PIPE Shares will depend upon your taxpayer status (i.e. whether you are an individual, a company or the trustee of a trust).

You will make a capital gain on the disposal of your PIPE Shares if the capital proceeds you receive exceed the cost base of your PIPE Shares. You will make a capital loss if the capital proceeds are less than the reduced cost base of your PIPE Shares.

As discussed below, you will be required to disregard the capital gain or capital loss you make on the disposal of your PIPE Shares if you are not a resident of Australia for income tax purposes at the time of the disposal and if you (together with your associates) hold less than a 10% interest in PIPE Networks.

Capital gains and capital losses of a taxpayer in a year of income from all sources are aggregated to determine if the taxpayer made a net capital gain. Any net capital gain for the year is included in the taxpayer’s assessable income and is subject to income tax at the taxpayer’s marginal tax rate. Net capital losses may not be deducted against other income for income tax purposes, but may be carried forward to offset against capital gains derived in future income years. Speciﬁc loss rules apply to PIPE Shareholders who are companies and trusts. These rules may limit the ability to offset capital losses in a current or later income year.

45 8. TAXATION IMPLICATIONS

Outlined below is a guide to calculating the capital gain or capital loss on the disposal of your PIPE Shares.

DISPOSAL OF PIPE SHARES

Capital Proceeds Your capital proceeds will be equal to the $6.30 per PIPE Share you receive from TPG.

Cost Base The cost base of your PIPE Shares is equal to the cost of acquisition plus any incidental costs of acquisition and disposal (such as brokerage and stamp duty).

Capital Gain If the capital proceeds received by you from the disposal of your PIPE Shares exceeds the cost base, a capital gain will arise.

Capital Loss If the capital proceeds received by you from the disposal of your PIPE Shares are less than the reduced cost base, a capital loss will arise. As outlined above, net capital losses cannot be used to reduce the other assessable income of a PIPE Shareholder in the year the loss is realised, but may be carried forward to offset future capital gains.

CGT Discount You will be entitled to beneﬁt from the CGT discount if: s you have beneﬁcially owned your PIPE Shares for at least 12 months at the Implementation Date; and s you are an individual, the trustee of a trust, or a complying superannuation entity. Where the CGT discount applies, you will be entitled to reduce your taxable capital gain realised on disposal of your PIPE Shares by 50% (for individuals and trustees holding PIPE Shares) or 33.33% (for complying superannuation entities). The CGT discount is applied only after available capital losses have been applied to reduce the capital gain. The CGT discount does not apply to capital losses. The CGT discount will not be available to you if you are a company.

The rules described above relating to discount capital gains and trusts are complex. Trustees should seek their own advice as to how the discount capital gains provisions apply to them and their beneﬁciaries, having regard to their own particular circumstances.

(c) Foreign shareholders You will be required to disregard the whole of the capital gain or capital loss you make on the disposal of your PIPE Shares if: s you are not a resident of Australia for the purposes of the Tax Law and have not used the PIPE Shares in carrying on business through an Australian permanent establishment; and s you (and your associates) have not held 10% or more of the shares in PIPE Networks throughout a 12 month period during the 2 years preceding the sale of your shares.

Foreign shareholders that have held 10% or more of the shares in PIPE Networks, either alone or together with their associates, should obtain speciﬁc advice on the application of the Australian CGT rules to any gain or loss realised on sale.

If you are a foreign shareholder, you should also obtain speciﬁc advice on the application of the laws of your country of residence and any Double Tax Treaty between your country of residence and Australia in determining the tax consequences of the disposal of your PIPE Shares.

46 8.3 Income tax implications (a) General The following discussion applies to you if you hold your PIPE Shares on revenue account for sale purposes.

(b) Calculation of the revenue gain or loss If you hold your PIPE Shares as trading stock, or otherwise in certain circumstances for the purpose of sale at a proﬁt, the proﬁt that you realise on the disposal of your PIPE Shares will be included in your assessable income. Alternatively, if you realise a loss on sale, the loss should be an allowable deduction to you.

The proﬁt or loss you include in your assessable income is calculated without reference to discounts on disposal, unlike the case with capital gains.

8.4 Stamp duty No stamp duty will be payable by any PIPE Shareholder on the disposal of the PIPE Shares to TPG. TPG, as the transferee/ acquirer of those shares will be the party who will be liable for any stamp duty that is payable in respect of the Scheme.

8.5 Goods and Services Tax (GST) You will not be liable to pay GST on the Scheme Consideration you receive for your PIPE Shares.

47 9. DEFINED TERMS

In this document:

$ or AUD means Australian Dollars.

1H10A means actual results for the 6 months ending 31 December 2009.

ADSL means asymmetric digital subscriber line. A transmission method allowing high data rate communication over existing copper wires. The downstream data (data downloaded by user) transmission rate is much higher than the upstream data rate.

ADSL2+ means a version of ADSL that uses double the bandwidth for downstream data transmission, effectively doubling maximum downstream data rates.

ANZ means Australia and New Zealand Banking Group Limited ACN 005 357 522.

ASIC means the Australian Securities and Investments Commission.

Associate has the meaning given to that term in section 12(2) of the Corporations Act.

ASX means ASX Limited ACN 008 624 691.

ASX Listing Rules means the listing rules of the ASX from time to time as modiﬁed by any express written waiver or exemption given by the ASX.

Board means the board of directors of PIPE Networks.

Break Fee means $3.7 million.

Business Day means a day that is not a Saturday, Sunday, bank holiday or public holiday in New South Wales or Queensland.

Call Option Shares means the 4,475,938 PIPE Shares held by Bevan Slattery and the 4,475,938 PIPE Shares held by Stephen Baxter (totalling 8,951,876 PIPE Shares) in respect of which a call option has been granted to TPG under the Option Deed.

CGT means capital gains tax.

CHESS means the Clearing House Electronic Subregister System for the electronic transfer of PIPE Shares and other ﬁnancial products operated by ASX Settlement and Transfer Corporation Pty Ltd ACN 008 504 532.

Commitment Letter means the legally binding commitment letter that TPG has executed with ANZ dated 18 December 2009.

Competing Transaction means any expression of interest, proposal or offer by a third party (other than TPG or its Related Entities) to evaluate or enter into any transaction that is similar to the Proposal or under which (other than as required or contemplated by the Scheme): (a) a person would acquire a relevant interest or voting power in 10% or more of PIPE Shares or of the securities of any member of the PIPE Group; (b) a person would enter into, buy, dispose of, terminate or otherwise deal with any cash settled equity swap or other synthetic, economic or derivative transaction connected with or relating to 10% or more of PIPE Shares or of the securities of any member of the PIPE Group; (c) a person would directly or indirectly acquire or obtain an interest (including an economic interest) in all or a substantial part or material part of the business conducted by, or property of, PIPE Networks or any member of the PIPE Group; (d) a person would acquire Control of PIPE Networks or any member of the PIPE Group; (e) a person may otherwise acquire, or merge with, PIPE Networks or any member of the PIPE Group (including by way of takeover bid, scheme of arrangement, capital reduction, sale of assets, sale of securities, strategic alliance, dual listed company structure or joint venture); or (f) PIPE Networks will issue, on a fully diluted basis, 10% or more of its capital as consideration for the assets or share capital of another person,

48 or any proposal by PIPE Networks to implement any reorganisation of capital or dissolution. The variation of a proposal or offer constitutes a proposal or offer for the purposes of this deﬁnition.

Conditions Precedent means the conditions precedent set out in clause 5.1 of the Implementation Agreement.

Control has the meaning given in section 50AA of the Corporations Act.

Corporations Act means the Corporations Act 2001 (Cth).

Counsel means senior counsel engaged by each of PIPE Networks and TPG in respect of the implementation of the Scheme.

Court means the Supreme Court of Queensland or such other court as is recommended by Counsel.

Deed Poll means a deed poll executed by TPG in favour of PIPE Shareholders in the form set out in Annexure C.

Directors means the directors of PIPE Networks whose names are set out in Section 7.1 of this document.

DSL means digital subscriber line. A transmission system allowing high data rate communication over copper telephone lines.

DSLAM means digital subscriber line access multiplexer. A device that concentrates ADSL subscriber lines to a single asynchronous transfer mode line (a digital communication method capable of very high speed transfer rates, suitable for transmission of images, voice or video as well as data).

EBITDA means earnings before interest, tax, depreciation and amortisation.

Effective means, when used in relation to the Scheme, the order of the Court made under section 411(4)(b) in relation to the Scheme coming into effect pursuant to section 411(10) of the Corporations Act.

Effective Date means the date on which the Scheme becomes Effective.

Enterprise Value means a method of calculating the value of PIPE Networks’ business, taking into account the value of the equity, net debt and any relevant surplus assets or liabilities. The calculation of the Enterprise Value is set out in footnote 4 on page 14 of this document.

EPS means earnings per share.

Ernst & Young means Ernst & Young Transaction Advisory Services Limited.

Facilities means Facility A, Facility B and Facility C together.

Facility A means a three year amortising term loan facility of up to $200,000,000.

Facility B means a three year interest only revolving loan facility of up to $160,000,000.

Facility C means a three year revolving multi-option working capital facility of up to $20,000,000.

First Court Date means the day on which an application made to the Court for orders, pursuant to section 411(1) of the Corporations Act, convening the Scheme Meeting is determined and, if the application is adjourned or subject to appeal for any reason, the day on which the application is determined after adjournment or the appeal is determined.

FY means ﬁnancial year ending 30 June.

FY06A means actual results for the ﬁnancial year ending 30 June 2006.

FY07A means actual results for the ﬁnancial year ending 30 June 2007.

FY08A means actual results for the ﬁnancial year ending 30 June 2008.

FY09A means actual results for the ﬁnancial year ending 30 June 2009.

FY10F means forecast results for the ﬁnancial year ending 30 June 2010.

FY11F means forecast results for the ﬁnancial year ending 30 June 2011.

Gbps means gigabytes per second.

49 9. DEFINED TERMS

GST means goods and services tax applicable in Australia.

Implementation Agreement means the Merger Implementation Agreement entered into between PIPE Networks and TPG on 11 November 2009.

Implementation Date means the ﬁfth Business Day after the Record Date.

Independent Expert means Ernst & Young.

IRU means indefeasible right of use.

ISP means Internet service provider.

Maximum Scheme Consideration means the maximum amount of cash required to be paid by TPG to Scheme Participants under the Scheme, which in aggregate is equal to $355,453,377.30.

MOU means Memorandum of Understanding.

NBN means National Broadband Network.

NPAT means net proﬁt after tax.

Option Deed means the option deed dated 11 November 2009 between TPG, Bevan Slattery and Stephen Baxter.

PIPE Group means PIPE Networks and its Related Entities.

PIPE Indemniﬁed Parties means PIPE Networks, its Related Entities and each of their respective Representatives.

PIPE Networks or Company means PIPE Networks Limited ACN 099 104 122 of Level 9, PIPE Networks House, 127 Creek Street, Brisbane, QLD, 4000.

PIPE Networks Share Registry means Link Market Services Limited ACN 083 214 537.

PIPE Option means an option to acquire a PIPE Share issued under the PIPE Networks Executive Option Plan or otherwise (not including the options granted to TPG under the Option Deed).

PIPE Share means an issued fully paid ordinary shares in the capital of PIPE Networks.

PIPE Shareholder means each person who is in the Register as the holder of PIPE Shares.

PPC-1 means Pipe Paciﬁc Cable 1.

Proposal means the proposed acquisition of all issued PIPE Shares by TPG under the Scheme.

Proxy Form means the proxy form for the Scheme Meeting accompanying this document.

Record Date means 5.00 pm on the ﬁfth Business Day following the Effective Date or such other date (after the Effective Date) as PIPE Networks and TPG may agree in writing.

Regulatory Authority includes: (a) a government or governmental, semi-governmental, administrative, ﬁscal or judicial entity or authority; (b) a minister, department, ofﬁce, commission, delegate, instrumentality, tribunal, agency, board, authority or organisation of any government; (c) any regulatory organisation established under statute; and (d) in particular, the ASX and ASIC.

Related Entity means in relation to a body corporate, any entity that is related to that body corporate within the meaning of section 50 of the Corporations Act or which is an economic entity (as deﬁned in any approved Australian accounting standard) that is Controlled by that body corporate.

Representatives means, in relation to an entity: (a) each of the entity’s Related Entities; and (b) each of its directors, ofﬁcers, employees, contractors, advisers (including legal, ﬁnancial and other expert advisers) and agents, but excluding the Independent Expert.

50 Scheme means the scheme of arrangement pursuant to Part 5.1 of the Corporations Act proposed between PIPE Networks and the PIPE Shareholders (other than TPG), the form of which is contained in Annexure D of this document subject to changes recommended by Counsel, together with any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and approved in writing by TPG and PIPE Networks.

Scheme Consideration means:

(a) subject to paragraph (b), $6.30 cash for each PIPE Share held by a Scheme Participant; or

(b) if the record date for any entitlement to be paid or participate in a dividend, distribution, return of capital or other entitlement occurs in respect of a PIPE Share after the date of the Implementation Agreement but on or before the Implementation Date (which, for the avoidance of doubt, does not include the dividend with a record date of 6 November 2009 as announced to the ASX before the date of the Implementation Agreement), $6.30 cash for each PIPE Share held by a Scheme Participant less the amount per PIPE Share of any such dividend, distribution, return of capital or entitlement.

Scheme Meeting means the meeting of the PIPE Shareholders (other than TPG) convened by the Court in relation to the Scheme pursuant to section 411(1) of the Corporations Act. It includes any adjournment of that meeting. The Scheme Meeting will commence at 10.00 am on Friday, 12 March 2010 at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane.

Scheme Participant means each person who is a PIPE Shareholder as at 5.00 pm on the Record Date, other than TPG.

Scheme Share means each PIPE Share on issue on the Record Date.

Scheme Shareholder means each person who holds Scheme Shares.

Second Court Date means the ﬁrst day on which an application made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme is heard or, if the application is adjourned or subject to appeal for any reason, the day on which the adjourned or appealed application is heard.

Second Court Hearing means the hearing of the application made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving the Scheme.

SP Telemedia Limited means TPG.

SPT means Soul Pattinson Telecommunications Pty Ltd.

Subscription Shares means the 2,800,000 PIPE Shares which were issued to TPG on 9 November 2009 for $6.30 per PIPE Share under a subscription agreement dated 4 November 2009 between PIPE Networks and TPG.

Sunset Date means 30 April 2010.

Superior Proposal means a bona ﬁde, unsolicited written Competing Transaction received by PIPE Networks after the date of the Implementation Agreement which the Board determines, acting in good faith and acting reasonably (after consultation with and the receipt of written advice from its external ﬁnancial advisers and from its external legal advisers practising in the area of corporate law):

(a) is reasonably capable of being valued and completed, taking into account all aspects of the Competing Transaction and the person making it; and

(b) would, if completed substantially in accordance with its terms, be more favourable to the PIPE Shareholders (as a whole) than the Scheme, taking into account all the terms and conditions of the Competing Transaction.

Tax Law means the Income Tax Assessment Act 1936 (Cth) and the Income Tax Assessment Act 1997 (Cth).

TPG means TPG Telecom Limited ACN 093 058 069 of 65 Waterloo Road, North Ryde, NSW, 2113. (formerly known as SP Telemedia Limited until 1 December 2009).

TPG Indemniﬁed Parties means TPG, its Related Entities and each of their respective Representatives.

TPG Share means a fully paid ordinary share in the capital of TPG.

USD means United States Dollars.

VoIP means voice over Internet protocol. Also called IP telephony. Enables voice communication to be transmitted via the Internet, with or without a computer and modem.

WAN means wide area network.

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52 ANNEXURE A Independent Expert’s Report

ANNEXURE A This page has been left blank intentionally. Independent Expert's Report and Financial Services Guide

PIPE Networks Limited

5 February 2010

A1 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

Part 1 – Independent Expert’s Report

The Directors 5 February 2010 PIPE Networks Limited 127 Creek Street BRISBANE QLD 4000

Private and confidential

Dear Directors

Independent Expert’s Report in relation to the Proposed Scheme of Arrangement with TPG Telecom Limited

Introduction and Purpose of Report

On 11 November 2009, PIPE Networks Limited (“PIPE Networks” or the “Company”) announced that it had entered into a merger implementation agreement (“Implementation Agreement”) with TPG Telecom Limited (“TPG Telecom”) under which it is proposed that TPG Telecom acquire 100% of the issued shares in PIPE Networks, other than the PIPE Networks shares it already owns, by way of a Scheme of Arrangement (“the Proposed Scheme”).

The Directors of PIPE Networks have appointed Ernst & Young Transaction Advisory Services Limited (“Ernst & Young Transaction Advisory Services”) to prepare an Independent Expert’s Report (“the Report”) in relation to the Proposed Scheme.

In preparing this Report, we have had reference to Australian Securities and Investments Commissions (“ASIC”) Regulatory Guide 111 Content of expert reports (“RG 111”) and ASIC Regulatory Guide 112 Independence of Experts (“RG 112”).

The effective date of this valuation is as at the date of this Report (the “Valuation Date”).

The Proposed Scheme

An overview of the Proposed Scheme is outlined below. The overview is only that and should not be regarded as a complete description of the Proposed Scheme. A more detailed discussion of the Proposed Scheme is outlined in the Scheme Booklet. This letter should be read in conjunction with the Independent Expert’s Report that is attached, and is to assist Shareholders make an informed decision about the Proposed Scheme.

Under the Implementation Agreement, it is proposed that TPG Telecom will acquire all of the issued shares of PIPE Networks for $6.30 cash per share by way of the Proposed Scheme between PIPE Networks and its Shareholders.

The Directors of PIPE Networks have unanimously recommended that Shareholders vote in favour of the Proposed Scheme in the absence of a superior proposal emerging and subject to the independent expert finding the Proposed Scheme in the best interests of PIPE Networks’ Shareholders.

Ernst & Young Transaction Advisory Services Limited, ABN 87 003 599 844 Australian Financial Services Licence No. 240585

A2 2

Summary and Opinion

In the circumstances of the Proposed Scheme, our report is prepared to assist non associated Shareholders (“Non Associated Shareholders”) assess the merits of the Proposed Scheme. Non Associated Shareholders are those Shareholders other than TPG Telecom.

In our opinion, in the absence of a superior proposal, we consider the Proposed Scheme to be in the best interests of the Non Associated Shareholders.

In forming our opinion, Ernst & Young Transaction Advisory Services has considered the factors as set out in the attached Independent Expert’s Report. This opinion should be read in conjunction with our detailed Independent Expert’s Report which sets out our scope and findings.

Other matters

This Independent Expert’s Report constitutes general financial product advice only and has been prepared without taking into account the individual circumstances of PIPE Networks’ Shareholders. PIPE Networks’ Shareholders should consider the advice in the context of their own circumstances and preferences. PIPE Networks’ Shareholders should also have regard to the Scheme Booklet in relation to the Proposed Scheme.

Ernst & Young Transaction Advisory Services has prepared a Financial Services Guide in accordance with the Corporations Act. The Financial Services Guide is included as Part 2 of this Report.

The decision whether to accept the Proposed Scheme is a matter for individual Shareholders to consider having regard to factors such as value expected, future market conditions, investment objectives, risk profile, liquidity preferences, portfolio strategy and tax position. Shareholders who are in doubt as to the impact of the Proposed Scheme on their personal circumstances should consult their own professional adviser.

Yours sincerely

Cathy Montesin Grant Murdoch Representative Director and Representative

Attachments: Part 1 – Independent Expert’s Report Part 2 – Financial Services Guide

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A3 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

Contents

Glossary ...... 2 1. Overview of the Proposed Scheme ...... 3 2. Scope of the Report ...... 5 3. Industry overview ...... 9 4. Profile of PIPE Networks ...... 14 5. Valuation methodologies ...... 28 6. Valuation analysis ...... 30 7. Evaluation of the Proposed Scheme ...... 36 Appendix A Sources of Information ...... 40 Appendix B Disclaimers and Declarations ...... 41 Appendix C Common valuation methodologies ...... 43 Appendix D Industry company multiples and descriptions ...... 45 Appendix E Industry transaction multiples and descriptions ...... 47

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A4 Glossary

Term Meaning $/A$ All monetary values stated in Australian Dollars, unless otherwise stated ABN Australian Business Number AJC Australia - Japan cable AFSL Australian Financial Services License ASIC Australian Securities and Investments Commission ASX Australian Securities Exchange CBD Central Business District Consideration $6.30 per ordinary share of PIPE Networks Limited Corporations Act Corporations Act 2001 DCF Discounted cash flow Directors The Board of Directors of PIPE Networks EBIT Earnings before interest and taxation EBITDA Earnings before interest, taxation, depreciation and amortisation FY0XA Actual results for the financial year ended 30 June 200X FY0XF Forecast results for the financial year ended 30 June 200X Ernst & Young Transaction Ernst & Young Transaction Advisory Services Limited ABN 87 003 599 844 Advisory Services HFC Hybrid - Fibre Coaxial Implementation Agreement The Merger Implementation Agreement dated 11 November 2009 Independent Expert's Report or The Independent Expert's Report prepared by Ernst & Young Transaction Advisory Report Services dated ______IRU Indefeasible Rights of Use ISPs Internet Service Providers KPI Key Performance Indicator Management The management team of PIPE Networks Limited NBN National Broadband Network NPAT Net Profit after Tax na Information not available for the purposes of our analysis PIPE Networks' Shareholders other than TPG Telecom who are participating in the Non Associated Shareholders Proposed Scheme PIPE Networks PIPE Networks Limited ACN 099 104 122 PPC-1 Pipe Pacific Cable 1 - PIPE Networks' submarine cable connecting Australia and Guam Proposed Scheme Refers to the Scheme of Arrangement being entered into between TPG Telecom and PIPE Networks, to be approved at the Shareholder Meeting on 12 March 2010. RG111 ASIC Regulatory Guide 111 Content of Expert Reports RG112 ASIC Regulatory Guide 112 Independence of Experts Scheme Booklet The Scheme Booklet dated 5 February 2010 Tata Tata Communications TPG Telecom TPG Telecom Limited, formerly SP Telemedia Limited Tyco Tyco Electronics Corporation US$ US Dollars VWAP Volume Weighted Average Price

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A5 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

1. Overview of the Proposed Scheme

1.1 Overview An overview of the Proposed Scheme is outlined below. The overview is only that and should not be regarded as a complete description of the Proposed Scheme. A more detailed discussion of the Proposed Scheme is outlined in the Scheme Booklet to assist Non Associated Shareholders make an informed decision about the Proposed Scheme.

On 11 November 2009, PIPE Networks announced that it had entered into an Implementation Agreement with TPG Telecom under which it proposed that TPG Telecom will acquire all of the issued shares of PIPE Networks for $6.30 cash per share by way of the Proposed Scheme between PIPE Networks and its Shareholders.

The Directors of PIPE Networks have indicated their unanimous recommendation in favour of the Proposed Scheme in the absence of a superior proposal emerging and subject to the independent expert finding the Proposed Scheme in the best interests of PIPE Networks’ Shareholders. Subject to these conditions, the aforementioned Directors also intend to vote their shares in favour of the Proposed Scheme, in the absence of a superior proposal.

1.2 Conditions of the Proposed Scheme The Implementation Agreement outlines a number of conditions precedent and other pre- implementation steps. These are summarised as follows:

► Satisfactory completion of due diligence by TPG Telecom by 11 December 2009;

► TPG Telecom entering into a financing agreement with a financier in relation to the consideration payable under the Proposed Scheme by 18 December 2009;

► Certain regulatory approvals from Australian Securities and Investments Commission (“ASIC”), Australian Securities Exchange (“ASX”), US Department of Homeland Security and Federal Communications Commission;

► Shareholders’ approval of the Proposed Scheme;

► No restraints or prohibitions issued by any regulatory, judicial or government authority that would prevent the implementation of the Proposed Scheme;

► No PIPE Networks material adverse event or prescribed occurrence as outlined in the Implementation Agreement;

► PIPE Networks and TPG Telecom warranties remaining true and correct;

► All PIPE Networks options have lapsed or been exercised;

► All funding conditions in relation to TPG Telecom have been satisfied or waived;

► The S&P/ASX 300 Index remaining within a prescribed trading level as outlined in the Implementation Agreement.

► The approval of the Court in accordance with Section 411(4)(b) of the Corporations Act.

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A6 1.3 TPG Telecom’s background TPG Telecom Limited is an Australian-based licensed telecommunications carrier engaged in the sale of retail and wholesale telecommunication products and services.

On 7 December 2009, the company changed its name from SP Telemedia Limited. This name change was effective from 1 December 2009.

The company has been listed on the Australian Securities Exchange since 2001. In 2008 a merger between TPG Holdings Limited and SP Telemedia Limited joined the brands of TPG and SP Telemedia’s Soul.

The company provides voice, internet and data solutions through one of the largest networks in Australia. Its network infrastructure includes fixed line, fibre and wireless services connecting voice customers with call collection areas throughout Australia and data and internet customers with more than 300 exchange areas.

On 9 November 2009, TPG Telecom subscribed for 2.8 million ordinary shares in PIPE Networks in an unconditional share placement at $6.30 per share. On 11 November 2009, TPG Telecom and PIPE Networks announced that it had entered into an Implementation Agreement under which TPG Telecom would acquire all of the shares outstanding in PIPE Networks for $6.30 per share.

Further to the unconditional share placement, as at 11 November 2009, TPG Telecom were granted call options over 4,475,938 PIPE Networks shares from each of Bevan Slattery and Stephen Baxter (totalling 8,951,876 PIPE Networks shares). These options, together with the shares issued under the placement, ascribed TPG Telecom a 19.8% relevant interest in PIPE Networks. However, TPG has no ability to control the exercise of any voting rights attaching to the 8,951,876 PIPE Networks shares the subject of the Option Deed.

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A7 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

2. Scope of the Report

2.1 Purpose of the Report Section 411 of the Corporations Act regulates schemes of arrangement between companies and their security holders. Part 3 of Schedule 8 of the Corporations Regulations prescribes the information to be sent to the security holders in relation to schemes of arrangement pursuant to Section 411. Specifically, Part 3 of Schedule 8 of the Corporations Regulations requires an Independent Expert’s report be prepared in relation to a scheme when a party to that scheme has a prescribed shareholding in the company subject to the scheme, or where any directors are also directors of the company subject to the scheme.

We note that there is no legal requirement for PIPE Networks to commission an independent expert’s report in respect of the Proposed Scheme as there are no common directors between TPG Telecom and PIPE Networks, nor does TPG Telecom hold at least 30% of the shares in PIPE Networks. However, the directors of PIPE Networks have requested that an independent expert’s report be prepared to assist the Non Associated Shareholders in assessing the merits of the Proposed Scheme.

Schedule 8 requires that an Independent Expert’s report must state whether, in the opinion of the Independent Expert, the scheme of arrangement is in the “best interests” of members and should set out the reasons for that opinion.

This Independent Expert’s Report considers the interests of Shareholders as a whole and not individually. Individual Non Associated Shareholders may have circumstances that affect them in particular ways that are not general to the Non Associated Shareholders as a whole and this report cannot, and does not, consider such issues.

Ernst & Young Transaction Advisory Services’ opinion should not be construed as a recommendation as to whether or not to vote in favour of the Proposed Scheme. Approval or rejection of the Proposed Scheme is a matter for individual Shareholders based on their own circumstances including their appetite for risk, investment objectives, investment portfolio and tax positions.

2.2 Basis of evaluation Schemes of arrangement pursuant to Section 411 of the Corporations Act can encompass a wide range of transactions.

There is no legal definition of the expression “in the best interest”. ASIC has issued RG 111 Content of expert reports, which provides some guidance as to how “in the best interest” should be interpreted in a range of circumstances.

RG 111 paragraphs 15 to 20 deals with “Control Transactions by Way of a Scheme of Arrangement” and indicates that “Schemes of arrangement can be used as an alternative to a Chapter 6 takeover bid to achieve substantially the same outcome. In these circumstances, we expect the form of analysis to be substantially the same as for a takeover bid, even though the wording of the opinion will also be whether the proposed scheme is ‘in the best interests of the members of the company’. This reflects that the legislative test for schemes of arrangement differs from that applicable to a Chapter 6 takeover bid.”

Subject to our comments above, in our view the proposed acquisition by TPG Telecom of the issued shares of PIPE Networks represents a control transaction as intended under RG 111 and therefore RG 111 paragraphs 15 to 20 are relevant for the purposes of our Report.

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A8 RG 111 paragraph 17 indicates that “if an expert would conclude that a proposal was ‘fair and reasonable’ if it was in the form of a takeover bid, it will also be able to conclude that the scheme is in the best interests of the members of the company.”

The meaning of “fair and reasonable” in the context of takeover bids is outlined in RG 111 paragraphs 9 to 14. This guidance makes it clear that, in the context of a takeover bid, “fair” and “reasonable” are two distinct concepts. Under this approach:

► An offer is “fair” if the value of the offer price or consideration is equal to or greater than the value of the securities that are the subject of the offer. The comparison is to be made assuming 100% ownership of the target and it is “inappropriate to apply a discount on the basis that the shares being acquired represent a minority or ‘portfolio’ parcel of shares.”

► An offer is “reasonable” if it is fair. It might also be “reasonable” if, despite being “not fair”, the expert believes that there are sufficient reasons for security holders to accept the offer in the absence of any higher bid before the close of the offer.

RG 111 paragraph 12 lists a number of items which experts may consider when assessing the reasonableness of an offer. We have considered these in the preparation of this Independent Expert’s Report.

In light of the above, we have considered:

► Whether the value of a PIPE Networks share (on a controlling basis) is higher or lower than the $6.30 cash consideration being offered under the Proposed Scheme;

► Whether a premium for control is being offered, and whether this is appropriate in the circumstance;

► Other commercial and qualitative factors relevant to Non Associated Shareholders; and

► The likelihood of an alternative superior proposal being made to Non Associated Shareholders.

In accordance with the ASIC guidance we analysed the Proposed Scheme in the context of whether it is fair and reasonable. If the Proposed Scheme is considered fair and reasonable to the Non Associated Shareholders then the Proposed Scheme will be in the best interests of the Non Associated Shareholders.

All amounts in this Report are expressed in Australian dollars (“$” or “A$”) unless otherwise stated.

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A9 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

2.3 Limitations and Reliance

We have considered a number of sources of information in preparing this Independent Expert’s Report and arriving at our opinion. These sources of information are detailed in Appendix A to our Report.

Our opinion is based on economic, market and other conditions prevailing at the date of this Independent Expert’s Report. These conditions can change significantly over relatively short periods of time.

This Independent Expert’s Report is also based upon financial and other information provided by PIPE Networks in relation to the Proposed Scheme. Ernst & Young Transaction Advisory Services has considered and relied upon this information. The information provided to Ernst & Young Transaction Advisory Services has been evaluated through analysis, enquiry and review for the purposes of forming an opinion as to whether the Proposed Scheme is in the best interests of the Non Associated Shareholders. However, Ernst & Young Transaction Advisory Services does not warrant that its enquiries have identified all of the matters that an audit, an extensive examination or ‘due diligence’ and/or tax investigation might disclose.

Preparation of this Independent Expert’s Report does not imply that Ernst & Young Transaction Advisory Services has, in any way, audited the accounts or records of PIPE Networks. It is understood that the accounting information that was provided was prepared in accordance with generally accepted accounting principles, including Australian equivalents to International Financial Reporting Standards as applicable.

In forming our opinion Ernst & Young Transaction Advisory Services has also assumed that:

► Matters such as title, compliance with laws and regulations and contracts in place are in good standing and will remain so and that there are no material legal proceedings, other than as publicly disclosed;

► The information set out in the Scheme Booklet and accompanying documents sent to PIPE Networks’ Shareholders is complete, accurate and fairly presented in all material respects;

► The information relied upon by Ernst & Young Transaction Advisory Services in its analysis was accurate and not misleading;

► The Proposed Scheme will be implemented in accordance with the terms; and

► The legal mechanisms to implement the Proposed Scheme are correct and will be effective.

To the extent that there are legal issues relating to assets, properties or business interests or issues relating to compliance with applicable laws, regulations and policies, Ernst & Young Transaction Advisory Services assumes no responsibility and offers no legal opinion or interpretation on any issue.

The statements and opinions given in this Independent Expert’s Report are given in good faith and in the belief that such statements and opinions are not false or misleading.

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A10 Ernst & Young Transaction Advisory Services provided draft copies of this Independent Expert’s Report to the Directors and Management of PIPE Networks for their comments as to factual accuracy, as opposed to opinions, which are the responsibility of Ernst & Young Transaction Advisory Services alone. Changes made to this Independent Expert’s Report as a result of this review by the Directors and Management of PIPE Networks have not changed the methodology or conclusions reached by Ernst & Young Transaction Advisory Services.

The Report should be read in the context of the qualifications, limitations and consents set out in Appendix B of this Report.

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A11 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

3. Industry overview

3.1 Australian Telecommunications Industry1,2,3,4,5 The Australian telecommunications industry was expected to earn $39.2 billion in revenue in the 2008-09 year. The industry can be divided into three distinct segments, being fixed line, mobile and data & Internet. The industry is highly concentrated, with the dominant player, Telstra (formerly Government owned prior to its staged privatisation ending in 2006) having a market share, as estimated by Budde, of 67%. Telstra’s major competitor is Singtel- owned Optus, which is the second largest operator in the Australian telecommunication industry, with a market share estimated to be 20%. Both carriers operate across all market segments in the industry and, combined, own the majority of fixed line and data transmission infrastructure in Australia.

The industry’s second tier telecommunications providers own minimal infrastructure and are generally restricted to regulated use of existing infrastructure (such as Telstra’s copper network) or reseller arrangements with one of the major telecommunication providers.

The Australian telecommunications industry is governed by a series of Acts and regulatory agencies and, as of April 2009, has been the subject of new government legislative initiatives – including the building of a National Broadband Network (NBN) - that will fundamentally transform the industry’s competitive dynamics.

3.1.1 Fixed line By virtue of the statutory monopoly that Telstra had over the telecommunications industry prior to 1 July 1997, Telstra owns the copper network on which most fixed line services are carried. The Trade Practices Act (1974) dictates that carriers are able to access Telstra’s network and resell these services and the Australian Competition & Consumer Commission regulates pricing under this access regime. The fixed line market was expected to commence a gradual decline from 2007 onwards as local access charges as well as voice calls decline for all traditional voice services. 3.1.2 Mobile The Australian mobile telecommunications space is the most highly contested segment in the industry, with Telstra’s market share being lower than for the fixed line segment at 40.4%, followed by Optus 32.0% and VHA Pty Ltd (the recently merged Hutchison and Vodafone business) 27.1%. Up to 2006, mobile was the key driver of growth of the overall telecommunications market but as the market has rapidly approached saturation, growth in this segment has begun to subside.

1 IBISWorld Industry Report 9 June 2009, Wired Telecommunications Carriers in Australia J7121 2 IBISWorld Industry Report 12 March 2009, Communication Services in Australia 3 Budde.com.au ‘News & View September 2007’ 4 New National Broadband Network’ release - http://www.minister.dbcde.gov.au/media/media_releases/2009/022 5 RBA August 2009 Monetary Policy Statement PIPE Networks Limited Independent Expert's Report and Financial Services Guide Ernst & Young  9

A12 3.1.3 Data & Internet The Australian data and internet market continues to be the fastest growing of the three telecommunications segments, with its market share expected to be 20% of industry revenue in 2009. The Australian data & Internet market is defined by three separate types of industry participants:

► The majors (Telstra & Optus) who provide Internet connectivity to retail customers and high speed data transmission to large corporates, Government departments and wholesale services;

► Independent Internet Service Providers (“ISPs”) such as iiNet and TPG, who provide Internet connectivity to retail and Small-to-Medium Enterprises (SME) customers. While these carriers tend to own their own backhaul infrastructure, they are often reliant on Telstra’s copper network to provide the “last mile” to the end user; and

► Junior Telcos - the likes of PIPE Networks, Amcom, Nextgen and AAPT/Powertel - that provide high speed data connectivity to large corporates, Government departments and ISPs through the establishment and ownership of their own fibre networks.

3.1.4 Industry performance & demand determinants The Australian telecommunications industry was expected to generate total revenue of approximately $39.2 billion in 2008-09, of which approximately 20% of overall revenue was accounted for by data transmission and internet. Demand for data transmission and Internet products continues to drive overall industry growth and this trend is expected to continue, as expenditure on fixed voice products continues its decline and customers convert to mobile and data network solutions.

According to IBISWorld, the telecommunications sector will experience average annualised growth in revenue of 0.9% per annum during the outlook period 2008-09 to 2013-14. The industry growth rate is considered to be weighed down by continued weakness in fixed telecommunications, which in 2008-09 is expected to account for 32.9% of the $39.2 billion sector.

The convergent trends in telecommunications will be driven by consumer and business demand for services associated with transmission of data, particularly via fixed lines but wireless data transmission utilising 3G and wireless broadband will also positively affect industry revenue.

Consumer demand for telecommunications services is largely a function of employment levels, household disposable incomes, taxes and interest rates. A general increase in economic activity tends to correlate with increased demand for communications services. After a period of significant weakness caused by the Global Financial Crisis, the RBA expects the economy to gradually strengthen through 2010 and 2011, with growth expected to be around 3¾ per cent, or moderately above-trend, by the end of the forecast period.

Demand for communications services is also a function of supply, a reality that has significant implications for the Australian industry’s prospects given the government’s NBN proposal, discussed below. Presently, not all Australians have access to broadband internet services and a smaller proportion of the population are not covered by any of the terrestrially based mobile telecommunications networks. Though availability of services may depend on investment principles or government assistance, an increase in supply will increase demand.

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A13 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

3.1.5 Regulatory Framework

The telecommunications industry is governed by the Telecommunications Act 1997 and Parts XIB and XIC of the Trade Practices Act 1974. The Trade Practices Act addresses competition issues associated with telecommunications services whereas the Telecommunications Act establishes the framework for minimum service standards and licensing of carriers.

In April 2009 the Australian government announced its intention to establish a new wholesale only company (i.e. the company will be restricted from offering retail services) that will invest up to $43 billion over eight years to build and operate a National Broadband Network (“NBN”) delivering broadband at speeds up to 100Mbps to 90% of Australian homes and workplaces and wireless or satellite internet services to the remaining 10%. The NBN has the potential to fundamentally alter the competitive dynamics of the communications sector in Australia. It has not been established as yet whether existing infrastructure asset owners will be entitled to vend their assets into the new NBN company in return for equity in the business. An NBN implementation study is due to be completed in early 2010.

In September 2009, the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Bill 2009 was introduced into the Senate and is aimed at creating a more level playing field ahead of the build-out of the NBN. Under the bill introduced to parliament in September, Telstra faces the structural separation of its wholesale and retail businesses, by either voluntary or forcible means.

3.2 Australian Data Market6,7,8,9 The Australian data market has overtaken the mobile sector as the main driver of growth in the telecommunications industry with data revenues growing from $6 billion in 2007 to $8 billion in 2009. However, the overall market share of the sector is still relatively small. It is expected that the sector’s contribution to industry revenue will increase in the medium term, with data’s overall market share predicted to increase to 20% based on IBISWorld industry revenue forecasts. Telstra is the largest operator in the market with approximately 69% market share by revenue.

Figure1: Data revenues by provider (FY08A)

PIPE 1% Other 18%

Optus 12%

Telstra 69%

Source: Company filings The Australian data market consists of the physical transfer of data over a point-to-point or point-to-multipoint communication channel. Data can be transferred over copper wires, fibre optic cables, Hybrid-Fibre Coaxial (HFC) cables, wirelessly and via storage media.

6 PIPE Networks Company Filings 7Budde.com.au ‘News & View September 2007’ 8 Budde.com.au ‘2008 Australia – Telecoms Industry – Statistics and Forecasts – BuddeComm’, Executive Summary 9 Pioneer Consulting, “Market Study for PPC-1 prepared for PIPE International & ANZ”, September 2008 PIPE Networks Limited Independent Expert's Report and Financial Services Guide Ernst & Young  11

A14 3.2.1 Data transmission – end users The main use of data transmission is to facilitate the Internet for retail end-users, however, these services are also required for:

► Inter-exchange fibre backhaul for ISPs;

► Corporate and government data transmission:

► Between office buildings within cities and offices across different states;

► Linking offices with data centres; and

► Provision of corporate/government recovery services.

3.2.2 Demand determinants and performance outlook The demand for data transmission and storage products is driven by the capacity of businesses to invest in said infrastructure; the growing need for intra-city connectivity between corporate office locations; the need of ISPs and carriers requiring high-speed backhaul capacity to other carriers; disaster recovery requirements of organisations and government departments; and the need to outsource data centre operations.

The data market remains the fastest growing market in overall terms with a growth percentage of around 13% per annum in the 2007-2009 period, with this growth being driven largely by the growth in the retail broadband sector. According to Pioneer Consulting, the number of broadband users is predicted to grow from 12.7 million in 2009 to 17.3 million by 2020 and the data market is expected to benefit from this demand.

3.2.3 Data markets 3.2.3.1 Dark fibre

Dark fibre is unlit optical fibre allowing users to create a private network for their telecommunications equipment. The fibre is termed “dark” because the fibre is supplied to the client without any terminating equipment to ‘light’ the fibre. The end user controls the actual fibre and chooses the service provider from which they source services to “light” the fibre such as telephony and the internet.

3.2.3.2 Managed Ethernet Managed Ethernet allows for fast data transmission over shared cables, however, unlike dark fibre, Ethernet customers do not have direct links with their end-points and instead, multiple users share the capacity of fibre optic cable.

3.2.3.3 Peering Peering is the process of exchanging internet traffic between multiple ISPs and Content Service Providers (“CSPs”). Peering service providers set up physical locations where exchanges happen and negotiate peering agreements.

3.2.3.4 Data centres (Co location / Telehousing) Co-location or Telehousing refers to data centre services in which organisations can outsource their data storage requirements.

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A15 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

3.2.3.5 Other Internet Protocol (“IP”) has been adapted in recent years to enable communications services— voice (i.e. Voice over Internet Protocol or VoIP), facsimile, and/or voice-messaging applications— to be transported via the Internet. 3.3 Australian Submarine Cable Market10,11,12 For its international connectivity, the Australian telecommunications industry relies upon submarine cable networks connecting Australia with the world. According to TeleGeography research, due to Australia’s geographical isolation, the cost of building and maintaining international submarine cables is the highest in the world. Combined with the reality that ownership of these submarine cables is relatively concentrated, this has led to ISPs incurring the most expensive international bandwidth costs compared to OECD countries which, in turn, have been incurred by the Australian end user. It is expected that PPC-1 will increase competition in what is a concentrated market.

The three major cables that supply international capacity to Australia are operated by the major telecommunications companies, with Telstra owning 100% of the Endeavour cable and 47% of the Australia-Japan Cable (AJC); Telecom New Zealand and Singtel Optus owning 50.1% and 39.9% respectively of Southern Cross Cable. According to Pioneer Consulting, in 2008 the Southern Cross Cable was responsible for delivering 70% of Internet capacity to Australia. As a result of Telstra Endeavour and PIPE Networks Pacific Cable-1 (PPC-1) coming online however, Pioneer expects Southern Cross’ market share to fall to 54% by 2010. Further, PPC-1 is forecast to provide 9% of international capacity by 2010.

3.3.1 Demand determinants and performance outlook Demand for international bandwidth is primarily driven by the following:

► Increased adoption of broadband:

Pioneer Consulting forecasts broadband users in Australia to grow from 12.7m in 2009 to 17.3m by 2020, a CAGR of 2.8%. It should be noted that the Pioneer forecast was made prior to the announcement of the government’s NBN and that, as a result of the NBN, broadband penetration rates may increase significantly as high-speed Internet becomes widely accessible.

► Advances in broadband speeds

Higher Internet speeds are positively correlated to the amount of bandwidth consumed, as higher speeds allow users to download greater content in shorter periods of time. Further, the development of higher download speeds has been a significant driver of video content (i.e. YouTube) which consumes high amounts of bandwidth. The NBN company expects to provide broadband speeds of up to 100Mbps under its Fibre-to-the-Premises national network and according to the government’s announcement, these speeds will be up to 100 times faster than those currently used by many households and businesses.

► Increased download use per user

TeleGeography expects that growth in downloads per user will more than offset the declining pace of growth in broadband penetration. The growing popularity of video (bandwidth-intensive) content is expected to contribute to this growth.

10 TeleGeography Research, “Australian Submarine Cable Market Analysis”, February 2008 11 Pioneer Consulting, “Market Study for PPC-1 prepared for PIPE International & ANZ”, September 2008 12 ‘New National Broadband Network’ release - http://www.minister.dbcde.gov.au/media/media_releases/2009/022 PIPE Networks Limited Independent Expert's Report and Financial Services Guide Ernst & Young  13

A16 4. Profile of PIPE Networks

4.1 Overview of PIPE Networks PIPE Networks is an Australian listed facilities-based telecommunications service provider specialising in high speed data transmission to large corporates, Government departments and ISPs. The company was incorporated in 2001 and listed on the ASX in 2005.

The current corporate structure of PIPE Networks is outlined in the diagram below.

Figure 1: Corporate structure PIPE Networks Limited (ASX:PWK) Carrier License No. 101

PIPE International (Australia )Pty Ltd PIPE Transmission Pty Ltd Carrier License No. 241 Wholly owned subsidiary (100%) Wholly owned subsidiary (100%)

PPC 1 Limited (Bermuda) Wholly owned subsidiary (100%)

PPC 1 (US) Inc Wholly owned subsidiary (100%)

The operations of PIPE Networks have historically focused on a domestic dark fibre network which it owns. PIPE Networks has one of the most extensive fibre networks for metropolitan Australia. This network comprises approx 1,400km fibre optic cable primarily servicing the metropolitan areas of Sydney, Melbourne and Brisbane, as well as smaller central business district (“CBD”) networks in Adelaide, Perth and Hobart. The domestic revenue by product and state for FY09A is outlined below.

In addition to the wholly owned group above, PIPE Networks currently has an equity investment of 23.8% in Vocus Group Ltd (“Vocus Group”). Vocus Group provides wholesale voice and IP transit to telecommunication companies and ISPs across Australia, New Zealand and the USA.

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A17 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

Figure 2: Domestic revenue by product (FY09A) Figure 3: Domestic revenue by state (FY09A)

Managed Peering Other ethernet 5% 1% 2% Other 7% Telehousing 12% Victoria 16%

Queensland 42%

New South Wales WAN 35% 80%

WAN is currently PIPE Networks’ main product offering, accounting for 80% of revenue in FY09A. The WAN business line is predominantly made up of dark fibre, but also contains inter-capital connections and data centre interconnections. For the purposes of this Report, PIPE Networks’ dark fibre will be used interchangeably with PIPE Networks’ WAN segment. For dark fibre, the customer is responsible for selecting the service provider from which they wish to source services such as telephony, subscription TV and internet. That is, PIPE Networks provides the infrastructure not the data transmission.

Dark fibre provides for higher transmission speeds and increased security of transmitted data, as a result of the customer having control of a dedicated cable with no intermediate exchange.

Managed Ethernet is the major competitor to dark fibre product. In Managed Ethernet, data is transmitted over shared cables, which reduces the speed and security compared to dark fibre. PIPE Networks commenced providing this product in 2004, accounting for 2% of PIPE Networks’ domestic revenues in FY09A. Market share for this product is dominated by Telstra and Optus, which is their primary product offering for high speed data transmission.

Other domestic product revenues include:

► Telehousing ($5.6 million FY09A) – Data centre services (data storage) offered in metropolitan Brisbane, Sydney, Melbourne, Adelaide and Hobart. Customers lease rack space in which they store their own data.

► Peering ($2.4 million FY09A) – ISPs enter into agreements with an exchange provider, allowing other ISPs to access data with each other. PIPE Networks is the largest peering exchange provider in Australia.

Domestic revenue model Each of PIPE Networks’ products has different revenue models given their respective characteristics, which are outlined below:

► WAN – revenues are primarily via long-term leasing arrangements. Customers typically purchase fibre cores on a 3 to 10 year basis, paying monthly fees to use the fibre optic cable. The amount customers pay is determined by the amount of the fibre cores purchased and the total cable length (i.e. number of fibre cores) used. As of November 2009, 25.35% of available fibre capacity had been utilised.

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A18 ► Managed Ethernet – customers are charged a flat monthly fee based on usage to access the network.

► Telehousing – customer is charged an initial setup cost, then an annual fee per rack.

► Peering – customers are charged a fixed fee based on capacity required. Customers pay the same price regardless of how much of the purchased capacity they use.

International operations – PPC 1 On 8 October 2009, PIPE Networks announced the completion of a submarine cable system named PPC -1, linking Sydney to Guam. This is Australia’s first carrier neutral cable, which Management anticipate will benefit consumers by increasing the level of competition in the industry.

In addition to the Sydney to Guam direct connection, PIPE Networks entered into an agreement with Tata Communications (“Tata”) to purchase onward capacity between Guam to Japan and Guam to United States.

The structure of the PPC-1 operation is outlined below. Figure 4: PPC -1 structure PIPE Networks Ltd (ASX listed) 100%

IRUcontracts PIPE International (Australia) Pty Ltd

100% Equity investment IRUcontracts PPC-1 Limited (Bermuda) International Customers IRU contracts (owns submarine cable) Tyco Electronics 100% Receives certain IRU and Spur payments PPC 1 (US) Inc

Financing of PPC 1 ► In relation to PPC-1, there exists a remaining obligation payable primarily to Tyco Telecommunications ("Tyco"), the supplier of the PPC-1 cable system, and is due at various times over the coming 6 months. Furthermore, supplier payments have generally been rescheduled to align with customer receipts, along with a number of customer receipts being brought forward to more closely align with the timing of supplier payments. Management expects that the majority of repayments to Tyco will be funded by either external financing (i.e. equity and/or debt raising) or operating cash flows of the consolidated group.

► The total remaining liability owing for the construction of PPC-1 and associated infrastructure (including payments to Tyco and other remaining obligations relating to costs of construction, such as the Sydney landing station) is A$51.8 million.

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A19 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

International (PPC -1) revenue model ► Similar to dark fibre, the PPC-1 revenue model will operate on long-term leasing arrangements which grant customers the right to exclusively use bandwidth provided by the cable, in exchange for fixed periodic payments.

► Specifically, customers of PPC-1 are able to purchase capacity via two methods:

1. Indefeasible Rights of Use (IRU)

► An IRU provides access to a pre-specified amount of fibre optic bandwidth to a customer over a specified time period. Unlike a conventional operating lease, the customer has the right to use the determined capacity as if they owned the bandwidth themselves. This includes the right to sell or trade the capacity as desired. In most cases, IRUs are long term, typically 15 years.

► The accounting treatment on the sale of an IRU is to recognise the net gain (gross sale proceeds less the cost of the disposed capacity) as revenue. One exception to this treatment exists with one specific swap agreement. In this case the gain on sale of capacity is recognised pro-rata over the term of the IRU agreement (15 years).

► In addition to the fixed IRU fee, customers are required to pay an ongoing operating and maintenance fee which is equal to 3%-4% of the IRU fee. This is used by PIPE Networks to maintain the cable.

2. Leases

► Leases offer shorter term capacity options (5 to 8 years) to customers on an operating lease model. Customers ‘rent’ capacity and pay an annual subscription fee to access the capacity in that cable. This does not involve any disposal of capacity for accounting purposes. Management advise that the per unit cost tends to be higher than an IRU due to the short-term nature of the contracts.

► The key difference to an IRU, is that the lease holders do not hold any rights of ownership to the capacity.

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A20 4.2 Board of Directors The table below summarises PIPE Networks’ Board of Directors:

Figure 5: Board of Directors Directors Position Mr Roger Brian Clarke Chairman Mr Bevan Andrew Slattery Chief Executive Officer Mr Stephen Ross Baxter Non-Executive Director Mr Jason Sinclair Executive Director Mr Gregory A J Baynton Non-Executive Director Source: Management information 4.3 Capital Structure and Ownership As at 6 January 2010, the top 20 Shareholders of PIPE Networks are outlined in the table below.

Figure 6: Top 20 Shareholders

Percentage of total Number of shares shares on issue Mr Bevan Slattery 8,103,572 13.7% Mr Stephen Baxter 8,003,572 13.5% Fisher Funds Mgt 4,721,813 8.0% Acorn Capital 3,983,948 6.7% TPG Telecom 2,800,000 4.7% Aviva Investors 2,164,851 3.7% Challenger Managed Investments 1,722,297 2.9% Kinetic Investment Partners 1,294,268 2.2% Renaissance Smaller Companies 1,241,483 2.1% Wilson HTM 800,000 1.4% OC Funds Mgt 629,825 1.1% Mr Gregory AJ Baynton 628,853 1.1% Contango Asset Mgt 590,420 1.0% Deutsche Securities 453,340 0.8% Goldman Sachs JBWere 425,572 0.7% UBS Global Asset Mgt 422,776 0.7% Mr & Mrs Raymond J Campbell 340,000 0.6% Mr & Mrs Duncan G Andrews 300,000 0.5% Mr David F Oakley 300,000 0.5% Mr Roger B Clarke 233,572 0.4% Total shares of top 20 shareholders 39,160,162 66.1% Other shareholders 20,061,009 33.9% Total shares on issue 59,221,171 100.0% Source: Orient Capital ShareTrak 6 January 2010

► As shown in the table above, the top 4 Shareholders hold 41.9% of the total shares on issue.

► The ownership interest shown above for TPG Telecom excludes the call options granted by Mr Bevan Slattery and Mr Stephen Baxter to TPG Telecom over 8,951,876 shares.

4.4 Employee Share options As at the date of this Report, Management advise that no options remain outstanding. We note that a condition of the Proposed Scheme is that all outstanding options must either be lapsed or exercised.

► 100,000 options were exercised on 24 November 2009, and 66,520 were exercised on 11 December 2009.

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A21 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

► 4,474 options expired on 12 December 2009.

4.5 Share Price History A graph of the share price and trading volumes of PIPE Networks over the period from 31 December 2007 to 6 January 2010 is detailed as follows:

Figure 7: PIPE Networks – Monthly share price and trading volume since 31 December 2007

14 15 16 3,000,000 13 7 1 11 2 3 4 5 12 6 6 2,500,000 10 7 8 9 5 2,000,000 4 1,500,000 3 Volume

1,000,000 priceShare 2 500,000 1 0 0 08 09 07 08 08 08 08 08 08 08 08 08 09 09 09 09 09 09 09 09 09 10 08 08 09 09 ------Jul Jul Apr Apr - - Jan Jan Jun Oct Jan Jun Oct Feb Mar Feb Mar Aug Sep Aug Sep Dec - Nov Dec - Nov Dec May May ------6 31 31 30 30 31 30 31 31 30 31 29 31 28 31 31 30 31 30 31 30 31 30 31 31 31

Volume Close price

Source: Factiva & ASX The items noted on the graph related to the following announcements made by PIPE Networks:

1. PIPE Networks upgraded guidance for FY08F of $33 million to $35 million revenue and $7.0 million to $7.4 million NPAT and provided FY09A guidance of $44 million to $46 million revenue, excluding PPC-1. Further, Board approval for legal and financial structure of PPC-1 was obtained.

2. iiNet signs internet bandwidth capacity agreement with PIPE International.

3. 1H08A results released; NPAT up 40% to $3.28 million.

4. PIPE Networks upgrades earnings guidance for FY09F, to NPAT of $11 million to $12 million.

5. Equity raising via a 6.5 million share placement. Funds raised were used in the funding of the PPC-1 construction.

6. FY08A results released: $7.2 million NPAT, 49% increase on prior corresponding period.

7. PIPE Networks advised that the banking syndicate decision on project financing for PPC-1 was pending and that alternative funding sources were being arranged in case of failure of the banking syndicate financing proposal.

8. Trading halt in PIPE Networks shares requested and instated until conclusion of negotiations to secure financiers for PPC-1, following the failure of the banking syndicate financing proposal.

9. Memorandum of Understanding signed with PPC-1 system supplier (Tyco) and a key customer, allowing PPC-1 to continue as scheduled.

10. 1H09A results released: $5.3 million NPAT, up 62% on prior comparable period.

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A22 11. High trading volume as a result of institutional investors, Acorn Capital and Fisher Funds, buying 3.5 million shares.

12. PIPE Networks lands PPC-1 cable in Sydney and confirms FY09F guidance of $11 million NPAT.

13. Wilson Investment Group becomes a substantial Shareholder, acquiring 2.8 million shares.

14. PIPE Networks announces the successful completion and testing of PPC-1.

15. On 11 November 2009 PIPE Networks and TPG Telecom Limited announced that it had entered into an Implementation Agreement under which TPG Telecom would acquire all of the shares outstanding in PIPE Networks for $6.30 per share. This followed an unconditional placement of 2.8 million ordinary shares in PIPE Networks at $6.30 per share to TPG Telecom on 9 November 2009.

16. On 17 December 2009, TPG completed due diligence and on 21 December 2009, TPG satisfied the funding requirement for its proposed takeover of PIPE.

The share trading history of PIPE Networks is also set out in the table below.

Figure 8: PIPE Networks share trading history Date High Low Close Volume Monthly liquidity $ $ $ listed shares Notes Annual Summary 2008 4.89 1.88 3.05 9,725,377 (calendar year) 2009 6.28 2.90 6.14 19,018,988 Period to 6/01/2010 6.22 6.14 6.20 354,418

Monthly Summary 31-Jan-09 3.62 3.00 3.00 632,026 1.2% 28-Feb-09 3.30 2.90 3.04 1,978,653 3.6% 31-Mar-09 3.83 2.92 3.74 641,551 1.1% 30-Apr-09 4.00 3.37 3.52 467,647 0.8% 31-May-09 4.15 3.50 4.10 1,450,923 2.6% 30-Jun-09 4.40 3.85 4.35 1,466,480 2.6% 31-Jul-09 4.40 4.10 4.30 1,003,671 1.8% 31-Aug-09 5.48 4.23 5.30 1,903,878 3.4% 30-Sep-09 5.75 5.21 5.57 1,563,142 2.8% 31-Oct-09 6.28 5.37 6.08 2,551,367 4.5% 30-Nov-09 6.10 5.80 5.90 2,660,561 4.5% 31-Dec-09 6.20 5.90 6.10 2,593,613 4.4% Source: Factiv a & DatAnaly sis ► As shown above, the shares reflect a low level of liquidity. The comparative average monthly shares traded for the S&P/ASX 200 as a proportion of total shares outstanding on companies who comprise the S&P/ASX 200 over the same period of time was approximately 12.0%. PIPE’s comparatively low level of liquidity can be attributed to substantial Shareholders accounting for nearly half of the issued shares.

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A23 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

4.6 Earnings and Financial Position 4.6.1 Earnings Set out below are the historical consolidated income statements for the years ended 30 June 2008 and 30 June 2009, as well as the forecast income statement for the year ending 30 June 2010.

Figure 9: Consolidated income statement Currency: $ 000 FY08A FY09A FY10F Total domestic revenue 34,083 48,361 61,500 Total PPC-1 revenue 198 1,367 34,500 Total revenue 34,280 49,728 96,000 Total domestic expenses (20,668) (28,712) (34,000) Total PPC-1 expenses (600) (2,466) (9,500) Total expenses (21,267) (31,178) (43,500) Domestic EBITDA 13,415 19,649 27,500 International (PPC-1) EBITDA (402) (1,099) 25,000 Total EBITDA 13,013 18,550 52,500 Depreciation and amortisation (2,937) (4,400) na EBIT 10,075 14,151 na Net interest (expenses)/income 102 383 na Interest revenue 301 695 Finance expense (199) (312) Net profit before income tax 10,178 14,533 na Net gain/(loss) from discontinued operations (31) 31 na Net profit after significant items before tax 10,147 14,565 na Income tax expense (2,943) (4,060) na Net profit after tax 7,204 10,504 24,000 KPIs Revenue growth - domestic business na 41.9% 27.2% Revenue growth - PPC 1 na 591.6% 2,424.4% EBITDA margin - domestic business 39.4% 40.6% 44.7% EBITDA margin - PPC-1 (203.5%) (80.4%) 72.5% EBIT margin - domestic business 30.7% 31.6% na EBIT margin - PPC-1 (203.7%) (81.4%) na Source: PIPE Networks Limited Annual Report 2009 and Scheme Booklet

► Historical earnings growth has been driven by the expansion of the dark fibre network and customer base. Future growth includes the commencement of the international business, as shown in Management’s forecast for FY10F above.

YTD actual trading (6 months ended 31 December 2009) ► Actual trading results for the 6 months ended 31 December 2009 are in line with Management’s forecast.

We have discussed the financial performance of the domestic and international operations separately below.

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A24 4.6.1.1 Domestic business

Figure 10: Domestic business income statement excerpt

Currency: $ 000 FY08A FY09A FY10F Revenue 34,083 48,361 61,500 EBITDA 13,415 19,649 27,500 EBITDA margin 39.4% 40.6% 44.7% Source: PIPE Netw orks Limited Annual Report 2009 & FY10 Management forecast Revenue ► Revenues associated with the domestic business have grown substantially, with an increase of 41.9% in FY09A compared to FY08A. Revenues are earned via long-term customer contracts, generally ranging from 3 to 10 years. In FY09A 87% of total revenues were ‘recurring’ based on these contracts in place.

► Consistent with FY09A, FY10F revenue is driven by growth in contracted customers, with 90% of total revenues ($55.9 million) forecast to be recurring. Domestic revenues are forecast to increase by 27.2% in FY10F compared to FY09A.

The following diagram is a domestic revenue bridge from FY09A to FY10F.

Figure 11: Domestic revenue bridge – FY09A to FY10F

70 8.7 61.5 60 6.1 48.3 (6.3) 4.7 50 42.0 40

30 Currency:$m 20

0 FY09A FY09A revenue revenue recurring domestic revenue revenue revenue) (recurring FY10Ftotal revenue) (recurring FY10Fsetup Less:FY09A setuprevenue FY10Fgrowth FY10Fraterun

► FY10F run rate ($4.7 million) represents the full year impact of customers signed up during FY09A.

Expenses and EBITDA margin ► The trend in EBITDA margin, with an average annual EBITDA margin of 40% for FY08A and FY09A, reflects the relatively fixed cost base and resulting economies of scale from the organic growth in revenues. EBITDA margin is forecast to increase to 44.7% in FY10F from 40.6% in FY09A.

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A25 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

4.6.1.2 International business – PPC 1

Figure 12: International business income statement excerpt Currency: $ 000 FY08A FY09A FY10F Revenue 198 1,367 34,500 EBITDA (402) (1,099) 25,000 Source: Audited management accounts & FY10 Management forecast Revenue ► PPC-1 commenced operations in October 2009. Historical financial performance reflects costs associated with the construction of PPC -1 and some upfront income for incremental engineering work completed in relation to IRU sales. In FY08A and FY09A, leasing revenue was received from customers for the use of co-locations at PIPE Networks’ landing station in Sydney.

► FY10F revenue includes the following:

► Gain on sale of capacity on the sale of IRU agreements following the commissioning of PPC-1 in October 2009. It is noted that the accounting gain on sale of an IRU agreement is the net of cash proceeds received for the IRU and the accounting cost base of the IRU. As such, the gain on sale of an IRU agreement is lower than the cash receipts generated by the sale.

► One-off gain on sale in relation to the construction and connection of a ‘spur’ to a signed IRU customer connecting the main PPC-1 cable from Guam to Madang in Papua New Guinea.

► Leasing revenue. FY10F leasing revenue is based on signed leasing contracts at the date of this report. Lease terms range from 90 to 96 months. Management are forecasting this revenue to be the major contributor to FY11F earnings.

► Operating and maintenance revenue from IRU customers. IRU customers are charged an ongoing fee for PIPE Networks operating and maintaining the fibre capacity they have purchased.

Expenses ► Key expenditure items include marine maintenance, insurance, employee expenses and depreciation.

FY11F forecast earnings ► Management are expecting an FY11F EBITDA of $15.4 million for the PPC-1 business. This is predominantly based on ongoing revenues from leasing contracts and O&M revenues from contracted IRU customers. Whilst IRU sales are expected to occur in future, the quantum and timing remains highly uncertain and have not been included in the forecast.

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A26 4.6.2 Financial Position The following table sets out the audited balance sheets as at 30 June 2008 and 30 June 2009.

Figure 13: Balance sheet of PIPE Networks Currency: $ 000 Jun08A Jun09A Current assets Cash and cash equivalents 22,061 3,286 Term deposits 5,000 - Trade and other receivables 3,204 8,439 Other assets 1,990 1,284 Total current assets 32,255 13,009

Non current assets Trade and other receivables 1,787 650 Property, plant & equipment 94,086 143,399 Deferred tax assets 773 1,396 Investment in associates 250 250 Other assets 1,342 2,705 Total non current assets 98,238 148,400

Total assets 130,493 161,409

Current liabilities Trade and other payables 5,969 6,640 Prepaid revenue 2,878 13,328 Accrued expenses 417 1,537 Current tax liabilities 608 762 Provision for employee benefits 257 437 Borrowings 133 10 Total current liabilities 10,262 22,714

Non current liabilities Borrowings 43,000 38,518 Prepaid revenue 4,698 5,343 Deferred tax liabilities 645 1,790 Provision for employee benefits 55 103 Total non current liabilities 48,398 45,754

Total liabilities 58,660 68,468

Net assets 71,833 92,941 Source: PIPE Netw orks Limited Annual Report 2009

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A27 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

Current assets ► The decline in cash at Jun09A reflects the purchase of property plant and equipment. The cash balance at Jun08A includes a debt drawdown of $47.0 million and proceeds from equity issue of $26 million. As at 31 December 2009, cash and cash equivalents amounted to $14.8 million.

► Other assets comprise accrued income, deposits and prepayments.

Non-current assets Property plant and equipment

Figure 14: Property plant and equipment Currency: $ 000 Jun08A Jun09A Optic fibre cable 36,179 47,358 Plant & equipment 2,785 4,654 Leasehold improvements 730 2,024 Network equipment 2,244 2,192 Computer hardware 401 446 Computer software 154 256 Leased motor vehicles 55 61 Other assets 5 5 Capital works in progress 51,533 86,403 Total property, plant & equipment 94,086 143,399 Source: PIPE Netw orks Limited Annual Report 2009

► The increase in property plant and equipment can be attributed to optic fibre cable network increase and capital works in progress. The optic fibre cable network was increased in FY09A by 18%.

► Capital works in progress primarily relates to the capitalised costs associated with the construction of PPC–1, including the Sydney landing station. PPC–1 became operational on 1 October 2009, and we are advised that this asset was transferred to property, plant and equipment and commenced depreciation from this date.

Other non-current assets

► Other non-current assets predominately comprise loans made to Vocus Group, and EFTel Limited (“EFTel”). As at 31 December 2009, the balances of these loans were $650,000 and $1.85 million respectively.

► EFTel is a telephone and internet service provider, listed on the ASX. Management advise that the loan made to EFTel was provided on commercial terms and is secured by a fixed charge.

► Management advise that the loan to Vocus Group is expected to be recovered for the full amount as at the date of this Report.

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A28 Current and non current liabilities ► The increase in current liabilities at 30 June 2009 compared to 30 June 2008 can largely be attributed to prepaid revenue.

► Historically, prepaid revenue relates primarily to customer prepayments relating to the construction of the Madang spur (Spur Billing Milestones) and revenue from deposits received in relation to the sale of an IRU. Future prepaid revenue is expected to be primarily related to the sale of an IRU with a specific customer for capacity on PPC-1. Income from the sale of IRU with this customer is recognised over the term of the IRU. That is, a liability is raised upon sale and then amortised through the income statement on a pro-rata basis over the IRU term.

► Accrued expenses relate to GST payable, payroll liabilities and incentives.

► Deferred tax liabilities relate to accrued revenue and capitalised interest expense.

Borrowings ► Borrowings comprise a secured facility with ANZ. The facility is secured by a fixed and floating charge over the assets of PIPE Networks.

► As at 31 December 2009, borrowings totalled $39.5 million.

4.6.3 Tax Position PIPE Networks and its wholly owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity in the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘stand-alone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to the head entity. The tax consolidated group has entered a tax funding arrangement with its subsidiaries.

As at 30 June 2009, PIPE Networks had $646,000 of income tax losses recognised as a deferred tax asset, which is included in a total deferred tax asset of $1.396 million.

4.6.4 Dividends and Dividend Reinvestment Plan Dividends paid or provided in the past three years are set out in the table below.

Figure 15: PIPE Networks historical dividends Balance date Notes Dividend type Dividend per share ($) Franked (%) Book close date 30/06/2009 Final 0.08 100.0% 6/11/2009 30/06/2008 Final 0.07 100.0% 7/11/2008 30/06/2007 Final 0.05 100.0% 28/09/2007 30/06/2006 Final 0.02 100.0% 31/10/2006 Source: DatAnalysis

We note that Directors declared an $0.08 per share fully franked final dividend which was paid on 20 November 2009.

PIPE Networks suspended its Dividend Reinvestment Plan (“DRP”) with effect from 11 November 2009, pursuant to the Company’s powers under rule 8.1 of PIPE Networks’ Dividend Reinvestment Plan Rules. Prior to its suspension, the DRP offered ordinary Shareholders in Australia and New Zealand the option to acquire fully paid ordinary shares in PIPE Networks without transaction costs at a 7.5% discount to the prevailing market share price.

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A29 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

4.6.5 Contingent liabilities Ernst & Young Transaction Advisory Services has considered any contingent liabilities in the valuation of PIPE Networks. Management advise that at the date of this Report, no contingent liabilities exist.

Note that as per the FY09A annual report, Management disclosed capital commitments of $91.1 million as contingent liabilities not recognised on the balance sheet as at 30 June 2009. These contingent liabilities related primarily to amounts owing in relation to the construction of PPC-1. Since completion of PPC-1, this has been invoiced and the liability has been brought on the balance sheet. As at 31 December 2009, the remaining accrued liability in relation to the construction of PPC-1 is $51.8 million.

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A30 5. Valuation methodologies

Ernst & Young Transaction Advisory Services considers that the appropriate definition of value for the purposes of valuing the shares in PIPE Networks is market value. Market value is typically defined as:

“The price that would be negotiated in an open and unrestricted market between a knowledgeable, willing but not anxious buyer and a knowledgeable, willing but not anxious seller acting at arm’s length.”

Consistent with the requirements of RG 111 we have assessed the market value of 100% of the issued shares of PIPE Networks as a whole.

5.1 Common business valuation methodologies There are a number of commonly used valuation methodologies available to value a business. The four primary methodologies used for valuing a business are:

► Discounted cash flow (“DCF”);

► Capitalisation of earnings;

► Net realisable value of assets; and

► Market-based assessments.

Each methodology is appropriate in certain circumstances. The decision as to which methodology to apply generally depends on the nature of the business being valued, the methodology most commonly adopted in valuing such businesses and the availability of appropriate information.

We have outlined each of the above valuation methodologies in more detail in Appendix C.

5.2 Selection of Valuation Methodologies Ernst & Young Transaction Advisory Services has selected the capitalisation of earnings methodology as our primary valuation methodology to assess the underlying value of PIPE Networks. Ernst & Young Transaction Advisory Services has selected a market based assessment and the net realisable value of assets as cross checks to our primary valuation methodology to assess the underlying value of PIPE Networks. In adopting our methodologies we have considered a number of factors including:

► Due to the uncertainty in certain aspects of the future cash flows of the business, we consider that a DCF methodology is unable to adequately capture the value of the business. Therefore, a DCF methodology has not been used;

► Whilst the issued shares of PIPE Networks are listed on the ASX, it is relatively thinly traded and therefore we do not consider a market-based assessment to be the most appropriate measure of market value. However, we consider a market based assessment an appropriate cross check to our primary methodology;

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A31 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

► Valuations based on the net realisable value of assets are commonly applied to businesses which are either not a going concern or have earnings which are not considered an appropriate reflection of value. On this basis, the net realisable value of assets is not considered any appropriate methodology to assess the underlying value of PIPE Networks. However, we consider a net realisable value of assets methodology to provide an appropriate cross check to our primary methodology; and

► Capitalisation of earnings has been considered to be the most appropriate method in determining a value for PIPE Networks due to the nature of the company’s operations, earnings profile and the availability of information.

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A32 6. Valuation analysis

6.1 Introduction As discussed in Section 5 of this Report, we have applied the capitalisation of earnings methodology as our primary valuation methodology to assess the underlying value of the equity of PIPE Networks. In addition, Ernst & Young Transaction Advisory Services has selected a market based assessment as our secondary valuation methodology. Ernst & Young Transaction Advisory Services has determined the market value of a 100% controlling interest in the equity of PIPE Networks by aggregating the:

► Enterprise value of the consolidated entity;

► The net debt position of the consolidated entity; and

► Any surplus assets and liabilities identified.

6.2 Capitalisation of Earnings Methodology Applying the capitalisation of earnings methodology in establishing the enterprise value for PIPE Networks involves:

► Estimation of future normalised earnings; and

► Determination of an appropriate earnings multiple range.

These are discussed in further detail below.

6.2.1.1 Future Normalised Earnings When considering the future normalised earnings of PIPE Networks, Ernst & Young Transaction Advisory Services notes that the consolidated operations comprise:

► Domestic business; and

► International business.

We note that the historical growth in domestic operations has been attributed to an increased network and sale of capacity to customers via long term contracts. Management consider future growth to be driven by incremental sales utilising the existing network.

The international business commenced operations in October 2009. FY10F includes significant upfront, once-off revenue on the sale of IRUs. Management advise that post FY10F there are currently no further sales of IRUs already contracted. Although there are expected to be additional future IRU sales, the timing and quantum of any such sales remains uncertain. Recurring revenue will be sourced from the recurring leasing revenue on long-term contracts and O&M revenue from IRU customers.

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A33 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

In applying the capitalisation of earnings methodology for the purpose of valuing PIPE Networks, Ernst & Young Transaction Advisory Services has adopted EBITDA as the appropriate measure of earnings. Factors considered in making this choice include:

► Eliminates the effects of gearing and provides a value which is independent of the current funding structure of the company;

► Removes the effects of different taxation regimes and taxation benefits that may be available to the company; and

► Eliminates the distortions that differences in depreciation and amortisation rates may cause.

We have considered a number of factors in our selection of an appropriate basis for future normalised earnings. These include:

► FY10F is the first year of the international (PPC-1) operations. FY10F includes significant once-off earnings associated with IRU sales which had all been derived by November 2009. Whilst there are expected to be additional future IRU sales, Management do not expect the same level of IRU sales achieved in FY10F to be maintained going forward. The nature and quantum of the future IRU sales is unable to be quantified at this time due to the uncertainty around sales of this nature, and the lack of history available on which to base an appropriate assumption;

► Management’s best estimate of a normalised FY10F EBITDA for the international business, excluding new IRU sales, is $15.4m.

► The domestic business has been achieving year-on-year growth in EBITDA, which is driven by increased recurring revenues on both new and existing customer contracts. Management consider that FY10F EBITDA of $27.5m is an appropriate basis of estimating future EBITDA for the domestic business.

► Forecast revenues are primarily based on long – term customer contracts, which provide for a reasonably high degree of predictability;

► Management advise that YTD actual results for the 6 months ended 31 December 2009 are in line with forecast for FY10F.

On this basis of the above, we consider an appropriate estimate of future normalised EBITDA for PIPE Networks to be $42.9 million.

6.2.2 Earnings multiples In our assessment of an appropriate earnings multiple, Ernst & Young Transaction Advisory Services has had regard to the trading multiples of listed companies within the telecommunications industry, multiples implied by comparable transactions within the industry and a number of other factors.

As we have assessed future normalised earnings based on Management’s forecast EBITDA, we have assessed an appropriate forecast EBITDA multiple to apply to the future normalised earnings.

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A34 6.2.2.1 Trading multiples Ernst & Young Transaction Advisory Services has given consideration to multiples observed in relation to the telecommunications industry for listed companies. The observed multiples and associated commentary is located at Appendix D.

The trading multiples are based on the market price for minority or portfolio shareholdings and do not include a premium for control. A premium for control is applicable when the acquisition for control of a company would give rise to benefits such as:

► Access to cash flows;

► Access to tax benefits; and

► Control of the Board of Directors of the company.

Evidence from studies indicates the control premium on successful takeovers has frequently been in the region of 10% to 30% and that premiums vary significantly from acquisition to acquisition.

In assessing the trading multiples we note the following:

► PIPE Networks is an infrastructure owner and provider, focusing largely on providing its dark fibre product to corporate and government customers domestically. The number of other directly comparable domestic companies is limited, as the other domestic infrastructure owners tend to be part of larger diversified telecommunications companies.

► Whilst we consider the nature of Amcom Telecommunications’ operations to be most comparable to PIPE Networks’ domestic business, we note that it is smaller, and exhibits a significantly lower earnings growth profile than PIPE Networks has shown.

► The number of comparable pure play submarine cable owners is limited. PPC-1 is carrier neutral, compared to other major submarine cables which are operated by the major telecommunication service providers such as Telstra and Optus (Singapore Telecommunications Ltd).

► While it has been difficult to source direct comparables to PIPE Networks, we consider that the range of comparable companies noted are subject to similar risks and market conditions as those faced by PIPE Networks.

► PIPE Networks is forecasting significant growth in EBITDA in FY10F driven by the addition of the international business and continued growth in the domestic operations. The forecast growth has been reflected in the share price performance and hence trading multiple in recent months prior to the announcement of the Proposed Scheme.

► The dominant market position of PIPE Networks’ dark fibre business on the East Coast of Australia.

► The significant potential for growth in PIPE Networks’ international business, particularly in relation to future IRUs sales which are unable to be forecast at this time.

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A35 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

6.2.2.2 Transaction multiples Recent transactions within the telecommunications industry, along with brief descriptions of the transactions are located at Appendix E. We note the following from the transactions:

► In respect of the domestic business of PIPE Networks we consider Amcom, Uecomm and Powertel to be the most comparable targets given the nature of their operations.

► Uecomm was a listed specialist fibre broadband carrier which had a similar growth profile to PIPE Networks, however we note the transaction was completed over five years ago.

► The Amcom transaction was part of a 100% divestment by Elders Limited completed by a staged sale of multiple non-controlling stakes to various acquirers. We note this transaction multiple reflects a minority holding in Amcom.

► Where transaction multiples were not able to be identified due to limited publicly available information, we have included for completeness.

► Ernst & Young Transaction Advisory Services notes that the multiples implied in the above transactions were derived based on the latest historical earnings prior to the transaction, may incorporate a premium for control and may reflect the synergistic benefits paid by the acquirer.

6.2.2.3 Assessment of capitalisation multiples In assessing an appropriate earnings multiple to apply to the valuation of PIPE Networks, Ernst & Young Transaction Advisory Services has had regard to the trading multiples and the multiples implied by comparable transactions as discussed above.

We have not differentiated multiples for the domestic and PPC-1 business on the basis of the following:

► The telecommunications industry is made up of diversified telecommunications companies incorporating aspects of the domestic and PPC-1 business in their operations. We therefore consider it appropriate to benchmark PIPE Networks as a diversified telecommunications company.

► majority of revenue base for both the domestic and PPC-1 is recurring from long-term contracts.

► we consider the domestic and PPC-1 business of PIPE Networks to carry a similar risk profile in terms of markets and infrastructure risks.

Based on the above, Ernst & Young Transaction Advisory Services has adopted an EBITDA multiple range of 8.0 to 9.0 times on a minority basis.

The Proposed Scheme contemplates the acquisition of 100% of the equity of PIPE Networks. Evidence from empirical studies suggest a control premium for transactions in Australia to be in the range of 10%-30% and that premiums vary significantly from transaction to transaction.

Accordingly, Ernst & Young Transaction Advisory Services has adopted an EBITDA multiple range of 9.5 to 10.5 times on a controlling basis.

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A36 6.2.3 Surplus assets and liabilities The following table outlines the identified surplus assets and liabilities as at 31 December 2009.

Currency: $ 000 Low High PPC-1 construction liability (51,761) (51,761) Surplus cash receivable from historical IRU and spur sales 10,527 10,527 Investment in Vocus Group 6,000 6,000 Commercial loan to Vocus Group 650 650 Commercial loan to EFTel Limited 1,853 1,853 Shares in listed companies 10,147 10,147 Total net surplus liability (22,584) (22,584) Source: Management information and Ernst & Young

As at 31 December 2009, PIPE Networks has an outstanding current liability of $51.8m in relation to the construction of PPC-1 and associated infrastructure such as the Sydney landing station. This liability is to be deducted from the assessed enterprise value when calculating equity value.

Management advise that $10.527 million is receivable in relation to the significant once-off IRU and spur sales achieved. Management are unable to forecast an expected level of IRU sales going forward, due to the uncertainty inherent in this particular income stream. On this basis, this receivable is considered to be a surplus asset for consideration in our valuation assessment.

The investment in Vocus Group represents a 23.8% minority shareholding by PIPE Networks. This asset has been valued based on the capitalisation of earnings methodology, using capitalisation multiples appropriate for companies the size and nature of Vocus Group.

As at 31 December 2009, Management advise that loans are receivable from Vocus Group and EFTel for $650,000 and $1.853 million respectively. These are surplus to the normal business operations and therefore are included in our valuation assessment as surplus assets.

PIPE acquired shares in listed companies during December 2009. As at the Valuation Date, these shares were valued at $10.147 million. These shares have been treated as surplus assets.

Management advise that no other surplus assets or liabilities exist at the date of this Report.

6.2.4 Income tax losses Ernst & Young Transaction Advisory Services has had consideration to the available income tax losses held by PIPE Networks. At 30 June 2009, PIPE Networks had carried forward tax losses of $646,000.

We note that as the proposal is for 100% of PIPE Networks’ issued shares the Continuity of Ownership Test will not apply in considering whether the tax losses may be carried forward. As such, consideration must be given to the Same Business Test and whether it can be satisfied.

We have given consideration to the following:

► Significant uncertainty exists in relation to the ability to satisfy the stringent requirement of the Same Business Test and other tax consolidation rules; and

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A37 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

► The carried forward tax losses $646,000 would not have a material impact on the valuation.

As a result, Ernst & Young Transaction Advisory Services has not assigned value to the available PIPE Networks tax losses.

6.2.5 Net interest bearing liabilities Ernst & Young Transaction Advisory Services has had regard to the net interest bearing liabilities of PIPE Networks as at 31 December 2009 of $39.5 million.

Included in interest bearing liabilities are a $39.5 million financing facility and $23,570 of finance leases. The table below sets out net interest bearing liabilities.

Management has confirmed that an appropriate level of cash to be regarded as surplus to the operations of PIPE Networks is $9.8 million. The remaining $5m cash on hand at 31 December 2009 is considered part of required working capital and is expected to fluctuate with business requirements.

Figure 16: PIPE Networks net interest bearing liabilities as at 31 December 2009 Currency: $ 000 Net interest bearing liabilities 39,524 Less: cash and cash equivalents (9,800) Net interest bearing liabilities 29,724 Source: Unaudited management accounts 31 December 2009

6.2.6 Valuation summary Based on the above, Ernst & Young Transaction Advisory Services has assessed the value of PIPE Networks to be in the range of $6.00 to $6.72 per share. This value includes a premium for control. The table below sets out a summary of our valuation.

Figure 17: Valuation summary Currency: $ 000 Low High Future normalised EBITDA 42,900 42,900 Capitalisation multiple 9.5 10.5 Enterprise value 407,550 450,450 Less: net interest bearing liability (29,724) (29,724) Add/(less): Surplus assets/(liabilities) (22,584) (22,584) Equity value 355,242 398,142 Shares on issue ('000) 59,221 59,221 Value per share ($) 6.00 6.72 Source: Ernst & Young Transaction Advisory Services 6.3 Cross check We have undertaken a cross check to the assessed value derived using the capitalisation of earnings approach. Specifically, Ernst & Young Transaction Advisory Services has considered the net tangible assets of PIPE Networks, share trading prices as well as the replacement cost for the PPC-1 asset. We consider that this cross check does not raise any inconsistencies with our primary valuation approach.

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A38 7. Evaluation of the Proposed Scheme

7.1 Approach to Assessing the Proposed Scheme In forming our opinion as to whether the Proposed Scheme is in the best interest of Non Associated Shareholders, Ernst & Young Transaction Advisory Services has considered the following:

► Whether the value of a PIPE Networks share (on a controlling basis) is higher or lower than the $6.30 cash consideration being offered under the Proposed Scheme;

► Whether a premium for control is being offered, and whether this is appropriate in the circumstance;

► The likelihood of an alternative superior proposal being made to Non Associated Shareholders; and

► Other commercial and qualitative factors considered relevant to Non Associated Shareholders.

7.2 Fairness 7.2.1 Value of Consideration Offered to Shareholders Set out below is a comparison of our estimate of the value of a PIPE Networks share and the consideration offered under the Proposed Scheme:

Figure 18: Value of consideration Currency: $ Low High Cash consideration per share under Proposed Scheme 6.30 6.30 Assessed value per share on a controlling interest basis 6.00 6.72 Source: Ernst & Young Transaction Advisory Services

Ernst & Young Transaction Advisory Services has assessed the equity value of each PIPE Networks share to be in the range of $6.00 to $6.72.

As previously noted, our valuation assessment has been undertaken on a controlling interest basis, which includes a premium for control.

7.2.2 Control premium A party obtaining control of a company usually pays a premium over and above the price at which minority parcels of shares are traded. ASIC guidelines require the Independent Expert to assess whether a premium for control is included in the consideration payable for the PIPE Networks business. The higher the premium, the greater the benefit to all existing PIPE Networks Shareholders.

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A39 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

In assessing whether the consideration under the Proposed Scheme does include a premium for control, Ernst & Young Transaction Advisory Services has considered the following factors:

► As outlined in Section 7.4, Ernst & Young Transaction Advisory Services notes that the consideration being offered is higher than the traded share price of PIPE Networks on the ASX prior to the announcement of the Proposed Scheme.

► Our valuation of PIPE Networks as outlined in Section 6 is inclusive of an assessed premium for control. As the assessed value of the consideration offered under the Proposed Scheme exceeds this value, this supports the existence of a control premium.

7.2.3 Conclusion – Fairness As the consideration per share being offered under the Proposed Scheme falls within our assessed range of values per share, we consider the Proposed Scheme to be fair.

7.3 Reasonableness In accordance with RG111 paragraph 11, as we have concluded that the Proposed Scheme is fair, we also consider it to be reasonable.

7.4 Other commercial and qualitative factors relevant to Non Associated Shareholders 7.4.1 Comparison to trading prices Ernst & Young Transaction Advisory Services has considered the reasonableness of our valuation by comparing our results to the recent share prices of PIPE Networks. Set out below is a summary of the prices (Volume-Weighted Average Price or “VWAP”) at which PIPE Networks shares traded on the ASX prior to and since the announcement of the Proposed Scheme on 11 November 2009.

Figure 19: Comparison of TPG Telecom’s Proposed Scheme consideration and PIPE’ Networks’ historical VWAP Period between One month prior to Two months prior to Three months prior to Proposed Scheme and Proposed Scheme Proposed Scheme Proposed Scheme 6 January 2010

$6.30 $5.98 $5.98 $5.83 $5.53

Source: Bidder's Statement and Factiva

In considering the above prices, Ernst & Young Transaction Advisory Services note that:

► Our valuation is inclusive of a premium for control, whereas the share prices used in our comparison are in respect of minority parcels of shares traded prior to the announcement of the Proposed Scheme. Accordingly, these share prices are not likely to include a premium for control.

► PIPE Networks shares display a low level of liquidity, with monthly trading volumes generally being less than 3% of the shares on issue.

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A40 7.4.2 Other considerations Other considerations for Non Associated Shareholders if the Proposed Scheme proceeds are set out below:

Unanimous Board recommendation PIPE Networks’ Board of Directors has indicated its unanimous recommendation in favor of the Proposed Scheme, in the absence of a superior proposal emerging and subject to the independent expert finding the Proposed Scheme in the best interests of PIPE Networks Shareholders.

Liquidity of shares PIPE Networks’ shares display a relative low level of liquidity (refer Section 4.5). The Proposed Scheme offers Non Associated Shareholders the opportunity to realise value for all their shares.

Control premium Ernst & Young Transaction Advisory Services considers that the consideration of $6.30 cash per share under the Proposed Scheme includes a premium for control.

No brokerage costs on the transfer Non Associated Shareholders will not be subject to brokerage costs on the transfer of their PIPE Networks shares to TPG Telecom under the Proposed Scheme.

Forego capital growth Non Associated Shareholders will forego any potential upside in the Company and the share price.

Forego future dividend income stream Non Associated Shareholders will forego future dividend income.

Cash proposal A cash proposal provides certainty around the value that the Non-Associated Shareholders will realise under the Proposed Scheme.

7.5 The likelihood of an alternative proposal PIPE Networks Shareholders should be aware that the Proposed Scheme will not prevent any third party from making a takeover bid for PIPE Networks before the Proposed Scheme is affected. As outlined in section 1.3, we note that TPG Telecom has a 19.8% relevant interest in PIPE Networks. However, TPG currently has no ability to control the exercise of any voting rights attaching to the 8,951,876 PIPE Networks shares the subject of the Option Deed, until these options are exercised.

Should these options be exercised, the existence of a 19.8% shareholder in PIPE Networks may decrease the likelihood of an alternative proposal being made at a higher price than the current proposal. The existence of a 19.8% shareholder may also prevent an alternative proposal being successfully accepted due to the existence of a blocking stake in the

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A41 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

company. The Directors have indicated that they are not aware of any alternative proposals at the date of this Report. 7.6 Other matters In addition to the specific areas discussed above, we have also considered other matters that we consider to be of importance for the Non Associated Shareholders in forming their view on the Proposed Scheme.

7.6.1 Shareholders should consider their own personal circumstances in evaluation the Proposed Scheme The decision of each Shareholder as to whether to accept the Proposed Scheme is a matter for individual Shareholders. The decision of each Shareholder should be based on their own views as to the matters at hand, including the underlying value of the Proposed Scheme, risk profiles, liquidity preferences, future market and industry conditions and their tax positions.

7.6.2 The potential for synergies Our assessed valuation of PIPE Networks’ shares has not included any synergies that may be realised by TPG Telecom as a consequence of the Proposed Scheme. The earnings upon which the valuations contained in this Report are based do not include any synergies that may ultimately be realised.

7.7 Conclusion summary We have determined the value of the PIPE Networks shares and have compared this to the value of the consideration being offered by TPG Telecom. As the value of the consideration falls within the range of values that we have ascribed to the PIPE Networks shares being acquired, we consider the terms of the Proposed Scheme to be fair.

Under the guidance provided by ASIC RG 111, as we consider the terms to be fair, we also consider them to be reasonable. As we are able to conclude that the terms of the Proposed Scheme are fair and reasonable, we also consider them to be in the best interests of the Non Associated Shareholders, in the absence of a superior proposal.

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A42 Appendix A Sources of Information

► Discussion with Management of PIPE Networks Limited;

► ASIC Regulatory Guides 111 and 112;

► Internal information provided by Management of PIPE Networks Limited, including Board Reports and management accounts;

► Annual and half yearly statutory financial reports of PIPE Networks Limited;

► Annual reports of, and news releases related to, the comparable companies and their respective transactions;

► Employee Share Plan;

► ShareTrak;

► Capital IQ;

► Bloomberg;

► OneSource;

► DatAnalysis;

► IBISWorld Industry Reports, IBISWorld Pty Limited;

► Budde.com.au;

► Reserve Bank of Australia;

► Website of the Minister for Broadband, Communications and the Digital Economy;

► Dow Jones Factiva;

► Budde Report 2006 Australia, Telecoms Industry – ‘Overview and Statistics’;

► TeleGeography Research, February 2008, “Australian Submarine Cable Market Analysis”; and

► Pioneer Consulting, September 2008. “Market Study for PPC-1 prepared for PIPE International”.

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A43 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

Appendix B Disclaimers and Declarations

Ernst & Young Transaction Advisory Services, which is wholly owned by Ernst & Young holds an Australian Financial Services Licence under the Corporations Act and its Representatives are qualified to provide this Report. The Directors of Ernst & Young Transaction Advisory Services responsible for this Report have not provided financial advice to either PIPE Networks or TPG Telecom in respect of the Proposed Scheme.

Prior to accepting this engagement Ernst & Young Transaction Advisory Services considered its independence with respect to PIPE Networks and TPG Telecom with reference to the ASIC RG112 entitled “Independence of experts”. In Ernst & Young Transaction Advisory Services’ opinion it is independent of PIPE Networks and TPG Telecom. We advise that Ernst & Young Transaction Advisory Services has had no relationship with PIPE Networks or TPG Telecom over the past two years.

The statements and opinions given in this Report are given in good faith and the belief that such statements and opinions are not false or misleading. In the preparation of this Report Ernst & Young Transaction Advisory Services has relied upon and considered information believed after due inquiry to be reliable and accurate. Ernst & Young Transaction Advisory Services has no reason to believe that any information supplied to it was false or that any material information has been withheld from it. Ernst & Young Transaction Advisory Services has evaluated the information provided to it by PIPE Networks as well as other parties, through inquiry, analysis and review, and nothing has come to its attention to indicate the information provided was materially misstated or would not afford reasonable grounds upon which to base this Report. Ernst & Young Transaction Advisory Services does not imply and it should not be construed that it has audited or in any way verified any of the information provided to it, or that its inquiries could have verified any matter which a more extensive examination might disclose.

PIPE Networks has provided an indemnity to Ernst & Young Transaction Advisory Services for any claims arising out of any misstatement or omission in any material or information provided to it in the preparation of this Report.

Ernst & Young Transaction Advisory Services provided draft copies of this Report to the Directors and Management of PIPE Networks for their comments as to factual accuracy, as opposed to opinions, which are the responsibility of Ernst & Young Transaction Advisory Services alone. Changes made to this Report as a result of this review by the Directors and Management of PIPE Networks has not changed the methodology or conclusions reached by Ernst & Young Transaction Advisory Services.

Ernst & Young Transaction Advisory Services will receive a professional fee based on time spent in the preparation of this Report, estimated at approximately $120,000 excluding GST. Ernst & Young Transaction Advisory Services will not be entitled to any other pecuniary or other benefit whether direct or indirect, in connection with the making of this Report.

Ms Cathy Montesin, Representative of Ernst & Young Transaction Advisory Services and an Executive Director of Ernst & Young has assumed overall responsibility for this Report. Cathy has over 15 years experience in providing financial advice and valuation advice and has professional qualifications appropriate to the advice being offered.

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A44 Mr Grant Murdoch, a Director and Representative of Ernst & Young Transaction Advisory Services and a Partner of Ernst & Young has also been involved in the preparation of this Report. He has over 35 years experience in providing financial advice and valuation advice and has professional qualifications appropriate to the advice being offered.

The preparation of this Report has had regard to relevant ASIC Regulatory Guides. It is not intended that the Report should be used for any other purpose other than to accompany the Scheme Booklet sent to PIPE Networks’ Shareholders. In particular, it is not intended that this Report should be used for any other purpose other than as an expression of its opinion as to whether or not the Proposed Scheme is fair and reasonable to Shareholders of PIPE Networks Limited.

The financial forecasts used in the preparation of this Report reflect the Directors and Management’s judgement based on present circumstances, as to both the most likely set of conditions and the course of action it is most likely to take. It is usually the case that some events and circumstances do not occur as expected or are not anticipated. Therefore, actual results during the forecast period will almost always differ from the forecast and such differences may be material. To the extent that our conclusions are based on forecasts, we express no opinion on the achievability of those forecasts.

Ernst & Young Transaction Advisory Services consents to the issue of this Report in the form and context in which it is included in the Scheme Booklet to be sent to PIPE Networks’ Shareholders.

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A45 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

Appendix C Common valuation methodologies

Discounted cash flow (“DCF”)

DCF valuations are based on the net present value of cash flows expected to be generated from future activities. The projected cash flows are discounted to a present day value at a discount rate that reflects both the time value of money and the risks inherent in the projected cash flows.

The DCF methodology is appropriate in valuing businesses with a finite life such as mines, businesses that are in a start up phase and are expecting considerable volatility in cash flows, or businesses with a changing cash flow profile over time.

This methodology requires consideration of the following factors:

► Quantification and assessment of the cash flow forecasts of the business;

► Calculation of a terminal value. The terminal value captures the value of cash flows occurring after the forecast period. This value is discounted to a present day value and added to the present value of the cash flows occurring during the forecast period;

► Determination of a discount rate which is used to convert the future cash flows into a present day value. The discount rate reflects both the time value of money and the risks inherent in the projected cash flows; and

► A deduction for the value of net interest bearing debt of the business (if the discounted cash flows have been determined on a pre financing basis) and an adjustment for the value of any surplus assets and liabilities.

Capitalisation of Earnings Capitalisation of earnings valuations involve capitalising, or multiplying, the earnings of a business using a multiple that reflects both the risks underlying the earnings and the growth prospects of the business. This methodology is most appropriate for mature businesses with substantial operations history and a consistent earnings trend that is sufficiently stable to be indicative of ongoing earnings potential.

This methodology requires consideration of the following factors:

► Estimation of normalised earnings having regard to historical and projected earnings, abnormal or non-recurring items of income and expenditure and other factors including key industry risk factors, growth prospects and the general economic outlook;

► Determination of an appropriate earnings multiple that reflects the risks inherent in the business, its growth prospects and alternative investment opportunities available. Earnings multiples are generally applied to net profit after tax (“NPAT”), earnings before interest and tax (“EBIT”) or earnings before interest, tax, depreciation and amortisation (“EBITDA”). Earnings multiples applied to NPAT are known as price earnings multiples (PE multiples) and are commonly used in relation to listed public companies. Earnings multiples applied to EBIT or EBITDA are commonly used for valuing whole businesses for acquisition purposes where gearing is in the control of the acquirer. The EBIT and EBITDA alternatives are not likely to lead to a valuation conclusion which is materially different to that derived by using a PE multiple;

► Adjustment for the value of net interest bearing debt of the business (if EBIT or EBITDA are being applied); and

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A46 ► Adjustment for the value of any surplus assets and liabilities.

Net Realisable Value Net realisable value of assets valuations involves the determination of the net realisable value of the assets of a business assuming an orderly realisation of those assets. This approach is appropriate where the business is a going concern, where there are surplus or non-operating assets and where the assets are generally not generating an appropriate level of return. A discount may be included to allow for the time value of money and for reasonable costs of undertaking the realisation.

The net realisable value of the assets can be determined on the basis of:

► Orderly realisation: this method estimates fair market value by determining the net assets of the underlying business including an allowance for the reasonable costs of carrying out the sale of assets, taxation charges and the time value of money assuming the business is wound up in an orderly manner. This is not a valuation on the basis of a forced sale where the assets might be sold at values materially different from their fair market value;

► Liquidation: this is a valuation on the basis of a forced sale where the assets might be sold at values materially different from their fair market value; or

► Going concern: the net assets on a going concern basis estimates the market value of the net assets but does not take into account any realisation costs. This method is often considered appropriate for the valuation of an investment or property holding company. Adjustments may need to be made to the book value of assets and liabilities to reflect their going concern value.

The net realisable value of assets is relevant where a company is making sustained losses or profits but at a level less than the required rate of return or where it is close to liquidation. The assets based valuation approach should provide a minimum value for the equity in the company and is adopted as the primary valuation method when the asset based approach exceeds the value obtained under the capitalisation of earnings or discounted cash flow approach.

Market-Based Assessments Market based assessment valuations relate to the valuation of businesses, shares or other assets using the prices at which comparable companies, shares or assets have been bought and sold in arms’ length transactions. This is often the most reliable evidence as to value but in the case of companies it is often difficult to find directly comparable transactions.

For companies whose shares are traded on a securities exchange, the relevant share price would, prima facie, constitute the market value of the shares, however, such market prices usually reflect the prices paid for small parcels of shares and as such do not include a control premium relevant to a significant parcel of shares. In addition, where there is a low level of liquidity in a company’s shares, the share price may not appropriately reflect the market value that would be achieved in a highly liquid environment.

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A47 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

Appendix D Industry trading multiples and descriptions

Comparable companies Country Year end Market Enterprise Historical FY10 forecast Historic EBITDA Forecast FY10 capitalisation value ($m) EBITDA ($m) EBITDA multiple multiple ($m) Domestic operators Telstra Corporation Ltd Australia 30-Jun-09 42,058 58,535 11,167 11,173 5.2 5.2 Singapore Telecommunications Ltd Singapore 31-Mar-09 30,498 35,042 4,464 6,335 7.8 5.5 Telecom Corporation of New Zealand New Zealand 30-Jun-09 4,869 7,109 1,777 1,784 4.0 4.0 Hutchison Telecommunications Australia Ltd Australia 31-Dec-08 1,832 2,717 189 269 14.4 10.1 TPG Telecom Limited (formerly SP Telemedia) Australia 31-Jul-09 1,204 1,254 98 139 12.8 9.0 Pipe Networks Ltd Australia 30-Jun-09 367 488 18 53 26.7 9.3 iiNet Ltd Australia 30-Jun-09 295 311 67 76 4.6 4.1 M2 Telecommunications Group Ltd Australia 30-Jun-09 188 198 13 na 14.8 na Amcom Telecommunications Ltd Australia 30-Jun-09 166 180 19 22 9.6 8.3 Macquarie Telecom Group Ltd Australia 30-Jun-09 105 72 26 na 2.8 na

International operators Cogent Communications Group Inc. United States 31-Dec-08 469 593 42 66 14.1 9.0 Abovenet Inc. United States 31-Dec-08 1,586 1,499 103 159 14.6 9.5 Alaska Communications Systems Group Inc. United States 31-Dec-08 358 889 119 127 7.5 7.0 *Market capitalisation dated 6 December 2009 *All amounts above are denominated in the local reported currency *Historical EBITDA reflects the full year audited results for the given year end shown in the table *PIPE Networks enterprise value includes a A$51.6m liability for the construction of PPC-1 Source: Bloomberg, Capital IQ and ASX announcements

Domestic operators

► Telstra Corporation is a full service operator, providing all three major products (Data, fixed voice and mobile). It is the largest operator and network owner in the Australian industry, on-selling to junior telecommunication providers. Forecast EBITDA based on analyst guidance is anticipated to remain relatively consistent with FY09A. Telstra owns the Endeavour submarine cable, and 40% of the Australian-Japan submarine cable.

► Singapore Telecommunications is the owner of Optus, the second largest full service telecommunications operator in Australia. EBITDA is forecast to increase compared to FY09A. On 9 October 2009, the company announced the completion of a US$500 million notes issue distributed to institutional investors in Asia and Europe. Singapore Telecommunications owns 39.9% of the Southern Cross submarine cable.

► Telecom Corporation of New Zealand (“Telecom NZ”)is a full service provider of telecommunications services to customers in New Zealand and Australia. It owns brands, AAPT and Powertel. Powertel is a data and fixed voice provider via its own network. AAPT is primarily a reseller of data, fixed voice and mobile services. FY10F EBITDA is forecast to increase slightly compared to FY09A. Telecom NZ owns 50.1% of the Southern Cross submarine cable.

► Hutchison Telecommunications primarily provides residential mobile phone services. On 10 June 2009, the company announced the completion of a merger with Vodafone Australia Limited. In the 6 months to 30 June 2009, the company reported a 12% increase in EBITDA compared to the half year to 30 June 2008. FY10F EBITDA is forecast to increase compared to FY09A.

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A48 ► TPG Telecom Limited is a multimedia full-service telecommunications company in Australia. A merger between TPG Holdings Limited and SP Telemedia in 2008, resulted in the company trading under major brands TPG and Soul. FY10F EBITDA is forecast to increase compared to FY09A. We note that TPG Telecom’s market capitalisation has increased following the announcement of the Proposed Scheme, resulting in an increased EBITDA trading multiple.

► iiNet is an internet service provider in Australia. FY10F EBITDA is forecast to increase compared to FY09A.

► M2 Telecommunications Group is primarily a reseller of data, fixed voice and mobile services. On 2 June 2009 the company announced the acquisition of business assets from Commander Communications Limited.

► Amcom Telecommunications is primarily a data provider which owns its network. FY10F EBITDA is forecast to remain relatively consistent with FY09A.

► Macquarie Telecom Group is a small reseller of data, fixed voice and mobile services to Corporate and Government customers. No forecast EBITDA guidance for FY10F is available at the time of this report.

International operators

► Cogent Communications Group Inc. provides high-speed Internet access and Internet Protocol, or communications services. It also operates data centres that allow customers to co-locate their equipment and access the company’s network. FY10F EBITDA is forecast to increase markedly compared to FY09A.

► Abovenet Inc. is a United States-based provider of bandwidth, fibre optic (dark fibre) communications infrastructure, and co-location services to communications carriers, and corporate and government customers. FY10F EBITDA is forecast to increase markedly compared to FY09A.

► Alaska Communications Systems Inc. is an Alaskan (US) based provider of integrated communications services including both Wireline (voice, data, broadband, multi- protocol label switching services, network access, long distance, and other services) and Wireless (facilities-based voice and data services; and equipment sales). The company offers additional services through wholly-owned submarine cable networks. FY10F EBITDA is forecast to increase marginally on FY09A.

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A49 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

Appendix E Industry transaction multiples and descriptions

Implied Implied historical forecast Date Target Acquirer Deal value Cash/scrip % interest EV/EBITDA EV/EBITDA 25/05/2009 Pacific Crossing Ltd NTT Communications Corporation USD105m* Cash 100.0% n/a n/a 1/09/2008 Amcom Telecommunications Limited Sarich Investments Inc AUD 10m Cash 10.9% 7.3 n/a 8/05/2008 Westnet Pty Ltd iiNet Limited USD 83m Cash 100.0% 15.6 6.8 7/02/2008 TPG Holdings Pty Ltd SP Telemedia Limited AUD 245m Cash and scrip 100.0% 11.6 5.0 10/10/2007 Hutchison 3G Australia Pty Ltd Hutchison Telecommunications (Aust) Limited AUD 331m Scrip 19.9% n/a n/a 31/01/2007 Powertel Limited Telecom Corporation of New Zealand AUD 357m Cash 100.0% 8.3 8.2 21/05/2004 Uecomm Limited Optus Networks Pty Ltd AUD 282m Cash 100.0% 12.9 8.7 * Deal v alue of USD105m for Pacific Cross Ltd transaction is an estimate based on limited publicly av ailable information Source: Merger market, broker reports, company filings

Date Target Acquirer Target % Deal description interest

25/05/2009 Pacific Crossing NTT 100% NTT Communications Corporation, the Japan based information, communication and technological Ltd Communications solutions provider, acquired Pacific Crossing Ltd, the Bermuda based telecommunications network Corporation company.

1/09/2008 Amcom Sarich Investments 10.9% Elders Limited progressively divested its 50% shareholding in Amcom Telecommunications Telecommunication Inc commencing 1 September 2008. One such divestment transaction was the purchase of a 10.9% s Limited stake by Sarich Investments Inc for AUD 10 million.

8/05/2008 Westnet Pty Ltd iiNet Limited 100% iiNet Ltd, the listed Australian based broadband and telephone services provider, has agreed to acquire Westnet, the Australia based internet service provider, for a cash consideration of AUD 81 million.

7/02/2008 TPG Holdings Pty SP Telemedia 100% SP Telemedia Limited, the listed Australian based telecommunications company, acquired TPG Ltd Limited Holdings Pty Ltd, the Australian IT systems and internet & network services providers, for a cash consideration of AUD 244.5 million.

10/10/2007 Hutchison 3G Hutchison 19.9% Hutchison Telecommunications (Australia) Limited, the listed Australian provider of Australia Pty Ltd Telecommunication telecommunications and multimedia services, acquired a stake of 19.94% in Hutchison 3G Australia s (Aust) Limited Pty Limited, the Australia based telecom 3G provider for AUD 297 million.

31/07/2007 Powertel Limited Telecom 100% Telecom Corporation of New Zealand Ltd, the New Zealand based telecommunications carrier, Corporation of New acquired Powertel Ltd, an operator of urban and inter-city fibre-optic networks across Australia, for Zealand AUD 327 million.

21/05/2004 Uecomm Limited Optus Networks 100% Optus Networks Pty Ltd made a recommended cash offer for Uecomm Ltd, a listed provider of Pty Ltd specialist fibre broadband carrier delivering data and Internet services for a cash consideration of AUD 222.8 million. Source: Merger market, brokers reports, company filings

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A50

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A51 ANNEXURE A – INDEPENDENT EXPERT’S REPORT

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A53 This page has been left blank intentionally. ANNEXURE B Implementation Agreement

ANNEXURE B This page has been left blank intentionally. ANNEXURE B – IMPLEMENTATION AGREEMENT

Contents 9.3 SPT representations and warranties B20 Details B2 9.4 SPT undertakings B20 Agreed terms B3 9.5 Timing of representations and warranties B21 1. Defined terms & interpretation B3 9.6 Survival of representations and warranties B21 1.1 Defined terms B3 10. Termination rights B21 1.2 Interpretation B8 10.1 Termination events B21 1.3 Headings B9 10.2 Notice of breach B22 2. Due diligence by SPT B9 10.3 Termination right B22 2.1 Enquiries by SPT B9 10.4 Effect of termination B22 2.2 Obligations on PIPE to provide information B9 11. Public announcements B22 2.3 Right of termination for failure to provide 11.1 Announcement of transaction B22 DD information B9 11.2 Public announcements B22 2.4 Right of termination for adverse DD B10 11.3 Statements on termination B22 3. SPT’s finance B10 12. Exclusivity B22 3.1 SPT’s obligation to seek finance B10 12.1 No-shop B22 3.2 Limitation on SPT’s obligation B10 12.2 No-talk B22 3.3 PIPE to provide reasonable assistance B10 12.3 Due diligence information B22 3.4 Right of termination for failure 12.4 Notification of approaches B23 to obtain finance B10 12.5 Access to information B23 4. Agreement to propose Scheme B10 12.6 PIPE’s response to Rival Bidder and SPT’s 4.1 Proposal of Scheme B10 right to respond B23 4.2 Compliance with obligations B11 12.7 Fiduciary out B24 12.8 No current discussions B24 5. Conditions B11 12.9 Legal advice B25 5.1 Conditions Precedent to implementation of the Scheme B11 13. Break Fee B25 5.2 Waiver of Conditions Precedent B11 13.1 SPT declaration B25 5.3 Best endeavours to satisfy 13.2 Acknowledgments B25 Conditions Precedent B12 13.3 Agreement on Costs B25 5.4 Regulatory Approvals B12 13.4 Reimbursement of Costs B25 5.5 Assistance of Representatives B12 13.5 Claims B26 5.6 Notice of satisfaction of Condition Precedent B12 13.6 Compliance with law B26 5.7 Notice of failure to satisfy Condition Precedent B12 14. GST B26 5.8 Conditions Precedent not met B13 14.1 Interpretation B26 6. The transaction steps B13 14.2 GST exclusive B26 6.1 Scheme B13 15. Notices B27 6.2 Scheme Consideration B13 15.1 Service of notices B27 6.3 Timetable B13 15.2 Effective on receipt B27 7. The Scheme B13 16. General B27 7.1 PIPE’s obligations in relation to the Scheme B13 16.1 Alterations B27 7.2 PIPE registry details B15 16.2 Approvals and consents B27 7.3 SPT’s obligations in relation to the Scheme B15 16.3 Assignment B27 7.4 Scheme Booklet B15 16.4 Entire agreement B28 7.5 Indemnities B16 16.5 Survival and indemnities B28 7.6 Good faith co-operation B16 16.6 Costs and stamp duty B28 7.7 Recommendation of the Directors B16 16.7 Counterparts B28 7.8 Court refuses to make orders B17 16.8 No merger B28 7.9 Appointment of Directors to PIPE Board B17 16.9 Severability B28 8. Conduct of business B17 16.10 Waiver B28 8.1 Conduct of business by PIPE B17 16.11 Relationship B28 8.2 Transaction implementation and access 16.12 No representation or reliance B28 to information B18 16.13 Governing law and jurisdiction B28 16.14 Specific performance B28 9. Representations, warranties and undertakings B18 16.15 Mutual further assurances B28 9.1 PIPE representations and warranties B18 9.2 PIPE undertakings B19 Signing page B29

B1 ANNEXURE B – IMPLEMENTATION AGREEMENT

Details Date 11 November 2009

Parties Name PIPE Networks Limited

ABN 21 099 104 122

Short form name PIPE

Notice details Level 9, PIPE Networks House 127 Creek Street BRISBANE QLD 4000 Facsimile: +61 7 3233 9880 Attention: Louise Bolger

Name SP Telemedia Limited

ABN 46 093 058 069

Short form name SPT

Notice details 65 Waterloo Road NORTH RYDE NSW 2113 Facsimile: +61 2 9888 9148 Attention: Alan Latimer

Background A PIPE and SPT have agreed that SPT will acquire all of the PIPE Shares under the Scheme, subject to SPT finalising its due diligence investigations on PIPE and finalising its debt financing, and subject to the approval of the holders of the PIPE Shares and the Court.

B At the request of SPT, PIPE intends to propose the Scheme and issue the Scheme Booklet.

C PIPE and SPT have agreed to do the things required by this agreement in order to enable the Scheme to be proposed, approved and implemented.

B2 Agreed terms 1. Deﬁned terms & interpretation 1.1 Deﬁned terms In this document:

Accounting Standards has the meaning given in section 9 of the Corporations Act.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited ACN 008 624 691.

Break Fee means $3.7 million.

Business Day means: (a) for receiving a notice under clause 15, Monday to Friday inclusive except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day and any other day that ASX declares is not a business day; and (b) for all other purposes, a day that is not a Saturday, Sunday, bank holiday or public holiday in New South Wales or Queensland.

Claim means any obligation, debt, cause of action, disability, claim, proceeding, suit or demand of any nature howsoever arising and whether present or future, ﬁxed or unascertained, actual or contingent, whether at law, in equity, under statute or otherwise.

Competing Transaction means any expression of interest, proposal or offer by a third party (other than SPT or its Related Entities) to evaluate or enter into any transaction that is similar to the Transaction or under which (other than as required or contemplated by the Scheme): (a) a person would acquire a relevant interest or voting power in 10% or more of PIPE Shares or of the securities of any of member of the PIPE Group; (b) a person would enter into, buy, dispose of, terminate or otherwise deal with any cash settled equity swap or other synthetic, economic or derivative transaction connected with or relating to 10% or more of PIPE Shares or of the securities of any of member of PIPE Group; (c) a person would directly or indirectly acquire or obtain an interest (including an economic interest) in all or a substantial part or material part of the business conducted by, or property of, PIPE or any member of the PIPE Group; (d) a person would acquire Control of PIPE or any member of the PIPE Group; (e) a person may otherwise acquire, or merge with, PIPE or any member of the PIPE Group (including by way of takeover bid, scheme of arrangement, capital reduction, sale of assets, sale of securities, strategic alliance, dual listed company structure or joint venture); or (f) PIPE will issue, on a fully diluted basis, 10% or more of its capital as consideration for the assets or share capital or another person, or any proposal by PIPE to implement any reorganisation of capital or dissolution. The variation of a proposal or offer constitutes a proposal or offer for the purposes of this deﬁnition.

Conditions Precedent means the conditions precedent set out in clause 5.1 of this agreement.

Conﬁdentiality Agreement means the conﬁdentiality deed between SPT and PIPE dated 17 August 2009.

Control has the meaning given in section 50AA of the Corporations Act.

Corporations Act means the Corporations Act 2001 (Cth).

Counsel means senior counsel engaged by each of PIPE and SPT in respect of the implementation of the Scheme.

Counterproposal is deﬁned in clause 12.6(c).

Court means the Supreme Court of Queensland or such other court as is recommended by Counsel.

DD Period means the period from the date of this agreement until 6.00pm on 11 December 2009, or such earlier time as the parties agree.

B3 ANNEXURE B – IMPLEMENTATION AGREEMENT

DD Reference Materials means: (a) the information memorandum dated August 2009 prepared by PIPE and provided to SPT; (b) PIPE’s annual report dated 28 September 2009 which was announced to ASX on 30 September 2009; (c) the ‘Earnings Guidance and Market Update FY10’ issued by PIPE and dated 25 June 2009 which was announced to ASX on 25 June 2009 (which includes guidance for PIPE for FY10 and only PPC-1 for FY11); (d) the ‘Upgrade on Earnings Guidance for FY2010’ issued by PIPE and dated 27 October 2009 which was announced to ASX on 27 October 2009; (e) the copies of the Chairman’s and CEO’s presentations relating to the 2009 Annual General Meeting of PIPE announced to ASX on 27 October 2009; (f) the management presentation dated 17 September 2009 prepared by PIPE and provided to SPT; and (g) the “Gilligan Data Room Index – Q&A Register” dated 7 September 2009 prepared by PIPE and provided to SPT.

Deed Poll means the deed poll substantially in the form of Annexure 2 subject to changes recommended by Counsel (or in such other form as agreed between PIPE and SPT).

Effective means, when used in relation to a Scheme, the order of the Court made under section 411(4)(b) in relation to the Scheme coming into effect pursuant to section 411(10) of the Corporations Act.

Effective Date means the date on which the Scheme becomes Effective.

Exclusivity Period means the period from and including the date of this agreement to the Sunset Date or the date this agreement is terminated, whichever is earlier.

Explanatory Statement means the statement pursuant to section 412 of the Corporations Act, which will be registered by ASIC in relation to the Scheme, copies of which will be included in the Scheme Booklet.

Finance Period means the period from the date of this agreement until 6.00pm on 18 December 2009, or such earlier time as the parties agree.

Financial Indebtedness means any debt or other monetary liability (whether actual or contingent) in respect of moneys borrowed or raised or any financial accommodation including under or in respect of any: (a) bill, bond, debenture, note or similar instrument; (b) acceptance, endorsement or discounting arrangement; (c) guarantee; (d) finance or capital lease; (e) agreement for the deferral of a purchase price or other payment in relation to the acquisition of any asset or service; or (f) obligation to deliver goods or provide services paid in advance by any financier, other than in the ordinary course of business.

Funding Requirement means SPT’s obligation to pay the Scheme Consideration to Scheme Participants under the Scheme as contemplated by this agreement.

GST means a goods and services tax or similar value added tax levied or imposed under the GST Law.

GST Law has the meaning given to it in the A New Tax System (Goods and Services Tax) Act 1999 (Cth).

Implementation Date means the ﬁfth Business Day after the Record Date.

Independent Expert means a person to be appointed by PIPE pursuant to clause 7.1(c) as independent expert to prepare a report to be provided to the PIPE Board and PIPE Shareholders to advise as to whether the Scheme is in the best interest of PIPE Shareholders.

B4 Insolvency Event means in relation to a person: (a) the person is or becomes unable to pay its debts as and when they fall due within the meaning of the Corporations Act or is otherwise presumed to be insolvent under the Corporations Act, or would be presumed to be insolvent if that Act applied; (b) the person suspends or threatens to suspend payment of its debts generally; (c) the calling of a meeting to consider a resolution to wind up the person (other than where the resolution is frivolous or cannot reasonably be considered to be likely to lead to the actual winding up of the person) or the making of an application or the making of any order, or the passing of any resolution, for the winding up, liquidation or bankruptcy of the party other than where the application or order (as the case may be) is set aside within 14 days; (d) the appointment of a provisional liquidator, liquidator, receiver or a receiver and manager or other insolvency ofﬁcial (whether under Australian law or foreign law) to the person or to the whole or a substantial part of the property or assets of the person; (e) the appointment of an administrator to the person; (f) the entry by a person into any compromise or arrangement with creditors; or (g) the person ceases or threatens to cease to carry on business.

Listing Rules means the ofﬁcial listing rules of ASX.

Material Contract means a contract or commitment in respect of the domestic business of PIPE, which is not entered into in the ordinary course of that business and requires total payments in excess of $2 million, or any other type of contract or commitment agreed by the parties.

Notice of Meeting means the notice convening the Scheme Meeting together with the proxy forms for that meeting.

PIPE Board means the board of directors of PIPE.

PIPE Director means a director of PIPE.

PIPE Group means PIPE and its Related Entities.

PIPE ESOP means the PIPE Networks Executive Option Plan.

PIPE Indemniﬁed Parties means PIPE, its Related Entities and each of their respective Representatives.

PIPE Information means all information contained in the Scheme Booklet, but does not include SPT Information or the Independent Expert’s report that is included in or accompanies the Scheme Booklet.

PIPE Material Adverse Event means events or occurrences or matters that occur or fail to occur on or after the date of this agreement other than: (a) those required to be done or procured by PIPE pursuant to this agreement; (b) those relating to changes in business conditions affecting the Australian telecommunications sector generally; (c) those fairly disclosed, or that are reasonably apparent on the face of the document as reasonably likely to ﬂow from an event, occurrence or matter that is fairly disclosed, in writing by PIPE to SPT before the date of this agreement, that individually, or when aggregated with all such events, occurrences or matters, is or are reasonably likely to have the effect of: (d) diminishing the consolidated earnings before interest, tax, depreciation and amortisation of the PIPE Group by $2.5 million or more; (e) diminishing the net proﬁt after tax of the PIPE Group by $2 million or more; or (f) diminishing the value of the net assets of the PIPE Group by $5 million or more.

PIPE Option means an option to acquire a PIPE Share issued under the PIPE ESOP or otherwise.

PIPE Prescribed Occurrence means the occurrence of any of the following: (a) a member of the PIPE Group converting all or any of its securities into a larger or smaller number of securities; (b) a member of the PIPE Group resolving to reduce its capital in any way or reclassifying, combining, splitting or redeeming or repurchasing directly or indirectly any of its securities;

B5 ANNEXURE B – IMPLEMENTATION AGREEMENT

(c) a member of the PIPE Group declaring, paying or distributing any dividend, bonus or other share of its proﬁts or assets by way of dividend, capital reduction or otherwise (other than the dividend with a record date of 6 November 2009 as announced to ASX); (d) a member of the PIPE Group: (i) entering into a buy-back agreement; or (ii) resolving to approve the terms of a buy-back agreement under the Corporations Act;

(e) a member of the PIPE Group issuing securities, or granting an option (including a performance right) over its securities, or agreeing to make such an issue or grant such an option (including a performance right); (f) a member of the PIPE Group issuing or agreeing to issue, securities or other instruments convertible into securities (including any performance right) but excluding any issue of PIPE Shares upon the exercise of any PIPE Options in existence as at the date of this agreement; (g) a member of the PIPE Group making any change or amendment to its constitution; (h) a member of the PIPE Group, without first obtaining SPT’s written consent: (i) acquiring or disposing of; (ii) agreeing to acquire or dispose of; or (iii) offering, proposing, announcing a bid or tendering for the acquisition of, any securities, business, intellectual property, assets (in the nature of a business or part of a business), interests in a joint venture, entity or undertaking the value of which exceeds $2 million in aggregate other than the acquisition or disposal of any assets in the course of conducting its existing business, consistent with past practice or as publicly announced to the market prior to the date of this agreement; (i) SPT or PIPE becoming aware that, as a result of SPT acquiring PIPE Group under the Scheme, any person exercises its right (whether subject to conditions or not) to terminate or vary any material agreement with a member of the PIPE Group, the variation or termination of which is, or is likely to constitute, a PIPE Material Adverse Event; (j) other than in the ordinary course of business, a member of the PIPE Group providing financial accommodation other than to members of the PIPE Group irrespective of what form of Financial Indebtedness that accommodation takes; (k) a member of the PIPE Group entering into or agreeing to enter into a Material Contract without first obtaining SPT’s prior written consent (which may not be unreasonably withheld or delayed); (l) an Insolvency Event occurs in relation to PIPE or any of its material Subsidiaries; or (m) a member of the PIPE Group making any significant change to its accounting practices or policies applied by it to report its financial position other than as a result of advice received from its auditors or to comply with the Accounting Standards, provided that a Prescribed Occurrence will not include a matter: (i) which is required to be done or procured by PIPE pursuant to this agreement, the Scheme or the Share Subscription Agreement; (ii) the undertaking of which has been approved in writing by SPT; or (iii) that has been fairly disclosed in writing by PIPE to SPT before the date of this agreement.

PIPE Registry means the manager from time to time of the Register.

PIPE Share means one fully paid ordinary share in the capital of PIPE.

PIPE Shareholders means each person who is registered in the Register as the holder of PIPE Shares.

Present and Future Financial Position, Financial Performance or Operations of the PIPE Group means: (a) the present financial position, financial performance or operations of the PIPE Group, including for the financial year ended 30 June 2009; (b) the financial position and financial performance of the PIPE Group for the financial year ending 30 June 2010; (c) the financial position and financial performance of the international business operated by the PIPE Group (known as “PPC-1”) for the financial year ending 30 June 2011.

B6 Public Announcement means the public announcement to be made by PIPE and SPT in the form of Annexure 1.

Record Date means 5pm on the ﬁfth Business Day following the Effective Date or such other date (after the Effective Date) as PIPE and SPT may agree in writing.

Regulator’s Draft means the draft of the Scheme Booklet in a form acceptable to both parties which is provided to ASIC pursuant to section 411(2) of the Corporations Act.

Regulatory Approval means any approval, clearance, consent, authorisation or other permit contemplated by clause 5.1(a).

RG 60 means Regulatory Guide 60 issued by ASIC on 4 August 1999.

RG 142 means Regulatory Guide 142 issued by ASIC on 4 August 1999.

Regulatory Review Period means the period from the date on which the Regulator’s Draft is submitted to ASIC to the date on which ASIC provides a letter indicating whether or not it proposes to appear to make submissions, or will intervene to oppose the Scheme, when the application made to the Court for orders under section 411(1) of the Corporations Act convening the Meetings to consider the Scheme is heard.

Related Entity means in relation to a party, any entity that is related to that party within the meaning of section 50 of the Corporations Act or which is an economic entity (as deﬁned in any approved Australian accounting standard) that is Controlled by that party.

Required Consultation Period means the period commencing at the time both parties become aware that clause 5.8(a)(i) or 5.8(a)(ii), as the case may be, is triggered and ending on the earlier of: (a) the end of that day that is 5 Business Days after both parties become so aware ; and (b) 8.00am on the Second Court Date.

Rival Bidder is deﬁned in clause 12.4.

Scheme means the scheme of arrangement pursuant to Part 5.1 of the Corporations Act proposed between PIPE and the PIPE Shareholders, the form of which is contained in Annexure 3 subject to changes recommended by Counsel, together with any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and approved in writing by SPT and PIPE.

Scheme Booklet means the information to be despatched to all PIPE Shareholders and approved by the Court in connection with the Scheme, including the Scheme, the Explanatory Statement in respect of the Scheme, an independent expert’s report prepared by the Independent Expert and the Notice of Meeting.

Scheme Consideration means: (a) subject to paragraph (b), $6.30 cash for each PIPE Share held by a Scheme Participant; or (b) if the record date for any entitlement to be paid or participate in a dividend, distribution, return of capital or other entitlement occurs in respect of a PIPE Share after the date of this agreement but on or before the Implementation Date (which, for the avoidance of doubt, does not include the dividend with a record date of 6 November 2009 as announced to ASX before the date of this agreement), $6.30 cash for each PIPE Share held by a Scheme Participant less the amount per PIPE Share of any such dividend, distribution, return of capital or entitlement. B7 ANNEXURE B – IMPLEMENTATION AGREEMENT

Scheme Meeting means the meeting of the PIPE Shareholders convened by the Court in relation to the Scheme pursuant to section 411(1) of the Corporations Act. It includes any adjournment of that meeting.

Scheme Participant means each person who is a PIPE Shareholder as at 5:00pm on the Record Date, other than SPT.

Share Subscription Agreement means the share subscription agreement between SPT and PIPE dated 4 November 2009.

SPT Indemniﬁed Parties means SPT, its Related Entities and each of their respective Representatives.

SPT Information means the information about SPT described in, and provided to PIPE by SPT under, clause 7.3(a).

Subsidiaries has the meaning given in section 9 of the Corporations Act.

Sunset Date means 30 April 2010.

Superior Proposal means a bona fide, unsolicited written Competing Transaction received by PIPE after the date of this agreement which the PIPE Board determines, acting in good faith and acting reasonably (after consultation with and the receipt of written advice from its external financial advisers and from its external legal adviser practising in the area of corporate law): (a) is reasonably capable of being valued and completed, taking into account all aspects of the Competing Transaction and the person making it; and (b) would, if completed substantially in accordance with its terms, be more favourable to the PIPE Shareholders (as a whole) than the Scheme, taking into account all the terms and conditions of the Competing Transaction. takes effect or taking effect means on and from the first time when an office copy of the Court order approving the Scheme pursuant to section 411(6) of the Corporations Act is lodged with ASIC pursuant to section 411(10) of the Corporations Act.

Timetable means the indicative timetable for the implementation of the Transaction set out in Annexure 4.

Transaction means the acquisition by SPT of all of the PIPE Shares by means of the Scheme in accordance with the terms of this agreement.

1.2 Interpretation In this agreement, except where the context otherwise requires: (a) the singular includes the plural and vice versa; (b) another grammatical form of a deﬁned word or expression has a corresponding meaning; (c) a reference to a clause, paragraph, schedule or annexure is to a clause or paragraph of, or schedule or annexure to, this agreement, and a reference to this agreement includes any schedule or annexure; (d) a reference to a document or instrument includes the document or instrument as novated, altered, supplemented or replaced from time to time; (e) a reference to A$, $A, dollar or $ is to Australian currency; (f) a reference to time is to Sydney, Australia time; (g) a reference to a party is to a party to this agreement, and a reference to a party to a document includes the party’s executors, administrators, successors and permitted assigns and substitutes; (h) a reference to a person includes a natural person, partnership, body corporate, association, governmental or local authority or agency or other entity; (i) a reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them; (j) a word or expression deﬁned in the Corporations Act has the meaning given to it in the Corporations Act;

B8 (k) the meaning of general words is not limited by specific examples introduced by including, for example or similar expressions; (l) any agreement, representation, warranty or indemnity by two or more parties (including where two or more persons are included in the same defined term) binds them jointly and severally; (m) any agreement, representation, warranty or indemnity in favour of two or more parties (including where two or more persons are included in the same defined term) is for the benefit of them jointly and severally; (n) any statement made by a party to the best of its knowledge, is made on the basis that the party has, in order to establish that the statement is true and not misleading in any respect: (i) made all reasonable enquiries of the officers, managers, employees and other persons who could reasonably be expected to have information relevant to the matters to which the statement relates; and (ii) where those enquiries would have prompted a reasonable person to make further enquiries, made those further enquiries, and that, as a result of those further enquiries, the party has no reason to doubt that the statement is true and not misleading in any respect; (o) a rule of construction does not apply to the disadvantage of a party because the party was responsible for the preparation of this agreement or any part of it; and (p) if a day on or by which an obligation must be performed or an event must occur is not a Business Day, the obligation must be performed or the event must occur on or by the next Business Day.

1.3 Headings Headings are for ease of reference only and do not affect interpretation.

2. Due diligence by SPT 2.1 Enquiries by SPT At any time during the DD Period, SPT may require PIPE to provide any and all information to SPT which is, in any way, connected with the PIPE Group, its business or operations and which is necessary, in the reasonable opinion of SPT, for the purpose of allowing SPT to: (a) form an informed view as to whether the Present and Future Financial Position, Financial Performance and Operations of the PIPE Group are fully and fairly described in the DD Reference Materials; or (b) arrange funding to satisfy the Funding Requirement.

2.2 Obligations on PIPE to provide information (a) PIPE must provide any information required by SPT under clause 2.1 that is within the possession or control of PIPE, or that is reasonably accessible or capable of being reasonably compiled by PIPE from information within its possession or control, to the extent it is reasonable for: (i) a purchaser of all of the PIPE Shares to request that information and to the extent the information would be considered material by a purchaser of all of the PIPE Shares, acting reasonably; or (ii) a party seeking to arrange funding to satisfy the Funding Requirement to request that information and to the extent the information would be considered material by a financier considering whether to make available funding to satisfy the Funding Requirement. (b) PIPE must provide the information to SPT under clause 2.2(a) as soon as reasonably practicable after the information is requested by SPT: (i) through the electronic data room established by PIPE unless clause 2.2(b)(ii) applies; (ii) in relation to specific information of a kind described in writing by PIPE to SPT prior to the date of this agreement, by making it available for inspection in legible hard copy form or on computer at PIPE’s registered office.

2.3 Right of termination for failure to provide DD information SPT may, within 4 Business Days after the end of the DD Period, terminate this agreement by notice in writing to PIPE if PIPE: (a) breaches its obligations under clause 2.2; or (b) has not provided to SPT all information required by SPT under clause 2.1, to the extent it is reasonable for: (i) a purchaser of all of the PIPE Shares to request that information and to the extent the information would be considered material by a purchaser of all of the PIPE Shares, acting reasonably; or

B9 ANNEXURE B – IMPLEMENTATION AGREEMENT

(ii) a party seeking to arrange funding to satisfy the Funding Requirement to request that information and to the extent the information would be considered material by a ﬁnancier considering whether to make available funding to satisfy the Funding Requirement, within the following timeframes: (iii) where SPT made the request less than 5 Business Days, but at least 4 Business Days, before the end of the DD Period – at least 2 Business Days before the end of the DD Period, provided that no requests may be made less than 3 Business Days before the end of the DD Period; or (iv) if the request is made earlier, at least 5 Business Days before the end of the DD Period, provided that in the case of requests made 5 or 6 Business Days before the end of the DD Period – 2 Business Days after the request is made.

2.4 Right of termination for adverse DD SPT may, at any time within 4 Business Days after the end of the DD Period, terminate this agreement by notice in writing to PIPE if SPT is aware of information (whether obtained under this clause 2 or otherwise) which, in the reasonable opinion of SPT, causes SPT to believe that the Present and Future Financial Position, Financial Performance or Operations of the PIPE Group are not fully and fairly described in the DD Reference Materials and that any or all misdescriptions or omissions results, in the reasonable opinion of SPT, in the Present and Future Financial Performance, Financial Position or Operations of the PIPE Group being negatively affected by an impact on earnings before interest, tax, depreciation and amortisation of $1 million or more as compared to the description in the DD Reference Materials.

3. SPT’s finance 3.1 SPT’s obligation to seek finance From the date of this agreement until the end of the Finance Period (or until this obligation is satisfied), SPT must in good faith: (a) make application(s) to financier(s) for funding sufficient to satisfy the Funding Requirement; and (b) vigorously pursue such applications with a view to minimising any conditions to drawdown and concluding terms (reasonable in the opinion of SPT) of a facility prior to the end of the Finance Period.

3.2 Limitation on SPT’s obligation In performing its obligations under clause 3.1, SPT is not required to agree to: (a) any interest rate (or equivalent ﬁnancing charge) which materially exceeds the market interest rate (or equivalent ﬁnancing charge) for funding a transaction of the nature and size of the Transaction; (b) any fee or charge which, in the reasonable opinion of SPT, is unusual or excessive; (c) any condition to drawdown which is not also a Condition to implementation of the Scheme.

3.3 PIPE to provide reasonable assistance PIPE will provide SPT with all reasonable assistance requested by SPT or by its prospective ﬁnanciers in connection with SPT’s obligations under clause 3.1.

3.4 Right of termination for failure to obtain finance (a) SPT shall notify PIPE in writing by 7.00pm on the last day of the Finance Period whether or not SPT has entered into a financing agreement with a financier which satisfies the Funding Requirement. (b) If, at the end of the Finance Period, SPT has not entered into a financing agreement with a financier which satisfies the Funding Requirement, SPT or PIPE may terminate this agreement by notice in writing to the other. (c) The notice under clause 3.4(b) must be given no later than 2 Business Days after the end of the Finance Period.

4. Agreement to propose Scheme 4.1 Proposal of Scheme (a) PIPE agrees to propose the Scheme upon and subject to the terms of this agreement. (b) SPT agrees with PIPE to assist PIPE to propose and give effect to the Scheme on and subject to the terms of this agreement.

B10 4.2 Compliance with obligations The parties obligations under this agreement to propose the Scheme are subject to their compliance with their respective obligations, functions, powers and duties under this agreement, PIPE’s constitution, at law and under the Listing Rules.

5. Conditions 5.1 Conditions Precedent to implementation of the Scheme The Scheme, the obligations of PIPE under clause 7.1(p), and the obligations of SPT under clause 6.2 are subject to the satisfaction of the following Conditions Precedent (unless waived by a party in accordance with clause 5.2) on or prior to the Second Court Date (or such other date as specified in the relevant Condition Precedent): (a) Regulatory Authorities: (i) PIPE obtains approval from the US Department of Homeland Security and the Federal Communications Commission; (ii) ASIC and ASX issue or provide such consents or approvals or do other acts which the parties agree are necessary or desirable to implement the Transaction. If such consents, approvals or doing of other acts are subject to conditions those conditions must be acceptable to both parties; and (iii) all other mandatory approvals of Regulatory Authorities to the Transaction are obtained; (b) Shareholder approval: before 8.00am on the Second Court Date, PIPE Shareholders approve the Scheme at the Scheme Meeting by the requisite majorities under the Corporations Act; (c) Restraining orders: as at 8.00am on the Second Court Date, no temporary restraining order, preliminary or permanent injunction or other order or decision has been issued or made by any court of competent jurisdiction or any Regulatory Authority and there is no other legal restraint or prohibition preventing the consummation of any aspect of the Transaction on the Implementation Date; (d) No PIPE Material Adverse Event: no PIPE Material Adverse Event occurs between the date of this agreement and 8.00am on the Second Court Date; (e) No PIPE Prescribed Occurrence: no PIPE Prescribed Occurrence occurs between the date of this agreement and 8.00am on the Second Court Date; (f) PIPE representations and warranties: the representations and warranties given by PIPE under clause 9.1 are true and correct in all respects, in each case at the times set out in clause 9.5; (g) SPT representations and warranties: the representations and warranties given by SPT under clause 9.3 are true and correct in all respects, in each case at the times set out in clause 9.5; (h) No PIPE Options: before 8.00am on the first Business Day after the date of the Scheme Meeting, all PIPE Options have lapsed or been exercised; (i) Funding conditions: before 8.00am on the Second Court Date, each and every condition precedent (other than a condition requiring Court approval of the Scheme) to drawdown under facilities established by SPT to satisfy the Funding Requirement is satisfied or waived; and (j) Decline in S&P/ASX 300 Index: on no day in the period between the date of this agreement and the Business Day before the Second Court Date is the S&P/ASX 300 Index at the close of trading for the previous 5 trading days 15% or more below its level as at the close of trading on the date of this agreement.

5.2 Waiver of Conditions Precedent (a) The Conditions Precedent in clause 5.1(b) is for the benefit of PIPE and SPT, and cannot be waived. (b) The Conditions Precedent in clauses 5.1(a) and 5.1(c) are for the benefit, and any breach or non-fulfilment of those Conditions Precedent may only be waived with the written consent, of PIPE and SPT. (c) The Conditions Precedent in clauses 5.1(d), 5.1(e), 5.1(f), 5.1(h), 5.1(i) and 5.1(j) are for the sole benefit of, and any breach or non-fulfilment of those Conditions Precedent may only be waived with the written consent of, SPT. (d) The Condition Precedent in clause 5.1(g) is for the sole benefit of, and any breach or non-fulfilment of that Condition Precedent may only be waived with the written consent of, PIPE. (e) A party entitled to waive the breach or non-fulfilment of a Condition Precedent pursuant to this clause 5.2 may do so in its absolute discretion. (f) If PIPE or SPT waives the breach or non-fulfilment of any of the Conditions Precedent, that waiver will not preclude it from suing the other party for any breach of this agreement that resulted from the breach or non-fulfilment of the Condition Precedent that was waived or arising from the same event which gave rise to the breach or non-fulfilment of the Condition Precedent (provided that if the waiver of the Condition Precedent is itself conditional and the other party accepts the condition, the terms of the condition apply despite this clause 5.2(f)).

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5.3 Best endeavours to satisfy Conditions Precedent Each of PIPE and SPT will use its best endeavours to procure that: (a) each of the Conditions Precedent is satisfied as soon as practicable after the date of this agreement or continues to be satisfied at all times until the last time it is to be satisfied (as the case may require); and (b) there is no occurrence within the control of PIPE or SPT (as the context requires) or their Related Entities that would prevent the Conditions Precedent being satisfied, provided that, without limiting PIPE’s obligations under clause 3.3, PIPE is not required to use its best endeavours in respect of the Condition Precedent in clause 5.1(i).

5.4 Regulatory Approvals (a) Without limiting the generality of clause 5.3: (i) each party must promptly apply for all relevant Regulatory Approvals and take all steps it is responsible for as part of the Regulatory Approval process, including responding to requests for information at the earliest practicable time; (ii) each of PIPE and SPT must consult with the other in advance in relation to all communications (whether written or oral, and whether direct or via agents or advisers) with any Regulatory Authority relating to any Regulatory Approval (Communications) and, without limiting the generality of the foregoing, must: (A) provide the other party with drafts of any material written Communications to be sent to a Regulatory Authority and make such amendments thereto as the other party reasonably requires; and (B) provide copies of any written Communications sent to or received from a Regulatory Authority to the other party promptly upon despatch or receipt (as the case may be), in each case to the extent it is reasonable to do so; and (iii) each party will have the right to be represented and make submissions at any proposed meeting with any Regulatory Authority relating to any Regulatory Approval. (b) Notwithstanding anything in this agreement to the contrary, in obtaining any Regulatory Approval, SPT will not be required to agree to conditions: (i) requiring any member of the SPT Group to agree to or proffer to: (A) divest, operate separately or hold separately any of the material business or assets of the PIPE Group; (B) cease to conduct or materially reduce the scope of any material business or operations in any jurisdiction in which the PIPE Group conducts business or operations; or (C) limit the type or scope of any proposed or potential business or operations in any jurisdiction; or (ii) that do not merely impose procedural or other non-material requirements incidental to the Regulatory Approval.

5.5 Assistance of Representatives Each party must procure that its Representatives work (including by attending meetings and by providing information) in good faith and in a timely and co-operative fashion with the other parties to satisfy the Conditions Precedent.

5.6 Notice of satisfaction of Condition Precedent Each party must promptly after becoming aware of the satisfaction of any Condition Precedent give the other party notice of the satisfaction of that Condition Precedent and provide reasonable evidence the Condition Precedent has been satisﬁed.

5.7 Notice of failure to satisfy Condition Precedent (a) PIPE and SPT must promptly give the other notice of a failure to satisfy a Condition Precedent or of any event that will prevent a Condition Precedent being satisfied. (b) PIPE or SPT (as the case may be) must give written notice to the other party as soon as reasonably practicable (and in any event before 5.00pm on the day before the Second Court Date) as to whether or not it waives the breach or non fulfilment of any Condition Precedent resulting from the occurrence of that event, specifying the Condition Precedent in question. (c) A waiver of such breach or non fulfilment in respect of one Condition Precedent of this agreement will not constitute: (i) a waiver of breach or non fulfilment of any other Condition Precedent of this agreement resulting from the same event; or (ii) a waiver of breach or non fulfilment of that Condition Precedent resulting from any other event.

B12 5.8 Conditions Precedent not met (a) If: (i) there is a breach or non-fulfilment of a Condition Precedent which is not waived in accordance with this agreement; or (ii) there is an act, failure to act, event or occurrence which will prevent a Condition Precedent being satisfied by the date specified in clause 5.1 for its satisfaction (and the breach or non-fulfilment of the Condition Precedent which would otherwise occur has not already been waived in accordance with this agreement), PIPE and SPT must consult in good faith with a view to: (iii) determining whether the Scheme or a transaction that results in SPT having beneficial ownership of all of the PIPE Shares may proceed by way of alternative means or methods; (iv) extending the time or date for satisfaction of the relevant Condition Precedent or the Sunset Date; or (v) changing the date of application made to the Court for an order under section 411(4)(b) of the Corporations Act approving the Scheme or adjourning that application (as applicable) to another date agreed to in writing by PIPE and SPT (being a date no later than five Business Days before the Sunset Date). (b) If PIPE and SPT are unable to reach agreement under clause 5.8(a) within the Required Consultation Period, either PIPE or SPT may, provided that Condition Precedent is for the benefit of that party, terminate this agreement by notice in writing to the other without incurring any liability to the other party because of that termination (other than under clause 13 if applicable), unless the relevant occurrence or the breach or non fulfilment of the Condition Precedent arises out of a breach of clauses 5.3 or 5.7 by the terminating party.

6. The transaction steps 6.1 Scheme (a) Subject to SPT complying with its obligations under clause 11.1, PIPE must propose the Scheme to PIPE Shareholders on and subject to the terms and conditions of this agreement. (b) If the Scheme becomes Effective, then on the Implementation Date: (i) all of the PIPE Shares held by Scheme Participants on the Record Date will be transferred to SPT; and (ii) each Scheme Participant will be paid the Scheme Consideration for each PIPE Share held by them at the Record Date.

6.2 Scheme Consideration SPT undertakes to PIPE (in its own right and as trustee on behalf of the Scheme Participants) that, if the Scheme becomes Effective, in consideration for the transfer to SPT of each PIPE Share held by a Scheme Participant under the terms of the Scheme, SPT will accept that transfer and provide to the Scheme Participants the Scheme Consideration by procuring the payment to a trust account operated by PIPE of an amount in cleared funds equal to the aggregate amount of the Scheme Consideration for all Scheme Participants, before 12 noon on the Implementation Date in accordance with the terms of the Scheme and the Deed Poll.

6.3 Timetable The parties acknowledge the Timetable as an indicative timetable and will consult with each other regularly in relation to: (a) performing their respective obligations within the framework established by the Timetable; and (b) any need to modify the Timetable.

7. The Scheme 7.1 PIPE’s obligations in relation to the Scheme PIPE must execute all documents and do all acts and things within its power as may be necessary or desirable for the implementation and performance of the Scheme on a basis consistent with this agreement and substantially in accordance with the Timetable, and in particular PIPE must: (a) promote merits of Transaction: participate in, and ensure the PIPE Board participates in, efforts reasonably requested by SPT to promote the merits of the Transaction, including meeting with key members of PIPE at the reasonable request of SPT; (b) Scheme Booklet: prepare the Scheme Booklet in respect of the Scheme in accordance with all applicable laws and policy and in particular with the Corporations Act, RG 60 and RG 142 and the Listing Rules, make available to SPT advance drafts of the Scheme Booklet (so that SPT has a reasonable opportunity to review and comment on those drafts), consult with SPT in relation to the content of those drafts and consider in good faith, for the purpose of amending those drafts (as to content and presentation), comments from SPT and its Representatives on those drafts;

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(c) commission Independent Expert’s Report: promptly appoint an Independent Expert to provide a report for inclusion in the Scheme Booklet stating whether in its opinion the Scheme is in the best interest of PIPE Shareholders, and provide any assistance and information reasonably requested by the Independent Expert to enable it to prepare its report; (d) amend Scheme Booklet: implement such changes to those parts of the Scheme Booklet relating to SPT which are provided to PIPE by SPT in accordance with clause 7.3(a) as reasonably requested by SPT prior to finalising the Regulator’s Draft; (e) proposed Regulator’s Draft: provide SPT with the proposed Regulator’s Draft at least 2 Business Days before its submission to enable SPT to review the proposed Regulator’s Draft. (f) liaise with ASIC: provide copies of the Regulator’s Draft to ASIC for its review and approval for the purposes of section 411(2) of the Corporations Act and liaise with ASIC throughout the Regulatory Review Period; (g) keep SPT informed: during the Regulatory Review Period: (i) promptly provide to SPT and include in revised drafts of the Scheme Booklet any new information in relation to the PIPE Group not included in the Regulator’s Draft which is required by the Corporations Act or RG 60 or RG 142 to be included in the Scheme Booklet; and (ii) promptly inform and consult with SPT in relation to any matters raised by ASIC in connection with the Scheme Booklet or the Scheme including in relation to any presentation and/or the making of any submission in writing or at any proposed meeting with ASIC, and co-operate with SPT to resolve any such matters; (h) approval of Scheme Booklet: as soon as practicable after the end of the Regulatory Review Period, procure that a meeting of the PIPE Board is convened to consider approving the Scheme Booklet for dispatch to the PIPE Shareholders, subject to approval of the Court; (i) Court direction and advice: promptly after, and provided that the approvals in clauses 7.1(f), 7.1(h) and 7.3(e) have been obtained, apply to the Court for orders under section 411(1) of the Corporations Act directing PIPE to convene the Scheme Meeting to consider the Scheme and take all reasonable steps necessary to comply with the orders of the Court; (j) registration of Scheme Booklet: request ASIC to register the Explanatory Statement included in the Scheme Booklet in relation to the Scheme in accordance with section 412(6) of the Corporations Act; (k) section 411(17)(b) Statement: apply to ASIC for the production of a statement pursuant to section 411(17)(b) of the Corporations Act stating that ASIC has no objection to the Scheme; (l) Scheme Meeting: promptly convene the Scheme Meeting in accordance with any orders which are made by the Court pursuant to section 411(1) of the Corporations Act; (m) Court documents: consult with SPT in relation to the content of the documents required for the purpose of each Court hearing held, including for the purposes of section 411(1) and 411(4)(b) of the Corporations Act in relation to the Scheme (including originating process, affidavits, submissions and draft minutes of Court orders) and consider in good faith, for the purpose of amending drafts of those documents, comments from SPT and its Representatives on those documents; (n) Court approval of Scheme: as soon as practicable after the PIPE Shareholders approve the Scheme at the Scheme Meeting, apply (and to the extent necessary, re-apply) to the Court for orders approving the Scheme under section 411(4) of the Corporations Act substantially in accordance with the Timetable; (o) lodge copy of Court orders: if the Court makes orders under section 411(4) of the Corporations Act approving the Scheme, lodge with ASIC an office copy of the order of the Court approving the Scheme under section 411(10) of the Corporations Act on the day such office copy is received or such later date as agreed in writing by SPT; (p) registration: if the Court makes orders under section 411(4) of the Corporations Act approving the Scheme: (i) close the Register as at the Record Date to determine the identity of the Scheme Participants and their entitlements to the Scheme Consideration; (ii) provide to SPT all information about the Scheme Participants that SPT reasonably requires in order for SPT to provide the Scheme Consideration to the Scheme Participants in accordance with the Scheme; (iii) execute proper instruments of transfer of and effect and register the transfer of the PIPE Shares in accordance with the Scheme; and (iv) do all other things contemplated by or necessary to give effect to the Scheme and the orders of the Court; and (q) PIPE incentive plans: subject to Court approval of the Scheme but with effect from the Effective Date, suspend all of its executive and employee incentive plans that will or could result in securities being granted to PIPE Group employees.

B14 7.2 PIPE registry details For the purpose of clause 7.1(p), PIPE must give all necessary directions to the PIPE Registry to ensure that any information that SPT reasonably requests in relation to the Register, including any CHESS sub-register and any issuer sponsored subregister, is promptly provided to SPT and, where requested by SPT, PIPE must procure that such information is made available in such electronic form as is reasonably requested by SPT.

7.3 SPT’s obligations in relation to the Scheme SPT must execute all documents and do all acts and things within its power as may be necessary or desirable for the implementation and performance of the Scheme on a basis consistent with this agreement and substantially in accordance with the Timetable, and in particular SPT must: (a) SPT Information: prepare and provide to PIPE all information in relation to SPT that is required to be included in the Scheme Booklet to comply with applicable laws and policy and in particular with the Corporations Act, RG 60 and RG 142 and the Listing Rules relevant to that information (SPT Information), make available to PIPE drafts of that information, consult with PIPE in relation to the content of those drafts and consider in good faith, for the purpose of amending those drafts, comments from PIPE and its Representatives on that information; (b) assist Independent Expert: subject to the Independent Expert entering into arrangements with PIPE including in relation to confidentiality in a form reasonably acceptable to SPT, provide any assistance and information reasonably requested by the Independent Expert to enable it to prepare its report to be sent together with the Scheme Booklet; (c) review drafts of Scheme Booklet: as soon as practicable after delivery, review drafts of the Scheme Booklet prepared by PIPE and provide comments on those drafts in good faith; (d) confirmation of SPT Information: as soon as reasonably practicable after receipt from PIPE of the proposed Regulator’s Draft referred to in clause 7.1(e), either: (i) confirm in writing to PIPE that the SPT Information in the form and context in which it appears in the proposed Regulator’s Draft is not misleading or deceptive in any material respect and does not contain any material omission; or (ii) provide to PIPE the changes required to ensure that the SPT Information in the form and context in which it appears in the Regulator’s Draft is not misleading or deceptive in any material respect and does not contain any material omission; (e) approval of Scheme Booklet: as soon as practicable after the end of the Regulatory Review Period, procure that a meeting of the SPT Board is convened to consider approving those sections of the Scheme Booklet that relate to any SPT Indemnified Parties appropriate for dispatch to the PIPE Shareholders, subject to the approval of the Court; (f) Deed Poll: prior to the despatch of the Scheme Booklet to PIPE Shareholders, execute the Deed Poll and deliver the executed Deed Poll to PIPE; and (g) representation: procure that it has separate representation by counsel at the Court hearings convened for the purposes of section 411(1) and 411(4)(b) of the Corporations Act, at which, through its counsel, SPT will undertake (if requested by the Court) to do all such things and take all such steps within its power as may be necessary in order to ensure the fulfilment of its obligations under this agreement and the Scheme.

7.4 Scheme Booklet (a) The parties agree that: (i) the efficient preparation of the Scheme Booklet is in the interests of the parties and PIPE Shareholders; and (ii) they will use all reasonable endeavours and utilise all necessary resources (including management resources and the resources of external advisers) to produce the Scheme Booklet as soon as reasonably practicable and in accordance with the Timetable. (b) SPT’s obligations under clauses 7.3(c), 7.3(d)and 7.3(e) relate only to the factual accuracy of SPT Information and SPT takes no responsibility for information in the Scheme Booklet other than SPT Information. To that end, the Scheme Booklet will include a statement: (i) by PIPE that SPT Indemnified Parties are not responsible for any information contained in the Scheme Booklet other than SPT Information; and (ii) by SPT that the PIPE Indemnified Parties are not responsible for any SPT Information contained in the Scheme Booklet. (c) PIPE must undertake reasonable verification processes for the purposes of complying with clause 7.1(h). (d) SPT must undertake reasonable verification processes for the purposes of complying with clause 7.3(e).

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(e) The parties must promptly inform the other if they have any reason to believe that any information in the Scheme Booklet is misleading or deceptive in any material respect (whether by omission or otherwise) whether because of SPT Information or otherwise. (f) If there is a dispute as to the content of any part of the Scheme Booklet (including SPT Information), the parties must consult in good faith and use their reasonable endeavours to resolve the dispute within 2 Business Days. If the parties fail to agree on the form or content of the Scheme Booklet: (i) PIPE will have the ﬁnal decision on the form or content of any PIPE Information, provided that the PIPE Information must comply with any applicable law, policy (including RG 62 and RG 142) or Listing Rule; and (ii) SPT will have the ﬁnal decision on the form or content of any SPT Information, provided that the SPT Information must comply with any applicable law, policy (including RG 62 and RG 142) or Listing Rule. Even if there is a dispute as to the form or content of the Scheme Booklet and the parties use this procedure, the parties will continue to perform their obligations under this agreement.

7.5 Indemnities (a) SPT acknowledges and agrees that it is responsible for the SPT Information contained in the Scheme Booklet and must pay to PIPE on demand an amount equal to all losses, damages, costs, expenses, penalties and other liabilities suffered or incurred by the PIPE Indemniﬁed Parties arising out of or in connection with any failure of the SPT Information to comply with any applicable law, policy (including RG 62 and RG 142) or Listing Rule in connection with its inclusion in the Scheme Booklet. (b) PIPE acknowledges and agrees that it is responsible for the PIPE Information contained in the Scheme Booklet and must pay to SPT on demand an amount equal to all losses, damages, costs, expenses, penalties and other liabilities suffered or incurred by the SPT Indemniﬁed Parties arising out of or in connection with any failure of the PIPE Information to comply with any applicable law, policy (including RG 62 and RG 142) or Listing Rule in connection with its inclusion in the Scheme Booklet.

7.6 Good faith co-operation Each party must procure that its Representatives work (including by attending meetings and by providing information) in good faith and in a timely and co-operative fashion with the other parties to implement the Scheme and to prepare all documents required relating to the Scheme.

7.7 Recommendation of the Directors (a) Each PIPE Director in office at the relevant time must, in the Public Announcement, Scheme Booklet and in any other public statements made after execution of this agreement and relating to the Scheme or the Transaction recommend that PIPE Shareholders vote in favour of all resolutions to be proposed at the Scheme Meeting in relation to the Scheme and approve the Scheme, without any qualification other than a qualification that the recommendation is subject to: (i) no Superior Proposal being made; and (ii) the Independent Expert opining in its final report to PIPE for inclusion in the Scheme Booklet that the Scheme is in the best interests of PIPE Shareholders. (b) The PIPE Directors must not make any public statement or take any other action that qualifies their support of the Transaction or contradicts, or subsequently change, withdraw or modify, the recommendation referred to in clause 7.7(a) except where: (i) the Independent Expert does not opine in its final report to PIPE for inclusion in the Scheme Booklet that the Scheme is in the best interests of PIPE Shareholders; (ii) the PIPE Board determines, after SPT’s rights under clause 12.6 have been exhausted, that a Competing Transaction constitutes a Superior Proposal; or (iii) the PIPE Directors have determined in good faith and acting reasonably after consultation with PIPE’s independent financial adviser and receiving written advice from its external legal adviser practising in the area of corporate law, that making the recommendation referred to in clause 7.7(a) may constitute a breach of the PIPE Directors’ fiduciary duties or statutory obligations, provided that this clause 7.7(b)(iii) is not relied upon to deny SPT its rights under clause 12.6.

B16 (c) The Scheme Booklet will state that each PIPE Director who holds PIPE Shares, or on whose behalf PIPE Shares are held, intends to vote in favour of the Scheme, without any qualification other than a qualification that the intention is subject to: (i) no Superior Proposal being made; and (ii) the Independent Expert opining in its final report to PIPE for inclusion in the Scheme Booklet that the Scheme is in the best interests of PIPE Shareholders. (d) PIPE represents and warrants to SPT that it has been advised by each PIPE Director in office at the date of this agreement that he or she will act in accordance with clause 7.7(a), 7.7(b) and 7.7(c).

7.8 Court refuses to make orders (a) If the Court refuses to make any orders pursuant to section 411(1) of the Corporations Act convening the Scheme Meeting to consider or approve the Scheme, PIPE must appeal the Court’s decision to the fullest extent possible except where: (i) the parties agree otherwise; or (ii) PIPE and SPT are each advised by their legal counsel that an appeal would have no reasonable prospect of success. (b) The costs of any appeal referred to in clause 7.8(a) will be borne equally by SPT and PIPE unless one of the parties is advised by its legal counsel that an appeal would have no reasonable prospect of success, and that appeal fails, in which case the costs of that appeal will be borne solely by the other party.

7.9 Appointment of Directors to PIPE Board PIPE represents and warrants to SPT that it has been advised by each PIPE Director that he or she will, and PIPE must procure that the PIPE Board will: (a) on the Effective Date, take all actions necessary to ensure the nominees of SPT are lawfully appointed as directors of PIPE and represent a majority of the PIPE Board; and (b) as soon as practicable after the Scheme Consideration has been paid, ensure that all directors on the PIPE Board other than SPT’s nominees resign (provided that a proper board is constituted at all times).

8. Conduct of business 8.1 Conduct of business by PIPE (a) From the date of this agreement until the Implementation Date, the PIPE Group must conduct its business in the ordinary course of business consistent with past practice, including making all reasonable efforts to: (i) maintain its business and assets; (ii) keep available the services of its officers and employees; and (iii) preserve its relationships with customers, suppliers, licensors, licensees, joint venturers and others with whom it has business dealings, except: (iv) as may be required or contemplated by this agreement; or (v) as may be undertaken with the prior approval of SPT, such approval not to be unreasonably withheld or delayed. (b) Notwithstanding clause 8.1(a), the PIPE Group must not: (i) increase the remuneration of or pay any bonus (excluding sales commission under existing sales commission arrangements) or issue any securities or options to, or otherwise vary the employment agreements with, any of its directors or any employees with an existing annual total fixed remuneration greater than $100,000 (Senior Executive); (ii) accelerate the rights of any of its directors or Senior Executives to benefits of any kind; (iii) pay a director or Senior Executive a termination payment, other than as provided for in an existing employment contract in place as at the date of this agreement and a copy of which has previously been disclosed to SPT; (iv) give or agree to give a financial benefit to a related party of PIPE other than in accordance with the exceptions set out in Chapter 2E of the Corporations Act; (v) amend in any material respect any arrangement with its financial advisers in respect of the transactions contemplated by this agreement; (vi) enter into any new financing arrangements in excess of $5 million in aggregate, other than for the refinancing of Financial Indebtedness that has been disclosed in writing to SPT before the execution of this agreement; (vii) pay any fee to any adviser where such fee is contingent on completion of the Transaction (other than the success fee payable to Macquarie Capital Advisers as disclosed in writing to SPT before the execution of this agreement); (viii) take any action which would be reasonably expected to give rise to a PIPE Prescribed Occurrence;

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(ix) modify the rules of the PIPE ESOP or the terms of issue of any PIPE Options; (x) take any action: (A) in respect of its information technology systems which would have a material adverse impact on those systems; or (B) in respect of its distribution and logistics arrangements which would have a material adverse impact on those arrangements; or (xi) agree to do any of the matters set out above, except: (xii) with the prior written consent of SPT (such consent not to be unreasonably withheld or delayed); or (xiii) as required by law or under this agreement.

8.2 Transaction implementation and access to information (a) From the date of this agreement until the Implementation Date: (i) PIPE will provide SPT with copies of PIPE’s monthly management reports; and (ii) the chief executive and chief financial officer of both PIPE and SPT will meet in person or by telephone conference on a fortnightly basis, beginning on the date of this agreement, to discuss the PIPE Group’s financial position, prospects and affairs. (b) The rights and obligations of the parties under this clause 8.2, are subject to the terms of the Confidentiality Agreement. (c) Nothing in this clause 8.2 requires PIPE or SPT to act at the direction of the other. The business of each party and their Subsidiaries will continue to operate independently of the other until the Implementation Date.

9. Representations, warranties and undertakings 9.1 PIPE representations and warranties PIPE represents and warrants to SPT on its own behalf and separately as trustee or nominee for each SPT Indemnified Party that: (a) incorporation: it is a body corporate validly existing under the laws of its place of incorporation and each member of the PIPE Group is a corporation validly existing under the laws of its place of incorporation; (b) corporate power: it has the corporate power to enter into and perform or cause to be performed its obligations under this agreement and to carry out the transactions contemplated by this agreement; (c) corporate authorisations: it has taken all necessary corporate action to authorise the entry into of this agreement and the Scheme and, subject to PIPE Shareholders approving the Scheme, has taken all necessary corporate action to authorise the performance of this agreement and the Scheme and to carry out the transactions contemplated by this agreement and the Scheme; (d) binding obligations: (subject to laws generally affecting creditors’ rights and principles of equity) this agreement is valid and binding upon it; (e) solvency: each member of the PIPE Group is solvent and no resolutions have been passed nor has any other step been taken or legal proceedings commenced or threatened against it for its winding up or dissolution or for the appointment of a liquidator, receiver, administrator or similar officer over any or all of its assets; (f) regulatory action: no regulatory action of any nature has been taken which would prevent, inhibit or otherwise have a material adverse effect on its ability to fulfil its obligations under this agreement; (g) no default: this agreement does not conflict with or result in the breach of or default under any provision of PIPE’s constitution or any writ, order or injunction, judgement, law, rule, regulation or instrument to which PIPE is party or subject or of which it or any member of the PIPE Group is bound; and (h) no PIPE Prescribed Occurrence since 1 July 2009: as at the date of this agreement: (i) no PIPE Prescribed Occurrences of a kind referred to in paragraphs (a) to (g) and (l) and (m) of the definition of PIPE Prescribed Occurrence has occurred since 1 July 2009, (ii) no PIPE Prescribed Occurrence of a kind referred to in paragraphs (h) to (k) of the definition of PIPE Prescribed Occurrence that is outside the ordinary course of business has occurred since 1 July 2009, other than as announced to the ASX prior to the date of this agreement or as disclosed in writing to SPT prior to execution of this agreement;

B18 (i) no PIPE Prescribed Occurrence since execution: no PIPE Prescribed Occurrence has occurred since execution of this agreement without the prior written consent of SPT; (j) disclosure: PIPE is not in breach of its continuous disclosure obligations under the Corporations Act or the Listing Rules and, as at the date of this agreement, PIPE is not relying on the carve out in Listing Rule 3.1A to withhold any information from disclosure other than as disclosed in writing to SPT or its Representatives before the execution of this agreement; (k) disclosure of bonuses etc: other than as disclosed to SPT in writing prior to the execution of this agreement: (i) no employee, officer or contractor of the PIPE Group whose total annual remuneration exceeds $100,000 is entitled to receive any bonus, incentive or other entitlement (whether or not subject to the satisfaction of conditions) except to the extent that the bonus, incentive or other entitlement comprises: (A) base cash salary or wages of an employee; (B) remuneration of a non-executive director from an amount approved by shareholders of PIPE; (C) reasonable non-contingent remuneration of a contractor; (D) statutory leave entitlements; (E) reasonable superannuation contributions; (F) payments in lieu of notice of termination of an employee in an amount not exceeding 12 weeks base cash salary or wages; or (G) PIPE Options granted to employees prior to the date of this agreement which were included in an Appendix 4B announced to ASX shortly after grant; and (ii) no employee, officer or contractor of the PIPE Group is entitled to receive any bonus, incentive or other entitlement of more than $20,000 (whether or not subject to the satisfaction of conditions) except to the extent that the bonus, incentive or other entitlement comprises: (A) base cash salary or wages of an employee; (B) remuneration of a non-executive director from an amount approved by shareholders of PIPE; (C) reasonable non-contingent remuneration of a contractor; (D) statutory leave entitlements; (E) reasonable superannuation contributions; (F) payments in lieu of notice of termination of an employee in an amount not exceeding 12 weeks base cash salary or wages; or (G) PIPE Options granted to employees prior to the date of this agreement which were included in an Appendix 4B announced to ASX shortly after grant; (l) all information: as at the end of the DD Period, it has complied with all of its obligations to provide to SPT information under clause 2; (m) not misleading: the information that has been provided to SPT in writing since the date of the Confidentiality Agreement is not, to the best of its knowledge, when considered as a whole, misleading or deceptive; and (n) issued securities: the issued PIPE securities as of the date of this agreement are: (i) 59,054,651 PIPE Shares (which number includes the PIPE Shares issued to SPT under the Share Subscription Agreement); and (ii) 170,994 PIPE Options, and the PIPE Group has not issued, or agreed to issue, any other securities or instruments which may convert into PIPE Shares or any other securities in PIPE (other than under the Share Subscription Agreement).

9.2 PIPE undertakings PIPE undertakes to SPT that: (a) PIPE Information: as at the date of the Scheme Booklet, the PIPE Information will: (i) comply in all material respects with the requirements of the Corporations Act, the Listing Rules and RG 60 and RG142; and (ii) not contain any material statement which is misleading or deceptive nor contain any material omission having regard to applicable disclosure requirements; (b) reliance: information provided by PIPE to SPT under this agreement or in connection with the Transaction (including PIPE Information) will be provided in good faith and on the understanding that SPT will rely on that information for the purposes of considering and approving SPT Information in the Scheme Booklet before it is despatched and in implementing the Scheme;

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(c) updating information: it will as a continuing obligation, provide SPT all such further or new information which may arise after the date of the Scheme Booklet until the date of the Scheme Meeting which may be necessary to ensure there would be no breach of clause 9.2(a) if it applied as at the date upon which that information arose; and (d) provision of information to Independent Expert: all information provided by or on behalf of PIPE to the Independent Expert to enable the Independent Expert’s report to be included in the Scheme Booklet will be provided in good faith and on the understanding that the Independent Expert will rely upon that information for the purpose of preparing the Independent Expert’s report.

9.3 SPT representations and warranties SPT represents and warrants to PIPE (on its own behalf and separately as trustee or nominee for each PIPE Indemnified Party) that: (a) incorporation: it is a body corporate validly existing under the laws of its place of incorporation; (b) corporate power: it has the corporate power to enter into and perform or cause to be performed its obligations under this agreement and to carry out the transactions contemplated by this agreement; (c) corporate authorisations: it has taken all necessary corporate action to authorise the entry into of this agreement and the Scheme and has taken all necessary corporate action to authorise the performance of this agreement and the Scheme and to carry out the transactions contemplated by this agreement and the Scheme; (d) binding obligations: (subject to laws generally affecting creditors’ rights and principles or equity) this agreement is valid and binding upon it; (e) solvency: SPT is solvent and no resolutions have been passed nor has any other step been taken or legal proceedings commenced or threatened against it for its winding up or dissolution or for the appointment of a liquidator, receiver, administrator or similar officer over any or all of its assets; (f) regulatory action: no regulatory action of any nature has been taken which would prevent, inhibit or otherwise have a material adverse effect on its ability to fulfil its obligations under this agreement; (g) no default: this agreement does not conflict with or result in the breach of or default under any provision of SPT’s constitution or any writ, order or injunction, judgement, law, rule, regulation or instrument to which SPT is party or subject or of which it is bound; and (h) disclosure: SPT is not in breach of its continuous disclosure obligations under the Corporations Act or the Listing Rules.

9.4 SPT undertakings SPT undertakes to PIPE that: (a) SPT Information: SPT Information to be provided in accordance with this agreement and included in the Scheme Booklet, as at the date of the Scheme Booklet, will: (i) comply in all material respects with the requirements of the Corporations Act, the Listing Rules and RG 60 and RG 142; and (ii) not contain any material statement which is misleading or deceptive, nor contain any material omission, having regard to applicable disclosure requirements; (b) reliance: information provided by SPT to PIPE under this agreement or in connection with the Transaction (including SPT Information) will be provided in good faith and on the understanding that PIPE will rely on that information for the purposes of considering and approving SPT Information in the Scheme Booklet before it is despatched and in implementing the Scheme; (c) Updating information: it will, as a continuing obligation, provide to PIPE all such further or new information which may arise after the date of the Scheme Booklet until the date of the Scheme Meeting which may be necessary to ensure there would be no breach of clause 9.4(a) if it applied on the date on which the information arose; and (d) Provision of information to the Independent Expert: all information provided by or on behalf of SPT to the Independent Expert to enable the Independent Expert’s report to be included in the Scheme Booklet will be provided in good faith and on the understanding that the Independent Expert will rely on the information for the purpose of preparing the Independent Expert’s report.

B20 9.5 Timing of representations and warranties Each representation and warranty made or given under clause 9.1 and clause 9.3 is given: (a) at the date of the agreement and at 8.00am on the Second Court Date; or (b) where expressed, at the time at which the representation or warranty is expressed to be given.

9.6 Survival of representations and warranties Each representation and warranty in clauses 9.1 and 9.3: (a) is severable; (b) will survive the termination of this agreement; and (c) is given with the intent that liability under them will not be conﬁned to breaches which are discovered prior to the date of termination of this agreement.

10. Termination rights 10.1 Termination events Without limiting any other provision of this agreement: (a) either party (non-defaulting party) may terminate this agreement by notice in writing to the other party if: (i) the Sunset Date has passed before the Transaction has been implemented (other than as a result of a breach by the terminating party of its obligations under this agreement); (ii) each of the following has occurred: (A) the other party (defaulting party) is in material breach of a provision of this agreement (other than for breach of a representation or warranty in clause 9.1 or clause 9.3) at any time prior to 8.00am on the Second Court Date; (B) the non-defaulting party has given notice to the defaulting party setting out the relevant circumstances of the breach and stating an intention to terminate the agreement; and (C) the relevant circumstances have continued to exist 5 Business Days (or any shorter period ending at 8.00am on the Second Court Date) from the time the notice in clause 10.1(a)(ii)(B) is given; (iii) the required majorities of PIPE Shareholders do not approve the Scheme at the Scheme Meeting; (iv) a Court or other Regulatory Authority has issued an order, decree or ruling or taken other action that permanently restrains or prohibits the Transaction and that order, decree, ruling or other action has become final and cannot be appealed; or (v) it is permitted to in accordance with clause 5.8(b); or (b) SPT may terminate this agreement by notice in writing to PIPE if, at any time: (i) PIPE breaches any representation or warranty in clause 9.1 and: (A) the breach: (I) cannot be remedied by subsequent action on the part of PIPE before 8.00am on the Second Court Date; and (II) was of a kind that, had it been disclosed to SPT prior to its entry into this agreement, could reasonably be expected to have resulted in SPT either not entering into this agreement or entering into it on materially different terms; or (B) the breach amounts to, results in, or discloses anything, that could reasonably be expected to amount to a PIPE Material Adverse Event; (ii) a PIPE Director fails to make the recommendation referred to in clause 7.7(a), or withdraws his or her recommendation that PIPE Shareholders vote in favour of the Scheme or makes a public statement indicating that he or she no longer supports the Scheme; (iii) a Court or other Regulatory Authority has issued an order, decree or ruling or taken other action that restrains or prohibits SPT exercising or enjoying the benefit of any material rights under this agreement; or (iv) it is permitted to in accordance with clause 2.3, 2.4 or 3.4; or (c) PIPE may terminate this agreement by notice in writing to SPT if: (i) at any time prior to the Second Court Hearing, SPT breaches any representation or warranty in clause 9.3 and the breach: (A) cannot be remedied by subsequent action on the part of SPT before 8.00am on the Second Court Date; and (B) was of a kind that, had it been disclosed to PIPE prior to its entry into this agreement, could reasonably be expected to have resulted in PIPE either not entering into this agreement or entering into it on materially different terms; or (ii) at any time prior to the date of the Scheme Meeting, all of the PIPE Directors have changed, withdrawn or modified their recommendation (as set out in clause 7.7(a)) in accordance with clause 7.7(b); or (iii) it is permitted to in accordance with clause 3.4.

B21 ANNEXURE B – IMPLEMENTATION AGREEMENT

10.2 Notice of breach Each party must give notice to the other as soon as practicable after it becomes aware of a breach by it of this agreement (including in respect of any representation or warranty).

10.3 Termination right (a) Any right to terminate this agreement under clause 10.1(a), 10.1(b) or 10.1(c) that arises before the Second Court Date ceases at 8.00am on the Second Court Date. (b) Subject to clause 10.3(a), any right to terminate this agreement ceases when the Scheme becomes Effective.

10.4 Effect of termination (a) If a party terminates this agreement, each party will be released from all further obligations under this agreement other than under clauses 1, 11, 13, 14, 15 and 16. (b) Termination of this agreement does not affect any accrued rights or remedies of a party (including in respect of any past breach of this agreement by the other party).

11. Public announcements 11.1 Announcement of transaction Promptly after the execution of this agreement, the parties will issue the Public Announcement to ASX.

11.2 Public announcements (a) Subject to clause 11.2(b), PIPE must not make any public announcement or disclosure in relation to the Transaction (including any staff or client announcements or presentations) other than in a form approved by SPT (acting reasonably). (b) Where PIPE is required by law and/or the Listing Rules to make any announcement or make any disclosure in relation to the Transaction, it may do so only after it has given as much notice as possible to, and has consulted (to the fullest extent reasonable in the circumstances) with, SPT.

11.3 Statements on termination The parties must act in good faith and use all reasonable endeavours to issue agreed statements in respect of any termination of this agreement and, to that end but without limitation, clause 11.2 applies to any such statements or disclosures.

12. Exclusivity 12.1 No-shop During the Exclusivity Period, PIPE must ensure that neither it nor any of its Representatives directly or indirectly: (a) solicits, invites, encourages or initiates any enquiries, negotiations, discussions or proposals; or (b) communicates any intention to do any of these things, in relation to, or which may reasonably be expected to lead to, a Competing Transaction.

12.2 No-talk During the Exclusivity Period, but subject to clause 12.7, PIPE must ensure that neither it nor any of its Representatives directly or indirectly: (a) negotiates or enters into or participates in negotiations or discussions with any person; or (b) communicates any intention to do any of these things, in relation to, or which may reasonably be expected to lead to: (c) a Competing Transaction, even if that person’s Competing Transaction was not directly or indirectly solicited, encouraged or initiated by PIPE or any of its Representatives or the person has publicly announced the Competing Transaction; or (d) the Transaction not proceeding.

12.3 Due diligence information During the Exclusivity Period, PIPE must ensure that neither it nor any of its Representatives in relation to a Competing Transaction: (a) solicits, invites, initiates, encourages or, subject to clause 12.7, facilitates any party other than SPT to undertake due diligence investigations on PIPE, any of its Related Entities or their respective businesses and operations; or

B22 (b) subject to clause 12.7, makes available to any other person or permits any other person to receive (in the course of due diligence investigations or otherwise) any non public information relating to PIPE, any of its Related Entities or their respective businesses and operations.

12.4 Notification of approaches (a) During the Exclusivity Period, PIPE must promptly notify SPT of: (i) any approach, inquiry or proposal made to, and any attempt or any intention on the part of any person to initiate or continue any negotiations or discussions with PIPE or any of its Representatives with respect to, or that could reasonably be expected to lead to, any Competing Transaction, whether unsolicited or otherwise; (ii) any request for information relating to PIPE or any member of the PIPE Group or any of their businesses or operations or any request for access to the books or records of PIPE or any member of the PIPE Group, which PIPE has reasonable grounds to suspect may relate to a current or future Competing Transaction; (iii) any intention by PIPE or any of its Representatives to provide any information relating to PIPE, any member of the PIPE Group or any of their businesses or operations to any person in connection with or for the purposes of a current or future Competing Transaction in reliance on clause 12.7; (iv) any action by PIPE or any of its Representatives, or any intention of PIPE or any of its Representatives to take any action, in reliance on clause 12.7 (including under clause 12.4(a)(iii)); or (v) any breach of this clause 12.4. (b) Subject to clause 12.4(c), a notice given under this clause 12.4 must be accompanied by all material details of the relevant event, including: (i) the identity of the person or persons taking any action referred to in clause 12.4(a)(i) or 12.4(a)(ii) or on whose behalf any such action was taken or any person to whom PIPE intends to provide information under clause 12.4(a)(iii) (Rival Bidder); (ii) the terms and conditions of any Competing Transaction or any proposed Competing Transaction (to the extent known); and (iii) the circumstances in which any information is provided to the Rival Bidder. (c) PIPE will not be required to comply with its obligations under clause 12.4(b) to the extent the PIPE Directors have determined in good faith and acting reasonably after consultation with PIPE’s independent financial adviser and receiving written advice from its external legal adviser practising in the area of corporate law, that to do so may constitute a breach of the PIPE Directors’ fiduciary duties or statutory obligations, or confidentiality obligations of PIPE that exist prior to the date of this agreement.

12.5 Access to information (a) Where, in reliance on clause 12.7, the PIPE Group or any member of the PIPE Group or any of their Representatives proposes to provide any information relating to the PIPE Group to any person in connection with or for the purposes of a current or future Competing Transaction, it must, to the extent that SPT has not previously been provided with the information, provide SPT with a complete copy of that information at the same time as it is provided to the third party. (b) Nothing in this clause 12 prevents PIPE or its Representatives from: (i) providing information to its Representatives; (ii) providing information required to be provided by law, a Court or any Regulatory Authority; or (iii) making presentations to brokers, portfolio investors and analysts in the ordinary and usual course of business.

12.6 PIPE’s response to Rival Bidder and SPT’s right to respond (a) If PIPE is permitted by virtue of clause 12.7 to engage in activity that would otherwise breach clauses 12.2 and 12.3(b), PIPE must enter into a confidentiality agreement with the Rival Bidder which is on terms no less onerous to the Rival Bidder than the Confidentiality Agreement is to SPT, unless PIPE has entered into a relevant confidentiality agreement with the Rival Bidder prior to the date of this agreement. (b) Without prejudice to SPT’s rights under this clause 12, if at any time during the Exclusivity Period any PIPE Director wishes to approve or recommend entry into any agreement, commitment, arrangement or understanding relating to a Competing Transaction (other than a confidentiality agreement contemplated by clause 12.6(a)), PIPE must ensure that he does not do so: (i) unless the Competing Transaction is bona fide; and

B23 ANNEXURE B – IMPLEMENTATION AGREEMENT

(ii) until each of the following has occurred: (A) the PIPE Directors have made the determination contemplated by clause 12.7(b) in respect of that Competing Transaction; (B) PIPE has given SPT notice in writing of its intention to enter into an agreement, commitment, arrangement or understanding relating to that Competing Transaction, subject to SPT’s rights under clause 12.6(c); (C) PIPE has given SPT all information that would be required by clause 12.4(b) as if it was not subject in any way to clause 12.4(c); (D) SPT’s rights under clause 12.6(c) have been exhausted; and (E) the PIPE Directors have made the determination contemplated by clause 12.7(b) in respect of that Competing Transaction after SPT’s rights under clause 12.6(c) have been exhausted and after evaluation of any Counterproposal. (c) If PIPE gives notice to SPT under clause 12.6(b)(ii)(B), SPT will have the right, but not the obligation, at any time during the period of three Business Days following receipt of the notice, to: (i) offer to amend the terms of the Scheme; (ii) make a takeover bid for PIPE; or (iii) propose any other form of transaction, (each a Counterproposal), and if it does so then PIPE and the PIPE Directors must review the Counterproposal in good faith. If the Counterproposal would be more favourable to PIPE and PIPE Shareholders than the Competing Transaction (having regard to the matters noted in clause 12.7(b)), then: (iv) if the Counterproposal contemplates an amendment to the Scheme – the parties must negotiate in good faith to enter into an amended agreement in relation to the Scheme reflecting the Counterproposal; or (v) if the Counterproposal contemplates any other form of transaction – PIPE must announce promptly to the market that the PIPE Directors unanimously recommend the Counterproposal (which recommendation will be subject to the qualifications referred to in clauses 7.7(a)(i) and 7.7(a)(ii) (if applicable) and will be capable of being changed, withdrawn or modified in analogous circumstances to those set out in clause 7.7(b)), and the parties must pursue implementation of the Counterproposal in good faith. (d) For the purposes of this clause 12.6, each successive modification of any third party expression of interest, offer or proposal in relation to a Competing Transaction will constitute a new Competing Transaction.

12.7 Fiduciary out The restrictions in clause 12.2, clause 12.3(a) and clause 12.3(b) do not apply to the extent that they restrict PIPE or the PIPE Directors from taking or refusing to take any action with respect to a Competing Transaction (in relation to which there has been no contravention of this clause 12) provided: (a) the Competing Transaction is bona fide and is made in writing by or on behalf of a person that each of the PIPE Directors consider is of reputable commercial standing; and (b) the PIPE Directors have determined in good faith and acting reasonably after: (i) consultation with PIPE’s independent financial adviser, that the Competing Transaction: (A) is capable of being valued and completed; and (B) would, if completed substantially in accordance with its terms, be more favourable to the PIPE Shareholders than the Transaction, after taking into account all aspects of the Competing Transaction (including its terms and conditions) and the person making it; and (ii) receiving written advice from its external legal adviser practising in the area of corporate law, that failing to respond to such a bona fide Competing Transaction would more likely than not constitute a breach of the PIPE Directors’ fiduciary duties or statutory obligations.

12.8 No current discussions PIPE represents and warrants to SPT that, as at the date of this agreement, neither it nor any of its Representatives: (a) is participating, directly or indirectly, in any discussions or negotiations with a third party that concern, or that could reasonably be expected to lead to, a Competing Transaction for that party; or

B24 (b) is a party to any agreement, arrangement or understanding with a third party in relation to a Competing Transaction for it or a possible Competing Transaction that would prevent it entering into this agreement or complying with its obligations under this agreement.

12.9 Legal advice PIPE represents and warrants that: (a) prior to entering into this agreement it has received legal advice on this agreement and the operation of this clause 12; and (b) it and the PIPE Board considers this clause 12 to be fair and reasonable and that it is appropriate to agree to the terms in this clause 12 in order to secure the signiﬁcant beneﬁts to it, and PIPE Shareholders, resulting from the Transaction.

13. Break Fee 13.1 SPT declaration SPT represents and warrants to PIPE that it would not have entered into this agreement without the beneﬁt of this clause 13 and it would not have entered into and continued the negotiations and conducted due diligence into PIPE leading up to this agreement unless SPT had a reasonable expectation that PIPE would agree to enter into a clause of this kind.

13.2 Acknowledgments (a) PIPE acknowledges that SPT has incurred, or will incur: (i) significant external advisory costs; (ii) some internal costs of a similar kind (including directors and management time costs, risk management costs and capital costs); (iii) out of pocket expenses; (iv) commitment fees and other financing costs; and (v) reasonable opportunity costs incurred by SPT in pursuing the Transaction or in not pursuing other alternative acquisitions or strategic initiatives, in relation to the Transaction and will incur further costs if the Transaction is not successful (Costs). (b) PIPE represents and warrants that: (i) it has received legal advice on this deed and the operation of this clause 13; and (ii) it and the PIPE Board considers this clause to be fair and reasonable and that it is appropriate to agree to the terms in this clause 13 in order to secure the significant benefits to it, and PIPE Shareholders, resulting from the Transaction.

13.3 Agreement on Costs The parties acknowledge that the amount of the Costs is inherently unascertainable and that, even after termination of this agreement, the Costs will not be able to be accurately ascertained. As a genuine and reasonable pre-estimate of the costs that SPT will suffer if the Transaction does not proceed, the parties agree that, for the purposes of this clause 13, the Costs will be equal to the amount of the Break Fee (it being acknowledged by the parties that the Costs may be in excess of this amount).

13.4 Reimbursement of Costs (a) PIPE agrees to pay to SPT the Break Fee if at any time after execution of this agreement, any of the following events occur: (i) any PIPE Director: (A) fails to recommend as described in clause 7.7(a); (B) makes any public statement or takes any action that contradicts his or her recommendation; (C) qualiﬁes their support of the Transaction, or withdraws his or her recommendation; or (D) recommends against the Transaction, in each case other than as a result of the Independent Expert opining that the Scheme is not in the best interests of PIPE Shareholders (or the Independent Expert having opined that the Scheme is in the best interests of PIPE Shareholders, changes that opinion other than as a consequence of a Competing Transaction) and the Scheme has not become Effective by the Sunset Date; (ii) the Court fails (taking into account all appeals) to approve the Scheme for the purposes of section 411(1)(b) of the Corporations Act as a result of a material non-compliance by PIPE with any of its obligations under this agreement; (iii) the Effective Date of the Scheme has not occurred prior to the Sunset Date as a consequence of non-compliance by PIPE with any of its obligations under this agreement; (iv) a Competing Transaction is announced by the Sunset Date and:

B25 ANNEXURE B – IMPLEMENTATION AGREEMENT

(A) the Competing Transaction results in a persons obtaining Control of, or merging or amalgamating with, PIPE, within 6 months of it being announced; or (B) within 3 months of that Competing Transaction being announced, the PIPE Directors unanimously recommend it in the absence of a superior proposal and no superior proposal is subsequently announced by SPT, (v) by the Sunset Date, a person other than SPT acquires directly or indirectly (including by way of joint venture or dual listed company structure) an interest in all or a substantial part of the business or assets of the PIPE Group; or (vi) SPT terminates this agreement under clause 10.1(a)(ii); or (vii) a PIPE Material Adverse Event or a PIPE Prescribed Occurrence occurs and SPT terminates this agreement as a result. (b) The payment of the Break Fee by PIPE to SPT provided for in this clause 13.4 must be made within 5 Business Days of receipt of a written demand for payment by SPT. The demand may only be made after the occurrence of an event referred to in clause 13.4(a).

13.5 Claims Despite anything else in this agreement: (a) if PIPE becomes liable to pay the Break Fee under clause 13.4 and pays the Break Fee to SPT: (i) the liability of PIPE in respect of any Claim that arises under or in respect of this agreement is limited to an amount equal to the Break Fee; and (ii) PIPE will have no further liability or obligations under this agreement whatsoever, and any Claims or liabilities which had arisen prior to such payment will immediately lapse. (b) PIPE will not be required to pay the Break Fee if it validly terminates this agreement in accordance with clause 10.1(a) (ii), clause 10.1(c)(i) or clause 10.1(c)(iii) before any of the circumstances in clause 13.4(a) occur.

13.6 Compliance with law If a court or the Takeovers Panel determines that any part of the Break Fee: (a) constitutes or would, if performed, constitute: (i) a breach of the ﬁduciary or statutory duties of the PIPE Board; or (ii) unacceptable circumstances within the meaning of the Corporations Act; or (b) is unenforceable or would, if paid, be unlawful for any reason, then PIPE will not be obliged to pay such part of the Break Fee and, if such fee has already been paid, then SPT must within 5 Business Days after receiving written demand from PIPE refund that part of the Break Fee (to the extent it has been received by SPT) to PIPE.

14. GST 14.1 Interpretation In this clause 14 and the rest of this agreement, a word or expression deﬁned in the A New Tax System (Goods and Services Tax) Act 1999 (Cth) has the meaning given to it in that Act.

14.2 GST exclusive (a) Any consideration or amount payable under this agreement, including any non-monetary consideration (as reduced in accordance with clause 14.2(e) if required) (Consideration) is exclusive of GST. (b) If GST is or becomes payable on a Supply made under or in connection with this agreement, an additional amount (Additional Amount) is payable by the party providing consideration for the Supply (Recipient) equal to the amount of GST payable on that Supply as calculated by the party making the Supply (Supplier) in accordance with the GST Law. (c) The additional amount payable under clause 14.2(b) is payable at the same time and in the same manner as the consideration for the supply, subject to the provision of a valid Tax Invoice at or before that time. If a valid Tax Invoice is not provided at or before that time then the Additional Amount is only payable on receipt of a valid Tax Invoice. (d) If for any reason (including, without limitation, the occurrence of an Adjustment Event) the amount of GST payable on a Supply (taking into account any Decreasing or Increasing Adjustments in relation to the Supply) varies from the Additional Amount payable by the Recipient under clause 14.2(b):

B26 (i) the Supplier must provide a refund or credit to the Recipient, or the Recipient must pay a further amount to the Supplier, as appropriate; (ii) the refund, credit or further amount (as the case may be) will be calculated by the Supplier in accordance with the GST Law; and (iii) the Supplier must notify the Recipient of the refund, credit or further amount within 14 days after becoming aware of the variation to the amount of GST payable. Any refund or credit must accompany such notification or the Recipient must pay any further amount within 7 days after receiving such notification, as appropriate. If there is an Adjustment Event in relation to the Supply, the requirement for the Supplier to notify the Recipient will be satisfied by the Supplier issuing to the Recipient an Adjustment Note within 14 days after becoming aware of the occurrence of the Adjustment Event. (e) Despite any other provision in this agreement: (i) if an amount payable under or in connection with this agreement (whether by way of reimbursement, indemnity or otherwise) is calculated by reference to an amount incurred by a party, whether by way of cost, expense, outlay, disbursement or otherwise (Amount Incurred), the amount payable must be reduced by the amount of any Input Tax Credit to which that party is entitled in respect of that Amount Incurred; and (ii) no Additional Amount is payable under clause 14.2(b) in respect of a Supply to which section 84-5 of the GST Act applies. (f) Any reference in this clause to an Input Tax Credit to which a party is entitled includes an Input Tax Credit arising from a Creditable Acquisition by that party and to which the Representative Member of a GST Group of which the party is a member is entitled.

15. Notices 15.1 Service of notices A notice, demand, consent, approval or communication under this agreement (Notice) must be: (a) in writing and in English directed to the recipient’s address for notices speciﬁed in the Details, as varied by any Notice; and (b) hand delivered or sent by prepaid post or facsimile to that address.

15.2 Effective on receipt A Notice given in accordance with clause 15.1 takes effect when received (or at a later time speciﬁed in it), and is taken to be received: (a) if hand delivered, on delivery; (b) if sent by prepaid post, the second Business Day after the date of posting (or the seventh Business Day after the date of posting if posted to or from outside Australia); or (c) if sent by facsimile, when the sender’s facsimile system generates a message conﬁrming successful transmission of the entire Notice unless, within eight hours after the transmission, the recipient informs the sender that it has not received the entire Notice, but if the delivery or transmission under clause 15.2(a) or 15.2(c) is not on a Business Day or after 5.00pm on a Business Day, the Notice is taken to be received at 9.00am on the Business Day after that delivery, receipt or transmission.

16. General 16.1 Alterations This agreement may be altered only in writing signed by each party.

16.2 Approvals and consents Except where this agreement expressly states otherwise, a party may, in its discretion, give conditionally or unconditionally or withhold any approval or consent under this agreement.

16.3 Assignment A party may only assign this agreement or a right under this agreement with the prior written consent of each other party.

16.4 Entire agreement This agreement and the Conﬁdentiality Agreement contain the entire agreement between the parties as at the date of this agreement with respect to their subject matter and supersede all prior agreements and understandings between the parties in connection with them.

B27 ANNEXURE B – IMPLEMENTATION AGREEMENT

16.5 Survival and indemnities (a) Any indemnity or obligation of conﬁdentiality under in this agreement is independent and survives termination of this agreement. Any other term which by its nature is intended to survive termination of this agreement survives termination of this agreement. (b) It is not necessary for a party to incur expense or make payment before enforcing a right of indemnity under this agreement.

16.6 Costs and stamp duty (a) Except as otherwise provided in this agreement, each party must pay its own costs of negotiating, preparing, executing and performing this agreement and the Scheme Booklet and the proposed, attempted or actual implementation of this agreement and the Scheme. (b) Any stamp duty payable on the transfer of PIPE Shares to SPT under the Scheme must be paid by SPT.

16.7 Counterparts This agreement may be executed in counterparts. All executed counterparts constitute one document.

16.8 No merger The rights and obligations of the parties under this agreement do not merge on completion of any transaction contemplated by this agreement.

16.9 Severability A term or part of a term of this agreement that is illegal or unenforceable may be severed from this agreement and the remaining terms or part of a term of this agreement continue in force.

16.10 Waiver A party does not waive a right, power or remedy if it fails to exercise or delays in exercising the right, power or remedy. A single or partial exercise by a party of a right, power or remedy does not prevent another or further exercise of that or another right, power or remedy. A waiver of a right, power or remedy must be in writing and signed by the party giving the waiver.

16.11 Relationship Except where this agreement expressly states otherwise, this agreement does not create a relationship of employment, trust, agency or partnership between the parties.

16.12 No representation or reliance Each party acknowledges that: (a) no party (nor any person acting on its behalf) has made any representation or other inducement to it to enter into this agreement, except for representations or inducements expressly set out in this agreement; (b) it does not enter into this agreement in reliance on any representation or other inducement by or on behalf of any other party, except for any representation or inducement expressly set out in this agreement; and (c) clauses 16.12(a) and 16.12(b) above do not prejudice any rights a party may have in relation to information which had been ﬁled by the other party with ASIC or ASX.

16.13 Governing law and jurisdiction This agreement is governed by the law of Queensland and each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts of Queensland.

16.14 Speciﬁc performance The parties acknowledge that monetary damages alone would not be adequate compensation for a breach by any party of an obligation under this agreement and that speciﬁc performance of that obligation is an appropriate remedy.

16.15 Mutual further assurances Each party must do all things necessary or expedient to be done by it in connection with the matters referred to in this agreement.

B28 Signing page Executed as an agreement.

Signed for PIPE Networks Limited by

______Signature of Director Signature of Director/Secretary

______Name of Director (print) Name of Director/Secretary (print)

Signed for SP Telemedia Limited by

______Signature of Director Signature of Director/Secretary

______Name of Director (print) Name of Director/Secretary (print)

B29 This page has been left blank intentionally. ANNEXURE C Deed Poll

ANNEXURE C This page has been left blank intentionally. ANNEXURE C – DEED POLL

Details Date 2 February 2010

Deed poll by Name TPG Telecom Limited ABN 46 093 058 069

Short form name TPG

Notice details 65 Waterloo Road NORTH RYDE NSW 2113 Facsimile: +61 2 9888 9148 Attention: Alan Latimer

In favour of Name each Scheme Participant

Background A On 11 November 2009, PIPE Networks Limited (ABN 21 099 104 122) (PIPE) and TPG entered into a merger implementation agreement (Merger Implementation Agreement).

B Under the Merger Implementation Agreement, TPG has agreed to execute this deed poll.

C TPG is entering into this deed poll to covenant in favour of each Scheme Participant to perform TPG’s obligations under the Scheme.

C1 ANNEXURE C – DEED POLL

Agreed terms 1. Defined terms & interpretation 1.1 Defined terms In this deed poll: (a) Scheme means the proposed scheme of arrangement under Part 5.1 of the Corporations Act between PIPE and its shareholders, as contemplated by the Merger Implementation Agreement; and (b) capitalised terms have the same meaning as in the Scheme unless otherwise defined in this deed or the context requires otherwise.

1.2 Interpretation This deed poll is to be interpreted according to corresponding rules to those set out in clause 1.2 of the Scheme except that references to ‘this Scheme’ in clause 1.2 will be taken as being references to ‘this deed poll’.

1.3 Nature of deed poll TPG acknowledges that this deed poll may be relied on and enforced by any Scheme Participant in accordance with its terms even though those persons are not party to this deed poll.

2. Conditions Precedent and Termination 2.1 Conditions Precedent The obligations of TPG under clause 3 are subject to the Scheme becoming Effective.

2.2 Termination The obligations of TPG under this deed poll to Scheme Participants will terminate, and the terms of this deed poll will be of no further force or effect: (a) if the condition in clause 2.1 of this deed poll is not satisﬁed or waived in writing by TPG on or before the Sunset Date; or (b) automatically on the termination of the Merger Implementation Agreement, unless TPG and PIPE otherwise agree.

2.3 Consequences of Termination If this deed poll is terminated under clause 2.2 then, in addition and without prejudice to any other rights, powers or remedies available to it: (a) TPG is released from its obligations to further perform this deed poll except those obligations contained in clause 11; and (b) Scheme Participants retain the rights they have against TPG in respect of any breach of this deed poll by TPG which occurred before its termination.

3. Compliance with Scheme Obligations 3.1 Scheme consideration Subject to clause 2, in consideration for the transfer of the Scheme Shares to TPG in accordance with the Scheme, before 12.00 noon on the Implementation Date, TPG will pay the Aggregate Scheme Consideration to an account in the name of PIPE in accordance with clause 5.1 of the Scheme.

3.2 Other obligations Subject to clause 2, TPG will comply with its other obligations, and do all those things contemplated of it, under the Scheme, as if named as a party to the Scheme.

4. Warranties TPG represents and warrants in respect of itself that: (a) incorporation: it is a corporation validly existing under the laws of its place of incorporation; (b) corporate power: it has the corporate power to enter into and perform its obligations under this deed poll and to carry out the transactions contemplated by this deed poll; (c) corporate authorisations: it has taken all necessary corporate action to authorise the entry into this deed poll and has taken or, if the conditions precedent referred to in clause 2.1 are satisﬁed or waived, will take all necessary corporate action to authorise the performance of this deed poll and to carry out the transactions contemplated by this deed poll;

C2 (d) binding obligations: this deed poll is valid and binding upon it; (e) solvency: it is solvent and no resolutions have been passed nor has any other step been taken or legal proceedings commenced or threatened against it for its winding up or dissolution or for the appointment of a liquidator, receiver, administrator or similar officer over any or all of its assets; (f) regulatory action: no regulatory action of any nature has been taken which would prevent, inhibit or otherwise have a material adverse effect on its ability to fulfil its obligations under this deed poll; and (g) no default: this deed poll does not conflict with or result in the breach of or default under any provision of its constitution, any material term or provision of any material agreement or any writ, order or injunction, judgement, law, rule, regulation or instrument to which it is party or subject or of which it is bound.

5. Continuing Obligations This deed poll is irrevocable and remains in full force and effect until TPG has completely performed its obligations under this deed poll or the earlier termination of this deed poll under clause 2.

6. Further assurances TPG will do all things and execute all deeds, instruments, transfers or other documents as may be necessary to give full effect to the provisions of this deed poll and the transactions contemplated by it.

7. Notices (a) A notice, consent or other communication (Notice) under this deed poll is only effective if it is: (i) in writing, signed by or on behalf of the person giving it; (ii) addressed to the person to whom it is to be given; and (iii) either: (A) delivered or sent by pre-paid mail to that person’s address; or (B) sent by fax to that person’s fax number and the machine from which it is sent produces a report that states that it was sent in full. (b) A Notice that complies with this clause 7 is regarded as given and received: (i) if it is delivered or sent by fax: (A) by 5.00pm (local time in the place of receipt) on a Business Day – on that day; or (B) after 5.00pm (local time in the place of receipt) on a Business Day, or on a day that is not a Business Day – on the next Business Day; and (ii) if it is sent by mail: (A) within Australia – 3 Business Days after posting; or (B) to or from a place outside Australia – 7 Business Days after posting. (c) TPG’s notice details are as set out in the Details section of this deed poll.

8. Remedies cumulative The rights, powers and remedies provided to TPG and the Scheme Participants in this deed poll are in addition to, and do not exclude or limit, any right, power or remedy provided by law or equity.

9. Variation (a) A provision in this deed poll may only be varied by TPG if: (i) the variation is agreed to by PIPE, which agreement PIPE may give or withhold without reference to or approval by any PIPE Shareholder being required; and (ii) the Court indicates that the amendment would not, of itself, preclude approval of the Share Scheme. (b) TPG will enter into a further deed poll in favour of the Scheme Participants giving effect to any such amendment.

10. No waiver No failure to exercise nor any delay in exercising any right, power or remedy by a party operates as a waiver. A single or partial exercise of any right, power or remedy does not preclude any other or further exercise of that or any other right, power or remedy. A waiver is not valid or binding on the party granting that waiver unless made in writing.

C3 ANNEXURE C – DEED POLL

11. Costs and stamp duty All stamp duty that may be payable on or in connection with this deed poll and any instrument effected by, executed under or pursuant to this deed poll must be borne by TPG. TPG must indemnify each Scheme Participant on demand against any liability for that stamp duty and associated costs.

12. Assignment The rights and obligations of TPG and each Scheme Participant under this deed poll are personal. They cannot be assigned, encumbered or otherwise dealt with and neither TPG nor any Scheme Participant may attempt, or purport, to do so without the prior written consent of PIPE and TPG.

13. Governing law and jurisdiction This deed poll is governed by the laws of Queensland. TPG submits to the non-exclusive jurisdiction of courts exercising jurisdiction there in connection with matters concerning this deed poll.

C4 Signing page Executed as a deed poll.

Executed by TPG Telecom Limited

______Signature of director Signature of director/company secretary (Please delete as applicable)

______Name of director (print) Name of director/company secretary (print)

C5 This page has been left blank intentionally. ANNEXURE D Scheme

ANNEXURE D This page has been left blank intentionally. ANNEXURE D – SCHEME

Scheme of Arrangement Pursuant to section 411 of the Corporations Act Between

PIPE Networks Limited ABN 21 099 104 122 (PIPE) and The holders of fully paid ordinary shares in PIPE (other than TPG)

1. Definitions and interpretation 1.1 Defined terms The following definitions apply unless the context requires otherwise.

Aggregate Scheme Consideration means the aggregate of all Scheme Consideration payable to Scheme Participants under this Scheme.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited ABN 98 008 624 691 or, as the context requires, the ﬁnancial market conducted by it.

ASX Listing Rules means the ofﬁcial listing rules of ASX.

Business Day means a day that is not a Saturday, Sunday, bank holiday or public holiday in New South Wales or Queensland, Australia.

Conditions Precedent means the conditions precedent set out in clause 5.1 of the Merger Implementation Agreement.

Constitution means the constitution of PIPE (as amended from time to time).

Control has the meaning given in section 50AA of the Corporations Act.

Corporations Act means the Corporations Act 2001 (Cth).

Court means the Supreme Court of Queensland.

Court Approval Date means the ﬁrst day on which an application made to the Court for an order pursuant to section 411(4)(b) of the Corporations Act approving this Scheme is heard or, if the application is adjourned or subject to appeal for any reason, the ﬁrst day on which the adjourned or appealed application is heard.

Court Order means the order of the Court approving this Scheme under section 411(4)(b) of the Corporations Act.

Deed Poll means the deed poll dated 2 February 2010 executed by TPG in favour of the Scheme Participants.

Effective means, when used in relation to this Scheme, the Court Order coming into effect pursuant to section 411(10) of the Corporations Act.

Effective Date means the date on which this Scheme becomes Effective.

Explanatory Statement means the statement pursuant to section 412 of the Corporations Act which has been, or will be, registered by ASIC in relation to this Scheme, a copy of which will be included in the Scheme Booklet.

Implementation Date means the ﬁfth Business Day after the Record Date.

Independent Expert’s Report means the report prepared by a person to be appointed by PIPE as independent expert to prepare a report to be provided to the PIPE Shareholders to advise as to whether this Scheme is in the best interests of PIPE Shareholders.

Merger Implementation Agreement means the agreement of that name dated 11 November 2009 executed by PIPE and TPG.

D1 ANNEXURE D – SCHEME

PIPE Board means the board of directors of PIPE.

PIPE Register means the register of PIPE Shareholders maintained by PIPE pursuant to Chapter 2C of the Corporations Act.

PIPE Share means a fully paid ordinary share in the capital of PIPE.

PIPE Shareholder means a person registered in the PIPE Register as the holder of a PIPE Share.

PIPE means PIPE Networks Limited ABN 21 099 104 122.

Record Date means 5.00 pm on the ﬁfth Business Day following the Effective Date or such other date (after the Effective Date) as PIPE and TPG may agree in writing.

Registered Address means, in relation to a PIPE Shareholder, the address of the PIPE Shareholder as recorded in the PIPE Register.

Registry means the manager from time to time of the PIPE Register.

Related Body Corporate means, in relation to a person, any entity that is related to that person within the meaning of section 50 of the Corporations Act or which is an economic entity (as deﬁned in any approved Australian accounting standard) that is Controlled by that person.

Scheme means this scheme of arrangement, subject to any alterations or conditions made or required by the Court under section 411(6) of the Corporations Act and approved in writing by TPG and PIPE.

Scheme Booklet means the information to be despatched to all PIPE Shareholders and approved by the Court in connection with this Scheme, including this Scheme, the Deed Poll, the Explanatory Statement, the Independent Expert’s Report, and notices convening the Scheme Meeting together with the proxy form for that meeting.

Scheme Consideration means: (a) subject to paragraph (b), $6.30 cash for each Scheme Share held by a Scheme Participant; or (b) if the record date for any entitlement to be paid or participate in a dividend, distribution, return of capital or other entitlement occurs in respect of a PIPE Share after the date of the Merger Implementation Agreement but on or before the Implementation Date (which, for the avoidance of doubt, does not include the dividend with a record date of 6 November 2009 as announced to ASX before the date of the Merger Implementation Agreement), $6.30 cash for each Scheme Share held by a Scheme Participant less the amount per Scheme Share of any such dividend, distribution, return of capital or entitlement.

Scheme Meeting means the meeting of PIPE Shareholders (other than TPG) in relation to this Scheme convened by order of the Court pursuant to section 411(1) of the Corporations Act. It includes any adjournment of that meeting.

Scheme Participant means each PIPE Shareholder as at 5.00 pm on the Record Date (other than TPG).

Scheme Share means each PIPE Share held by a Scheme Participant.

Scheme Transfer means, for each Scheme Participant, a proper instrument of transfer of their Scheme Shares for the purpose of section 1071B of the Corporations Act, which may be a master transfer of all Scheme Shares.

Sunset Date means 30 April 2010.

TPG means TPG Telecom Limited ABN 46 093 058 069.

D2 1.2 Interpretation In this Scheme, except where the context otherwise requires: (a) the singular includes the plural and vice versa, and a gender includes other genders; (b) another grammatical form of a defined word or expression has a corresponding meaning; (c) a reference to a clause, paragraph, schedule or annexure is to a clause or paragraph of, or schedule or annexure to, this Scheme, and a reference to this Scheme includes any schedule or annexure, unless specified otherwise; (d) a reference to a document or instrument includes the document or instrument as novated, altered, supplemented or replaced from time to time; (e) a reference to A$, $A, dollar or $ is to Australian currency; (f) a reference to time is to Sydney, Australia time; (g) a reference to a party is to a party to this Scheme, and a reference to a party to a document includes the party’s executors, administrators, successors and permitted assigns and substitutes; (h) a reference to a person includes a natural person, partnership, body corporate, association, governmental or local authority or agency or other entity; (i) a reference to a statute, ordinance, code or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them; (j) a word or expression defined in the Corporations Act has the meaning given to it in the Corporations Act; (k) the meaning of general words is not limited by specific examples introduced by including, for example or similar expressions; (l) any agreement, representation, warranty or indemnity by two or more parties (including where two or more persons are included in the same defined term) binds them jointly and severally; (m) any agreement, representation, warranty or indemnity in favour of two or more parties (including where two or more persons are included in the same defined term) is for the benefit of them jointly and severally; (n) a rule of construction does not apply to the disadvantage of a party because the party was responsible for the preparation of this agreement or any part of it; and (o) if a day on or by which an obligation must be performed or an event must occur is not a Business Day, the obligation must be performed or the event must occur on or by the next Business Day.

1.3 Headings Headings are for ease of reference only and do not affect interpretation.

2. Preliminary 2.1 PIPE (a) PIPE is a public company limited by shares, incorporated in Australia and registered in Queensland. Its registered office is at Level 9, Indus House, 127 Creek Street, Brisbane Queensland 4000. (b) PIPE is admitted to the official list of ASX and PIPE Shares are officially quoted on ASX. (c) As at the date of the Scheme Booklet, 59,221,171 PIPE Shares were on issue.

2.2 TPG (a) TPG is a public company limited by shares, incorporated in Australia and registered in New South Wales. Its registered office is at 65 Waterloo Road, North Ryde New South Wales 2113. (b) TPG is admitted to the official list of ASX and ordinary shares in the capital of TPG are officially quoted on ASX.

2.3 TPG obligations and supporting documents (a) This document contains provisions purporting to impose obligations on TPG. However, those provisions do not obtain legal force by operation of section 411 of the Corporations Act but rather, so far as PIPE is concerned, under the Merger Implementation Agreement and so far as PIPE Shareholders are concerned, under the Deed Poll. In interpreting this document as a scheme of arrangement under that section, those provisions are to be interpreted as merely declaratory. (b) PIPE and TPG have agreed, by executing the Merger Implementation Agreement, to propose and implement the terms of, and to perform their respective obligations under, this Scheme. (c) TPG has executed a Deed Poll pursuant to which TPG has covenanted in favour of each Scheme Participant to do all those things TPG is required to do under this Scheme. (d) If this Scheme becomes Effective, PIPE undertakes in favour of each Scheme Participant that it will enforce the Deed Poll against TPG on behalf of and as agent and attorney for the Scheme Participants.

D3 ANNEXURE D – SCHEME

3. Conditions precedent (a) This Scheme is conditional on: (i) all of the Conditions Precedent having been satisfied or waived in accordance with the terms of the Merger Implementation Agreement; (ii) the Merger Implementation Agreement having not been terminated as at 8.00 am on the Court Approval Date; (iii) a Court Order having been made; and (iv) such other conditions imposed by the Court under section 411(6) of the Corporations Act, as are acceptable to TPG and PIPE, having been satisfied. (b) The fulfilment of each condition in clause 3(a) is a condition precedent to the binding effect of this Scheme. (c) On the Court Approval Date, PIPE and TPG must provide to the Court a certificate confirming whether or not all the conditions precedent to this Scheme, other than the conditions in clauses 3(a)(iii) and 3(a)(iv), have been satisfied or waived. (d) This Scheme will lapse and be of no further force or effect if the Effective Date has not occurred on or before the Sunset Date or such later date as the Court, with the consent of TPG and PIPE, may order.

4. The Scheme 4.1 Effect of Scheme (a) If this Scheme becomes Effective then: (i) all the Scheme Shares (together with all rights and entitlements attaching to the Scheme Shares) will be transferred to TPG; (ii) PIPE will enter the name of TPG in the PIPE Register in respect of all the Scheme Shares; (iii) TPG will provide the Aggregate Scheme Consideration to PIPE in accordance with clause 5; and (iv) PIPE will pay the Scheme Consideration to each PIPE Shareholder in accordance with clause 5, in accordance with the provisions of this Scheme. (b) If this Scheme becomes Effective, it will: (i) bind PIPE and all Scheme Participants, including those who do not attend the Scheme Meeting, those who do not vote at that meeting and those who vote against this Scheme at that meeting; and (ii) override the Constitution, to the extent of any inconsistency.

4.2 Procedural matters (a) If the Court makes the Court Order, PIPE must lodge with ASIC an office copy of that order on the day such office copy is received or such later date as agreed in writing by TPG. (b) This Scheme will come into effect on the Effective Date. (c) Before 12.00 noon on the Implementation Date, in consideration for the transfer of all the Scheme Shares to TPG, TPG must pay to PIPE in the manner required by clause 5 the Aggregate Scheme Consideration. (d) On the Implementation Date, subject to TPG paying the Aggregate Scheme Consideration in accordance with clause 5 and TPG providing PIPE with written confirmation of that payment: (i) all of the Scheme Shares together with all rights and entitlements attaching to the Scheme Shares as at that time will be transferred to TPG without the need for any further act by any Scheme Participant (other than acts performed by PIPE (or its directors or officers) as attorney or agent of the Scheme Participants under clause 8.2 or otherwise); and (ii) PIPE must deliver to TPG transfers of all the Scheme Shares duly completed and executed on behalf of the Scheme Participants in the form of Scheme Transfers which transfer all of the Scheme Shares to TPG. (e) TPG must immediately execute the transfers referred to in clause 4.2(d)(ii) as transferee and deliver the Scheme Transfers to PIPE for registration. (f) PIPE must, immediately following receipt of the transfers under clause 4.2(e) (in the form of Scheme Transfers in respect of the Scheme Shares), enter the name and address of TPG in the PIPE Register in respect of all the Scheme Shares. (g) The PIPE Board will be reconstituted by: (i) the appointment of the nominees of TPG as directors of PIPE on the Effective Date (or such later date as agreed in writing by TPG) so that the nominees of TPG represent a majority of the PIPE Board; and

D4 (ii) the resignation from the PIPE Board of all persons who are not nominees of TPG as soon as practicable after the Aggregate Scheme Consideration has been paid (provided that a proper board is constituted at all times).

5. Scheme Consideration 5.1 Scheme Consideration The obligations of TPG to pay the Aggregate Scheme Consideration must be satisfied by: (a) TPG, before 12.00 noon on the Implementation Date, depositing into an account in the name of PIPE an amount equal to the Aggregate Scheme Consideration in cleared funds; (b) subject to TPG having complied with clause 5.1(a), PIPE procuring that: (i) such amount be held by PIPE on trust for the Scheme Participants (except that any interest on the amount will be for the account of TPG) for the purpose of payment of the Aggregate Scheme Consideration to the Scheme Participants within five Business Days of the Implementation Date; and (ii) the Aggregate Scheme Consideration is paid to the Scheme Participants within five Business Days of the Implementation Date by either: (A) dispatching or procuring the dispatch to each Scheme Participant by pre-paid post (or pre-paid airmail if the address is outside Australia) to their Registered Address at the Record Date a cheque in Australian currency drawn on an Australian bank in the name of that Scheme Participant for an amount equal to; or (B) where the Scheme Participant has nominated (by written notice to PIPE on or before the Record Date) a bank account with an Australian financial institution for any purpose (including for the purpose of payment of the Scheme Consideration), then by depositing directly to that bank account an amount equal to, the number of Scheme Shares held by that Scheme Participant multiplied by the Scheme Consideration.

5.2 Joint holders In the case of joint holders of Scheme Shares, any Scheme Consideration must be paid by a cheque forwarded in the names of those joint holders or where the joint holders have nominated a bank account under clause 5.1(b)(ii)(B), the amount shall be deposited directly to the nominated bank account of the joint holders.

5.3 Court notices In the case of a notice having been given to PIPE (or the Registry) of an order made by a court of competent jurisdiction:

(a) which requires payment to a third party of a sum in respect of PIPE Shares held by a particular Scheme Participant, which would otherwise be payable to the particular Scheme Participant in accordance with clause 5.1(b), then PIPE shall procure that payment is made in accordance with that order; or (b) which would prevent PIPE from making payment to any particular Scheme Participant in accordance with clause 5.1(b), PIPE shall procure that PIPE (or Registry) retains an amount, in Australian dollars, equal to the number of Scheme Shares held by that Scheme Participant multiplied by the Scheme Consideration until such time as payment in accordance with clause 5.1(b) is permitted by law.

6. Dealings in PIPE Shares (a) For the purpose of establishing the persons who are Scheme Participants, dealings in PIPE Shares may only be recognised if: (i) in the case of dealings of the type to be effected using CHESS, the transferee is registered in the PIPE Register as the holder of the relevant PIPE Shares by the Record Date; and (ii) in all other cases, registrable transfers or transmission applications in respect of those dealings are received at the Registry by the Record Date. (b) PIPE must register registrable transfers or transmission applications of the kind referred to in clause 6(a)(ii) by, or as soon as practicable after, the Record Date. The persons shown in the PIPE Register, and the number of PIPE Shares shown as being held by them, after registration of those transfers and transmission applications will be taken to be PIPE Shareholders, and the number of PIPE Shares held by them, on the Record Date. (c) PIPE may not accept for registration, nor recognise for any purpose, any transfer or transmission application in respect of PIPE Shares received after the Record Date (or received prior to the Record Date not in registrable form). (d) PIPE must maintain or procure the maintenance of the PIPE Register in accordance with this clause 6. The PIPE Register immediately after registration of registrable transfers or transmission applications of the kind referred to in clause 6(a)(ii) will solely determine the persons who are Scheme Participants and their entitlements to the Scheme Consideration.

D5 ANNEXURE D – SCHEME

(e) From the Record Date and until registration of TPG in respect of all Scheme Shares under clause 4.2(f), no PIPE Shareholder may deal with PIPE Shares in any way except as set out in this Scheme and any attempt to do so will have no effect. (f) On or before 10.00 am on the Business Day immediately before the Implementation Date, PIPE must give to TPG details of the names and addresses shown in the PIPE Register of all Scheme Participants and of the number of Scheme Shares held by each of them on the Record Date.

7. Quotation of PIPE Shares (a) It is expected that the suspension of trading in PIPE Shares on ASX will occur from the close of trading on the Effective Date. (b) On a date after the Implementation Date to be determined by TPG, PIPE will apply for termination of the ofﬁcial quotation on ASX of PIPE Shares and apply to have itself removed from the ofﬁcial list of ASX.

8. General 8.1 Alterations and conditions If the Court proposes to approve this Scheme subject to alterations or conditions, PIPE may, by its counsel or solicitors but subject to the prior written approval of TPG, consent on behalf of all Scheme Participants to those alterations or conditions.

8.2 Covenants by Scheme Shareholders (a) Each Scheme Participant: (i) agrees to the transfer of all of their Scheme Shares to TPG in accordance with this Scheme; (ii) agrees to the modiﬁcation or variation (if any) of the rights attaching to their Scheme Shares arising from this Scheme; (iii) without the need for any further act, irrevocably appoints PIPE and each of its directors and ofﬁcers, jointly and severally, as that Scheme Participant’s attorney and agent for the purpose of executing any document or doing any other act necessary to give full effect to this Scheme and the transactions contemplated by it; and (iv) consents to PIPE doing all things and executing all deeds, instruments, transfers or other documents as may be necessary or desirable to give full effect to this Scheme and the transactions contemplated by it, including (without limitation) a proper instrument of transfer of its Scheme Shares for the purposes of section 1071B of the Corporations Act in the form of Scheme Transfers. (b) Subject to the provision of the Aggregate Scheme Consideration by TPG for the Scheme Shares in the manner contemplated in clause 5, on and from the Implementation Date until PIPE registers TPG as the holder of all Scheme Shares in the PIPE Register, each Scheme Participant: (i) is deemed to have appointed PIPE as its attorney and agent (and directed PIPE in such capacity) to appoint the Chairman of TPG (or other nominee of TPG) as its sole proxy and, where applicable, corporate representative to attend shareholder meetings of PIPE, exercise the votes attaching to the Scheme Shares of which they are the registered holder and sign any PIPE Shareholders’ resolution, and no Scheme Participant may attend or vote at any of those meetings or sign or vote on any resolutions (whether in person, by proxy or by corporate representative) other than pursuant to this clause 8.2(b). PIPE undertakes in favour of each Scheme Participant that it will appoint the Chairman of TPG (or other nominee of TPG) as the Scheme Participant’s proxy or, where applicable, corporate representative in accordance with this clause 8.2(b); and (ii) must take all other actions in the capacity as a registered holder of Scheme Shares as TPG reasonably directs.

8.3 Warranties by Scheme Participants Each Scheme Participant is deemed to have warranted to PIPE in its own right and on behalf of TPG that all their Scheme Shares (including any rights and entitlements attaching to those Scheme Shares) which are transferred to TPG under this Scheme will, at the date they are transferred to TPG, be fully paid and free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and restrictions on transfer of any kind and that they have full power and capacity to sell and to transfer such Scheme Shares (including any rights and entitlements attaching to those PIPE Shares) to TPG.

D6 8.4 Status of Scheme Shares (a) To the extent permitted by law, all Scheme Shares (including any rights and entitlements attaching to those Scheme Shares) which are transferred to TPG under this Scheme will, at the date of the transfer of them to TPG, vest in TPG free from all mortgages, charges, liens, encumbrances and interests of third parties of any kind, whether legal or otherwise, and free from any restrictions on transfer of any kind not referred to in this Scheme. (b) TPG will be beneﬁcially entitled to the Scheme Shares transferred to it under this Scheme pending registration by PIPE of the name and address of TPG in the PIPE Register as the holder of the Scheme Shares.

8.5 Notices Where a notice, transfer, transmission application, direction or other communication referred to in this Scheme is sent by post to PIPE, it will not be deemed to be received in the ordinary course of post or on a date other than the date (if any) on which it is actually received at PIPE’s registered ofﬁce.

8.6 Further assurances PIPE must do all things and execute all deeds, instruments, transfers or other documents as may be necessary or desirable to give full effect to this Scheme and the transactions contemplated by it.

8.7 Costs PIPE must pay the costs of this Scheme, except that TPG must pay any stamp duty payable on the transfer by Scheme Participants of the Scheme Shares to TPG.

8.8 Proper law The proper law of this Scheme is the law of Queensland.

D7 This page has been left blank intentionally. ANNEXURE E Conditions to TPG’s Financing

ANNEXURE E This page has been left blank intentionally. Definitions used in this Annexure Defined terms used in this Annexure have the same meaning as provided in Section 9 of this document unless otherwise defined below.

Agent means ANZ.

Borrower means TPG and any other wholly owned subsidiaries of TPG which may be agreed.

Facility Agent means ANZ.

Finance Documents includes: (a) facility agreement between the Finance Parties and the Obligors; (b) unlimited cross guarantee and indemnity from each Obligor; (c) security documents including the Securities; (d) subordination deed in relation to any shareholder loans or notes (if required); (e) hedging agreement between the Borrower and the Lender; and (f) any other documents which the Finance Parties’ legal adviser believes are necessary to fully secure the interests of the Finance Parties.

Finance Parties means the MLAUB, the Lenders, hedge counterparties, the Facility Agent and the Security Trustee.

Guarantors means the Borrower and each of its wholly owned subsidiaries, and any other new subsidiaries once created or once 100% acquired such that the total assets, EBITDA and revenue of the Borrower and each Guarantor represent not less than 95% of the total assets, EBITDA and revenue of the group.

Lenders means ANZ and a number of other banks or ﬁnancial institutions arranged by ANZ in consultation with TPG.

MLAUB or Mandated Lead Arranger, Underwriter and Bookrunner means ANZ.

Obligors means the Borrower and the Guarantors.

Second Court Hearing Date means the Second Court Date.

Securities means first ranking: (a) new fixed and floating charges over all assets and undertaking from each Obligor; (b) mortgages over any real property owned by the Obligors; and (c) share mortgages over any shares in each of the operating companies.

Security Trustee means ANZ Fiduciary Services Pty Ltd.

Target means PIPE Networks.

Financing conditions Under the Commitment Letter, the Lenders are not obliged to provide any drawing under the Facilities until the Facility Agent has received the following conditions precedent in a form and substance satisfactory to it (acting on the instructions ofall Lenders): 1. all Finance Documents, duly executed and delivered to the Agent; 2. where relevant, evidence that all Finance Documents have been appropriately stamped, or that funds in the appropriate amount have been provided to the Finance Parties’ legal advisor to allow stamping to occur; 3. legal opinion from the Finance Parties’ legal advisor conﬁrming enforceability of all Finance Documents;

E1 ANNEXURE E – CONDITIONS TO TPG’S FINANCING

4. any document required by a Finance Party pursuant to its know your customer requirements and each Finance Party has received a properly executed authorised representative certificate and the identity of each authorised representative has been verified to each Finance Party’s satisfaction in order to comply with the Anti-Money Laundering and Counter- Terrorism Financing Act 2006 (Cth); 5. certified corporate structure chart for the group; 6. audited financial model; 7. latest audited consolidated Financial Statements for the group; 8. provision of a funds flow statement setting out sources and uses of funds in the agreed form; 9. evidence that the Borrower has raised equity funding (or equivalent acceptable to all Lenders) (Equity Raising) on a fully underwritten basis on terms, structure and conditions and by underwriters acceptable to the Lenders, and evidence of the receipt by the Borrower of the net proceeds of the Equity Raising, which together with any cash on balance sheet available to be applied to fund the scheme consideration, is in a minimum amount of $110 million and that those proceeds will be applied, in addition to drawings under the Facilities, to fund the acquisition; 10. a copy of the scheme booklet in form and substance acceptable to the Lenders (acting reasonably) and the implementation agreements and other scheme documents in form and substance acceptable to the Lenders and any relevant document associated with the acquisition of the shares of the Target; 11. contractual arrangements for the retention of key management of the business; 12. evidence that any financial indebtedness of any group member, the Target or any of its subsidiaries (other than permitted financial indebtedness) has been or will be, on the date of first drawdown, fully and finally repaid; 13. evidence that any security interest in respect of any assets of any group member, the Target or any of its subsidiaries (other than a permitted security interest) has been or will be, on the date of first drawdown, released, including without limit arrangements satisfactory to the Lenders for the release in full of all security interests granted in favour of Tyco Telecommunications (US) Inc; 14. the acquisition of the Target, has become or been declared unconditional and completion of the acquisition will occur simultaneously with first drawdown (including without limitation that the scheme is approved by a court order and the court order has been lodged with ASIC, all conditions precedent to implementation of the scheme of arrangement have been satisfied or waived with the prior written consent of the Facility Agent, that the implementation documents have not been amended or varied without the prior written consent of the Facility Agent, evidence of court approval of the scheme of arrangement such that the scheme has become effective and the Borrower will acquire 100% of the shares in the Target); 15. a copy of the proposed form of all documents required under section 260B of the Corporations Act to approve the provision of financial assistance which are required to be completed by the Target and the Target’s subsidiaries before they lawfully provide Security for the Facilities; 16. all necessary corporate and regulatory approvals and consents have been obtained and remain in full force and effect; 17. a certified copy of the group’s hedging policy; 18. evidence of appropriate insurances, noting the Security Trustee’s interest; 19. certified copies of all material documents including without limitation the Tyco Telecommunications (US) Inc supply contract and related agreements; 20. verification certificate signed by 2 directors of each Obligor: (a) attaching relevant documents including extract of minutes of directors’ meeting authorising entry into the Finance Documents by the Obligor, constitutional documents and (if applicable) powers of attorney; and (b) certifying usual matters including solvency, corporate benefit and no breach of the Corporations Act including Chapter 2E (related party transactions);

21. all fees and expenses payable in connection with the Facilities prior to first drawdown must have been paid; 22. to be delivered prior to 8.00am on the Second Court Hearing Date, a certificate by 2 directors of the Borrower that to the best of their knowledge and belief having made all due enquiries nothing has occurred, since the date of the most recent consolidated financial statements for the group that have been delivered to the Agent, which has had or which would be reasonably likely to have a material adverse effect on the business, assets, revenues, prospects or overall financial

E2 condition of the group taken as a whole, or on the ability of a Borrower or a Guarantor to perform its material obligations under any Finance Document; 23. reports from: (a) Minter Ellison, in respect of legal due diligence; (b) Deloitte, in respect of ﬁnancial due diligence; (c) Deloitte, in respect of tax; (d) Deloitte, in respect of the industry; (e) Deloitte, in respect of the ﬁnancial model; (f) AON, in respect of insurance,

each with an appropriate reliance letter (or, in the case of the ﬁnancial model report referred to in paragraph (e), a release letter) in favour of each Finance Party;

24. the hedging protocol; and 25. ASIC searches showing no breach of the facility agreement.

E3 This page has been left blank intentionally. ANNEXURE F Notice of Scheme Meeting

ANNEXURE F This page has been left blank intentionally. ANNEXURE F – NOTICE OF SCHEME MEETING

Notice of Court ordered meeting of holders of PIPE Networks Limited shares (other than TPG Telecom Limited) By an Order of the Supreme Court of Queensland made on 5 February 2010 pursuant to section 411(1) of the Corporations Act, a meeting of PIPE Shareholders (other than TPG Telecom Limited) will be held at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane on Friday, 12 March 2010 commencing at 10.00 am (Brisbane time).

The Court has also directed that Mr Roger Clarke act as chairman of the meeting or failing him Mr Greg Baynton, and has directed the chairman to report the result of the meeting to the Court.

To enable you to make an informed voting decision, further information on the Scheme is set out in the document of which the notice convening the meeting forms part. Terms used in this notice have the same meaning as set out in the deﬁned terms in Section 9 of the document of which this notice forms part.

(a) Business of the meeting

To consider and, if thought ﬁt, pass the following resolution:

“That pursuant to, and in accordance with, section 411 of the Corporations Act, the scheme of arrangement proposed between the company and the holders of its ordinary shares (other than TPG Telecom Limited) as contained in and more particularly described in the document of which the notice convening this meeting forms part is approved (with or without modiﬁcation as approved by the Supreme Court of Queensland).”

(b) Voting

How to vote Shareholders can vote in either of two ways: s by attending the meeting and voting in person or by attorney or, in the case of corporate shareholders, by corporate representative; or s by appointing a proxy to attend and vote on their behalf, using the Proxy Form.

Voting in person Shareholders are asked to arrive at the venue 30 minutes prior to the time designated for the Scheme Meeting to allow for registration for the meeting. A representative of a company attending the meeting must present satisfactory evidence of his or her appointment to attend on its behalf, unless previously lodged with the PIPE Networks Share Registry.

Voting by proxy or attorney s A shareholder entitled to attend and vote is entitled to appoint not more than two proxies. Each proxy will have the right to vote on the poll and also to speak at the Scheme Meeting. s The appointment of a proxy may specify the proportion or the number of votes that the proxy may exercise. Where more than one proxy is appointed, and if the appointment does not specify the proportion or number of the shareholder’s votes each proxy may exercise, each proxy may exercise half of the votes (disregarding fractions). s A proxy need not be a PIPE Shareholder. s If a proxy is not directed how to vote on an item of business, the proxy may vote or abstain from voting, as that person thinks ﬁt. s If a proxy is instructed to abstain from voting on an item of business, that person is directed not to vote in the shareholder’s behalf on the poll, and the PIPE Shares the subject of the proxy appointment will not be counted in computing the required majority. s Shareholders who return their Proxy Form(s) with a direction how to vote but do not nominate the identity of their proxy will be taken to have appointed the chairman of the meeting as their proxy to vote on their behalf. If a Proxy Form is returned but the nominated proxy does not attend the meeting, the chairman of the meeting will act in place of the nominated proxy and vote in accordance with any instructions. Proxy appointments in favour of the chairman of the Scheme Meeting, the company secretary of PIPE Networks or any Director which do not contain a direction will be used to support the resolution to approve the Scheme.

F1 ANNEXURE F – NOTICE OF SCHEME MEETING

s A vote given in accordance with the terms of a proxy or the appointment of an attorney is valid despite the revocation of the proxy or the attorney, unless notice in writing of the revocation has been received by PIPE Networks before the start of the Scheme Meeting. s To be effective, a Proxy Forms or the appointment of an attorney, and the original or certiﬁed copy of any power of attorney or other authority under which that Proxy Form or appointment of an attorney was signed must be: – sent by mail to the PIPE Networks Share Registry (using the reply envelope included with the document), addressed, Pipe Network Limited, C/- Link Market Services Limited, Locked Bag A14, Sydney South, NSW, 1235, Australia; – faxed to (02) 9287 0309 or (07) 3233 9889, from within Australia or +61 2 9287 0309 or +61 7 3233 9889 from overseas; – lodged online at www.linkmarketservices.com.au; – delivered by hand to Link Market Services Limited, Level 12, 680 George Street, Sydney, NSW, 2000; or – sent to PIPE Networks’ registered ofﬁce at Level 9, PIPE Networks House, 127 Creek Street, Brisbane, QLD, 4000, so that they are received by no later than 10.00 am on Wednesday, 10 March 2010. A Proxy Form or appointment of an attorney received after this time will be invalid. s A Proxy Form must be signed by the shareholder or the shareholder’s attorney. Proxies given by corporations must be executed in accordance with the Corporations Act.

Jointly held PIPE Shares If the PIPE Shares are jointly held, only one of the joint shareholders is entitled to vote. If more than one shareholder votes in respect of jointly held PIPE Shares, only the vote of the shareholder whose name appears ﬁrst in the Register will be counted.

PIPE Networks has determined pursuant to regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the time for determining eligibility to vote at the Scheme Meeting is 7.00 pm (Sydney time) on Wednesday, 10 March 2010. Only those shareholders entered on the Register at that time will be entitled to attend and vote at the Scheme Meeting.

(d) Court approval

In accordance with section 411(4)(b) of the Corporations Act, in order to become effective the Scheme (with or without modiﬁcation) must be approved by an order of the Court. If the resolution put to this meeting is passed by the requisite majorities and the other conditions precedent to the Scheme are satisﬁed, PIPE Networks intends to apply to the Court on Wednesday, 17 March 2010 for approval of the Scheme.

F2 This page has been left blank intentionally. This page has been left blank intentionally. DIRECTORY

PIPE Networks Limited Level 9, PIPE Networks House 127 Creek Street Brisbane QLD 4000 AUSTRALIA

Financial Adviser Macquarie Capital Advisers Limited 1 Martin Place Sydney NSW 2000 AUSTRALIA

Australian Legal Adviser Clayton Utz 1 O’Connell Street Sydney NSW 2000 AUSTRALIA

Independent Expert Ernst & Young Transaction Advisory Services Limited 1 Eagle Street Brisbane QLD 4000 AUSTRALIA

Auditor Hacketts DFK Level 3, 549 Queen Street Brisbane QLD 4000 AUSTRALIA

Share Registry Link Market Services Limited Level 15, 324 Queen Street Brisbane QLD 4000 AUSTRALIA

LODGE YOUR PROXY All enquiries to: * By mail: PIPE Networks Limited ) Telephone: +61 2 8280 7454 C/- Link Market Services Limited ABN 21 099 104 122 Locked Bag A14 Sydney South NSW 1235 Australia 7 By fax: +61 2 9287 0309 : ONLINE www.linkmarketservices.com.au *X99999999999* X99999999999

SCHEME MEETING PROXY

STEP 1 APPOINT A PROXY I/We being a member(s) of PIPE Networks Limited and entitled to attend and vote hereby appoint: the Chairman OR if you are NOT appointing the Chairman of the of the Meeting Meeting as your proxy, please write the name of the (mark box) person or body corporate (excluding the registered shareholder) you are appointing as your proxy or failing the person/body corporate named, or if no person/body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally on my/our behalf and to vote for me/us in accordance with the following directions (or if no directions have been given, as the proxy sees ﬁt) at the Scheme Meeting of PIPE Networks Limited to be held at 10:00am on Friday, 12 March 2010, at The Grand Ballroom, Brisbane Marriott Hotel, 515 Queen Street, Brisbane and at any adjournment or postponement of the Scheme Meeting.

Proxies will only be valid and accepted by PIPE Networks Limited if they are signed and received no later than 48 hours before the Scheme Meeting. The Chairman of the Scheme Meeting intends to vote undirected proxies in favour of the items of business. Please read the voting instructions overleaf before marking any boxes with an X

STEP 2 VOTING DIRECTIONS

Your proxy may decide how to vote on any motion at the meeting, except where speciﬁcally directed below.

Resolution 1 For Against Abstain* That pursuant to, and in accordance with, section 411 of the Corporations Act, the scheme of arrangement proposed between the company and the holders of its ordinary shares (other than TPG Telecom Limited) as contained in and more particularly described in the document of which the notice convening this meeting forms part is approved (with or without modiﬁcation as approved by the Supreme Court of Queensland). *PWK PRX001* *PWK

i * If you mark the Abstain box for a particular Item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

STEP 3 SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual)

Sole Director and Sole Company Secretary Director/Company Secretary (Delete one) Director This form should be signed by the shareholder. If a joint holding, all shareholders must sign. If signed by the shareholder’s attorney, the power of attorney must have been previously noted by the registry or a certiﬁed copy attached to this form. If executed by a company, the form must be executed in accordance with the company’s constitution and the Corporations Act 2001 (Cth). PWK PRX001 HOW TO COMPLETE THIS PROXY FORM

Your Name and Address To appoint a second proxy you must: This is your name and address as it appears on the company’s (a) on each of the first Proxy Form and the second Proxy Form share register. If this information is incorrect, please make the state the percentage of your voting rights or number of correction on the form. Shareholders sponsored by a broker shares applicable to that form. If the appointments do not should advise their broker of any changes. Please note: you specify the percentage or number of votes that each proxy cannot change ownership of your shares using this form. may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded. Appointment of a Proxy (b) return both forms together. If you wish to appoint the Chairman of the Meeting as your proxy, mark the box in Step 1. If the person you wish to appoint Signing Instructions as your proxy is someone other than the Chairman of the Meeting please write the name of that person in Step 1. If you You must sign this form as follows in the spaces provided: leave this section blank, or your named proxy does not attend Individual: where the holding is in one name, the holder must the meeting, the Chairman of the Meeting will be your proxy. sign. A proxy need not be a shareholder of the company. A proxy may be an individual or a body corporate. Joint Holding: where the holding is in more than one name, all shareholders must sign. Votes on Items of Business – Proxy Appointment Power of Attorney: to sign under Power of Attorney, you must You may direct your proxy how to vote by placing a mark in lodge the Power of Attorney (or an original certified copy) with one of the boxes opposite each item of business. All your shares the registry. If you have not previously lodged this document will be voted in accordance with such a direction unless you for notation, please attach a certified photocopy of the Power indicate only a portion of voting rights are to be voted on any of Attorney to this form when you return it. item by inserting the percentage or number of shares you wish Companies: where the company has a Sole Director who is to vote in the appropriate box or boxes. If you do not mark also the Sole Company Secretary, this form must be signed by any of the boxes on the items of business, your proxy may vote that person. If the company (pursuant to section 204A of the as he or she chooses. If you mark more than one box on an Corporations Act 2001) does not have a Company Secretary, a item your vote on that item will be invalid. Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Appointment of a Second Proxy Company Secretary. Please indicate the office held by signing You are entitled to appoint up to two persons as proxies to in the appropriate place. attend and vote at the meeting. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning Corporate Representatives the company’s share registry or you may copy this form and If a representative of the corporation is to attend the return them both together. meeting the appropriate “Certificate of Appointment of Corporate Representative” should be produced prior to admission in accordance with the Notice of Meeting. A form of the certificate may be obtained from the company’s share registry.

Lodgement of a Proxy Form This Proxy Form (and any Power of Attorney under which it is signed) must be received at an address given below by 10:00am on Wednesday, 10 March 2010, being not later than 48 hours before the commencement of the meeting (or, if adjourned, the resumption of the meeting). Any Proxy Form (and any Power of Attorney under which it is signed) received after that time will not be valid for the scheduled meeting.

Proxy Forms (and any Power of Attorney under which it is signed) may be lodged using the reply paid envelope or: * by mail: PIPE Networks Limited or PIPE Networks Limited C/- Link Market Services Limited Level 9, PIPE Network House Locked Bag A14 127 Creek Street Sydney South NSW 1235 Brisbane QLD 4000 Australia Australia 7 by fax: +61 2 9287 0309 or +61 7 3233 9889

: online: ONLINE www.linkmarketservices.com.au lodging it online at Link’s website (www.linkmarketservices.com.au) in accordance with the instructions given there (you will be taken to have signed your Proxy Form if you lodge it in accordance with the instructions given on the website); Ä by hand: delivering it to Link Market Services Limited, Level 12, 680 George Street, Sydney NSW 2000.

If you would like to attend and vote at the Scheme Meeting, please bring this form with you. This will assist in registering your attendance.