Amendment Letter dated August 6, 2020 between National Australian Bank Limited and Reading Entertainment Australia Pty. Ltd

1

The Company, each Guarantor and the Bank agree that the Agreement is amended as set out in Schedule 2 (“Amendments”).

2

The amendments set out in paragraph 1 of this letter take effect upon the Bank receiving the following conditions precedent, each in form and substance acceptable to the Bank:

(a)

a PDF copy of this letter duly executed by each Transaction Party within 5 Business Days of the date of this letter; and

(b)

payment by the Company of a non-refundable restructure fee in the amount of A$60,000 within the period specified in paragraph (a) above.

3

Each Transaction Party confirms that the representations and warranties in clause 8 of the Agreement continue to be correct and are not misleading, subject to the limitation that the parties recognise that the COVID-19 Pandemic has had, and continues to have, a material adverse effect on the financial performance and position of the Transaction Parties. Such effects of the COVID- 19 Pandemic on the Transaction Parties shall not of themselves be deemed to be a Material Adverse Effect.

4

Except as expressly provided otherwise in this letter, the Bank reserves its rights in relation to any breach of the Transaction Documents.

5

Each Transaction Party acknowledges incurring obligations and giving rights under this letter for valuable consideration received from the Bank.

6

The Company, each Guarantor and the Bank agree that the Agreement, as amended by this letter, and each of the other Transaction Documents remain in full force and effect.

7

Except to the extent expressly set out in this letter, nothing in this letter or otherwise operates as a waiver of any obligation of a Transaction Party, nor shall anything prevent any further or other exercise, or the exercise, of any right or remedy of the Bank.

8

The parties acknowledge and agree that this letter is a "Transaction Document" for the purposes of the Agreement. The parties also acknowledge that the Banking Code of Practice does not apply to the Transaction Documents and the transactions under them as they are not a 'small business' as defined therein. By entering into this letter,  the parties accept and agree to the terms set out above.

9

If there is a conflict between the Agreement and this letter, the terms of this letter prevail.

10

This letter:

(a)

may consist of a number of copies, each signed by one or more parties to this letter.  If so,  the signed copies are treated as making up the one letter;  and

(b)

will be governed by and construed in accordance with the laws in force in Victoria and each party submits to the non-exclusive jurisdiction of the courts of Victoria.

o

Clause 1.1 (“Definitions”) is amended by including the following new definition immediately before the definition of “Accounting Standards”:

o

The definition of “Fixed Charges Cover Ratio” in clause 1.1 (“Definitions”) is deleted in its entirety and replaced with:

(c)

at any date (other than 31 December 2020, 31 March 2021 and 30 June 2021), the ratio of:

(i)

the aggregate amount of:

(A)

Adjusted EBITDA in respect of the 12 month period ending on that date; and

(B)

Total Lease Payments in respect of the 12 month period ending on that date,

(ii)

the aggregate amount of:

(A)

Gross Interest Expense paid or payable by the Reading Entertainment Australia Group (whether payable in respect of the Facilities or otherwise) in respect of the 12 month period ending on that date; and

(B)

Total Lease Payments in respect of the 12 month period ending on that date;

(d)

at 31 December 2020, 31 March 2021 or 30 June 2021, the ratio of:

(i)

the aggregate amount of:

(A)

Adjusted EBITDA in respect of the 3 month period ending on that date; and

(B)

Total Lease Payments in respect of the 3 month period ending on that date,

(ii)

the aggregate amount of:

(A)

Gross Interest Expense paid or payable by the Reading Entertainment Australia Group (whether payable in respect of the Facilities or otherwise) in respect of the 3 month period ending on that date; and

(B)

Total Lease Payments in respect of the 3 month period ending on that date.

o

the definition of “Margin” in clause 1.1 (“Definitions”) is deleted in its entirety and replaced with:

(a)

1.75% per annum for each Pricing Period which commences during the Relevant Period; and

(b)

for all other Pricing Periods, where the Leverage Ratio as shown in the Annual or Interim Compliance Certificate most recently delivered to the Bank (subject to clause 10.6(e)) on or before the first day of the relevant Pricing Period is:

(i)

greater than 3.0 times, 1.30% per annum;

(ii)

greater than 2.5 times but less than or equal to 3.0 times, 1.15% per annum;

(iii)

greater than 2.0 times but less than or equal to 2.5 times, 1.00% per annum: and

(iv)

less than or equal to 2.0 times, 0.85% per annum.

o

Clause 1.1 (“Definitions”) is amended by including the following new definition immediately before the definition of “Relevant Jurisdiction”:

o

Clause 1.1 (“Definitions”) is amended by including the following new definition immediately after the definition of “Relevant Jurisdiction”:

o

A new clause 9.3A is added as follows:

(a)

The parties acknowledge that:

(i)

AASB 16 took effect on and from 1 January 2019, which changed or eliminated the distinction between operating leases and finance leases; and

(ii)

the parties are continuing to assess the potential effect of AASB 16 on the calculation of the financial ratios referred to in clause 9.7 (“Financial ratios”) and the related definitions.

(b)

For each Calculation Date occurring on or prior to 31 December 2021:

(i)

the financial ratios referred to in clause 9.7 (“Financial ratios”) and the related definitions will be calculated ignoring any changes following AASB 16 taking effect on 1 January 2019; and

(ii)

the Company must provide with its Financial Statements and other financial information any reconciliation statements (audited, where applicable) necessary to enable the financial ratios in clause 9.7 (“Financial ratios”) and the related definitions to be calculated in accordance with paragraph (i).

(c)

If, in the reasonable opinion of the Borrower or the Bank, at any time after 31 December 2021, taking into account the AASB 16 changes when calculating the financial  ratios referred to in clause 9.7 (“Financial ratios”) and the related definitions would materially alter the effect of, or the calculation of, those financial ratios or related definitions, the Borrower and the Bank will negotiate in good faith to amend the relevant undertakings and definitions so that they have an effect comparable to that as if the AASB 16 changes did not apply.

o

Clause 9.4(e) (“Other information”) is amended by deleting the words “within 30 days of the end of every 36 month period from the date of this document” and replacing them with “by 31 July 2021 and every 36 months thereafter”.

o

Clause 9.5(f) (“Other financial undertakings”) is deleted in its entirety and replaced with:

(f)

Distributions: it must not make any Distribution except:

(i)

at any time on or prior to the Relevant Date, with the Bank’s prior written consent; and

(ii)

at any time after the Relevant Date, if:

(A)

no Event of Default subsists; and

(B)

such Distribution will not cause an Event of Default;

o

Clause 9.5(k) (“Other financial undertakings”) is deleted in its entirety and replaced with:

(k)

Management Fees: no Management Fees are paid except:

(i)

at any time on or prior to the Relevant Date, with the Bank’s prior written consent; and

(ii)

at any time after the Relevant Date, if no Event of Default subsists.

o

Clause 9.7(a)(i) (“Financial ratios”) is deleted in its entirety and replaced with:

(i)

Fixed Charges Cover Ratio:

(A)

at 31 December 2020, 31 March 2021 and 30 June 2021, the Fixed Charges Cover Ratio for the Calculation Period ending on that date is not less than 1.25 times (provided that, for the purposes of this sub-paragraph (B) only, “Calculation Period” shall be the period of three (3) months ending on that date); and

(B)

at each other Calculation Date (other than 30 June 2020 and 30 September 2020 (without prejudice to the Borrower’s obligation under clause 9.4(c) in respect of those dates)), the Fixed Charges Cover Ratio for the Calculation Period ending on that date is not less than

o

Clause 9.7(a)(ii) (“Financial ratios”) is deleted in its entirety and replaced with:

(ii)

Leverage Ratio: at each Calculation Date (other than 30 June 2020 to 30 June 2021 inclusive (without prejudice to the Borrower’s obligations under clause 9.4(b) and 9.4(c) in respect of those dates)), the Leverage Ratio for the Calculation Period ending on that date is less than or equal to 3.25 times;