EX-10.9 12 rdi-20151231xex10_9.htm EX-10.9 2015 10K Exhibit 109 NAB Amended Loan Agreement



567 Collins Street Melbourne VIC 3000

GPO Box 9925 Melbourne VIC 3001

Tel +61 3 9672 3000

Fax +61 3 9672 3010

www.corrs.com.au

Picture 1



Sydney Melbourne Brisbane

Perth

 



































National Australia Bank Limited



Reading Entertainment Australia Pty Ltd



Each Guarantor













Restatement Deed

(Corporate Markets Loan & Bank Guarantee Facility Agreement)





















































 


 









Contents

1

Definitions1

2

Consideration1

3

Conditions precedent2

4

Variation of Facility Agreement2

5

Acknowledgments2

6

Warranties and representations2

6.1

General2

6.2

Survival of warranties3

7

General3

7.1

Construction3

7.2

Costs and Expenses4

7.3

Counterparts4

7.4

Entire understanding4

7.5

Governing law and jurisdiction5

Schedule 1 –Guarantors6

Execution8

Annexure A - Restated Document17

 


 

Corrs Chambers Westgarth

 

Date:


 

15th December 2015

 





Parties





National Australia Bank Limited ABN 12 004 044 937 of Pier 3 Level 4, 800 Bourke Street, Docklands, Victoria 3008 (Bank)





Reading Entertainment Australia Pty Ltd ACN 070 893 908 of 98 York Street, South Melbourne, Victoria 3205 (Borrower)





Each person listed in schedule 1 (each a Guarantor)











Agreed terms







1

Definitions

In this document words and expressions which are defined or given a specific meaning in the Facility Agreement but which are not defined or given a specific meaning in this document have the same meaning as in the Facility Agreement. Otherwise, terms have the following meanings.

 



Facility Agreement

The Facility Agreement dated 24 June 2011 between the Bank, the Borrower and the Guarantors, as amended, varied or amended and restated from time to time, including on 14 June 2013 and 27 June 2014.

 



PPSAPersonal Property Securities Act (2009) (Cth).

 



Restated Facility Agreement

The Facility Agreement as varied and restated by this document.

 



Variation DateThe date on which Bank notifies the Borrower that the conditions precedent set out in clause 3 are satisfied.







2

Consideration

Each party has entered into this document in consideration of each other party agreeing to make the acknowledgements contained in this document and to amend the Facility Agreement in accordance with this document and acknowledges receipt of that consideration.

 


 

Corrs Chambers Westgarth





3

Conditions precedent

The amendments to the Facility Agreement are subject to the conditions precedent that:



(a)

the Bank has received in form and substance satisfactory to the Bank:



(i)

an original copy of this document, duly executed by the Borrower and each Guarantor;



(ii)

a non-refundable restructure fee of $30,000; and



(iii)

anything which the Bank has reasonably requested that a party provide to it in relation to the Facility Agreement; and



(b)

no Event of Default or Potential Event of Default subsists.







4

Variation of Facility Agreement

(a)

On and from the Variation Date the Facility Agreement is varied and restated in the form of annexure A.



(b)

The Borrower and each Guarantor agree to be bound by the Restated Facility Agreement on and from the Variation Date.





5

Acknowledgments

The Borrower and each Guarantor:



(a)

acknowledge that nothing in this document or any related financing change statement under the PPS Act releases, terminates or otherwise affects any liabilities of the Borrower to the Bank, or affects its liability under any Transaction Document;



(b)

acknowledge that the Bank has agreed to execute this document at the request of the Borrower and each Guarantor;



(c)

agree to the variation to the Facility Agreement and agrees that each Collateral Security extends to and secures the Borrower’s obligations to the Bank under the Transaction Documents, including the Restated Facility Agreement; and



(d)

acknowledge that their obligations (as borrower, guarantor, indemnifier, or otherwise) and the Bank’s rights are not affected by anything which might abrogate, prejudice or limit them or the effectiveness of this document, including the failure by any person named as an Original Guarantor to become bound by this document.







6

Warranties and representations



6.1

General

The Borrower and each Guarantor warrant and represent to the Bank that:



(a)

at the time of execution, and at the Variation Date:

 


 

Corrs Chambers Westgarth





(i)

it has capacity unconditionally to execute, deliver and comply with its obligations under this document and the Transaction Documents to which it is a party (including the Restated Facility Agreement);



(ii)

it has taken all necessary action to authorise the unconditional execution and delivery of, and the compliance with, its obligations under this document and the Transaction Documents (including the Restated Facility Agreement);



(iii)

this document and the Transaction Documents to which it is a party (including the Restated Facility Agreement) are its valid and legally binding obligations and are enforceable against it by each other party in accordance with the terms of this document and the Transaction Documents to which it is a party (including the Restated Facility Agreement), subject to principles of equity and rules affecting creditors’ rights generally; and



(iv)

its unconditional execution and delivery of this document and compliance with its obligations under this document and the Transaction Documents (including the Restated Facility Agreement) do not contravene:



(A)

any law or directive from a government entity;



(B)

its constituent documents;



(C)

any agreement or instrument to which it is a party; or



(D)

any obligation of it to any other person.



6.2

Survival of warranties

The warranties and representations in clause 6 survive the execution of this document and the variation and restatement of the Facility Agreement.







7

General



7.1

Construction

Unless expressed to the contrary, in this document:



(a)

words in the singular include the plural and vice versa;



(b)

any gender includes the other genders;



(c)

if a word or phrase is defined its other grammatical forms have corresponding meanings;



(d)

‘includes’ means includes without limitation;



(e)

no rule of construction will apply to a clause to the disadvantage of a party merely because that party put forward the clause or would otherwise benefit from it;



(f)

a reference to:

 


 

Corrs Chambers Westgarth





(i)

a person includes a partnership, joint venture, unincorporated association, corporation and a government or statutory body or authority;



(ii)

a person includes the person’s legal personal representatives, successors, assigns and persons substituted by novation;



(iii)

any legislation includes subordinate legislation under it and includes that legislation and subordinate legislation as modified or replaced;



(iv)

an obligation includes a warranty or representation and a reference to a failure to comply with an obligation includes a breach of warranty or representation;



(v)

a right includes a benefit, remedy, discretion or power;



(vi)

time is to local time in Melbourne;



(vii)

‘$’ or ‘dollars’ is a reference to Australian currency;



(viii)

this or any other document includes the document as novated, varied or replaced and despite any change in the identity of the parties;



(ix)

writing includes any mode of representing or reproducing words in tangible and permanently visible form, and includes fax transmissions;



(x)

this document includes all schedules and annexures to it; and



(xi)

a clause, schedule or annexure is a reference to a clause, schedule or annexure, as the case may be, of this document; and



(g)

where time is to be calculated by reference to a day or event, that day or the day of that event is excluded.



7.2

Costs and Expenses

The Borrower must on demand pay and if paid by the Bank reimburse to the Bank:



(a)

the Bank’s reasonable costs and expenses (including legal costs and expenses on a full indemnity basis) relating to the negotiation, preparation, execution, stamping and registration of this document; and



(b)

any duties and registration or other fees (including fines and penalties relating to such duties and fees) which are payable or are assessed by a relevant government body or other person to be payable in relation to this document or any transaction contemplated by it.



7.3

Counterparts

This document may consist of a number of counterparts and, if so, the counterparts taken together constitute one document.



7.4

Entire understanding

(a)

This document contains the entire understanding between the parties as to the subject matter of this document.

 


 

Corrs Chambers Westgarth





(b)

All previous negotiations, understandings, representations, warranties, memoranda or commitments concerning the subject matter of this document are merged in and superseded by this document and are of no effect. No party is liable to any other party in respect of those matters.



(c)

No oral explanation or information provided by any party to another:



(i)

affects the meaning or interpretation of this document; or



(ii)

constitutes any collateral agreement, warranty or understanding between any of the parties.



7.5

Governing law and jurisdiction

(a)

This document is governed by and is to be construed in accordance with the laws applicable in Victoria.



(b)

Each party irrevocably and unconditionally submits to the non-exclusive jurisdiction of the courts exercising jurisdiction in Victoria and any courts which have jurisdiction to hear appeals from any of those courts and waives any right to object to any proceedings being brought in those courts.

 


 

Corrs Chambers Westgarth





Schedule 1





Guarantors













Name

 

ACN

 

Particulars for delivery of notices



Reading Entertainment Australia Pty Ltd

 

070 893 908

 

Address:  98 York Street, South Melbourne VIC 3205 Australia

 

Fax: 03 9685 0999

 

Attention:   Managing Director, Wayne Smith

 

AND TO:

 

Reading International Inc.

Address: 6100 Center Drive, Suite 900 Los Angeles California 90045

United States of America Fax: +1 213 235 2229

Attention: Chief Financial Officer, Dev Ghose



Australia Country Cinemas Pty Ltd

 

076 276 349

 

Same as for Borrower



Australian Equipment Supply Pty Ltd

 

122 571 420

 

Same as for Borrower



Burwood Developments Pty Ltd

 

105 384 905

 

Same as for Borrower



Epping Cinemas Pty Ltd

 

073 997 172

 

Same as for Borrower



Hotel Newmarket Pty Ltd

 

094 367 969

 

Same as for Borrower



Newmarket Properties Pty Ltd

 

105 386 409

 

Same as for Borrower



Newmarket Properties No. 2 Pty Ltd

 

109 038 806

 

Same as for Borrower



Newmarket Properties #3 Pty Ltd

 

126 697 505

 

Same as for Borrower



Reading Auburn Pty Ltd

 

126 697 470

 

Same as for Borrower



Reading Australia Leasing (E&R) Pty Ltd

 

107 939 211

 

Same as for Borrower



Reading Belmont Pty Ltd

 

126 697 498

 

Same as for Borrower



Reading Bundaberg 2012 Pty Ltd

 

122 406 320

 

Same as for Borrower

 


 

Corrs Chambers Westgarth







Name

 

ACN

 

Particulars for delivery of notices

(formerly Reading Moonee Ponds Pty Ltd)

 

 



Reading Charlestown Pty Ltd

 

123 938 483

 

Same as for Borrower



Reading Cinemas Pty Ltd

 

073 808 643

 

Same as for Borrower



Reading Cinemas Management Pty Ltd

 

122 406 311

 

Same as for Borrower



Reading Colac Pty Ltd

 

108 861 061

 

Same as for Borrower



Reading Dandenong Pty Ltd

 

129 018 739

 

Same as for Borrower



Reading Elizabeth Pty Ltd

 

114 582 099

 

Same as for Borrower



Reading Exhibition Pty Ltd

 

103 529 782

 

Same as for Borrower



Reading Licences Pty Ltd

 

089 544 605

 

Same as for Borrower



Reading Maitland Pty Ltd

 

126 697 461

 

Same as for Borrower



Reading Melton Pty Ltd

 

109 074 517

 

Same as for Borrower



Reading Properties Pty Ltd

 

071 195 429

 

Same as for Borrower



Reading Properties Indooroopilly Pty Ltd as trustee for The Landplan Property Partners Discretionary Trust

 

121 284 884

 

Same as for Borrower



Reading Properties Taringa Pty Ltd as trustee for the Reading Property Partners No. 1 Discretionary Trust

 

128 819 483

 

Same as for Borrower



Reading Property Holdings Pty Ltd

 

126 289 772

 

Same as for Borrower



Reading Rouse Hill Pty Ltd

 

123 245 885

 

Same as for Borrower



Reading Sunbury Pty Limited

 

109 074 571

 

Same as for Borrower



Rhodes Peninsula Cinema Pty Ltd

 

120 827 812

 

Same as for Borrower



Westlakes Cinema Pty Ltd

 

108 531 308

 

Same as for Borrower



A.C.N. 143 633 096 Pty Ltd

 

143 633 096

 

Same as for Borrower

 





 

 


 

Corrs Chambers Westgarth





Annexure A





Restated Facility Agreement

































































































































 

 


 



567 Collins Street Melbourne VIC 3000

GPO Box 9925 Melbourne VIC 3001

Tel +61 3 9672 3000

Fax +61 3 9672 3010

www.corrs.com.au

Picture 3



Sydney Melbourne Brisbane

Perth

 

























Annexure A - Restated Facility Agreement



National Australia Bank Limited



Reading Entertainment Australia Group













Corporate Markets

Loan & Bank Guarantee Facility Agreement







































 

 


 















Contents

1

Interpretation1

1.1

Definitions1

1.2

Construction18

1.3

Headings19

1.4

Corporations Act, GST and Accounting Standards19

1.5

Subsisting Events of Default and Potential Events of Default19

1.6

Not used19

1.7

Inconsistency19

2

Consideration19

3

Conditions precedent20

3.1

Not used20

3.2

Conditions precedent to Advances and Drawings20

3.3

Not used20

4

Facility20

4.1

Nature20

4.2

Purpose20

4.3

Advances and Drawings20

4.4

Funding Notices21

4.5

Not used22

4.6

Not used22

4.7

Not used22

4.8

Bank Guarantee Facilities22

4.9

Cancellation22

4.10

Market disruption22

4.11

Alternative basis of interest or funding23

4.12

Pricing Review Events23

4.13

Consequences of a Pricing Review23

5

Payments24

5.1

Not used24

5.2

Voluntary prepayments24

5.3

Indemnity in respect of Bank Guarantees24

5.4

Mandatory prepayments26

5.5

Repayment26

5.6

Not used27

6

Interest and fees27

6.1

Pricing Periods27

6.2

Payment and rate27

6.3

Computation of interest28

6.4

Capitalisation of interest28

6.5

Merger28

 


 

Corrs Chambers Westgarth













7

Payments29

7.1

Place, manner and time of payment29

7.2

Gross-up29

7.3

Appropriation29

8

Representations and warranties29

9

General obligations33

9.1

Fees33

9.2

Records34

9.3

Financial Statements and other financial information34

9.4

Other information35

9.5

Other financial undertakings36

9.6

Insurance39

9.7

Financial ratios39

9.8

Environment40

9.9

No default42

9.10

Obligations of Trustees42

9.11

Release for Permitted Disposals43

10

Events of Default43

10.1

Nature43

10.2

Effect of Event of Default46

10.3

Cash Cover Account regarding Bank Guarantees47

10.4

Review Events48

10.5

Reviews48

11

Costs and expenses48





11.1

 

Interpretation

48 

11.2

Nature

48 

11.3

Remuneration

49 

12

Indemnities49

12.1

Nature49

12.2

Representatives50

12.3

Currency deficiency50

12.4

Independence and survival50

12.5

Accounting for transactions50

12.6

Liability for Regulatory Events51

13

Goods and Services Tax51





13.1

 

Taxable supply

51 

13.2

Adjustment events

52 

13.3

Payments

52 

 


 

Corrs Chambers Westgarth













14

52

15

53

15.1

53

15.2

53

16

53

16.1

53

16.2

54

16.3

54

16.4

54

16.5

54

16.6

55

16.7

55

16.8

56

16.9

56

16.10

56

16.11

56

16.12

56

16.13

57

16.14

57

16.15

57

16.16

57

17

58

17.1

58

17.2

58

17.3

58

18

59

18.1

59

18.2

59

18.3

59

18.4

59

18.5

59

18.6

60

18.7

61

18.8

61

18.9

62

18.10

62

18.11

62

18.12

62

18.13

62

18.14

62

18.15

63

18.16

63

18.17

64

18.18

64

 


 

Corrs Chambers Westgarth













18.19

Legal advice64

18.20

Further assurances64

18.21

Exclusion of certain provisions65

18.22

Notice of changes65

19

Notices65

19.1

General65

19.2

How to give a communication65

19.3

Particulars for delivery of notices66

19.4

Communications by post66

19.5

Communications by fax66

19.6

After hours communications66

19.7

Process service66

Schedule 1 – Transaction Parties67

Schedule 2 – Facilities70

Schedule 3 – Collateral Security71

Schedule 4 – Not used74

Schedule 5 – Conditions Precedent75

Schedule 6 – Verification Certificate79

Schedule 7 – Funding Notice81

Schedule 8 – Guarantor Accession Deed82

Schedule 9 – Compliance Certificate84

Schedule 10 – Interim Compliance Certificate86

 


 

Corrs Chambers Westgarth

 

















Date















15th December 2015

 





Parties



National Australia Bank Limited ABN 12 004 044 937 of Pier 3 Level 4, 800 Bourke Street, Docklands, Victoria 3008 (Bank)



Reading Entertainment Australia Pty Ltd ACN 070 893 908 of 98 York Street, South Melbourne, Victoria 3205 (Borrower)



Each person listed in schedule 1 (each an Original Guarantor)









Agreed terms





1

Interpretation



1.1

Definitions

In this document:



Accounting Standards means accounting principles and practices consistently applied which are generally accepted in Australia and are consistent with any applicable legislation in each case as in effect on the date of this document, including instruments in force under section 334 of the Corporations Act and provisions of such instruments.



Adjusted EBITDA means, for any period, EBITDA adjusted to exclude:



(a)

any non-cash impairment for non-current assets included in the consolidated financial statements of the Reading Entertainment Australia Group during the relevant period; and



(b)

any net foreign exchange amounts (whether realised or unrealised) included in the consolidated financial statements of the Reading Entertainment Australia Group during the relevant period.



and subject to adjustment in respect of any further extraordinary items with the Bank’s written consent.



Advance means the principal amount of an advance made under the Corporate Markets Loan Facility or, where appropriate, requested under the Corporate Markets Loan Facility.



Aggregate Amount means, in relation to a Drawing, the aggregate of the Face Values of all Bank Guarantees comprising that Drawing.



Annual Compliance Certificate means, in relation to a Financial Year, a

 


 







certificate substantially in the form of schedule 9.



Approved Valuer means a company or firm of duly qualified and licensed real estate valuers acceptable to the Bank in all respects and instructed by (or with the approval of) the Bank.



Attorney means any attorney appointed under this document and any sub- attorney appointed by an Attorney.



Authorisation includes any authorisation, consent, licence, permission, approval or exemption from any Government Body. If a Government Body could prohibit anything being done in connection with any matter or otherwise intervene within a specified time after notice has been given to it or any document lodged or filed with it in connection with the matter, the relevant matter will not be taken to have been Authorised until the specified time limit has expired without the Government Body taking any relevant action.



Authorised Representative means, in relation to any party to this document, a person with the right to act as the agent of that party for the purposes of this document. It includes a director or company secretary of that party (if it is a corporation) and, in the case of the Bank, an employee of the Bank whose title contains the word “manager”, “director”, “associate” or a similar term and a lawyer for the Bank. It also includes a person appointed by a party as an Authorised Representative of that party whose appointment is notified by the appointor to the other party in a notice which contains the specimen signature of the appointee.



Availability Period means in respect of each Facility, the period beginning on the date on which the conditions precedent are satisfied or waived by the Bank in accordance with the Transaction Documents and ending on the Termination Date.



Available Commitment means in respect of a Facility, the Facility Limit less the Outstanding Accommodation relating to that Facility.



Bank Guarantee means each bank guarantee issued (or deemed to have been issued) in accordance with this document.



Bank Guarantee Facility means the Facility described as such in schedule 2

and granted pursuant to clause 4.1(a)(ii).



Bank Guarantee Margin means, in respect of each Bank Guarantee:



(a)

prior to the ‘Variation Date’ under the Restatement Deed, 2.35% per annum; and



(b)

on and from the first services fee charge date (to be determined in accordance with clause 9.1(e)) following the ‘Variation Date’ under the Restatement Deed, 1.90% per annum.



Base Rate means, in relation to a Pricing Period:



(a)

the rate (expressed as a percentage yield per annum to maturity) being the arithmetic average (rounded up to the nearest four decimal places) of the buying rates published at or about 10.15 am on the first Business

 


 







Day of the Pricing Period on the Reuters Screen under the heading “BBSY” for Bills with a tenor as nearly as possible equal to that Pricing Period; or



(b)

if:



(i)

the rate is not displayed for a term equivalent to that period; or



(ii)

the basis of the calculation of the rate is changed after the date of this document so that in the opinion of the Bank it ceases to reflect the cost of providing the Facility,



the Base Rate will be the rate per centum per annum determined by the Bank to be the average of the buying rates quoted to the Bank by at least three Reference Banks at or about that time on that date. The buying rates must be for bills of exchange accepted by a leading Australian  bank and which have a term equivalent to the period. If there are no buying rates, the rate will be determined by the Bank having regard to indexes or other bases which the Bank determines to be as near as practicable to the indexes and bases used to determine the rate referred to in paragraph (a).

Beneficiary means in relation to a Bank Guarantee, the person who from time to time is entitled to make a claim for payment under that Bank Guarantee against the Bank.



Bill means a bill of exchange as defined in the Bills of Exchange Act 1909 (but does not include a cheque). It includes a document which, when signed by the persons named as drawer and acceptor in the relevant document, will become such a bill of exchange.



Break Costs means, in relation to any financial accommodation provided or to be provided by the Bank under a Facility, any liability or costs incurred by the Bank by reason of:



(a)

liquidating or re-deploying deposits or other funds acquired or contracted for by or on account of the Borrower or the Bank;



(b)

terminating or reversing any agreement or arrangement (including by entering into new agreements or arrangements to close out or net off existing agreements or arrangements) entered into by or on account of the Borrower or the Bank with a counterparty or an internal department of the Bank responsible for such agreements or arrangements to hedge, fix, swap or limit its effective cost of funding; or



(c)

any loss of any margins in relation to future lending or loss of any fees.



Burwood Property means:



(a)

the land and improvements known as 78 Middleborough Road, Old Burwood Road, Burwood, Victoria; and



(b)

all present or future agreements, documents or rights relating to the ownership, occupation, use, sale, transfer or disposal of all or any part of the land and improvements described in paragraph (a).

 


 







Business Day means a day which is not a Saturday, Sunday or bank or public holiday in Melbourne.



Cash Cover Rate means the rate (expressed as a rate per centum per annum) determined by the Bank (in good faith) to be the interest rate which it would pay on deposits at call for an amount similar to the amount at which the relevant deposit is made.



Calculation Date means 31 March, 30 June, 30 September and 31 December in each year.



Calculation Period means each period of twelve months ending on a Calculation Date.



Change of Control means there is a change (from that prevailing at the date  of this document) in the persons who control any of the following in respect of a Transaction Party:



(a)

more than 50% of the votes eligible to be cast in the election of directors or any similar matter; or



(b)

the right to appoint or remove directors (or members of a governing body having functions similar to a board of directors) representing more than 50% of the votes exercisable by the directors (or persons have similar functions); or



(c)

an interest of more than 50% in any category of the profits, distributions or net liquidation proceeds.



Collateral Security means:



(a)

any Guarantee by which any person Guarantees the Borrower’s compliance with its obligations under any of the Transaction Documents;



(b)

any Security which secures the payment of money owing (actually or contingently) from time to time by:



(i)

any Transaction Party in relation to any of the Transaction Documents; or



(ii)

any person in relation to a Guarantee of any Transaction Party’s compliance with its obligations under any of the Transaction Documents; and



(c)

without limiting the generality of paragraphs (a) and (b) each thing listed in schedule 3.



Contaminant means a noxious, harmful or hazardous condition (including an odour, temperature, sound, vibration or radiation) or substance the presence or use of which (having regard, without limitation, to the nature and quantity of the substance and other substances with which it is stored or used) does or may result in the breach of an Environmental Law or the issuing of an order or direction under an Environmental Law.



Corporate Markets Loan Facility means the Facility described as such in

schedule 2 and granted pursuant to clause 4.1(a)(i).

 


 







Corporations Act means the Corporations Act 2001 (Cth).



Current Bank Guarantee means a Bank Guarantee which has not Matured or Expired.



Daily Interest Rate means, for any day, the Interest Rate on that day divided by 365.



Disposal means a sale, lease, transfer or other disposal by any Transaction Party of any interest in:



(a)

any share or stock (whether or not ordinary or preference and whether or not redeemable) or any other instrument convertible or exchangeable into or entitling a person to acquire or subscribe for any share or stock;



(b)

the whole or any part of a business, business unit or line of business; or



(c)

any other asset under a particular transaction or related transactions not in the ordinary course of business of the Reading Entertainment Australia Group taken as a whole.



Distribution means:



(a)

in relation to any share capital of a Transaction Party, any dividend, charge, interest, fee, payment or other distribution (whether in cash or in kind) or redemption, repurchase, defeasance, retirement or redemption;



(b)

any interest, any redemption or early redemption of any amount of principal or any other payment in respect of any shareholder loan or other subordinated loans made to any Transaction Party; or



(c)

any loan or other financial accommodation made available by a Transaction Party to a person other than another Transaction Party.



Drawing means each Bank Guarantee issued or to be issued in accordance with this document under the same Funding Notice.



EBIT means, in relation to any period and without double counting, operating profit (loss) of the Reading Entertainment Australia Group (on a consolidated basis) from ordinary operations before interest, income tax and minority interests, but after deduction of depreciation and amortisation for that period, as determined in accordance with Accounting Standards.



EBITDA means, in relation to any period, EBIT for the Reading Entertainment Australia Group for that period, plus depreciation and amortisation as determined in accordance with Accounting Standards.



Encumbrance means any interest in or right over property and anything which would at any time prevent, restrict or delay the registration of any interest in or dealing with property. It includes a Security Interest.



Environmental Assessment Report means a report in relation to compliance with Environmental Law of the Land and any activities carried out on the Land.



Environmental Law means any legislation, regulations or related codes, standards or policies which relate to environmental and planning matters, including matters concerning land use, development, building works, pollution,

 


 







contamination, waste, toxic and hazardous substances, disposal of waste or other substances, human health, conservation of natural or cultural resources, heritage and resource allocation.



Environmental Liability means any liability, obligation, expense, penalty or fine arising out of a breach of Environmental Law which could be imposed on any Transaction Party or the Bank in respect of the Land as a result of activities carried on during the ownership, occupation or control of the Land by that Transaction Party, the Bank, any predecessor in title or any previous occupier or controller of the Land.

Event of Default means any event or circumstance described in clause 10.1.  Excluded Financial Indebtedness means Financial Indebtedness of the kind

referred to in paragraph (a), (c) or (d) of the definition of Permitted Financial

Indebtedness.



Excluded Property means:



(a)

the Burwood Property;



(b)

the present or future interest of Reading Cinemas Pty Ltd in the joint venture with Champion Pictures Pty Ltd relating to the Elsternwick cinema business or the assets the subject of the joint venture or the relevant joint venture agreement;



(c)

the present or future interest of Reading Exhibition Pty Ltd in the Garden City Cinema joint venture with Village Roadshow Exhibition and Birch Carroll & Coyle or the assets the subject of the joint venture or the relevant joint venture agreement; and



(d)

the present or future interest of Epping Cinemas Pty Ltd in the lease granted by Bevendale Pty Ltd or the property the subject of the lease to the extent that the existence of a charge over that interest or property would cause a breach of the that lease.



Expired means, in relation to a Bank Guarantee, that its Expiry Date has passed whether or not a claim has been made under it by the Beneficiary.



Expiry Date means, in relation to a Bank Guarantee, the date specified in that Bank Guarantee as the latest date by which the Beneficiary may make a claim under it.



Face Value means, in relation to a Bank Guarantee:



(a)

subject to paragraph (b), the amount specified in that Bank Guarantee as the aggregate maximum amount which the Beneficiary may claim under it; or



(b)

if the Beneficiary makes a claim, then between when the Beneficiary makes the first of those claims and the first to occur of the Bank Guarantee Maturing or Expiring, the Face Value of the Bank Guarantee will be the difference between its original face value and the aggregate of all valid claims made under it.



Facility means each of the facilities listed in schedule 2 (and each Facility

 


 







may be referred to by the Facility Name listed in schedule 2).



Facility Limit means, in respect of each Facility, the relevant Facility Limit set out in schedule 2, as reduced under this document.



Financial Close means the initial Funding Date.



Financial Indebtedness means any indebtedness or other liability (present or future, actual or contingent) relating to any financial accommodation including indebtedness or other liability:



(a)

for money borrowed or raised;



(b)

relating to the sale or negotiation of any negotiable instrument;



(c)

as lessee under any finance lease, as hirer under any hire purchase agreement or as purchaser under any title retention agreement;



(d)

relating to any preference share or unit categorised as debt under Accounting Standards;



(e)

under any commodity, currency or interest rate swap agreement, forward exchange rate agreement or futures contract (as defined in any statute);



(f)

under any Guarantee relating to any financial accommodation; or



(g)

for any deferred purchase price (other than in the nature of warranty retention amounts) for any asset or service.



Financial Statements means a balance sheet, an income statement, a statement of changes in equity, a cash flow statement, notes comprising a summary of significant accounting policies and other explanatory note; and any directors’ declarations, directors’ reports and auditor’s reports attached to, intended to be read with or required by the Corporations Act to accompany, all or any of those documents.



Financial Year means a period of 12 months ending on 31 December.



Fixed Charges Cover Ratio means, at any date, the ratio of:



(a)

the aggregate amount of:



(i)

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



(ii)

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



to



(b)

the aggregate amount of:



(i)

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



(ii)

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

 


 







Freehold Property means each freehold property owned by a Transaction Party that is the subject of a real property mortgage referred to in of schedule 3.



Funding Date means a date on which:



(a) an Advance is, or is proposed to be, made; or



(b) a Bank Guarantee is, or is proposed to be, issued, under this document.

Funding Notice means a notice in accordance with clause 4.4.



Government Body means any person or body exercising an executive, legislative, judicial or other governmental function. It includes any public authority constituted under a law of any country or political sub-division of any country. It also includes any person deriving a power directly or indirectly from any other person or body referred to in this definition.



Gross Interest Expense means, in relation to any period, the aggregate of all interest and amounts in the nature of interest (including commissions, discount fees, acceptance fees, facility fees, the interest element of a finance lease and fees or charges) payable in connection with any Financial Indebtedness of the Reading Entertainment Australia Group (other than Excluded Financial Indebtedness) for that period on a consolidated basis, whether accrued, paid, payable or expensed (including interest expense under each of the Facilities).



Guarantee means:



(a)

a guarantee, indemnity, undertaking, letter of credit, Security, acceptance or endorsement of a negotiable instrument or other obligation (actual or contingent) given by any person to secure compliance with an obligation by another person;



(b)

an obligation (actual or contingent) of a person to ensure the solvency of another person or the ability of another person to comply with an obligation, including by the advance of money or the acquisition for valuable consideration of property or services; and



(c)

an option under which a person is obliged on the exercise of the option to buy:



(i)

any debt or liability owed by another person; or



(ii)

any property which is subject to a Security Interest.



Guaranteed Money means all money:



(a)

which now or in the future is owing (actually or contingently) by a Transaction Party to the Bank under or in relation to any of the Transaction Documents;



(b)

which having now or in the future become owing (actually or contingently) by a Transaction Party to the Bank under or in relation to any of the Transaction Documents, ceases to be owing by reason of any law relating to insolvency and remains unpaid by the Transaction Party

 


 







and unreleased by the Bank; or



(c)

that now or in the future may become owing (actually or contingently) by a Transaction Party to the Bank under or in relation to any of the Transaction Documents,



for any reason, whether such money is payable:



(d)

by a Transaction Party alone or jointly or severally with any other person;



(e)

by a Transaction Party in its own right or in any capacity;



(f)

to the Bank in its own right or in any capacity; and



(g)

by a Transaction Party as liquidated or unliquidated damages caused or contributed to by any breach by the Transaction Party of any obligation owed by the Transaction Party (or any other Transaction Party) to the Bank under or in relation to any of the Transaction Documents,



and if any Transaction Document or any obligation of a Transaction Party to the Bank under or in relation to any of the Transaction Documents is void, voidable or otherwise unenforceable by the Bank in accordance with its terms, it includes all money which would have been within this definition if that Transaction Document or obligation was not void, voidable or otherwise unenforceable.



Guarantor means the Original Guarantors and each person that becomes a guarantor under clause 16. If there are more than one, Guarantor means each of them individually and every two or more of them jointly.



Guarantor Accession Deed means a deed substantially in the form of

schedule 8.



Half means each six month period ending on 30 June and 31 December in each year.



Hedging Transaction means a contract, agreement or arrangement (other than in respect of the price of electricity, gas, oil, foreign exchange or any other non-interest rate derivative contract) which is a futures contract or an interest rate hedge, swap, option, swaption, forward rate agreement or any other contract, agreement or arrangement similar to or having in respect of its  subject matter a similar effect to any of the preceding.



Indemnity Amount means, in relation to a Bank Guarantee, the amount or, as the case may be, the aggregate of the amounts payable by the Borrower in relation to a Bank Guarantee in accordance with clause 5.3.



Insolvency means:



(a)

in relation to a corporation, its winding up or dissolution or its administration, provisional liquidation or any administration having a similar effect;



(b)

in relation to an individual, his or her bankruptcy; and



(c)

in relation to a person, any arrangement (including a scheme of arrangement or deed of company arrangement), composition or

 


 







compromise with, or assignment for the benefit of, all or any class of that person’s creditors or members or a moratorium involving any of them



Insolvency Event means any of the following:



(a)

a person is or states that the person is unable to pay from the person’s own money all the person’s debts as and when they become due and payable;



(b)

a person is taken or must be presumed to be insolvent or unable to pay the person’s debts under any applicable legislation;



(c)

an order is made for the winding up or dissolution or an effective resolution is passed for the winding up or dissolution of a corporation;



(d)

an administrator, provisional liquidator, liquidator or person having a similar or analogous function under the laws of any relevant jurisdiction is appointed in relation to a corporation or an effective resolution is passed to appoint any such person and the action is not stayed, withdrawn or dismissed within 10 Business Days;



(e)

a controller is appointed in relation to any property of a corporation;



(f)

a corporation is deregistered under the Corporations Act or notice of its proposed deregistration is given to the corporation;



(g)

a distress, attachment or execution is levied or becomes enforceable against any property of a person;



(h)

a person enters into or takes any action to enter into an arrangement (including a scheme of arrangement or deed of Borrower arrangement), composition or compromise with, or assignment for the benefit of, all or any class of the person’s creditors or members or a moratorium involving any of them;



(i)

a petition for the making of a sequestration order against the estate of a person is presented and the petition is not stayed, withdrawn or dismissed within seven days or a person presents a petition against himself or herself;



(j)

a person presents a declaration of intention under section 54A of the

Bankruptcy Act 1966; or



(k)

anything analogous to or of a similar effect to anything described above under the law of any relevant jurisdiction occurs in relation to a person.



Insurance means insurance which a Transaction Party is obliged to take out or maintain under a Transaction Document.



Interest Rate means, in relation to a Pricing Period for an Advance until it becomes due and owing, an interest rate equal to the aggregate of the Base Rate for that Pricing Period and the Margin.



Interim Compliance Certificate means a certificate in substantially the form set out in schedule 10.



Land means any land owned or occupied by a Transaction Party that forms

 


 







part of the Secured Property.



Leasehold Properties means each leasehold property leased by a Transaction Party that is the subject of a mortgage of lease referred to in schedule 3 (including the mortgage of lease described at item 11 of schedule 3).



Leverage Ratio means, as at any date, the ratio of:



(a) Total Gross Debt outstanding on that date; to

(b) Adjusted EBITDA in respect of the 12 month period ending on that date. For the purposes of calculating Leverage Ratio on any date occurring before

the first anniversary of Financial Close, Leverage Ratio will be based on a pro

forma EBITDA for the 12 month period to that date.



Loan to Value Ratio at any date means the ratio (expressed as a percentage) of:



(a)

the aggregate of the Total Gross Debt outstanding on that date and any Outstanding Accommodation in relation a Current Bank Guarantee as at that date; to



(b)

the market value of the Freehold Properties and Leasehold Properties included in the Secured Property as noted in the most recent Valuation provided to the Bank pursuant to this document and accepted by the Bank.



Management Fees means management and consulting fees payable to Reading International Inc each Financial Year.



Margin means 0.95% per annum.



Material Adverse Effect means a material adverse effect on:



(a)

the business, operation, property, condition (financial or otherwise) of a Transaction Party or the Reading Entertainment Australia Group taken as a whole;



(b)

the ability of a Transaction Party to perform its obligations under the Transaction Documents; or



(c)

the validity or enforceability of the whole or any material part of any Transaction Document or any rights or remedies of the Bank under the Transaction Documents.



Matured means, in relation to a Bank Guarantee, that the Beneficiary has made a claim and is not entitled to claim any more under the relevant Bank Guarantee.



Month means a calendar month.



Outstanding Accommodation means at any time, the aggregate of:



(a)

the aggregate of the unpaid Advances outstanding under the Corporate Markets Loan Facility;



(b)

the Face Values of all Current Bank Guarantees and all Indemnity

 


 







Amounts in relation to each Bank Guarantee which are due and payable; and



(c)

for the purposes of clauses 5.5, 10 and 18.14 only and for no other purposes, any other amounts which the Borrower owes to the Bank or which the Borrower may owe to the Bank under or in connection with the Facilities and includes:



(i)

any other amounts which the Borrower owes to the Bank or which the Borrower may owe to the Bank under or in connection with any Hedging Transaction; and



(ii)

all interest, costs and fees payable under the Transaction Documents,



whether such amounts are owing actually or contingently and whether such amounts are then due for payment or will or may become due for payment and includes all interest, costs and fees payable under the Transaction Documents.



When used in relation to any Facility, it means the Outstanding Accommodation in relation to Advances or Drawings under that Facility (as applicable).



Overdue Money means money due and payable from time to time under each Transaction Document.



Overdue Rate means at any time, the aggregate of the Interest Rate and a default margin of 4.50% per annum.



Parent Subordination Agreement means the document entitled ‘subordination deed’ dated on or about the date of this document between the Borrower, Reading International Cinemas LLC and the Bank.



Permitted Disposal means a disposal:



(a)

of assets between the Transaction Parties;



(b)

of the land and improvements known as 70 Station Road, Indooroopilly Queensland and described in certificate of title 11485156, subject to Reading Properties Indooroopilly Pty Ltd seeking a release of the Bank’s Security over that property and compliance with clause 5.4(b);



(c)

of the Burwood Property;



(d)

of Reading Cinemas Pty Ltd’s interest as lessee in the Elsternwick cinema business, to Champion Pictures Pty Ltd;



(e)

of trading stock or cash made in the ordinary course of business;



(f)

of plant and equipment in exchange for other assets comparable or superior as to type, value and quality;



(g)

of obsolete or redundant assets;



(h)

arising as a result of a Permitted Encumbrance or a Distribution or payment permitted by clause 9.5(f), clause 9.5(j) or clause 5.4(b)(ii);

 


 







(i)

of assets that are the subject of a floating charge (or its equivalent) under a Collateral Security, provided the disposal is made in the ordinary course of business; or



(j)

where the aggregate value of the assets disposed of in the 12 month period ending on the date of the relevant disposal (and including the value of the relevant disposal) does not exceed $500,000.



Permitted Distributions means a distribution of any proceeds of the sale of:



(a) 40 Hall Street, Moonee Ponds, Victoria; or



(b) 78 Middleborough Road, Old Burwood Road, Burwood, Victoria, applied towards:

(c)

first, the repayment of parent loans to the Borrower from Reading International Inc (including accrued Management Fees, interest, capitalised interest or principal); and



(d)

after the repayment of all parent loans under paragraph (c), dividends paid to shareholders of the Borrower, provided the Leverage Ratio is less than 3.0 times at the time of the payment.



Permitted Encumbrance means:



(a)

an Encumbrance which has been approved by the Bank (including the Security Interests created by any Transaction Document);



(b)

any right of set off or combination arising by operation of law or practice over money deposited with a bank or financial institution in the ordinary course of the business of a Transaction Party;



(c)

an Encumbrance which arises by operation of law in the ordinary course of the business of a Transaction Party provided the debt secured by that Encumbrance is paid when due or contested in good faith by appropriate proceedings;



(d)

every easement, restrictive covenant, caveat or similar restriction over property, right of way, exception, encroachment, reservation, restriction, condition or limitation which arises in the ordinary course of the ordinary business of the relevant Transaction Party and does not either by itself or in the aggregate materially interfere with or impair the operation or use of a property affected thereby, have a Material Adverse Effect or otherwise restrict or prevent the Bank exercising its rights against any Secured Property under the relevant Collateral Security;



(e)

every right reserved to, or vested in, any municipality or governmental or other public authority by the terms of any right, power, franchise, grant, licence or permit to control or regulate any part of the property of a Transaction Party, or to use that property in any manner which does not either by itself or in the aggregate materially interfere with or impair the operation or the use thereof, have a Material Adverse Effect or otherwise restrict or prevent the Bank exercising its rights against any Secured Property under the relevant Collateral Security;

 


 







(f)

every Encumbrance incurred or deposits made in the ordinary course of ordinary business to secure the performance of tenders, statutory obligations, surety bonds, bids, leases, government contracts, performance and return of money bonds (provided that such Encumbrances do not restrict or prevent the Bank exercising its rights against any Secured Property under the relevant Collateral Security) or in connection with workers’ compensation, unemployment insurance and other types of social security;



(g)

every Encumbrance incurred or deposit made in the ordinary course of the business of a Transaction Party in respect of a leasehold property, the purchase of assets or the use of utilities, provided that:



(iii)

in relation to an Encumbrance incurred or deposit made in respect of the purchase of assets which secures an aggregate amount greater than $250,000 the Bank has given prior written consent to the Borrower; and



(iv)

the recourse of the holder of that Encumbrance is limited to the leasehold interest, the assets purchased or use of utilities and the proceeds of enforcement of the Encumbrance.



(h)

every retention of title arrangement in respect of trading stock acquired or to be acquired by a Transaction Party in the ordinary course of business;



(i)

any easement, caveat or other restriction in relation to a Freehold Property that would be apparent from a title search conducted before the date of this document; and



(j)

an Encumbrance over the Burwood Property granted by a Transaction Party in connection with the sale of the Burwood Property and the development of the Burwood Property by the purchaser (or an affiliate of the purchaser), provided that the recourse of the holder of that Encumbrance is limited to the Burwood Property and the proceeds of enforcement of the Encumbrance.



Permitted Financial Accommodation means:



(a)

financial accommodation granted by a Transaction Party to another Transaction Party;



(b)

any trade credit extended by a Transaction Party to its customers on normal commercial terms and in the ordinary course of business; or



(c)

any other financial accommodation granted with the prior consent of the Bank.



Permitted Financial Indebtedness means:



(a)

trade debt incurred in the ordinary course of business of the Transaction Parties;



(b)

Financial Indebtedness incurred under the Transaction Documents;



(c)

Financial Indebtedness owing from one Transaction Party to another

 


 







Transaction Party;



(d)

any Subordinated Debt;



(e)

a $225,000 loan from the landlord of the Westlakes Cinema property;



(f)

a $400,000 loan from the landlord of the Rhodes Cinema property;



(g)

Financial Indebtedness arising under any performance or similar bond guaranteeing performance by a Transaction Party under any contract entered into in the ordinary course of business;



(h)

Financial Indebtedness arising under a guarantee given to a landlord in respect of a lease entered into by a Transaction Party;



(i)

Financial Indebtedness under finance or capital leases of vehicles, plant, equipment or computers existing at the date of this document; and



(j)

Financial Indebtedness not permitted by the preceding paragraphs and the outstanding principal amount of which does not exceed $500,000 in aggregate for the Transaction Parties at any time.



PPS Act means the Personal Property Securities Act 2009 (Cth).



PPS property means all property (other than Excluded Property) over which the Borrower or a Security Provider is legally capable under the PPS Act of granting a security interest.



Potential Event of Default means any thing which, with the giving of notice, lapse of time or determination of materiality, will constitute an Event of Default.



Pricing Period means, in relation to an Advance under the Corporate Markets Loan Facility, the period having the duration selected in accordance with clause 6.1 and beginning on the Funding Date in relation to the Advance.



Quarter means each three month period ending on 31 March, 30 June, 30 September and 31 December in each year.



Reading Entertainment Australia Group means, at any time, the Borrower and any subsidiary of the Borrower and Reading Entertainment Australia Group Member means any one of them.



Release Date means the Business Day following the later of:



(a)

the latest of the Expiry Dates of all Current Bank Guarantees; and



(b)

the date on which the Bank is satisfied in its reasonable opinion that it has been paid all amounts which are then or may in the future become due and payable to the Bank under any of the Transaction Documents and that there is no prospect that any amounts which the Bank has received in relation to any of the Transaction Documents will subsequently be made void or be required to be repaid in whole or in part.



Relevant Jurisdiction means Victoria.



Receiver means a receiver or receiver and manager appointed by the Bank under any Transaction Document and any person who derives a right directly

 


 







or indirectly from a Receiver.



Reference Banks means each of Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia and Westpac Banking Corporation, or any other banks or financial institutions determined by the Bank from time to time following consultation with the Borrower.



Regulatory Event means any:



(a)

change in, or introduction of a new, law or other form of regulation;



(b)

change in, or introduction of a new, practice or policy of an Government Body;



(c)

investigation into a Transaction Party or any related entity of a Transaction Party by a Government Body;



(d)

application for or grant of an injunction or order in respect of any Encumbrance, Facility or account held with the Bank made by a Government Body, or



(e)

change in, or introduction of a new, code of practice or custom relating to the provision of the Services which a reasonable and prudent banker would comply with,



whether in Australia or elsewhere, that, in the Bank’s good faith opinion, applies in any way to a Transaction Party, or the Service.



Representative of a person means an officer, employee, contractor or agent of that person.



Restatement Deed means the document entitled ‘Restatement Deed’ executed in December 2015 between the Bank and the Transaction Parties.

Review Event means any event or circumstance described in clause 10.4. Secured Property means all property which, from time to time, is subject to a

Security which forms part of the Collateral Security.



Security means any document or transaction which reserves or creates a Security Interest.



Security Interest means any interest or right which secures the payment of a debt or other monetary obligation or the compliance with any other obligation. It includes any retention of title to any property and any right to set off or withhold payment of any deposit or other money.



Security Provider means each person who gives a Collateral Security (other than a related body corporate of the Bank).



Service means any service the Bank provides to the Borrower under or in relation to a Facility including making or processing any payment or issuing any document.



Subordinated Debt means:



(a)

Financial Indebtedness that is or may become owing by the Borrower to Reading International Cinemas, LLC, that is fully subordinated on the

 


 







terms set out in the Parent Subordination Agreement; and



(b)

Financial Indebtedness that is or may become owing by a Transaction Party to Reading International Inc (or any subsidiary or affiliate of Reading International Inc) that is fully subordinated on substantially the same terms (except for the name and other details of the subordinated lender) as those set out in the Parent Subordination Agreement.



Tax means a tax (including any tax in the nature of a goods and services tax), rate, levy, impost or duty (other than a tax on the net overall income of the Bank) and any interest, penalty, fine or expense relating to any of them.



Termination Date means, in respect of each Facility, the Termination Date set out in schedule 2, or such other date agreed in writing by the parties.



Total Gross Debt means, on any date, all Financial Indebtedness of the Reading Entertainment Australia Group, but excluding any Excluded Financial Indebtedness.



Total Lease Payments means the aggregate amount of all rental expenditure of the Reading Entertainment Australia Group, other than rental expenditure payable to any Transaction Party, calculated in accordance with Accounting Standards, for that period.



Transaction Documents means:



(a)

this document;



(b)

not used;



(c)

each Guarantor Accession Deed;



(d)

the Collateral Security;



(e)

the Parent Subordination Agreement;



(f)

the ISDA Master Agreement dated 17 June 2011 between the Bank and the Borrower, as amended from time to time;



(g)

each deed of consent listed in paragraph 6 of schedule 5 upon it being executed by the relevant parties;



(h)

any agreement relating to the priority of any Security which is a Collateral Security;



(i)

any document which the Borrower and the Bank agree is a Transaction Document for the purposes of this document; and



(j)

each document entered into for the purpose of amending, novating, restating or replacing any of them.



Transaction Parties means the Borrower and each Guarantor.



Trust means, in relation to any Transaction Party that enters into a Transaction Document in the capacity as trustee of a trust, the relevant trust.



Trust Deed means, in relation to a Trust, the trust deed or other document which establishes or evidences that Trust.

 


 







Trustee means a Transaction Party that enters into a Transaction Document acting as the trustee of a Trust.



Valuation means a valuation of the Freehold Properties or leasehold  properties included in the Secured Property addressed to the Bank, by an Approved Valuer in form and substance satisfactory to the Bank in all respects.



Verification Certificate means a certificate in substantially the form set out in

schedule 6.



1.2

Construction

Unless expressed to the contrary, in this document:



(a)

words in the singular include the plural and vice versa;



(b)

any gender includes the other genders;



(c)

if a word or phrase is defined its other grammatical forms have corresponding meanings;



(d)

“includes” means includes without limitation;



(e)

no rule of construction will apply to a clause to the disadvantage of a party merely because that party put forward the clause or would otherwise benefit from it; and



(f)

a reference to:



(i)

a person includes a partnership, joint venture, unincorporated association, corporation and a government or statutory body or authority;



(ii)

a person includes the person’s legal personal representatives, successors, assigns and persons substituted by novation;



(iii)

any legislation includes subordinate legislation under it and includes that legislation and subordinate legislation as modified or replaced;



(iv)

an obligation includes a representation or warranty and a reference to a failure to comply with an obligation includes a breach of representation or warranty;



(v)

a right includes a benefit, remedy, discretion or power;



(vi)

time is to local time in Melbourne;



(vii)

“$” or “dollars” is a reference to Australian currency;



(viii)

this or any other document includes the document as novated, varied or replaced and despite any change in the identity of the parties;



(ix)

writing includes any mode of representing or reproducing words in tangible and permanently visible form, and includes fax transmissions;



(x)

any thing (including any amount) is a reference to the whole or any

 


 







part of it and a reference to a group of things or persons is a reference to any one or more of them;



(xi)

this document includes all schedules and annexures to it; and



(xii)

a clause, schedule or annexure is a reference to a clause, schedule or annexure, as the case may be, of this document.



1.3

Headings

Headings do not affect the interpretation of this document.



1.4

Corporations Act, GST and Accounting Standards

Unless expressed to the contrary:



(a)

“control”, “controller”, “corporation”, “disclosing entity”, “holding company”, “marketable security”, “prospective liability”, “public company”, “related body corporate” and “subsidiary” each has the meaning which it is defined to have in the Corporations Act;



(b)

“adjustment event”, “consideration”, “GST”, “input tax credit”, “supply”, “taxable supply” and “tax invoice” each has the meaning which it is defined to have in the A New Tax System (Goods and Services Tax) Act 1999; and



(c)

“economic entity”, “entity” and “finance lease” each has the meaning which it has in the Accounting Standards.



(d)

terms have the meanings given to them in the PPS Act.



1.5

Subsisting Events of Default and Potential Events of Default

(a)

An Event of Default subsists if it has occurred and has not been waived by the Bank in accordance with this document or remedied.



(b)

A Potential Event of Default subsists if it exists and has not been waived by the Bank in accordance with this document or remedied.



1.6

Not used



1.7

Inconsistency

If there is any inconsistency between this document and any other Transaction Document, then this document prevails to the extent of that inconsistency.





2

Consideration

The Borrower enters into this document in consideration of the Bank agreeing to make the Facility available in accordance with this document.

 


 







3

Conditions precedent



3.1

Not used



3.2

Conditions precedent to Advances and Drawings

The obligation of the Bank to make any Advances or Drawings is subject to the further conditions precedent that the Bank is satisfied in its absolute discretion that:



(a)

the representations and warranties set out in clause 8.1 are correct and in all material respects not misleading in any material respect when the Funding Notice is given and on the Funding Date;



(b)

all fees and charges then due and payable in connection with the Facility have been paid (including the Restructure Fee set out in clause 9.1(a)); and



(c)

no Event of Default or Potential Event of Default subsists when the Funding Notice is given and on the Funding Date.



3.3

Not used





4

Facility



4.1

Nature

(a)

Subject to clauses 3 and 10.2, the Bank will make available:



(i)

the revolving Corporate Markets Loan Facility under which it will make Advances; and



(ii)

the Bank Guarantee Facility under which it will issue Bank Guarantees at the request of the Borrower,



in accordance with this document.



(b)

The Borrower may request one or more Advances and Drawings in accordance with this clause 4, but so that the Outstanding Accommodation under each Facility does not at any time exceed the relevant Facility Limit.



4.2

Purpose

The Borrower must only use Advances and Drawings under each Facility for the relevant purposes set out in schedule 2, and the Borrower must promptly repay to the Bank all Advances and Drawings not used for these purposes.



4.3

Advances and Drawings

(a)

The Borrower may request an Advance or a Drawing by giving a Funding Notice to the Bank by 11.00 am at least one clear Business Day before the date the proposed Advance or Drawing is required.



(b)

An Advance under the Corporate Markets Loan Facility must not be for an amount which, when added to the Outstanding Accommodation (if

 


 







any) under that Facility, causes the Facility Limit for that Facility to be exceeded. In determining with an Advance will cause the Facility Limit to be exceeded:



(i)

the amount of all Advances repaid on the Funding Date are excluded from the calculation of the Outstanding Accommodation; and



(ii)

the aggregate amount of all other Advances which the Borrower has requested to be made on the same Funding Date are included in that calculation.



(c)

The Aggregate Amount of a Drawing under the Bank Guarantee Facility must not, when added to the Outstanding Accommodation (if any) under that Facility, cause the Facility Limit for that Facility to be exceeded at any time during the Funding Period. In determining whether the Aggregate Amount of a Drawing will cause the Facility Limit to be exceeded:



(i)

the Face Value of all Bank Guarantees under a Facility which will mature on the Funding Date for the relevant Drawing are excluded from the calculation of the Outstanding Accommodation; and



(ii)

the Aggregate Amount of all other Drawings which the Borrower has requested to be made under the same Facility and on the same Funding Date are included in that calculation.



(d)

The Bank is only obliged to make Advances or accept any Drawings during the Availability Period.



4.4

Funding Notices

(a)

A Funding Notice must:



(i)

be substantially in the form of schedule 7;



(ii)

be signed by an Authorised Representative of the Borrower;



(iii)

specify the proposed Funding Date which must be a Business Day during the Availability Period;



(iv)

specify the amount of the proposed Advance or the Aggregate Amount of the proposed Drawing;



(v)

specify the duration of the Pricing Period for each Advance; and



(vi)

in the case of any Drawing, specify whether the Drawing is:



(A)

to comprise the issue of a new Bank Guarantee, and if so, also  specify the date to be shown as the Expiry Date, the person to be named as the Beneficiary and the Face Value of each requested Bank Guarantees; or



(B)

deemed to comprise an existing bank guarantee that prior to the  date of this document has been issued by the Bank at the  request  of  the  Borrower  and,  if  so,  specify  the  date shown   as  the  Expiry  Date,  the  person  named  as  the

 


 







Beneficiary and the Face Value of that bank guarantee.



(b)

The requirement of a Funding Notice is for the benefit of the Bank. The Bank may waive the requirement at any time and in any manner.



(c)

A Funding Notice is irrevocable from the time of its actual receipt in legible form by the Bank.



4.5

Not used



4.6

Not used



4.7

Not used



4.8

Bank Guarantee Facilities

In the case of the Bank Guarantee Facility on the Funding Date specified in the Funding Notice:



(a)

the Bank must for the purposes of a Drawing contemplated under clause 4.4(a)(vi)(A), issue each Bank Guarantee requested in the Funding Notice in accordance with that Funding Notice; or



(b)

the parties agree that for the purposes of a Drawing contemplated under clause 4.4(a)(vi)(B), the existing bank guarantee referred to in the Funding Notice is deemed to be a Bank Guarantee issued in accordance with the Bank Guarantee Facility and that Funding Notice.



4.9

Cancellation

The Borrower may cancel the Available Commitment or any part of it (being

$100,000 or an integral multiple of that amount) by giving 30 Business Days’ notice to the Bank specifying the amount to be cancelled and the date on which the cancellation takes effect. The cancellation takes effect on the date  specified in the notice (which must be a date not earlier than five Business  Days after the date the Bank receives the notice).



4.10

Market disruption

(a)

If the Bank determines that a Market Disruption Event occurs or has occurred in relation to an Advance, then the Bank will promptly notify the Borrower, and the Interest Rate on that Advance for that Pricing Period will be the rate per annum which is the sum of:



(i)

the Margin for the Advance; and



(ii)

the rate notified to the Borrower as soon as practicable and in any event no later than the Business Day before interest is due to be paid in respect of that Pricing Period, to be that which expresses as a percentage rate per annum the cost to the Bank of funding that Advance from whatever source or sources the Bank may reasonably select.



(b)

For the purposes of clause 4.10(a):



(i)

Market Disruption Event means:



(A)

at or about the time on the day (Quotation Day) for the Bank

 


 







to determine the Screen Rate for the relevant currency and Pricing Period, the Screen Rate is not available and the Bank is unable to specify another page or service displaying an appropriate rate; or



(B)

in relation to an Advance, before 5pm (local time) on the Business  Day  after  the  Quotation  Day  for  the  relevant period, the Bank notifies the Borrower, that as a result of market circumstances not limited to the Bank the cost to the Bank of funding the Advance exceeds the Screen Rate.



(ii)

Screen Rate means the rate specified in paragraph (a) of the definition of “Base Rate”.



4.11

Alternative basis of interest or funding

If a Market Disruption Event occurs and the Bank or the Borrower so requires, the Bank and the Borrower will enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest or discount.



4.12

Pricing Review Events

(a)

The Bank has the right to review the pricing applicable to a Facility (Review):



(i)

on or about the third anniversary of the date of this document;



(ii)

at any time if the Bank reasonably believes that an Event of Default subsists;



(iii)

at any time:



(A)

a change occurs  in  the  financial  markets  which  affects financial institutions generally; and/or



(B)

a general change occurs in the cost of funds in the financial markets in which the Bank raises funds (not being a change resulting from a change in the Bank’s credit rating or any other matter relating specifically to the Bank).



(b)

The Bank may request the Borrower to provide information in connection with a Review and the Borrower must provide such information as soon as possible following receipt of the request.



4.13

Consequences of a Pricing Review

(a)

Following a Review, the Bank may, by giving written notice to the Borrower and/or by way of advertisement in the local or national press:



(i)

introduce a new fee, charge or premium or change an existing fee, charge or premium (including its amount, the way in which it is calculated and when it is charged); and



(ii)

change the acceptance margin, line fee, interest rate or yield rate applicable to a Facility including by changing or introducing a margin (including by making the margin positive or negative), or

 


 







substituting a different indicator rate for the relevant indicator rate (except where the rate is a fixed rate).



(b)

Where the Bank gives the Borrower notice under clause 4.10(a) by way of advertisement in the local or national press, the Bank will also endeavour to directly notify the Borrower of the change although the Bank will not be precluded from charging the new or adjusted pricing if it does not directly notify the Borrower.



(c)

An introduction or change of a matter specified in clause 4.10(a) takes effect on the date specified in the relevant notice to the Borrower (which must be at least 30 days after the date on which the notice is given to the Borrower).





5

Payments



5.1

Not used



5.2

Voluntary prepayments

(a)

In relation to any Advance, the Borrower:



(i)

may prepay any Advance or a part of it (being a minimum of

$100,000 or an integral multiple of that amount) by giving 5 Business Days’ notice to the Bank specifying the amount to be prepaid and the date on which the prepayment will be made;



(ii)

may, subject to clause 4.3, redraw any amount prepaid in accordance with this clause 5.2; and



(iii)

must make any prepayment under this document together with accrued interest on the amount prepaid, any fees payable under clause 9.1 and any Break Costs, but otherwise without premium or penalty.



(b)

The Borrower may reimburse or repay the Face Value in respect of any Current Bank Guarantee by:



(i)

providing to the Bank, cash collateral (on terms satisfactory to the Bank and subject to clause 10.3) in an amount not less than the Face Value of the Bank Guarantee; or



(ii)

cancelling that Bank Guarantee by returning the original to the Bank together with written confirmation from the Beneficiary that the Bank has no further liability under that Bank Guarantee.



5.3

Indemnity in respect of Bank Guarantees

(a)

Without limiting clause 12.1, the Borrower indemnifies the Bank against any liability, loss, cost or expense sustained or incurred in relation to any Bank Guarantee or as a direct or indirect consequence of any claim made or purported to be made under any Bank Guarantee, or anything done by any person who is or claims to be entitled to the benefit of a Bank Guarantee.

 


 







(b)

Without limiting clause 5.3(a), the Borrower must pay to the Bank all amounts claimed by or paid to any Beneficiary in relation to any Bank Guarantee (whether or not the Beneficiary was entitled to make that claim or the Bank was required to make that payment), including any payment made by the Bank under clause 10.2(a)(iv)(B).



(c)

The Borrower’s obligations under clause 5.4(a) and (b) are absolute and unconditional. They are not affected by any reduction, termination or other impairment by set-off, deduction, abatement, counterclaim, agreement, defence, suspension, deferment or otherwise.



(d)

The Borrower is not released, relieved or discharged from any obligation under this document, nor will such obligation be prejudiced or affected for any reason, including:



(i)

any falsity, inaccuracy, insufficiency or forgery of or in any demand, certificate or declaration or other document which on its face purports to be signed or authorised under a Bank Guarantee;



(ii)

any failure by the Bank to enquire whether a cable, telex or other notification was inaccurately transmitted, received or given by an unauthorised person (other than where such failure occurs due to the wilful default or fraud of the Bank);



(iii)

the impossibility or illegality of performance of, or any invalidity of or affecting, any Transaction Document or Bank Guarantee or any other document;



(iv)

any act of any Government Body or arbitrator including any law, judgment, decree or order at any time in effect in any jurisdiction affecting any Transaction Document or Bank Guarantee or any document delivered under a Transaction Document;



(v)

any failure to obtain any consent, license or other authorisation necessary or desirable in connection with any Transaction Document or any Bank Guarantee; or



(vi)

any other cause or circumstance, foreseen or unforeseen, whether or not similar to any of the above, affecting any Transaction Document or Bank Guarantee or any transaction under a Transaction Document or Bank Guarantee,



(vii)

and the Bank need not inquire into any of these matters.



(e)

The Bank is irrevocably authorised and directed by the Borrower to pay immediately against a demand appearing or purporting to be made by or on behalf of a Beneficiary, any sums up to the Face Value of a Bank Guarantee which may be demanded from the Bank from time to time without any reference to or any necessity for confirmation or verification on the part of the Borrower, and notwithstanding any instructions from the Borrower to the contrary.



(f)

The obligations of the Borrower will not be affected or in any way limited by any falsity, inaccuracy, insufficiency or forgery of or in any notice or

 


 







demand pursuant to any liability or the failure of the Bank to enquire (other than where such failure arises due to the wilful default or fraud of the Bank) whether any notice or demand has been inaccurately transmitted or received from any cause whatsoever or has been given or sent by an unauthorised person.



5.4

Mandatory prepayments

(a)

Unless the Bank otherwise agrees, if any of the assets, business or undertaking of any Transaction Party is the subject of any Disposal (other than a Permitted Disposal) the Borrower must apply or ensure is applied an amount equal to the cash or equivalent proceeds received by the Transaction Party from the Disposal net of reasonable transaction costs and Taxes in prepayment of Outstanding Accommodation or (other than in respect of a disposal contemplated by clause 5.4(b)), at the Borrower’s election, in permanent reduction of the unused portion of one or more of the Facility Limits.



(b)

If the land and improvements known as 70 Station Road, Indooroopilly Queensland and described in certificate of title 11485156 are sold:



(i)

unless the Bank otherwise agrees in writing, the Borrower must apply or ensure is applied an amount equal to 50% of the proceeds arising from that sale net of reasonable transaction costs and Taxes in prepayment of the Outstanding Accommodation and/or in permanent reduction of the unused portion of the Facility Limit for the Corporate Markets Loan Facility; and



(ii)

subject to the prior written consent of the Bank (such consent not to be unreasonably withheld), a Transaction Party may make a Distribution or other payment to Reading International Inc (or any subsidiary or affiliate of Reading International Inc that is outside of the Reading Entertainment Australia Group) of an amount equal to 50% of the proceeds arising from that sale net of reasonable transaction costs and Taxes.



(c)

For the avoidance of doubt the requirements to prepay under

clause 5.4(b) will to the extent of the prepayment permanently reduce the Facility Limit of the relevant Facility or Facilities.



5.5

Repayment

Subject to clause 10.2 and clause 10.3, each Borrower must:



(a)

repay the Outstanding Accommodation in respect of each Facility on the Termination Date in respect of that Facility; and



(b)

subject to clause 6, and any other provision in a Transaction Document that provides otherwise, pay any other amounts payable in connection with the Transaction Documents, to the Bank on demand.

 


 







5.6

Not used





6

Interest and fees



6.1

Pricing Periods

(a)

Subject to clause 6.1(c), the Pricing Period for each Advance must be a period of 30, 60 or 90 days or six Months or another period agreed by the Bank.



(b)

Subject to clause 6.1(c), the first Pricing Period for an Advance commences on its Funding Date and will have the duration specified in the relevant Funding Notice. Each subsequent Pricing Period for the Advance:



(i)

commences on the day after the preceding Pricing Period for the Advance expires; and



(ii)

is a period notified by the Borrower to the Bank at least two Business Days before the last day of the current Pricing Period, but if the Borrower does not give notice, is of the same duration as the Pricing Period which immediately precedes it.



(c)

A Pricing Period:



(i)

which would otherwise end on a day which is not a Business Day ends on the next Business Day and a Pricing Period which would otherwise end after the Termination Date ends on the Termination Date. For the avoidance of doubt, if a Pricing Period ends on a day that is not followed by a Business Day, the Bank may extend that Pricing Period accordingly (except where this would be contrary to clause 6.1(c)(ii), in which case the Bank may shorten the Pricing Period); and



(ii)

May be adjusted by the Bank where necessary so that:



(A)

a Pricing Period starts on a Business Day;



(B)

all Advances will have the same Pricing Period;



(C)

a Pricing Period does not end after the Termination Date; and



(D)

if a new Advance is made during a Pricing Period for an existing Advance, the first Pricing Period for that new Advance ends on the same day as the Pricing Period for the existing Advance.



6.2

Payment and rate

(a)

In respect of the Corporate Markets Loan Facility:



(i)

interest for each day is calculated by applying the Daily Interest Rate to the Advance at the end of that day (excluding any amount to which the Overdue Rate applies); and

 


 







(ii)

the Borrower must pay accrued interest in respect of:



(A)

each Pricing Period, on the First Business Day after the expiry of that Pricing Period; and



(B)

the last Pricing Period, for the period up to and including the Termination Date, on the Termination Date.



(b)

The Borrower must pay interest on Overdue Money, and such interest must be paid on demand by the Bank.



(c)

The interest rate on Overdue Money will be the Overdue Rate.



6.3

Computation of interest

Interest will:



(a)

accrue from day to day;



(b)

be computed from and including the day when the money on which interest is payable becomes owing to the Bank by the Borrower until but excluding the day of payment of that money; and



(c)

be calculated on the actual number of days elapsed on the basis of a 365 day year.



6.4

Capitalisation of interest

The Bank may:



(a)

capitalise, on a monthly or other periodical basis as the Bank determines, any part of any interest which becomes due and payable and interest is payable in accordance with this document on capitalised interest; and



(b)

continue to capitalise interest despite:



(i)

that as between the Bank and the Borrower the relationship of Bank and customer has ceased;



(ii)

any composition agreed to by the Bank;



(iii)

any judgment or order against the Borrower; or



(iv)

any other thing.



6.5

Merger

If the liability of the Borrower to pay to the Bank any money payable under a Transaction Document becomes merged in any deed, judgment, order or other thing, the Borrower must pay interest on the amount owing from time to time under that deed, judgment, order or other thing at the higher of the rate payable under the Transaction Documents and that fixed by or payable under that deed, judgment, order or other thing.

 


 







7

Payments



7.1

Place, manner and time of payment

Each Transaction Party must make payments to the Bank under the Transaction Documents:



(a)

at the address specified in clause 19.3 or at such other place reasonably required by the Bank;



(b)

in a manner reasonably required by the Bank;



(c)

by 11.00 am local time in the place where payment is required to be made; and



(d)

in immediately available funds and without set-off, counter claim, condition or, unless required by law, deduction or withholding.



7.2

Gross-up

If a Transaction Party is required by law to deduct or withhold Taxes from any payment it must:



(a)

make the required deduction and withholding;



(b)

pay the full amount deducted or withheld in accordance with the relevant law;



(c)

deliver to the Bank an original receipt for each payment; and



(d)

pay an additional amount with such payment so that, after all applicable deductions or withholdings, the Bank actually receives for its own benefit the full amount which would have been payable to the Bank if no deduction or withholding had been required.



7.3

Appropriation

Subject to any express provision to the contrary in any Transaction Document, the Bank may appropriate any payment towards the satisfaction of any money due for payment by the Borrower in relation to a Transaction Document in any way that the Bank thinks fit and despite any purported appropriation by the Borrower.





8

Representations and warranties



8.1

Nature

Each Transaction Party represents and warrants that:



(a)

duly incorporated: if it purports to be a corporation, it is duly incorporated in accordance with the laws of its place of incorporation, validly exists under those laws and has the capacity to sue or be sued in its own name and to own its property and conduct its business as it is being conducted;



(b)

capacity:  it has capacity unconditionally to execute and deliver and comply with its obligations under the Transaction Documents;

 


 







(c)

action taken:  it has taken all necessary action to authorise the unconditional execution and delivery of, and the compliance with its obligations under, the Transaction Documents to which it is a party;



(d)

binding obligations: each Transaction Document constitutes the valid and legally binding obligations of, and is enforceable against it by the Bank in accordance with its terms (subject to any necessary stamping or registration and to equitable principles and insolvency laws);



(e)

priority:  each Security Interest which each Transaction Document purports to create exists and has the priority which the Bank has agreed to (subject to any necessary stamping and registration);



(f)

authorisations: each authorisation from, and filing and registration with, a Government Body necessary to enable it to unconditionally execute and deliver and comply with its obligations under the Transaction Documents to which it is a party has been obtained, effected and complied with;



(g)

no contravention: the unconditional execution and delivery of, and compliance with its obligations by it under, the Transaction Documents to which it is a party do not:



(i)

contravene any law to which it or any of its property is subject or any order or directive from a Government Body binding on it or any of its property;



(ii)

contravene its constituent documents;



(iii)

contravene any agreement or instrument to which it is a party;



(iv)

contravene any obligation it has to any other person; or



(v)

require it to make any payment or delivery in relation to any Financial Indebtedness (other than Excluded Financial Indebtedness) before the scheduled date for that payment or delivery;



(h)

correct information:  all information given and each statement made to any Bank by it or at its direction in relation to the Transaction Documents, is correct, complete and not misleading;



(i)

full disclosure: it has disclosed to the Bank all information which the Borrower has or has access to and which is relevant to the assessment by the Bank of the nature and amount of the risks undertaken by the Bank becoming a creditor of or taking a Security from it;



(j)

Financial Statements:  the Financial Statements of each of Transaction Party given to the Bank under clause 9.3:



(i)

are a true, fair and accurate statement of their respective financial performance and position and their respective consolidated financial performance and position at the date to which they are prepared; and



(ii)

have been prepared in accordance with clause 9.2 and 9.3,

 


 







except for such departures expressly disclosed in those Financial Statements;



(k)

no change in financial position:  there has been no change in the financial performance or position of a Transaction Party since the date to which the last Financial Statements given to the Bank under clause 9.3 were prepared, which has a Material Adverse Effect;



(l)

no related party transaction:  no person has contravened or will contravene sections 208 or 209 of the Corporations Act due to a Transaction Party entering into or performing its obligations under a Transaction Document;



(m)

no proceeding: except as notified to the Bank in writing before the date of this document, no litigation, arbitration or administrative proceeding is current, pending or, to the knowledge of the Borrower, threatened, which has, or the adverse determination of which would be likely to have, a Material Adverse Effect;



(n)

no trust: except as notified to the Bank in writing before the date of this document, no Transaction Party enters into a Transaction Document as trustee of any trust;



(o)

sole owner and no Encumbrances:  except as notified to the Bank in writing before the date of this document:



(i)

each Transaction Party is the sole legal and beneficial owner of the property it purports to own; and



(ii)

there are no Encumbrances over the property of any Transaction Party other than Permitted Encumbrances;



(p)

no existing default: no Event of Default, Review Event or Potential Event of Default subsists;



(q)

ranking of obligations: each obligation of the Borrower under this document ranks at least pari passu with all unsecured and unsubordinated obligations of the Borrower except obligations mandatorily preferred by law;



(r)

warranties correct: the representations and warranties given by any Transaction Party in any Transaction Document are correct in all material respects and not misleading in any material respect and will be when given or repeated;



(s)

no immunity: each Transaction Party and its property are free of any right of immunity from set-off, proceedings or execution in relation to its obligations under any Transaction Document;



(t)

insurance:  the Insurances are enforceable against the relevant insurer in accordance with their terms and are not void or voidable;



(u)

trust provisions: in relation to each Transaction Party which enters into any Transaction Document as trustee of a Trust:



(i)

the Trustee has power as trustee of the Trust to execute and

 


 







perform its obligations under the Transaction Documents;



(ii)

the Trustee, in executing the Transaction Documents and entering into those transactions, have properly performed their obligations to the beneficiaries of the Trust;



(iii)

all necessary action required by the Trust Deed to authorise the unconditional execution and delivery of, and compliance with its obligations under, the Transaction Documents has been taken;



(iv)

the Trustee is the only trustee of the Trust;



(v)

no effective action has been taken to remove the Trustee as trustee of the Trust or to appoint an additional trustee of the Trust;



(vi)

(A)the Trustee has a right to be fully indemnified out of the property of the Trust in relation to all of its obligations under the Transaction Documents;



(B)

the Trustee has not released or disposed of its equitable lien over the property of the Trust which secures that indemnity; and



(C)

the property of the Trust is sufficient to satisfy that indemnity;



(vii)

the Trustee has complied with all of its obligations as trustee of the Trust in relation to execution of the Transaction Documents;



(viii)

no effective action has been taken or, so far as the Trustee is aware, is contemplated by the beneficiaries of the Trust to terminate the Trust;



(ix)

the Trustee has disclosed to the Bank full details of:



(A)

the Trust and any  other  trust  or  fiduciary  relationship affecting the property of the Trust and, without limitation, has given  to the  Bank  copies  of  any  instruments  creating  or evidencing the Trust; and



(B)

the Trustee’s other trusteeships (if any);



(x)

the Trust is properly constituted and the Trust Deed is not void, voidable or otherwise unenforceable;



(xi)

the rights of the beneficiaries of the Trust in relation to, and their interest in, the property of the Trust are subject to:



(A)

the rights of the Bank in relation to, and their respective interests in, the property of the Trust; and



(B)

any rights or interests in the property of the Trust to which the Bank may from time to time be subrogated; and



(xii)

the Trustee:



(A)

if it is a corporation, is duly incorporated in accordance with the  laws of its place of incorporation, validly exists under those laws and has the capacity to sue and be sued in its

 


 







own name, to own property and to act as trustee of the Trust;



(B)

if it is natural person, has the capacity to be trustee of the Trust;



(v)

solvency: each Transaction party is not insolvent;



(w)

corporate benefit: each of the Transaction Parties will receive corporate benefit by entering into the Transaction Documents to which they are a party.



8.2

General

(a)

The interpretation of any statement contained in any representation or warranty will not be restricted by reference to or inference from any other statement contained in any other representation or warranty.



(b)

The Borrower acknowledges that the Bank enters into the Transaction Documents in reliance on each representation and warranty.



(c)

Each representation and warranty survives the execution of the Transaction Documents and is deemed to be repeated with reference to the facts and circumstances then existing on the date each Funding Notice is issued, on each Funding Date, on the last day of each Funding Period and on each day that an Annual Compliance Certificate or Interim Compliance Certificate is given.





9

General obligations



9.1

Fees

The Borrower must pay to the Bank:



(a)

restructure fee: on or before execution of the Restatement Deed, a non- refundable Restructure Fee of $30,000;



(b)

Corporate Markets Loan Facility Fee: a non-refundable facility fee on the Facility Limit in respect of the Corporate Markets Loan Facility calculated at 0.95% per annum from the date of the ‘Variation Date’ under the Restatement Deed, which will:



(i)

accrue from day to day from the date of this document up to and including the Termination Date;



(ii)

be payable monthly in arrears, on the first Business Day of each Month;



(iii)

be calculated on the actual number of days elapsed and on the basis of a 365 day year;



(c)

Reset Fee: on the first Business Day of each Pricing Period (other than the first Pricing Period) a non-refundable fee of $150.00;



(d)

Not used



(e)

Bank Guarantee service fee: on and from the first services fee charge

 


 







date following 30 June 2014, a non-refundable fee in respect of each Bank Guarantee of 50% of the applicable Bank Guarantee Margin calculated on the Face Value of the Bank Guarantee, payable on a pro- rata basis half yearly in arrears, with the first payment due six months after the relevant Funding Date of the Bank Guarantee, and subsequent payments due every six months thereafter until the Bank Guarantee Matures or Expires or is cancelled. This fee will be calculated on the actual number of days elapsed and on the basis of a 365 day year; and



(f)

Bank Guarantee issuance fee: a non-refundable fee in respect of each Bank Guarantee of 50% of the applicable Bank Guarantee Margin calculated on the Face Value of the Bank Guarantee (or $125 whichever is greater), payable on the relevant Funding Date of the Bank Guarantee.



9.2

Records

The Borrower must ensure that each Transaction Party:



(a)

prepares and keeps books, accounts and other records in accordance with the law and Accounting Standards; and



(b)

on demand, makes the same available for inspection and copying by the Bank.



9.3

Financial Statements and other financial information

The Borrower must give to the Bank:



(a)

annual Financial Statements:  as soon as practicable, and in any event within 120 days after the end of each Financial Year the consolidated audited Financial Statements of the Reading Entertainment Australia Group for that Financial Year;



(b)

Quarterly Financial Statements:  as soon as practicable, and in any event within 45 days after the end of each Quarter (other than the Quarter ending 31 December) the consolidated unaudited Financial Statements of the Reading Entertainment Australia Group for that Quarter (showing both actual and budget figures);



(c)

group structure diagram: within 120 days after the end of each Financial Year, a group structure diagram in relation to Reading International Inc. and the Reading Entertainment Australia Group which lists all the then Group Members and which contains such other information in relation to the legal relationship between Reading International Inc. and the Reading Entertainment Australia Group Members as the Bank reasonably requires;



(d)

budget: as soon as practicable, and in any event before 31 March for each Financial Year, a consolidated budget for the Reading Entertainment Australia Group for the current Financial Year showing the budgeted profit and loss, balance sheet and cash flow for the Reading Entertainment Australia Group and such other matters customarily dealt with in such budgets;



(e)

deregistration: not used;  and

 


 







(f)

other financial information:  promptly on reasonable notice from the Bank, such additional information in relation to the financial condition and the operations of the Borrower and each other Transaction Party as the Bank reasonably requests from time to time.



The Borrower must ensure that all Financial Statements given to the Bank under the Transaction Documents are prepared in accordance with the Corporations Act and the Accounting Standards.



If after the date of this document there is a change in the accounting principles or practices referred to in the definition of 'Accounting Standards' and the Bank or the Borrower reasonably considers that, if the change were to apply for the purposes of this document, the change would have a material effect on the Financial Statements or the calculation of the financial ratios in clause 9.7, the Bank and the Borrower shall endeavour to agree mutually acceptable changes to this document so that the accounting change can be adopted for the purposes of this document.



9.4

Other information

The Borrower must give to the Bank:



(a)

other information: on reasonable notice from the Bank, any other information in the possession or under the control of a Transaction Party which in the Bank’s reasonable opinion is necessary to verify the Borrower’s compliance with any Transaction Document;



(b)

Annual Compliance Certificate: as soon as practicable, and in any event within 120 days after the end of each Financial Year, an Annual Compliance Certificate for that Financial Year signed by at least one director of the Borrower;



(c)

Interim Compliance Certificate:  as soon as practicable, and in any event within 45 days after the end of each Quarter (other than the Quarter ending 31 December) an Interim Compliance Certificate for the previous 12 months signed by at least one director of the Borrower;



(d)

tenancy schedule: as soon as practicable, and in any event within 120 days of the end of each Financial Year an updated tenancy schedule for each Freehold Property, including (without limitation) the following details:



(i)

the name of each tenant;



(ii)

area let by each tenant;



(iii)

current passing rent paid by each tenant;



(iv)

the lease start date;



(v)

the lease term;



(vi)

the lease maturity date;



(vii)

the option term (if any);



(viii)

rent review details; and

 


 







(ix)

any other material or special clauses or conditions;



(e)

Valuations: on demand (provided that no more than one demand is made in a Financial Year and the Bank reasonably considers that there has been a material devaluation of the freehold and leasehold interests subject to the Collateral Security), and in any event within 30 days of the end of every 36 month period from the date of this document, a Valuation in respect of each Freehold Property and leasehold interest that is subject to the Collateral Security. Each Valuation is to be at the Borrower’s expense, addressed to the Bank, conducted by an Approved Valuer and in a form and substance (other than as to value) reasonably satisfactory to the Bank;



(f)

not used;



(g)

details of any proceeding:  full details of any litigation, arbitration, administrative proceeding or native title claim which affects a Transaction Party and which has or the adverse determination of which would be likely to have a Material Adverse Effect, as soon as it is commenced or  to the knowledge of the Borrower is threatened; and



(h)

claims:  on being notified of it, full details of any event which entitles the Borrower or the Bank to claim more than $1,000,000 under the Insurances.



9.5

Other financial undertakings

Each Transaction Party must ensure that:



(a)

negative pledge: no Encumbrances exist on its property (including the Secured Property and the land and improvements known as 78 Middleborough Road, Old Burwood Road, Burwood Victoria), except Permitted Encumbrances;



(b)

permitted financial transactions:  it does not, without the prior written consent of the Bank:



(i)

incur any Financial Indebtedness except Permitted Financial Indebtedness;



(ii)

provide any financial accommodation (excluding trade credit in the ordinary course of business) except Permitted Financial Accommodation;



(c)

disposals: must not dispose of any of its assets, either in a single transaction or in a series of transactions whether related or not and whether voluntary or involuntary, except Permitted Disposals;



(d)

mergers:  a Transaction Party does not:



(i)

enter into any merger, reconstruction or amalgamation; or



(ii)

acquire any property or business or make any investment if the property, business or investment is substantial in relation to the relevant Transaction Party,

 


 







if it would have or be likely to have a Material Adverse Effect;



(e)

maintain status: it does everything necessary to maintain its corporate existence in good standing and:



(i)

ensures that it has the right and is properly qualified to conduct its business in all relevant jurisdictions; and



(ii)

obtains and maintains all Authorisations necessary for the conduct of its business;



(iii)

comply with all laws affecting it or its business in all relevant jurisdictions



(f)

Distributions: it must not make any Distribution except:



(i)

Permitted Distributions;



(ii)

to another Transaction Party; or



(iii)

with the Bank’s prior written consent (such consent not to be unreasonably withheld),



and provided that:



(iv)

no Event of Default subsists; and



(v)

such Distribution will not cause an Event of Default;



(g)

Taxes: must



(i)

promptly pay when they become due for payment (or reimburse the Bank on demand for) all Taxes payable by it from time to time other than Taxes being contested in good faith where it has made adequate provisioning;



(ii)

not transfer any Tax losses to any person other than to the Borrower in connection with the preparation of consolidated annual Financial Statements or in connection with the Reading Entertainment Australia Group's tax consolidation arrangements; and



(iii)

not become a member of a consolidated group for the purposes of Part 3-90 of the Income Tax Assessment Act 1936 and the Income Tax Act 1997 including any amendments thereto (including any amendments made by the New Business Tax (Consolidation Act (No. 1)) 2002 and the New Business Tax System (Consolidation, Value Shifting, Damages and other Measures) Act 2002) other than in accordance with a Tax Sharing Agreement or otherwise on terms approved by the Bank;



(h)

Guarantor accession: if at any time:



(i)

there is a new wholly-owned member of the Reading Entertainment Australia Group that earns any revenue, holds an asset or is otherwise not dormant; or



(ii)

a wholly-owned member of the Reading Entertainment Australia

 


 







Group (as at the date of this document that is not a Guarantor) generates any revenue, acquires an asset or ceases to be dormant,



promptly, and in any event within 45 days, it procures the execution of:



(iii)

a Guarantor Accession Deed; and



(iv)

an all assets fixed and floating charge in favour of the Bank, in such form as the Bank requires,



by such of those wholly-owned subsidiaries as are required to rectify that situation and provides to the Bank any documents or evidence in relation to any such acceding entity as the Bank may reasonably consider necessary in respect to the entering into, validity and enforceability of the accession documents;



(i)

Major developments: in respect of any major development projects to be undertaken by the Transaction Parties (that are outside of the budgeted capital expenditure that has been disclosed to the Bank):



(i)

the Bank is provided with development budgets and other information reasonably requested by the Bank; and



(ii)

the Bank is given the first right of refusal in relation to the funding of the project;



(j)

Major acquisitions: in respect to any acquisitions or investments in assets to be undertaken by the Transaction Parties, the Bank’s written consent is obtained for (and prior to) the purchase of:



(i)

any freehold title or ground lease with a remaining tenor of 25 years or more and a consideration greater than $50,000,000; and



(ii)

the purchase of any other operating business assets with a consideration greater than $25,000,000.



(k)

Management Fees: the aggregate Management Fees paid by the Transaction Parties in a Financial Year does not exceed the amount set out in the ‘Amount’ column corresponding to that Financial Year set out in the following table (without the Bank’s prior written consent):





Financial Year Ending

 

Amount

31 December 2015

$5,250,000

31 December 2016

$5,512,500

31 December 2017

$5,788,125

31 December 2018

$6,077,531

31 December 2019

$6,381,408



No Management Fees may be paid while an Event of Default subsists;



(l)

Burwood property:

 


 







(i)

no Encumbrances exist on the land and improvements known as 78 Middleborough Road, Old Burwood Road, Burwood Victoria (except Permitted Encumbrances); and



(ii)

it does not, without the prior written consent of the Bank, incur any Financial Indebtedness in respect of (or secured by) the land and improvements known as 78 Middleborough Road, Old Burwood Road, Burwood Victoria (except Permitted Financial Indebtedness);



(m)

Preservation and protection of Security: it does everything necessary or reasonably required by the Bank to:



(i)

keep the Secured Property in good repair and in good working order;



(ii)

promptly pay when they become due for payment (or reimburse the Bank on demand for) all Taxes payable in respect of the Secured Property;



(iii)

preserve and protect the value of the Secured Property as a whole; and



(iv)

protect and enforce its title and the Bank’s title as mortgagee to the Secured Property.



9.6

Insurance

(a)

Subject to the provisions of the Transaction Documents, the Borrower must effect and maintain insurance over and in relation to the Secured Property, the business operations of the Group (including business interruption) and for public liability with insurers, for amounts, against risks and on terms and conditions:



(i)

that the Bank reasonably requires; or



(ii)

if the Bank does not notify the Borrower of its requirements, that a prudent and reasonable owner of the Secured Property would effect and maintain, including insurance for full replacement value on a reinstatement basis.



(b)

Subject to the provisions of the Transaction Documents, the Borrower must give to the Bank on demand a certificate in form and substance satisfactory to the Bank from the insurer to the effect that the required Insurances are current and no premium is overdue.



9.7

Financial ratios

(a)

The Borrower must ensure that:



(i)

Fixed Charges Cover Ratio: at each Calculation Date, the Fixed Charges Cover Ratio for the Calculation Period ending on that date is not less than 1.70 times.



(ii)

Leverage Ratio: at each Calculation Date, the Leverage Ratio for the Calculation Period ending on that date is less than or equal to

 


 







3.25 times.



(iii)

Loan to Value Ratio: at each Calculation Date, the Loan to Value Ratio for the Calculation Period ending on that date is less than or equal to 70%.



(b)

A financial ratio or amount to be determined under clause 9.7(a) must be tested or determined by reference to the most recently prepared  Financial Statements. The calculation of any amounts on a consolidated basis must be made in accordance with the requirements of the Accounting Standards relating to the consolidation of entities.



9.8

Environment

(a)

Each Transaction Party must ensure that at all times all practical and reasonable steps that can be taken and measures and precautions that can be adopted are taken or adopted by each Transaction Party to ensure that:



(i)

all persons, things and activities of any kind on or using the Land comply with all Environmental Laws and any consent, permit, approval, licence, authorisation, certification, order or direction granted or issued under any Environmental Law;



(ii)

if there is any non-compliance with any Environmental Law or any consent, permit, approval, licence, authorisation, certification, order or direction granted or issued under any Environmental Law:



(A)

the impact on the Land and the environment is minimised; and



(B)

steps are taken as quickly as possible to rectify the non- compliance, eliminate or reduce any liability arising from the non-compliance and to ensure the non-compliance does not recur;



(iii)

it or any person on the Land does not:



(A)

allow onto or permit to exist on the Land any Contaminant; or



(B)

allow a Contaminant to escape or be released into the environment,



if to do so would be in breach of any Environmental Law or any consent, permit, approval, licence, authorisation, certification, order or direction granted or issued under any Environmental Law or could give rise to an order or direction being issued under any Environmental Law; and



(iv)

if any Contaminant is discovered on or affecting the Land (other than a Contaminant which is safely stored in accordance with lawful authority) or, without lawful authority, escapes or is released from the Land into the environment:



(A)

the impact on the Land and the environment is minimised;

 


 







and



(B)

steps are taken as quickly as possible to safely contain the Contaminant and to remove the Contaminant from the environment or the Land or reduce the levels of the Contaminant to a level required  or  recommended  by the relevant Government Body as safe and in either case to eliminate or reduce any liability arising from the Contaminant and  do all things necessary to restore the Land and the environment.



(b)

If there is any non-compliance under clauses 9.8(a)(i),  (ii) or (iii) or any Contaminant is discovered or the Borrower has reason to believe that there is some Contaminant on the Land requiring action to be taken under clause 9.8(a)(iv), the Borrower must immediately notify the Bank.



(c)

If there is or the Bank has reason to believe that there may be any

non-compliance under clauses 9.8(a)(i),  (ii) or (iii) or any Contaminant is discovered or the Bank has reason to believe that there is some Contaminant on the Land requiring action to be taken under

clause 9.8(a)(iv), the Borrower, at the request of the Bank, must procure

and furnish to the Bank, in a form acceptable to the Bank, an Environmental Assessment Report in relation to the Land and any operations conducted on it.



(d)

The Borrower indemnifies the Bank from and against all:



(i)

Environmental Liability; and



(ii)

damages, losses, outgoings, costs, charges or expenses suffered or incurred by the Bank in respect of any action, claim or demand made or brought in respect of or otherwise arising from or in connection with any breach of any Environmental Law in relation to the Land.



(e)

The Borrower must immediately notify the Bank of:



(i)

the existence of any Contaminant on or adjacent to or affecting the Land; and



(ii)

the receipt by any Transaction Party of any notice, order or direction:



(A)

to clean up any Contaminant on the Land; or



(B)

alleging any breach of Environmental Law.



(f)

If requested by the Bank, the Borrower must provide the Bank with a copy of each environmental consent, permit, approval, licence, authorisation, certification, order and direction relating to the Land together with confirmation that:



(i)

it is complying with the terms and conditions of each consent, permit, approval, licence, authorisation, certification, order and direction; and

 


 







(ii)

it has renewed each consent, permit, approval, licence, authorisation, certification, order and direction as appropriate.



(g)

The Borrower must:



(i)

when reasonably required by the Bank, obtain or permit the Bank to obtain an Environmental Assessment Report from a person approved by the Bank in relation to the Land; and



(ii)

promptly comply with any reasonable recommendation contained  in any Environmental Assessment Report relating to compliance with Environmental Law in relation to the Land and obtain any consent, permit, approval, licence, authorisation, certification, order and direction required in order to comply with that  recommendation.



9.9

No default

The Borrower must ensure that an Event of Default does not occur.



9.10

Obligations of Trustees

If a Transaction Party is a Trustee the Borrower must ensure that it:



(a)

ensures that the property of the Trust is not mixed with any other property;



(b)

complies with its obligations as trustee of the Trust;



(c)

does not release, dispose of or otherwise prejudice its right of indemnity against, and equitable lien over, the property of the Trust and its right of indemnity (if any) against the beneficiaries of the Trust in relation to any money owing to the Bank;



(d)

at the Bank’s request:



(i)

exercises its right of indemnity against, and equitable lien over, the property of the Trust and its right of indemnity (if any) against the beneficiaries of the Trust in relation to any money owing to the Bank; and



(ii)

assigns to the Bank those indemnities and that equitable lien and otherwise facilitates the subrogation of the Bank to those indemnities and that equitable lien;



(e)

does not, if the Trust is a unit trust, consent to or register the transfer of units in the Trust or cancel, repurchase, redeem or issue any units in the Trust;



(f)

ensures that:



(i)

another person is not appointed as trustee of the Trust;



(ii)

the Trust is not terminated or its terms varied;



(iii)

the Trustee does not resign and is not removed or replaced as trustee of the Trust;



(iv)

the property of the Trust is not resettled;

 


 







(v)

the capital of the property of the Trust is not distributed at any time; and



(vi)

income of the Trust is not distributed to anyone other than a Transaction Party while an Event of Default or Potential Event of Default subsists;



(g)

prepares and keeps full and true records and books of accounts of the Trust and makes them available for inspection and copying by the Bank on demand; and



(h)

does not default in performing or observing its obligations under the Transaction Documents.



9.11

Release for Permitted Disposals

The Bank must on request from (and at the cost of) a Transaction Party  release from the Collateral Security that part of the Secured Property that is the subject of a Permitted Disposal (other than a Permitted Disposal of the kind referred to in paragraph (a) of that term's definition).





10

Events of Default



10.1

Nature

Each of the following is an Event of Default (whether or not caused by anything outside the control of any Transaction Party):



(a)

non-payment: a Transaction Party does not pay on the due date any principal, interest and fees due for payment by it under a Transaction Document in accordance with the relevant Transaction Document;



(b)

other non-compliance: a Transaction Party does not comply with any other obligation under a Transaction Document and if that default is capable of rectification:



(i)

it is not rectified within five Business Days (or any other longer period agreed by the Bank) after its occurrence; or



(ii)

the Transaction Party does not during that period take all action which in the Bank’s reasonable opinion is necessary to rectify that default;



(c)

untrue warranty: a representation, warranty or statement made or deemed to be made by a Transaction Party in a Transaction Document is untrue or misleading in any material respect or a reply by a Transaction Party to a requisition made by, or on behalf of, the Bank is untrue or misleading in any material respect;



(d)

void document: a Transaction Document is void, voidable or otherwise unenforceable by the Bank or is claimed to be so by a Transaction Party;



(e)

compliance unlawful: it is unlawful for a Transaction Party to comply with any of its obligations under a Transaction Document or it is claimed to be so by a Transaction Party;

 


 







(f)

loss of priority:  a Security Interest created by or purportedly created by a Collateral Security does not have or ceases to have the priority which it purports to have under the relevant Transaction Document or becomes ineffective to secure the payment of the money or compliance with the obligations which it purports to secure, otherwise than by any act of the Bank;



(g)

Insolvency Event: an Insolvency Event occurs in relation to a Transaction Party;



(h)

authorisation ceasing: an Authorisation from a Government Body necessary to enable:



(i)

a Transaction Party to comply with its obligations under a Transaction Document or carry on its principal business or activity;



(ii)

a Transaction Party to carry on its principal business or activity; or

(iii) the Bank to exercise its rights under a Transaction Document, is withheld or ceases to be in full force and effect and, in the case of

clause 10.1(h)(i), would have a Material Adverse Effect;



(i)

Material Adverse Effect: an event or series of events whether related or not, including any material adverse change in the property or financial condition of a Transaction Party, occurs which has a Material Adverse Effect;



(j)

cross default:



(i)

Financial Indebtedness (other than Excluded Financial Indebtedness) of a Transaction Party in excess of $500,000 becomes due for payment before its stated maturity other than by the exercise of an option of the Transaction Party to pay it before its maturity;



(ii)

a Transaction Party fails to pay when due for payment (or within any applicable grace period) any Financial Indebtedness (other than Excluded Financial Indebtedness) in excess of $500,000;



(iii)

an obligation by a person to a Transaction Party to provide financial accommodation or to acquire or underwrite Financial Indebtedness (other than Excluded Financial Indebtedness) in excess of $500,000 ceases before its stated maturity other than by the exercise of an option of the Transaction Party to cancel that obligation; or



(iv)

a marketable security issued by a Transaction Party and having a face value over $500,000 is required to be redeemed or repurchased before its stated maturity other than by the exercise of an option of the issuer to redeem or repurchase;