PLEDGE AND SECURITY AGREEMENT
 
THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”) dated as of February 22,
2008, is made by READING CONSOLIDATED HOLDINGS, INC., a Nevada corporation
(“Pledgor”), in favor of NATIONWIDE THEATRES CORP., a California corporation
(“Pledgee”).
 
W I T N E S S E T H:
 
WHEREAS, reference is made to that certain Asset Purchase and Sale Agreement,
dated as of October 8, 2007, by and among Pacific Theatres Exhibition Corp., a
California corporation, Consolidated Amusement Theatres, Inc., a Hawaii
corporation, Michael Forman and Christopher Forman, on the one hand, and
Consolidated Amusement Theatres, Inc., a Nevada corporation (“Buyer”), and
Reading International, Inc., a Nevada corporation, on the other hand, as amended
by Amendment No. 1 thereto entered into as of February 8, 2008 and Amendment
No. 2 thereto entered into on February 14, 2008 (as so amended, the “Purchase
Agreement”);
 
WHEREAS, concurrent with the consummation of the transactions contemplated by
the Purchase Agreement and the execution of this Agreement, Pledgee is making a
loan to Pledgor evidenced by a promissory note in favor of Pledgee dated the
date hereof in the principal amount of $21,000,000 (the “Note”); and
 
WHEREAS, Pledgee agrees to make further loans to Pledgor as provided in and to
be evidenced by the Note; and
 
WHEREAS, in order to secure all of Pledgor’s obligations to Pledgee under the
Note, Pledgor has agreed to pledge to Pledgee all of the issued and outstanding
capital stock (the “Pledged Shares”) of Consolidated Amusement Holdings, Inc., a
Nevada corporation (“CAH, Inc”), in accordance with the terms of this Agreement.
 
NOW, THEREFORE, in consideration of the premises and the agreements herein and
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereby agree as follows:
 
1.           Definition.  All terms used in this Agreement which are defined in
Article 9 of the Uniform Commercial Code (the “Code”) as currently in effect in
the State of California and which are not otherwise defined herein shall have
the same meanings herein as set forth in the Code.  The term “Default” shall
mean the occurrence of a “Default” under the Note or any material breach of any
of Pledgor's representations, warranties or covenants in this Agreement.
 
2.           Pledge and Grant of Security Interest and Substituting and Release
of Collateral.
 
(a)           As collateral security for all of the Obligations (as defined in
Section 3 hereof), Pledgor hereby pledges and assigns to Pledgee, and grants to
Pledgee a continuing security interest in, the following (collectively, the
“Pledged Collateral”):
 
 
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(i)           the Pledged Shares, the certificates now or hereafter representing
or evidencing the Pledged Shares and all options and other rights, contractual
or otherwise, in respect thereof; and
 
(ii)           all proceeds of any and all of the foregoing, including all
dividends, distributions, redemption payments or liquidation payments with
respect to the foregoing;
 
in each case, as Pledgor’s interest therein may arise or appear (whether by
ownership, security interest, claim or otherwise).
 
3.           Security for Obligations.  The security interest created hereby in
the Pledged Collateral constitutes continuing collateral security for the
following (collectively, the “Obligations”):
 
(a)           the prompt payment and satisfaction by Pledgor of all of its
liabilities and obligations under the Note; and
 
(b)           the performance by Pledgor of all of his obligations arising
under, or contemplated by, this Agreement.
 
4.           Delivery of the Pledged Collateral.  All certificates currently
representing the Pledged Shares shall be delivered to Pledgee concurrently with
the execution and delivery of this Agreement, to be held by it hereunder.  All
other certificates and other instruments constituting Pledged Collateral from
time to time shall be delivered to Pledgee promptly upon the receipt thereof by
or on behalf of the Pledgor.  All such certificates and instruments shall be
held by Pledgee pursuant hereto and shall be delivered in suitable form for
transfer by delivery or shall be accompanied by duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Pledgee.
 
5.           Representations and Warranties.  Pledgor represents and warrants to
Pledgee as follows:
 
(a)           Pledgor is and will be at all times the record and beneficial
owner of the Pledged Collateral, free and clear of any lien, security interest,
option or other charge or encumbrance, except for the security interest created
by this Agreement.
 
(b)           This Agreement creates a valid security interest in favor of
Pledgee in the Pledged Collateral, as security for the Obligations.  Such
security interest is, or in the case of Pledged Collateral in which Pledgor
obtains rights after the date hereof, will be, a perfected, first priority
security interest.
 
(c)           Pledgor is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada. Pledgor has all requisite
power to own, lease and license its properties and assets and to carry on its
business in the manner and in the places where such properties and assets are
owned, leased, licensed or operated or such business is conducted.
 
 
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(d)           Pledgor has full right, power and authority to enter into this
Agreement and to perform its obligations hereunder. The entry into and
performance of this Agreement has been duly authorized by all necessary action
on the part of Pledgor in accordance with its governing documents and applicable
law, and this Agreement constitutes, and each other document, instrument and
agreement to be entered into by Pledgor pursuant to the terms of this Agreement
will constitute, a valid agreement binding upon and enforceable against Pledgor
in accordance with its terms (except as limited by bankruptcy or similar laws or
the availability of equitable remedies).
 
(e)           The execution, delivery and performance by Pledgor of this
Agreement, and all other agreements, instruments and documents referred to or
contemplated herein or therein do not require the consent, waiver, approval,
license or authorization of any Person or public authority which has not been
obtained and do not and will not contravene or violate (with or without the
giving of notice or the passage of time or both) the governing documents of
Pledgor or any judgment, injunction, order, law, rule or regulation applicable
to Pledgor.  Pledgor is not a party to, or subject to or bound by, any judgment,
injunction or decree of any court or governmental authority or any lease,
agreement, instrument or document which may restrict or interfere with the
performance by Pledgor of this Agreement, or such other leases, agreements,
instruments and documents.
 
(f)           Each of Pledgor and CAH, Inc. is a newly-formed entity, created
for the purpose of effectuating the transactions contemplated by this Agreement,
the Note and the Purchase Agreement. Neither Pledgor nor CAH, Inc. has conducted
any business, incurred any liabilities nor engaged in any transactions other
than in connection with (i) the organization and formation of Pledgor and CAH,
Inc. and (ii) the negotiation and execution of this Agreement, the Note and the
Purchase Agreement, the documents and instruments contemplated by the Purchase
Agreement, and the consummation of the transactions contemplated hereby and
thereby.
 
(g)           No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of Pledgor,
threatened by or against Pledgor or CAH, Inc. or against any of their respective
properties including, without limitation, the Pledged Collateral.
 
(h)           Reading International Services Company, a California corporation
and wholly owned subsidiary of RDI (as defined in the Purchase Agreement), owns,
beneficially and of record, 100% of the outstanding capital stock of Pledgor
(determined on a fully-diluted and as-converted basis).  Pledgor owns,
beneficially and of record, 100% of the outstanding capital stock of CAH, Inc.
(determined on a fully-diluted and as-converted basis).  CAH, Inc. owns,
beneficially and of record, 100% of the outstanding capital stock of Buyer
(determined on a fully-diluted and as-converted basis).  There are not
outstanding any options, warrants or rights to subscribe for or to purchase the
capital stock or any securities convertible into or exchangeable for the capital
stock of any of Pledgor, CAH, Inc. or Buyer.  All of the outstanding shares of
the capital stock of each of Pledgor, CAH, Inc. and Buyer are validly issued,
fully paid and nonassessable, and no such shares of capital stock are subject
to, or have been issued in violation of, preemptive rights.
 
 
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All warranties and representations made herein shall survive the execution and
delivery of this Agreement and the enforcement of some or all of the rights
granted to Pledgee hereunder or pursuant to the Note.
 
6.           Covenants.
 
(a)           So long as any of the Obligations shall remain outstanding,
Pledgor shall, unless Pledgee shall otherwise consent in writing:
 
(i)            keep adequate records concerning the Pledged Collateral and
permit Pledgee and its attorneys and other representatives at any reasonable
time and from time to time to examine and make copies of and abstracts from such
records;
 
(ii)            at its expense, promptly deliver to Pledgee a copy of each
notice or other communication received by it in respect of the Pledged
Collateral;
 
(iii)           at its expense, defend the Pledgor’s right, title and interest
in and to the Pledged Collateral and Pledgee’s security interest therein against
the claims of any person;
 
(iv)           not sell, assign (by operation of law or otherwise), exchange or
otherwise dispose of, or grant any option or warrant with respect to, any
Pledged Collateral or any interest therein;
 
(v)            not create or suffer to exist any lien, security interest or
other charge or encumbrance upon or with respect to any Pledged Collateral
except for the security interest created hereby;
 
(vi)           not make or consent to any amendment or other modification or
waiver with respect to any Pledged Collateral or enter into any agreement or
permit to exist any restriction with respect to any Pledged Collateral other
than pursuant hereto;
 
(vii)          not enter into any transaction which would result in a “Change of
Control” of Pledgor within the meaning of the Note;
 
(viii)         not cause or permit CAH, Inc. or Buyer to enter into any merger
or consolidation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution);
 
(ix)           not cause or permit CAH, Inc. to dispose of all or any material
part of its property or business; and
 
(x)            not cause or permit CAH, Inc. or Buyer to issue or agree to
issue, or grant any option or warrant with respect to, any other shares of its
capital stock, other than any such issuances or grants to Pledgor which, when
made, shall be delivered to Pledgee and shall constitute Pledged Collateral
hereunder
 
(b)           In addition, Pledgor shall not do any of the following:
 
 
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                (i)            cause or permit CAH, Inc. to engage in any
business or commercial operations other than holding the capital stock and
securities and guaranteeing the obligations of Buyer;
 
(ii)           cause or permit CAH, Inc. to incur any indebtedness, except that
CAH, Inc. may incur trade payables in the ordinary course of its business
described in Section 6(b)(i) and indebtedness in connection with CAH, Inc.’s
guarantees of obligations of Buyer; or
 
(iii)           cause or permit Buyer to make any payments or reimbursements to
RDI or any of its affiliates other than as provided in the Management Agreement
attached as an Exhibit to the Note (provided that it is understood that the
obligation of the Manager under the Management Agreement may be assigned to any
affiliate of RDI)
 
7.           Voting Rights, Dividends, Etc. in Respect of the Pledged
Collateral.
 
(a)           So long as no Default shall have occurred and be continuing:
 
(i)           Pledgor may exercise any and all voting and other consensual
rights pertaining to any Pledged Collateral for any purpose not inconsistent
with the terms of this Agreement;
 
(ii)           Pledgor may receive and retain any and all dividends paid in cash
with respect of the Pledged Collateral; and
 
(iii)           Pledgee will execute and deliver (or cause to be executed and
delivered) to Pledgor all such proxies and other instruments as Pledgor may
reasonably request for the purpose of enabling Pledgor to exercise the voting
and other rights which it is entitled to exercise pursuant to Section 7(a)(i)
hereof, and to receive the dividends which it is authorized to receive and
retain pursuant to Section 7(a)(ii) of this Agreement.
 
(b)           Upon the occurrence and during the continuance of a Default;
 
(i)           all rights of Pledgor to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to Section
7(a)(i) of this Agreement, and to receive the dividends which it would otherwise
be authorized to receive and retain pursuant to Section 7(a)(i) of this
Agreement, shall cease, and all such rights shall thereupon become vested in
Pledgee, who shall thereupon have the sole right to exercise such voting and
other consensual rights and to receive and hold as Pledged Collateral such
dividends;
 
(ii)           without limiting the generality of the foregoing, Pledgee may, at
its option, exercise any and all rights of conversion, exchange, subscription or
any other rights, privileges or options pertaining to any of the Pledged
Collateral as if it were the absolute owner thereof, including, without
limitation, the right to exchange, in its discretion, any and all of the Pledged
Collateral upon the merger, consolidation, reorganization, recapitalization or
other adjustment of Pledgee, or upon the exercise by Pledgee of any right,
privilege or option pertaining to any Pledged Collateral, and, in connection
therewith, to deposit and deliver any and
 
 
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all of the Pledged Collateral with any committee, depository, transfer agent,
registrar or other designated agent upon such terms and conditions as it may
determine; and
 
(iii)           all dividends which are received by the Pledgor contrary to the
provisions of Section 7(b)(i) hereof shall be received in trust for the benefit
of Pledgee, shall be segregated from other funds of Pledgor, and shall be
forthwith paid over to Pledgee as Pledged Collateral in the exact form received
with any necessary endorsement and/or appropriate stock powers duly executed in
blank, to be held by Pledgee as Pledged Collateral and as further collateral
security for the Obligations.
 
8.           Additional Provisions Concerning the Pledged Collateral.
 
(a)           Upon the occurrence and during the continuance of a Default,
Pledgor hereby irrevocably appoints Pledgee as Pledgor's attorney-in-fact and
proxy, with full authority in the place and stead of the Pledgor and in name of
Pledgor or otherwise, from time to time in Pledgee’s discretion, to take any
action and to execute any instrument which Pledgee may deem necessary or
advisable to accomplish the purposes of this Agreement, including, without
limitation, to receive, indorse and collect all instruments made payable to the
Pledgor representing any dividend or other distribution in respect of any
Pledged Collateral and to give full discharge for the same.
 
(b)           If Pledgor fails to perform any agreement or obligation contained
herein, Pledgee itself may perform, or cause performance of, such agreement or
obligation, and the expenses of Pledgee incurred in connection therewith shall
be payable by Pledgor.
 
9.           Remedies Upon Default; Application of Funds.
 
(a)           Pledgee may exercise all rights and remedies in respect of the
Pledged Collateral available to a secured party under the Code, by law or
otherwise.
 
(b)           Pledgee may exercise any and all rights and remedies of Pledgor
under or in respect of the Pledged Collateral (including, but not limited to,
any and all rights of Pledgor to demand or otherwise require payment of any
amount under, or performance of any provision of, the Pledged Collateral).
 
(c)           Pledgee may take possession of the Pledged Collateral.
 
(d)           Pledgee may, without notice to Pledgor, sell all or any part of
the Pledged Collateral in one or more parcels at public or private sale, at any
of Pledgee’s offices, or elsewhere, for cash, on credit or for future delivery,
and upon such other terms as Pledgee may deem commercially reasonable
 
(e)           Any cash held by Pledgee as Pledged Collateral and all cash
proceeds received by Pledgee in respect of any sale of, collection from, or
other realization upon, all or any part of the Pledged Collateral shall be
applied as follows:
 
(i)           first, to the payment of the reasonable costs and expenses,
including reasonable attorneys' fees and legal expenses, incurred by Pledgee in
connection with
 
 
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(A) the administration of this Agreement, (B) the custody, preservation, use or
operation of, or the sale of, collection from, or other realization upon, any
Pledged Collateral, (C) the exercise or enforcement of any of the rights of
Pledgee hereunder or (D) the failure of Pledgor to perform or observe any of the
provisions hereof;
 
(ii)           second, at the option of Pledgee, to the payment or other
satisfaction of any liens and other encumbrances upon any of the Pledged
Collateral;
 
(iii)           third, to the payment of the Obligations;
 
(iv)           fourth, to the payment of any other amounts required by
applicable law; and
 
(v)           fifth, the surplus proceeds, if any, to Pledgor or to whomsoever
shall be lawfully entitled to receive the same or as a court of competent
jurisdiction shall direct.
 
10.           Expenses.  Subject to Section 8(e) above, each party to this
Agreement shall pay all of its own expenses incurred in connection with this
Agreement.
 
11.           Notices, Etc.  All notices and other communications provided for
hereunder shall be in writing and shall be given as provided in the Purchase
Agreement.
 
12.           Miscellaneous.
 
(a)           No amendment of any provision of this Agreement shall be effective
unless it is in writing and signed by the parties hereto, and no waiver of any
provision of this Agreement, and no consent to any departure by Pledgor
therefrom, shall be effective unless it is in writing and signed by Pledgee, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
 
(b)           No failure on the part of the Pledgee to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right.  The rights and remedies of
Pledgee provided herein are cumulative and are in addition to, and not exclusive
of, any rights or remedies provided by law.
 
(c)           Any provision of this Agreement, which is prohibited or
unenforceable in any jurisdiction, shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
 
(d)           Upon the satisfaction in full of the Obligations, (i) this
Agreement and the security interest created hereby shall terminate and all
rights to the Pledged Collateral shall revert to Pledgor, and (ii) the Pledgee
will, upon Pledgor's request, (A) return to Pledgor such of the Pledged
Collateral as shall not have been sold or otherwise disposed of or applied
pursuant to the terms hereof, and (B) execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such termination.
 
 
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(e)           This Agreement shall be governed by and construed in accordance
with the laws of the State of California.
 
(f)           Pledgor agrees that, at any time and from time to time, at
Pledgor’s expense, Pledgor will promptly execute, deliver and file or record all
further financing statements instruments and documents, and will take all
further actions, that may be reasonably necessary or desirable, or that Pledgee
may reasonably request, in order to perfect and protect any pledge or security
interest granted hereby or to enable Pledgee to exercise and enforce its rights
and remedies hereunder with respect to any Pledged Collateral.
 
(g)           If Pledgor shall fail to do any act or thing which Pledgor has
covenanted to do hereunder or any representation or warranty of Pledgor shall be
breached and not cured or remedied as provided herein, Pledgee may (but shall
not be obligated to) do the same or cause it to be done or remedy any such
breach and there shall be added to the Obligations the cost or expense incurred
by Pledgee in so doing, and any and all amounts expended by Pledgee in taking
any such action shall be repayable to it upon its demand therefor and shall bear
interest at the maximum rate permitted by applicable law from the date advanced
to the date of repayment.
 
(h)           Any dispute of any nature or character whatsoever between the
parties and arising under or with respect to this Agreement, or the subject
matter hereof or thereof, shall be resolved by a proceeding in accordance with
the provisions of California Code of Civil Procedure Section 638 et seq., for a
determination to be made which shall be binding upon the parties as if tried
before a court or jury.  The parties agree specifically as to the following:
 
(i)           Within five (5) Business Days after service of a demand by a party
hereto, the parties shall agree upon a single referee who shall then try all
issues, whether of fact or law, and then report a finding or judgment
thereon.  If the parties are unable to agree upon a referee either party may
seek to have one appointed, pursuant to California Code of Civil Procedure
Section 640, by the presiding judge of the Los Angeles County Superior Court;
 
(ii)           The compensation of the referee shall be such charge as is
customarily charged by the referee for like services.  The cost of such
proceedings shall initially be borne equally by the parties.  However, the
prevailing party in such proceedings shall be entitled, in addition to all other
costs, to recover its contribution for the cost of the reference as an item of
damages and/or recoverable costs;
 
(iii)           If a reporter is requested by either party, then a reporter
shall be present at all proceedings, and the fees of such reporter shall be
borne by the party requesting such reporter.  Such fees shall be an item of
recoverable costs.  Only a party shall be authorized to request a reporter;
 
(iv)           The referee shall apply all California Rules of Procedure and
Evidence and shall apply the substantive law of California in deciding the
issues to be heard.  Notice of any motions before the referee shall be given,
and all matters shall be set at the convenience of the referee;
 
 
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(v)           The referee’s decision under California Code of Civil Procedure
Section 644, shall stand as the judgment of the court, subject to appellate
review as provided by the laws of the State of California; and
 
(vi)           The parties agree that they shall in good faith endeavor to cause
any such dispute to be decided within four (4) months.  The date of hearing for
any proceeding shall be determined by agreement of the parties and the referee,
or if the parties cannot agree, then by the referee. The referee shall have the
power to award damages and all other relief.
 
(vii)           For purposes of this Agreement, the term “Business Day” means
Monday through Friday, excluding any day of the year on which banks are required
or authorized to close in California.
 
[Signature page follows]
 
 
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.
 

 
PLEDGOR:
     
READING CONSOLIDATED HOLDINGS, INC.
         
By:            /s/ Andrzej
Matyczynski                                                                
 
Name:  Andrzej Matyczynski
 
Title:  Chief Financial Officer
             
PLEDGEE:
     
NATIONWIDE THEATRES CORP.
         
By:            /s/ Ira
Levin                                                                
 
Name:  Ira Levin
 
Title:  Vice President
   

 
 
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