Document:

exhibit10_68.htm

    REAL PROPERTY PURCHASE AND
SALE AGREEMENT

    

    

    THIS REAL PROPERTY PURCHASE AND SALE
AGREEMENT (this "Agreement") is made
and entered into as of October 8, 2007 (the “Effective Date”) by
and between CONSOLIDATED AMUSEMENT THEATRES, INC., a Hawaii corporation (“Seller"), and
CONSOLIDATED AMUSEMENT THEATRES, INC., a Nevada corporation (“Buyer"), with
reference to the following facts:

    

    A.           Seller
is the tenant, among other tenancies, under the leases described on Exhibit A attached
hereto (the "Leases"), which
Leases relate to those certain premises located in the State of Hawaii as more
particularly described in the Leases (the "Leased
Premises").

    

    B.           Subject
to the terms and conditions of this Agreement, Seller desires to sell, transfer,
convey and assign to Buyer, and Buyer desires to purchase, accept and assume
from Seller, all of the right, title and interest of Seller in the “Property”
(as defined in Section 1.1 below).

    

    NOW, THEREFORE, in consideration of the
foregoing recitals and the mutual covenants, agreements, representations and
warranties herein contained, Seller and Buyer hereby agree as
follows:

    

    1.           Purchase and Sale of
Property; Assumption of Liabilities.

    

    1.1           Purchase of
Property.  Upon the terms and subject to the conditions
hereinafter set forth, at the “Closing” (as defined in Section 8.1 hereof),
Seller shall sell, transfer, convey and assign to Buyer, and Buyer shall
purchase from Seller, and assume certain liabilities with respect to, all right,
title and interest of Seller in, to and under (a) the Leases and (b) all
buildings, improvements and fixtures located on or comprising a part of the
Leased Premises (collectively, the “Property”).

    

    1.2           Assumed
Liabilities.  Effective as of the Closing Date, Buyer shall
assume any and all liabilities and obligations of Seller under the Leases which
accrue on or after the Closing Date (the “Assumed
Liabilities”).  Except for the Assumed Liabilities and except
as otherwise specifically set forth in any of the other “Transaction Documents”
(as such term is defined in Article 11), Buyer is not assuming any other
liabilities or obligations of Seller. The obligations and covenants of Buyer set
forth in this Section 1.2 and elsewhere in this Agreement shall survive the
Closing indefinitely.

    

    1.3           Assignment by
Buyer.  Subject to the terms of Section 7.1.1 below, Buyer
shall have the right to assign its right to take title at Closing to some or all
of the Property to one or more wholly-owned direct or indirect subsidiaries of
Buyer (the “Buyer
Subs”); provided, however, that no such assignment shall relieve Buyer of
its obligations under this Agreement (including, without limitation, Section 1.2
and Article 10 hereof) or any of the other Transaction Documents. Buyer shall
provide Seller with

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    written
notice of such election, the identities of the Buyer Subs, and which of the
Property is to be acquired by the Buyer Subs at least ten (10) days prior to the
“Closing Date” (as such term is defined in Section 8.1 below).

    

    1.4           Exchange.  Seller
intends to transfer its obligations to sell the Property to a “qualified
intermediary,” as defined in Treasury Regulation Sec. 1.1031(k)-1(g)(4)(iii),
for the purpose of effecting an exchange qualifying under Sec. 1031 of the
Code.  Buyer agrees to such assignments, if made, and further agrees
that it will execute promptly acknowledgements of its receipts of notices of
such assignments delivered to Buyer by Seller.  Buyer and Seller agree
that any such assignment shall not affect the representations, warranties and
other obligations of the parties under this Agreement or Buyer’s title to the
Property, except that the Purchase Price, adjusted as provided herein, shall be
paid to the assignee or assignees identified in such notice or
notices.  Buyer further agrees to cooperate with Seller and to execute
such other documents reasonably requested by Seller to effect such exchanges, so
long as Buyer incurs no cost, expense or liability (other than its own
attorneys’ fees and costs incurred in reviewing, negotiating and executing such
documents) as a result of such cooperation.  It is understood that,
subject to the performance of Buyer’s obligations under this Agreement, Buyer
shall have no responsibility for the proposed exchanges, and makes no
representations or warranties as to whether any transaction effectuated by
Seller, in fact, will accomplish Seller’s tax objectives.

    

    2.           Purchase
Price.

    

    2.1           Purchase
Price.  The purchase price for the Property shall be
Twenty-Nine Million Five Hundred Thousand Dollars ($29,500,000), which shall be
subject to adjustment and reimbursement as hereinafter provided (the "Purchase
Price").    Buyer shall pay the Purchase Price to
Seller in full at the Closing by wire transfer of immediately available funds to
an account or accounts designated by Seller not less than two (2) “Business
Days” (as such term is defined in Article 11) prior to the Closing
Date.

    

    2.2           Adjustments to Purchase
Price.  The Purchase Price shall be subject to adjustment at
the Closing as follows:

    

    2.2.1                      Prepaid Expenses, Prorations
and Deposits.  The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses and receipts
(other than those adjusted pursuant to Section 2.2.2), including any prepaid
expenses and receipts, if any, under the Leases or other obligations to be borne
pursuant to this Agreement by Seller prior to the Closing Date and by Buyer on
or after the Closing Date.  Without limiting the generality of the
foregoing, all expenses arising under the Leases, including, without limitation,
rent (other than “Percentage Rent” (as defined in Section 2.2.2 below)), utility
charges, insurance charges, common area operating expenses, real, excise and
personal property Taxes and assessments levied against the Leased Premises,
promotional fund expenses, use Taxes, deposits under the Leases, and similar
prepaid and deferred items, in each case to the extent relating to the Leases,
shall be prorated between Buyer and Seller in accordance with the principle that
Seller shall be

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    responsible
for all expenses, costs, and liabilities, and shall be entitled to all receipts,
allocable to the period ending prior to the Closing Date, and Buyer shall be
responsible for all expenses, costs, liabilities and obligations, and shall be
entitled to all receipts, allocable to the period on or after the Closing
Date.

    

    2.2.2                      Percentage
Rent.  With respect to any percentage rent or any other rent
based on the income (gross or otherwise) (“Gross Income”) of the
tenant (collectively, “Percentage Rent”)
payable under any Lease for the applicable lease years or other periods
specified thereunder (each, a “Lease Year”) during
which the Closing occurs, the Percentage Rent (taking into account any
applicable credits or adjustments) shall be prorated between Buyer and Seller
(where Seller is responsible for the period ending immediately prior to the
Closing Date and Buyer is responsible for the period on and after the Closing
Date) such that each party shall pay when due that percent of the total
Percentage Rent payable which equals such party’s respective Gross Income under
such Lease divided by the total Gross Income under such Lease for such Lease
Year.  Seller shall pay to Buyer, or Buyer shall pay to Seller, as the
case may be, its pro rata share due in respect of such estimated Percentage Rent
within thirty (30) days after receipt by the paying party of the appropriate
statements evidencing the amount thereof.  Any dispute arising under
this Section 2.2.2 shall be resolved in accordance with the procedures set forth
in Section 2.2.3.3 and 2.2.3.4.

    

    2.2.3                      Manner of Determining
Adjustments. The Purchase Price, taking into account the adjustments and
prorations pursuant to this Section, will be determined finally in accordance
with the following procedures:

    

    2.2.3.1  Seller shall
prepare and deliver to Buyer not later than five (5) Business Days before the
Closing Date an itemized preliminary settlement statement (the “Preliminary Settlement
Statement”) which shall set forth Seller’s good faith estimate of the
adjustments to the Purchase Price in accordance with Section 2.2.1
hereof.

    

    2.2.3.2  If Seller and Buyer
have not agreed upon a final settlement statement on or before the Closing Date,
then Seller and Buyer shall cooperate in good faith to finalize such settlement
statement as soon as practicable after the Closing; provided, however, the
parties shall use such Seller’s good faith estimated adjustments to the Purchase
Price as set forth in the Preliminary Settlement Statement delivered pursuant to
Section 2.2.3.1 above for purposes of determining the amount of any estimated
adjustment to the Purchase Price paid by Buyer to Seller at
Closing.  If Seller and Buyer have not agreed upon a final settlement
statement on or before the Closing Date, not later than sixty (60) days after
the Closing Date, Buyer shall deliver to Seller a statement (the “Buyer Adjustment
Statement”) setting forth, in reasonable detail, its determination of the
adjustments to the Purchase Price and the calculation thereof and reminding
Seller of the thirty (30) day response period set forth in Section
2.2.3.3.  If Buyer fails to deliver the Buyer Adjustment Statement to
Seller within the sixty (60) day period specified in the preceding sentence,
Seller’s determination of the adjustments to

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    the
Purchase Price as set forth in the Preliminary Settlement Statement shall be
conclusive and binding on the parties as of the last day of the sixty (60) day
period.

    

    2.2.3.3  If Seller disputes
Buyer’s determination of the adjustments to the Purchase Price, it shall deliver
to Buyer a statement notifying Buyer of such dispute within thirty (30) days
after its receipt of the Buyer Adjustment Statement.  If Seller
notifies Buyer of its acceptance of the Buyer Adjustment Statement, or if Seller
fails to deliver its statement within the thirty (30) day period specified in
the preceding sentence, Buyer’s determination of the adjustments to the Purchase
Price as set forth in the Buyer Adjustment Statement shall be conclusive and
binding on the parties as of the date of notification of such acceptance or the
last day of the thirty (30) day period, and the appropriate party shall promptly
pay to the other party in immediately available funds the amount of any such
adjustment.

    

    2.2.3.4  Seller and Buyer
shall use good faith efforts to resolve any dispute involving the determination
of any adjustments to the Purchase Price, and each party shall afford the other
party and its representatives reasonable access to all appropriate books,
records and statements relating to the subject matter of
the  adjustments to the Purchase Price contemplated by this Section
2.2 for such purpose.  If the parties are unable to resolve the
dispute within sixty (60) days after Buyer delivers the Buyer Adjustment
Statement to Seller, Seller and Buyer jointly shall designate an independent
accounting firm that has, or a movie theater executive who has, consistent and
recent experience in real property matters similar to those involving the
Property (the “Designated
Arbitrator”) to resolve the dispute.  If, for any reason, the
parties are unable to agree upon the Designated Arbitrator within seventy-five
(75) days after Buyer delivers the Buyer Adjustment Statement to Seller, or the
Designated Arbitrator fails or refuses to accept such engagement within fifteen
(15) days after the parties’ written request therefor, Seller and Buyer shall
jointly designate the Los Angeles office of PriceWaterhouseCoopers (the “Replacement
Arbitrator”) to resolve the dispute.  If the Replacement
Arbitrator fails or refuses to accept such engagement, in either case within
fifteen (15) days after the parties’ written request therefor, either Seller or
Buyer may thereafter petition the Superior Court of Los Angeles County,
California for the appointment of an independent accounting firm to act as the
Replacement Arbitrator and resolve the dispute. Absent fraud or manifest error,
(a) the Designated Arbitrator’s or Replacement Arbitrator’s, as applicable,
resolution of the dispute shall be final and binding on the parties, (b) subject
to Section 2.3, the appropriate party shall promptly pay to the other party in
immediately available funds the amount of any such adjustment, and (c) a
judgment may be entered in any court of competent jurisdiction if such amount is
not so paid.  Any fees and costs of the Designated Arbitrator or
Replacement Arbitrator shall be split equally between the parties.

    

    2.3           Payment of Adjustments to
and Reimbursements of the Purchase Price.  If, pursuant to
Section 2.2, it is determined after the Closing Date that Buyer shall be
obligated to pay any amounts to Seller, then Buyer shall make such payments in
full to Seller within ten (10) days after such amount is finally determined to
be due.  Conversely, if, pursuant to Section 2.2, it is determined
after the Closing Date that Seller

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    shall be
obligated to pay any amounts to Buyer, then Seller shall make such payments in
full to Buyer within ten (10) days after such amount is finally determined to be
due.

    

    2.4           Late Interest.  If
any amount payable pursuant to the provisions of this Article 2 is not paid
within ten (10) days after such amount is finally determined to be due, such
amount shall thereafter accrue interest until paid in full at an annual rate
equal to the lesser of the “prime” interest rate as announced by The Wall Street Journal from
time to time during such period plus 2%, or the maximum interest rate permitted
by applicable law.

    

    2.5           Allocation of Purchase
Price.  The Purchase Price shall be allocated among the
Property as follows: (a) Eleven Million Five Hundred Thousand Dollars
($11,500,000) of the Purchase Price shall be allocated to the Lease for
“Mililani” (as such term is defined in Exhibit A-1 attached
hereto), and (b) Eighteen Million Dollars ($18,000,000) of the Purchase Price
shall be allocated to the Lease for “Ward” (as such   term is
defined in Exhibit
A-1 attached hereto).  To the extent that the Purchase Price is
increased or decreased pursuant to Section 2.2 above, the amounts allocated to
the Leases for “Mililani” and “Ward” shall increased or decreased
proportionately based on the amount of the total Purchase Price allocated to
such portion of the Property.  Buyer and Seller shall (a) be bound by
the Allocation for all Tax purposes; (b) prepare and file all Tax returns
(including IRS Form 8594 and any required exhibits thereto, and any amendments
thereto) in a manner consistent with the Allocation; and (c) take no position
inconsistent with the Allocation in any Tax return or in any proceeding before
any taxing authority.  In the event that the Allocation is disputed by
any taxing authority, the party receiving notice of such dispute shall promptly
notify and consult with the other parties and keep the other parties apprised of
material developments concerning resolution of such dispute.

    

    2.6           Survival.  The
parties’ respective obligations under this Article 2 shall survive the
Closing.

    

    3.           Representations and
Warranties of Seller.

    

                          3.1           Representations and
Warranties of Seller.  Seller hereby represents and warrants to
Buyer as follows:

    

    3.1.1                      Organization.  Seller
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Hawaii. Seller 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.

    

    3.1.2                      Authority.  Subject
to the terms of any consent provisions of the Leases, Seller 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 have been duly
authorized by all necessary action on the part of Seller in accordance
with

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    its
Articles of Incorporation and Bylaws and applicable law.  This
Agreement constitutes, and each other document, instrument and agreement to be
entered into by Seller pursuant to the terms of this Agreement will constitute,
a valid agreement binding upon and enforceable against Seller in accordance with
its terms (except as limited by bankruptcy or similar laws or the availability
of equitable remedies).

    

    3.1.3                      Consents.  The
execution, delivery and performance by Seller of this Agreement, and all other
agreements, instruments or documents referred to herein or contemplated hereby,
do not require the consent, waiver, approval, license or authorization of any
Person (other than the landlords under the Leases) or public authority which has
not been obtained or provided for in this Agreement and do not and will not
contravene or violate (with or without the giving of notice or the passage of
time or both), the Articles of Incorporation or Bylaws of Seller, any other
contract or agreement to which such entity is a party or by which such entity is
bound or any judgment, injunction, order, law, rule or regulation applicable to
such entity. Seller is not a party to, or subject to or bound by, any judgment,
injunction or decree of any court or governmental authority which may restrict
or interfere with the performance of this Agreement, or such other agreements,
instruments and documents.

    

    3.1.4                      The
Leases.   Exhibit A sets forth
a true, complete and accurate list of both of the Leases (including all
amendments, extensions, renewals, ground or master lessor consents, and existing
non-disturbance and attornment agreements with respect
thereto).  Subject to the terms of the Leases, Seller has, and on the
Closing Date will have, valid leasehold interests in the Leases free and clear
of any “Liens” (as defined in Article 11) other than (a) “Permitted Liens” (as
defined in Article 11), (b) so-called “non-monetary” Liens, including, without
limitation, any ground or underlying leases, easements, parking agreements,
reciprocal easement agreements, conditions, covenants and restrictions,
restrictive covenants, development or similar agreements, zoning limitations and
other restrictions imposed by any “Governmental Authority” (as defined in
Article 11), or any other matter which a survey of the Leased Premises or a
review of the public records regarding the Leased Property would show, whether
created by or in the name of Seller or any other party, or (c) any other Liens,
whether “monetary” or “non-monetary” Liens, created by or in the name of any
Person other than Seller or any “Affiliate” (as defined in Article 11) of
Seller, including, without limitation, by any fee owner or ground lessor under
the Leases.  True, complete and accurate copies of the Leases, as well
as any and all existing guaranties of Seller or its Affiliates with respect
thereto, have been delivered or otherwise made available to Buyer through
Seller’s data site operated by Merrill Corporation (the “Data Site”), and such
Leases set forth the entire agreement and understanding between the parties
thereto with respect to the leasing and occupancy of the Leased
Premises.  Each such Lease is in full force and effect against Seller
and is valid and binding against Seller and, to Seller’s Knowledge, the
applicable landlord thereunder.  Except as set forth on Schedule 3.1.4,
neither Seller nor, to Seller’s Knowledge, any landlord under the Leases is in
default under the Leases, nor has any event occurred or failed to occur or any
action been taken or not taken which, with the giving of notice, the passage of
time or both would mature into or otherwise become a default under the Leases by
Seller or, to Seller’s Knowledge,

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    the
applicable landlord thereunder.  No landlord under any Lease is an
“Affiliate” (as such term is defined in Article 11) of Seller.  Seller
has not subleased, licensed or otherwise granted any “Person” (as such term is
defined in Article 11) the right to use or occupy the Leased Premises or any
portion thereof and the Seller is in exclusive possession of the Leased
Premises.  To Seller’s Knowledge, there is no pending or threatened
condemnation of any part of any Leased Premises by any Governmental
Authority.

     

    3.1.5                      Improvements.  Since
January 1, 2005, with respect to the Property, Seller has not received any
written notice of, and otherwise has no Knowledge of, any violation of any
applicable federal, state or local laws (other than any applicable
“Environmental Laws” (as defined in Article 11) or the “ADA” (as defined
below)), building ordinances, or health and safety ordinances, which has not
been cured in all material respects.  Since January 1, 2005, with
respect to the Property, Seller has not received any written notice from any
Governmental Authority, or to the actual knowledge of Ira Levin and Jay Swerdlow
(who, for this purpose only, shall be deemed to actually know of all information
in their respective business and personal files maintained with respect to the
Property), any other Person, of any violation of any applicable Environmental
Laws or the Americans with Disabilities Act, 42 U.S.C. 12101 et seq. (the “ADA”).  Except
as expressly set forth in the immediately preceding sentence, no representation
or warranty is made that any Leased Premises or any improvements made by or
constructed for Seller or any third party is in compliance with Environmental
Laws or the ADA.   Except as set forth in Schedule 3.1.5, to
Seller’s Knowledge, since January 1, 2005, no improvements on the Leased
Premises have suffered any material casualty or other material damage that has
not been repaired in all material respects.

    

    3.1.6                      Compliance with
Law.  Except as set forth in Schedule 3.1.6, since
January 1, 2005, to Seller’s Knowledge, the operation of the business conducted
at the Leased Premises has been conducted in accordance with all applicable
laws, rules, codes, injunctions, decrees, rulings, regulations, orders and other
legal requirements of all Governmental Authorities, the failure to comply with
which could have a Material Adverse Effect.  Except as set forth in
Schedule 3.1.6,
since January 1, 2005, Seller has not received written notice of any material
violation of any such law, regulation, order or other legal
requirement.  Seller is not in default with respect to any order,
writ, judgment, award, injunction or decree of any Governmental Authority
applicable to such business or any part of the Property which has not been cured
in all material respects, nor has any event occurred or failed to occur or any
action been taken or not taken which, with the giving of notice, the passage of
time or both would mature into or otherwise become such a
default.  Except as set forth in Schedule 3.1.6, to
Seller’s Knowledge, Seller is not under investigation with respect to any
purported violation of (a) any law, regulation, order or other legal
requirement, or (b) any order, writ, judgment, award, injunction or decree of
any Governmental Authority applicable to such business or any part of the
Property.  No representation or warranty is hereby made by virtue of
this Section 3.1.6 in respect of any matters covered by Section
3.1.5.

    

    3.1.7                      Litigation.  Except
as set forth in Schedule 3.1.7, to
Seller’s Knowledge, there are no actions, suits, claims, proceedings, hearings,
disputes or

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    investigations
currently pending or threatened in writing at any time after January 1, 2005,
before any Governmental Authority or that would come before any arbitrator,
brought by or against Seller involving, affecting or relating to the Property,
including, without limitation, any labor, employment or Tax-related actions,
suits, claims, proceedings, hearings, disputes or
investigations.  Seller is not subject to any order, writ,
assessments, judgment, award, injunction or decree of any Governmental Authority
relating to the Property.   No representation or warranty is
hereby made by virtue of this Section 3.1.7 in respect of any matters covered by
the second sentence of Section 3.1.5.

    

    3.1.8                      Certain Tax
Matters.  Seller is not a “foreign person” within the meaning
of Code Section 1445(f) or a “foreign partner” within the meaning of Code
Section 1446.  No part of the Property is “tax-exempt use property”
within the meaning of Code Section 168(h).

    

    3.1.9                      Affiliate
Transactions.  Except as set forth on Schedule 3.1.9
attached hereto, (a) Seller is not a party to any contract or arrangement with,
or indebted, either directly or indirectly, to any of its Affiliates in
connection with any part of the Property, and (b) none of Seller’s Affiliates
own any asset, tangible or intangible, which is used in and material to the
operation of any part of the Property.

    

    3.1.10                      Brokerage.  Except
with respect to the engagement of Lazard Freres & Co. LLC, Seller has not
employed any broker, finder or agent or has incurred or will incur any
obligation or liability to any broker, finder or agent with respect to the
transactions contemplated by this Agreement, and all fees and expenses payable
in connection with the engagement of Lazard Freres & Co. LLC will be paid by
Seller.

    

    3.2           Knowledge.

    Where any
representation or warranty contained in this Agreement is expressly qualified by
reference “to Seller’s Knowledge,” “to the Knowledge of Seller,” or any similar
language, it refers to the actual knowledge of Neil Haltrecht (Executive Vice
President of Seller), Nora Dashwood (Executive Vice President and Chief
Operating Officer of Seller), Jay Swerdlow (Executive Vice President of Seller),
Ira Levin (Executive Vice President and General Counsel of Seller), Joe Miraglia
(Director of Staff Operations of Seller), and Terri Shimohara (Vice President,
Human Resources of Seller), in each case after due inquiry.

    

    3.3           “As Is” Purchase.
BUYER ACKNOWLEDGES THAT AS A MATERIAL CONDITION OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, BUYER IS ACQUIRING THE PROPERTY ON AN “AS IS, WHERE IS” BASIS
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.  EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, THERE ARE NO WARRANTIES, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, REPRESENTATIONS AS TO THE PHYSICAL
OR OTHER CONDITION OF THE LEASES, THE LEASED PREMISES, OR ANY OTHER PORTION OF
THE PROPERTY, OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, WITH

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    RESPECT
TO THE LEASES, THE LEASED PREMISES OR ANY OTHER PORTION OF THE PROPERTY. BUYER
HAS MADE AND AGREES TO MAKE A THOROUGH AND CAREFUL EXAMINATION OF THE LEASES,
THE LEASED PREMISES AND ALL OTHER PORTIONS OF THE PROPERTY AND WILL ASSURE
ITSELF THAT THE LEASES, THE LEASED PREMISES AND ALL OTHER PORTIONS OF THE
PROPERTY ARE SUITABLE FOR BUYER’S INTENDED PURPOSE.  IF THE CLOSING
OCCURS, AND SUBJECT TO THE SPECIFIC AND EXPRESS REPRESENTATIONS AND WARRANTIES
CONTAINED HEREIN, (A) BUYER SHALL BE DEEMED TO HAVE ACCEPTED THE LEASES, THE
LEASED PREMISES AND ALL OTHER PORTIONS OF THE PROPERTY WITH AND SUBJECT TO ALL
DEFECTS AND DEFICIENCIES, AND (B) BUYER EXPRESSLY ASSUMES THE RISK THAT
SUBSEQUENT EVENTS OR UNDISCOVERED OR UNKNOWN CONDITIONS COULD MAKE ALL OR PART
OF THE LEASES, THE LEASED PREMISES OR ANY OTHER PORTION OF THE PROPERTY
UNSUITABLE FOR BUYER’S INTENDED PURPOSES.

    

    3.4           Release.  As
a material inducement to Seller to enter into and perform its obligations under
this Agreement, Buyer, on behalf of itself and all of its successors, assigns,
Affiliates and representatives, hereby releases and discharges Seller, its
Affiliates, and their respective officers, directors, shareholders, partners,
members. managers, employees, agents, attorneys and representatives, and
successors and assigns, from any and all claims, demands, liabilities,
obligations, expenses (including attorneys' fees), causes of action, suits and
rights, whether now known or unknown, suspected or unsuspected, which exist,
existed or may exist or have existed at any time now or in the future and
arising out of or relating to the physical condition of the Property, including,
without limitation, in connection with any compliance or non-compliance by
Seller or any other party with the ADA or any similar state or local law, or
arising from the presence of any Hazardous Materials or the Property’s or any
party’s compliance with any Environmental Laws; provided, however, that the
foregoing release shall not apply to any claim to the extent arising from (a)
the breach of any express covenant, representation or warranty by Seller under
this Agreement, or (b) fraud committed by Seller or any Affiliate of
Seller.  The foregoing release extends to, and Buyer hereby waives and
relinquishes, all of its rights under Section 1542 of the California Civil Code
and any similar law or rule of any other jurisdiction.  California
Civil Code Section 1542 provides:

    

    "A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor."

    

    3.5           Updating of
Schedules.  Seller shall, from time to time, prior to the
Closing, update the Schedules to this Agreement, or create any new
schedules revising its representations and warranties, if after the Effective
Date Seller learns of new exceptions to the representations and warranties set
forth in this Agreement (together, the "Updated Schedules"),
and promptly deliver such Updated Schedules to Buyer.  If any Updated
Schedule reflects or describes a Material Adverse Effect from the
conditions previously

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    described
in the representations and warranties, then Buyer may, at its option, upon
written notice thereof to Seller, within ten (10) Business Days of Buyer's
receipt of an Updated Schedule, terminate this Agreement upon notice
to the other party.  If Seller's representations and warranties were true
and correct when made, then Buyer's sole remedy in the event of the receipt
of an Updated Schedule shall be to terminate this Agreement in accordance
with the foregoing sentence (or to proceed with the Closing).  If the then
scheduled Closing Date would occur prior to the end of the ten (10) Business
Days period set forth in this Section 3.5, the delivery of any Updated Schedule
shall postpone the Closing Date to the date which is ten (10) Business Days
after Buyer’s receipt of such Updated Schedule.

    

    4.           Representations and
Warranties of Buyer.  Buyer hereby represents and warrants to
Seller as follows:

    

    4.1           Organization.  Buyer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada.  Buyer 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.

    

    4.2           Authority.  Buyer
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 Buyer 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 Buyer
pursuant to the terms of this Agreement will constitute, a valid agreement
binding upon and enforceable against Buyer in accordance with its terms (except
as limited by bankruptcy or similar laws or the availability of equitable
remedies).

    

    4.3           Consents.  The
execution, delivery and performance by Buyer 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 (other than the landlords under the Leases and any lenders having
Liens on the Leased Premises) 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 Buyer or any
judgment, injunction, order, law, rule or regulation applicable to Buyer. Buyer
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 Buyer of this
Agreement, or such other leases, agreements, instruments and
documents.

    

    4.4           Financial Condition.
Buyer is a newly formed entity, created for the purpose of effectuating the
transactions contemplated by this Agreement.  On the Closing Date and
after giving effect to the transactions contemplated by this Agreement, (a)
Buyer will have shareholders’ equity (determined in accordance with GAAP) of
not

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    less than
Twenty Million Dollars ($20,000,000), (b) the assets of Buyer shall include all
right, title and interest of the tenant under the lease for “RDI’s” (as defined
in Section 13.16 below) movie theater in Manville, New Jersey (the “Manville Theater”),
and (c) Buyer will not have indebtedness for borrowed money in excess of the
aggregate amount of Fifty-Five Million Dollars
($55,000,000).  Attached hereto as Schedule 4.4 are (i)
a true and complete summary of the material terms of the Lease for the Manville
Theater, and (ii) Theater Level Cash Flow Reports for the Manville Theater for
RDI’s fiscal year ended December 31, 2006 and for the eight-month period
ended August 31, 2007 (collectively, the “Manville
P&Ls”).  The Manville P&Ls present fairly in all
material respects the results of operations for the Manville Theater, along with
circuit revenue and expenses allocated to such theater based on attendance, for
the periods referred to therein.  RDI maintains its books and records
in accordance with GAAP applied on a consistent basis, and the Manville P&Ls
were prepared from and are consistent with such books and records, except that
the Manville P&Ls exclude certain financial statements and lack the footnote
disclosures that are required for GAAP.

    

    4.5           Brokerage.  Except
in connection with the “Financing” (as defined in Section 7.4.2), Buyer has not
employed any broker, finder or agent or has incurred or will incur any
obligation or liability to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.  Any such obligation or
liability in connection with the Financing shall be borne solely by Buyer or
RDI.

    

    5.           Conditions Precedent to
Buyer's Obligations.  Buyer's obligations under this Agreement
are subject to the fulfillment of each of the conditions set forth in this
Article 5 at or before the Closing, subject, however, to the right of Buyer to
waive any one or more of such conditions in whole or in part (provided that no
such waiver shall be implied or binding upon Buyer unless given in
writing).

    

    5.1           Performance by
Seller.  Seller shall have timely performed and complied with
in all material respects all agreements and conditions required by this
Agreement to be performed and complied with by Seller on or prior to the Closing
Date, including, without limitation, delivery to Buyer of the “Seller
Deliveries” (as defined in Section 8.3 below) in accordance with Section 8.3
below.

    

    5.2           Accuracy of Representation
and Warranties.  The representations and warranties herein of
Seller shall be true and correct in all material respects as of the Closing Date
(except to the extent any such representation or warranty is qualified by
materiality, in which case such representation or warranty shall be true in all
respects).

    

    5.3           No
Injunctions.  No order shall have been entered in any action or
proceeding before any Governmental Authority, and no preliminary or permanent
injunction by any court of competent jurisdiction shall have been issued and
remain in effect, which would have the effect of making the consummation of the
transactions contemplated by this Agreement illegal; provided, however, that if
any such action, proceeding or injunction exists as a result of the wrongful
action or omission to act of

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

    Buyer or
any of Buyer’s Affiliates, the same shall be an event of default by Buyer under
this Agreement.

    

    5.4           HSR
Act.  All required filings under Section 7A of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall have
been completed and all applicable time limitations under the HSR Act shall have
expired without a request for further information by the relevant federal
authorities under such Act, or in the event of such a request for further
information, the expiration of all applicable time limitations under the HSR Act
shall have occurred without the objection of such federal
authorities.

    

    6.           Conditions Precedent to
Seller's Obligations.  Seller's obligations under this
Agreement are subject to the fulfillment of each of the conditions set forth
below in this Article 6 at or before the Closing, subject, however to the right
of Seller to waive any one or more such conditions in whole or in part (provided
that no such waiver shall be implied or binding upon Seller unless given in
writing).

    

    6.1           Performance by
Buyer.  Buyer shall have timely performed and complied with in
all material respects all agreements and conditions required by this Agreement
to be performed and complied with by Buyer on or prior to the Closing Date,
including, without limitation, delivery to Seller of the “Buyer Deliveries” (as
defined in Section 8.2 below) in accordance with Section 8.2 below.

    

    6.2           Accuracy of Representations
and Warranties.  The representations and warranties herein of
Buyer shall be true and correct in all material respects as of the Closing Date
(except to the extent any such representation or warranty is qualified by
materiality, in which case such representation or warranty shall be true in all
respects).

    

    6.3           No
Injunctions.  No order shall have been entered in any action or
proceeding before any Governmental Authority, and no preliminary or permanent
injunction by any court of competent jurisdiction shall have been issued and
remain in effect, which would have the effect of making the consummation of the
transactions contemplated by this Agreement illegal; provided, however, that if
any such action, proceeding or injunction exists as a result of the wrongful
action or omission to act of Seller or any of Seller’s Affiliates, the same
shall be an event of default by Seller under this Agreement.

    

    6.4           HSR
Act.  All required filings under Section 7A of the HSR Act
shall have been completed and all applicable time limitations under the HSR Act
shall have expired without a request for further information by the relevant
federal authorities under such Act, or in the event of such a request for
further information, the expiration of all applicable time limitations under the
HSR Act shall have occurred without the objection of such federal
authorities.

    

    7.           Covenants.

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    7.1           Commercially Reasonable
Efforts.

    

    7.1.1                      Upon
the terms and subject to the conditions of this Agreement, the parties hereto
will use commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things necessary, proper or
advisable consistent with applicable law to consummate and make effective in the
most expeditious manner practicable the transactions contemplated by the
Transaction Documents, including, without limitation, obtaining any
authorizations, consents, orders or approvals of any Person or Governmental
Authority that may be or become necessary in connection with the execution,
delivery or performance of a party’s obligations
hereunder.  Notwithstanding the foregoing, neither Seller nor Buyer
shall be required to pay consideration or grant any rights, guarantee or
concession to any third party or to modify in any material manner the terms of
any Lease in order to obtain any such consent or approval or any such release;
provided, however, that if Buyer elects to cause any Buyer Sub to take an
assignment of any of Seller’s right, title or interest under, or assume any of
Seller’s obligations under, any of the Leases, and the landlord’s consent is
required under any such Lease, Buyer shall offer to provide a guarantee to the
landlord of all of such assumed obligations concurrently with Seller’s initial
submission to such landlord of request for such consent.

    

    7.1.2                      Buyer
shall use its commercially reasonable efforts and Seller shall use its
commercially reasonable efforts to cooperate fully to obtain promptly all such
authorizations, consents, orders and approvals required to be obtained in
connection with the transactions contemplated hereby. Without limiting the
generality of the foregoing, to the extent such filing is required by the HSR
Act, Seller and Buyer agree that each shall prepare and file a notification and
report form pursuant to the HSR Act as soon as practicable after the Effective
Date, but in no event later than ten (10) days after the Effective
Date.  If a filing is made under the HSR Act, Seller and Buyer each
also agree to request early termination in such filing and respond with
reasonable diligence and dispatch to any request for additional information made
in response to such filing.  All filing fees associated with complying
with the HSR Act shall be borne 50% by Seller and 50% by Buyer.

    

    7.1.3                      Notwithstanding
the provisions of Section 7.1.2, with respect to the assignment of the Leases
from Seller to Buyer, Seller, at its cost and expense, shall use its
commercially reasonable efforts, and Buyer, at its cost and expense, shall use
its commercially reasonable efforts to cooperate fully with Seller:

    

    (a) to
obtain promptly from the landlords under the Leases the consents, if any,
required to be obtained in connection with the grant to the lenders under the
“Financing” (as defined in Section 7.4.2) of Liens on the tenant’s interest in
such Leases and other consents, estoppels and approvals required as conditions
precedent to the closing of the Financing (collectively, the “Leasehold
Mortgages”); provided, however, that Buyer shall bear any expenses
attributable to obtaining the Leasehold Mortgages.  In connection
therewith, Buyer agrees promptly to provide all financial and other information
and background materials regarding Buyer, its Affiliates and
their

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    respective
senior management, and such lenders, which the landlord under any Lease may
reasonably request in connection with such landlord’s evaluation of Seller’s
request for the grant of such Leasehold Mortgages.  Buyer also agrees
to make its and its Affiliates’ senior management reasonably available to all
such landlords for this purpose.  Buyer hereby acknowledges that, in
those cases where the landlord’s consent is not required for the grant to the
lenders under the Financing of a Leasehold Mortgage with respect to such Lease,
Seller may elect to send notices to various landlords, rather than requests for
consents, which notices describe the transaction contemplated by this Agreement,
and some of which notices seek the “acknowledgment” of a particular landlord to
the grant of the particular Leasehold Mortgage; and

    

    (b)           to
obtain releases of Seller’s and its Affiliates’ liability under the
Leases.

    

    With
respect to the matters described in this Section 7.1.3, Seller may elect at any
time to shift to Buyer primary responsibility for obtaining such agreements
under this Section by so notifying Buyer in writing.  Thereafter,
Buyer shall, at Buyer’s expense as provided above, use its commercially
reasonable efforts to accomplish the matters described in this Section, and
Seller shall use its commercially reasonable efforts to cooperate fully with
Buyer.

    

    7.1.4                      In
no event shall Buyer or any Affiliate of Buyer be required to increase the
equity capital of Buyer or to contribute any assets to Buyer, or (except as
otherwise provided in Section 7.1.1 above) to provide any guarantee or other
credit enhancement to or for the benefit of Buyer, in order to obtain any
consent contemplated by this Section 7.1.

    

    7.2           Access to Properties and
Records.  From and after the Effective Date through the Closing
Date or the earlier termination of this Agreement, Seller shall afford to Buyer,
and to the accountants, counsel and representatives of the Buyer, upon
reasonable prior notice, reasonable access during normal business hours
throughout the period prior to the Closing to the Leased Premises and, during
such period, shall furnish promptly to Buyer all other information concerning
the Property and its personnel as such parties may reasonably
request.  Notwithstanding anything in this Section to the contrary, no
access pursuant to this Section 7.2 shall unreasonably interfere with Seller’s
conduct of its business at the Leased Premises.  Buyer shall notify
Seller in writing of any material breach of this provision known to it and shall
afford Seller a reasonable opportunity to cure any such breach.

    

    7.3           Seller’s Operations Prior to
the Closing.

    

    7.3.1                      Seller’s Operations Prior to
the Closing.  From and after the Effective Date until the
Closing, Seller (a) shall not sell, transfer, assign, dispose of or grant any
Lien on, or permit to be sold, transferred, assigned, disposed of or encumbered,
all or any material part of the Property as the same shall be constituted on the
Effective Date, except to the extent that any such Lien will be removed at or
prior to the Closing, or 

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    remove or
permit to be removed all or any part of the Property from the Leased Premises;
(b) shall not enter into any lease, contract or commitment or incur any
liabilities or obligations in connection with the Property, except for leases,
contracts, commitments, liabilities or obligations that will not bind Buyer or
the Property after the Closing; (c) shall not release, waive or compromise any
of its rights with respect to, the Property without the prior written consent of
Buyer, which consent shall not be unreasonably withheld, conditioned or delayed
to the extent such proposed action occurs in the ordinary course of its business
consistent with past practice and which is reasonably expected to be without
Material Adverse Effect upon the value or utility of the Property; (d) shall
not, directly or indirectly, destroy or otherwise dispose of any books, records
or files relating to the Property, other that in the ordinary course of
business, generally consistent with past practice; and (e) shall otherwise
conduct operations at the Leased Premises in the ordinary course of its business
consistent with its past practice at the Leased Premises.

    

    7.3.2                      Certain
Repairs.  Seller shall cause to be undertaken and completed in
a workmanlike manner prior to the Closing the repairs described in the scope of
work attached hereto as Schedule
7.3.2.

    

    7.4           
Cooperation.

    

    7.4.1                      Generally.  Each
party shall provide the other with such cooperation as may reasonably be
requested, at the expense of the requesting party (unless the requesting party
is to be indemnified with respect thereto, in which case such cooperation shall
be given at the expense of the indemnifying party), in connection with the
defense of any third party litigation relating to the subject matter of this
Agreement.  Additionally, until March 31, 2010, Seller shall make
available to Buyer’s independent accountants such information and documentation
regarding the Property to the extent such information and documentation is
reasonably required in connection with an audit by such independent accountant
of Buyer’s financial statements or the preparation of financial disclosure
required under applicable Federal securities laws, including an audit of
acquired businesses as required by 17 CFR § 210.3-05, and allow Buyer’s
independent accountants to make and retain copies of such information and
documentation, provided that (a) such information and documentation is then in
the possession or control of Seller or Seller’s Affiliates, and (b) so long as
Buyer’s independent accountant does not require that such information or
documentation be obtained directly from Seller, such information and
documentation is not otherwise in the possession or control of Buyer, any of
Buyer’s Affiliates or such independent accountant, or is not otherwise
reasonably available from another source to Buyer or such independent
accountant.  Seller also agrees to make its and its Affiliates’ senior
management reasonably available to Buyer and its accountants for this
purpose.

    

    7.4.2                      Cooperation with respect to
Buyer’s Financing.  Buyer hereby represents and warrants to
Seller that (a) it has obtained a written commitment letter and related term
sheet from a financially responsible institution, true and correct copies of
which have been furnished to Seller, for debt financing to be used by Buyer to

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    fund a
portion of the Purchase Price (the “Financing”), and (b)
said commitment letter and related term sheet are in full force and effect, and
Buyer has performed all of its obligations thereunder required to be performed
on or prior to the Effective Date.  Prior to the Closing Date, Seller
agrees promptly to provide all financial and other information and materials
regarding the Property as reasonably requested by Buyer or its accountants from
time to time in connection with the preparation of audited financial statements
of the Property for the twelve (12) months ended June 30, 2005, 2006 and 2007,
respectively, and unaudited financial statements for the most recent practicable
interim period subsequent to June 30, 2007 and prior to the Closing
Date.  Seller also agrees to make its and its Affiliates’ senior
management reasonably available to Buyer and its accountants for this
purpose.  Subject to Seller’s performance of its obligations under
this Section 7.4.2, the completion of said financial statements shall not
be a condition precedent to the obligations of Buyer under this Agreement, and
Seller shall not be in breach or default of its obligations under this Section
7.4.2 if such audited financial statements are not completed for any reason by
any particular date so long as Seller has cooperated with Buyer and its
accountants as required by this Section 7.4.2.  Seller agrees that,
effective upon the Closing, Buyer’s accountants shall be released for the
benefit of Buyer from any and all obligations of confidentiality that it may owe
to Seller or its Affiliates only to the extent they relate to the
Property.

    

    7.5           Delivery of Information;
Delivery of Mail and Assets; Collection of Accounts Receivable. After the
Closing Date, each of the parties hereto shall cause their personnel to provide
the other party with financial accounting, Tax, and similar information
reasonably necessary to prepare Tax returns and other filings relating to the
Property, to compute Percentage Rent payable under the Leases, and to finalize
the prorations and adjustments called for by Section 2.2
hereof.  Seller agrees that it will promptly deliver to Buyer any mail
or other communications received by Seller on or after the Closing Date
pertaining to the Property and any cash, checks or other instruments of payment
to which Seller is not entitled.  Buyer agrees that it will promptly
deliver to Seller any mail or other communications received by Buyer on or after
the Closing Date pertaining to Seller's operations, properties or other affairs
of Seller, any cash, checks or other instruments of payment to which Buyer is
not entitled, and any other assets or properties of Seller.

    

    7.6           Post-Closing Covenants of
Buyer.

    

    7.6.1                      Maintenance of
Insurance.  Buyer agrees that from and after the Closing Date,
Buyer shall at all times maintain in complete force and effect, in accordance
with the requirements of the Leases, all policies of insurance required by the
Leases to be maintained by the tenant. Buyer shall deliver to Seller executed
copies of certificates of insurance evidencing the foregoing on the Closing
Date. New certificates shall be delivered promptly whenever policies are renewed
or new policies are written. As often as any such policy shall expire or be
terminated, a renewal or additional policy shall be procured and maintained by
Buyer in like manner and to like extent, and new certificates thereof shall be
delivered to Seller. All policies of insurance maintained by Buyer pursuant to
the requirements of the Leases shall contain a provision that the

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    company
issuing said policy will give Seller not less than ten (10) days' notice in
writing in advance of any cancellation or lapse of the effective date or any
reduction in the amounts of insurance. In the event that Buyer fails to comply
with any of the requirements of this Section 7.6.1, and Buyer fails to cure such
non-compliance within ten (10) days of delivery of notice thereof from Seller,
Seller may obtain any and all policies of insurance required to comply with
tenant's obligations under the Leases, and Buyer shall immediately pay to Seller
any and all costs reasonably incurred by Seller in connection with obtaining and
maintaining such insurance.

    

    7.6.2                      Amendment of Real Property
Leases; Exercise of Options; Waiver of Rights.  Without
Seller’s prior written consent (which consent may not be unreasonably withheld
or delayed), until the earlier of the date on which (a) Seller and all of
Seller’s Affiliates are no longer liable on or are released from any further
liability under the applicable Lease, or (b) Buyer delivers to Seller (i) an
audited balance sheet for Buyer showing a net worth (calculated in accordance
with GAAP) of at least $50,000,000, and (ii) an audited income statement for
Buyer showing a ratio of indebtedness to “Theater Level Cash Flow” (as defined
in Article 11 below) for all theaters then operated by Buyer of 5.5-to-1 or
less, Buyer shall not (x) exercise any option to extend or renew the term of any
Lease if, as of the date on which Buyer proposes to exercise any such option,
the theater operated pursuant to such Lease has Theater Level Cash Flow in the
most recently completed calendar year of less than $200,000, or (y) amend or
modify any Lease to eliminate or materially change, or otherwise waive or
forfeit, any material rights or privileges of the tenant under any such
Lease.

    

    7.7           Destruction of Books,
Records and Files.  If, after the Closing, Seller or any of its
Affiliates proposes to destroy or otherwise dispose of any books, records or
files relating to the Property (but not including any financial reports or other
information regarding the Property to the extent such financial reports or other
information is integrated into financial reports or other information regarding
the operations generally of Seller or such Affiliate), Seller shall deliver
prior notice thereof to Buyer and Buyer shall have a period of sixty (60) days
from receipt of such notice to deliver notice to Seller of its desire to take
possession of such books, records or files, in which event Seller shall deliver
to Buyer possession of such books, records or files at the earliest practicable
date.  Seller shall not destroy or otherwise dispose of such books,
records or files prior to the end of such sixty (60) day period.

     

    8.           Closing.

    

                          8.1           Closing
Date.  Subject to the satisfaction (or waiver by Buyer or
Seller as provided therein) of the conditions precedent in Articles 5 and 6
hereof, the transactions contemplated by this Agreement shall be consummated at
a closing (the “Closing”) at the
offices of Weissmann Wolff Bergman Coleman Grodin & Evall, LLP, 9665
Wilshire Boulevard, Ninth Floor, Beverly Hills, California 90212.  The
Closing shall occur on the date which is the first Friday occurring after the
date which is sixty-five (65) days after the Effective Date (the “Scheduled Closing
Date”).  If the Closing does not occur on the Scheduled Closing
Date by reason of the failure of any condition 

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    precedent
set forth in Article 5 or 6 hereof (a “Non-Satisfied Condition
Precedent”), the party in whose favor the Non-Satisfied Condition
Precedent exists shall have the right to extend the Scheduled Closing Date until
the date which is the second Friday occurring after the date on which the
Non-Satisfied Condition Precedent is satisfied or
waived.  Notwithstanding the foregoing, this Agreement shall
automatically terminate if the Closing shall not have occurred on or before the
date which is the first Friday which is more than one hundred twenty-five (125)
days after the Effective Date (the “Outside Closing
Date”).  Notwithstanding anything to the contrary contained
herein, nothing herein shall be deemed to excuse or waive any breach or default
by either party of its obligations under this Agreement.  The date of
the Closing is sometimes referred to herein as the "Closing
Date."  The Closing shall be effective as of 8:00 a.m. (local
time) on the Closing Date.

    

    8.2           Deliveries by Buyer.
At the Closing, Buyer shall deliver to Seller the following (collectively, the
"Buyer
Deliveries"):

    

    8.2.1                      Payment of Purchase
Price.    Immediately available funds in an amount
equal to the Purchase Price paid to and received by Seller.

    

    8.2.2                      Assignment and Assumption of
Leases.  Duly executed and, where necessary, acknowledged
counterparts of the Assignment and Assumption of Leases by and between Buyer and
Seller in substantially the form of Exhibit B attached
hereto (the “Assignment and Assumption of
Leases”).

    

    8.2.3                      Buyer’s Closing
Certificate.  A duly executed certificate, dated as of the
Closing Date, to the effect that the conditions specified in Sections 6.1 and
6.2 have been satisfied in accordance with the terms and provisions
hereof.

    

    8.2.4                      Additional
Deliveries.  Such additional documents, instruments and
agreements, signed and properly acknowledged by Buyer, if appropriate, as may be
necessary to comply with Buyer's obligations under this Agreement.

    

    8.3           Deliveries by
Seller.  At the Closing, Seller shall deliver to Buyer all of
the following (collectively, the "Seller
Deliveries"):

    

    8.3.1                      Assignment and Assumption of
Leases.  Duly executed and, where necessary, acknowledged
counterparts of the Assignment and Assumption of Leases.

    

    8.3.2                      Seller’s Closing
Certificate.  A duly executed certificate, dated as of the
Closing Date, to the effect that the conditions specified in Sections 5.1 and
5.2 have been satisfied in accordance with the terms and provisions
hereof.

     

    
      8.3.3                      Additional
Deliveries.  Such additional documents, instruments and
agreements, signed and properly acknowledged by Seller, if appropriate, as may
be necessary to comply with Seller's obligations under this
Agreement.

       

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    

    8.4           Closing
Costs.  Buyer and Seller shall each pay 50% of all documentary
transfer, excise or similar Taxes (including all State of Hawaii general excise
or gross income Taxes), if any, payable in connection with the transactions
contemplated by this Agreement.  Buyer and Seller shall each bear
their own legal and accounting costs and fees. Buyer and Seller shall each pay
50% of all sales and similar Taxes payable in connection with the transactions
contemplated by this Agreement.

    

    8.5           Possession.  Possession
of the Property, including, without limitation, the Leased Premises shall be
delivered to Buyer on the Closing Date; provided, however, that Seller shall
deliver possession of all files for the Leases, and all original warranties and
guarantees, in each case to the extent included in the Property, within five (5)
Business Days after the Closing Date.

    

    9.           Termination.  Notwithstanding
anything to the contrary contained herein, this Agreement may be terminated at
any time before the Closing (a) by mutual consent of Seller and Buyer; (b) by
Buyer, upon written notice to Seller, if Seller has breached any representation,
warranty, covenant or agreement, such breach has had, either individually or in
the aggregate, a Material Adverse Effect, and such breach is either not capable
of being cured prior to the Closing or, if such breach is capable of being
cured, is not so cured within ten (10) days of notice by Buyer to Seller of such
breach; (c) by Seller, upon written notice to Buyer, if Buyer has breached any
representation, warranty, covenant or agreement, and such breach is either not
capable of being cured prior to the Closing or, if such breach is capable of
being cured, is not so cured within ten (10) days of notice by Seller to Buyer
of such breach; or (d) subject to the terms of Section 8.1 above, by either
party hereto if the Closing shall not have occurred on or prior to the Scheduled
Closing Date (as the same may be extended pursuant to this
Agreement).  If this Agreement is terminated, this Agreement shall
become null and void and have no further force or effect, and no party hereto
(or any of such party’s Affiliates, directors, officers, agents or
representatives), shall have any liability or obligation hereunder; provided,
however, that (i) the letter agreement dated as of January 15, 2007 by and among
Seller, RDI and the other party thereto (the “Confidentiality
Agreement”) shall remain in full force and effect, (ii) each party shall
bear its own fees and expenses incurred in connection with the negotiation and
documentation of this Agreement and the Transaction Documents, and (iii)
notwithstanding the foregoing, but subject to the terms of Article 10 below,
termination of this Agreement shall not release any party from any liability for
any breach by such party of any of its representations, warranties, covenants or
agreements contained in this Agreement prior to such termination; and, provided,
further, that Buyer shall promptly change its corporate name to a name that does
not include the word “Consolidated” or any derivation of such word or any other
name confusingly similar to the name of Consolidated.

    

    10.           Indemnification.

     

    
      10.1           Indemnification by
Buyer.    Subject to the terms
of this Article 10, Buyer shall indemnify and hold Seller, its Affiliates and
their respective employees, 

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    officers,
directors, members, managers, shareholders, agents, contractors, attorneys and
representatives (collectively, the “Seller Indemnified
Parties”) harmless from and against, and agrees to promptly defend any
Seller Indemnified Party from and reimburse any Seller Indemnified Party for,
any and all any and all liabilities, demands, claims, actions, causes of action,
costs, damages, deficiencies, Taxes, penalties, fines and other losses and
expenses, whether or not arising out of a claim made by any third party,
including all interest, penalties, reasonable attorneys’ fees and expenses, and
all amounts paid or incurred in connection with any action, demand, proceeding,
investigation or claim by any third party (including any Governmental Authority)
(“Losses”)
which such Seller Indemnified Party may at any time suffer or incur, or become
subject to, as a result of or in connection with:

    

    10.1.1                      any
untruth or inaccuracy in any representation or warranty of Buyer or the Buyer
Subs contained in this Agreement or in any other Transaction Document; provided,
however, that for purposes of determining an untruth or inaccuracy in any such
representation or warranty for purposes of this Section 10.1.1, the
representations and warranties of Buyer or the Buyer Subs that are limited or
qualified by references to “material” or “materiality” or “Material Adverse
Effect” or similar qualifications shall be construed as if they were not limited
or qualified by such qualifications;

    

    10.1.2                      any
failure of Buyer or the Buyer Subs duly to perform or observe any term,
provision, covenant, agreement or condition contained in this Agreement or the
other Transaction Documents to be performed or observed by Buyer or the Buyer
Subs; or

    

    10.1.3                      any
claim or cause of action by any party arising on or after the Closing Date
against any Seller Indemnified Party (including, without limitation, any claim
or cause of action arising from the failure to obtain any required consents or
approvals, including, without limitation, consents or approvals from landlords,
to the grant of Leasehold Mortgages) with respect to the Property, the
obligations of Seller assumed by Buyer or the Buyer Subs under this Agreement
(including the Assumed Liabilities) or any of the other Transaction Documents,
including any default by Buyer or any of the Buyer Subs under any of the Leases
arising on or after the Closing Date.

    

    10.2           Indemnification by
Seller.    Subject to the terms
of this Article 10, Seller shall indemnify and hold the Buyer, its Affiliates
and their respective employees, officers, directors, members, managers,
shareholders, agents, contractors, attorneys and representatives (collectively,
the “Buyer Indemnified
Parties”) harmless from and against, and agrees to promptly defend any
Buyer Indemnified Party from and reimburse any Buyer Indemnified Party for, any
and all Losses which such Buyer Indemnified Party may at any time suffer or
incur, or become subject to, as a result of or in connection with:

     

    
      10.2.1                      any
untruth or inaccuracy in any representation or warranty of Seller contained in
this Agreement or in any other Transaction Document; provided,

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    however,
that for purposes of determining an untruth or inaccuracy in any such
representation or warranty for purposes of this Section 10.2.1, the
representations and warranties of Seller that are limited or qualified by
references to “material” or “materiality” or “Material Adverse Effect” or
similar qualifications shall be construed as if they were not limited or
qualified by such qualifications;

    

    10.2.2                      any
failure of Seller duly to perform or observe any term, provision, covenant,
agreement or condition contained in this Agreement or the other Transaction
Documents to be performed or observed by the Seller;

    

    10.2.3                      except
as otherwise provided by and subject to the terms of Sections 3.3 and 3.4 above,
any claim or cause of action by any party arising on or after the Closing Date
against any Buyer Indemnified Party with respect to the obligations of Seller
retained by Seller under this Agreement or any of the other Transaction
Documents, including any default by Seller under any of Leases arising prior to
the Closing Date or any failure of Seller to satisfy any of its liabilities
other than the Assumed Liabilities.

    

    10.3           Notification and Defense of
Claims.

    

    10.3.1                      A
party entitled to be indemnified pursuant to Section 10.1 or 10.2 (the “Indemnified Party”)
shall promptly notify the party or parties liable for such indemnification (the
“Indemnifying
Party”) in writing of any claim, action, lawsuit, proceeding,
investigation or demand which the Indemnified Party has determined has given or
could give rise to a right of indemnification under this Agreement; provided,
however, that a failure to give prompt notice or to include any specified
information in any notice will not affect the rights or obligations of any party
hereunder except and only to the extent that, as a result of such failure, any
party which was entitled to receive such notice was prejudiced as a result of
such failure.  Subject to the Indemnifying Party’s right to defend in
good faith third party claims as hereinafter provided, the Indemnifying Party
shall satisfy its obligations under this Section 10 within thirty (30) days
after the receipt of written notice thereof from the Indemnified
Party.

    

    10.3.2                      If
the Indemnified Party shall notify the Indemnifying Party of any claim or demand
pursuant to Section 10.3.1, and if such claim or demand relates to a claim or
demand asserted by a third party against the Indemnified Party, the Indemnifying
Party shall have the right to defend any such claim or demand asserted against
the Indemnified Party.  The Indemnified Party shall have the right to
participate in the defense of any such claim or demand at its own
expense.  Without limiting the generality of the foregoing, the
Indemnified Party shall not be entitled to indemnification for any fees or costs
of defending any such claim or demand unless and until the Indemnifying Party
elects not to assume the defense of such claim or demand.  The
Indemnifying Party shall notify the Indemnified Party in writing, as promptly as
possible (but in any case five (5) Business Days before the due date for the
answer or response to a claim) after the date of the notice of claim given by
the Indemnified Party to the Indemnifying Party under Section 10.3.1 of its
election to defend any such third party 

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

    claim or
demand.  So long as the Indemnifying Party is defending in good faith
any such claim or demand asserted by a third party against the Indemnified
Party, the Indemnified Party shall not settle or compromise such claim or demand
without the prior written consent of the Indemnifying Party (which consent may
be granted or withheld in the Indemnifying Party’s sole and absolute
discretion), and the Indemnified Party shall make available to the Indemnifying
Party or its agents all records and other material in the Indemnified Party’s
possession reasonably required by it for its use in contesting any third party
claim or demand.  In the event the Indemnifying Party elects to defend
such claim or action, the Indemnifying Party shall have the right to settle or
compromise such claim or action without the consent of the Indemnified Party,
provided that the terms of the settlement or compromise impose no additional
obligations on the Indemnified Party with respect to the subject matter of the
claim or demand for which the Indemnifying Party has not agreed to indemnify the
Indemnified Party.

    

    10.4           Survival of Representations
and Warranties.  The representations and warranties of the
parties contained in this Agreement and the other Transaction Documents shall
survive the Closing until March 31, 2009, except that the representations and
warranties set forth in Sections 3.1.1, 3.1.2, 3.1.4 (second, third and
penultimate sentences only), and 3.1.8 shall survive until the applicable
statute of limitations has run (the “Survival
Period”).  Notwithstanding any other provision to the contrary,
no party shall be required to indemnify, defend or hold harmless any other party
pursuant to Section 10.1.1 or 10.2.1, unless the Indemnified Party has asserted
a claim with respect to such matters within the Survival Period.

    

    10.5           Characterization of
Payments. Any
payments made pursuant to this Article 10 shall be treated for all Tax purposes
as adjustments to the Purchase Price and no party or any of its Affiliates shall
take any position on a Tax return or in any proceeding with any taxing authority
contrary to such treatment, unless otherwise required by law. 

    

    10.6           Limitations.  Notwithstanding anything
to the contrary contained in this Agreement or in any of the other Transaction
Documents, the parties’ respective indemnification obligations under this
Agreement shall be subject to the limitations contained in this Section
10.6. 

    

    10.6.1                      Buyer
shall not be required to indemnify, defend or hold harmless any Seller
Indemnified Party, and Seller shall not be required to indemnify, defend or hold
harmless any Buyer Indemnified Party, for any inaccuracy in or breach of a
representation or warranty pursuant to Section 10.1.1 or 10.2.1, as
applicable, the aggregate amount of all such Losses of the Seller
Indemnified Parties or the Buyer Indemnified Parties, respectively, exceeds an
aggregate amount equal to $307,292 (the “Deductible”), after
which event the Seller Indemnified Parties or the Buyer Indemnified Parties,
as applicable, shall be entitled to recover for all Losses in excess of the
Deductible, subject to the other terms of this Agreement.

      

                                      10.6.2                      Buyer
shall not be required to indemnify, defend or hold harmless the Seller
Indemnified Parties, and Seller shall not be required to indemnify,

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    defend or
hold harmless the Buyer Indemnified Parties, for Losses in excess of an
aggregate amount equal to 100% of
the Purchase Price; provided, however, that the foregoing limitation shall not
apply to (a) the payment of the Purchase Price by Buyer to Seller, (b) any
indemnification pursuant to any of Sections 10.1.3 or 10.2.3, as applicable, or
(c) any indemnification arising out of a breach by Seller of its representation
and warranty in Sections 3.1.4 (second, third and penultimate sentences only)
above.

    

    10.6.3                      The
parties agree, for themselves and on behalf of their respective Affiliates,
successors and assigns, that with respect to each indemnification obligation
under this Agreement or any of the other Transaction Documents, the amount of
any Losses shall be reduced by the amount, if any, of any federal, state or
local income Tax benefit realized or any insurance proceeds
received.

    

                                    10.6.4                      The
parties agree that, except as otherwise expressly provided elsewhere in this
Agreement or in any other Transaction Document, the indemnification provisions
of this Article 10 shall be the sole and exclusive remedy for any breach of or
inaccuracy in any representation, warranty, covenant or agreement contained in
this Agreement or in any of the other Transaction Documents; provided, that
either party shall be entitled to seek specific performance of the other party’s
obligation to close the transaction contemplated by this Agreement.

    

                                    10.6.5                      No
Indemnified Party shall seek or be entitled to, or accept payment of, any award
or judgment for consequential, incidental, special, indirect or punitive damages
or lost profits suffered by such Indemnified Party, whether based on statute,
contract, tort or otherwise, and whether or not arising from the Indemnifying
Party’s sole, joint or concurrent negligence, strict liability or other
fault.

    

    10.6.6                      Seller
shall have no indemnification obligation hereunder to the extent any Losses
arose out of or resulted from the inaccuracy of any representation or warranty
of Seller, and Buyer or any Affiliate of Buyer had actual knowledge of such
inaccuracy prior to the execution and delivery of this Agreement by
Buyer.  For purposes of this Section, the term “actual knowledge”
means the actual knowledge of any one or more of John Hunter, Andrzej
Matyczynski, or S. Craig Tompkins.  Additionally, Buyer shall be
deemed to have “actual knowledge” of any fact which has been disclosed in
writing by Seller, its Affiliates or their respective officers, employees,
agents or representatives to any outside attorney or accountant of
Buyer.

    

    11.           Certain Defined
Terms.  For purposes of this Agreement, the following terms
have the meaning set forth below:

    

    “Affiliate” means, as
to any Person, any other Person which directly or indirectly controls, or is
under common control with, or is controlled by, such Person.  As used
in this definition, “control” (including, with its correlative meanings,
“controlled by” and “under common control with”) shall mean possession, directly
or indirectly, of the power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests by contract or otherwise) of such 

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    Person;
provided, however, in no event shall either of Michael Forman or Christopher
Forman be deemed an Affiliate of Buyer.

    

    “Business Day” means
Monday through Friday, excluding any day of the year on which banks are required
or authorized to close in California.

    

    “Code” means the
Internal Revenue Code of 1986, as amended, and any successor law.

    

    “Environmental Laws”
means all applicable laws, regulations and other requirements of any
Governmental Authority relating to pollution, health or safety or to the
protection of human health, safety or the environment.

    

    “GAAP” means United
States generally accepted accounting principles, as in effect from time to
time.

    

    “Governmental
Authority” means any U.S., federal, state or local government,
governmental authority, regulatory or administrative agency or commission or any
court, tribunal, or judicial or arbitral body (or any political subdivision
thereof).

    

    “Hazardous Materials”
means any hazardous substance, hazardous waste, contaminant, pollutant or toxic
substance (as such terms are defined in any applicable Environmental Law);
provided that “Hazardous Materials” shall not include customary products used
and/or stored by Seller in the ordinary course of its business.

    

    “Lien” means any
mortgage, pledge, security interest, encumbrance, lien (statutory or other) or
charge of any kind, including, without limitation, any conditional sale or other
title retention agreement, any lease in the nature of a conditional sale or
title retention agreement, and including any lien or charge outstanding by
statute or other laws which secures the payment of a debt (including, without
limitation, any Tax) or the performance of an obligation.

    

    “Material Adverse
Effect” means a material adverse effect on the value or the Property,
taken as a whole, provided, however that any such material adverse effect
arising out of or resulting from an event or series of events or circumstances
affecting (a) the motion picture industry generally or (b) any one or more
markets in which any of the theaters operated at the Property operate, shall not
constitute a Material Adverse Effect, including, without limitation, the opening
for business of any theater competitive to any such theater.

    

    “Permitted Liens”
means the following Liens: (a) Liens for Taxes, assessments or other
governmental charges or levies not yet due and payable; and (b) statutory Liens
of landlords
and Liens of carriers, warehousemen, mechanics, materialmen and other Liens
imposed by Law and on a basis consistent with past practice for amounts not yet
due.

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    

    “Person” means any
individual, corporation, limited liability company, partnership, joint venture,
association, trust, any other unincorporated organization or Governmental
Authority.

    

    “Tax” or “Taxes” means all
federal, state, local or foreign taxes, including, but not limited to, income,
gross income, gross receipts, capital, production, excise, employment, sales,
use, transfer, transfer gain, ad valorem, premium, profits, license, capital
stock, franchise, severance, stamp, withholding, Social Security, employment,
unemployment, disability, worker’s compensation, payroll, utility, windfall
profits, customs duties, personal property, real property, environmental,
registration, alternative or add-on minimum, estimated and other taxes,
governmental fees or like charges of any kind whatsoever, including any
interest, penalties or additions thereto whether disputed or not.

    

    “Theater Level Cash
Flow” means, with respect to any movie theater for any
period,  (i) the gross revenues from the operation of such theater for
such period, less (ii) the film
costs and cost of concessions for such theater for such period, less (iii) the
operating expenses (including, without limitation, payroll, payroll benefits,
repairs and maintenance, supplies, utilities, advertising, insurance, security
services, taxes and licenses) of such theater for such period, and less (iv) the
occupancy expenses (including, without limitation, the base or minimum rent,
percentage rent, additional rent and real estate taxes) of such theater for such
period, in each case calculated in accordance with GAAP, applied on a consistent
basis (with the exception that rents will not be calculated on a straight line
basis as would otherwise be required under FASB 13).  For the
avoidance of doubt, “operating expenses” shall exclude any general or
administrative expenses not incurred at the theater level, and any depreciation,
amortization, interest or income tax costs.

    

    “Transaction
Documents” means this Agreement and all documents, agreements and
instruments contemplated by and being delivered pursuant to or in connection
with this Agreement.

    

    12.           Notices.  In
the event either party desires or is required to give notice to the other party
in connection with this Agreement, the same shall be in writing and shall be
delivered in person or by recognized overnight air courier service, or deposited
with the United States Postal Service, postage prepaid, or certified mail,
return receipt requested, addressed to Buyer or Seller at the appropriate
address as set forth below:

    

               If
to either
Seller:                       Consolidated
Amusement Theatres, Inc.

    120 N. Robertson
Boulevard

    Los Angeles, California
90048

    Attention: Chief Operating
Officer

     

    
      With a copy
to:                     Weissmann
Wolff Bergman Coleman

      Grodin
& Evall, LLP

      9665 Wilshire Boulevard, Ninth
Floor

       

    

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    Beverly Hills, California
90212

    Attention:  Mitchell Evall
& Andrew Schmerzler

    

    If to
Buyer:                            Consolidated
Amusement Theatres, Inc.

    c/o Reading International,
Inc.

    500 Citadel Drive, Suite
300

    Commerce, California
90040

    Attention: Chief Operating
Officer

    

    With a copy
to:                    Troy
& Gould Professional Corporation

    1801 Century Park East, Suite
1600

    Los Angeles, California
90067

    Attention:  Dale E. Short,
Esq.

    

    Any such
notice shall be deemed to have been given on the date so delivered, if delivered
personally or by overnight air courier service, or, if mailed, on the date shown
on the return receipt as the date of delivery or the date on which the Post
Office certified that it was unable to deliver, whichever is applicable. Either
party may, by written notice to the other party, specify a different address to
which notices shall be given, by sending notice thereof in the manner set forth
above.  No copies of notices given to any party after the date which
is one (1) year after the Closing Date also need be given to outside counsel for
such party.

    

    13.           Miscellaneous.

    

    13.1           Entire Agreement;
Amendment.  This Agreement (including all Exhibits and
Schedules hereto), the other Transaction Documents, and the Confidentiality
Agreement contain all of the terms and conditions agreed upon by the parties
hereto with reference to the subject hereof.  No other prior or
concurrent agreements not specifically referred to herein, oral or otherwise,
shall be deemed to exist or to bind any of the parties hereto. No officer or
employee of Seller or Buyer shall have authority to make any representation or
promise not contained in this Agreement and each of the parties hereto agrees
that it is not executing this Agreement in reliance upon any such representation
or promise. This Agreement may not be modified or changed except by written
instruments signed by all of the parties hereto. Subject to the restrictions on
assignment set forth herein this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and
assigns.

    

    13.2           Assignment.  Except
as permitted by Section 1.3, Buyer may not assign or otherwise transfer all or
any of its rights, obligations or interests under this Agreement without the
prior written consent of Seller. Except as permitted by Section 1.4, Seller may
not assign or otherwise transfer all or any of its rights, obligations or
interests under this Agreement without the prior written consent of
Buyer.  No assignment of this Agreement by any party shall be
effective until an executed written assumption by such assignee of the assigning
party’s obligations under this Agreement is 

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    delivered
to the other party and no such assignment shall relieve any party of its
obligations under this Agreement.

    

    13.3           Governing
Law.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Hawaii, regardless of the
laws that might otherwise govern under applicable principles of conflicts of law
of such state.

    

    13.4           Drafting.  This
Agreement has been jointly negotiated and drafted, and shall be construed as a
whole according to its fair meaning and not strictly for or against any
party.

    

    13.5           Further
Assurances.  Each of the parties hereto agrees that it will,
forthwith upon any request by the other party, cooperate fully in the
preparation, execution, acknowledgment, delivery and recording of any
agreements, instruments, memoranda or documents reflecting or in furtherance of
any of the transactions contemplated by this Agreement.

    

    13.6           Intentionally
omitted.

    

    13.7           Confidentiality; Press
Releases.  Except and to the extent required by applicable law
(including, without limitation, Buyer’s obligation to file a report on Form 8-K
with the Securities and Exchange Commission and issue a press release in
connection with the execution and delivery of this Agreement) and the rules and
regulations of the American Stock Exchange, and except as may be necessary to
consummate the transactions contemplated hereby, until the Closing no party
hereto shall disclose the existence of this Agreement, or any of the terms or
provisions hereof, or make any press release or similar disclosure, without the
prior written consent of the other party.  To the extent reasonably
feasible, the initial press release or other announcement or notice regarding
the transactions contemplated by this Agreement shall be made jointly by the
parties; provided, however, that nothing in this Agreement shall prohibit any
party from making press release required by applicable law. Upon the Closing,
the confidentiality and non-disclosure obligations of the parties hereunder and
under the Confidentiality Agreement shall terminate, except to the extent that
such obligations relate to documentation or information relating to any
properties of Seller other than the Property and the businesses conducted
thereon, which obligations shall survive until the expiration of the
Confidentiality Agreement in accordance with its
terms.  Notwithstanding the foregoing, following the Closing, without
the prior written consent of Buyer, neither Seller nor any of its Affiliates
shall, directly or indirectly, disclose to any Person any non-public information
regarding the Property, except that Seller and its Affiliates may disclose such
information (a) in connection with matters related to the sale of the Property
or the other transactions contemplated by the Transaction Documents; (b) in
connection with the preparation of reports and documents to be filed by Seller
or any of its Affiliates with any Governmental Authority; (c) to Seller’s
officers, directors, employees, agents, representatives, attorneys and
accountants provided that Seller shall be responsible for any non-permitted
disclosure of such 

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    information
by any such Persons; (d) if required to do so by a Governmental Authority of
competent jurisdiction, and (e) if such information is in the public domain or
is previously published or disseminated by a third party other than pursuant to
the provisions of a confidentiality agreement entered with Buyer.

    

    13.8           Waiver.  No
action taken pursuant to this Agreement shall be deemed to constitute a waiver
by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.

    

    13.9           Third
Parties.  Except as otherwise expressly provided for or
contemplated by this Agreement, nothing in this Agreement, express or implied,
shall or is intended to confer upon any Person other than the parties hereto, or
their respective successors or assigns, any rights or remedies of any nature or
kind whatsoever under or by reason of this Agreement.

    

    13.10                      Section
Headings.  Section headings are provided herein for convenience
only and shall not serve as a basis for interpretation or construction of this
Agreement, nor as evidence of the intention of the parties hereto.

    

    13.11                      Severability.  If
any provision of this Agreement as applied to either party or to any
circumstance shall be adjudged by a court to be void or unenforceable, the same
shall in no way affect any other provision of this Agreement, the application of
any such provision in any other circumstances or the validity or enforceability
of the Agreement as a whole.

    

    13.12                      Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute but one and the
same instrument.

    

    13.13                      Reference.  Except
as otherwise expressly provided in this Agreement, any dispute of any nature or
character whatsoever between the parties and arising under or with respect to
this Agreement or any of the other Transaction Documents, 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:

     

    
      13.13.1                      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;

    

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

     

    13.13.2                      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;

    

    13.13.3                      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;

    

    13.13.4                      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;

    

    13.13.5                      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

    

    13.13.6                      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.

    
 

    13.14                      Interpretative
Matters

    .  Unless
the context otherwise requires, (a) all references to Articles, Sections or
Schedules are to Articles, Sections or Schedules in this Agreement,
(b) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with GAAP, (c) words in the singular
or plural include the singular and plural, and pronouns stated in either the
masculine, the feminine or neuter gender shall include the masculine, feminine
and neuter and (d) whenever the words “include,” “includes” or “including” are
used in this Agreement they shall be deemed to be followed by the words “without
limitation.”

    

    13.15                      No Personal
Liability.  Under no circumstances shall any personal liability
or obligation under this Agreement or under any of the other Transaction
Documents be imposed or assessed against any shareholder, member, manager,
officer, director, employee or agent of any party to this Agreement or of any of
such party’s Affiliates, and no party (nor any party claiming through such
party) shall commence any proceedings or otherwise seek to impose any liability
whatsoever against any such shareholders, member, manager, officer, director,
employee or agents.

     

    
      13.16                      Guaranty.  Concurrently
herewith, Reading International, Inc., a Nevada corporation (“RDI”), has executed
and delivered to Seller a Guaranty in substantially the form of Exhibit C attached
hereto.

       

    

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    (Signatures
contained on next page)

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    

    IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.

    

    

                                CONSOLIDATED
AMUSEMENT THEATRES,INC., a Hawaii corporation

    

                                By:/s/ James D.
Vandever

                                Its:Vice
President

    

                                CONSOLIDATED
AMUSEMENT THEATRES, INC., a
Nevada corporation

    

                                By:/s/ John
Hunter

                                Its:Chief Operating
Officer

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    LIST
OF EXHIBITS

    

    Exhibit
A                     The
Leases

    Exhibit
B                      Form
of Assignment and Assumption of Leases

    Exhibit
C                      Guaranty
of Reading International, Inc.

    

    

    LIST
OF SCHEDULES

    

    Schedule
3.1.4            The
Leases

    Schedule
3.1.5            Improvements

    Schedule
3.1.6            Compliance
with Laws

    Schedule
3.1.7            Litigation

    Schedule
3.1.9            Affiliate
Transactions

    Schedule
4.4               Manville
Lease Summary and Manville P&Ls

    Schedule
7.3.2            Description
and Scope of Repair Work

     

    
      
         

      

      
        32exhibit10_69.htm

    LEASEHOLD PURCHASE AND SALE
AGREEMENT

    

    

    THIS LEASEHOLD PURCHASE AND SALE
AGREEMENT (this "Agreement") is made
and entered into as of October 8, 2007 (the “Effective Date”) by
and between KENMORE ROHNERT, LLC, a Delaware limited liability company (“Seller”), and
CONSOLIDATED AMUSEMENT THEATRES, INC., a Nevada corporation (“Buyer"), with
reference to the following facts:

    

    A.           Seller
is the tenant under the lease described on Exhibit A attached
hereto (the "Lease"), which Lease
relates to those certain premises located in Rohnert Park, California, as more
particularly described in the Lease (the "Leased
Premises").

    

    B.           Seller
is the sublandlord under the sublease described on Exhibit B attached
hereto (the “Sublease”) with
Pacific Theatres Exhibition Corp., a California corporation (“Pacific”), pursuant
to which Seller subleases the entire Leased Premises to Pacific.

    

    C.           Buyer
is party to that certain Asset Purchase and Sale Agreement of even date (the
“Asset Purchase
Agreement”) by and between Buyer and Reading International, Inc., a
Nevada corporation (“RDI”), on the one
hand, and Pacific, Consolidated Amusement Theatres, Inc., a Hawaii corporation,
Michael Forman and Christopher Forman, on the other hand. Capitalized terms used
but not defined herein shall have the respective meanings given them in the
Asset Purchase Agreement.

    

    C.           Subject
to the terms and conditions of this Agreement, Seller desires to sell, transfer,
convey and assign to Buyer, and Buyer desires to purchase, accept and assume
from Seller, all of the right, title and interest of Seller in, to and under the
“Property” (as defined in Section 1.1 below).

    

    NOW, THEREFORE, in consideration of the
foregoing recitals and the mutual covenants, agreements, representations and
warranties herein contained, the parties hereby agree as follows:

    

    1.           Purchase and Sale of Assets;
Assumption of Liabilities.

    

    1.1           Purchase of
Assets.  Upon the terms and subject to the conditions
hereinafter set forth, at the “Closing” (as defined in Section 8.1 hereof),
Seller shall sell, transfer, convey and assign to Buyer, and Buyer shall
purchase from Seller, and assume certain liabilities with respect to, all right,
title and interest of Seller (a) as tenant in, to and under the Lease (the
“Leasehold
Interest”), and (b) as sublandlord in, to and under the Sublease (the
“Subleasehold
Interest” and, with the Leasehold Interest, the “Property”).

    

    1.2           Assumed
Liabilities.  Effective as of the Closing Date, Buyer shall
assume any and all liabilities and obligations of Seller as tenant under the
Lease and as

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    sublandlord
under the Sublease, in each case, which accrue on or after the Closing Date (the
“Assumed
Liabilities”).  Except for the Assumed Liabilities and except
as otherwise specifically set forth in any of the other “Transaction Documents”
(as defined in Article 11), Buyer is not assuming any other liabilities or
obligations of Seller.  The obligations and covenants of Buyer set
forth in this Section 1.2 and elsewhere in this Agreement shall survive the
Closing indefinitely.

    

    1.3           Assignment by
Buyer.  Subject to Section 7.1.1 below, Buyer shall have the
right to assign its right to take title at Closing the Property to a
wholly-owned direct or indirect subsidiary of Buyer (the “Buyer Sub”);
provided, however, that no such assignment shall relieve Buyer of its
obligations under this Agreement (including, without limitation, Section 1.2 and
Article 10 hereof) or any of the other “Transaction Documents” (as defined in
Article 11). Buyer shall provide Seller with written notice of such election and
the identity of the Buyer Sub at least ten (10) days prior to the Closing
Date.

    

    1.4           Exchange.  Seller
intends to transfer its obligations to sell the Property to a “qualified
intermediary,” as defined in Treasury Regulation Sec. 1.1031(k)-1(g)(4)(iii),
for the purpose of effecting an exchange qualifying under Sec. 1031 of the
“Code” (as defined in Article 11).  Buyer agrees to such assignment,
if made, and further agrees that it will execute promptly acknowledgement of its
receipt of notice of such assignment delivered to Buyer by
Seller.  Buyer and Seller agree that any such assignment shall not
affect the representations, warranties and other obligations of the parties
under this Agreement or Buyer’s title to the Property, except that the Purchase
Price, adjusted as provided herein, shall be paid to the assignee identified in
such notice.  Buyer further agrees to cooperate with Seller and to
execute such other documents reasonably requested by Seller to effect such
exchange, so long as Buyer incurs no cost, expense or liability (other than its
own attorneys’ fees and costs incurred in reviewing, negotiating and executing
such documents) as a result of such cooperation.  It is understood
that, subject to the performance of Buyer’s obligations under this Agreement,
Buyer shall have no responsibility for the proposed exchange, and makes no
representations or warranties as to whether any transaction effectuated by
Seller, in fact, will accomplish Seller’s tax objectives.

    

    2.           Purchase
Price.

    

    2.1           Purchase
Price.  The purchase price for the Leasehold Interest shall be
Seven Million Eight Hundred Thousand Dollars ($7,800,000), which shall be
subject to adjustment and reimbursement as hereinafter provided (the "Purchase
Price").  Buyer shall pay the Purchase Price to Seller in full
concurrently with the Closing by wire transfer of immediately available funds to
an account or accounts designated by Seller not less than two (2) “Business
Days” (as defined in Article 11) prior to the Closing Date.

    

    2.2           Adjustments to Purchase
Price.  The Purchase Price shall be subject to adjustment at
the Closing as follows:

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    2.2.1                      Prepaid Expenses, Prorations
and Deposits.  The Purchase Price shall be increased or
decreased as required to effectuate the proration of expenses  and
receipts (other than those adjusted pursuant to Section 2.2.2), including any
prepaid expenses and receipts, if any, under the Lease and the Sublease to be
borne pursuant to this Agreement by Seller prior to the Closing Date and by
Buyer on or after the Closing Date.  Without limiting the generality
of the foregoing, all expenses incurred by the tenant under the Lease,
including, without limitation, rent (other than “Percentage Rent” (as defined in
Section 2.2.2 below)), utility charges, insurance charges, common area operating
expenses, real, excise and personal property “Taxes” (as defined in Article 11)
and assessments levied against the Leased Premises, promotional fund expenses,
use Taxes, deposits under the Lease or the Sublease, and similar prepaid and
deferred items, in each case to the extent relating to the Lease or the
Sublease, shall be prorated between Buyer and Seller in accordance with the
principle that Seller shall be responsible for all expenses, costs, and
liabilities, and shall be entitled to all receipts, allocable to the period
ending prior to the Closing Date, and Buyer shall be responsible for all
expenses, costs, liabilities and obligations, and shall be entitled to all
receipts, allocable to the period on or after the Closing Date.

    

    2.2.2                      Manner of Determining
Adjustments. The Purchase Price, taking into account the adjustments and
prorations pursuant to this Section, will be determined finally in accordance
with the following procedures:

    

    2.2.2.1  Seller shall
prepare and deliver to Buyer not later than five (5) Business Days before the
Closing Date an itemized preliminary settlement statement (the “Preliminary Settlement
Statement”) which shall set forth Seller’s good faith estimate of the
adjustments to the Purchase Price in accordance with Section 2.2.1
hereof.

    

    2.2.2.2  If Seller and Buyer
have not agreed upon a final settlement statement on or before the Closing Date,
then Seller and Buyer shall cooperate in good faith to finalize such settlement
statement as soon as practicable after the Closing; provided, however, the
parties shall use such Seller’s good faith estimated adjustments to the Purchase
Price as set forth in the Preliminary Settlement Statement delivered pursuant to
Section 2.2.2.1 above for purposes of determining the amount of any estimated
adjustment to the Purchase Price paid by Buyer to Seller at
Closing.  If Seller and Buyer have not agreed upon a final settlement
statement on or before the Closing Date, not later than sixty (60) days after
the Closing Date, Buyer shall deliver to Seller a statement (the “Buyer Adjustment
Statement”) setting forth, in reasonable detail, its determination of the
adjustments to the Purchase Price and the calculation thereof and reminding
Seller of the thirty (30) day response period set forth in Section
2.2.2.3.  If Buyer fails to deliver the Buyer Adjustment Statement to
Seller within the sixty (60) day period specified in the preceding sentence,
Seller’s determination of the adjustments to the Purchase Price as set forth in
the Preliminary Settlement Statement shall be conclusive and binding on the
parties as of the last day of the sixty (60) day period.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    2.2.2.3  If Seller disputes
Buyer’s determination of the adjustments to the Purchase Price, it shall deliver
to Buyer a statement notifying Buyer of such dispute within thirty (30) days
after its receipt of the Buyer Adjustment Statement.  If Seller
notifies Buyer of its acceptance of the Buyer Adjustment Statement, or if Seller
fails to deliver its statement within the thirty (30) day period specified in
the preceding sentence, Buyer’s determination of the adjustments to the Purchase
Price as set forth in the Buyer Adjustment Statement shall be conclusive and
binding on the parties as of the earlier of the date of notification of such
acceptance or the last day of the thirty (30) day period, and the appropriate
party shall promptly pay to the other party in immediately available funds the
amount of any such adjustment.

    

    2.2.2.4  Seller and Buyer
shall use good faith efforts to resolve any dispute involving the determination
of any adjustments to the Purchase Price, and each party shall afford the other
party and its representatives reasonable access to all appropriate books,
records and statements relating to the subject matter of
the  adjustments to the Purchase Price contemplated by this Section
2.2 for such purpose.  If the parties are unable to resolve the
dispute within sixty (60) days after Buyer delivers the Buyer Adjustment
Statement to Seller, Seller and Buyer jointly shall designate an independent
accounting firm that has, or a movie theater executive who has, consistent and
recent experience in real property matters similar to those involving the
Property (the “Designated
Arbitrator”) to resolve the dispute.  If, for any reason, the
parties are unable to agree upon the Designated Arbitrator within seventy-five
(75) days after Buyer delivers the Buyer Adjustment Statement to Seller, or the
Designated Arbitrator fails or refuses to accept such engagement within fifteen
(15) days after the parties’ written request therefor, Seller and Buyer shall
jointly designate the Los Angeles office of PriceWaterhouseCoopers (the “Replacement
Arbitrator”) to resolve the dispute.  If the Replacement
Arbitrator fails or refuses to accept such engagement, in either case within
fifteen (15) days after the parties’ written request therefor, either Seller or
Buyer may thereafter petition the Superior Court of Los Angeles County,
California for the appointment of an independent accounting firm to act as the
Replacement Arbitrator and resolve the dispute. Absent fraud or manifest error,
(a) the Designated Arbitrator’s or Replacement Arbitrator’s, as applicable,
resolution of the dispute shall be final and binding on the parties, (b) subject
to Section 2.3, the appropriate party shall promptly pay to the other party in
immediately available funds the amount of any such adjustment, and (c) a
judgment may be entered in any court of competent jurisdiction if such amount is
not so paid.  Any fees and costs of the Designated Arbitrator or
Replacement Arbitrator shall be split equally between the parties.

    

    2.3           Payment of Adjustments to
and Reimbursements of the Purchase Price.  If, pursuant to
Section 2.2, it is determined after the Closing Date that Buyer shall be
obligated to pay any amounts to Seller, then Buyer shall make such payments in
full to Seller within ten (10) days after such amount is finally determined to
be due.  Conversely, if, pursuant to Section 2.2, it is determined
after the Closing Date that Seller shall be obligated to pay any amounts to
Buyer, then Seller shall make such payments in full to Buyer within ten (10)
days after such amount is finally determined to be due.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      

      2.4           Late Interest.  If
any amount payable pursuant to the provisions of this Article 2 is not paid
within ten (10) days after such amount is finally determined to be due, such
amount shall thereafter accrue interest until paid in full at an annual rate
equal to
the lesser of the “prime” interest rate as announced by The Wall Street Journal from
time to time during such period plus 2%, or the maximum interest rate permitted
by applicable law.

    

    

    2.5           Survival.  The
parties’ respective obligations under this Article 2 shall survive the
Closing.

    

    3.           Representations and
Warranties of Seller.

    

                          3.1           Representations and
Warranties of Seller.  Seller hereby represents and warrants to
Buyer as follows:

    

    3.1.1                      Organization.  Seller
is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Delaware.  Seller 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.

    

    3.1.2                      Authority.  Subject
to the terms of any consent provisions of the Lease, Seller 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 have been duly
authorized by all necessary action on the part of Seller in accordance with its
governing documents and applicable law.  This Agreement constitutes,
and each other document, instrument and agreement to be entered into by Seller
pursuant to the terms of this Agreement will constitute, a valid agreement
binding upon and enforceable against Seller in accordance with its terms (except
as limited by bankruptcy or similar laws or the availability of equitable
remedies).

    

    3.1.3                      Consents.  The
execution, delivery and performance by Seller of this Agreement, and all other
agreements, instruments or documents referred to herein or contemplated hereby,
do not require the consent, waiver, approval, license or authorization of any
Person (other than the consent of First Republic Bank (or any
successor-in-interest of First Republic Bank) if and to the extent that the
Nondisturbance and Attornment Agreement dated as of July 1, 1998 by and among
Bishop & Bishop Land, LLC, Pacific and First Republic Bank remains in
effect) or public authority which has not been obtained or provided for in this
Agreement 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
Seller, any other contract or agreement to which Seller is a party or by which
Seller is bound or any judgment, injunction, order, law, rule or regulation
applicable to Seller. Seller is not a party to, or subject to or bound by, any
judgment, injunction or decree of any court or governmental authority which may
restrict or interfere with the performance of this Agreement, or such other
agreements, instruments and documents.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    
      

      3.1.4                      The Lease and the
Sublease.   Exhibit A sets forth
a true, complete and accurate description of the Lease (including all
amendments, extensions, renewals,
ground or master lessor consents, and existing non-disturbance and attornment
agreements with respect thereto), and Exhibit B sets forth
a true, complete and accurate description of the Sublease (including all
amendments, extensions, renewals, ground or master lessor consents, and existing
non-disturbance and attornment agreements with respect
thereto).  Subject to the terms of the Lease and the Sublease, Seller
has, and on the Closing Date will have, a valid leasehold interest in the Lease
free and clear of any “Liens” (as defined in Article 11) other than (a)
“Permitted Liens” (as defined in Article 11), (b) so-called “non-monetary”
Liens, including, without limitation, any ground or underlying leases,
easements, parking agreements, reciprocal easement agreements, conditions,
covenants and restrictions, restrictive covenants, development or similar
agreements, zoning limitations and other restrictions imposed by any
“Governmental Authority” (as defined in Article 11), or any other matter which a
survey of the Leased Premises or a review of the public records regarding the
Leased Property would show, whether created by or in the name of Seller or any
other party, or (c) any other Liens, whether “monetary” or “non-monetary” Liens,
created by or in the name of any Person other than Seller or any “Affiliate” (as
defined in Article 11) of Seller, including, without limitation, by any fee
owner or ground lessor under the Lease.  True, complete and accurate
copies of the Lease and the Sublease have been delivered or otherwise made
available to Buyer through Seller’s Affiliate’s data site operated by Merrill
Corporation (the “Data
Site”), and such Lease and Sublease set forth the entire agreement and
understanding between the parties thereto with respect to the leasing and
occupancy (or, as applicable, subleasing and occupancy) of the Leased
Premises.  The Lease and the Sublease are each in full force and
effect against Seller and are valid and binding against Seller and, to Seller’s
Knowledge, the applicable landlord or subtenant thereunder.  Neither
Seller nor, to Seller’s Knowledge, the landlord under the Lease or Pacific under
the Sublease is in default under the Lease or the Sublease, as applicable, nor
has any event occurred or failed to occur or any action been taken or not taken
which, with the giving of notice, the passage of time or both would mature into
or otherwise become a default under the Sublease or the Lease by Seller or, to
Seller’s Knowledge, the landlord or Pacific thereunder.  The landlord
under the Lease is not an Affiliate of Seller, but Pacific is an Affiliate of
Seller.  Except for the Sublease, Seller has not subleased, licensed
or otherwise granted any “Person” (as such term is defined in Article 11) the
right to use or occupy the Leased Premises or any portion thereof and, except
for the Sublease, Seller is in exclusive possession of the Leased Premises. To
Seller’s Knowledge, there is no pending or threatened condemnation of any part
of any Leased Premises by any “Governmental Authority” (as such term is defined
in Article 11).

    

    

    3.1.5                      Litigation.  To
Seller’s Knowledge, there are no actions, suits, claims, proceedings, hearings,
disputes or investigations currently pending or threatened in writing at any
time after January 1, 2005, before any Governmental Authority or that would come
before any arbitrator, brought by or against Seller involving, affecting or
relating to the Property, including, without limitation, any labor, employment
or Tax-related actions, suits, claims, proceedings, hearings, disputes or

     

    
      
        
           

        

        
          6

          
            

          

        

        
           

        

      

    

     

    investigations.  Seller is not subject to any order,
writ, assessments, judgment, award, injunction or decree of any Governmental
Authority relating to the Property.

    

    3.1.6.                      Certain Tax
Matters.  Seller is not a “foreign person” within the meaning
of Code Section 1445(f) or a “foreign partner” within the meaning of Code
Section 1446.  No part of the Property is “tax-exempt use property”
within the meaning of Code Section 168(h).

    

    3.1.7                      Affiliate
Transactions.  Except for the Sublease, (a) Seller is not a
party to any contract or arrangement with, or indebted, either directly or
indirectly, to any of its Affiliates in connection with any part of the
Property, and (b) none of Seller’s Affiliates own any asset, tangible or
intangible, which is used in and material to the operation of any part of the
Property.

    

    3.1.8                      Brokerage.  Except
with respect to the engagement of Lazard Freres & Co. LLC by Affiliates of
Seller, Seller has not employed any broker, finder or agent or has incurred or
will incur any obligation or liability to any broker, finder or agent with
respect to the transactions contemplated by this Agreement, and all fees and
expenses payable in connection with the engagement of Lazard Freres & Co.
LLC will be paid by such Affiliates of Seller.

    

    3.1.9                      Development
Projects.  Neither Seller nor any Affiliate of Seller is bound
by any agreement or commitment regarding the development, construction or
operation of any proposed development that is currently contemplated to include
a commercial motion picture theater in any part of the “Territory” (as defined
in Article 12 below).  For purposes of this Agreement, the “Territory”
means all property which is located within a radius of ten (10) miles from 555
Rohnert Park Expressway, Rohnert Park, California.

    

    3.2           Knowledge.    Where any
representation or warranty contained in this Agreement is expressly qualified by
reference “to Seller’s Knowledge,” “to the Knowledge of Seller,” or any similar
language, it refers to the actual knowledge of Neil Haltrecht (Executive Vice
President of Pacific), Nora Dashwood (Executive Vice President and Chief
Operating Officer of Pacific), Jay Swerdlow (Executive Vice President of
Pacific), Ira Levin (Executive Vice President and General Counsel of Pacific),
Joe Miraglia (Director of Staff Operations of Pacific), and Terri Shimohara
(Vice President, Human Resources of Pacific), in each case after due
inquiry.

    

    3.3           “As Is” Purchase.
BUYER ACKNOWLEDGES THAT AS A MATERIAL CONDITION OF THE TRANSACTIONS CONTEMPLATED
BY THIS AGREEMENT, BUYER IS ACQUIRING THE PROPERTY ON AN “AS IS, WHERE IS” BASIS
EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS AGREEMENT.  EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, THERE ARE NO WARRANTIES, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, REPRESENTATIONS AS TO THE PHYSICAL
OR OTHER CONDITION OF THE LEASE, THE LEASED PREMISES OR ANY OTHER PORTION OF THE
PROPERTY, OR IMPLIED WARRANTIES OF 

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

    MERCHANTABILITY
OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE LEASE, THE LEASED
PREMISES OR ANY OTHER PORTION OF THE PROPERTY. BUYER HAS MADE AND AGREES TO MAKE
A THOROUGH AND CAREFUL EXAMINATION OF THE LEASE, THE LEASED PREMISES AND ALL
OTHER PORTIONS OF THE PROPERTY AND WILL ASSURE ITSELF THAT THE LEASE, THE LEASED
PREMISES AND THE ALL OTHER PORTIONS OF THE PROPERTY ARE SUITABLE FOR BUYER’S
INTENDED PURPOSE.  IF THE CLOSING OCCURS, AND SUBJECT TO THE SPECIFIC
AND EXPRESS REPRESENTATIONS AND WARRANTIES CONTAINED HEREIN, (A) BUYER SHALL BE
DEEMED TO HAVE ACCEPTED THE LEASE, THE LEASED PREMISES AND ALL OTHER PORTIONS OF
THE PROPERTY WITH AND SUBJECT TO ALL DEFECTS AND DEFICIENCIES, AND (B) BUYER
EXPRESSLY ASSUMES THE RISK THAT SUBSEQUENT EVENTS OR UNDISCOVERED OR UNKNOWN
CONDITIONS COULD MAKE ALL OR PART OF THE LEASE, THE LEASED PREMISES OR ANY OTHER
PORTION OF THE PROPERTY UNSUITABLE FOR BUYER’S INTENDED PURPOSES.

    

    3.4           Release.  As
a material inducement to Seller to enter into and perform its obligations under
this Agreement, Buyer, on behalf of itself and all of its successors, assigns,
Affiliates and representatives, hereby releases and discharges Seller and its
Affiliates, and their respective officers, directors, shareholders, partners,
members, managers, employees, agents, attorneys and representatives, and
successors and assigns, from any and all claims, demands, liabilities,
obligations, expenses (including attorneys' fees), causes of action, suits and
rights, whether now known or unknown, suspected or unsuspected, which exist,
existed or may exist or have existed at any time now or in the future and
arising out of or relating to the physical condition of the Property, including,
without limitation, in connection with any compliance or non-compliance by
Seller or any other party with the ADA or any similar state or local law, or
arising from the presence of any “Hazardous Materials” (as defined in Article
11) or the Property’s or any party’s compliance with any “Environmental Laws”
(as defined in Article 11); provided, however, that the foregoing release shall
not apply to any claim to the extent arising from (a) the breach of any express
covenant, representation or warranty by Seller under this Agreement or
(b) fraud committed by Seller or any Affiliate of Seller.  The
foregoing release extends to, and Buyer hereby waives and relinquishes, all of
its rights under Section 1542 of the California Civil Code and any similar law
or rule of any other jurisdiction.  California Civil Code Section 1542
provides:

    

    "A
general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing the release, which
if known by him or her must have materially affected his or her settlement with
the debtor."

    

    3.5           Updating of
Schedules.  Seller shall, from time to time, prior to the
Closing, update the Schedules to this Agreement, or create any new
schedules revising its representations and warranties, if after the Effective
Date Seller learns of new exceptions to the representations and warranties set
forth in this Agreement (together, the "Updated Schedules"),
and promptly deliver such Updated Schedules to Buyer.  If any Updated
Schedule reflects or describes a “Material Adverse Effect” (as defined in
Article 11) from 

     

    
      
        
           

        

        
          8

          
            

          

        

        
           

        

      

    

    

    the
conditions previously described in the representations and warranties,
then Buyer may, at its option, upon written notice thereof to Seller,
within ten (10) Business Days of Buyer's receipt of an Updated
Schedule, terminate this Agreement upon notice to Seller.  If
Seller's representations and warranties were true and correct when made,
then Buyer's sole remedy in the event of the receipt of an Updated Schedule
shall be to terminate this Agreement in accordance with the foregoing
sentence (or to proceed with the Closing).  If the then scheduled Closing
Date would occur prior to the end of the ten (10) Business Days period set forth
in this Section 3.5, the delivery of any Updated Schedule shall postpone the
Closing Date to the date which is ten (10) Business Days after Buyer’s receipt
of the Updated Schedule.

    

    4.           Representations and
Warranties of Buyer.  Buyer hereby represents and warrants to
Seller as follows:

    

    4.1           Organization.  Buyer
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada.  Buyer 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.

    

    4.2           Authority.  Buyer
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 Buyer 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 Buyer
pursuant to the terms of this Agreement will constitute, a valid agreement
binding upon and enforceable against Buyer in accordance with its terms (except
as limited by bankruptcy or similar laws or the availability of equitable
remedies).

    

    4.3           Consents.  The
execution, delivery and performance by Buyer 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 (other than the landlord under the Lease and any lenders having
Liens on the Leased Premises) 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 Buyer or any
judgment, injunction, order, law, rule or regulation applicable to Buyer. Buyer
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 Buyer of this
Agreement, or such other leases, agreements, instruments and
documents.

    

    4.4           Financial Condition.
Buyer is a newly formed entity, created for the purpose of effectuating the
transactions contemplated by this Agreement.  On the Closing Date and
after giving effect to the transactions contemplated by this Agreement, (a)
Buyer will have shareholders’ equity (determined in accordance with “GAAP” (as

     

    
      
        
           

        

        
          9

          
            

          

        

        
           

        

      

    

    

    defined
in Article 11)) of not less than Twenty Million Dollars ($20,000,000), (b) the
assets of Buyer shall include all right, title and interest of the tenant under
the lease for “RDI’s” (as defined in Section 13.16 below) movie theater in
Manville, New Jersey (the “Manville Theater”),
and (c) Buyer will not have indebtedness for borrowed money in excess of the
aggregate amount of Fifty-Five Million Dollars
($55,000,000).  Attached hereto as Schedule 4.4 are (i)
a true and complete summary of the material terms of the Lease for the Manville
Theater, and (ii) Theater Level Cash Flow Reports for the Manville Theater for
RDI’s fiscal year ended December 31, 2006 and for the eight-month period
ended August 31, 2007 (collectively, the “Manville
P&Ls”).  The Manville P&Ls present fairly in all
material respects the results of operations for the Manville Theater, along with
circuit revenue and expenses allocated to such theater based on attendance, for
the periods referred to therein.  RDI maintains its books and records
in accordance with GAAP applied on a consistent basis, and the Manville P&Ls
were prepared from and are consistent with such books and records, except that
the Manville P&Ls exclude certain financial statements and lack the footnote
disclosures that are required for GAAP.

    

    4.5           Brokerage.  Except
in connection with the “Financing” (as defined in Section 7.4.2 below), Buyer
has not employed any broker, finder or agent or has incurred or will incur any
obligation or liability to any broker, finder or agent with respect to the
transactions contemplated by this Agreement.  Any such obligation or
liability in connection with the Financing shall be borne solely by Buyer or
RDI.

    

    5.           Conditions Precedent to
Buyer's Obligations.  Buyer's obligations under this Agreement
are subject to the fulfillment of each of the conditions set forth in this
Article 5 at or before the Closing, subject, however, to the right of Buyer to
waive any one or more of such conditions in whole or in part (provided that no
such waiver shall be implied or binding upon Buyer unless given in
writing).

    

    5.1           Performance by
Seller.  Seller shall have timely performed and complied with
in all material respects all agreements and conditions required by this
Agreement to be performed and complied with by Seller on or prior to the Closing
Date, including, without limitation, delivery to Buyer of the “Seller
Deliveries” (as defined in Section 9.3 below) in accordance with Section 8.3
below.

    

    5.2           Accuracy of Representation
and Warranties.  The representations and warranties herein of
Seller shall be true and correct in all material respects as of the Closing Date
(except to the extent any such representation or warranty is qualified by
materiality, in which case such representation or warranty shall be true in all
respects).

    

    5.3           No
Injunctions.  No order shall have been entered in any action or
proceeding before any Governmental Authority, and no preliminary or permanent
injunction by any court of competent jurisdiction shall have been issued and
remain in effect, which would have the effect of making the consummation of the
transactions contemplated by this Agreement illegal; provided, however, that if
any such action, proceeding or injunction exists as a result of the wrongful
action or omission to act of 

    
      
        
           

        

        
          10

          
            

          

        

        
           

        

      

    

     

    Buyer or any of Buyer’s Affiliates, the same shall be an event of
default by Buyer under this Agreement.

     

    
      

      5.4           HSR
Act.  All required filings under Section 7A of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), shall have
been completed and all applicable time limitations under the HSR Act shall have
expired without a request for further information by the relevant federal
authorities under such Act, or in the event of such a request for further
information, the expiration of all applicable time limitations under the HSR Act
shall have occurred without the objection of such federal
authorities.

    

    

    6.           Conditions Precedent to
Seller's Obligations.  Seller's obligations under this
Agreement are subject to the fulfillment of each of the conditions set forth
below in this Article 6 at or before the Closing, subject, however to the right
of Seller to waive any one or more such conditions in whole or in part (provided
that no such waiver shall be implied or binding upon Seller unless given in
writing).

    

    6.1           Performance by
Buyer.  Buyer shall have timely performed and complied with in
all material respects all agreements and conditions required by this Agreement
to be performed and complied with by Buyer on or prior to the Closing Date,
including, without limitation, delivery to Seller of the “Buyer Deliveries” (as
defined in Section 9.2 below) in accordance with Section 8.2 below.

    

    6.2           Accuracy of Representations
and Warranties.  The representations and warranties herein of
Buyer shall be true and correct in all material respects as of the Closing Date
(except to the extent any such representation or warranty is qualified by
materiality, in which case such representation or warranty shall be true in all
respects).

    

    6.3           No
Injunctions.  No order shall have been entered in any action or
proceeding before any Governmental Authority, and no preliminary or permanent
injunction by any court of competent jurisdiction shall have been issued and
remain in effect, which would have the effect of making the consummation of the
transactions contemplated by this Agreement illegal; provided, however, that if
any such action, proceeding or injunction exists as a result of the wrongful
action or omission to act of Seller or any of Seller’s Affiliates, the same
shall be an event of default by Seller under this Agreement.

    

    6.4           HSR
Act.  All required filings under Section 7A of the HSR Act
shall have been completed and all applicable time limitations under the HSR Act
shall have expired without a request for further information by the relevant
federal authorities under such Act, or in the event of such a request for
further information, the expiration of all applicable time limitations under the
HSR Act shall have occurred without the objection of such federal
authorities.

    

    7.           Covenants.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    
      7.1           Commercially Reasonable
Efforts.

       

      
        
          7.1.1                      Upon the
terms and subject to the conditions of this Agreement, the parties hereto will
use commercially reasonable efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable
consistent with applicable law to consummate and make effective in the most
expeditious manner practicable the transactions contemplated by the Transaction
Documents, including, without limitation, obtaining any authorizations,
consents, orders or approvals of any Person or Governmental Authority that may
be or become necessary in connection with the execution, delivery or performance
of a party’s obligations hereunder.  Notwithstanding the foregoing,
neither Seller nor Buyer shall be required to pay consideration or grant any
rights, guarantee or concession to any third party or to modify in any material
manner the terms of the Lease in order to obtain any such consent or approval or
any such release; provided, however, that if Buyer elects to cause a Buyer Sub
to take an assignment of any of Seller’s right, title or interest under, or
assume any of Seller’s obligations under, the Lease, and the landlord’s consent
is required under any such Lease, Buyer shall offer to provide a guarantee to
the landlord of all of such assumed obligations concurrently with Seller’s
initial submission to such landlord of request for such
consent.

        

      

    

    

    7.1.2                      Buyer
shall use its commercially reasonable efforts and Seller shall use its
commercially reasonable efforts to cooperate fully to obtain promptly all such
authorizations, consents, orders and approvals required to be obtained in
connection with the transactions contemplated hereby. Without limiting the
generality of the foregoing, to the extent such filing is required by the HSR
Act, Seller and Buyer agree that each shall prepare and file a notification and
report form pursuant to the HSR Act as soon as practicable after the Effective
Date, but in no event later than ten (10) days after the Effective
Date.  If a filing is made under the HSR Act, Seller and Buyer each
also agree to request early termination in such filing and respond with
reasonable diligence and dispatch to any request for additional information made
in response to such filing.  All filing fees associated with complying
with the HSR Act shall be borne 50% by Seller and 50% by Buyer.

    

    7.1.3                      Notwithstanding
the provisions of Section 7.1.2, with respect to the assignment of the Lease
from Seller to Buyer, Seller, at its cost and expense, shall use its
commercially reasonable efforts, and Buyer, at its cost and expense, shall use
its commercially reasonable efforts to cooperate fully with Seller:

    

    (a) to
obtain promptly from the landlord under the Lease and all other appropriate
parties any consent required to be obtained in connection with (i) such
assignment and (ii) the grant to the lenders under the Financing of Liens on the
tenant’s interest in the Lease and other consents, estoppels and approvals
required as conditions precedent to the closing of the Financing (collectively,
the “Leasehold
Mortgages”); provided, however, that Buyer shall bear any expenses
attributable to obtaining the Leasehold Mortgages.  In connection
therewith, Buyer agrees promptly to provide all financial and other information
and background materials regarding Buyer, its 

     

    
      
        
           

        

        
          12

          
            

          

        

        
           

        

      

    

    

    Affiliates
and their respective senior management, and such lenders, which the landlord or
any other appropriate party under the Lease may reasonably request in connection
with such party’s evaluation of Seller’s request for consent to any such
assignment or grant of any such Leasehold Mortgage.  Buyer also agrees
to make its and its Affiliates’ senior management reasonably available to such
parties for this purpose.  Buyer hereby acknowledges that, in those
cases where no party’s consent is required for the assignment of the Lease to
Buyer or to the grant to the lenders under the Financing of a Leasehold Mortgage
with respect to such Lease, Seller may elect to send notices to the landlord
and/or all other appropriate parties, rather than requests for consents, which
notices describe the transaction contemplated by this Agreement, and some of
which notices seek the “acknowledgment” of such landlord and such other parties
to the assignment of the Lease; and

    

    (b)           to
obtain releases of Seller’s and its Affiliates’ liability under the
Lease.

    

    With
respect to the matters described in this Section 7.1.3, Seller may elect at any
time to shift to Buyer primary responsibility for obtaining the consents and
agreements under this Section by so notifying Buyer in
writing.  Thereafter, Buyer shall, at Seller’s expense as provided
above, use its commercially reasonable efforts to accomplish the matters
described in this Section, and Seller shall use its commercially reasonable
efforts to cooperate fully with Buyer.  The parties agree that, if the
landlord or any other party is presented with a combined request to consent to
the assignment of the Leasehold Interest hereunder and the grant of a Leasehold
Mortgage with respect to such Leasehold Interest refuses, without explanation,
to provide the consents requested, or it is not otherwise reasonably apparent
from such party’s response to such combined request whether such landlord would
have consented to the assignment of the Leasehold Interest if such request had
not been accompanied by a request for a Leasehold Mortgage, it shall be presumed
that such refusal was attributable only to the request for consent to the
Leasehold Mortgage for purposes of determining whether the condition precedent
set forth in Section 5.4 of the Asset Purchase Agreement has been satisfied;
provided, however, that Buyer shall be entitled to rebut such presumption by
requiring Seller to present to such party a separate request for consent to
assignment of the Leasehold Interest only, and if such party fails for any
reason to provide such consent to assignment it shall be deemed a failure of the
condition precedent set forth in Section 5.4 of the Asset Purchase
Agreement.

    

    7.1.4                      In
no event shall Buyer or any Affiliate of Buyer be required to increase the
equity capital of Buyer or to contribute any assets to Buyer, or (except as
otherwise provided in Section 7.1.1 above) to provide any guarantee or other
credit enhancement to or for the benefit of Buyer, in order to obtain any
consent contemplated by this Section 7.1.1.

    

    7.2           Access to Properties and
Records.  From and after the Effective Date through the Closing
Date or the earlier termination of this Agreement, Seller shall afford to Buyer,
and to the accountants, counsel and representatives of the Buyer, upon

      
        
           

        

        
          13

          
            

          

        

        
           

        

      

    reasonable
prior notice, reasonable access during normal business hours throughout the
period prior to the Closing to the Leased Premises and, during such period,
shall furnish promptly to Buyer all other information concerning the Property
and its personnel as such parties may reasonably
request.  Notwithstanding anything in this Section to the contrary, no
access pursuant to this Section 7.2 shall unreasonably interfere with Seller’s
or Pacific’s conduct of its business at the Leased Premises.  Buyer
shall notify Seller in writing of any material breach of this provision known to
it and shall afford Seller a reasonable opportunity to cure any such
breach.

    

    7.3           Seller’s Operations Prior to
the Closing.  From and after the Effective Date until the
Closing, Seller (a) shall not sell, transfer, assign, dispose of or grant any
Lien on, or permit to be sold, transferred, assigned, disposed of or encumbered,
all or any material part of the Property as the same shall be constituted on the
Effective Date, except to the extent that any such Lien will be removed at or
prior to the Closing; (b) shall not enter into any lease, contract or commitment
or incur any liabilities or obligations in connection with the Property, except
for leases, contracts, commitments, liabilities or obligations that will not
bind Buyer or the Property after the Closing; (c) shall not release, waive or
compromise any of its rights with respect to, the Lease without the prior
written consent of Buyer, which consent shall not be unreasonably withheld,
conditioned or delayed to the extent such proposed action occurs in the ordinary
course of its business consistent with past practice and which is reasonably
expected to be without Material Adverse Effect upon the value or utility of the
Property; and (d) shall not, directly or indirectly, destroy or otherwise
dispose of any books, records or files relating to the Lease or the Property,
other that in the ordinary course of business, generally consistent with past
practice.

    

    7.4           
Cooperation.

    

    7.4.1                      Generally.  Each
party shall provide the other with such cooperation as may reasonably be
requested, at the expense of the requesting party (unless the requesting party
is to be indemnified with respect thereto, in which case such cooperation shall
be given at the expense of the indemnifying party), in connection with the
defense of any third party litigation relating to the subject matter of this
Agreement.  Additionally, until March 31, 2010, Seller shall make
available to Buyer’s independent accountants such information and documentation
regarding the Property to the extent such information and documentation is
reasonably required in connection with an audit by such independent accountant
of Buyer’s financial statements or the preparation of financial disclosure
required under applicable Federal securities laws, including an audit of
acquired businesses as required by 17 CFR § 210.3-05, and allow Buyer’s
independent accountants to make and retain copies of such information and
documentation, provided that (a) such information and documentation is then in
the possession or control of Seller or Seller’s Affiliates, and (b) so long as
Buyer’s independent accountant does not require that such information or
documentation be obtained directly from Seller, such information and
documentation is not otherwise in the possession or control of Buyer, any of
Buyer’s Affiliates or such independent accountant, or is not otherwise
reasonably available from another source to Buyer or such independent
accountant.  Seller also 

     

    
      
        
           

        

        
          14

          
            

          

        

        
           

        

      

    

     

    agrees to make its and its Affiliates’ senior management
reasonably available to Buyer and its accountants for this purpose.

    7.4.2                      Cooperation with respect to
Buyer’s Financing.  Buyer hereby represents and warrants to
Seller that (a) it has obtained a written commitment letter and related term
sheet from a financially responsible institution, true and correct copies of
which have been furnished to Seller, for debt financing to be used by Buyer to
fund a portion of the Purchase Price (the “Financing”), and (b)
said commitment letter and related term sheet are in full force and effect, and
Buyer has performed all of its obligations thereunder required to be performed
on or prior to the Effective Date.  Prior to the Closing Date, Seller
agrees promptly to provide all financial and other information and materials
regarding the Property as reasonably requested by Buyer or its accountants from
time to time in connection with the preparation of audited financial statements
of the “Purchased Assets” and the “Business” (each as defined in the Asset
Purchase Agreement) for the twelve (12) months ended June 30, 2005, 2006 and
2007, respectively, and unaudited financial statements for the most recent
practicable interim period subsequent to June 30, 2007 and prior to the Closing
Date.  Seller also agrees to make its and its Affiliates’ senior
management reasonably available to Buyer and its accountants for this
purpose.  Subject to Seller’s performance of its obligations under
this Section 7.4.2, the completion of said financial statements shall not
be a condition precedent to the obligations of Buyer under this Agreement, and
Seller shall not be in breach or default of its obligations under this Section
7.4.2 if such audited financial statements are not completed for any reason by
any particular date so long as Seller has cooperated with Buyer and its
accountants as required by this Section 7.4.2.  Seller agrees that,
effective upon the Closing, Buyer’s accountants shall be released for the
benefit of Buyer and RDI from any and all obligations of confidentiality that it
may owe to Seller or its Affiliates only to the extent they relate to the
Property.

    

    7.5           Delivery of Information;
Delivery of Mail and Assets; Collection of Accounts Receivable. After the
Closing Date, each of the parties hereto shall cause their personnel to provide
the other party with financial accounting, Tax, and similar information
reasonably necessary to prepare Tax returns and other filings relating to the
Lease and to finalize the prorations and adjustments called for by Section 2.2
hereof.  Seller agrees that it will promptly deliver to Buyer any mail
or other communications received by Seller on or after the Closing Date
pertaining to the Property and any cash, checks or other instruments of payment
to which Seller is not entitled.  Buyer agrees that it will promptly
deliver to Seller any mail or other communications received by Buyer on or after
the Closing Date pertaining to Seller's operations, properties or other affairs
of Seller, any cash, checks or other instruments of payment to which Buyer is
not entitled, and any other assets or properties of Seller.

    

    7.6           Post-Closing Covenants of
Buyer.

    

    7.6.1                      Maintenance of
Insurance.  Buyer agrees that from and after the Closing Date,
Buyer shall at all times maintain in complete force and effect, in accordance
with the requirements of the Lease, all policies of insurance required by the

     

    
      
        
           

        

        
          15

          
            

          

        

        
           

        

      

    

    

    Lease to
be maintained by the tenant. Buyer shall deliver to Seller executed copies of
certificates of insurance evidencing the foregoing on the Closing Date. New
certificates shall be delivered promptly whenever policies are renewed or new
policies are written. As often as any such policy shall expire or be terminated,
a renewal or additional policy shall be procured and maintained by Buyer in like
manner and to like extent, and new certificates thereof shall be delivered to
Seller. All policies of insurance maintained by Buyer pursuant to the
requirements of the Lease shall contain a provision that the company issuing
said policy will give Seller not less than ten (10) days' notice in writing in
advance of any cancellation or lapse of the effective date or any reduction in
the amounts of insurance. In the event that Buyer fails to comply with any of
the requirements of this Section 7.6.1, and Buyer fails to cure such
non-compliance within ten (10) days of delivery of notice thereof from Seller,
Seller may obtain any and all policies of insurance required to comply with
tenant's obligations under the Lease, and Buyer shall immediately pay to Seller
any and all costs reasonably incurred by Seller in connection with obtaining and
maintaining such insurance.

    

    7.6.2                      Amendment of Lease; Exercise
of Options; Waiver of Rights.  Without Seller’s prior written
consent (which consent may not be unreasonably withheld or delayed), until the
earlier of the date on which (a) Seller and all of Seller’s Affiliates are no
longer liable on or are released from any further liability under the Lease, or
(b) Buyer delivers to Seller (i) an audited balance sheet for Buyer showing a
net worth (calculated in accordance with GAAP) of at least $50,000,000, and (ii)
an audited income statement for Buyer showing a ratio of indebtedness to
“Theater Level Cash Flow” (as defined in Article 11) for all theaters then
operated by Buyer of 5.5-to-1 or less, Buyer shall not (x) exercise any option
to extend or renew the term of the Lease if, as of the date on which Buyer
proposes to exercise any such option, the theater operated pursuant to the Lease
has Theater Level Cash Flow in the most recently completed calendar year of less
than $200,000, or (y) amend or modify the Lease to eliminate or materially
change, or otherwise waive or forfeit, any material rights or privileges of the
tenant under the Lease.

    

    7.7           Destruction of Books,
Records and Files.  If, after the Closing, Seller or any of its
Affiliates proposes to destroy or otherwise dispose of any books, records or
files relating to the Property (but not including any financial reports or other
information regarding the Property to the extent such financial reports or other
information is integrated into financial reports or other information regarding
the operations generally of Seller or such Affiliate), Seller shall deliver
prior notice thereof to Buyer and Buyer shall have a period of sixty (60) days
from receipt of such notice to deliver notice to Seller of its desire to take
possession of such books, records or files, in which event Seller shall deliver
to Buyer possession of such books, records or files at the earliest practicable
date.  Seller shall not destroy or otherwise dispose of such books,
records or files prior to the end of such sixty (60) day period.

     

    8.           Closing.

    

                          8.1           Closing
Date.  Subject to the satisfaction (or waiver by Buyer or
Seller as provided therein) of the conditions precedent in Articles 5 and 6
hereof, the 

     

    
      
        
           

        

        
          16

          
            

          

        

        
           

        

      

    

    

    transactions
contemplated by this Agreement shall be consummated at a closing (the “Closing”) at the
offices of Weissmann Wolff Bergman Coleman Grodin & Evall, LLP, 9665
Wilshire Boulevard, Ninth Floor, Beverly Hills, California 90212.  The
Closing shall occur on the date which is the first Friday occurring after the
date which is sixty-five (65) days after the Effective Date (the “Scheduled Closing
Date”).  If the Closing does not occur on the Scheduled Closing
Date by reason of the failure of any condition precedent set forth in Article 5
or 6 hereof (a “Non-Satisfied Condition
Precedent”), the party in whose favor the Non-Satisfied Condition
Precedent exists shall have the right to extend the Scheduled Closing Date until
the date which is the second Friday occurring after the date on which the
Non-Satisfied Condition Precedent is satisfied or
waived.  Notwithstanding the foregoing, this Agreement shall
automatically terminate if the Closing shall not have occurred on or before the
date which is the first Friday which is more than one hundred twenty-five (125)
days after the Effective Date (the “Outside Closing
Date”).  Notwithstanding anything to the contrary contained
herein, nothing herein shall be deemed to excuse or waive any breach or default
by either party of its obligations under this Agreement.  The date of
the Closing is sometimes referred to herein as the "Closing
Date."  The Closing shall be effective as of 8:00 a.m. (local
time) on the Closing Date.

    

    8.2           Deliveries by Buyer.
At the Closing, Buyer shall deliver to Seller the following (collectively, the
"Buyer
Deliveries"):

    

    8.2.1                      Payment of Purchase
Price.  Immediately available funds in an amount equal to the
Purchase Price paid to and received by Seller.

    

    8.2.2                      Assignment and Assumption of
Lease and Sublease.  Duly executed and, where necessary,
acknowledged counterparts of the Assignment and Assumption of Lease and Sublease
by and between Buyer and Seller in substantially the form of Exhibit C attached
hereto (the “Assignment and Assumption of
Sublease”).

    

    8.2.3                      Buyer’s Closing
Certificate.  A duly executed certificate, dated as of the
Closing Date, to the effect that the conditions specified in Sections 6.1 and
6.2 have been satisfied in accordance with the terms and provisions
hereof.

    

    8.2.4                      Additional
Deliveries.  Such additional documents, instruments and
agreements, signed and properly acknowledged by Buyer, if appropriate, as may be
necessary to comply with Buyer's obligations under this Agreement.

    

    8.3           Deliveries by
Seller.  At the Closing, Seller shall deliver to Buyer all of
the following (collectively, the "Seller
Deliveries"):

    

    8.3.1                      Assignment and Assumption of
Lease and Sublease.  Duly executed and, where necessary,
acknowledged counterparts of the Assignment and Assumption of Lease and
Sublease.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    
      

      8.3.2                      Seller’s Closing
Certificate.  A duly executed certificate, dated as of the
Closing Date, to the effect that the conditions specified in Sections 5.1 and
5.2 have been satisfied in accordance with the terms and provisions
hereof.

    

    

    8.3.3                      Additional
Deliveries.  Such additional documents, instruments and
agreements, signed and properly acknowledged by Seller, if appropriate, as may
be necessary to comply with Seller's obligations under this
Agreement.

    

    8.4           Closing
Costs.  Buyer and Seller shall each pay 50% of all documentary
transfer, excise or similar Taxes, if any, payable in connection with the
transactions contemplated by this Agreement.  Buyer and Seller shall
each bear their own legal and accounting costs and fees. Buyer and Seller shall
each pay 50% of all sales and similar Taxes payable in connection with the
transactions contemplated by this Agreement.

    

    8.5           Possession.  Subject
to the terms of the Sublease, possession of the Leased Premises shall be
delivered to Buyer on the Closing Date; provided, however, that Seller shall
deliver possession of all files for the Lease within five (5) Business Days
after the Closing Date.

    

    9.           Termination.  Notwithstanding
anything to the contrary contained herein, this Agreement may be terminated at
any time before the Closing (a) by mutual consent of Seller and Buyer; (b) by
Buyer, upon written notice to Seller, if Seller has breached any representation,
warranty, covenant or agreement, such breach has had, either individually or in
the aggregate, a Material Adverse Effect, and such breach is either not capable
of being cured prior to the Closing or, if such breach is capable of being
cured, is not so cured within ten (10) days of notice by Buyer to Seller of such
breach; or (c) by Seller, upon written notice to Buyer, if Buyer has breached
any representation, warranty, covenant or agreement, and such breach is either
not capable of being cured prior to the Closing or, if such breach is capable of
being cured, is not so cured within ten (10) days of notice by Seller to Buyer
of such breach.  If this Agreement is terminated, this Agreement shall
become null and void and have no further force or effect, and no party hereto
(or any of such party’s Affiliates, directors, officers, agents or
representatives), shall have any liability or obligation hereunder; provided,
however, that (i) the letter agreement dated as of January 15, 2007 by and among
Pacific, Consolidated and RDI (the “Confidentiality
Agreement”) shall remain in full force and effect, (ii) each party shall
bear its own fees and expenses incurred in connection with the negotiation and
documentation of this Agreement and the Transaction Documents, and (iii)
notwithstanding the foregoing, but subject to the terms of Article 10 below,
termination of this Agreement shall not release any party from any liability for
any breach by such party of any of its representations, warranties, covenants or
agreements contained in this Agreement prior to such termination.

    

    10.           Indemnification.

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    
      

      10.1           Indemnification by
Buyer.                                                                Subject
to the terms of this Article 10, Buyer shall indemnify and hold Seller, its
Affiliates and their respective employees, officers, directors, members,
managers, shareholders, agents, contractors, attorneys and representatives
(collectively, the “Seller Indemnified
Parties”) harmless from and against, and
agrees to promptly defend any Seller Indemnified Party from and reimburse any
Seller Indemnified Party for, any and all any and all liabilities, demands,
claims, actions, causes of action, costs, damages, deficiencies, Taxes,
penalties, fines and other losses and expenses, whether or not arising out of a
claim made by any third party, including all interest, penalties, reasonable
attorneys’ fees and expenses, and all amounts paid or incurred in connection
with any action, demand, proceeding, investigation or claim by any third party
(including any Governmental Authority) (“Losses”) which such
Seller Indemnified Party may at any time suffer or incur, or become subject to,
as a result of or in connection with:

    

    

    10.1.1                      any
untruth or inaccuracy in any representation or warranty of Buyer or any Buyer
Sub contained in this Agreement or in any other Transaction Document; provided,
however, that for purposes of determining an untruth or inaccuracy in any such
representation or warranty for purposes of this Section 10.1.1, the
representations and warranties of Buyer that are limited or qualified by
references to “material” or “materiality” or “Material Adverse Effect” or
similar qualifications shall be construed as if they were not limited or
qualified by such qualifications.

    

    10.1.2                      any
failure of Buyer or any Buyer Sub duly to perform or observe any term,
provision, covenant, agreement or condition contained in this Agreement or the
other Transaction Documents to be performed or observed by Buyer or such Buyer
Sub; or

    

    10.1.3                      any
claim or cause of action by any party arising on or after the Closing Date
against any Seller Indemnified Party (including, without limitation, any claim
or cause of action arising from the failure to obtain any required consents or
approvals, including, without limitation, consents or approvals from any party,
to the assignment of the Lease to Buyer) with respect to the Property, the
obligations of Seller assumed by Buyer or an Buyer Sub under this Agreement
(including the Assumed Liabilities) or any of the other Transaction Documents,
including any default by Buyer or any Buyer Sub under the Lease arising on or
after the Closing Date.

    

    10.2           Indemnification by
Seller.    Subject to the terms
of this Article 10, Seller shall indemnify and hold the Buyer, its Affiliates
and their respective employees, officers, directors, members, managers,
shareholders, agents, contractors, attorneys and representatives (collectively,
the “Buyer Indemnified
Parties”) harmless from and against, and agrees to promptly defend any
Buyer Indemnified Party from and reimburse any Buyer Indemnified Party for, any
and all Losses which such Buyer Indemnified Party may at any time suffer or
incur, or become subject to, as a result of or in connection
with:

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    
      10.2.1                      any
untruth or inaccuracy in any representation or warranty of Seller contained in
this Agreement or in any other Transaction Document; provided, however, that for
purposes of determining an untruth or inaccuracy in any such representation or
warranty for purposes of this Section 10.2.1, the representations and warranties
of Seller that are limited or qualified by references to “material” or
“materiality”
or “Material Adverse Effect” or similar qualifications shall be construed as if
they were not limited or qualified by such qualifications.

    

    

    10.2.2                      any
failure of Seller duly to perform or observe any term, provision, covenant,
agreement or condition contained in this Agreement or the other Transaction
Documents to be performed or observed by the Seller; or

    

    10.2.3                      except
as otherwise provided by and subject to the terms of Sections 3.3 and 3.4 above,
any claim or cause of action by any party arising on or after the Closing Date
against any Buyer Indemnified Party with respect to the obligations of Seller
retained by Seller under this Agreement or any of the other Transaction
Documents, including any default by Seller under the Lease arising prior to the
Closing Date or any failure of Seller to satisfy any of its liabilities other
than the Assumed Liabilities.

    

    10.3           Notification and Defense of
Claims.

    

    10.3.1                      A
party entitled to be indemnified pursuant to Section 10.1 or 10.2 (the “Indemnified Party”)
shall promptly notify the party or parties liable for such indemnification (the
“Indemnifying
Party”) in writing of any claim, action, lawsuit, proceeding,
investigation or demand which the Indemnified Party has determined has given or
could give rise to a right of indemnification under this Agreement; provided,
however, that a failure to give prompt notice or to include any specified
information in any notice will not affect the rights or obligations of any party
hereunder except and only to the extent that, as a result of such failure, any
party which was entitled to receive such notice was prejudiced as a result of
such failure.  Subject to the Indemnifying Party’s right to defend in
good faith third party claims as hereinafter provided, the Indemnifying Party
shall satisfy its obligations under this Section 10 within thirty (30) days
after the receipt of written notice thereof from the Indemnified
Party.

    

    10.3.2                      If
the Indemnified Party shall notify the Indemnifying Party of any claim or demand
pursuant to Section 10.3.1, and if such claim or demand relates to a claim or
demand asserted by a third party against the Indemnified Party, the Indemnifying
Party shall have the right to defend any such claim or demand asserted against
the Indemnified Party.  The Indemnified Party shall have the right to
participate in the defense of any such claim or demand at its own
expense.  Without limiting the generality of the foregoing, the
Indemnified Party shall not be entitled to indemnification for any fees or costs
of defending any such claim or demand unless and until the Indemnifying Party
elects not to assume the defense of such claim or demand.  The
Indemnifying Party shall notify the Indemnified Party in writing, as promptly as
possible (but in any case five (5) Business Days before the due date for the
answer or response to 

     

    
      
        
           

        

        
          20

          
            

          

        

        
           

        

      

    

    

    a claim)
after the date of the notice of claim given by the Indemnified Party to the
Indemnifying Party under Section 10.3.1 of its election to defend any such third
party claim or demand.  So long as the Indemnifying Party is defending
in good faith any such claim or demand asserted by a third party against the
Indemnified Party, the Indemnified Party shall not settle or compromise such
claim or demand without the prior written consent of the Indemnifying Party
(which consent may be granted or withheld in the Indemnifying Party’s sole and
absolute discretion), and the Indemnified Party shall make available to the
Indemnifying Party or its agents all records and other material in the
Indemnified Party’s possession reasonably required by it for its use in
contesting any third party claim or demand.  In the event the
Indemnifying Party elects to defend such claim or action, the Indemnifying Party
shall have the right to settle or compromise such claim or action without the
consent of the Indemnified Party, provided that the terms of the settlement or
compromise impose no additional obligations on the Indemnified Party with
respect to the subject matter of the claim or demand for which the Indemnifying
Party has not agreed to indemnify the Indemnified Party.

    

    10.4           Survival of Representations
and Warranties.  The representations and warranties of the
parties contained in this Agreement and the other Transaction Documents, shall
survive the Closing until March 31, 2009, except that the representations and
warranties set forth in Sections 3.1.1, 3.1.2, 3.1.4 (second, third, and
penultimate sentences only), and 3.1.6 shall survive until the applicable
statute of limitations has run (the “Survival
Period”).  Notwithstanding any other provision to the contrary,
no party shall be required to indemnify, defend or hold harmless any other party
pursuant to Section 10.1.1 or 10.2.1, unless the Indemnified Party has asserted
a claim with respect to such matters within the Survival Period.

    

    10.5           Characterization of
Payments. Any
payments made pursuant to this Article 10 shall be treated for all Tax purposes
as adjustments to the Purchase Price and no party or any of its Affiliates shall
take any position on a Tax return or in any proceeding with any taxing authority
contrary to such treatment, unless otherwise required by law. 

    

    10.6           Limitations.  Notwithstanding anything
to the contrary contained in this Agreement or in any of the other Transaction
Documents, the parties’ respective indemnification obligations under this
Agreement shall be subject to the limitations contained in this Section
10.6. 

    

    10.6.1                      Buyer
shall not be required to indemnify, defend or hold harmless any Seller
Indemnified Party, and Seller shall not be required to indemnify, defend or hold
harmless any Buyer Indemnified Party, for any inaccuracy in or breach of a
representation or warranty pursuant to Section 10.1.1 or 10.2.1, as
applicable, the aggregate amount of all such Losses of the Seller
Indemnified Parties or the Buyer Indemnified Parties, respectively, exceeds an
aggregate amount equal to $81,250 (the “Deductible”), after
which event the Seller Indemnified Parties or the Buyer Indemnified Parties, as
applicable, shall be entitled to recover for all Losses in excess of the
Deductible, subject to the other terms of this Agreement; provided, however,
that the 

     

    
      
        
           

        

        
          21

          
            

          

        

        
           

        

      

    

     

    limitations set forth in this Section 10.6.1 shall not apply to
Losses resulting from or arising in connection with any breach of the
representations and warranties of Seller under Sections 3.1.9 hereof.

       

      
        10.6.2                      Buyer
shall not be required to indemnify, defend or hold harmless the Seller
Indemnified Parties, and Seller shall not be required to indemnify, defend or
hold harmless the Buyer Indemnified Parties, for Losses in excess of an
aggregate amount equal to 100% of
the Purchase Price; provided, however, that the foregoing limitation shall not
apply to (a) the payment of the Purchase Price by Buyer to Seller, (b) any
indemnification pursuant to any of Sections 10.1.3 or 10.2.3, as applicable, or
(c) any indemnification arising out of a breach by Seller of its representation
and warranty in Sections 3.1.4 (second, third, and penultimate sentences only)
above.

      

    

    

    10.6.3                      The
parties agree, for themselves and on behalf of their respective Affiliates,
successors and assigns, that with respect to each indemnification obligation
under this Agreement or any of the other Transaction Documents, the amount of
any Losses shall be reduced by the amount, if any, of any federal, state or
local income Tax benefit realized or any insurance proceeds
received.

     

    
      10.6.4                      The
parties agree that, except as otherwise expressly provided elsewhere in this
Agreement or in any other Transaction Document, the indemnification provisions
of this Article 10 shall be the sole and exclusive remedy for any breach of or
inaccuracy in any representation, warranty, covenant or agreement contained in
this Agreement or in any of the other Transaction Documents; provided, that
either party shall be entitled to seek specific performance of the other party’s
obligation to close the transaction contemplated by this
Agreement.

    

     

    
      10.6.5                      No
Indemnified Party shall seek or be entitled to, or accept payment of, any award
or judgment for consequential, incidental, special, indirect or punitive damages
or lost profits suffered by such Indemnified Party, whether based on statute,
contract, tort or otherwise, and whether or not arising from the Indemnifying
Party’s sole, joint or concurrent negligence, strict liability or other
fault.

    

    

    10.6.6                      Seller
shall have no indemnification obligation hereunder to the extent any Losses
arose out of or resulted from the inaccuracy of any representation or warranty
of Seller, and Buyer or any Affiliate of Buyer had actual knowledge of such
inaccuracy prior to the execution and delivery of this Agreement by
Buyer.  For purposes of this Section, the term “actual knowledge”
means the actual knowledge of any one or more of John Hunter, Andrzej
Matyczynski, or S. Craig Tompkins.  Additionally, Buyer shall be
deemed to have “actual knowledge” of any fact which has been disclosed in
writing by Seller, its Affiliates or their respective officers, employees,
agents or representatives to any outside attorney or accountant of
Buyer.

    

    11.           Certain Defined
Terms.  For purposes of this Agreement, the following terms
have the meaning set forth below:

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    
      “Affiliate” means, as
to any Person, any other Person which directly or indirectly controls, or is
under common control with, or is controlled by, such Person.  As used
in this definition, “control” (including, with its correlative meanings,
“controlled by” and “under common control with”) shall mean possession, directly
or indirectly, of the power to direct or cause the direction of management or
policies (whether through ownership of securities or partnership or other
ownership interests by contract or otherwise) of such Person;
provided, however, in no event shall either of Michael Forman or Christopher
Forman be deemed an Affiliate of Buyer.

    

    

    “Business Day” means
Monday through Friday, excluding any day of the year on which banks are required
or authorized to close in California.

    

    “Code” means the
Internal Revenue Code of 1986, as amended, and any successor law.

    

    “Environmental Laws”
means all applicable laws, regulations and other requirements of any
Governmental Authority relating to pollution, health or safety or to the
protection of human health, safety or the environment.

    

    “GAAP” means United
States generally accepted accounting principles, as in effect from time to
time.

    

    “Governmental
Authority” means any U.S., federal, state or local government,
governmental authority, regulatory or administrative agency or commission or any
court, tribunal, or judicial or arbitral body (or any political subdivision
thereof).

    

    “Hazardous Materials”
means any hazardous substance, hazardous waste, contaminant, pollutant or toxic
substance (as such terms are defined in any applicable Environmental Law);
provided that “Hazardous Materials” shall not include customary products used
and/or stored by Seller in the ordinary course of its business.

    

    “Lien” means any
mortgage, pledge, security interest, encumbrance, lien (statutory or other) or
charge of any kind, including, without limitation, any conditional sale or other
title retention agreement, any lease in the nature of a conditional sale or
title retention agreement, and including any lien or charge outstanding by
statute or other laws which secures the payment of a debt (including, without
limitation, any Tax) or the performance of an obligation.

    

    “Material Adverse
Effect” means a material adverse effect on the value of the Property,
taken as a whole, provided, however that any such material adverse effect
arising out of or resulting from an event or series of events or circumstances
affecting (a) the motion picture industry generally or (b) any one or more
markets in which any of the theaters operated at the Property are located, shall
not constitute a Material Adverse Effect, including, without limitation, the
opening for business of any theater competitive to any such
theater.

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

     

    
      “Permitted Liens”
means the following Liens: (a) Liens for Taxes, assessments or other
governmental charges or levies not yet due and payable; and (b) statutory Liens
of landlords and Liens of carriers, warehousemen, mechanics, materialmen and
other Liens imposed by Law and on a basis consistent with past practice for
amounts not yet due.

       

    

    “Person” means any
individual, corporation, limited liability company, partnership, joint venture,
association, trust, any other unincorporated organization or Governmental
Authority.

    

    “Tax” or “Taxes” means all
federal, state, local or foreign taxes, including, but not limited to, income,
gross income, gross receipts, capital, production, excise, employment, sales,
use, transfer, transfer gain, ad valorem, premium, profits, license, capital
stock, franchise, severance, stamp, withholding, Social Security, employment,
unemployment, disability, worker’s compensation, payroll, utility, windfall
profits, customs duties, personal property, real property, environmental,
registration, alternative or add-on minimum, estimated and other taxes,
governmental fees or like charges of any kind whatsoever, including any
interest, penalties or additions thereto whether disputed or not.

    

     “Theater Level Cash
Flow” means, with respect to any movie theater for any
period,  (i) the gross revenues from the operation of such theater for
such period, less (ii) the film
costs and cost of concessions for such theater for such period, less (iii) the
operating expenses (including, without limitation, payroll, payroll benefits,
repairs and maintenance, supplies, utilities, advertising, insurance, security
services, taxes and licenses) of such theater for such period, and less (iv) the
occupancy expenses (including, without limitation, the base or minimum rent,
percentage rent, additional rent and real estate taxes) of such theater for such
period, in each case calculated in accordance with GAAP, applied on a consistent
basis (with the exception that rents will not be calculated on a straight line
basis as would otherwise be required under FASB 13).  For the
avoidance of doubt, “operating expenses” shall exclude any general or
administrative expenses not incurred at the theater level, and any depreciation,
amortization, interest or income tax costs.

    

    “Transaction
Documents” means this Agreement and all documents, agreements and
instruments contemplated by and being delivered pursuant to or in connection
with this Agreement.

    

    12.           Notices.  In
the event either party desires or is required to give notice to the other party
in connection with this Agreement, the same shall be in writing and shall be
delivered in person or by recognized overnight air courier service, or deposited
with the United States Postal Service, postage prepaid, or certified mail,
return receipt requested, addressed to Buyer or Seller at the appropriate
address as set forth below:

    

                    
If to
Seller:                            Kenmore
Rohnert, LLC

    120 N. Robertson
Boulevard

    Los Angeles, California
90048

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

     

    
      Attention: Ira S. Levin,
Esq.

       

    

    With a copy
to:                    Weissmann
Wolff Bergman Coleman

    Grodin
& Evall, LLP

    9665 Wilshire Boulevard, Ninth
Floor

    Beverly Hills, California
90212

    Attention:  Mitchell Evall
& Andrew Schmerzler

    

    If to
Buyer:                            Consolidated
Amusement Theatres, Inc.

    c/o Reading International,
Inc.

    500 Citadel Drive, Suite
300

    Commerce, California
90040

    Attention: Chief Operating
Officer

    

    With a copy
to:                     Troy
& Gould Professional Corporation

    1801 Century Park East, Suite
1600

    Los Angeles, California
90067

    Attention:  Dale E. Short,
Esq.

    

    Any such
notice shall be deemed to have been given on the date so delivered, if delivered
personally or by overnight air courier service, or, if mailed, on the date shown
on the return receipt as the date of delivery or the date on which the Post
Office certified that it was unable to deliver, whichever is applicable. Any
party may, by written notice to the other party, specify a different address to
which notices shall be given, by sending notice thereof in the manner set forth
above.  No copies of notices given to any party after the date which
is one (1) year after the Closing Date also need be given to outside counsel for
such party.

    

    13.           Miscellaneous.

    

    13.1           Entire Agreement;
Amendment.  This Agreement (including all Exhibits and
Schedules hereto), the other Transaction Documents and the Confidentiality
Agreement contain all of the terms and conditions agreed upon by the parties
hereto with reference to the subject hereof.  No other prior or
concurrent agreements not specifically referred to herein, oral or otherwise,
shall be deemed to exist or to bind any of the parties hereto. No officer or
employee of any party shall have authority to make any representation or promise
not contained in this Agreement and each of the parties hereto agrees that it is
not executing this Agreement in reliance upon any such representation or
promise. This Agreement may not be modified or changed except by written
instruments signed by all of the parties hereto. Subject to the restrictions on
assignment set forth herein this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and
assigns.

    

    13.2           Assignment.  Except
as permitted by Section 1.3, Buyer may not assign or otherwise transfer all or
any of its rights, obligations or interests under this Agreement without the
prior written consent of Seller.  Except as permitted by Section

     

    
      
        
           

        

        
          25

          
            

          

        

        
           

        

      

    

    

    1.4,
Seller may not assign or otherwise transfer all or any of its rights,
obligations or interests under this Agreement without the prior written consent
of Buyer.  No assignment of this Agreement by any party shall be
effective until an executed written assumption by such assignee of the assigning
party’s obligations under this Agreement is delivered to the other party and no
such assignment shall relieve any party of its obligations under this
Agreement.

    

    13.3           Governing
Law.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law of such state.

    

    13.4           Drafting.  This
Agreement has been jointly negotiated and drafted, and shall be construed as a
whole according to its fair meaning and not strictly for or against any
party.

    

    13.5           Further
Assurances.  Each of the parties hereto agrees that it will,
forthwith upon any request by the other party, cooperate fully in the
preparation, execution, acknowledgment, delivery and recording of any
agreements, instruments, memoranda or documents reflecting or in furtherance of
any of the transactions contemplated by this Agreement.

    

    13.6           Intentionally
omitted.

    

    13.7           Confidentiality; Press
Releases.  Except and to the extent required by applicable law
(including, without limitation, Buyer’s obligation to file a report on Form 8-K
with the Securities and Exchange Commission and issue a press release in
connection with the execution and delivery of this Agreement) and the rules and
regulations of the American Stock Exchange, and except as may be necessary to
consummate the transactions contemplated hereby, until the Closing no party
hereto shall disclose the existence of this Agreement, or any of the terms or
provisions hereof, or make any press release or similar disclosure, without the
prior written consent of the other party.  To the extent reasonably
feasible, the initial press release or other announcement or notice regarding
the transactions contemplated by this Agreement shall be made jointly by the
parties; provided, however, that nothing in this Agreement shall prohibit any
party from making press release required by applicable law. Upon the Closing,
the confidentiality and non-disclosure obligations of the parties hereunder and
under the Confidentiality Agreement shall terminate, except to the extent that
such obligations relate to documentation or information relating to any
properties of Seller other than the Property and the businesses conducted
thereon, which obligations shall survive until the expiration of the
Confidentiality Agreement in accordance with its
terms.  Notwithstanding the foregoing, following the Closing, without
the prior written consent of Buyer, neither Seller nor any of its Affiliates
shall, directly or indirectly, disclose to any Person any non-public information
regarding the Property, except that Seller and its Affiliates may disclose such
information (a) in connection with matters related to the sale of the Property
or the other transactions contemplated by the 

     

    
      
        
           

        

        
          26

          
            

          

        

        
           

        

      

    

    

    Transaction
Documents; (b) in connection with the preparation of reports and documents to be
filed by Seller or any of its Affiliates with any Governmental Authority; (c) to
Seller’s officers, directors, members, managers, employees, agents,
representatives, attorneys and accountants provided that Seller shall be
responsible for any non-permitted disclosure of such information by any such
Persons; (d) if required to do so by a Governmental Authority of competent
jurisdiction, and (e) if such information is in the public domain or is
previously published or disseminated by a third party other than pursuant to the
provisions of a confidentiality agreement entered with Buyer.

    

    13.8           Waiver.  No
action taken pursuant to this Agreement shall be deemed to constitute a waiver
by the party taking such action of compliance with any representations,
warranties, covenants or agreements contained in this Agreement. The waiver by
any party of a breach of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach.

    

    13.9           Third
Parties.  Except as otherwise expressly provided for or
contemplated by this Agreement, nothing in this Agreement, express or implied,
shall or is intended to confer upon any Person other than the parties hereto, or
their respective successors or assigns, any rights or remedies of any nature or
kind whatsoever under or by reason of this Agreement.

    

    13.10                      Section
Headings.  Section headings are provided herein for convenience
only and shall not serve as a basis for interpretation or construction of this
Agreement, nor as evidence of the intention of the parties hereto.

    

    13.11                      Severability.  If
any provision of this Agreement as applied to either party or to any
circumstance shall be adjudged by a court to be void or unenforceable, the same
shall in no way affect any other provision of this Agreement, the application of
any such provision in any other circumstances or the validity or enforceability
of this Agreement as a whole.

    

    13.12                      Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute but one and the
same instrument.

    

    13.13                      Reference.  Except
as otherwise expressly provided in this Agreement, any dispute of any nature or
character whatsoever between the parties and arising under or with respect to
this Agreement or any of the other Transaction Documents, 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:

    

    13.13.1                      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,

     

    
      
        
           

        

        
          27

          
            

          

        

        
           

        

      

    

     

    pursuant to California Code of Civil Procedure Section 640, by the
presiding judge of the Los Angeles County Superior Court;

    13.13.2                      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;

    

    13.13.3                      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;

    

    13.13.4                      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;

    

    13.13.5                      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

    

    13.13.6                      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.

     

    13.14                      Interpretative
Matters

    .  Unless
the context otherwise requires, (a) all references to Articles, Sections or
Schedules are to Articles, Sections or Schedules in this Agreement,
(b) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with GAAP, (c) words in the singular
or plural include the singular and plural, and pronouns stated in either the
masculine, the feminine or neuter gender shall include the masculine, feminine
and neuter and (d) whenever the words “include,” “includes” or “including” are
used in this Agreement they shall be deemed to be followed by the words “without
limitation.”

    

    13.15                      No Personal
Liability.  Under no circumstances shall any personal liability
or obligation under this Agreement or under any of the other Transaction
Documents be imposed or assessed against any shareholder, member, manager,
officer, director, employee or agent of any party to this Agreement or of any of
such party’s Affiliates, and no party (nor any party claiming through such
party) shall commence any proceedings or otherwise seek to impose any liability
whatsoever against any such shareholders, member, manager, officer, director,
employee or agents.

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

       

    

    13.16                      Guaranty.  Concurrently
herewith, RDI has executed and delivered to Seller a Guaranty in substantially
the form of Exhibit
D attached hereto.

    

    

    [Signatures
contained on next page]

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

       

    

    IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the date first above written.

    

    KENMORE ROHNERT, LLC,

    a Delaware limited liability
company

    

    By:            Kenmore Properties, Inc.,

                                                                                                     
a Washington corporation,

                                                                                                    
as its sole member

     

                                                                                   
By:    /s/ James D.
Vandever

                                                                                    Its:    Vice
President

    

    

                
CONSOLIDATED AMUSEMENT THEATRES, INC., 

                                                
a Nevada corporation

     

                                                
By:    /s/ John
Hunter

                                                 Its:    Chief Operating
Officer

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    

    LIST
OF EXHIBITS

    

    Exhibit
A                      The
Lease

    Exhibit
B                      The
Sublease

    Exhibit
C                      Assignment
and Assumption of Lease and Sublease

    Exhibit
D                      RDI
Guaranty

    

    LIST
OF SCHEDULES

    

    Schedule
3.1.3             Required
Consents

    Schedule
4.1.4             Manville
Lease Summary and Manville P&Ls

     

    
      
         

      

      
        31

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00139-of-00352.parquet"}]]