Document:

exhibit10_72.htm

    
       

    

    CREDIT
AGREEMENT

    Dated as
of February 21, 2008

    among

    CONSOLIDATED
AMUSEMENT THEATRES, INC.,

    as
Borrower,

    THE OTHER
CREDIT PARTIES SIGNATORY HERETO,

    as Credit
Parties,

    THE
LENDERS SIGNATORY HERETO

    FROM TIME
TO TIME,

    as
Lenders,

    and

    GENERAL
ELECTRIC CAPITAL CORPORATION,

    as
Administrative Agent, Agent and Lender

    GE
CAPITAL MARKETS, INC.

    as Lead
Arranger

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
OF CONTENTS

     

    

     

    Page

    

      
        	
                1.           AMOUNT
      AND TERMS OF CREDIT

              	
                1

              
	
                1.1Credit
      Facilities

              	
                2

              
	
                1.2Letters
      of Credit

              	
                5

              
	
                1.3Prepayments

              	
                5

              
	
                1.4Use
      of Proceeds

              	
                8

              
	
                1.5Interest
      and Applicable Margins

              	
                8

              
	
                1.6Reserved

              	
                11

              
	
                1.7Reserved

              	
                11

              
	
                1.8Cash
      Management Systems

              	
                11

              
	
                1.9Fees

              	
                11

              
	
                1.10Receipt
      of Payments

              	
                11

              
	
                1.11Application
      and Allocation of Payments

              	
                11

              
	
                1.12Loan
      Account and Accounting

              	
                12

              
	
                1.13Indemnity

              	
                13

              
	
                1.14Access

              	
                14

              
	
                1.15Taxes

              	
                14

              
	
                1.16Capital
      Adequacy; Increased Costs; Illegality

              	
                15

              
	
                1.17Single
      Loan

              	
                17

              
	
                2.           CONDITIONS
      PRECEDENT

              	
                17

              
	
                2.1Conditions
      to the Initial Loans

              	
                17

              
	
                2.2Further
      Conditions to Each Loan

              	
                19

              
	
                3.           REPRESENTATIONS
      AND WARRANTIES

              	
                19

              
	
                3.1Corporate
      Existence; Compliance with Law

              	
                19

              
	
                3.2Executive
      Offices, Collateral Locations, FEIN, Organizational Number

              	
                20

              
	
                3.3Corporate
      Power, Authorization, Enforceable Obligations

              	
                20

              
	
                3.4Financial
      Statements and Projections

              	
                20

              
	
                3.5Material
      Adverse Effect

              	
                21

              
	
                3.6Ownership
      of Property; Liens

              	
                22

              
	
                3.7Labor
      Matters

              	
                22

              
	
                3.8Ventures,
      Subsidiaries and Affiliates; Outstanding Stock and
      Indebtedness

              	
                23

              
	
                3.9Government
      Regulation

              	
                23

              
	
                3.10Margin
      Regulations

              	
                23

              
	
                3.11Taxes

              	
                23

              
	
                3.12ERISA

              	
                24

              
	
                3.13No
      Litigation

              	
                25

              
	
                3.14Brokers

              	
                25

              
	
                3.15Intellectual
      Property

              	
                25

              
	
                3.16Full
      Disclosure

              	
                25

              
	
                3.17Environmental
      Matters

              	
                26

              
	
                3.18Insurance

              	
                27

              
	
                3.19Deposit
      and Disbursement Accounts

              	
                27

              
	
                3.20[Reserved]

              	
                27

              
	
                3.21Trade
      Relations

              	
                27

              
	
                3.22Bonding;
      Licenses

              	
                27

              
	
                3.23Solvency

              	
                27

              
	
                3.24Acquisition
      Agreement

              	
                27

              
	
                3.25Status
      of Holdings

              	
                28

              
	
                3.26OFAC

              	
                28

              
	
                3.27Patriot
      Act

              	
                28

              
	
                4.           FINANCIAL
      STATEMENTS AND INFORMATION

              	
                28

              
	
                4.1Reports
      and Notices

              	
                28

              
	
                4.2Communication
      with Accountants

              	
                28

              
	
                5.           AFFIRMATIVE
      COVENANTS

              	
                29

              
	
                5.1Maintenance
      of Existence and Conduct of Business

              	
                29

              
	
                5.2Payment
      of Charges.

              	
                29

              
	
                5.3Books
      and Records

              	
                30

              
	
                5.4Insurance;
      Damage to or Destruction of Collateral

              	
                30

              
	
                5.5Compliance
      with Laws

              	
                31

              
	
                5.6Supplemental
      Disclosure

              	
                31

              
	
                5.7Intellectual
      Property

              	
                32

              
	
                5.8Environmental
      Matters

              	
                32

              
	
                5.9Access
      Agreements; Liens on Real Estate Interests

              	
                32

              
	
                5.10Interest
      Rate/Currency Fluctuations Protection

              	
                33

              
	
                5.11Further
      Assurances

              	
                34

              
	
                5.12Future
      Credit Parties

              	
                34

              
	
                5.13Post
      Closing

              	
                34

              
	
                6.           NEGATIVE
      COVENANTS

              	
                35

              
	
                6.1Mergers,
      Subsidiaries, Etc.

              	
                35

              
	
                6.2Investments;
      Loans and Advances

              	
                38

              
	
                6.3Indebtedness

              	
                39

              
	
                6.4Employee
      Loans and Affiliate Transactions

              	
                39

              
	
                6.5Capital
      Structure and Business

              	
                40

              
	
                6.6Guaranteed
      Indebtedness

              	
                40

              
	
                6.7Liens

              	
                40

              
	
                6.8Sale
      of Stock and Assets

              	
                41

              
	
                6.9ERISA

              	
                41

              
	
                6.10Financial
      Covenants

              	
                41

              
	
                6.11Hazardous
      Materials

              	
                41

              
	
                6.12Sale
      Leasebacks

              	
                42

              
	
                6.13Restricted
      Payments

              	
                42

              
	
                6.14Change
      of Corporate Name or Location; Change of Fiscal Year

              	
                42

              
	
                6.15No
      Impairment of Intercompany Transfers

              	
                42

              
	
                6.16Real
      Estate Purchases

              	
                42

              
	
                6.17Changes
      Relating to Material Contracts

              	
                43

              
	
                6.18Holdings

              	
                43

              
	
                7.           TERM

              	
                43

              
	
                7.1Termination

              	
                43

              
	
                7.2Survival
      of Obligations Upon Termination of Financing Arrangements

              	
                43

              
	
                8.           EVENTS
      OF DEFAULT; RIGHTS AND REMEDIES

              	
                44

              
	
                8.1Events
      of Default

              	
                44

              
	
                8.2Remedies

              	
                46

              
	
                8.3Waivers
      by Credit Parties

              	
                46

              
	
                9.           ASSIGNMENT
      AND PARTICIPATIONS; APPOINTMENT OF AGENT

              	
                47

              
	
                9.1Assignment
      and Participations

              	
                47

              
	
                9.2Appointment
      of Agent

              	
                50

              
	
                9.3Agent's
      Reliance, Etc.

              	
                51

              
	
                9.4GE
      Capital and Affiliates

              	
                51

              
	
                9.5Lender
      Credit Decision

              	
                51

              
	
                9.6Indemnification

              	
                52

              
	
                9.7Successor
      Agent

              	
                52

              
	
                9.8Setoff
      and Sharing of Payments

              	
                53

              
	
                9.9Advances;
      Payments; Non-Funding Lenders; Information; Actions in
    Concert

              	
                53

              
	
                10.           SUCCESSORS
      AND ASSIGNS

              	
                55

              
	
                10.1Successors
      and Assigns

              	
                55

              
	
                11.           MISCELLANEOUS

              	
                56

              
	
                11.1Complete
      Agreement; Modification of Agreement

              	
                56

              
	
                11.2Amendments
      and Waivers

              	
                56

              
	
                11.3Fees
      and Expenses

              	
                58

              
	
                11.4No
      Waiver

              	
                59

              
	
                11.5Remedies

              	
                60

              
	
                11.6Severability

              	
                60

              
	
                11.7Conflict
      of Terms

              	
                60

              
	
                11.8Confidentiality

              	
                60

              
	
                11.9GOVERNING
      LAW

              	
                61

              
	
                11.10Notices

              	
                61

              
	
                11.11Section
      Titles

              	
                63

              
	
                11.12Counterparts

              	
                63

              
	
                11.13WAIVER
      OF JURY TRIAL

              	
                63

              
	
                11.14Press
      Releases and Related Matters

              	
                63

              
	
                11.15Reinstatement

              	
                64

              
	
                11.16Advice
      of Counsel

              	
                64

              
	
                11.17No
      Strict Construction

              	
                64

              

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    INDEX OF
APPENDICES

     

    

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      
        	
                Annex
      A (Recitals)

              	
                -Definitions

              
	
                Annex
      B (Section 1.2)

              	
                -Letters
      of Credit

              
	
                Annex
      C (Section 1.8)

              	
                -Cash
      Management System

              
	
                Annex
      D (Section 2.1(a))

              	
                -Closing
      Checklist

              
	
                Annex
      E (Section 4.1(a))

              	
                -Financial
      Statements and Projections -- Reporting

              
	
                Annex
      F (Section 4.1(b))

              	
                -Collateral
      Reports

              
	
                Annex
      G (Section 6.10)

              	
                -Financial
      Covenants

              
	
                Annex
      H (Section 9.9(a))

              	
                -Lenders'
      Wire Transfer Information

              
	
                Annex
      I (Section 11.10)

              	
                -Notice
      Addresses

              
	
                Annex
      J (from Annex A-Commitments definition)

              	
                -Commitments
      as of Closing Date

              
	 
      	 
      
	
                Exhibit
      1.1(a)(i)

              	
                -Form
      of Notice of Revolving Credit Advance

              
	
                Exhibit
      1.1(a)(ii)

              	
                -Form
      of Revolving Note

              
	
                Exhibit
      1.1(b)

              	
                -Form
      of Term Note

              
	
                Exhibit
      1.5(e)

              	
                -Form
      of Notice of Conversion/Continuation

              
	
                Exhibit
      9.1(a)

              	
                -Form
      of Assignment Agreement

              
	
                Exhibit
      B-1

              	
                -Application
      for Standby Letter of Credit

              
	
                Schedule  1.1

              	
                -Agent's
      Representatives

              
	
                Disclosure
      Schedule  1.4

              	
                -Sources
      and Uses; Funds Flow Memorandum

              
	
                Disclosure
      Schedule  3.1

              	
                -Type
      of Entity; State of Organization

              
	
                Disclosure
      Schedule  3.2

              	
                -Executive
      Offices, Collateral Locations, FEIN

              
	
                Disclosure
      Schedule  3.4(a)

              	
                -Financial
      Statements

              
	
                Disclosure
      Schedule  3.4(b)

              	
                -Pro
      Forma

              
	
                Disclosure
      Schedule  3.4(c)

              	
                -Projections

              
	
                Disclosure
      Schedule  3.6

              	
                -Real
      Estate and Leases

              
	
                Disclosure
      Schedule  3.7

              	
                -Labor
      Matters

              
	
                Disclosure
      Schedule  3.8                                                      

              	
                -Ventures,
      Subsidiaries and Affiliates; Outstanding Stock

              
	
                Disclosure
      Schedule  3.11

              	
                -Tax
      Matters

              
	
                Disclosure
      Schedule  3.12

              	
                -ERISA
      Plans

              
	
                Disclosure
      Schedule  3.13

              	
                -Litigation

              
	
                Disclosure
      Schedule  3.14

              	
                -Brokers

              
	
                Disclosure
      Schedule  3.15

              	
                -Intellectual
      Property

              
	
                Disclosure
      Schedule  3.17

              	
                -Hazardous
      Materials

              
	
                Disclosure
      Schedule  3.18

              	
                -Insurance

              
	
                Disclosure
      Schedule  3.19

              	
                -Deposit
      and Disbursement Accounts

              
	
                Disclosure
      Schedule  3.22

              	
                -Bonds;
      Patent, Trademark Licenses

              
	
                Disclosure
      Schedule  6.3

              	
                -Indebtedness

              
	
                Disclosure
      Schedule  6.4(a)

              	
                -Transactions
      with Affiliates

              
	
                Disclosure
      Schedule  6.7

              	
                -Existing
      Liens

              

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

     

    This
CREDIT AGREEMENT (this “Agreement”), dated as of February 21, 2008 among
CONSOLIDATED AMUSEMENT THEATRES, INC., a Nevada corporation (“Borrower”); the other
Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a
Delaware corporation (in its individual capacity, “GE Capital”), for
itself, as Lender, and as Agent for Lenders, and the other Lenders signatory
hereto from time to time.

     

    RECITALS

     

    WHEREAS,
Borrower has requested that Lenders extend revolving and term credit facilities
to Borrower of up to Fifty Five Million Dollars ($55,000,000) in the aggregate
for the purpose of funding a portion of the Acquisition (as defined herein) and
to provide (a) working capital financing for Borrower and its Subsidiaries and
(b) funds for other general corporate purposes of Borrower and its
Subsidiaries; and for these purposes, Lenders are willing to make certain loans
and other extensions of credit to Borrower of up to such amount upon the terms
and conditions set forth herein; and

     

    WHEREAS,
Borrower has agreed to secure all of its obligations under the Loan Documents
(as defined herein) by granting to Agent (as defined herein), for the benefit of
Agent and Lenders, a security interest in and lien upon all of its existing and
after-acquired personal and real property; and

     

    WHEREAS,
Reading International, Inc., a Nevada corporation (“Reading”) is willing
to guarantee all of the obligations of Borrower to Agent and Lenders under the
Loan Documents, subject to certain release provisions more particularly set
forth in the Reading Guaranty (as defined herein); and

     

    WHEREAS,
Consolidated Amusement Holdings, Inc., a Nevada corporation (“Holdings”) is willing
to guarantee all of the obligations of Borrower to Agent and Lenders under the
Loan Documents and to pledge to Agent, for the benefit of Agent and Lenders, all
of the Stock of Borrower to secure such guaranty; and

     

    WHEREAS,
all Domestic Subsidiaries of Borrower are willing to guarantee all of the
obligations of Borrower to Agent and Lenders under the Loan Documents and to
grant to Agent, for the benefit of Agent and Lenders, a security interest in and
lien upon all of such existing and after-acquired personal and real property to
secure such guaranty; and

     

    WHEREAS,
capitalized terms used in this Agreement shall have the meanings ascribed to
them in Annex A
and, for purposes of this Agreement and the other Loan Documents, the rules of
construction set forth in Annex A shall
govern.  All Annexes, Disclosure Schedules, Exhibits and other
attachments (collectively, “Appendices”) hereto,
or expressly identified to this Agreement, are incorporated herein by reference,
and taken together with this Agreement, shall constitute but a single
agreement.  These Recitals shall be construed as part of the
Agreement.

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, and for other good and valuable consideration, the parties hereto
agree as follows:

     

    1.      AMOUNT
AND TERMS OF CREDIT

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

     

    1.1           Credit
Facilities.

     

    (a)           Revolving Credit
Facility.

     

    (i)           Subject
to the terms and conditions hereof, each Revolving Lender agrees to make
available to Borrower from time to time until the Commitment Termination Date
its Pro Rata Share of advances (each, a “Revolving Credit
Advance”).  The Pro Rata Share of the Revolving Loan of any
Revolving Lender shall not at any time exceed its separate Revolving Loan
Commitment.  The obligations of each Revolving Lender hereunder shall
be several and not joint.  Until the Commitment Termination Date and
subject to the terms and conditions hereof, Borrower may from time to time
borrow, repay and reborrow under this Section 1.1(a); provided, that the
amount of any Revolving Credit Advance to be made at any time shall not exceed
Borrowing Availability at such time.  Each Revolving Credit Advance
shall be made on notice by Borrower to one of the representatives of Agent
identified in Schedule
1.1 at the address specified therein.  Any such notice must be
given no later than (1) 1:00p.m. (New York time) on the Business Day of the
proposed Revolving Credit Advance, in the case of an Index Rate Loan, or (2)
1:00 p.m. (New York time) on the date which is three (3) Business Days prior to
the proposed Revolving Credit Advance, in the case of a LIBOR
Loan.  Each such notice (a ”Notice of Revolving Credit
Advance”) must be given in writing (by telecopy, overnight courier, or
Electronic Transmission) substantially in the form of Exhibit 1.1(a)(i),
and shall include the information required in such Exhibit and such other
information as may be reasonably required by Agent with respect to the use of
proceeds.   If
Borrower desires to have the Revolving Credit Advances bear interest by
reference to a LIBOR Rate, it must comply with Section
1.5(e).

     

    (ii)           Except
as provided in Section
1.12, Borrower shall execute and deliver to each Revolving Lender a note
to evidence the Revolving Loan Commitment of that Revolving
Lender.  Each note shall be in the principal amount of the Revolving
Loan Commitment of the applicable Revolving Lender, dated the Closing Date and
substantially in the form of Exhibit
1.1(a)(ii)  (each a “Revolving Note” and,
collectively, the “Revolving
Notes”).  Each Revolving Note shall represent the obligation of
Borrower to pay the amount of the applicable Revolving Lender’s Revolving Loan
Commitment or, if less, such Revolving Lender's Pro Rata Share of the aggregate
unpaid principal amount of all Revolving Credit Advances to Borrower together
with interest thereon as prescribed in Section
1.5.  The entire unpaid balance of the Revolving Loan and all
other non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date.

     

    (iii)           Each
payment of principal with respect to the Revolving Loan shall be paid to Agent
for the ratable benefit of each Revolving Loan Lender making a Revolving Loan,
ratably in proportion to each such Revolving Loan Lender’s respective Revolving
Loan Commitment.

     

    (b)           Term Loan
B.

     

    (i)           Subject
to the terms and conditions hereof, each Term Lender agrees to make a term loan
(collectively, the “Term Loan B”) on the
Closing Date to Borrower in the original principal amount of its Term Loan B
Commitment.  The obligations of each Term

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    Lender
hereunder shall be several and not joint.  The Term Loan B shall be
evidenced by promissory notes substantially in the form of Exhibit 1.1(b) (each
a “Term B Note”
and collectively the “Term B Notes”), and,
except as provided in Section 1.12,
Borrower shall execute and deliver each Term B Note to the applicable Term
Lender.  Each Term B Note shall represent the obligation of Borrower
to pay the amount of the applicable Term Lender's Term Loan B Commitment,
together with interest thereon as prescribed in Section
1.5.

     

    (ii)           Borrower
shall repay the principal amount of the Term Loan B in twenty (20) consecutive
quarterly installments on the last day of March, June, September and December of
each year, commencing March 31, 2008, as follows:

     

    Payment                                           Installment

       Dates                                             Amounts 

     

    March 31,
2008                                        $125,000.00

    June 30,
2008                                           $125,000.00

    September
30,
2008                                 $125,000.00

    December
31,
2008                                  $125,000.00

    

    March 31,
2009                                        $125,000.00

    June 30,
2009                                           $125,000.00

    September
30,
2009                                 $125,000.00

    December
31,
2009                                  $125,000.00

     

    March 31,
2010                                        $125,000.00

    June 30,
2010                                           $125,000.00

    September
30,
2010                                 $125,000.00

    December
31,
2010                                  $125,000.00

    

    March 31,
2011                                        $125,000.00

    June 30,
2011                                           $125,000.00

    September
30,
2011                                 $125,000.00

    December
31,
2011                                  $125,000.00

    

    March 31,
2012                                        $125,000.00

    June 30,
2012                                           $125,000.00

    September
30,
2012                                 $125,000.00

    December
31,
2012                                  $125,000.00

    

    The final
installment due on February 21, 2013 shall be in the amount equal to $47,500,000
or, if different the remaining principal balance of the Term Loan
B.

     

    (iii)           Notwithstanding
Section
1.1(b)(ii), the aggregate outstanding principal balance of the Term Loan
B shall be due and payable in full in immediately available funds on the
Commitment Termination Date, if not sooner paid in full.  No payment
with respect to the Term Loan B may be reborrowed.

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (iv)           Each
payment of principal with respect to the Term Loan B shall be paid to Agent for
the ratable benefit of each Term Lender, ratably in proportion to each such Term
Lender's respective Term Loan B Commitment.

     

    (c)           Incremental Term Loan B
Facility.

     

    (i)           The
Borrower may, from time to time until the Commitment Termination Date, request
the Lenders or, subject to Agent and Requisite Lenders’ prior approval and the
other provisions of this clause (c), other financial institutions as set forth
below, to provide additional Commitments with respect to the Term Loan B, at the
Borrower’s option up to an aggregate amount not in excess of Fifteen Million
Dollars ($15,000,000) (the “Incremental Term Loan B Facility”); provided, however, that (i) the
Borrower shall have given Agent at least twenty (20) days advance written notice
of its intention to obtain the Incremental Term Loan B Facility, the desired
amount of the Incremental Term Loan B Facility and the intended Incremental
Facility Effective Date (as hereinafter defined), (ii) all conditions precedent
set forth in Section
2.1 and Section 2.2, as the
case may be, applied as if the Incremental Term Loan B Facility became effective
on the Closing Date, shall have been satisfied as of the Incremental Facility
Effective Date; (iii) Agent shall have received on or prior to the Incremental
Facility Effective Date a certificate of the Secretary or an Assistant Secretary
of each Credit Party, in form and substance satisfactory to Agent, certifying
the resolutions of such Person’s board of directors (or equivalent governing
body) approving and authorizing the Incremental Term Loan B Facility to the
extent of the stated desired amount of such Incremental Term Loan B Facility,
and certifying that none of the organizational documents of such Credit Party
delivered to the Agent prior thereto have been modified or altered in any way
(or if modifications have occurred, certifying new copies of such organizational
documents), (iv) Agent shall have received an opinion of counsel to the Credit
Parties in form and substance and from counsel reasonably satisfactory to the
Agent and addressed to Agent dated the Incremental Facility Effective Date and
addressing such matters as the Agent may reasonably request, (v) no Default or
Event of Default exists or results therefrom and after giving pro forma effect
thereto, Borrower is in compliance with the Financial Covenants set forth on
Annex
G and (vi) Agent shall have received such new Notes, reaffirmations
of guaranties, security agreements, pledge agreements and subordination
agreements as it shall request, together with amendments to all Mortgages
reflecting that the Incremental Term Loan B Facility is secured pari passu
with the Loans outstanding immediately prior to giving effect to the
Incremental Term Loan B Facility, together with such endorsements to title
policies as the Agent shall request.

     

    (ii)           The
Borrower shall offer the Incremental Term Loan B Facility to (x) first, the
Lenders, and each Lender will have the right, but not any obligation, to
commit their Pro Rata Share of the proposed Incremental Term
Loan B Facility; provided that, if any
Lender or Lenders shall decline to commit to such proposed
Incremental Term Loan B Facility, then each other Lender which shall
have committed to provide its Pro Rata Share of such proposed Incremental
Facility shall have the right, but not any obligation to increase its
commitment to such Incremental Term Loan B Facility, or (y) if all existing
Lenders fail to provide the entire requested amount of such Incremental Term
Loan B Facility as set forth above, then with the prior approval of Agent,
Borrower may designate any other bank or other financial institution provided,
however, that any new bank or financial institution must be acceptable to the
Agent (an “Additional
Lender”); and such Lender or Additional Lender shall have executed
an

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    assumption
agreement in form and substance satisfactory to Agent (an “Assumption
Agreement”) pursuant to which such Lender or Additional Lender shall
agree to commit to all or a portion of such Incremental Term Loan B Facility
and, in the case of an Additional Lender, to be bound by the terms of this
Agreement as a Lender. On the effective date provided for in the Assumption
Agreements providing for an Incremental Term Loan B Facility (each a “Incremental Facility
Effective Date”), the Commitments in question will be increased, as
appropriate, by the additional amount(s) committed to by each Lender or
Additional Lender on the Incremental Facility Effective Date in regard
thereto.  In the event there are Lenders and Additional Lenders that
have committed to the Incremental Term Loan B Facility in excess of the
maximum amount requested (or permitted), then the Agent shall have the right to
allocate such commitments, first, to Lenders and then to Additional
Lenders.

     

    (iii)           The
Incremental Term Loan B Facility (i) shall rank pari passu in right of
payment with the Term Loan B, (ii) shall not have a final maturity earlier than
the then existing maturity date for the existing Term Loan B, (iii) shall
amortize at 1% per year (with the remainder payable at maturity), (iv) shall
have an Applicable Margin equal to or greater than the Applicable Margin then in
effect for the existing Term Loan B; provided if such Applicable Margin is
greater than the Applicable Margin then in effect for the existing Term Loan B,
the Applicable Margin for such Term Loan B shall automatically be increased such
that the Applicable Margins for the Term Loan B and the Incremental Term Loan B
Facility shall be equal and (v) except for any differences permitted hereby,
shall have the same terms and conditions as the Term Loan B (it being understood
that Incremental Term Loan B Facility may be made as part of the existing
tranche of Term Loan B).  Any amendments necessary to effectuate this
clause (c) may be made with the Agent’s and Borrower’s consent
only.

     

    (d)           Reliance on
Notices.  Agent shall be entitled to rely upon, and shall be
fully protected in relying upon, any Notice of Revolving Credit Advance, Notice
of Conversion/Continuation or similar notice believed by Agent to be
genuine.  Agent may assume that each Person executing and delivering
any notice in accordance herewith was duly authorized, unless the responsible
individual acting thereon for Agent has actual knowledge to the
contrary.

     

    1.2           Letters of
Credit.  Subject
to and in accordance with the terms and conditions contained herein and in Annex B, Borrower
shall have the right to request, and Revolving Lenders agree to incur, or
purchase participations in, Letter of Credit Obligations in respect of
Borrower.

     

    1.3           Prepayments.

     

    (a)           Voluntary
Prepayments.  Borrower may at any time on at least five (5)
days' prior written notice to Agent voluntarily prepay all or part of the Term
Loan B; provided that any
such prepayments shall be in a minimum amount of $500,000 and integral multiples
of $100,000 in excess of such amount.  In addition, Borrower may at
any time on at least ten (10) days' prior written notice to Agent terminate the
Revolving Loan Commitment; provided that upon
such termination, all Loans and other Obligations shall be immediately due and
payable in full and all Letter of Credit Obligations shall be cash
collateralized or otherwise satisfied in accordance with Annex B; provided, however, that any
such notice may state that it is

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    conditioned
upon the effectiveness of a refinancing and/or payment in full of the
Obligations from the proceeds of other credit facilities, the consummation of a
particular disposition or the occurrence of a change of control, in which case
such notice may be revoked by Borrower (by notice to Agent on or prior to the
specified prepayment date) if such condition is not satisfied, in which case no
payment obligation shall arise.  Any such voluntary prepayment and any
such termination of the Revolving Loan Commitment must be accompanied by the
payment any LIBOR funding breakage costs in accordance with Section
1.13(b).  Upon any such prepayment and termination of the
Revolving Loan Commitment, Borrower's right to request Revolving Credit
Advances, or request that Letter of Credit Obligations be incurred on its
behalf, shall simultaneously be terminated.  Any partial prepayments
of the Term Loan B made by Borrower shall be applied to prepay the scheduled
installments of the Term Loan B in inverse order of maturity.

     

    (b)           Mandatory
Prepayments.

     

    (i)           If
at any time the outstanding balance of the Revolving Loan exceeds the Maximum
Amount, Borrower shall immediately repay the aggregate outstanding Revolving
Credit Advances to the extent required to eliminate such excess.  If
any such excess remains after repayment in full of the aggregate outstanding
Revolving Credit Advances, Borrower shall provide cash collateral for the Letter
of Credit Obligations in the manner set forth in Annex B to the extent
required to eliminate such excess. 

     

    (ii)           Immediately
upon receipt by any Credit Party of any cash proceeds of any asset disposition,
Borrower shall prepay the Loans in an amount equal to all such proceeds, net of
(A) commissions and other reasonable transaction costs, fees and expenses
properly attributable to such transaction and payable by such Credit Party in
connection therewith (in each case, paid to non-Affiliates), (B) transfer taxes,
(C) amounts payable to holders of Liens on such asset (to the extent such Liens
constitute Liens permitted hereunder), if any, and (D) an appropriate reserve
for income taxes paid or payable in accordance with GAAP in connection
therewith, including any reserves required to be established in accordance with
GAAP against liabilities reasonably anticipated and attributable to the subject
asset disposition, including, without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under indemnification obligations associated with such
asset disposition; provided that upon the reversal of any such reserve, such
amounts so reversed shall be immediately used to repay the Loans in accordance
herewith.  Any such prepayment shall be applied in accordance with
Section
1.3(c).  The following shall not be subject to mandatory
prepayment under this clause
(ii):  (1) proceeds of sales and dispositions permitted under
Section 6.8 (a), (b),
(c) or (d), and (2) asset disposition proceeds that are reinvested in the
Business within two hundred seventy (270) days following receipt thereof and
until reinvested are used to repay outstanding Revolving Loans or if no
Revolving Loans are then outstanding are deposited in a Blocked Account in which
Agent has a first priority perfected Lien; provided that Borrower notifies Agent
of its intent to reinvest at the time such proceeds are received and when such
reinvestment occurs.  Thereafter, such funds shall be made available
to such Credit Party for reinvestment as follows: (i) Borrower shall request a
Revolving Credit Advance or release from the Blocked Account be made to such
Credit Party in the amount requested to be released; and (ii) so long as the
conditions set forth in Section 2.2 have been
met, Revolving Lenders shall make such Revolving Credit Advance or Agent shall
release funds from

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    such
Blocked Account.  To the extent not reinvested, such proceeds shall be
applied in accordance with Section 1.3(c); provided that in the
case of proceeds pertaining to any Credit Party other than Borrower, such
proceeds shall be applied to the Loans owing by Borrower.

     

    (iii)           If
any Credit Party issues Stock (other than Stock issuances to Reading or its
Affiliates the proceeds of which are contributed to the Borrower and used for
the improvement or expansion of the Business, Permitted Acquisitions, Capital
Expenditures or Investments permitted hereunder) or any Credit Party incurs
Indebtedness (other than Indebtedness incurred pursuant to Section 6.3), no
later than the Business Day following the date of receipt of the proceeds
thereof, Borrower shall prepay the Loans (and cash collateralize Letter of
Credit Obligations) in an amount equal to all such proceeds from the issuance of
such Stock or incurrence of Indebtedness, net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in connection
therewith.  Any such prepayment shall be applied in accordance with
Section
1.3(c).  The following shall not be subject to prepayment under
this clause
(iii):  proceeds of Stock issuances to employees of Holdings
and its Subsidiaries.

     

    (iv)           Until
the Termination Date, Borrower shall prepay the Obligations on March 31 of each
Fiscal Year in an amount equal to seventy five percent (75%) of Excess Cash Flow
for the immediately preceding Fiscal Year, commencing with the Fiscal Year
ending December 31, 2008 which shall be payable on March 31,
2009.  Any prepayments from Excess Cash Flow paid pursuant to this
clause (iv)
shall be applied in accordance with Section
1.3(c).  Each such prepayment shall be accompanied by a
certificate signed by a Responsible Financial Officer of the Borrower certifying
the manner in which Excess Cash Flow and the resulting prepayment were
calculated, which certificate shall be in form and substance reasonably
satisfactory to Agent.

     

    (v)           If
as of the last day of any Fiscal Quarter, the Loan to Contributed Capital Ratio
is more than 82.5%, no later than 5 Business Days after the end of such Fiscal
Quarter Borrower shall prepay the Loans (and cash collateralize Letter of Credit
Obligations) in an amount equal to the amount that would result in such Loan to
Contributed Capital Ratio equaling no more than 82.5%.  Any such
prepayment shall be applied in accordance with Section
1.3(c).

     

    (c)           Application of Certain
Mandatory Prepayments.  Any prepayments made by Borrower
pursuant to Sections
1.3(b)(ii), (b)(iii), (b)(iv) or (v)  above and any prepayments
from insurance or condemnation proceeds in accordance with Section 5.4(b) or (c)
and the Mortgage(s), respectively, shall be applied as follows: first, to Fees and
reimbursable expenses of Agent then due and payable pursuant to any of the Loan
Documents; second, to interest
then due and payable on the Term Loan B; third, to prepay the
scheduled principal installments of the Term Loan B in inverse order of
maturity, until such Term Loan B shall have been prepaid in full; fourth, to interest
then due and payable on the Revolving Credit Advances; fifth, to the
outstanding principal balance of Revolving Credit Advances until the same has
been paid in full; and sixth, to any Letter
of Credit Obligations, to provide cash collateral therefor in the manner set
forth in Annex
B, until all such Letter of Credit Obligations have been fully cash
collateralized in the manner set forth in Annex B; provided, however, that
if an Event of Default has occurred and is continuing, such prepayment occurs
other than through the exercise of remedies pursuant to the terms of the Loan
Documents and the Requisite Revolving Lenders so 

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    elect,
any such prepayments shall be applied as follows: first, to Fees and
reimbursable expenses of Agent then due and payable pursuant to any of the Loan
Documents; second, to interest
then due and payable on the Term Loan B and Revolving Loan; third, to prepay the
Term Loan B and the Revolving Loan, applied pro rata to scheduled principal
installments of the Term Loan B, and applied to Revolving Credit Advances before
application to provide cash collateral for any Letter of Credit Obligations in
the manner set forth in Annex B.  The Revolving Loan Commitment shall
not be permanently reduced by the amount of any such prepayments.

     

    (d)           No Implied
Consent.  Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not  permitted by other provisions of this Agreement or the other
Loan Documents.

     

    1.4           Use of
Proceeds.  Borrower
shall utilize the proceeds of the Loans solely for the Acquisition and Permitted
Acquisitions (and to pay any related transaction expenses), and for the
financing of the ordinary working capital and general corporate needs of
Borrower and its Subsidiaries.  Disclosure Schedule
(1.4) contains a description of Borrower's sources and uses of funds as
of the Closing Date, including Loans and Letter of Credit Obligations to be made
or incurred on that date, and a funds flow memorandum detailing how funds from
each source are to be transferred to particular uses.

     

    1.5           Interest and Applicable
Margins.

     

    (a)           Borrower
shall pay interest to Agent, for the ratable benefit of Lenders in accordance
with the various Loans being made by each Lender, in arrears on each applicable
Interest Payment Date, at the following rates with respect to the Revolving
Credit Advances and the Term Loan B, the Index Rate plus the Applicable Index
Margin per annum or, at the election of Borrower, the applicable LIBOR Rate plus
the Applicable LIBOR Margin per annum.

     

    As of the
Closing Date the Applicable Margins are as follows:

     

    
      	
              Applicable
      Index Margin

            	
              2.75%

            
	
              Applicable
      LIBOR Margin

            	
              4.00%

            

    

     

    The
Applicable Margins may be adjusted by reference to the following
grids:

     

    
      	
              If Leverage Ratio is:

            	
              Level
      of

              Applicable Margins:

            
	
              > 3.25

            	
              Level
      I

            
	
              > 2.75, but < 3.25

            	
              Level
      II

            
	
              > 2.25, but < 2.75

            	
              Level
      III

            
	
              <
      2.25

            	
              Level
      IV

            

    

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

     

    
      	 
      	
              Applicable Margins

            
	 
      	
              Level I

            	
              Level II

            	
              Level III

            	
              Level IV

            
	
              Applicable

              Index
      Margin

            	
              2.75%

            	
              2.50%

            	
              2.25%

            	
              2.00%

            
	
              Applicable
      LIBOR Margin

            	
              4.00%

            	
              3.75%

            	
              3.50%

            	
              3.25%

               

            

    

    

    Adjustments
in the Applicable Margins commencing with the Fiscal Quarter ending March 31,
2008 shall be implemented quarterly on a prospective basis, for each calendar
month commencing at least five (5) days after the date of delivery to Lenders of
the quarterly unaudited or annual audited (as applicable) Financial Statements
evidencing the need for an adjustment.  Concurrently with the delivery
of those Financial Statements, Borrower shall deliver to Agent and Lenders a
certificate, signed by a Responsible Financial Officer of the Borrower, setting
forth in reasonable detail the basis for the continuance of, or any change in,
the Applicable Margins.  Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement, result in an increase in the Applicable Margins
to the highest level set forth in the foregoing grid, until the date that is
five (5) days following the delivery of those Financial Statements demonstrating
that such an increase is not required.  If an Event of Default has
occurred and is continuing at the time any reduction in the Applicable Margins
is to be implemented, that reduction shall be deferred until the first day of
the first calendar month following the date on which such Event of Default is
waived or cured.  In the event that any Financial Statement or
Compliance Certificate delivered hereunder is shown to be inaccurate (regardless
of whether this Agreement or the Commitments are in effect when such inaccuracy
is discovered), and such inaccuracy, if corrected, would have led to the
application of a higher Applicable Margin based upon the foregoing pricing grid
(the “Accurate
Applicable Margin”) for any period that such Financial statement or
Compliance Certificate covered, then (i) Borrower shall immediately, following
actual knowledge of the Borrower of the occurrence thereof, deliver to the Agent
a correct Financial Statement or Compliance Certificate, as the case may be, for
such period, (ii) the Applicable Margin shall be adjusted such that after giving
effect to the corrected Financial Statements or Compliance Certificate, as the
case may be, the Applicable Margin shall be reset to the Accurate Applicable
Margin based upon the foregoing pricing grid for such period as set forth in the
foregoing pricing grid for such period and (iii) shall concurrently with the
delivery of the corrected Financial Statement or Compliance Certificate, as the
case may be, pay to the Agent, for the account of the Lenders, the accrued
additional interest owing as a result of such Accurate Applicable Margin for
such period.    The provisions of this definition shall not
limit the rights of the Agent and the Lenders with respect to Section 1.5(d) or
Article
VIII.

    

    (b)           Solely
for purposes of the payment of interest and not in connection with the
calculation of Financial Covenants or otherwise, if any payment on any Loan
becomes due and payable on a day other than a Business Day, the maturity thereof
will be extended to the next succeeding Business Day (except as set forth in the
definition of LIBOR Period) and, with respect
to payments of principal, interest thereon shall be payable at the then
applicable rate during such extension.

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    (c)           All
computations of Fees calculated on a per annum basis and interest shall be made
by Agent on the basis of a 360-day year, in each case for the actual number of
days occurring in the period for which such interest and Fees are
payable.  The Index Rate is a floating rate determined for each
day.  Each determination by Agent of interest rates and Fees hereunder
shall be presumptive evidence of the correctness of such rates and
Fees.

     

    (d)           So
long as an Event of Default has occurred and is continuing under Section 8.1(a), (g) or
(h), or so long as any other Event of Default has occurred and is
continuing and at the election of Agent (or upon the written request of
Requisite Lenders) confirmed by written notice from Agent to Borrower (a “Default Rate
Notice”), the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percentage points (2%) per annum above the
rates of interest or the rate of such Fees otherwise applicable hereunder unless
Agent or Requisite Lenders elect to impose a smaller increase (the “Default Rate”), and
all outstanding Obligations shall bear interest at the Default Rate applicable
to such Obligations.  Interest and Letter of Credit Fees at the
Default Rate shall accrue from the initial date of such Event of Default (if in
respect of such an Event of Default under Section 8.1(a), (g) or (h)) or in the case
of any other Event of Default from and after receipt by Borrower of a Default
Rate Notice, in either case, until the subject Event of Default is cured or
waived and shall be payable upon demand.

     

    (e)           Subject
to the conditions precedent set forth in Section 2.2, Borrower
shall have the option to (i) request that any Revolving Credit Advance be made
as a LIBOR Loan, (ii) convert at any time all or any part of outstanding Loans
from Index Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index
Rate Loan, subject to payment of LIBOR breakage costs in accordance with Section 1.13(b) if
such conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan as a LIBOR Loan upon
the expiration of the applicable LIBOR Period and the succeeding LIBOR Period of
that continued Loan shall commence on the first day after the last day of the
LIBOR Period of the Loan to be continued.  Any Loan or group of Loans
having the same proposed LIBOR Period to be made or continued as, or converted
into, a LIBOR Loan must be in a minimum amount of $250,000 and integral
multiples of $100,000 in excess of such amount.  Any such election
must be made by 1:00 p.m. (New York time) on the third Business Day prior to
(1) the date of any proposed Advance which is to bear interest at the LIBOR
Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to be
continued as such, or (3) the date on which Borrower wishes to convert any
Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by Borrower in
such election.  If no election is received with respect to a LIBOR
Loan by 1:00 p.m. (New York time) on the third Business Day prior to the end of
the LIBOR Period with respect thereto (or if a Default or an Event of Default
has occurred and is continuing), that LIBOR Loan shall be converted to an Index
Rate Loan at the end of its LIBOR Period.  Borrower must make such
election by notice to Agent in writing, by telecopy, overnight courier or
Electronic Transmission.  In the case of any conversion or
continuation, such election must be made pursuant to a written notice (a “Notice of
Conversion/Continuation”) in the form of Exhibit
1.5(e).

     

    
      (f)           Notwithstanding
anything to the contrary set forth in this Section 1.5, if
a court of competent jurisdiction determines in a final non-appealable order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the “Maximum

    

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

    Lawful Rate”), then
so long as the Maximum Lawful Rate would be so exceeded, the rate of interest
payable hereunder shall be equal to the Maximum Lawful Rate; provided, however, that if at
any time thereafter the rate of interest payable hereunder is less than the
Maximum Lawful Rate, Borrower shall continue to pay interest hereunder at the
Maximum Lawful Rate until such time as the total interest received by Agent, on
behalf of Lenders, is equal to the total interest that would have been received
had the interest rate payable hereunder been (but for the operation of this
paragraph) the interest rate payable since the Closing Date as otherwise
provided in this Agreement.  In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate.

     

    1.6           Reserved

     

    1.7           Reserved.

     

    1.8           Cash Management
Systems.  On
or prior to the  Closing Date, Borrower will establish and will
maintain until the Termination Date, the cash management systems described in
Annex C (the
“Cash Management
Systems”).

     

    1.9           Fees.

     

    (a)           Borrower
shall pay to GE Capital, individually, the Fees specified in the GE Capital Fee
Letter.

     

    (b)           As
additional compensation for the Revolving Lenders, Borrower shall pay to Agent,
for the ratable benefit of such Lenders, in arrears, on the last day of each
calendar quarter prior to the Commitment Termination Date and on the Commitment
Termination Date, a Fee for Borrower's non-use of available funds in an amount
equal to one-half of one percent (0.50%) per annum (calculated on the basis of a
360 day year for actual days elapsed) multiplied by the difference between (x)
the Maximum Amount (as it may be reduced from time to time) and (y) the average
for the period of the daily closing balance of the Revolving Loan outstanding
during the period for which the such Fee is due.

     

    (c)           Borrower
shall pay to Agent, for the ratable benefit of Revolving Lenders, the Letter of
Credit Fee as provided in Annex B.

     

    1.10           Receipt of
Payments.  Borrower
shall make each payment under this Agreement not later than 2:00 p.m. (New York
time) on the day when due in immediately available funds in Dollars to the
Collection Account.  For purposes of computing interest and Fees and
Borrowing Availability of any date, all payments shall be deemed received on the
Business Day on which immediately available funds therefor are received in the
Collection Account prior to 2:00 p.m. New York time.  Payments
received after 2:00 p.m. New York time on any Business Day or on a day that is
not a Business Day shall be deemed to have been received on the following
Business Day.

     

    
      1.11           Application and Allocation of
Payments.

    

     

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    (a)           So
long as no Event of Default has occurred and is continuing, (i) payments
matching specific scheduled payments then due shall be applied to those
scheduled payments; (iii) voluntary prepayments shall be applied in accordance
with the provisions of Section 1.3(a); and
(iii) mandatory prepayments shall be applied as set forth in Section
1.3(c).  All payments and prepayments applied to a particular
Loan shall be applied ratably to the portion thereof held by each Lender as
determined by its Pro Rata Share; provided that any such payments received shall
be applied first to repay Loans outstanding as Index Rate Loans and then to
Loans outstanding as LIBOR Rate Loans, with those LIBOR Rate Loans having
earlier expiring LIBOR Periods being repaid prior to those with later expiring
LIBOR Periods.  As to any other payment, and as to all payments made
when an Event of Default has occurred and is continuing or following the
Commitment Termination Date, Borrower hereby irrevocably waives the right to
direct the application of any and all payments received from or on behalf of
Borrower, and Borrower hereby irrevocably agrees that Agent shall have the
continuing exclusive right to apply any and all such payments against the
Obligations as Agent may deem advisable notwithstanding any previous entry by
Agent in the Loan Account or any other books and records.  In the
absence of a specific determination by Agent with respect thereto, payments from
proceeds of Collateral following the exercise of remedies shall be applied to
amounts then due and payable in the following order: (1) to Fees and Agent's
expenses reimbursable hereunder; (2) to interest on the Loans, ratably in
proportion to the interest accrued as to each Loan; (3) to principal payments on
the other Loans and any Obligations under any Secured Rate Contract and to
provide cash collateral for Letter of Credit Obligations in the manner described
in Annex B,
ratably to the aggregate, combined principal balance of the other Loans,
Obligations under any Secured Rate Contracts and outstanding Letter of Credit
Obligations; and (4) to all other Obligations including expenses of Lenders to
the extent reimbursable under Section
11.3.

     

    (b)           Agent
is authorized to, and at its sole election may, charge to the Revolving Loan
balance on behalf of Borrower and cause to be paid all Fees, expenses, Charges,
costs (including insurance premiums in accordance with Section 5.4(a)) and
interest and principal, other than principal of the Revolving Loan, owing by
Borrower under this Agreement or any of the other Loan Documents if and to the
extent Borrower fails to pay promptly any such amounts as and when due (and, in
the case of any expenses, Charges, and costs, following the presentment of an
invoice therefor), even if the amount of such charges would exceed Borrowing
Availability at such time.  At Agent's option and to the extent
permitted by law, any charges so made shall constitute part of the Revolving
Loan hereunder.

     

    1.12           Loan Account and
Accounting.  Agent
shall maintain a loan account (the “Loan Account”) on its
books to record: all Advances and the Term Loan B, all payments made by
Borrower, and all other debits and credits as provided in this Agreement with
respect to the Loans or any other Obligations.  All entries in the
Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Agent's most recent printout or other written statement, shall,
absent manifest error, be presumptive evidence of the amounts due and owing to
Agent and Lenders by Borrower; provided that any
failure to so record or any error in so recording shall not limit or otherwise
affect Borrower's duty to pay the Obligations.  Agent shall render to
Borrower a monthly accounting of transactions with respect to the Loans setting
forth the balance of the Loan Account for the immediately preceding
month.  Unless Borrower notifies Agent in writing of any objection to
any such accounting (specifically describing the basis for such objection),

     

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

    within
thirty (30) days after the date thereof, each and every such accounting shall be
presumptive evidence of all matters reflected therein.  Only those
items expressly objected to in such notice shall be deemed to be disputed by
Borrower.  Notwithstanding any provision herein contained to the
contrary, any Lender may elect (which election may be revoked) to dispense with
the issuance of Notes to that Lender and may rely on the Loan Account as
evidence of the amount of Obligations from time to time owing to
it.

     

    1.13           Indemnity.

     

    (a)           Each
Credit Party that is a signatory hereto shall jointly and severally indemnify
and hold harmless each of Agent, Lenders and their respective Affiliates, and
each such Person’s respective officers, directors, employees, attorneys, agents
and representatives (each, an “Indemnified Person”),
from and against any and all suits, actions, proceedings, claims, damages,
losses, liabilities and expenses (including reasonable attorneys’ fees and
disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted by any Credit Party, any affiliate
thereof or any third party against or incurred by any such Indemnified
Person as the result of credit having been extended, suspended or terminated
under this Agreement and the other Loan Documents and the administration of such
credit, and in connection with or arising out of the Loan Documents, the
commitment and proposal letters related thereto, the transactions contemplated
hereunder and thereunder and any actions or failures to act in connection
therewith, including any and all losses associated with  Electronic
Transmissions or E-Systems as well as for failures caused by a Credit Party’s
equipment, software, services or otherwise used in connection therewith, and any
and all Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents with respect to, or relating to the transactions under, the Loan
Documents and any investigation, litigation, or proceeding related to any such
matters (collectively, “Indemnified
Liabilities”); provided, that no
such Credit Party shall be liable for any indemnification to an Indemnified
Person to the extent that any such suit, action, proceeding, claim, damage,
loss, liability or expense results from that Indemnified Person’s gross negligence or
willful misconduct as finally determined by a court of competent
jurisdiction.  NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO
ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.

     

    (b)           To
induce Lenders to provide the LIBOR Rate option on the terms provided herein, if
(i) any LIBOR Loans are repaid in whole or in part prior to the last day of any
applicable LIBOR Period (whether that repayment is made pursuant to any
provision of this Agreement or any other Loan Document or occurs as a result of
acceleration, by operation of law or otherwise); (ii) Borrower shall default in
payment when due of the principal amount of or interest on any LIBOR Loan; (iii)
Borrower shall refuse to accept any borrowing of, or shall request a termination
of any borrowing, conversion into or continuation of LIBOR Loans after Borrower
has given notice requesting the same in accordance herewith; or (iv) Borrower
shall 

     

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    fail to
make any prepayment of a LIBOR Loan after Borrower has given a notice thereof in
accordance herewith, then Borrower shall indemnify and hold harmless each Lender
from and against all losses, costs and expenses resulting from or arising from
any of the foregoing.  Such indemnification shall include any loss
(excluding loss of margin) or expense arising from the reemployment of funds
obtained by it or from fees payable to terminate deposits from which such funds
were obtained.  For the purpose of calculating amounts payable to a
Lender under this subsection, each Lender shall be deemed to have actually
funded its relevant LIBOR Loan through the purchase of a deposit bearing
interest at the LIBOR Rate in an amount equal to the amount of that LIBOR Loan
and having a maturity comparable to the relevant LIBOR Period; provided, that each
Lender may fund each of its LIBOR Loans in any manner it sees fit, and the
foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection.  This covenant shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.  As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written, reasonably
detailed, calculation of all amounts payable pursuant to this Section 1.13(b), and
such calculation shall be binding on the parties hereto unless Borrower shall
object in writing within ten (10) Business Days of receipt thereof, specifying
the basis for such objection in detail.

     

    1.14           Access.  Each
Credit Party that is a party hereto shall, during normal business hours, from
time to time upon five (5) Business Days’ prior written notice as frequently as
Agent reasonably determines to be appropriate: (a) provide Agent and any of its
officers, employees and agents access to its properties, facilities, advisors,
officers and employees of each Credit Party and to the Collateral, (b) permit
Agent, and any of its officers, employees and agents, to inspect, audit and make
extracts from any Credit Party's books and records, and (c) permit Agent, and
its officers, employees and agents, to inspect, review, evaluate and make test
verifications and counts of the Accounts, Inventory and other Collateral of any
Credit Party.  If an Event of Default has occurred and is continuing,
each such Credit Party shall provide such access to Agent and to each Lender at
all times and without advance notice.  Furthermore, so long as any
Event of Default under Section 8.1(a), (g) or
(h) has occurred and is continuing, Borrower shall provide Agent and each
Lender with access to its material suppliers.  Each Credit Party shall
make available to Agent and its counsel reasonably promptly originals or copies
of all books and records that Agent may reasonably request.  Each
Credit Party shall deliver any document or instrument necessary for Agent, as it
may from time to time reasonably request, to obtain records from any service
bureau or other Person that maintains records for such Credit Party, and shall
maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by such Credit Party.  Agent will give
Lenders at least five (5) Business Days’ prior written notice of regularly
scheduled audits, which audits, in the absence of the existence of an Event of
Default, shall occur no more frequently than
annually.  Representatives of other Lenders may accompany Agent's
representatives on regularly scheduled audits at no charge to
Borrower.

     

    1.15           Taxes.

     

    (a)           Any
and all payments by Borrower hereunder or under the Notes shall be made, in
accordance with this Section 1.15, free
and clear of and without deduction for any and all present or future
Taxes.  If Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under the Notes, (i) the sum
payable shall be increased 

     

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    as much
as shall be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 1.15) Agent
or Lenders, as applicable, receive an amount equal to the sum they would have
received had no such deductions been made, (ii) Borrower shall make such
deductions, and (iii) Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable
law.  Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent the original or a certified copy of a receipt
evidencing payment thereof.

     

    (b)           Each
Credit Party that is a signatory hereto shall indemnify and, within ten (10)
days of demand therefor, pay Agent and each Lender for the full amount of Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section 1.15)
paid by Agent or such Lender, as appropriate, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally asserted.

     

    (c)           Each
Lender organized under the laws of a state of the United States shall provide to
Borrower and Agent a properly completed and executed IRS Form W-9. Each Lender
organized under the laws of a jurisdiction outside the United States (a “Foreign Lender”) as
to which payments to be made under this Agreement or under the Notes are exempt
from United States withholding tax under an applicable statute or tax treaty
shall provide to Borrower and Agent a properly completed and executed IRS Form
W-8ECI or Form W-8BEN -or other applicable form, certificate or document
prescribed by the IRS or the United States certifying as to such Foreign
Lender's entitlement to such exemption (a “Certificate of
Exemption”).  The Agent shall have the right to refuse to allow
a Person to be a Lender under this Agreement if such Person has not provided to
the Agent a Form W-9 or a Certificate of Exemption prior to becoming a Lender
hereunder.

     

    1.16           Capital Adequacy; Increased
Costs; Illegality.

     

    (a)           If
any law, treaty, governmental (or quasi-governmental) rule, regulation,
guideline or order regarding capital adequacy, reserve requirements or similar
requirements or compliance by any Lender with any request or directive regarding
capital adequacy, reserve requirements or similar requirements (whether or not
having the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrower
shall from time to time upon demand by such Lender (with a copy of such demand
to Agent) pay to Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction.  A
certificate as to the amount of that reduction and showing the basis of the
computation thereof submitted by such Lender to Borrower and to Agent shall be
presumptive evidence of the matters set forth therein.

     

    (b)           If,
due to either (i) the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost

     

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased
cost.  A certificate as to the amount of such increased cost,
submitted to Borrower and to Agent by such Lender, shall be presumptive evidence
of the matters set forth therein.  Each Lender agrees that, as
promptly as practicable after it becomes aware of any circumstances referred to
above which would result in any such increased cost, the affected Lender shall,
to the extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrower pursuant to this Section
1.16(b).

     

    (c)           Notwithstanding
anything to the contrary contained herein, if the introduction of or any change
in any law or regulation (or any change in the interpretation thereof) shall
make it unlawful, or any central bank or other Governmental Authority shall
assert that it is unlawful, for any Lender to agree to make or to make or to
continue to fund or maintain any LIBOR Loan, then, unless that Lender is able to
make or to continue to fund or to maintain such LIBOR Loan at another branch or
office of that Lender without, in that Lender's reasonable opinion, materially
adversely affecting it or its Loans or the income obtained therefrom, on notice
thereof and demand therefor by such Lender to Borrower through Agent,
(i) the obligation of such Lender to agree to make or to make or to
continue to fund or maintain LIBOR Loans shall terminate and (ii) Borrower
shall forthwith prepay in full all outstanding LIBOR Loans owing to such Lender,
together with interest accrued thereon, unless Borrower,
within five (5) Business Days after the delivery of such notice and demand,
converts all LIBOR Loans into Index Rate Loans.

     

    (d)           Within
forty five (45) days after receipt by Borrower of written notice and demand from
any Lender (an “Affected Lender”) for
payment of additional amounts or increased costs as provided in Sections 1.15(a), 1.16(a) or
1.16(b), Borrower may, at its option, notify Agent and such Affected
Lender of its intention to replace the Affected Lender.  So long as no
Default or Event of Default has occurred and is continuing, Borrower, with the
consent of Agent, may obtain, at Borrower's expense, a replacement Lender
(“Replacement
Lender”) for the Affected Lender, which Replacement Lender must be
reasonably satisfactory to Agent.  If Borrower obtains a Replacement
Lender within ninety (90) days following notice of its intention to do so, the
Affected Lender must sell and assign its Loans and Commitments to such
Replacement Lender for an amount equal to the principal balance of all Loans
held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale and such assignment shall not require the
payment of an assignment fee to Agent; provided, that
Borrower shall have reimbursed such Affected Lender for the additional amounts
or increased costs that it is entitled to receive under this Agreement through
the date of such sale and assignment.  Notwithstanding the foregoing,
Borrower shall not have the right to obtain a Replacement Lender if the Affected
Lender rescinds its demand for increased costs or additional amounts within 15
days following its receipt of Borrower's notice of intention to replace such
Affected Lender.  Furthermore, if Borrower gives a notice of intention
to replace and does not so replace such Affected Lender within ninety (90) days
thereafter, Borrower's rights under this Section 1.16(d) shall
terminate with respect to such Affected Lender and Borrower shall promptly
pay all increased costs or additional amounts demanded by such Affected Lender
pursuant to Sections
1.15(a), 1.16(a) and 1.16(b).

     

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    1.17           Single
Loan.  All
Loans to Borrower and all of the other Obligations of Borrower arising under
this Agreement and the other Loan Documents shall constitute one general
obligation of Borrower secured, until the Termination Date, by all of the
Collateral.

     

    2.      CONDITIONS
PRECEDENT

     

    2.1           Conditions to the Initial
Loans.  No
Lender shall be obligated to make any Loan or incur any Letter of Credit
Obligations on the Closing Date, or to take, fulfill, or perform any other
action hereunder, until the following conditions have been satisfied or provided
for in a manner reasonably satisfactory to Agent, or waived in writing by Agent
and Requisite Lenders:

     

    (a)           Credit Agreement; Loan
Documents.  This Agreement or counterparts hereof shall have
been duly executed by, and delivered to, Borrower, each other Credit Party,
Agent and Lenders; and Agent shall have received such documents, instruments,
agreements and legal opinions as Agent shall reasonably request in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, including all those listed in the Closing Checklist attached hereto
as Annex D,
each in form and substance reasonably satisfactory to Agent.

     

    (b)           Acquisition of Assets Free
and Clear.  Agent shall have received evidence that the assets
acquired in the Acquisition are being acquired free and clear of any Liens
(other than Liens permitted hereunder), such evidence to be reflected in
documentation reasonably acceptable to Agent.

     

    (c)           Approvals.  Agent
shall have received (i) satisfactory evidence that the Credit Parties have
obtained all required consents and approvals of all Persons including all
requisite Governmental Authorities, to the execution, delivery and performance
of this Agreement and the other Loan Documents and the consummation of the
Related Transactions or (ii) an officer's certificate in form and substance
reasonably satisfactory to Agent affirming that no such consents or approvals
are required.

     

    (d)           Payment of
Fees.  Borrower shall have paid the Fees required to be paid on
the Closing Date in the respective amounts specified in Section 1.9
(including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all reasonable, documented and out-of-pocket fees, costs
and expenses of closing presented as of the Closing Date.

     

    (e)           Capital Structure: Other
Indebtedness.  The capital structure of each Credit Party, the
corporate structure of the Credit Parties, the terms and conditions of all
Indebtedness of each Credit Party, and all governing organizational documents of
the Credit Parties, as well as the tax effects resulting from the
Acquisition,  shall be reasonably acceptable to Agent in its sole
discretion.

     

    (f)           Due
Diligence.  Agent shall have completed its business,
environmental, and legal due diligence, including without limitation as to
Material Contracts, other debt instruments,
equity and member agreements, management agreements, incentive and employment
agreements, acquisition agreement, tax agreements and other material agreements
and governing documents of the Credit Parties, with results reasonably
satisfactory to Agent.

     

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

     

    (g)           Evidence of Competitive Free
Film Zone.  Agent shall be satisfied that all Acquired Theatres
(other than Kaahumanu) shall operate in a “competitive free film
zone”.

     

    (h)           Maximum Leverage Ratio/Loan
to Contributed Capital Ratio.  After giving pro forma effect to
the Related Transactions, Borrower and its Subsidiaries shall have, on a
consolidated basis, for the twelve months ending on December 31, 2007, a
Leverage Ratio of not more than 3.6:1.0.  After giving pro forma
effect to the Related Transactions, the Loan to Contributed Capital Ratio as of
the Closing Date shall not exceed 69%.

     

    (i)           Minimum
EBITDA.  After giving pro forma effect to the Related
Transactions, Borrower and its Subsidiaries shall have, on a consolidated basis,
EBITDA for the twelve month period ending on December 31, 2007 of not less than
$13,789,000.

     

    (j)            Consummation of Related
Transactions.  Agent shall have received fully executed copies
of the Acquisition Agreement and final and complete copies of each of the other
Related Transactions Documents, each of which shall be in full force and effect
in form and substance reasonably satisfactory to Agent.  The
Acquisition and the other Related Transactions shall have been consummated in
accordance with the terms of the Acquisition Agreement and the other Related
Transactions Documents.  The Acquisition shall include solely the
Acquired Theatres and the purchase price shall not exceed
$69,300,000.  Additionally, Agent shall have received evidence that
(i) the Closing Date Equity Contribution shall have been made on terms and
conditions reasonably satisfactory to the Agent and (ii) the Manville Theatre
Contribution and the Dallas Theatre Contribution shall have been consummated, in
form and substance reasonably satisfactory to Agent.

     

    (k)           No Material
Changes.  As of the Closing Date, (i) since the Sellers’
audited financial statements dated June 30, 2007, there not occurring or
becoming known to the Agent any event, development or circumstance that has
caused or could reasonably be expected to cause any material adverse condition
or material adverse change in or affecting the industry in which the Borrower
operates, the business, operations, property (including but not limited to the
Collateral), condition (financial or otherwise) or prospects or projections of
the Borrower and its affiliates, or of any other Credit Party, (ii) there not
occurring or becoming known to the Agent any information or other matter
affecting the Acquired Theatres, or Borrower, any of its affiliates, Guarantors
or the Related Transactions that in the Agent’s judgment is inconsistent in a
material and adverse manner with any such information or other matter disclosed
to the Lenders prior to the date hereof, (iii) no litigation commenced which
would challenge the Related Transactions or which, if successful, would have a
material adverse impact on the Borrower, its business, or its ability to repay
the Obligations, (iv) since the Sellers’ most recent audited financial
statements, no material increase in the liabilities, liquidated or contingent,
or a material decrease in the assets.

     

    
      (l)           Minimum Cash on
Hand.  After giving pro forma effect to the Related
Transactions, Borrower and its Subsidiaries shall have, on a consolidated basis,
cash on hand of not less than $700,000.

    

     

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    2.2           Further Conditions to Each
Loan.  Except
as otherwise expressly provided herein, no Lender shall be obligated to fund any
Advance or incur any Letter of Credit Obligation, if, as of the date
thereof:

     

    (a)           any
representation or warranty by any Credit Party contained herein or in any other
Loan Document is untrue or incorrect as of such date (A) as stated if such
representation or warranty contains an express materiality qualification or (B)
in any material respect if such representation or warranty does not contain such
a qualification, except to the extent that such representation or warranty
expressly relates to an earlier date (in which case such representation or
warranty shall not have been untrue or incorrect as of such earlier date (A) as
stated if such representation or warranty contains an express materiality
qualification or (B) in any material respect if such representation or warranty
does not contain such a qualification) and except for changes therein expressly
permitted or expressly contemplated by this Agreement, and Agent or Requisite
Revolving Lenders have determined not to make such Revolving Credit Advance or
incur any Letter of Credit Obligation as a result of the fact that such
representation or warranty is untrue or incorrect as aforesaid;

     

    (b)           
any Default or Event of Default has occurred and is continuing or would result
after giving effect to any Advance (or the incurrence of any Letter of Credit
Obligation), and Agent or Requisite Revolving Lenders shall have determined not
to make any Advance or incur any Letter of Credit Obligation as a result of that
Default or Event of Default; or

     

    (c)           after
giving effect to any Advance (or the incurrence of any Letter of Credit
Obligations), the outstanding principal amount of the Revolving Loan would
exceed the Maximum Amount.

     

    The
request and acceptance by Borrower of the proceeds of any Advance, or the
incurrence of any Letter of Credit Obligations shall be deemed to constitute, as
of the date thereof, (i) a representation and warranty by Borrower that the
conditions in this Section
2.2  have been satisfied and (ii) a reaffirmation by Borrower
of the granting and continuance of Agent's Liens, on behalf of itself and
Lenders, pursuant to the Collateral Documents.

     

    3.      REPRESENTATIONS
AND WARRANTIES

     

    To induce
Lenders to make the Loans and to incur Letter of Credit Obligations, the Credit
Parties executing this Agreement, jointly and severally, make the following
representations and warranties to Agent and each Lender with respect to all
Credit Parties, each and all of which shall survive the execution and delivery
of this Agreement. The representations shall be deemed to apply to the Acquired
Theatres, the Dallas Theatre and the Manville Theatre after giving pro forma
effect to the consummation of the Acquisition, the Dallas Theatre Contribution
and the Manville Contribution as if the Borrower owned such theaters at all
times on and prior to the Closing Date.

    3.1           Corporate Existence; Compliance with
Law.  Each
Credit Party (a) is a corporation, limited liability company, general
partnership or limited partnership duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation or
organization, which as of the date hereof is set forth in Disclosure Schedule
(3.1); (b) is duly 

     

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

     

    qualified
to conduct business and is in good standing in each other jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to be so qualified would not result in
exposure to losses or liabilities which, alone or in the aggregate, could
reasonably be expected to have a Material Adverse Effect; (c) has the requisite
power and authority and the legal right to own, pledge, mortgage or otherwise
encumber and operate its properties, to lease the property it operates under
lease and to conduct its business as now conducted or proposed to be conducted;
(d) subject to specific representations regarding Environmental Laws, has all
material licenses, permits, consents or approvals from or by, and has made all
material filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable provisions of law and
regulation, except where the failure to comply, alone or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.

     

    3.2           Executive Offices,
Collateral Locations, FEIN, Organizational Number.  As
of the Closing Date, each Credit Party's name as it appears in official filings
in its state of incorporation or organization, the state of incorporation or
organization, organization type, organization number, if any, issued by its
state incorporation or organization, and the current location of each Credit
Party's chief executive office and the warehouses and premises at which any
Collateral are located are set forth in Disclosure Schedule
(3.2).  In addition, Disclosure Schedule
(3.2) lists the federal employer identification number of each Credit
Party.

     

    3.3           Corporate Power,
Authorization, Enforceable Obligations.  The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Person's power; (b) have been duly authorized by all necessary
corporate, limited liability company or limited partnership action; (c) do not
contravene any provision of such Person's charter, bylaws or partnership or
operating agreement as applicable; (d) do not violate any law or regulation, or
any order or decree of any court or Governmental Authority; (e) do not conflict
with or result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, Theatre Lease or other material lease,
material agreement or other material instrument to which such Person is a party
or by which such Person or any of its property is bound; (f) do not result in
the creation or imposition of any Lien upon any of the property of such Person
other than those in favor of Agent, on behalf of itself and Lenders, pursuant to
the Loan Documents; and (g) do not require the consent or approval of any
Governmental Authority or any other Person, except those referred to in Section 2.1(c), all
of which will have been duly obtained, made or complied with prior to the
Closing Date.  Each of the Loan Documents shall be duly executed and
delivered by each Credit Party that is a party thereto and each such Loan
Document shall constitute a legal, valid and binding obligation of such Credit
Party enforceable against it in accordance with its terms.

     

    
      3.4           Financial Statements and
Projections.  Except
for the Projections and the Pro Forma, all Financial Statements concerning
Borrower and its Subsidiaries that are referred to below have been prepared in
accordance with GAAP consistently applied throughout the periods covered (except
as disclosed therein and except, with respect to unaudited Financial Statements,

    

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    for the
absence of footnotes and normal year-end audit adjustments) and present fairly
in all material respects the financial position of the Persons covered thereby
as at the dates thereof and the results of their operations and cash flows for
the periods then ended.

     

    (a)           Financial
Statements.  The following Financial Statements attached hereto
as Disclosure Schedule
(3.4(a)) have been delivered on the date hereof:

     

    (i)           The
audited consolidated balance sheets at June 28, 2007 and the related statements
of income and cash flows of Sellers with respect to the Acquired Theatres for
the Fiscal Year then ended, certified by KPMG, LLP.

     

    (ii)           The
unaudited balance sheet(s) at December 31, 2007 and the related statement(s) of
income and cash flows of Reading with respect to the Manville Theatre and the
Dallas Theatre.

     

    (b)           Pro
Forma.  The Pro Forma delivered on the date hereof and attached
hereto as Disclosure
Schedule (3.4(b)) was prepared by Borrower giving pro forma effect to
the Related Transactions, was based on the unaudited consolidated balance sheets
of Borrower and its Subsidiaries dated January 1, 2008.

     

    (c)           Projections.  The
Projections delivered on the date hereof and attached hereto as Disclosure Schedule
(3.4(c)) have been prepared by Borrower in light of the past operations
of the Acquired Theatres, the Dallas Theatre and the Manville Theatre, but
including future payments of known contingent liabilities, and reflect
projections for the five year period beginning on January 1, 2008 on a
month-by-month basis.  The Projections are based upon the same
accounting principles as those used in the preparation of the financial
statements described above and the estimates and assumptions stated therein, all
of which Borrower believes to be reasonable and fair in light of current
conditions and current facts known to Borrower and, as of the Closing Date,
reflect Borrower's good faith and reasonable estimates of the future financial
performance of Borrower for the period set forth therein.  The
Projections are not a guaranty of future performance, and actual results may
differ from the Projections.

     

    3.5           Material Adverse
Effect.  Between
June 30, 2007 and the Closing Date, (a) no Credit Party has incurred any
obligations, contingent or noncontingent liabilities, liabilities for Charges,
long-term leases or unusual forward or long-term commitments that are not
reflected in the Pro Forma and that, alone or in the aggregate, could reasonably
be expected to have a Material Adverse Effect, and (b) no contract, lease or
other agreement or instrument has been entered into by any Credit Party or has
become binding upon any Credit Party's assets and no law or regulation
applicable to any Credit Party has been adopted that has had or could reasonably
be expected to have a Material Adverse Effect.  As of the Closing
Date, no Credit Party is in default and to the best of Borrower's knowledge no
third party is in default under any Material Contract, lease or other material
agreement or instrument, that alone or in the aggregate could reasonably be
expected to have a Material Adverse Effect.  Since June 30, 2007 no
event has
occurred, that alone or together with other events, could reasonably be expected
to have a Material Adverse Effect.

     

    
      
         

      

      
        21

        
          

        

      

      
         

      

    

     

    3.6           Ownership of Property;
Liens.  As
of the Closing Date, the real estate (“Real Estate”) listed
in Disclosure Schedule
(3.6) constitutes all of the real property owned, leased, subleased, or
used by any Credit Party.  Each Credit Party owns good and marketable
fee simple title to all of its owned Real Estate, and valid and marketable
leasehold interests in all of its leased Real Estate, (as of the Closing Date,
all as described on Disclosure Schedule
(3.6)), and copies of all such leases or a summary of terms thereof
reasonably satisfactory to Agent have been delivered to Agent.  Disclosure Schedule
(3.6) further describes any Real Estate with respect to which any Credit
Party is a lessor, sublessor or assignor as of the Closing Date.  Each
Credit Party also has good and marketable title to, or valid leasehold interests
in, all of its personal property and assets.  As of the Closing Date,
none of the properties and assets of any Credit Party are subject to any Liens
other than Liens permitted hereunder, and there are no facts, circumstances or
conditions  known to any Credit Party that may result in any Liens
(including Liens arising under Environmental Laws) other than Permitted
Encumbrances.  Each Credit Party has received all deeds, assignments,
waivers, consents, nondisturbance and attornment or similar agreements, bills of
sale and other documents, and has duly effected all recordings, filings and
other actions necessary to establish, protect and perfect such Credit Party's
right, title and interest in and to all such Real Estate and other properties
and assets.  Disclosure Schedule
(3.6) also describes any purchase options, rights of first refusal or
other similar contractual rights existing as of the Closing Date and pertaining
to any Real Estate.  As of the Closing Date, no portion of any Credit
Party's Real Estate has suffered any material damage by fire or other casualty
loss that has not heretofore been repaired and restored in all material respects
to its original condition or otherwise remedied.  As of the Closing
Date, all material permits required to have been issued or appropriate to enable
the Real Estate to be lawfully occupied and used for all of the purposes for
which it is currently occupied and used have been lawfully issued and are in
full force and effect.

     

    3.7           Labor
Matters.  Except
as set forth on Disclosure Schedule
(3.7), as of the Closing Date: (a) no strikes or other material labor
disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) hours worked by and payment made to employees of each
Credit Party comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters; (c) all payments due
from any Credit Party for employee health and welfare insurance have been paid
or accrued as a liability on the books of such Credit Party; (d) no Credit Party
is a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement, employment agreement, bonus, restricted stock,
stock option, or stock appreciation plan or agreement or any similar plan,
agreement or arrangement (and true and complete copies of any agreements
described on Disclosure Schedule
(3.7) have been delivered to Agent); (e) there is no organizing activity
involving any Credit Party pending or, to any Credit Party's knowledge,
threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g) there are no material complaints or charges against
any Credit Party pending or, to the knowledge of any Credit Party, threatened to
be filed with any Governmental Authority or
arbitrator based on, arising out of, in connection with, or otherwise relating
to the employment or termination of employment by any Credit Party of any
individual.

     

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

     

    3.8           Ventures, Subsidiaries and
Affiliates; Outstanding Stock and Indebtedness.  Except
as set forth in Disclosure Schedule
(3.8), as of the Closing Date, no Credit Party has any Subsidiaries, is
engaged in any joint venture or partnership with any other Person, or is an
Affiliate of any other Person.  All of the issued and outstanding
Stock of each Credit Party is owned, as of the Closing Date, by each of the
Stockholders and in the amounts set forth in Disclosure Schedule
(3.8).  Except as set forth in Disclosure Schedule
(3.8), as of the Closing Date, there are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
any Credit Party may be required to issue, sell, repurchase or redeem any of its
Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries.  All outstanding Indebtedness and Guaranteed
Indebtedness of each Credit Party as of the Closing Date (except for the
Obligations) is described in Section 6.3
(including Disclosure
Schedule (6.3)).

     

    3.9           Government
Regulation.  No
Credit Party is an “investment company” or an “affiliated person” of, or
“promoter” or “principal underwriter” for, an “investment company,” as such
terms are defined in the Investment Company Act of 1940.  No Credit
Party is subject to regulation under any federal or state statute that restricts
or limits its ability to incur Indebtedness or to perform its obligations
hereunder. The making of the Loans by Lenders to Borrower, the incurrence of the
Letter of Credit Obligations on behalf of Borrower, the application of the
proceeds thereof and repayment thereof and the consummation of the Related
Transactions will not violate any provision of any such statute or any rule,
regulation or order issued by the Securities and Exchange
Commission.

     

    3.10           Margin
Regulations.  No
Credit Party is engaged, nor will it engage, principally or as one of its
important activities, in the business of extending credit for the purpose of
“purchasing” or “carrying” any “margin stock” as such terms are defined in
Regulation U of the Federal Reserve Board as now and from time to time hereafter
in effect (such securities being referred to herein as “Margin
Stock”).  No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a “purpose credit” within the meaning of
Regulations T, U or X of the Federal Reserve Board.  No Credit Party
will take or permit to be taken any action that might cause any Loan Document to
violate any regulation of the Federal Reserve Board.

     

    3.11           Taxes.  All
Federal and other material tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority, and
all Charges have been paid prior to the date on which any fine, penalty,
interest or late charge may be added thereto for nonpayment thereof, excluding
Charges or other amounts being contested in accordance with Section 5.2(b) and
unless the failure to so file or pay would not reasonably be expected to result
in fines, penalties or interest in excess of $50,000 in the
aggregate.  Proper and accurate amounts have been withheld by each
Credit Party from its respective employees for all periods in full and complete
compliance with all applicable federal, state, local and foreign laws and such
withholdings have been timely paid to the respective Governmental
Authorities.  Disclosure

     

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    Schedule (3.11) sets
forth as of the Closing Date those taxable years for which any Credit Party's
tax returns are currently being audited by the IRS or any other applicable
Governmental Authority and any assessments or threatened assessments in
connection with such audit, or otherwise currently
outstanding.  Except as described in Disclosure Schedule
(3.11), as of the Closing Date, no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges.  Except as set forth on Disclosure Schedule
(3.11), none of the Credit Parties and their respective predecessors are
liable for any Charges: (a) under any agreement (including any tax sharing
agreements) or (b) to each Credit Party's knowledge, as a
transferee.  As of the Closing Date, no Credit Party has agreed or
been requested to make any adjustment under IRC Section 481(a), by reason of a
change in accounting method or otherwise, which would reasonably be expected to
have a Material Adverse Effect.

     

    3.12           ERISA.

     

    (a)           Disclosure Schedule
(3.12) lists as of the Closing Date, (i) all ERISA Affiliates and (ii)
all Plans and separately identifies all Pension Plans, including Title IV Plans,
Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare
Plans.  Copies of all such listed Plans, together with a copy of the
latest form IRS/DOL 5500-series form for each such Plan have been delivered to
Agent.  Except with respect to Multiemployer Plans, each Qualified
Plan has been determined by the IRS to qualify under Section 401 of the IRC, the
trusts created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and, nothing has occurred that would cause
the loss of such qualification or tax-exempt status.  Each Plan is in
compliance in all material respects with the applicable provisions of ERISA and
the IRC, including the timely filing of all reports required under the IRC or
ERISA, including the statement required by 29 CFR Section
2520.104-23.  Neither any Credit Party nor ERISA Affiliate has failed
to make any material contribution or pay any material amount due as required by
either Section 412 of the IRC or Section 302 of ERISA or the terms of any such
Plan.  Neither any Credit Party nor ERISA Affiliate has engaged in a
“prohibited transaction,” as defined in Section 406 of ERISA and Section 4975 of
the IRC, in connection with any Plan, that would subject any Credit Party to a
material tax on prohibited transactions imposed by Section 502(i) of ERISA or
Section 4975 of the IRC.

     

    (b)           Except
as set forth in Disclosure Schedule
(3.12): (i) no Title IV Plan has any material Unfunded Pension Liability;
(ii) no ERISA Event or event described in Section 4062(e) of ERISA with respect
to any Title IV Plan has occurred or is reasonably expected to occur; (iii)
there are no pending, or to the knowledge of any Credit Party, threatened
material claims (other than claims for benefits in the normal course),
sanctions, actions or lawsuits, asserted or instituted against any Plan or any
Person as fiduciary or sponsor of any Plan; (iv) no Credit Party or ERISA
Affiliate has incurred or reasonably expects to incur any material liability as
a result of a complete or partial withdrawal from a Multiemployer Plan; (v)
within the last five years no Title IV Plan of any Credit Party or ERISA
Affiliate has been terminated, whether or not in a “standard termination” as
that term is used in Section 4041 of ERISA, nor has any Title IV Plan of any
Credit Party or ERISA Affiliate (determined at any time within the past five
years) with material Unfunded Pension Liabilities been transferred outside of
the “controlled group” (within the meaning of Section 4001(a)(14) of ERISA) of
any Credit Party or ERISA Affiliate; (vi) except in the case of any ESOP,
Stock of all Credit Parties and their ERISA 

     

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    Affiliates
makes up, in the aggregate, no more than 10% of fair market value of the assets
of any Plan measured on the basis of fair market value as of the latest
valuation date of any Plan; and (vii) no liability under any Title IV Plan
has been satisfied with the purchase of a contract from an insurance company
that is not rated AAA by the Standard & Poor's Corporation or an equivalent
rating by another nationally recognized rating agency.

     

    3.13           No
Litigation.  No
action, claim, lawsuit, demand, investigation or proceeding is now pending or,
to the knowledge of any Credit Party, threatened against any Credit Party,
before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, “Litigation”),
(a) that challenges any Credit Party's right or power to enter into or
perform any of its obligations under the Loan Documents to which it is a party,
or the validity or enforceability of any Loan Document or any action taken
thereunder, or (b) that has a reasonable risk of being determined adversely to
any Credit Party and that, if so determined, could reasonably be expected to
have a Material Adverse Effect.  Except as set forth on Disclosure Schedule
(3.13), as of the Closing Date there is no Litigation pending or
threatened that seeks damages in excess of $250,000 or injunctive relief
against, or alleges criminal misconduct of, any Credit Party.

     

    3.14           Brokers.  Except
as set forth on Disclosure Schedule
(3.14), no broker or finder acting on behalf of any Credit Party or
Affiliate thereof brought about the obtaining, making or closing of the Loans or
the Related Transactions, and no Credit Party or Affiliate thereof has any
obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.

     

    3.15           Intellectual
Property.  As
of the Closing Date, each Credit Party owns or has rights to use all material
Intellectual Property necessary to continue to conduct its business as now
conducted by it or presently proposed to be conducted by it, and each registered
Patent, registered Trademark, registered Copyright and License (other than any
License in respect of commercially available software or any License in respect
of the presentation of any motion picture or other License necessary to conduct
the Business in the normal course) is listed, together with application or
registration numbers, as applicable, in Disclosure Schedule
(3.15).  Each Credit Party conducts its business and affairs
without infringement of or interference with any Intellectual Property of any
other Person in any material respect.  Except as set forth in Disclosure Schedule
(3.15), as of the Closing Date, no Credit Party is aware of any material
infringement claim by any other Person with respect to any Intellectual
Property.

     

    3.16           Full
Disclosure.  No
information contained in this Agreement, any of the other Loan Documents,
Financial Statements or Collateral Reports or other written reports from time to
time delivered hereunder or any written statement furnished by or on behalf of
any Credit Party to Agent or any Lender pursuant to the terms of this Agreement
(other than any Projections, pro forma statements or other forward looking
disclosures) contains or will contain, when delivered, any untrue statement of a
material fact or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading in light of the
circumstances under which they were made; provided that (a) with respect to
information relating to Borrower’s industry generally and trade data which
relates to a Person that is not a Credit Party, Borrower represents and warrants
only that such information is believed by it in good faith to be accurate in all
material respects, and (b) with respect to Financial Statements, 

     

    
      
         

      

      
        25

        
          

        

      

      
         

      

    

    other
than projected financial information, Borrower only represents that such
Financial Statements present fairly in all material respects the consolidated
financial condition of the applicable Person as of the dates
indicated.  Projections from time to time delivered hereunder are or
will be based upon the estimates and assumptions stated therein, all of which
Borrower believed at the time of delivery to be reasonable and fair in light of
current conditions and current facts known to Borrower as of such delivery date,
and reflect Borrower's good faith and reasonable estimates of the future
financial performance of Borrower and of the other information projected therein
for the period set forth therein.  Such Projections are not a guaranty
of future performance and actual results may differ from those set forth in such
Projections.  The Liens granted to Agent, on behalf of itself and
Lenders, pursuant to the Collateral Documents will at all times, subject to
compliance with, and the exclusions from, the provisions hereof and the
Collateral Documents, be fully perfected first priority Liens in and to the
Collateral described therein, subject, as to priority, only to Liens permitted
hereunder.

     

    3.17           Environmental
Matters.

     

    (a)           Except
as set forth in Disclosure Schedule
(3.17), as of the Closing Date: (i) the Real Estate is free of
contamination from any Hazardous Material except for such contamination that
would not materially adversely impact the value or marketability of such Real
Estate and that would not result in Environmental Liabilities that could
reasonably be expected to exceed $500,000; (ii) no Credit Party has caused or
suffered to occur any material Release of Hazardous Materials on, at, in, under,
above, to, from or about any of its Real Estate; (iii) the Credit Parties are
and have been in compliance with all Environmental Laws, except for such
noncompliance that would not result in Environmental Liabilities which could
reasonably be expected to exceed $500,000; (iv) the Credit Parties have
obtained, and are in compliance with, all Environmental Permits required by
Environmental Laws for the operations of their respective businesses as
presently conducted or as proposed to be conducted, except where the failure to
so obtain or comply with such Environmental Permits would not result in
Environmental Liabilities that could reasonably be expected to exceed $500,000,
and all such Environmental Permits are valid, uncontested and in good standing;
(v) no Credit Party is involved in operations or knows of any facts,
circumstances or conditions, including any Releases of Hazardous Materials, that
are likely to result in any Environmental Liabilities of such Credit Party which
could reasonably be expected to exceed $500,000; (vi) there is no Litigation
arising under or related to any Environmental Laws, Environmental Permits or
Hazardous Material that seeks damages, penalties, fines, costs or expenses in
excess of $500,000 or injunctive relief against any Credit Party; (vii) no
notice has been received by any Credit Party identifying it as a “potentially
responsible party” or requesting information under CERCLA or analogous state
statutes, and to the knowledge of the Credit Parties, there are no facts,
circumstances or conditions that may result in any Credit Party being identified
as a “potentially responsible party” under CERCLA or analogous state statutes;
and (viii) the Credit Parties have provided to Agent copies of all existing
environmental reports, reviews and audits and all written information pertaining
to actual or potential Environmental Liabilities, in each case relating to any
Credit Party.

     

    
      (b)           Each
Credit Party hereby acknowledges and agrees that Agent (i) is not now, and has
not ever been, in control of any of the Real Estate or any Credit Party's
affairs, and (ii) does not have the capacity through the provisions of the Loan
Documents or otherwise to 

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

     

    influence
any Credit Party's conduct with respect to the ownership, operation or
management of any of its Real Estate or compliance with Environmental Laws or
Environmental Permits.

     

    3.18           Insurance.  Disclosure Schedule
(3.18) lists all insurance policies of any nature maintained, as of the
Closing Date, for current occurrences by each Credit Party, as well as a summary
of the terms of each such policy.

     

    3.19           Deposit and Disbursement
Accounts.  Disclosure Schedule
(3.19) lists all banks and other financial institutions at which any
Credit Party maintains deposit or other accounts as of the Closing Date, and
such Schedule correctly identifies the name, address and telephone number of
each depository, the name in which the account is held, a description of the
purpose of the account, and the complete account number therefor.

     

    3.20           [Reserved]

     

    3.21           Trade
Relations.  As
of the Closing Date, there exists no actual or, to the knowledge of any Credit
Party, threatened termination or cancellation of, or any material adverse
modification or change in the business relationship of any Credit Party with any
supplier essential to its operations.

     

    3.22           Bonding;
Licenses.  Except
as set forth on Disclosure Schedule
(3.22), as of the Closing Date, no Credit Party is a party to or bound by
any surety bond agreement or bonding requirement with respect to products or
services sold by it.

     

    3.23           Solvency.  Both
before and after giving effect to (a) the Loans and Letter of Credit Obligations
to be made or incurred on the Closing Date or such other date as Loans and
Letter of Credit Obligations requested hereunder are made or incurred, (b) the
disbursement of the proceeds of such Loans pursuant to the instructions of
Borrower, (c) the Acquisition and the consummation of the other Related
Transactions and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each of the Borrower, individually, and the
Credit Parties, taken as a whole, is and will be Solvent.

     

    3.24           Acquisition
Agreement.  As
of the Closing Date, Borrower has delivered to Agent a complete and correct copy
of the Acquisition Agreement (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith) and the Reading Note.  No
Credit Party and to the knowledge of any Credit Party no other Person party
thereto is in default in the performance or compliance with any provisions
thereof.  The Acquisition Agreement complies with, and the Acquisition
has been consummated in accordance with, all applicable laws.  The
Acquisition Agreement is in full force and effect as of the Closing Date and has
not been terminated, rescinded or withdrawn. All requisite approvals by
Governmental Authorities having jurisdiction over Seller, any Credit Party and
other Persons referenced therein, with respect to the transactions contemplated
by the Acquisition Agreement, have been obtained, and no such approvals impose
any conditions to the consummation of the transactions contemplated by the
Acquisition Agreement or to the conduct by any Credit Party of its business
thereafter.  To each Credit Party's knowledge, none of the Sellers’
representations or warranties in the Acquisition Agreement contain any untrue
statement of a material fact or omit any fact necessary to make the

     

    
      
         

      

      
        27

        
          

        

      

      
         

      

    

    statements
therein not misleading.  Each of the representations and warranties
given by each applicable Credit Party in the Acquisition Agreement is true and
correct in all material respects. 

     

    3.25           Status of
Holdings.  Prior
to the Closing Date, Holdings will not have engaged in any business or incurred
any Indebtedness or any other liabilities (except in connection with its
corporate formation, the Related Transactions Documents and this
Agreement).

     

    3.26           OFAC.  No
Credit Party (i) is a person whose property or interest in property is blocked
or subject to blocking pursuant to Section 1 of Executive Order 13224 of
September 23, 2001 Blocking Property and Prohibiting Transactions With Persons
Who Commit, Threaten to Commit, or Support Terrorism (66 Fed. Reg. 49079
(2001)), (ii) engages in any dealings or transactions prohibited by Section 2 of
such executive order, or is otherwise associated with any such person in any
manner violative of Section 2, or (iii) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other U.S. Department of Treasury’s Office of Foreign
Assets Control regulation or executive order.

     

    3.27           Patriot
Act.  Each
Credit Party is in compliance, in all material respects, with the (i) the
Trading with the Enemy Act, as amended, and each of the foreign assets control
regulations of the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) the Uniting And Strengthening America By Providing
Appropriate Tools Required To Intercept And Obstruct Terrorism (USA Patriot Act
of 2001).  No part of the proceeds of the Loans will be used, directly
or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended.

     

    4.      FINANCIAL
STATEMENTS AND INFORMATION

     

    4.1           Reports and
Notices.

     

    (a)           Each
Credit Party executing this Agreement hereby agrees that from and after the
Closing Date and until the Termination Date, it shall deliver to Agent or to
Agent and Lenders, as required, the Financial Statements, notices, Projections
and other information at the times, to the Persons and in the manner set forth
in Annex
E.

     

    (b)           Each
Credit Party executing this Agreement hereby agrees that from and after the
Closing Date and until the Termination Date, it shall deliver to Agent or to
Agent and Lenders, as required, the various Collateral Reports at the times, to
the Persons and in the manner set forth in Annex F.

     

    4.2           Communication with Accountants.  Each
Credit Party executing this Agreement authorizes (a) Agent and (b) so long as an
Event of Default has occurred and is continuing, each Lender, to communicate
directly with its independent certified public accountants, including Deloitte
& Touche LLP, and authorizes and shall instruct those accountants and
advisors to communicate to Agent and each Lender information relating to any

     

    
      
         

      

      
        28

        
          

        

      

      
         

      

    

    Credit
Party with respect to the business, results of operations and financial
condition of any Credit Party.  In connection with the exercise of any
such rights, Agent or such Lender shall provide Borrower with a copy of all
transmittals and requests made to Borrower’s accountants concurrently with the
transmittal thereof to such accountants, and shall give Borrower reasonably
prior opportunity to participate in any conversations or meetings with such
accountants.

     

    5.      AFFIRMATIVE
COVENANTS

     

    Each
Credit Party executing this Agreement jointly and severally agrees as to all
Credit Parties that from and after the date hereof and until the Termination
Date:

     

    5.1           Maintenance of Existence and
Conduct of Business.  Each
Credit Party shall:  do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence and its
material rights and franchises, except as permitted by Section 6.1; continue
to conduct its business substantially as now conducted or as otherwise permitted
hereunder; and at all times maintain, preserve and protect all of its assets and
properties used or useful in the conduct of its business, and keep the same in
good repair, working order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time make, or cause to be
made, all necessary or appropriate repairs, replacements and improvements
thereto consistent with industry practices.  Except as otherwise
permitted hereunder, each Credit Party shall maintain good and marketable fee
simple title to all of its owned Real Estate and a valid leasehold interest in
all of its leased Real Estate.

     

    5.2           Payment of
Charges.

     

    (a)           Subject
to Section
5.2(b), each Credit Party shall pay and discharge or cause to be paid and
discharged promptly all (i) material Charges imposed upon it, its income
and profits, or any of its property (real, personal or mixed), all Charges with
respect to tax, social security and unemployment withholding with respect to its
employees and all other material Charges, (ii) lawful claims for labor,
materials, supplies and services or otherwise, and (iii) all storage or
rental charges payable to warehousemen and bailees, in each case, before any
thereof shall become past due, except in the case of clauses (ii) and
(iii) where the failure to pay or discharge such Charges would not result
in aggregate liabilities in excess of $500,000.

     

    (b)           Each
Credit Party may in good faith contest, by appropriate proceedings, the validity
or amount of any Charges, Taxes or claims described in Section 5.2(a); provided, that (i)
adequate reserves with respect to such contest are maintained on the books of
such Credit Party, in accordance with GAAP; (ii) no Lien other than a Permitted
Encumbrance shall be imposed to secure payment of such Charges (other than
payments to warehousemen and/or bailees) that is superior to any of the Liens
securing payment of the Obligations and such contest is maintained and
prosecuted continuously and with diligence and operates to suspend collection or
enforcement of such Charges, (iii) none of the Collateral  becomes
subject to forfeiture or loss as a
result of such contest, and (iv) such Credit Party shall promptly pay or
discharge such contested Charges, Taxes or claims and all additional charges,
interest, penalties and expenses, if any, and shall deliver to Agent evidence
reasonably acceptable to Agent of such compliance, payment or discharge, if such
contest is terminated or discontinued adversely to such Credit Party or the
conditions set forth in this Section 5.2(b) are no
longer met.

     

    
      
         

      

      
        29

        
          

        

      

      
         

      

    

     

    5.3           Books and
Records.  Each
Credit Party shall keep adequate books and records with respect to its business
activities in which proper entries, reflecting all financial transactions, are
made in accordance with GAAP and on a basis consistent with the Financial
Statements attached as Disclosure Schedule
(3.4(a)).

     

    5.4           Insurance; Damage to or
Destruction of Collateral.

     

    (a)           The
Credit Parties shall, at their sole cost and expense, maintain the policies of
insurance described on Disclosure Schedule
(3.18) as in effect on the date hereof or  other replacement
policies of insurance covering similar risks and in such amounts as are
maintained by other Persons engaged in a similar Business and issued by insurers
reasonably acceptable to Agent.  Such policies of insurance (or the
loss payable and additional insured endorsements delivered to Agent) shall
contain provisions pursuant to which the insurer agrees to provide thirty (30)
days prior written notice to Agent in the event of any non-renewal, cancellation
or amendment of any such insurance policy.  If any Credit Party at any
time or times hereafter shall fail to obtain or maintain any of the policies of
insurance required above or to pay all premiums relating thereto, Agent may at
any time or times thereafter obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto that Agent
deems advisable.  Agent shall have no obligation to obtain insurance
for any Credit Party or pay any premiums therefor.  By doing so, Agent
shall not be deemed to have waived any Default or Event of Default arising from
any Credit Party's failure to maintain such insurance or pay any premiums
therefor.  All sums so disbursed, including reasonable attorneys'
fees, court costs and other charges related thereto, shall be payable on demand
by Borrower to Agent and shall be additional Obligations hereunder secured by
the Collateral.

     

    (b)           If
reasonably requested by Agent, each Credit Party shall deliver to Agent from
time to time a report of a reputable insurance broker reasonably satisfactory to
Agent, with respect to its insurance policies.

     

    (c)           Borrower
and each Credit Party shall deliver to Agent, in form and substance reasonably
satisfactory to Agent, endorsements to (i) all “All Risk” and business
interruption insurance of Borrower and the other Credit Parties naming Agent, on
behalf of itself and Lenders, as loss payee, and (ii) all general liability and
other liability policies of the Credit Parties naming Agent, on behalf of itself
and Lenders, as additional insured.  Each Credit Party irrevocably
makes, constitutes and appoints Agent (and all officers, employees or agents
designated by Agent), so long as any Default or Event of Default has occurred
and is continuing , as Borrower’s and each other Credit Party’s true and lawful
agent and attorney-in-fact for the purpose of making, settling and adjusting
claims under such “All Risk” policies of insurance, endorsing the name of each
Credit Party on any check or other item of payment for the proceeds of such “All
Risk” policies of insurance and for making all determinations and decisions with
respect to such “All Risk” policies of insurance.  Agent shall have no
duty to exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney.  Borrower shall promptly notify Agent of any loss,
damage, or destruction to the Collateral in the amount of $250,000 or more,
whether or not covered by insurance.  After deducting from such
proceeds (i) the expenses incurred by Agent in the collection or handling
thereof, and (ii) amounts required to be paid to creditors (other than Lenders)
having Permitted Encumbrances and amounts required to be paid to landlord under
any leases, Agent may, at its option, apply such proceeds to the reduction of

     

    
      
         

      

      
        30

        
          

        

      

      
         

      

    

    the
Obligations in accordance with Section 1.3(d),
provided that
in the case of insurance proceeds pertaining to any Credit Party other than
Borrower, such insurance proceeds shall be applied to the Loans owing by
Borrower, or permit or require each Credit Party to use such money, or any part
thereof, to replace, repair, restore or rebuild the Collateral in a diligent and
expeditious manner with materials and workmanship of substantially the same
quality as existed before the loss, damage or destruction. Notwithstanding the
foregoing, if the casualty giving rise to such insurance proceeds could not
reasonably be expected to have a Material Adverse Effect, no Default has
occurred and is continuing, and such loss or casualty does not occur at, or
relate to, a theatre which generates more than 5% of Borrower’s revenues, Agent
shall, to the extent Agent is in possession thereof, deliver to the applicable
Credit Party all casualty insurance proceeds so that the applicable Credit Party
can replace, restore, repair or rebuild the property; provided that if such
Credit Party has not completed or entered into binding agreements to complete
such replacement, restoration, repair or rebuilding within 270 days of such
casualty, Agent may apply such insurance proceeds to the Obligations in
accordance with Section 1.3(c); provided further that
in the case of insurance proceeds pertaining to any Credit Party other than
Borrower, such insurance proceeds shall be applied to the Loans owing by
Borrower.  All insurance proceeds that are to be made available to
Borrower to replace, repair, restore or rebuild the Collateral shall be applied
by Agent to reduce the outstanding principal balance of the Revolving Loan
(which application shall not result in a permanent reduction of the Revolving
Loan Commitment).  All insurance proceeds made available to any Credit
Party that is not a Borrower to replace, repair, restore or rebuild Collateral
shall be deposited in a Blocked Account.  Thereafter, such funds shall
be made available to such Credit Party to provide funds to replace, repair,
restore or rebuild the Collateral as follows: (i) Borrower shall request a
Revolving Credit Advance or release from the cash collateral account be made to
such Credit Party in the amount requested to be released; and (ii) so long as
the conditions set forth in Section 2.2 have been
met, Revolving Lenders shall make such Revolving Credit Advance or Agent shall
release funds from such Blocked Account.  To the extent not used to
replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with Section 1.3(c); provided that in the
case of insurance proceeds pertaining to any Credit Party other than Borrower,
such insurance proceeds shall be applied to the Loans owing by
Borrower.

     

    5.5           Compliance with
Laws.  Each
Credit Party shall comply with all federal, state, local and foreign laws and
regulations applicable to it, including ERISA, labor laws, and Environmental
Laws and Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

     

    5.6           Supplemental
Disclosure.  From
time to time as may be reasonably requested by Agent (which request will not be
made more frequently than once each year absent the occurrence and continuance
of an Event of Default) or at Credit Parties' election, the Credit Parties shall
supplement each Disclosure Schedule hereto, or any representation herein or in
any other Loan Document, with respect to any matter hereafter arising that, if
existing or occurring at the date of this Agreement, would have been required to
be set forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein); provided that (a) no

     

    
      
         

      

      
        31

        
          

        

      

      
         

      

    

    such
supplement to any such Disclosure Schedule or representation shall amend,
supplement or otherwise modify any Disclosure Schedule or representation, or be
or be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Agent and Requisite Lenders
in writing, and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing
Date.

     

    5.7           Intellectual
Property.  Each
Credit Party will conduct its business and affairs without material infringement
of or material interference with any Intellectual Property of any other Person
in any material respect and shall comply in all material respects with the terms
of its Licenses.

     

    5.8           Environmental
Matters.  Each
Credit Party shall and shall reasonably attempt to cause each Person within its
control to: (a) conduct its operations and keep and maintain its Real Estate in
compliance with all Environmental Laws and Environmental Permits other than
noncompliance that could not reasonably be expected to have a Material Adverse
Effect; (b) implement any and all investigation, remediation, removal and
response actions that are appropriate or necessary to maintain the value and
marketability of the Real Estate or to otherwise comply with Environmental Laws
and Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate in all material
respects; (c) notify Agent promptly after such Credit Party becomes aware of any
violation of Environmental Laws or Environmental Permits or any Release on, at,
in, under, above, to, from or about any Real Estate that is reasonably likely to
result in Environmental Liabilities in excess of $250,000; and (d) promptly
forward to Agent a copy of any material order, notice, request for information
or any communication or report received by such Credit Party in connection with
any such violation or Release or any other matter relating to any Environmental
Laws or Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of $250,000 in each case whether or not the
Environmental Protection Agency or any Governmental Authority has taken or
threatened any action in connection with any such violation, Release or other
matter.  If Agent at any time has a reasonable basis to believe that
there may be a violation of any Environmental Laws or Environmental Permits by
any Credit Party or any Environmental Liability arising thereunder, or a Release
of Hazardous Materials on, at, in, under, above, to, from or about any of its
Real Estate, that, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party shall, upon Agent’s written request (i)
cause the performance of such environmental audits including subsurface sampling
of soil and groundwater, and preparation of such environmental reports, at
Borrower’s expense, as Agent may from time to time reasonably request, which
shall be conducted by reputable environmental consulting firms reasonably
acceptable to Agent and shall be in form and substance reasonably acceptable to
Agent, and (ii) permit Agent or its representatives to have access to all Real
Estate for the purpose of conducting such environmental audits and testing as
Agent deems appropriate, including subsurface sampling
of soil and groundwater.  Borrower shall reimburse Agent for the
reasonable and documented costs of such audits and tests and the same will
constitute a part of the Obligations secured hereunder.

       

      5.9           Access Agreements; Liens on
Real Estate Interests.

    

     

    
      
         

      

      
        32

        
          

        

      

      
         

      

    

     

    (a)           Fee Owned Real Estate and
Leasehold Interest with respect to Movie Theatres. On or prior to
the Closing Date, Agent shall have received Mortgages covering all Mortgaged
Properties together with all requirements set forth in Annex D with respect
thereto.  To the extent permitted hereunder, if any Credit Party
proposes to acquire a fee ownership interest in Real Estate or a leasehold
interest with respect to any movie theatre after the Closing Date, it shall
within 10 Business Days of the consummation of such acquisition provide to Agent
a mortgage or deed of trust granting Agent a first priority Lien on such Real
Estate, together with, if requested by Agent and within such reasonable time
frames as may be requested by Agent, environmental audits, mortgage title
insurance policy, real property survey, local counsel opinion(s), and, if
required by Agent, supplemental casualty insurance and flood insurance, landlord
estoppel agreements, mortgagee waivers, if applicable and such other documents,
instruments or agreements reasonably requested by Agent, in each case, in form
and substance reasonably satisfactory to Agent.  If any lease which is
subject to a Mortgage in favor of Agent expires or terminates and is
subsequently renewed, Borrower shall with reasonable promptness provide to Agent
a mortgage or deed of trust granting Agent a first priority Lien on such Real
Estate, together with, if requested by Agent and within such reasonable time
frames as may be requested by Agent, mortgage title insurance policy, local
counsel opinion(s), and, if required by Agent, supplemental casualty insurance
and flood insurance, landlord estoppel agreements, mortgagee waivers, if
applicable and such other documents, instruments or agreements reasonably
requested by Agent, in each case, in form and substance reasonably satisfactory
to Agent.

     

    (b)           Other Leased Property.  On
or prior to the Closing Date, Agent shall have received, with respect to all
leased property where (1) a Credit Party is the lessee, (2) the leased property
does not contain a movie theatre, (3) all of such leased property has not been
sublet to a third party and (4) the Credit Parties maintain Collateral in excess
of $250,000, a landlord waiver or bailee agreement with respect to such
location, which agreement shall contain a waiver or subordination of all Liens
or claims that such lessor, mortgagee or bailee may assert against the
Collateral at that location, shall grant Agent access to the Collateral at that
location, with respect to all leased property shall contain the consent of the
lessor to a Mortgage on such location in favor of Agent, and shall otherwise be
reasonably satisfactory in form and substance to Agent.  After the
Closing Date, no real property or warehouse space which does not contain a movie
theatre and where Collateral with a value in excess of $250,000 is maintained
shall be leased by any Credit Party without the prior written consent of Agent
unless and until a satisfactory agreement with the applicable lessor or bailee
letter, as appropriate, shall first have been obtained with respect to such
location.  Each Credit Party shall timely and fully pay and perform
its obligations under all leases and other agreements with respect to each
leased location or public warehouse where any Collateral is or may be
located.

     

    5.10           Interest Rate/Currency
Fluctuations Protection.  Within
ninety (90) days after the Closing Date, Borrower shall enter into and maintain
interest rate cap, swap or collar agreements,
or other agreements or arrangements designed to provide protection against
fluctuations in interest rates, which shall be on terms, for a period of at
least 2 years following the Closing Date and with counter parties reasonably
acceptable to Agent, and pursuant to which Borrower is protected against
increases in interest rates from and after the date of such contracts as to a
notional amount of not less than 50% of the Loans outstanding on the Closing
Date.

     

    
      
         

      

      
        33

        
          

        

      

      
         

      

    

     

    5.11           Further
Assurances.  Each
Credit Party executing this Agreement agrees that it shall and shall cause each
other Credit Party to, at such Credit Party's expense and upon the reasonable
request of Agent, duly execute and deliver, or cause to be duly executed and
delivered, to Agent such further instruments and do and cause to be done such
further acts as may be necessary or proper in the reasonable opinion of Agent to
carry out more effectively the provisions and purposes of this Agreement and
each Loan Document.  Each Credit Party (other than Holdings) executing
this Agreement acknowledges and agrees that it will not issue any Stock to any
other Person after the Closing Date unless (i) no Change of Control would result
therefrom and (ii) such Stock is pledged to Agent, pursuant to documentation and
with such diligence as Agent shall request.

     

    5.12           Future Credit
Parties.  In
the event that, subsequent to the Closing Date, any Person becomes a Domestic
Subsidiary, such Person shall within 10 Business Days of becoming a Domestic
Subsidiary become a Credit Party, and concurrently with such Person’s becoming a
Credit Party, the Credit Party that owns the Stock of such Person shall (i)
pledge 100% such Stock and all Intercompany Notes issued by such Person to Agent
pursuant to the Borrower Pledge Agreement or such other pledge agreement in form
and substance reasonably satisfactory to Agent, (ii) shall cause such Person (A)
to become a party to this Agreement, and (B) to provide all relevant
documentation with respect thereto and to take such other actions as such Person
would have been required to provide and take pursuant to Annex D if such
Person had been a Credit Party on the Closing Date; (iii) shall cause such
Person (A) to become a party to the Subsidiary Guaranty, the Security Agreement
and, if such Credit Party owns any Stock, cause such Credit Party to become a
party to a stock pledge agreement in form and substance reasonably satisfactory
to Agent, pursuant to which such Credit Party shall pledge 100% of the Stock of
any of its Domestic Subsidiaries and 66% of the voting Stock and 100% of the
non-voting Stock of its first tier Foreign Subsidiaries and (B) to provide all
relevant documentation with respect thereto and to take such other actions as
such Person would have been required to provide and take pursuant to Annex D if such
Person had been a Credit Party on the Closing Date and (iv) if such Person owns
or leases any Real Estate, to comply with Sections 5.9 with
respect to such Real Estate.  Borrower agrees that, following the
delivery of any Collateral Documents required to be executed and delivered by
this Section
5.11 the recordation thereof, if applicable, and the completion of such
other conditions as may be necessary to perfect a security interest in or a lien
upon the assets purportedly the subject of such Collateral Document, Agent shall
have a valid and enforceable, perfected, first priority Lien on the respective
Collateral covered thereby, free and clear of all Liens, other than (i)
Permitted Encumbrances and (ii) perfection of Liens in other assets of the
Credit Parties in an aggregate amount not to exceed $100,000 at any one
time.  All actions to be taken pursuant to this Section 5.11 shall be
at the expense of Borrower or the applicable Credit Party, and shall be taken to
the reasonable satisfaction of Agent.

    

      5.13           Post Closing.  Each
Credit Party executing this Agreement agrees that it shall and shall cause each
other Credit Party to:

       

      (i)           deliver
to the Agent no later than 60 days after the Closing Date, the audited
consolidated balance sheets at June 30, 2005 and 2006 and the related statements
of income and cash flows of Sellers with respect to the Acquired Theatres for
the Fiscal Years then ended, certified by KPMG LLP;

    

    
      
         

      

      
        34

        
          

        

      

      
         

      

    

     

    (ii)           deliver
to the Agent no later than 60 days after the Closing Date (which time period may
be extended in the Agent’s discretion), (1) a landlord estoppel agreement, in
form and substance satisfactory to the Agent, with respect to the leased
location at the Mockingbird Station Shopping Center, Dallas County, Texas and
(2) a leasehold mortgage, in form and substance satisfactory to the Agent, with
respect to the leased location at the Mockingbird Station Shopping Center,
Dallas County, Texas;

     

    (iii)           use
commercially reasonable efforts to deliver to the Agent no later than 90 days
after the Closing Date, landlord estoppel agreements, in form and substance
reasonably satisfactory to the Agent, with respect to the following Acquired
Theatres: Koko Marina; Ko’olau; Kaahumanu; and Kukui Mall;

     

    (iv)           deliver
to the Agent no later than 180 days after the Closing Date (which time period
may be extended in the Agent’s discretion), either (1) (x) a landlord estoppel
agreement, in form and substance satisfactory to the Agent, with respect to the
leased location at 4211 Waialae Avenue, Honolulu, Hawaii and (y) a leasehold
mortgage, in form and substance satisfactory to the Agent, with respect to the
leased location at 4211 Waialae Avenue, Honolulu, Hawaii or (2) a collateral
assignment duly executed by Borrower and Kahala Center Company, in form and
substance satisfactory to the Agent, with respect to the Kahala Management
Agreement.

     

    (v)           deliver
to the Agent not later than 120 days after the Closing Date, with respect to the
Koko Marina 8 leased location, evidence satisfactory to Agent of (1) recordation
of a certified copy of (x) Stipulation for Dismissal With Prejudice of All
Claims in the Complaint and First Amended Counterclaim Except for Claims Brought
by Counterclaimants Against Counterclaim Defendant Funds 4 US, LLC, filed
November 20, 2006, and (y) Release and Discharge of Notice of Pendency of Action
filed on September 27, 2004, filed December 29, 2005, and (2) recordation of a
Release and Discharge of Notice of Pendency of Action that was recorded November
20, 2003 as Document No. 2003-254884.

     

    6.      NEGATIVE
COVENANTS

     

    Each
Credit Party executing this Agreement jointly and severally agrees as to all
Credit Parties that from and after the date hereof until the Termination
Date:

     

    6.1           Mergers, Subsidiaries,
Etc.

     

      No
Credit Party shall directly or indirectly, by operation of law or otherwise
without the prior written consent of the Requisite Lenders (other than the
Related Transactions), (a) form or acquire any Foreign Subsidiary or (b) merge
with, consolidate with, acquire all or substantially all of the assets or Stock
of, or otherwise combine with or acquire, any Person; provided that: any
Credit Party may merge, consolidate or liquidate with
another Credit Party; provided that if
Borrower is a party to such merger or consolidation, Borrower shall be the
surviving entity.  Notwithstanding the foregoing, Borrower (or
Holdings, so long as contemporaneously therewith, all assets so acquired are
transferred to Borrower), may acquire all or substantially all of the assets or
Stock of, any Person (the “Target”) or
consummate any Theater Acquisition (in each case, a “Permitted
Acquisition”) subject to the satisfaction of each of the following
conditions:

       

      (i)           Agent
shall receive at least thirty (30) Business Days' prior

    

     

    
      
         

      

      
        35

        
          

        

      

      
         

      

    

    written
notice of such proposed Permitted Acquisition, which notice shall include a
reasonably detailed description of such proposed Permitted
Acquisition;

     

    (ii)           such
Permitted Acquisition shall only involve assets located in the United States or
Canada, shall be in a competitive free film zone and comprising a business, or
those assets of a business, of the type engaged in by Borrower as of the Closing
Date, and which business would not subject Agent or any Lender to regulatory or
third party approvals in connection with the exercise of its rights and remedies
under this Agreement or any other Loan Documents other than approvals applicable
to the exercise of such rights and remedies with respect to Borrower prior to
such Permitted Acquisition;

     

    (iii)           such
Permitted Acquisition shall be consensual and shall have been approved by the
Target's board of directors;

     

    (iv)           no
additional Indebtedness, Guaranteed Indebtedness, contingent obligations or
other liabilities shall be incurred, assumed or otherwise be reflected on a
consolidated balance sheet of Borrower and Target after giving effect to such
Permitted Acquisition, except (A) Loans made hereunder, (B) Indebtedness
permitted pursuant to Section 6.7(c) and
(C) ordinary course trade payables, accrued expenses and unsecured Indebtedness
of the Target to the extent no Default or Event of Default has occurred and is
continuing or would result after giving effect to such Permitted
Acquisition;

     

    (v)           the
sum of all amounts payable in connection with all Permitted Acquisitions
(including all transaction costs and all Indebtedness, liabilities and
contingent obligations incurred or assumed in connection therewith or otherwise
reflected on a consolidated balance sheet of Borrower and Target) shall not
exceed in the aggregate $15,000,000 in the case of all or any portion of such
Permitted Acquisitions funded with the proceeds of the Loans and $25,000,000 for
all such Permitted Acquisitions;

     

    (vi)           the
Target shall not have incurred an operating loss for the trailing twelve-month
period preceding the date of the Permitted Acquisition, as determined based upon
the Target's financial statements for its most recently completed fiscal year
and its most recent interim financial period completed within sixty (60) days
prior to the date of consummation of such Permitted Acquisition and after giving
effect to cost savings, synergies and other savings approved by
Agent;

     

    (vii)           the
business and assets acquired in such Permitted Acquisition shall be free and
clear of all Liens (other than Permitted Encumbrances);

    

      (viii)                      at
or prior to the closing of any Permitted Acquisition, Agent will be granted a
first priority perfected Lien (subject to Permitted Encumbrances) in all assets
acquired pursuant thereto or in the assets and Stock of the Target, and Holdings
and Borrower and the Target shall have executed such documents and taken such
actions as may be required by Agent in connection therewith;

       

      (ix)           Concurrently
with delivery of the notice referred to in clause (i) above,
Borrower shall have delivered to Agent, in form and substance reasonably
satisfactory to Agent:

    

    
      
         

      

      
        36

        
          

        

      

      
         

      

    

     

    (A)                      a
pro forma consolidated balance sheet, income statement and cash flow statement
of Holdings and its Subsidiaries (the “Acquisition Pro
Forma”), based on recent financial statements, which shall be complete
and shall fairly present in all material respects the assets, liabilities,
financial condition and results of operations of Holdings and its Subsidiaries
in accordance with GAAP consistently applied, but taking into account such
Permitted Acquisition and the funding of all Loans in connection therewith, and
such Acquisition Pro Forma shall reflect that (x) on a pro forma basis, Holdings
and its Subsidiaries would have had a ratio of Funded Debt to EBITDA not in
excess of 2.75 to 1.0 for the four quarter period reflected in the Compliance
Certificate most recently delivered to Agent pursuant to Annex E prior to the
consummation of such Permitted Acquisition (after giving effect to such
Permitted Acquisition and all Loans funded in connection therewith as if made on
the first day of such period), (y) average daily Borrowing Availability for
the 90-day period preceding the consummation of such Permitted Acquisition would
have exceeded $1,000,000 on a pro forma basis (after giving effect to such
Permitted Acquisition and all Loans funded in connection therewith as if made on
the first day of such period) and the Acquisition Projections (as hereinafter
defined) shall reflect that such Borrowing Availability of $1,000,000 shall
continue for at least ninety (90) days after the consummation of such Permitted
Acquisition, and (z) on a pro forma basis, no Event of Default has occurred
and is continuing or would result after giving effect to such Permitted
Acquisition and Borrower would have been in compliance with the financial
covenants set forth in Annex G for the four
quarter period reflected in the Compliance Certificate most recently delivered
to Agent pursuant to Annex E prior to the
consummation of such Permitted Acquisition (after giving effect to such
Permitted Acquisition and all Loans funded in connection therewith as if made on
the first day of such period);

     

    (B)                      updated
versions of the most recently delivered Projections covering the one (1) year
period commencing on the date of such Permitted Acquisition and otherwise
prepared in accordance with the Projections (the “Acquisition
Projections”) and based upon historical financial data of a recent date
reasonably satisfactory to Agent, taking into account such Permitted
Acquisition; and

     

    (C)                      a
certificate of the chief financial officer of Holdings and Borrower to the
effect that: (w) Borrower (after taking into consideration all rights of
contribution and indemnity Borrower has against Holdings and each other
Subsidiary of Holdings) will be Solvent upon the consummation of the Permitted
Acquisition; (x) the Acquisition Pro Forma fairly presents the financial
condition of Holdings and Borrower (on a
consolidated basis) as of the date thereof after giving effect to the Permitted
Acquisition; (y) the Acquisition Projections are reasonable estimates of the
future financial performance of Holdings and Borrower subsequent to the date
thereof based upon the historical performance of Holdings, Borrower and the
Target and show that Holdings and Borrower shall continue to be in compliance
with the financial covenants set forth in Annex G for the
1-year period thereafter; and (z) Holdings and Borrower has completed their due
diligence investigation with respect to the Target and such Permitted
Acquisition, which investigation was conducted in a manner similar to that which
would have been conducted by a prudent purchaser of a comparable business and
the results of which investigation were delivered to Agent and
Lenders;

     

    
      
         

      

      
        37

        
          

        

      

      
         

      

    

     

    (x)           on
or prior to the date of such Permitted Acquisition, Agent shall have received,
in form and substance reasonably satisfactory to Agent, copies of the
acquisition agreement and related agreements and instruments, and all opinions,
certificates, lien search results and other documents reasonably requested by
Agent, including those specified in the last sentence of Section 5.9;
and

     

    (xi)           at
the time of such Permitted Acquisition and after giving effect thereto, no
Default or Event of Default has occurred and is continuing.

     

    6.2           Investments; Loans and
Advances.  Except
as otherwise expressly permitted by this Section 6, no Credit
Party shall make or permit to exist any investment in, or make, accrue or permit
to exist loans or advances of money to, any Person, through the direct or
indirect lending of money, holding of securities or otherwise, except
that:  (a) each Credit Party may hold investments comprised of notes
payable, or stock or other securities issued by Account Debtors to such Credit
Party pursuant to negotiated agreements with respect to settlement of such
Account Debtor's Accounts in the ordinary course of business; (b) each Credit
Party may make and hold investments in respect of prepaid expenses, negotiable
instruments held for collection or lease, workers’ compensation, performance and
other similar deposits provided to third parties in the ordinary course of
business; (c) each Credit Party may hold investments constituting non-cash
consideration received by such Credit Party in connection with asset
dispositions permitted hereby; (d) each Credit Party may make Investments in
connection with Permitted Acquisitions; (e) each Credit Party may make
investments in any Guarantor (other than Reading or Holdings) and any Guarantor
may make investments in Borrower or in any other Guarantor (other than Reading
or Holdings), (f) each Credit Party may, with the prior written consent of the
Agent (which consent shall not be unreasonably withheld), make other investments
funded with proceeds of equity issuances or capital contributions not required
to be used repay the Loans; (g) maintain its existing investments in its
Subsidiaries as of the Closing Date; (h) each Credit Party may hold investments
resulting from hedging obligations under swaps, caps and collar arrangements
arranged by GE Capital or any Lender entered into pursuant to Section 5.10 or any
other hedging obligation entered into for non-speculative purposes and (i) so
long as no Default or Event of Default has occurred and is continuing, Borrower
may make investments, subject to Control Letters in favor of Agent for the
benefit of Lenders or otherwise subject to a perfected security interest in
favor of Agent for the benefit of Lenders, in (i) marketable direct
obligations issued or unconditionally guaranteed by the United States of America
or any agency thereof maturing within one year from the date of acquisition
thereof, (ii) commercial paper maturing no more than one year from the date
of creation thereof and currently having the highest rating obtainable
from either Standard & Poor's Ratings Group or Moody's Investors Service,
Inc., (iii) certificates of deposit maturing no more than one year from the date
of creation thereof issued by commercial banks incorporated under the laws of
the United States of America, each having combined capital, surplus and
undivided profits of not less than $300,000,000 and having a senior unsecured
rating of “A” or better by a nationally recognized rating agency (an “A Rated Bank”), (iv)
demand and time deposits maturing no more than thirty (30) days from the date of
creation thereof with A Rated Banks and (v) mutual funds that invest solely in
one or more of the investments described in clauses (i) through
(iv) above, and (j) other investments not exceeding $100,000 in the
aggregate at any time outstanding.

     

    
      
         

      

      
        38

        
          

        

      

      
         

      

    

     

    6.3           Indebtedness.

     

    (a)           No
Credit Party shall create, incur, assume or permit to exist any Indebtedness,
except (without duplication) (i) Indebtedness secured by purchase money security
interests and Capital Leases permitted in Section 6.7(c), (ii)
the Loans and the other Obligations, (iii) unfunded pension fund and other
employee benefit plan obligations and liabilities to the extent they are
permitted to remain unfunded under applicable law, (iv) existing Indebtedness
described in Disclosure Schedule
(6.3) and refinancings thereof or amendments or modifications thereof
that do not have the effect of increasing the principal amount thereof or
changing the amortization thereof (other than to extend the same) and that are
otherwise on terms and conditions no less favorable taken as a whole to any
Credit Party, Agent or any Lender, than the terms of the Indebtedness being
refinanced, amended or modified, (v) hedging obligations under swaps, caps and
collar arrangements arranged by GE Capital or any Lender entered into pursuant
to Section 5.10
or any other hedging obligation entered into for non-speculative purposes, (vi)
Indebtedness specifically permitted under Section 6.1,
(vii) obligations under surety bonds, appeal or similar obligations entered
into in the ordinary course of business, and (viii) Indebtedness consisting of
intercompany loans and advances made by Borrower to any other Credit Party that
is a Guarantor or by any such Guarantor to Borrower; provided, that: (A)
Borrower shall have executed and delivered to each such Guarantor, and each such
Guarantor shall have executed and delivered to Borrower, if so requested by
Agent, a demand note (collectively, the “Intercompany Notes”)
to evidence any such intercompany Indebtedness owing at any time by Borrower to
such Guarantor or by such Guarantor to Borrower, which Intercompany Notes shall
be in form and substance reasonably satisfactory to Agent and shall be pledged
and delivered to Agent pursuant to the applicable Pledge Agreement or Security
Agreement as additional collateral security for the Obligations; (B) Borrower
shall record all intercompany transactions on its books and records in a manner
reasonably satisfactory to Agent; (C) the obligations of Borrower under any such
Intercompany Notes shall be subordinated to the Obligations of Borrower
hereunder in a manner reasonably satisfactory to Agent; (D) at the time any such
intercompany loan or advance is made by Borrower and after giving effect
thereto, Borrower shall be Solvent; and (E) no Default or Event of Default
pursuant to Section
8.1(a), (g) or (h) would occur and
be continuing after giving effect to any such proposed intercompany
loan.

     

    (b)           No
Credit Party shall, directly or indirectly, voluntarily purchase, redeem,
defease or prepay any principal of, premium, if any, interest or other amount
payable in respect of any Indebtedness prior to its scheduled maturity, other
than (i) the Obligations; (ii) Indebtedness secured by a Permitted Encumbrance
and Liens permitted under Section
6.7(c)  if the asset securing such Indebtedness has been sold
or otherwise disposed of in accordance with Sections 6.8(b) or
(c); (iii) Indebtedness permitted by Section 6.3(a)(iv)
upon any refinancing thereof in accordance with Section 6.3(a)(iv);
(iv) as otherwise permitted in Section 6.14 and (v)
Indebtedness owing to a Credit Party (other than Holdings) permitted
hereunder.

       

      6.4           Employee Loans and Affiliate
Transactions.

       

      (a)           Except
(i) as otherwise expressly permitted in this Section 6 with
respect to Affiliates,  (ii) as set forth in the Reading Management
Agreement, (iii) reasonable and customary fees paid to, and indemnities issued
for the benefit of, members of the board of directors (or similar governing
body) of Holdings and its Subsidiaries in the ordinary course of

    

     

    
      
         

      

      
        39

        
          

        

      

      
         

      

    

    business
and so long as no Event of Default has occurred and is continuing and (iv)
compensation arrangements for, and indemnities issued for the benefit of,
officers and other employees of Holdings and its Subsidiaries entered into in
the ordinary course of business and so long as no Event of Default has occurred,
no Credit Party shall enter into or be a party to any transaction with any other
Credit Party or any Affiliate thereof except in the ordinary course of and
pursuant to the reasonable requirements of such Credit Party's business and upon
fair and reasonable terms that are no less favorable to such Credit Party than
would be obtained in a comparable arm's length transaction with a Person not an
Affiliate of such Credit Party.  In addition, if any such transaction
or series of related transactions involves payments in excess of $500,000 in the
aggregate, the terms of these transactions must be disclosed in advance to Agent
and Lenders.  All such transactions existing as of the date hereof are
described in Disclosure Schedule
(6.4(a)).

     

    (b)           No
Credit Party shall enter into any lending or borrowing transaction with any
employees of any Credit Party, except loans to its respective employees on an
arm's-length basis in the ordinary course of business for travel and
entertainment expenses, relocation costs and similar purposes and stock option
financing up to a maximum of $100,000 to any employee and up to a maximum of
$250,000 in the aggregate at any one time outstanding.

     

    6.5           Capital Structure and
Business.  If
all or part of a Credit Party's Stock is pledged to Agent, that Credit Party
shall not issue additional Stock.  No Credit Party shall amend its
charter or bylaws in a manner that would adversely affect Agent or Lenders or
such Credit Party's duty or ability to repay the Obligations.  No
Credit Party shall engage in any business other than the businesses currently
engaged in by it or businesses reasonably related thereto.

     

    6.6           Guaranteed
Indebtedness.  No
Credit Party shall create, incur, assume or permit to exist any Guaranteed
Indebtedness except (a) by endorsement of instruments or items of payment for
deposit to the general account of any Credit Party, (b) for Guaranteed
Indebtedness incurred for the benefit of any other Credit Party if the primary
obligation is expressly permitted by this Agreement, (c) for Guaranteed
Indebtedness arising in connection with operating leases entered into by a
Credit Party from time to time and (d) for customary Guaranteed Indebtedness
incurred by such Credit Party in favor of title insurers.

     

    6.7           Liens.  No
Credit Party shall create, incur, assume or permit to exist any Lien on or with
respect to the Collateral or any of its other properties or assets (whether now
owned or hereafter acquired) except for (a) Permitted Encumbrances; (b) Liens in
existence on the date hereof and summarized on Disclosure Schedule
(6.7) securing Indebtedness described on Disclosure Schedule
(6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property; (c) Liens created after the date hereof by
conditional sale or other title retention agreements (including Capital Leases)
or in connection with purchase money Indebtedness with respect to Equipment and
Fixtures acquired by any Credit Party in the ordinary course of business,
involving the incurrence of an aggregate amount of purchase money Indebtedness
and Capital Lease Obligations of not more than $1,000,000 outstanding at any one
time for all such Liens (provided that such
Liens attach only to the assets subject to such purchase money Indebtedness and
such Indebtedness is incurred within ninety (90) days following such purchase
and does not 

     

    
      
         

      

      
        40

        
          

        

      

      
         

      

    

    exceed
100% of the purchase price of the subject assets); and (d) Liens in the nature
of deposits received by a Credit Party from a sublessor or other account debtor
in the ordinary course of business.  In addition, no Credit Party
shall become a party to any agreement, note, indenture or instrument, or take
any other action, that would prohibit the creation of a Lien on any of its
properties or other assets in favor of Agent, on behalf of itself and Lenders,
as additional collateral for the Obligations, except (1) operating leases,
Capital Leases, Equipment and Fixtures that are subject to purchase money
obligations permitted hereby or Licenses which prohibit Liens upon the assets
that are subject thereto, (2) leasehold interests in Real Property (other than
in respect of leaseholds in respect of a movie theater) and (3) customary
provisions restricting assignments, subletting or other transfers contained in
leases, licenses and other agreements entered into in the ordinary course of
business.

     

    6.8           Sale of Stock and
Assets.  No
Credit Party shall sell, transfer, convey, assign or otherwise dispose of any of
its properties or other assets, including the Stock of any of its Subsidiaries
(whether in a public or a private offering or otherwise) or any of its Accounts,
other than (a) the sale of Inventory in the ordinary course of business, (b) the
non-exclusive licensing of intellectual property rights in the ordinary course
of business; (c) dispositions of property (including Stock) by any Subsidiary to
Borrower or to another Subsidiary; provided that if the transferor of such
property is a Guarantor, the transferee thereof must either be Borrower or a
Subsidiary that is a Guarantor, (d) dispositions of property by Borrower to any
Subsidiary that is a Guarantor, (e) leases or subleases of interests in real
property entered into in the ordinary course of business (other than leases or
subleases of any material portion of a Theatre Lease which lease or sublease
could reasonably be expected to (i) have a Material Adverse Effect, (ii) impair
such Credit Party’s ability to operate its movie theatre operations conducted
therein or (iii) materially impair the Collateral), (f) the surrender or waiver
of contractual rights or the settlement, release or surrender of contract or
tort claims in the ordinary course of business, (g) dispositions of cash and
cash equivalents in the ordinary course of business except to the extent
otherwise prohibited hereby, (h) the sale or other disposition by a Credit Party
of Equipment and Fixtures that are obsolete or no longer used or useful in such
Credit Party's business and (i) other dispositions of assets having a book
value, not exceeding $250,000 in the aggregate in any Fiscal Year.

     

    6.9           ERISA.  No
Credit Party shall, or shall cause or permit any ERISA Affiliate to, cause or
permit to occur (i) an event that could result in the imposition of a Lien under
Section 412 of the IRC or Section 302 or 4068 of ERISA or (ii) an ERISA Event to
the extent such ERISA Event would reasonably be expected to result in taxes,
penalties and other liability in excess of $250,000 in the
aggregate.

    6.10           Financial
Covenants.  Borrower
shall not breach or fail to comply with any of the Financial
Covenants.

     

    6.11           Hazardous
Materials.  No
Credit Party shall cause or permit a Release of any Hazardous Material on, at,
in, under, above, to, from or about any of the Real Estate where such Release
would (a) violate in any respect, or form the basis for any Environmental
Liabilities under, any Environmental Laws or Environmental Permits or (b)
otherwise adversely impact the value or marketability of any of the Real Estate
or any of the Collateral, other than such 

     

    
      
         

      

      
        41

        
          

        

      

      
         

      

    

     

    violations
or Environmental Liabilities or impacts on the value or marketability of any
such Real Estate or Collateral that could not reasonably be expected to have a
Material Adverse Effect.

     

    6.12           Sale-Leasebacks.  No
Credit Party shall engage in any sale-leaseback, synthetic lease or similar
transaction involving any of its assets.

     

    6.13           Restricted
Payments.  No
Credit Party shall make any Restricted Payment, except (a) intercompany
loans and advances between Borrower and Guarantors to the extent permitted by
Section 6.3,
(b) dividends and distributions by Subsidiaries of Borrower paid to
Borrower, (c) employee loans permitted under Section 6.4(b),
(d) payments of principal and interest of Intercompany Notes issued in
accordance with Section 6.3, (e)
Permitted Tax Distributions, (f) dividends and distributions by the Credit
Parties to the parent company of Holdings in any Fiscal Year in an aggregate
amount not to exceed 25% of Excess Cash Flow from the immediately preceding
Fiscal Year so long as (i) Borrower has made the required prepayment of the
Obligations for such preceding Fiscal Year in accordance with Section 1.3(b)(iv)
(ii) no Default or Event of Default has occurred and is continuing or would
result therefrom and (iii) as of the date of such payment, Borrower’s Leverage
Ratio is less than 2.75:1.0 and (g) payments made pursuant to the Reading
Management Agreement as in effect on the date hereof and pro-rata payments made
with respect to Reading company-wide contracts.

     

    6.14           Change of Corporate Name or
Location; Change of Fiscal Year.  No
Credit Party shall (a) change its name as it appears in official filings in the
state of its incorporation or other organization; provided that Borrower may
change its name to Consolidated Entertainment, Inc., so long as Borrower
delivers evidence of such name change to Agent within 15 days after the giving
effect thereto, (b) change its chief executive office, principal place of
business, corporate offices or warehouses or locations at which Collateral is
held or stored, or the location of its records concerning the Collateral, (c)
change the type of entity that it is, (d) change its organization identification
number, if any, issued by its state of incorporation or other organization, or
(e) change its state of incorporation or organization, in each case without at
least thirty (30) days prior written notice to Agent and after Agent's written
acknowledgment that any reasonable action requested by Agent in connection
therewith, including to continue the perfection of any Liens in favor of Agent,
on behalf of Lenders, in any Collateral, has been completed or taken, and provided that any
such new location shall be in the continental United States or
Canada.  No Credit Party shall change its Fiscal Year.

     

    6.15           No Impairment of
Intercompany Transfers.  No
Credit Party shall directly or indirectly enter into or become bound by any
agreement, instrument, indenture or other obligation (other than this Agreement
and the other Loan Documents) that could directly or indirectly restrict,
prohibit or require the consent of any Person with respect to the payment of
dividends
or distributions or the making or repayment of intercompany loans by a
Subsidiary of Borrower to Borrower.

       

      6.16           Real Estate
Purchases.  No
Credit Party shall acquire any fee simple ownership interests or leasehold
interests in Real Estate unless such Credit Party has complied with the
requirements of Section
5.9.

    

     

    
      
         

      

      
        42

        
          

        

      

      
         

      

    

     

    6.17           Changes
Relating to Material Contracts.

     

    (a)           No
Credit Party shall change or amend the terms of the Reading Management Agreement
or the Kahala Management Agreement if the effect of such amendment would have a
material adverse effect on any Credit Party, the Agent or Lenders

     

    (b)           No
Credit Party shall change or amend the terms of the Reading Note if such
amendment or change would make (i) the Reading Note a recourse obligation of the
Borrower and (ii) amend or modify the provisions of Section 3 thereof or
otherwise add other similar adjustment provisions to the terms
thereof.

     

    (c)           No
Credit Party shall change or amend the terms of any Material Contract if the
effect of such amendment would have a material adverse effect on any Credit
Party, the Agent or Lenders.

     

    (d)           No
Credit Party shall agree to modify, terminate, amend, alter or cancel any
Theatre Lease without the prior written consent of the Agent (not to be
unreasonably withheld, delayed or conditioned by Agent) if such modification,
termination, amendment, alteration or cancellation would have a material adverse
effect on any Credit Party, Agent or the Lenders.

     

    6.18           Holdings.  Holdings
shall not engage in any trade or business, or own any assets (other than Stock
of its Subsidiaries and cash and cash equivalents) or incur any Indebtedness or
Guaranteed Indebtedness (other than the Obligations and Indebtedness owing to
any Credit Party).

     

    7.      TERM

     

    7.1           Termination.  The
financing arrangements contemplated hereby shall be in effect until the
Commitment Termination Date, and the Loans and all other Obligations shall be
automatically due and payable in full on such date.

     

    7.2           Survival of Obligations Upon
Termination of Financing Arrangements.  Except
as otherwise expressly provided for in the Loan Documents, no termination or
cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Agent and Lenders
relating to any unpaid portion of the Loans or any other Obligations, due or not
due, liquidated, contingent or unliquidated or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination
Date.  Except as otherwise expressly provided herein or in any other
Loan Document, all undertakings, agreements, covenants, warranties and representations
of or binding upon the Credit Parties, and all rights of Agent and each Lender,
all as contained in the Loan Documents, shall not terminate or expire, but
rather shall survive any such termination or cancellation and shall continue in
full force and effect until the Termination Date; provided, that the
provisions of Section
11, the payment obligations under Sections 1.15 and
1.16,  and the indemnities contained in the Loan Documents
shall survive the Termination Date.

     

    
      
         

      

      
        43

        
          

        

      

      
         

      

    

     

    8.      EVENTS
OF DEFAULT; RIGHTS AND REMEDIES

     

    8.1           Events of
Default.  The
occurrence of any one or more of the following events (regardless of the reason
therefor) shall constitute an “Event of Default”
hereunder:

     

    (a)           Borrower
(i) fails to make any payment of principal of the Loans when due and payable,
(ii) fails to make any payment in respect of interest on, or Fees owing in
respect of, the Loans or any of the other Obligations when due and payable
within three (3) days of the due date thereof, or (iii) fails to pay or
reimburse Agent or Lenders for any expense reimbursable hereunder or under any
other Loan Document within ten (10) days following Agent's demand for such
reimbursement or payment of expenses.

     

    (b)           Any
Credit Party fails or neglects to perform, keep or observe any of the provisions
of Sections 1.4, 1.8,
5.4(a), 5.13 or 6, or any of the provisions set forth in Annexes C or G,
respectively.

     

    (c)           Borrower
fails or neglects to perform, keep or observe any of the provisions of Section 4.1 or any
provisions set forth in Annexes E or F,
respectively, and the same shall remain unremedied for three (3) Business Days
or more.

     

    (d)           Any
Credit Party fails or neglects to perform, keep or observe any other provision
of this Agreement or of any of the other Loan Documents (other than any
provision embodied in or covered by any other clause of this Section 8.1) and the
same shall remain unremedied for thirty (30) days or more following the earlier
to occur of (i) knowledge by Borrower of such failure or neglect and (ii) the
receipt of written notice from Agent of such failure or neglect.

     

    (e)           A
default or breach occurs under any other agreement, document or instrument to
which any Credit Party is a party that is not cured within any applicable grace
period therefor, and such default or breach (i) involves the failure to make any
payment when due in respect of any Indebtedness or Guaranteed Indebtedness
(other than the Obligations) of any Credit Party in excess of $500,000 in the
aggregate (including (x) undrawn committed or available amounts and (y) amounts
owing to all creditors under any combined or syndicated credit arrangements), or
(ii) causes, or permits any holder of such Indebtedness or Guaranteed
Indebtedness or a trustee to cause, Indebtedness or Guaranteed Indebtedness or a
portion thereof in excess of $500,000 in the aggregate to become due prior to
its stated maturity or prior to its regularly scheduled dates of payment, or
cash collateral to be demanded in respect thereof, in each case, regardless of
whether such default is waived, or such right is exercised, by such holder or
trustee.

     

    
      (f)           Assets
of any Credit Party with a fair market value of $500,000 or more are attached,
seized, levied upon or subjected to a writ or distress warrant, or come within
the possession of any receiver, trustee, custodian or assignee for the benefit
of creditors of any Credit Party and such condition continues for thirty (30)
days or more.

       

      (g)           A
case or proceeding is commenced against any Credit Party seeking a decree or
order in respect of such Credit Party (i) under the Bankruptcy Code or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, 

       

    

    
      
         

      

      
        44

        
          

        

      

      
         

      

    

     

    receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for such
Credit Party or for any substantial part of any such Credit Party's assets, or
(iii) ordering the winding-up or liquidation of the affairs of such Credit
Party, and such case or proceeding shall remain undismissed or unstayed for
sixty (60) days or more or a decree or order granting the relief sought in such
case or proceeding is granted by a court of competent jurisdiction.

     

    (h)           Any
Credit Party (i) files a petition seeking relief under the Bankruptcy Code or
any other applicable federal, state or foreign bankruptcy or other similar law,
(ii) consents to or fails to contest in a timely and appropriate manner to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) for such Credit Party or
for any substantial part of any such Credit Party's assets, (iii) makes an
assignment for the benefit of creditors, or (iv) takes any action in furtherance
of any of the foregoing, or (v) admits in writing its inability to, or is
generally unable to, pay its debts as such debts become due.

     

    (i)           A
final judgment or judgments for the payment of money in excess of $500,000 in
the aggregate at any time are outstanding against one or more of the Credit
Parties (which judgments are not covered by insurance policies as to which
liability has been accepted by the insurance carrier), and the same are not,
within thirty (30) days after the entry thereof, discharged or execution thereof
stayed or bonded pending appeal, or such judgments are not discharged prior to
the expiration of any such stay.

     

    (j)           except
pursuant to a release or termination expressly permitted under any Loan
Document, any material provision of any Loan Document for any reason ceases to
be valid, binding and enforceable in accordance with its terms (or any Credit
Party shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien
created under any Loan Document ceases to be a valid and perfected first
priority Lien (except as otherwise permitted herein or therein) in any of the
Collateral purported to be covered thereby.

     

    (k)           Any
Change of Control occurs.

     

    (l)           Any
event occurs, whether or not insured or insurable, as a result of which
revenue-producing activities cease or are substantially curtailed at facilities
of Borrower generating more than 25% of Borrower's revenues for the Fiscal Year
preceding such event and such cessation or curtailment continues for more than
sixty (60) days.

    

      (m)           Any
Theatre Lease with respect to any movie theater or theaters generating more than
25% of Borrower's revenues for the Fiscal Year preceding is terminated or
otherwise is failed to be renewed.

       

      (n)           Any
material default or breach by Borrower occurs and is continuing under any
Material Contract or any Material Contract shall be terminated for any reason
and such Material Contract is not replaced within 90 days of such
termination.

    

    
      
         

      

      
        45

        
          

        

      

      
         

      

    

     

    (o)           Reading
shall fail to pay Borrower’s corporate overhead expenses pursuant to the terms
of the Reading Management Agreement.

     

    (p)           Any
representation or warranty herein or in any Loan Document or in any written
statement, report, financial statement or certificate (made or delivered to
Agent or any Lender by any Credit Party is untrue or incorrect in any material
respect as of the date when made or deemed made.

     

    8.2           Remedies.

     

    (a)           If
any Event of Default has occurred and is continuing, Agent may (and at the
written request of the Requisite Revolving Lenders shall), without notice,
suspend the Revolving Loan facility with respect to additional Advances and/or
the incurrence of additional Letter of Credit Obligations, whereupon any
additional Advances and additional Letter of Credit Obligations shall be made or
incurred in Agent's sole discretion (or in the sole discretion of the Requisite
Revolving Lenders, if such suspension occurred at their direction) so long as
such Event of Default is continuing.  If any Event of Default has
occurred and is continuing, Agent may (and at the written request of Requisite
Lenders shall), without notice except as otherwise expressly provided herein,
increase the rate of interest applicable to the Loans and the Letter of Credit
Fees to the Default Rate.

     

    (b)           If
any Event of Default has occurred and is continuing, Agent may (and at the
written request of the Requisite Lenders shall), without notice:
(i) terminate the Revolving Loan facility with respect to further Advances
or the incurrence of further Letter of Credit Obligations; (ii) reduce the
Revolving Loan Commitment from time to time; (iii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized in the manner set forth in Annex B, all without
presentment, demand, protest or further notice of any kind, all of which are
expressly waived by Borrower and each other Credit Party; or (iv) exercise
any rights and remedies provided to Agent under the Loan Documents or at law or
equity, including all remedies provided under the Code; provided, that upon
the occurrence of an Event of Default specified in Sections 8.1(g) or
(h), the Commitments shall be immediately terminated and all of the
Obligations, including the Revolving Loan, shall become immediately due and
payable without declaration, notice or demand by any Person.

     

    8.3           Waivers by Credit
Parties.  Except
as otherwise provided for in this Agreement or by applicable law, each Credit
Party waives: (a) presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration, protest,
default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent on which any Credit Party may in
any way be liable, and hereby ratifies and confirms whatever Agent may do in
this regard, (b) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon, the
Collateral or any bond or security that might be required by any court prior to
allowing Agent to exercise any of its remedies, and (c) the benefit of all
valuation, appraisal, marshaling and exemption laws.

     

    
      
         

      

      
        46

        
          

        

      

      
         

      

    

     

    9.      ASSIGNMENT
AND PARTICIPATIONS; APPOINTMENT OF AGENT

     

    9.1           Assignment and
Participations.

     

    (a)           Binding
Effect.  This Agreement shall become effective when it shall
have been executed by Holdings, the Borrowers, the other Credit Parties and
Agent and when Agent shall have been notified by each Lender and L/C Issuer that
such Lender or L/C Issuer has executed it.  Thereafter, it shall be
binding upon and inure to the benefit of, but only to the benefit of, Holdings,
the Borrower, the Credit Parties (in each case, except for those provisions of
this Article 9
relating solely to Agent), Agent, each Lender and L/C Issuer and, in each case,
their respective successors and permitted assigns.  Except as
expressly provided in any Loan Document (including in Section 9.7), none of
Holdings, the Borrower, the other Credit Parties, any L/C Issuer or Agent shall
have the right to assign any rights or obligations hereunder or any interest
herein.

     

    (b)           Right to
Assign.  Subject to compliance with clause (c) below, each
Lender may sell, transfer, negotiate or assign all or a portion of its rights
and obligations hereunder (including all or a portion of its Commitments and its
rights and obligations with respect to Loans and Letters of Credit) (each, a
“Sale”) to any
of the following Persons (each an “Eligible Assignee”)
(i) any existing Lender, (ii) any Affiliate or Approved Fund of any existing
Lender or (iii) any other Person acceptable (which acceptance shall not be
unreasonably withheld or delayed) to Agent and, as long as no Event of Default
is continuing, the Borrower; provided, however, that (x)
such Sales do not have to be ratable between the facilities but must be ratable
among the obligations owing to and owed by such Lender with respect to a
facility, and (y) for each facility, the aggregate outstanding principal amount
(determined as of the effective date of the applicable Assignment Agreement) of
the Loans, Commitments and Letter of Credit Obligations subject to any such Sale
shall be in a minimum amount of $1,000,000, unless such Sale is made to an
existing Lender or an Affiliate or Approved Fund of any existing Lender, is of
the assignor’s (together with its Affiliates and Approved Funds) entire interest
in such facility or is made with the prior consent of the Borrower and
Agent.

     

    (c)           Procedure.  The
parties to each Sale made in reliance on clause (b) above
(other than those described in clause (e) or (f) below) shall
execute and deliver to Agent an Assignment Agreement via an electronic
settlement system designated by Agent (or, if previously agreed with Agent, via
a manual execution and delivery of the Assignment Agreement) evidencing such
Sale, together with any existing Note subject to such Sale (or any affidavit of
loss therefor acceptable to Agent), the applicable tax forms required to be
delivered pursuant to Section 1.15(c) and payment of an
assignment fee in the amount of $3,500; provided, that (1) if
a Sale by a Lender is made to an Affiliate or an Approved Fund of such assigning
Lender, then no assignment fee shall be due in connection with such Sale, and
(2) if a Sale by a Lender is made to an assignee that is not an Affiliate or
Approved Fund of such assignor Lender, and concurrently to one or more
Affiliates or Approved Funds of such assignee, then only one assignment fee of
$3,500 shall be due in connection with such Sale.  Upon receipt of all
the foregoing, and conditioned upon such receipt and, if such assignment is made
in accordance with Section 9.1(b)(iii),
upon Agent (and the Borrower, if applicable) consenting to such Assignment
Agreement, from and after the effective date specified in such Assignment
Agreement, Agent 

     

    
      
         

      

      
        47

        
          

        

      

      
         

      

    

    shall
record or cause to be recorded in the Register the information contained in such
Assignment Agreement.

     

    (d)           Effectiveness.  Subject
to the recording of an Assignment Agreement by Agent in the Register pursuant to
Section 9.1(h) (i) the assignee thereunder shall become a party hereto and, to
the extent that rights and obligations under the Loan Documents have been
assigned to such assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Lender, (ii) any applicable Note shall be
transferred to such assignee through such entry and (iii) the assignor
thereunder shall, to the extent that rights and obligations under this Agreement
have been assigned by it pursuant to such Assignment Agreement, relinquish its
rights (except for those surviving the termination of the Commitments and the
payment in full of the Obligations) and be released from its obligations under
the Loan Documents, other than those relating to events or circumstances
occurring prior to such assignment (and, in the case of an Assignment Agreement
covering all or the remaining portion of an assigning Lender’s rights and
obligations under the Loan Documents.

     

    (e)           Grant of Security
Interests.  In addition to the other rights provided in this
Section 9.1,
each Lender may grant a security interest in, or otherwise assign as collateral,
any of its rights under this Agreement, whether now owned or hereafter acquired
(including rights to payments of principal or interest on the Loans), to (A) any
federal reserve bank (pursuant to Regulation A of the Federal Reserve Board),
without notice to Agent or (B) any holder of, or trustee for the benefit of the
holders of, such Lender’s securities or Indebtedness by notice to Agent; provided, however, that no such
holder or trustee, whether because of such grant or assignment or any
foreclosure thereon (unless such foreclosure is made through an assignment in
accordance with clause
(b) above), shall be entitled to any rights of such Lender hereunder and
no such Lender shall be relieved of any of its obligations
hereunder.

     

    (f)           Participants and
SPVs.  In addition to the other rights provided in this Section 9.1, each
Lender may, (x) with notice to Agent, grant to an SPV the option to make all or
any part of any Loan that such Lender would otherwise be required to make
hereunder (and the exercise of such option by such SPV and the making of Loans
pursuant thereto shall satisfy the obligation of such Lender to make such Loans
hereunder) and such SPV may assign to such Lender the right to receive payment
with respect to any Obligation and (y) without notice to or consent from Agent
or the Borrower, sell participations to one or more Persons in or to all or a
portion of its rights and obligations under the Loan Documents (including all
its rights and obligations with respect to the Term Loan B, Revolving Loans and
Letters of Credit); provided, however, that,
whether as a result of any term of any Loan Document or of such grant or
participation, (i) no such SPV or participant shall have a commitment, or be
deemed to have made an offer to commit, to make Loans hereunder, and, except as
provided in the applicable option agreement, none shall be liable for any
obligation of such Lender hereunder, (ii) such Lender’s rights and obligations,
and the rights and obligations of the Credit Parties and Agent, the other
Lenders and the L/C Issuer towards such Lender, under any Loan Document shall
remain unchanged and each other party hereto shall continue to deal solely with
such Lender, which shall remain the holder of the Obligations in the Register,
except that (A) each such participant and SPV shall be entitled to the benefit
of Sections
1.13(b), 1.15 and 1.16, but only to the
extent such participant or SPV delivers the tax forms such Lender is required to
deliver pursuant to Section 1.15(c) and
then only to the extent of any amount to which such Lender 

     

    
      
         

      

      
        48

        
          

        

      

      
         

      

    

    would be
entitled in the absence of any such grant or participation and (B) each such SPV
may receive other payments that would otherwise be made to such Lender with
respect to Loans funded by such SPV to the extent provided in the applicable
option agreement and set forth in a notice provided to Agent by such SPV and
such Lender, provided, however, that in no
case (including pursuant to clause (A) or (B) above) shall an
SPV or participant have the right to enforce any of the terms of any Loan
Document, and (iii) the consent of such SPV or participant shall not be required
(either directly, as a restraint on such Lender’s ability to consent hereunder
or otherwise) for any amendments, waivers or consents with respect to any Loan
Document or to exercise or refrain from exercising any powers or rights such
Lender may have under or in respect of the Loan Documents (including the right
to enforce or direct enforcement of the Obligations), except for those described
in clauses
(ii), (iii) and (iv) of Section 11.2(c) with
respect to amounts, or dates fixed for payment of amounts, to which such
participant or SPV would otherwise be entitled and, in the case of participants,
except for those described in Section
11.1(c)(v).  No party hereto shall institute (and each Credit
Party shall cause each other Credit Party not to institute) against any SPV
grantee of an option pursuant to this clause (f) any
bankruptcy, reorganization, insolvency, liquidation or similar proceeding, prior
to the date that is one year and one day after the payment in full of all
outstanding commercial paper of such SPV; provided, however, that each
Lender having designated an SPV as such agrees to indemnify each Indemnified
Person against any Indemnified Liability that may be incurred by, or asserted
against, such Indemnified Person as a result of failing to institute such
proceeding (including a failure to get reimbursed by such SPV for any such
Indemnified Liability).  The agreement in the preceding sentence shall
survive the termination of the Commitments and the payment in full of the
Obligations.

     

    (h)           Agent,
acting solely for this purpose as a nonfiduciary agent of the Credit Parties,
shall maintain at one of its offices in Alpharetta, Georgia, or such other
location as Agent shall notify Lenders in writing, a copy of each Assignment
Agreement delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitments of, and principal amounts of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”).  The
entries in the Register shall be conclusive absent manifest error, and Borrower,
the Agent and the Lenders shall treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary.  The Register
shall be available for inspection by Borrower and any Lender, at any reasonable
time and from time to time upon reasonable prior notice; provided, however, each Lender
shall only be entitled to inspect an excerpt of the Register containing
information relating to such Lender and such Lender’s Loans and
Commitments.  In the case of any assignment not reflected in the
Register, the assigning Lender agrees that it shall maintain a comparable
register as a non-fiduciary agent of the Credit Parties.

     

    
      (i)           Each
Credit Party executing this Agreement shall assist any Lender permitted to sell
assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be
requested.  Each Credit Party executing this Agreement shall certify
the correctness, completeness and accuracy of all descriptions of the Credit
Parties and their respective affairs contained in any selling materials provided
by them 

    

    
      
         

      

      
        49

        
          

        

      

      
         

      

    

     

    and all
other information provided by them and included in such materials, except that
any Projections delivered by Borrower shall only be certified by Borrower as
having been prepared by Borrower in compliance with the representations
contained in Section
3.4(c).

    

    (j)           Any
Lender may furnish any information concerning Credit Parties in the possession
of such Lender from time to time to assignees and participants (including
prospective assignees and participants); provided, that such
Lender shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section
11.8.

    

    9.2           Appointment of
Agent.  GE
Capital is hereby appointed to act on behalf of all Lenders as Agent under this
Agreement and the other Loan Documents.  The provisions of this Section 9.2 are
solely for the benefit of Agent and Lenders and no Credit Party nor any other
Person shall have any rights as a third party beneficiary of any of the
provisions hereof.  In performing its functions and duties under this
Agreement and the other Loan Documents, Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any Credit
Party or any other Person.  Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents.  The duties of Agent shall be mechanical and
administrative in nature and Agent shall not have, or be deemed to have, by
reason of this Agreement, any other Loan Document or otherwise a fiduciary
relationship in respect of any Lender.  Except as expressly set forth
in this Agreement and the other Loan Documents or required by applicable law,
Agent shall not have any duty to disclose, and shall not be liable for failure
to disclose, any information relating to any Credit Party or any of their
respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any
capacity.  Neither Agent nor any of its Affiliates nor any of their
respective officers, directors, employees, agents or representatives shall be
liable to any Lender for any action taken or omitted to be taken by it in
accordance with this Agreement or in accordance with any other Loan Document, or
in connection herewith or therewith, except for damages caused by its or their
own gross negligence or willful misconduct as finally determined by a court of
competent jurisdiction.

     

    If Agent
shall request instructions from Requisite Lenders, Requisite Revolving Lenders
or all affected Lenders with respect to any act or action (including failure to
act) in connection with this Agreement or any other Loan Document, then Agent
shall be entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from Requisite Lenders, Requisite
Revolving Lenders or all affected Lenders, as the case may be, and Agent shall
not incur liability to any Person by reason of so refraining.  Agent
shall be fully justified in failing or refusing to take any action hereunder or
under any other Loan Document (a) if such action would, in the opinion of Agent,
be contrary to law or the terms of this Agreement or any other Loan Document,
(b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action.  Without limiting the foregoing, no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting or
refraining from acting hereunder or under any other Loan Document in accordance
with the instructions of Requisite Lenders, Requisite Revolving Lenders or all
affected Lenders, as applicable.

     

    
      
         

      

      
        50

        
          

        

      

      
         

      

    

     

    9.3           Agent's Reliance,
Etc.  Neither
Agent nor any of its Affiliates nor any of their respective directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement or the other Loan
Documents, except for damages caused by its or their own gross negligence or
willful misconduct as finally determined by a court of competent
jurisdiction.  Without limiting the generality of the foregoing,
Agent:  (a)  may treat the payee of any Note as the holder
thereof until Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form reasonably satisfactory to Agent; (b)
may consult with legal counsel, independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken by it in good faith in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.

     

    9.4           GE Capital and
Affiliates.  With
respect to its Commitments hereunder, GE Capital shall have the same rights
and powers under this Agreement and the other Loan Documents as any other Lender
and may exercise the same as though it were not Agent; and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include GE Capital in its
individual capacity.  GE Capital and its Affiliates may lend money to,
invest in, and generally engage in any kind of business with, any Credit Party,
any of their Affiliates and any Person who may do business with or own
securities of any Credit Party or any such Affiliate, all as if GE Capital were
not Agent and without any duty to account therefor to Lenders.  GE
Capital and its Affiliates may accept fees and other consideration from any
Credit Party for services in connection with this Agreement or otherwise without
having to account for the same to Lenders.

     

    9.5           Lender Credit
Decision.  Each
Lender acknowledges that it has, independently and without reliance upon Agent
or any other Lender and based on the Financial Statements referred to in Section 3.4(a) and
such other documents and information as it has deemed appropriate, made its own
credit and financial analysis of the Credit Parties and its own decision to
enter into this Agreement.  Each Lender also acknowledges that it
will, independently and
without reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this
Agreement.  Each Lender acknowledges the potential conflict of
interest of each other Lender as a result of Lenders holding disproportionate
interests in the Loans, and expressly consents to, and waives any claim based
upon, such conflict of interest.

     

    
      
         

      

      
        51

        
          

        

      

      
         

      

    

     

    9.6           Indemnification.  Lenders
agree to indemnify Agent (to the extent not reimbursed by Credit Parties and
without limiting the obligations of Credit Parties hereunder), ratably according
to their respective Pro Rata Shares, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted by any third party or any Credit Party against
Agent in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith, including, without limitation, any and all losses arising in
connection with Electronic Transmissions hereunder or any other Loan Document
with respect hereto or thereto or the use of E-Systems by the parties hereto (as
well as any failures of any Lender’s, any Credit Party’s or any other Person’s
Equipment, software or services in connection with such Electronic Transmissions
and/or E-Systems); provided, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent’s gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.  Without limiting the
foregoing, each Lender agrees to reimburse Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including reasonable counsel fees)
incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that Agent is not reimbursed for such expenses by Credit
Parties.

     

    9.7           Successor
Agent.  Agent
may resign at any time by giving not less than thirty (30) days' prior written
notice thereof to Lenders and Borrower.  Upon any such resignation,
the Requisite Lenders shall have the right to appoint a successor
Agent.  If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within thirty (30)
days after the resigning Agent's giving notice of resignation, then the
resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
shall be a Lender, if a Lender is willing to accept such appointment, or
otherwise shall be a commercial bank or financial institution or a subsidiary of
a commercial bank or financial institution if such commercial bank or financial
institution is organized under the laws of the United States of America or of
any State thereof and has a combined capital and surplus of at least
$300,000,000.  If no successor Agent has been appointed pursuant to
the foregoing, within thirty (30) days after the date such notice of resignation
was given by the resigning Agent, such resignation shall become effective and
the Requisite Lenders shall thereafter perform all the duties of Agent hereunder
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above. Any successor Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower, such approval not to be
unreasonably withheld or delayed; provided that such
approval shall not be required if a Default or an Event of Default has occurred
and is continuing.  Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Agent.  Upon the earlier of the acceptance of any appointment as Agent
hereunder by a successor Agent or the effective date of the resigning Agent's
resignation, the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Agent shall
continue.  After any resigning Agent's resignation hereunder, the

     

    
      
         

      

      
        52

        
          

        

      

      
         

      

    

    provisions
of this Section
9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was acting as Agent under this Agreement and the other Loan
Documents.

     

    9.8           Setoff and Sharing of
Payments.  In
addition to any rights now or hereafter granted under applicable law and not by
way of limitation of any such rights, upon the occurrence and during the
continuance of any Event of Default and subject to Section 9.9(f), each
Lender is hereby authorized at any time or from time to time, without prior
notice to any Credit Party or to any Person other than Agent, any such notice
being hereby expressly waived, to offset and to appropriate and to apply any and
all balances held by it at any of its offices for the account of Borrower or any
Guarantor (regardless of whether such balances are then due to Borrower or any
Guarantor) and any other properties or assets at any time held or owing by that
Lender or that holder to or for the credit or for the account of Borrower or any
Guarantor against and on account of any of the Obligations that are not paid
when due; provided that the Lender exercising such offset rights shall give
notice thereof to the affected Credit Party promptly after exercising such
rights.  Any Lender exercising a right of setoff or otherwise
receiving any payment on account of the Obligations in excess of its Pro Rata
Share thereof shall purchase for cash (and the other Lenders or holders shall
sell) such participations in each such other Lender's or holder's Pro Rata Share
of the Obligations as would be necessary to cause such Lender to share the
amount so offset or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares, (other than offset rights
exercised by any Lender with respect to Sections 1.13, 1.15 or
1.16).  Borrower and each Guarantor agrees, to the fullest
extent permitted by law, that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share of the Obligations and
may sell participations in such amounts so offset to other Lenders and holders
and (b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such
participation.  Notwithstanding the foregoing, if all or any portion
of the offset amount or payment otherwise received is thereafter recovered from
the Lender that has exercised the right of offset, the purchase of
participations by that Lender shall be rescinded and the purchase price restored
without interest.

     

    9.9           Advances; Payments;
Non-Funding Lenders; Information; Actions in Concert.

     

    (a)           Advances;
Payments.

     

    (i)           Each
Revolving Lender shall make the amount of such Lender's Pro Rata Share of such
Revolving Credit Advance available to Agent in same day funds by wire transfer
to Agent's account as set forth in Annex H not later
than 3:00 p.m. (New York time) on the
requested funding date, in the case of an Index Rate Loan and not later than
11:00 a.m. (New York time) on the requested funding date in the case of a LIBOR
Loan.  After receipt of such wire transfers (or, in the Agent's sole
discretion, before receipt of such wire transfers), subject to the terms hereof,
Agent shall make the requested Revolving Credit Advance to
Borrower.  All payments by each Revolving Lender shall be made without
setoff, counterclaim or deduction of any kind.

     

    
      
         

      

      
        53

        
          

        

      

      
         

      

    

     

    (ii)           Not
less than once during each calendar week or more frequently at Agent's election
(each, a “Settlement
Date”), Agent shall advise each Lender by telephone, or telecopy of the
amount of such Lender's Pro Rata Share of principal, interest and Fees paid for
the benefit of Lenders with respect to each applicable Loan.  Provided
that each Lender has funded all payments and Advances required to be made by it
and purchased all participations required to be purchased by it under this
Agreement and the other Loan Documents as of such Settlement Date, Agent shall
pay to each Lender such Lender's Pro Rata Share of principal, interest and Fees
paid by Borrower since the previous Settlement Date  for the benefit
of such Lender on the Loans held by it.  To the extent that any Lender
(a “Non-Funding
Lender”) has failed to fund all such payments and Advances or failed to
fund the purchase of all such participations, Agent shall be entitled to set off
the funding short-fall against that Non-Funding Lender's Pro Rata Share of
all payments received from Borrower.  Such payments shall be made by
wire transfer to such Lender's account (as specified by such Lender in Annex H or the
applicable Assignment Agreement) not later than 2:00 p.m. (New York time) on the
next Business Day following each Settlement Date.

     

    (b)           Availability of
Lender's Pro
Rata Share.  Agent may assume that each Revolving Lender will
make its Pro Rata Share of each Revolving Credit Advance available to Agent on
each funding date.  If such Pro Rata Share is not, in fact, paid to
Agent by such Revolving Lender when due, Agent will be entitled to recover such
amount on demand from such Revolving Lender without setoff, counterclaim or
deduction of any kind.  If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower and Borrower shall immediately repay such amount to
Agent.  Nothing in this Section 9.9(b) or
elsewhere in this Agreement or the other Loan Documents shall be deemed to
require Agent to advance funds on behalf of any Revolving Lender or to relieve
any Revolving Lender from its obligation to fulfill its Commitments hereunder or
to prejudice any rights that Borrower may have against any Revolving Lender as a
result of any default by such Revolving Lender hereunder.  To the
extent that Agent advances funds to Borrower on behalf of any Revolving Lender
and is not reimbursed therefor on the same Business Day as such Advance is made,
Agent shall be entitled to retain for its account all interest accrued on such
Advance until reimbursed by the applicable Revolving Lender.

     

    (c)           Return of
Payments.

     

    (i)           If
Agent pays an amount to a Lender under this Agreement in the belief or
expectation that a related payment has been or will be received by Agent from
Borrower and such related payment is not received by Agent, then Agent will be
entitled to recover such amount from such Lender on demand without setoff,
counterclaim or deduction of any kind.

    

      (ii)           If
Agent determines at any time that any amount received by Agent under this
Agreement must be returned to Borrower or paid to any other Person pursuant to
any insolvency law or otherwise, then, notwithstanding any other term or
condition of this Agreement or any other Loan Document, Agent will not be
required to distribute any portion thereof to any Lender.  In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to Borrower or such other Person, without
setoff, counterclaim or deduction of any kind.

    

    
      
         

      

      
        54

        
          

        

      

      
         

      

    

     

    (d)           Non-Funding
Lenders.  The failure of any Non-Funding Lender to make any
Revolving Credit Advance or any payment required by it hereunder shall not
relieve any other Lender (each such other Revolving Lender, an “Other Lender”) of its
obligations to make such Advance or purchase such participation on such date,
but neither any Other Lender nor Agent shall be responsible for the failure of
any Non-Funding Lender to make an Advance, purchase a participation or make any
other payment required hereunder.  Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
“Lender” or a “Revolving Lender” (or be included in the calculation of
“Requisite Lenders”, or “Requisite Revolving Lenders” hereunder) for any voting
or consent rights under or with respect to any Loan Document.  At
Borrower's request, Agent or a Person acceptable to Agent shall have the right
with Agent's consent and in Agent's sole discretion (but shall have no
obligation) to purchase from any Non-Funding Lender, and each Non-Funding Lender
agrees that it shall, at Agent's request, sell and assign to Agent or such
Person, all of the Commitments of that Non-Funding Lender for an amount equal to
the principal balance of all Loans held by such Non-Funding Lender and all
accrued interest and fees with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.

     

    (e)           Dissemination of
Information.  Agent shall use reasonable efforts to provide
Lenders with any notice of Default or Event of Default received by Agent from,
or delivered by Agent to, any Credit Party, with notice of any Event of Default
of which Agent has actually become aware and with notice of any action taken by
Agent following any Event of Default; provided, that Agent shall not be liable
to any Lender for any failure to do so, except to the extent that such failure
is attributable to Agent's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.  Lenders acknowledge
that Borrower is required to provide Financial Statements and Collateral Reports
to Lenders in accordance with Annexes E and F hereto and agree
that Agent shall have no duty to provide the same to Lenders.

     

    (f)           Actions in
Concert.  Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.

     

    
      10.           SUCCESSORS
AND ASSIGNS

       

      10.1           Successors and
Assigns.  This
Agreement and the other Loan Documents shall be binding on and shall inure to
the benefit of each Credit Party, Agent, Lenders and their respective successors
and assigns (including, in the case of any Credit Party, a debtor-in-possession
on behalf of such Credit Party), except as otherwise provided herein or
therein.  No Credit Party may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Agent and Lenders.  Any such purported assignment, transfer,
hypothecation or other conveyance by any Credit Party without the prior express
written consent of Agent and Lenders shall be void.  The terms and
provisions of this Agreement are for the 

       

    

    
      
         

      

      
        55

        
          

        

      

      
         

      

    

    purpose
of defining the relative rights and obligations of each Credit Party, Agent and
Lenders with respect to the transactions contemplated hereby and no Person shall
be a third party beneficiary of any of the terms and provisions of this
Agreement or any of the other Loan Documents.

     

    11.           MISCELLANEOUS

     

    11.1           Complete Agreement;
Modification of Agreement.  The
Loan Documents constitute the complete agreement between the parties with
respect to the subject matter thereof and may not be modified, altered or
amended except as set forth in Section
11.2.  Any letter of interest, commitment letter, fee letter or
confidentiality agreement, if any, between any Credit Party and Agent or any
Lender or any of their respective Affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall
be superseded by this Agreement.  Notwithstanding the foregoing, the
GE Capital Fee Letter and any market flex provisions contained in the final
commitment letter between Agent and Borrower shall survive the execution and
delivery of this Agreement and shall continue to be binding obligations of the
parties.

     

    11.2           Amendments and
Waivers.

     

    (a)           Except
for actions expressly permitted to be taken by Agent, no amendment,
modification, termination or waiver of any provision of this Agreement or any
other Loan Document, or any consent to any departure by any Credit Party
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Agent and Borrower (and, in the case of the Reading Guaranty,
Reading), and by Requisite Lenders, Requisite Revolving Lenders or all affected
Lenders, as applicable.  Except as set forth in clauses (b) and (c)
below, all such amendments, modifications, terminations or waivers requiring the
consent of any Lenders shall require the written consent of Requisite
Lenders.

     

    (b)           No
amendment, modification, termination or waiver of or consent with respect to any
provision of this Agreement that waives compliance with the conditions precedent
set forth in Section
2.2 to the making of any Loan or the incurrence of any Letter of Credit
Obligations shall be effective unless the same shall be in writing and signed by
Agent, Requisite Revolving Lenders and Borrower.  Notwithstanding
anything contained in this Agreement to the contrary, no waiver or consent with
respect to any Default or any Event of Default shall be effective for purposes
of the conditions precedent to the making of Loans or the incurrence of Letter of
Credit Obligations set forth in Section 2.2 unless
the same shall be in writing and signed by Agent, Requisite Revolving Lenders
and Borrower.

       

      (c)           No
amendment, modification, termination or waiver shall, unless in writing and
signed by Agent and each Lender directly affected thereby:  (i)
increase the principal amount of any Lender's Commitment (which action shall be
deemed to directly affect all Lenders); (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date
(other than payment dates of mandatory prepayments under Section
1.3(b)(ii)-(v)) or final maturity date of the principal amount of any
Loan of any affected Lender; (iv) waive, forgive, defer, extend or postpone any
payment of interest or Fees as to any affected Lender; (v) release

    

     

    
      
         

      

      
        56

        
          

        

      

      
         

      

    

    any
Guaranty (unless the Stock of the relevant Credit Party is sold in a transaction
permitted hereby) or, except as otherwise permitted herein or in the other Loan
Documents, release, or permit any Credit Party to sell or otherwise dispose of,
all or substantially all of the Collateral; (vi) change the percentage of the
Commitments or of the aggregate unpaid principal amount of the Loans that shall
be required for Lenders or any of them to take any action hereunder; and (vii)
amend or waive this Section 11.2 or the
definitions of the terms “Requisite Lenders”, or “Requisite Revolving Lenders”
insofar as such definitions affect the substance of this Section
11.2.  Each amendment, modification, termination or waiver
shall be effective only in the specific instance and for the specific purpose
for which it was given. No amendment, modification or waiver of this Agreement
or any Loan Document altering the ratable treatment of Obligations arising under
Secured Rate Contracts resulting in such Obligations being junior in right of
payment to principal on the Loans or resulting in Obligations owing to any
Secured Swap Provider becoming unsecured (other than release of Liens in
accordance with the terms hereof), in each case in a manner adverse to any
Secured Swap Provider, shall be effective without the written consent of such
Secured Swap Provider (or in the case of a Secured Rate Contract arranged by GE
Capital or an Affiliate of GE Capital, GE Capital). No amendment,
modification, termination or waiver shall be required for Agent to take
additional Collateral pursuant to any Loan Document. No amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the holder of that Note.  No notice to or
demand on any Credit Party in any case shall entitle such Credit Party or any
other Credit Party to any other or further notice or demand in similar or other
circumstances.  Any amendment, modification, termination, waiver or
consent effected in accordance with this Section 11.2 shall be
binding upon each holder of the Notes at the time outstanding and each future
holder of the Notes. Notwithstanding anything to the contrary contained herein,
the Loans and Commitments may be increased and/or additional tranches of debt
may be added hereunder and may be secured pari passu with the other Obligations
upon the written consent of Borrower, Agent and the Requisite Lenders; provided
that no Lender’s Commitments or Loans may be increased hereunder without such
Lender’s written consent.   Notwithstanding the foregoing, this
Agreement and the other Loan Documents may be amended (or amended and restated)
with the written consent of the Requisite Lenders, Agent and Borrower (i) to add
one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the accrued
interest and fees in respect thereof to share ratably in the benefits of this
Agreement and the other Loan Documents with the Term Loan B and Revolving Loans
and the accrued interest and fees in respect thereof and (ii) to include
appropriately the Lenders holding such credit facilities in any determination of
the Requisite Lenders.  Any amendments
to effectuate the preceding sentence may be made with Agent’s, Requisite
Lenders’ and Borrower’s consent only.

       

      (d)           If,
in connection with any proposed amendment, modification, waiver or termination
(a “Proposed
Change”):

       

      (i)           requiring
the consent of all affected Lenders, the consent of Requisite Lenders is
obtained, but the consent of other Lenders whose consent is required is not
obtained (any such Lender whose consent is not obtained as described in this
clause (i) and
in clauses (ii) and
(iii) below being referred to as “Non Consenting
Lender”);

    

     

    
      
         

      

      
        57

        
          

        

      

      
         

      

    

     

    (ii)           requiring
the consent of Requisite Revolving Lenders, the consent of Revolving Lenders
holding 51% or more of the aggregate Revolving Loan Commitments is obtained, but
the consent of Requisite Revolving Lenders is not obtained; or

     

    (iii)           requiring
the consent of Requisite Lenders, the consent of Lenders holding 51% or more of
the aggregate Commitments is obtained, but the consent of Requisite Lenders is
not obtained;

     

    then, so
long as Agent is not a Non Consenting Lender, at Borrower’s request Agent, or a
Person reasonably acceptable to Agent, shall have the right with Agent’s consent
and in Agent’s sole discretion (but shall have no obligation) to purchase from
such Non Consenting Lenders, and such Non Consenting Lenders agree that they
shall, upon Agent’s request, sell and assign to Agent or such Person, all of the
Commitments of such Non Consenting Lenders for an amount equal to the principal
balance of all Loans held by the Non Consenting Lenders and all accrued interest
and Fees with respect thereto through the date of sale, such purchase and sale
to be consummated pursuant to an executed Assignment Agreement.

     

    (e)           Upon
payment in full in cash and performance of all of the Obligations (other than
indemnification Obligations), termination of the Commitments and a release of
all claims against Agent and Lenders, and so long as no suits, actions
proceedings, or claims are pending or threatened against any Indemnified Person
asserting any damages, losses or liabilities that are Indemnified Liabilities,
Agent shall deliver to Borrower termination statements, mortgage releases and
other documents necessary or appropriate to evidence the termination of the
Liens securing payment of the Obligations.

     

    11.3           Fees and
Expenses.  Borrower
shall reimburse (i) Agent for all fees (including the reasonable fees and
expenses of all of its counsel, advisors, consultants and auditors and any fees
incurred for any E-Systems allocated by the Agent in its sole discretion to the
Credit Agreement transactions contemplated hereby), costs and expenses
(including the reasonable fees and expenses of all of its counsel, advisors,
consultants and auditors) and (ii) Agent (and, with respect to clauses (c) and (d)
below, all Lenders) for all fees, costs and expenses, including the reasonable
fees, costs and expenses of counsel or other advisors (including environmental
and management consultants and appraisers) incurred in connection with the
negotiation, preparation and filing and/or recordation of the Loan Documents and
incurred in connection with:

    

      (a)           any
amendment, modification or waiver of, or consent with respect to, or termination
of, any of the Loan Documents or Related Transactions Documents or advice in
connection with the syndication and administration of the Loans made pursuant
hereto or its rights hereunder or thereunder; provided that Borrower’s
obligations under this clause (a) shall be limited to reasonable out-of-pocket
fees and expenses;

       

      (b)           any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
Agent, any Lender, any Credit Party or any other Person and whether as a party,
witness or otherwise) in any way relating to the Collateral, any of the Loan
Documents or any other agreement to be executed or delivered in connection
herewith or therewith, including any litigation, contest, dispute, suit, case,
proceeding or action, and any appeal or review thereof, in

    

    
      
         

      

      
        58

        
          

        

      

      
         

      

    

     

    connection
with a case commenced by or against any or all of the Credit Parties or any
other Person that may be obligated to Agent by virtue of the Loan Documents,
including any such litigation, contest, dispute, suit, proceeding or action
arising in connection with any work-out or restructuring of the Loans during the
pendency of one or more Events of Default; provided that in the
case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders; provided, further,
that no Person shall be entitled to reimbursement under this clause (b) in respect
of any litigation, contest, dispute, suit, proceeding or action to the extent
any of the foregoing results from such Person's gross negligence or willful
misconduct as finally determined by a court of competent
jurisdiction;

     

    (c)           any
attempt to enforce any remedies of Agent or any Lender against any or all of the
Credit Parties or any other Person that may be obligated to Agent or any Lender
by virtue of any of the Loan Documents, including any such attempt to enforce
any such remedies in the course of any work-out or restructuring of the Loans
during the pendency of one or more Events of Default; provided, that in the
case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;

     

    (d)           any
workout or restructuring of the Loans during the pendency of one or more Events
of Default;

     

    (e)           the
forwarding to Borrower or any other Person on behalf of Borrower by Agent of the
proceeds of any Loan (including a wire transfer fee of $25 per wire transfer);
and

     

    (f)           efforts
to (i) monitor the Loans or any of the other Obligations, (ii) evaluate, observe
or assess any of the Credit Parties or their respective affairs, and (iii)
verify, protect, evaluate, assess, appraise, collect, sell, liquidate or
otherwise dispose of any of the Collateral; provided that Borrower’s obligations
under this clause (f) shall be limited to reasonable out-of-pocket fees and
expenses;

     

    including,
as to each of clauses
(a) through (f) above, all reasonable attorneys' and other professional
and service providers' fees arising from such services and other advice,
assistance or other representation, including those in connection with any
appellate proceedings, and all expenses, costs, charges and other fees incurred
by such counsel and others in connection with or relating to any of the events
or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrower to Agent.  Without
limiting the generality of the foregoing, such expenses, costs, charges and fees
may include: fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram or telecopy charges; secretarial overtime charges; and
expenses for travel, lodging and food paid or incurred in connection with the
performance of such legal or other advisory services.

       

      11.4           No Waiver.  Agent's
or any Lender's failure, at any time or times, to require strict performance by
the Credit Parties of any provision of this Agreement or any other Loan Document
shall not waive, affect or diminish any right of Agent or such Lender thereafter
to demand strict compliance and performance herewith or
therewith.  Any suspension or waiver of an Event of Default shall not
suspend, waive or affect any other Event of Default whether the

    

     

    
      
         

      

      
        59

        
          

        

      

      
         

      

    

    same is
prior or subsequent thereto and whether the same or of a different
type.  Subject to the provisions of Section 11.2, none of
the undertakings, agreements, warranties, covenants and representations of any
Credit Party contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Credit Party shall be deemed to have been
suspended or waived by Agent or any Lender, unless such waiver or suspension is
by an instrument in writing signed by an officer of or other authorized employee
of Agent and the applicable required Lenders and directed to Borrower specifying
such suspension or waiver.

     

    11.5           Remedies.  Agent's
and Lenders' rights and remedies under this Agreement shall be cumulative and
nonexclusive of any other rights and remedies that Agent or any Lender may have
under any other agreement, including the other Loan Documents, by operation of
law or otherwise.  Recourse to the Collateral shall not be
required.

     

    11.6           Severability.  Wherever
possible, each provision of this Agreement and the other Loan Documents shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement or any other Loan Document shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement or such other Loan Document.

     

    11.7           Conflict of
Terms.  Except
as otherwise provided in this Agreement or any of the other Loan Documents by
specific reference to the applicable provisions of this Agreement, if any
provision contained in this Agreement conflicts with any provision in any of the
other Loan Documents, the provision contained in this Agreement shall govern and
control.

     

    11.8           Confidentiality.  Each
Lender aggress to use all reasonable efforts to maintain, in accordance with its
customary practices, the confidentiality of information obtained by it pursuant
to any Loan Document and not designated by any Credit Party as public, except
that such information may be disclosed (i) with the Borrower’s consent, (ii) to
Related Persons of such Lender, L/C Issuer or the Agent, as the case may be, or
to any Person that any L/C Issuer causes to issue Letters of Credit hereunder,
that are advised of the confidential nature of such information and are
instructed to keep such information confidential, (iii) to the extent such
information presently is or hereafter becomes available to such Lender, L/C
Issuer or the Agent, as the case may be, on a non-confidential basis from a
source other than any Credit Party, (iv) to the extent disclosure is required by
applicable Requirements of Law or other legal process or requested or demanded
by any Governmental Authority, (v) to the extent necessary or customary for
inclusion in league table measurements or in any tombstone or other advertising
materials (and the Credit Parties consent to the publication of such tombstone
or other advertising materials by the Agent, any Lender, any L/C Issuer or any
of their Related Persons), (vi) to the National Association of Insurance
Commissioners or any similar organization, any examiner or any nationally
recognized rating agency or otherwise to the extent consisting of general
portfolio information that does not identify borrowers, (vii) to current or
prospective assignees, SPVs grantees of any option described in Section 9.1(f)
or participants, direct or contractual counterparties to any Secured Rate
Contract permitted hereunder and to their respective Related Persons, in each
case to the extent such assignees, participants, counterparties or Related
Persons agree to be bound by provisions substantially similar to the provisions
of this Section 11.8 and
(viii) in connection with the exercise of any remedy under any Loan
Document.  In the event of 

     

    
      
         

      

      
        60

        
          

        

      

      
         

      

    

    any
conflict between the terms of this Section 11.8 and
those of any other Contracts entered into with any Credit Party (whether or not
a Loan Document), the terms of this Section 11.8
shall govern.

     

    11.9           GOVERNING
LAW.  EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN
DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED
STATES OF AMERICA.  EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT
THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK, NEW
YORK SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS PERTAINING TO THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT AGENT,
LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY AND; PROVIDED, FURTHER THAT NOTHING
IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING
SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE
COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER IN FAVOR OF AGENT.  EACH CREDIT PARTY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION
THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT.  EACH CREDIT PARTY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE
ADDRESS SET FORTH IN
ANNEX I OF THIS
AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN
THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.

       

      11.10                      Notices.  Except
as otherwise provided herein, whenever it is provided herein that any notice,
demand, request, consent, approval, declaration or other communication shall or
may be given to or served upon any of the parties by any other parties, or
whenever any of the parties desires to give or serve upon any other parties any
communication with respect to this Agreement, each such notice, demand, request,
consent, approval, declaration or other communication shall be in writing and
shall be deemed to have been validly served, given or 

    

     

    
      
         

      

      
        61

        
          

        

      

      
         

      

    

    delivered
(a) upon the earlier of actual receipt and three (3) Business Days after deposit
in the United States Mail, registered or certified mail, return receipt
requested, with proper postage prepaid, (b) upon transmission, when sent by
telecopy or other similar facsimile transmission during normal business hours on
a Business Day (with such telecopy or facsimile promptly confirmed by delivery
of a copy by personal delivery or United States Mail as otherwise provided in
this Section
11.10); (c) one (1) Business Day after deposit with a reputable
overnight courier with all charges prepaid, (d) when delivered, if
hand-delivered by messenger, or (e) upon transmission, when sent by Electronic
Transmission or on the date of such posting in the case of posting to a website,
all of which shall be addressed to the party to be notified and sent to the
address or facsimile number indicated in Annex I or to such
other address (or facsimile number) as may be substituted by notice given as
herein provided.  The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such
notice.  Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
(other than Borrower or Agent) designated in Annex I to receive
copies shall in no way adversely affect the effectiveness of such notice,
demand, request, consent, approval, declaration or other
communication.

     

    Each
party hereto hereby authorizes the Agent to transmit, post or otherwise make or
communicate, in its sole discretion (and the Agent shall not be required to
transmit, post or otherwise make or communicate), Electronic Transmissions in
connection with this Agreement; provided, however, that notices
to any Credit Party shall not be made by any posting to an Internet or
extranet-based site or other equivalent service but may be made by e-mail or
E-fax.  Each party hereto hereby acknowledges and agrees that the use
of Electronic Transmissions is not necessarily secure and that there are risks
associated with such use, including, without limitation, risks of interception,
disclosure and abuse and indicates it assumes and accepts such risks by hereby
authorizing the Agent to transmit Electronic Transmissions.

     

    Electronic
Transmissions that are not readily capable of bearing either a signature or a
reproduction of a signature may be signed, and shall be deemed signed, by
attaching to or logically associating with such Electronic Transmission an
E-Signature.  Each party may rely upon, and assume the authenticity
of, any E-Signature contained in or associated with an Electronic
Transmission.  No Electronic Transmission shall be denied legal effect
merely because it is made electronically.  Each Electronic
Transmission shall be deemed sufficient to satisfy any legal requirement for a
“writing” and each e-Signature shall be deemed sufficient to satisfy any legal
requirement for a “signature”, in each case including, without limitation,
pursuant to the Uniform Commercial Code, the Federal Uniform Electronic
Transactions Act, the Electronic
Signatures in Global and National Commerce Act and any substantive or procedural
law governing such subject matter.  Each Electronic Transmission
containing a signature, a reproduction of a signature or an E-Signature shall,
for all intents and purposes, have the same effect and weight as a signed paper
original.  Each party hereto agrees not to contest the validity or
enforceability of an Electronic Transmission or E-Signature under the provisions
of any applicable law requiring certain documents to be in writing or signed;
provided however, that nothing herein shall limit a party’s right to contest
whether an Electronic Transmission or E-Signature has been altered after
transmission.

       

      Each
Lender and the Borrower acknowledges that all uses of an E-System will be
governed by and subject to, in addition to this clause, separate terms and
conditions posted or 

    

     

    
      
         

      

      
        62

        
          

        

      

      
         

      

    

    referenced
in such E-System or related agreements executed by such Lender or the Borrower
in connection with such use.

     

    The
E-Systems and the Electronic Transmissions are provided “as is” and “as
available”.  The Agent does not warrant the accuracy, adequacy or
completeness of the E-Systems and the Electronic Transmissions and disclaims
liability for errors or omissions therein.  No Warranty of any kind is
made by the Agent in connection with the E-Systems or the Electronic
Communications, including, without limitation, any warranty of merchantability,
fitness for a particular purpose, non-infringement of third party rights or
freedom from viruses or other code defects.  Each Lender and the
Borrower acknowledge that the Agent shall have no responsibility for maintaining
or providing any equipment, software, services and testing required in
connection with all Electronic Transmissions or otherwise required for such
e-System.

     

    11.11                      Section
Titles.  The
Section titles and Table of Contents contained in this Agreement are and shall
be without substantive meaning or content of any kind whatsoever and are not a
part of the agreement between the parties hereto.

     

    11.12                      Counterparts.  This
Agreement may be executed in any number of separate counterparts, each of which
shall collectively and separately constitute one agreement.

     

    11.13                      WAIVER OF JURY
TRIAL.  BECAUSE
DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST
QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION
RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING
SUCH APPLICABLE LAWS.  THEREFORE, TO ACHIEVE THE BEST COMBINATION OF
THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE
ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE
ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT,
LENDERS AND ANY CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
OR THE TRANSACTIONS RELATED THERETO.

       

      11.14                      Press Releases and Related
Matters.  Each
Credit Party executing this Agreement agrees that neither it nor its Affiliates
will in the future issue any press releases or other public disclosure using the
name of GE Capital or its affiliates or referring to this Agreement, the other
Loan Documents or the Related Transactions Documents without at least two (2)
Business Days' prior notice to GE Capital and without the prior written consent
of GE Capital unless (and only to the extent that) such Credit Party or
Affiliate is required to do so under law and then, in any event, such Credit
Party or Affiliate will consult with GE Capital before issuing such press
release or other public disclosure.  Each Credit Party consents to the
publication by Agent or any Lender of advertising material relating to the
financing transactions 

    

     

    
      
         

      

      
        63

        
          

        

      

      
         

      

    

    contemplated
by this Agreement using Borrower’s name, product photographs, logo or
trademark.  Agent or such Lender shall provide a draft of any
advertising material to each Credit Party for review and comment prior to the
publication thereof.  Agent reserves the right to provide to industry
trade organizations information necessary and customary for inclusion in league
table measurements.

     

    11.15                      Reinstatement.  This
Agreement shall remain in full force and effect and continue to be effective
should any petition be filed by or against any Credit Party for liquidation or
reorganization, should any Credit Party become insolvent or make an assignment
for the benefit of any creditor or creditors or should a receiver or trustee be
appointed for all or any significant part of any Credit Party's assets, and
shall continue to be effective or to be reinstated, as the case may be, if at
any time payment and performance of the Obligations, or any part thereof, is,
pursuant to applicable law, rescinded or reduced in amount, or must otherwise be
restored or returned by any obligee of the Obligations, whether as a “voidable
preference,” “fraudulent conveyance,” or otherwise, all as though such payment
or performance had not been made.  In the event that any payment, or
any part thereof, is rescinded, reduced, restored or returned, the Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.

     

    11.16                      Advice of
Counsel.  Each
of the parties represents to each other party hereto that it has discussed this
Agreement and, specifically, the provisions of Sections 11.9 and
11.13, with its counsel.

     

    11.17                      No Strict
Construction.  The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

     

    
      
         

      

      
        64

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.

     

    BORROWER

    

    CONSOLIDATED
AMUSEMENT THEATRES, INC.

    

    

    By:           /s/ Andrzej
Matyczynski                                                                           

    Name:      Andrzej
Matyczynski

    Title:        CFO

     

    
      
         

      

      
        65

        
          

        

      

      
         

      

    

     

    GENERAL
ELECTRIC CAPITAL

    CORPORATION, as Agent and
Lender

    

    

    By:           /s/ General Electric Capital
Corporation

    Duly Authorized
Signatory

    
      
         

      

      
        66

        
          

        

      

      
         

      

    

    BANK
OF HAWAII

    

    

    By:           /s/ Linda R.
Ho                                                                           

    Name:      Linda R. Ho

    Title:        Vice
President

     

    
      
         

      

      
        67

        
          

        

      

      
         

      

    

     

    CENTRAL
PACIFIC BANK

    

    

    By:           /s/ Garrett
Grace                                                                           

    Name:      Garrett Grace

    Title:        Vice President

    
      
         

      

      
        68

        
          

        

      

      
         

      

    

    AMERICAN
SAVINGS BANK

    

    

    By:           /s/ Danford H.
Oshima                                                                           

    Name:      Danford H.
Oshima

    Title:       
Vice
President

     

    
      
         

      

      
        69

        
          

        

      

      
         

      

    

    The
following Persons are signatories to this Agreement in their capacity as Credit
Parties and not as Borrowers.

     

    CONSOLIDATED
AMUSEMENT HOLDINGS, INC.

    

    By: /s/ Andrzej
Matyczynski                                                                           

    Name:
Andrzej
Matyczynski                                                                           

    Title:
Chief Financial
Officer                                                                           

    

    

    

    READING
CINEMAS NJ, INC.

    

    By: /s/ Andrzej
Matyczynski                                                                           

    Name:
Andrzej
Matyczynski                                                                           

    Title:
Treasurer                                                                           

     

    
      
         

      

      
        70

        
          

        

      

      
         

      

    

    

    ANNEX
A (Recitals)

    to

    CREDIT
AGREEMENT

     

    DEFINITIONS

     

    Capitalized
terms used in the Loan Documents shall have (unless otherwise provided elsewhere
in the Loan Documents) the following respective meanings and all references to
Sections, Exhibits, Schedules or Annexes in the following definitions shall
refer to Sections, Exhibits, Schedules or Annexes of or to the
Agreement:

     

    “Account Debtor” means
any Person who may become obligated to any Credit Party under, with respect to,
or on account of, an Account, Chattel Paper or General Intangibles (including a
payment intangible).

     

    “Accounting Changes”
has the meaning ascribed thereto in Annex G.

     

    “Accounts” means all
“accounts,” as such term is defined in the Code, now owned or hereafter acquired
by any Credit Party, including (a) all accounts receivable, other receivables,
book debts and other forms of obligations (other than forms of obligations
evidenced by Chattel Paper or Instruments), (including any such obligations that
may be characterized as an account or contract right under the Code), (b) all of
each Credit Party's rights in, to and under all purchase orders or receipts for
goods or services, (c) all of each Credit Party's rights to any goods
represented by any of the foregoing (including unpaid sellers' rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all rights to payment due to any
Credit Party for property sold, leased, licensed, assigned or otherwise disposed
of, for a policy of insurance issued or to be issued, for a secondary obligation
incurred or to be incurred, for energy provided or to be provided, for the use
or hire of a vessel under a charter or other contract, arising out of the use of
a credit card or charge card, or for services rendered or to be rendered by such
Credit Party or in connection with any other transaction (whether or not yet
earned by performance on the part of such Credit Party), (e) all healthcare
insurance receivables, and (f) all collateral security of any kind, now or
hereafter in existence, given by any Account Debtor or other Person with respect
to any of the foregoing.

     

    “Acquisition” means
the acquisition of the Acquired Theatres and related assets of Sellers pursuant
to the Acquisition Agreement.

     

    “Acquisition
Agreement” means that certain Asset Purchase and Sale Agreement dated as
of October 4, 2007, by and among Sellers, Michael Forman and Christopher Forman,
Borrower and Reading.

     

    “Acquired Theatres”
means, collectively theatres in the following locations (i) Rohnert Park, (ii)
Valley Plaza, (iii) Grossmont, (iv) Town Square, (v) Kaahumanu, (vi) Kukui Mall
(subject to landlord consent to assignment of lease), (vii) Kapolei, (viii) Koko
Marina, (ix) Ko’olau, (x) Mililani, (xi) Pearlridge, (xii) Ward and (xiii)
Kahala.

     

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

     “Activation Event” and
“Activation Notice” have the meanings ascribed thereto in Annex C.

     

    “Additional Lender”
has the meaning ascribed to it in Section
1.1(c).

    

    “Advance” means any
Revolving Credit Advance.

     

    “Affiliate” means,
with respect to any Person, (a) each Person that, directly or indirectly, owns
or controls, whether beneficially, or as a trustee, guardian or other fiduciary,
10% or more of the Stock having ordinary voting power in the election of
directors of such Person, (b) each Person that controls, is controlled by or is
under common control with such Person, (c) each of such Person's officers,
directors, joint venturers and partners and (d) in the case of Borrower, the
immediate family members, spouses and lineal descendants of individuals who are
Affiliates of Borrower.  For the purposes of this definition, “control” of a Person
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of its management or policies, whether through the ownership
of voting securities, by contract or otherwise; provided, however, that the
term “Affiliate” shall
specifically exclude Agent and each Lender.

     

    “Agent” means GE
Capital in its capacity as Agent for Lenders or its successor appointed pursuant
to Section
9.7.

     

    “Agreement” means the
Credit Agreement by and among Borrower, the other Credit Parties party thereto,
GE Capital, as Agent and Lender and the other Lenders from time to time party
thereto, as the same may be amended, supplemented, restated or otherwise
modified from time to time.

     

    “Appendices” has the
meaning ascribed to it in the recitals to the Agreement.

     

    “Applicable L/C
Margin” means the per annum fee, from time to time in effect, payable
with respect to outstanding Letter of Credit Obligations as determined by
reference to Section
1.5(a).

     

    “Applicable Margins”
means collectively the Applicable Index Margin and the Applicable LIBOR
Margin.

     

    “Applicable Index
Margin” means the per annum interest rate margin from time to time in
effect and payable in addition to the Index Rate applicable to the Loans, as
determined by reference to Section
1.5(a).

     

    “Applicable LIBOR
Margin” means the per annum interest rate from time to time in effect and
payable in addition to the LIBOR Rate applicable to the Loans, as determined by
reference to Section
1.5(a).

     

    “Approved Fund” means,
with respect to any Lender, any Person (other than a natural Person) that (a) is
or will be engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and (b) is advised or managed by (i) such Lender, (ii) any Affiliate of
such Lender or

     

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

    (iii) any
Person (other than an individual) or any Affiliate of any Person (other than an
individual) that administers or manages such Lender.

     

    “Assignment Agreement”
means an assignment agreement entered into by a Lender, as assignor, and any
Person, as assignee, pursuant to the terms and provisions of Section 9.1 (with the
consent of any party whose consent is required by Section 9.1),
accepted by Agent, in substantially the form of Exhibit 9.1(a),
or any other form approved by Agent.

     

    “Assumption Agreement”
has the meaning ascribed to it in Section
1.1(c).

     

    “Bankruptcy Code”
means the provisions of Title 11 of the United States Code, 11 U.S.C.
§§ 101 et seq.

     

    “Blocked Accounts” has
the meaning ascribed to it in Annex C.

     

    “Borrower” has the
meaning ascribed thereto in the preamble to the Agreement.

     

    “Borrower Pledge
Agreement” means the Pledge Agreement of even date herewith executed by
Borrower in favor of Agent, on behalf of itself and Lenders, pledging the Stock
of its Subsidiaries described therein, if any, and all Intercompany Notes owing
to or held by it.

     

    “Borrowing
Availability” means as of any date of determination the Maximum Amount
less the
Revolving Loan then outstanding.

     

    “Business” means the
operation by the Credit Parties of full length motion picture cinemas and
associated and ancillary activities in connection therewith.

     

    “Business Day” means
any day that is not a Saturday, a Sunday or a day on which banks are required or
permitted to be closed in the States of Georgia and/or New York and in reference
to LIBOR Loans shall mean any such day that is also a LIBOR Business
Day.

     

    “Capital Expenditures”
means, with respect to any Person, all expenditures (by the expenditure of cash
or the incurrence of Indebtedness) by such Person during any measuring period
for any fixed assets or improvements or for replacements, substitutions or
additions thereto, that have a useful life of more than one year and that are
required to be capitalized under GAAP but excluding expenditures (i) in respect
of the consummation of the Acquisition and Permitted Acquisitions, (ii)
constituting amounts constituting proceeds that are reinvested in the business
of the Credit Parties in accordance with the terms hereof and (iii) any tenant
improvement allowance or landlord contributions to tenancy buildouts (to the
extent paid for or reimbursed by the landlord).

     

    “Capital Lease” means,
with respect to any Person, any lease of any property (whether real, personal or
mixed) by such Person as lessee that, in accordance with GAAP, would be required
to be classified and accounted for as a capital lease on a balance sheet of such
Person.

     

    
      
         

      

      
        A-3

        
          

        

      

      
         

      

    

    “Capital Lease
Obligation” means, with respect to any Capital Lease of any Person, the
amount of the obligation of the lessee thereunder that, in accordance with GAAP,
would appear on a balance sheet of such lessee in respect of such Capital
Lease.

     

    “Cash Collateral
Account” has the meaning ascribed to it Annex B.

     

    “Cash Equivalents” has
the meaning ascribed to it in Annex B.

     

    “Cash Interest
Expense” shall mean for any period, cash Interest Expense paid or accrued
on Total Debt for such period.

     

    “Cash Management
Systems” has the meaning ascribed to it in Section
1.8.

     

    “Change of Control”
means any event, transaction or occurrence as a result of which (a) any person
or group of persons (within the meaning of the Securities  Exchange
Act of 1934) other than the Cotter Family shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of
the issued and outstanding shares of capital Stock of Reading having the right
to vote for the election of directors of Reading under ordinary circumstances
and the Cotter Family shall cease to beneficially own and control at least 51%
of the issued and outstanding shares of capital Stock of Reading having the
right to vote for the election of directors of Reading under ordinary
circumstances; (b) Reading ceases to own and control all of the economic and
voting rights associated with ownership of at least one hundred percent (100%)
of all classes of the outstanding capital Stock of Holdings on a fully diluted
basis; (c) Holdings ceases to own and control all of the economic and voting
rights associated with all of the outstanding capital Stock of Borrower or (d)
Borrower ceases to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of its Subsidiaries, except
in connection with a transaction permitted hereby.

     

    “Charges” means all
federal, state, county, city, municipal, local, foreign or other governmental
taxes (including taxes owed to the PBGC at the time due and payable), levies,
assessments, charges, liens, claims or encumbrances upon or relating to (a) the
Collateral, (b) the Obligations, (c) the employees, payroll, income or gross
receipts of any Credit Party, (d) any Credit Party's ownership or use of
any properties or other assets, or (e) any other aspect of any Credit Party's
business.

     

    “Chattel Paper” means
any “chattel paper,” as such term is defined in the Code, including electronic
chattel paper, now owned or hereafter acquired by any Credit Party, wherever
located.

     

    “Closing Date” means
February 21, 2008.

     

    “Closing Equity
Contribution” means the direct or indirect capitalization of Borrower
with at least $22,500,000 of cash equity from Reading on or prior to the Closing
Date.

     

    “Closing Checklist”
means the schedule, including all appendices, exhibits or schedules thereto,
listing certain documents and information to be delivered in connection
with

     

    
      
         

      

      
        A-4

        
          

        

      

      
         

      

    

    the
Agreement, the other Loan Documents and the transactions contemplated
thereunder, substantially in the form attached hereto as Annex D.

     

    “Code” means the
Uniform Commercial Code as the same may, from time to time, be enacted and in
effect in the State of New York; provided, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern; provided
further, that in the event that, by reason of mandatory provisions of
law, any or all of the attachment, perfection or priority of, or remedies with
respect to, Agent's or any Lender's Lien on any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term “Code” shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.

     

    “Collateral” means the
property covered by the Security Agreement, the Mortgages and the other
Collateral Documents and any other property, real or personal, tangible or
intangible, now existing or hereafter acquired, that may at any time be or
become subject to a security interest or Lien in favor of Agent, on behalf of
itself and Lenders, to secure the Obligations.

     

    “Collateral
Assignments” means each collateral assignment agreement made in favor of
Agent, on behalf of itself and Lenders, by any Credit Party, in form and
substance acceptable to Agent.

     

    “Collateral Documents”
means the Security Agreement, the Pledge Agreements, the Guaranties, the
Mortgages, the Patent Security Agreement, the Trademark Security Agreement, the
Copyright Security Agreement, the Collateral Assignments and all similar
agreements entered into guaranteeing payment of, or granting a Lien upon
property as security for payment of, the Obligations.

     

    “Collateral Reports”
means the reports with respect to the Collateral referred to in Annex F.

     

    “Collection Account”
means that certain account of Agent, account number  502-328-54 in the
name of Agent at DeutscheBank Trust Company Americas in New York, New York ABA
No. 021 001 033, or such other account as may be specified in writing by Agent
as the “Collection Account.”

     

    “Commitment Termination
Date” means the earliest of (a) February 21, 2013, (b) the date of
termination of Lenders' obligations to make Advances and to incur Letter of
Credit Obligations or permit existing Loans to remain outstanding pursuant to
Section 8.2(b),
and (c) the date of prepayment in full by Borrower of the Loans and the
cancellation and return (or stand-by guarantee) of all Letters of Credit or the
cash collateralization of all Letter of Credit Obligations pursuant to Annex B, and the
permanent reduction of the Commitments to zero dollars ($0).

     

    
      
         

      

      
        A-5

        
          

        

      

      
         

      

    

    “Commitments” means
(a) as to any Lender, the aggregate of such Lender's  Revolving Loan
Commitment and Term Loan B Commitment as set forth on Annex J to the
Agreement or in the most recent Assignment Agreement executed by such Lender and
(b) as to all Lenders, the aggregate of all Lenders' Revolving Loan Commitments
and Term Loan B Commitments, which aggregate commitment shall be Fifty Five
Million Dollars ($55,000,000) on the Closing Date, as to each of clauses (a) and (b),
as such Commitments may be reduced, amortized or adjusted from time to time in
accordance with the Agreement.

     

    “Compliance
Certificate” has the meaning ascribed to it in Annex E.

     

    “Contracts” means all
“contracts,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, in any event, including all contracts,
undertakings, or agreements (other than rights evidenced by Chattel Paper,
Documents or Instruments) in or under which any Credit Party may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any Account.

     

    “Contributed Capital”
means as of any date of determination, the sum of (a) the principal amount of
the Loans as of the Closing Date minus  principal
payments paid or payable in respect of the Term Loan as of such date, minus the aggregate
principal amount of all mandatory prepayments as of such date in respect of the
Revolving Loans with respect to which there was a concurrent mandatory Revolving
Loan Commitment reduction in the amount of such prepayment, (b) the original
principal amount of the Reading Note as of the Closing Date minus the amount of
all reductions in the principal amount of the Reading Note as a result of
adjustments made as of such date pursuant to Section 3 of the Reading Note plus
(c) $1,500,000.

     

    “Control Letter” means
a letter agreement between Agent and (i) the issuer of uncertificated securities
with respect to uncertificated securities in the name of any Credit Party, (ii)
a securities intermediary with respect to securities, whether certificated or
uncertificated, securities entitlements and other financial assets held in a
securities account in the name of any Credit Party, (iii) a futures commission
merchant or clearing house, as applicable, with respect to commodity accounts
and commodity contracts held by any Credit Party, whereby, among other things,
the issuer, securities intermediary or futures commission merchant limits any
security interest in the applicable financial assets in a manner reasonably
satisfactory to Agent, acknowledges the Lien of Agent, on behalf of itself and
Lenders, on such financial assets, and agrees to follow the instructions or
entitlement orders of Agent without further consent by the affected Credit
Party.

     

    “Copyright License”
means any and all rights now owned or hereafter acquired by any Credit Party
under any written agreement granting any right to use any Copyright or Copyright
registration.

     

    “Copyright Security
Agreements” means the Copyright Security Agreements made in favor of
Agent, on behalf of itself and Lenders, by each applicable Credit
Party.

     

    “Copyrights” means all
of the following now owned or hereafter adopted or acquired by any Credit Party:
(a) all copyrights and General Intangibles of like nature (whether

     

    
      
         

      

      
        A-6

        
          

        

      

      
         

      

    

    registered
or unregistered), all registrations and recordings thereof, and all applications
in connection therewith, including all registrations, recordings and
applications in the United States Copyright Office or in any similar office or
agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof, and (b) all reissues, extensions
or renewals thereof.

     

    “Cotter Family” means
Mr. James J. Cotter, Ms. Ellen M. Cotter, Mr. James J. Cotter,
Jr.,  Ms. Margaret Cotter, their spouses or lineal descendants, the
estates of any of the foregoing Persons and any trusts established for the
benefit of the foregoing Persons and any corporation, limited liability company,
limited partnership or similar entity of which 100% of the Stock of such Person
is owned beneficially and of record by any one or more of the
foregoing.

     

    “Credit Parties” means
Holdings, Borrower, and each of their respective Subsidiaries.

     

    “Current Assets”
means, with respect to any Person, all current assets of such Person as of any
date of determination calculated in accordance with GAAP, but excluding cash,
cash equivalents and debts due from Affiliates.

     

    “Current Liabilities”
means, with respect to any Person, all liabilities of such Person that should,
in accordance with GAAP, be classified as current liabilities, and in any event
shall include all Indebtedness payable on demand or within one year from any
date of determination without any option on the part of the obligor to extend or
renew beyond such year, all accruals for federal or other taxes based on or
measured by income and payable within such year, but excluding the current
portion of long-term debt required to be paid within one year and the aggregate
outstanding principal balance of the Revolving Loan.

     

    “Dallas Theatre
Contribution” means the contribution of the theater located at the
Mockingbird Station Shopping Center, Dallas, Texas, by Reading to Holdings and
thereafter by Holdings to Borrower on the Closing Date pursuant to the Dallas
Theatre Contribution Documents.

     

    “Dallas Theatre Contribution
Documents” means (i) that certain Assignment and Assumption Agreement by
and between Citadel Cinemas, Inc., a Nevada corporation, and Reading
International Services Company, a California corporation, dated on or about the
date hereof, (ii) that certain Assignment and Assumption Agreement by and
between Reading International Services Company, a California corporation, and
Reading Consolidated Holdings Inc., a Nevada corporation, dated on or about the
date hereof, (iii) that certain Assignment and Assumption Agreement by and
between Reading Consolidated Holdings Inc., a Nevada corporation, and
Consolidated Amusement Holdings, Inc., a Nevada corporation, dated on or about
the date hereof, (iv) that certain Assignment and Assumption Agreement by and
between Consolidated Amusement Holdings, Inc., a Nevada corporation, and
Consolidated Amusement Theatres, Inc., a Nevada corporation, dated on or about
the date hereof, (v) that certain Unanimous Written Consent of Directors of
Reading International, Inc., dated on or about the date hereof, (vi) that
certain Joint Unanimous Written Consent of Directors and Sole Shareholder of
Citadel Cinemas, Inc., dated on or about the date hereof, (vii) that certain
Joint Unanimous Written Consent of Directors and Shareholders of Reading
International Services Company,

     

    
      
         

      

      
        A-7

        
          

        

      

      
         

      

    

    dated on
or about the date hereof, (viii) that certain Joint Unanimous Written Consent of
Directors and Sole Shareholder of Reading Consolidated Holdings, Inc., dated on
or about the date hereof, and (ix) that certain Joint Unanimous Written Consent
of Directors and Sole Shareholder of Consolidated Amusement Holdings, Inc.,
dated on or about the date hereof.

     

     “Debt Service” means,
with respect to any Person for any fiscal period, an amount equal to the sum of
(a) Cash Interest Expense for such period and (b) the scheduled
amortization of any outstanding Indebtedness during such period.

     

     “Default” means any
event that, with the passage of time or notice or both, would, unless cured or
waived, become an Event of Default.

     

    “Default Rate” has the
meaning ascribed to it in Section
1.5(d).

     

    “Default Rate Notice”
has the meaning ascribed to it in Section
1.5(d).

     

    “Deposit Accounts”
means all “deposit accounts” as such term is defined in the Code, now or
hereafter held in the name of any Credit Party.

     

    “Disclosure Schedules”
means the Schedules prepared by Borrower and denominated as Disclosure Schedules (1.4)
through (6.7) in the Index to the Agreement.

     

    “Documents” means any
“documents,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located.

     

    “Dollars” or “$” means lawful
currency of the United States of America.

     

     “Domestic Subsidiary”
means any direct or indirect Subsidiary of Holdings that is not a Foreign
Subsidiary.

     

    “EBITDA” means, with
respect to any Person for any fiscal period, without duplication, an amount
equal to (a) consolidated net income of such Person for such period, determined
in accordance with GAAP, minus (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain or loss during such period
arising from the sale, exchange or other disposition of capital assets by such
Person (including any fixed assets, whether tangible or intangible, and all
inventory sold in conjunction with the disposition of fixed assets and all
securities), and (v) any other non-cash gains, charges, items and other non-cash
purchase accounting adjustments that have been added in determining consolidated
net income, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication, plus (c) the sum of
(i) any provision for income taxes, (ii) Interest Expense, (iii) loss from
extraordinary items for such period, (iv) depreciation and amortization for such
period, (v) other non-cash charges, items and any non-cash purchase accounting
adjustments (excluding bad debt write-offs and reserves) for such period, (vi)
the amount of any deduction to consolidated net income as the result of any
grant to any members of the management of such Person or any of its Subsidiaries
of any Stock and (vii) transaction expenses associated with the consummation of
the Acquisition and any Permitted Acquisition, in each case to the extent such
expenses are deducted from net income in accordance with GAAP and as approved by
Agent.

     

    
      
         

      

      
        A-8

        
          

        

      

      
         

      

    

     For
purposes of this definition, the following items shall be excluded in
determining consolidated net income of a Person: (1) the income (or deficit) of
any other Person accrued prior to the date it became a Subsidiary of, or was
merged or consolidated into, such Person or any of such Person's Subsidiaries;
(2) the income (or deficit) of any other Person (other than a Subsidiary) in
which such Person has an ownership interest, except to the extent any such
income has actually been received by such Person in the form of cash dividends
or distributions; (3) the undistributed earnings of any Subsidiary of such
Person to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary;
(4) [reserved]; (5) any write-up of any asset; (6) any net gain from the
collection of the proceeds of life insurance policies; (7) any net gain arising
from the acquisition of any securities, or the extinguishment, under GAAP, of
any Indebtedness, of such Person; (8) in the case of a successor to such Person
by consolidation or merger or as a transferee of its assets, any earnings of
such successor prior to such consolidation, merger or transfer of assets; and
(9) any deferred credit representing the excess of equity in any Subsidiary of
such Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.

     

    “EBITDAR” means, with
respect to any Person for any period, without duplication, an amount equal to
(a) EBITDA for such period, plus (b) Lease Expense for such period.

     

    “E-Fax” means any
system used to receive or transmit faxes electronically.

     

    “Electronic
Transmission” means each notice, request, instruction, demand, report,
authorization, agreement, document, file, information and any other
communication transmitted, posted or otherwise made or communicated by e-mail,
E-Fax, Internet or extranet-based site or any other equivalent electronic
service, whether owned, operated or hosted by the Administrative Agent, any
Affiliate of the Agent or any other Person.

     

    “Eligible Assignee”
has the meaning ascribed to it in Section
9.1(b).

     

    “E-Signature” means
the process of attaching to or logically associating with an Electronic
Transmission an electronic symbol, encryption, digital signature or process
(including, without limitation, the name or an abbreviation of the name of the
party transmitting the Electronic Transmission) with the intent to sign,
authenticate or accept the Electronic Transmission.

     

    “E-Systems” means any
electronic system such as an Internet or extranet-based site (including, without
limitation, IntralinksTM),
whether owned, operated or hosted by the Administrative Agent, any Affiliate of
the Agent or any other Person, providing for access to data protected by
passcodes or other security systems.

     

    “Environmental Laws”
means all applicable federal, state, local and foreign laws, statutes,
ordinances, codes, rules, standards and regulations, now or hereafter in effect,
and any applicable judicial or administrative interpretation thereof, including
any applicable judicial or administrative order, consent decree, order or
judgment, imposing liability or standards of conduct for or relating to the
regulation and protection of human health, safety, the environment

     

    
      
         

      

      
        A-9

        
          

        

      

      
         

      

    

    and
natural resources (including ambient air, surface water, groundwater, wetlands,
land surface or subsurface strata, wildlife, aquatic species and
vegetation).  Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C. §§
9601 et seq.)
(“CERCLA”); the
Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101
et seq.); the
Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136 et seq.); the Solid
Waste Disposal Act (42 U.S.C. §§ 6901 et seq.); the Toxic
Substance Control Act (15 U.S.C. §§ 2601 et seq.); the Clean
Air Act (42 U.S.C. §§ 7401 et seq.); the Federal
Water Pollution Control Act (33 U.S.C. §§ 1251 et seq.); the
Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.); and the
Safe Drinking Water Act (42 U.S.C. §§ 300(f) et seq.), and any and
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.

     

    “Environmental
Liabilities” means, with respect to any Person, all liabilities,
obligations, responsibilities, response, remedial and removal costs,
investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Laws, Environmental Permits, or in connection
with any Release or threatened Release or presence of a Hazardous Material
whether on, at, in, under, from or about or in the vicinity of any real or
personal property.

     

    “Environmental
Permits” means all permits, licenses, authorizations, certificates,
approvals or registrations required by any Governmental Authority under any
Environmental Laws.

     

    “Equipment” means all
“equipment,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located and, in any event, including all
such Credit Party's machinery and equipment, including processing equipment,
conveyors, machine tools, data processing and computer equipment, including
embedded software and peripheral equipment and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended from time to time,
and any regulations promulgated thereunder.

     

    
      
         

      

      
        A-10

        
          

        

      

      
         

      

    

    “ERISA Affiliate”
means, with respect to any Credit Party, any trade or business (whether or not
incorporated) that, together with such Credit Party, are treated as a single
employer within the meaning of Sections 414(b), (c), (m) or (o) of the
IRC.

     

    “ERISA Event” means,
with respect to any Credit Party or any ERISA Affiliate, (a) any event described
in Section 4043(c) of ERISA with respect to a Title IV Plan; (b) the withdrawal
of any Credit Party or ERISA Affiliate from a Title IV Plan subject to Section
4063 of ERISA during a plan year in which it was a substantial employer, as
defined in Section 4001(a)(2) of ERISA; (c) the complete or partial withdrawal
of any Credit Party or any ERISA Affiliate from any Multiemployer Plan; (d) the
filing of a notice of intent to terminate a Title IV Plan or the treatment of a
plan amendment as a termination under Section 4041 of ERISA; (e) the institution
of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(f) the failure by any Credit Party or ERISA Affiliate to make when due required
contributions to a Multiemployer Plan or Title IV Plan unless such failure is
cured within thirty (30) days; (g) any other event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or Multiemployer Plan or for the imposition of liability under Section 4069 or
4212(c) of ERISA; (h) the termination of a Multiemployer Plan under Section
4041A of ERISA or the reorganization or insolvency of a Multiemployer Plan under
Section 4241 or 4245 of ERISA; or (i) the loss of a Qualified Plan's
qualification or tax exempt status; or (j) the termination of a Plan described
in Section 4064 of ERISA.

     

    “ESOP” means a Plan
that is intended to satisfy the requirements of Section 4975(e)(7) of the
IRC.

     

    “Event of Default” has
the meaning ascribed to it in Section
8.1.

     

    “Excess Cash Flow”
means, without duplication, with respect to any Fiscal Year of Borrower and its
Subsidiaries, consolidated EBITDA of Borrower (a) plus decreases or minus
increases (as the case may be) in Working Capital, minus (b) Capital
Expenditures during such Fiscal Year (excluding the financed portion thereof),
minus (c) Interest Expense paid or accrued (excluding any original issue
discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense), minus (d) scheduled principal
payments paid or payable in respect of borrowed money, minus (e) the aggregate
amount of all optional prepayments in respect of the Loans (provided, in the
case of a prepayment of the Revolving Loans, that there is a concurrent
Revolving Loan Commitment reduction in the amount of such prepayment), plus or
minus (as the case may be), (f) extraordinary gains or losses which are cash
items not included in the calculation of net income plus (g) taxes deducted in
determining consolidated net income to the extent not paid for in cash, minus
(h) Permitted Tax Distributions.

     

    “Fair Labor Standards
Act” means the Fair Labor Standards Act, 29 U.S.C. §201 et
seq.

     

    “Federal Funds Rate”
means, for any day, a floating rate equal to the weighted average of the rates
on overnight federal funds transactions among members of the Federal Reserve
System, as determined by Agent in its sole discretion, which determination shall
be final, binding and conclusive (absent manifest error).

     

    
      
         

      

      
        A-11

        
          

        

      

      
         

      

    

    “Federal Reserve
Board” means the Board of Governors of the Federal Reserve
System.

     

    “Fees” means any and
all fees payable to Agent or any Lender pursuant to the Agreement or any of the
other Loan Documents.

     

    “Financial Covenants”
means the financial covenants set forth in Annex G.

     

    “Financial Statements”
means the consolidated and, if applicable and if requested by Agent,
consolidating income statements, statements of cash flows and balance sheets of
Borrower delivered in accordance with Section 3.4 and Annex E.

     

    “Fiscal Month” means
any of the monthly accounting periods of Borrower.

     

    “Fiscal Quarter” means
any of the quarterly accounting periods of Borrower, ending on March 31, June
30, September 30 and December 31 of each year.

     

    “Fiscal Year” means
any of the annual accounting periods of Borrower ending on December 31 of each
year.

     

    “Fixed Charges” means,
with respect to any Person for any fiscal period, (a) Debt Service for such
period, plus (b) income taxes
paid or payable in cash with respect to such fiscal period (including Permitted
Tax Distributions), plus (c) Capital
Expenditures during such period (excluding the financed portion thereof), plus (d) Lease
Expense for such period.

     

    “Fixed Charge Coverage
Ratio” means, with respect to any Person for any fiscal period, the ratio
of EBITDAR to Fixed Charges.

     

    “Fixtures” means all
“fixtures” as such term is defined in the Code, now owned or hereafter acquired
by any Credit Party.

     

    “Foreign Subsidiary”
means any Subsidiary organized in a jurisdiction other than the United States of
America or any state thereof or the District of Columbia.

     

    “Funded Debt” means,
with respect to any Person, without duplication, all Indebtedness for borrowed
money evidenced by notes, bonds, debentures, or similar evidences of
Indebtedness and that by its terms matures more than one year from, or is
directly or indirectly renewable or extendible at such Person's option under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of more than one year from the date of creation thereof,
and specifically including Capital Lease Obligations, current maturities of
long-term debt, revolving credit and short-term debt extendible beyond one year
at the option of the debtor, and also including, in the case of Borrower, the
Obligations and, without duplication, Guaranteed Indebtedness consisting of
guaranties of Funded Debt of other Persons.

     

    “GAAP” means generally
accepted accounting principles in the United States of America, consistently
applied, as such term is further defined in Annex G to the
Agreement.

     

    
      
         

      

      
        A-12

        
          

        

      

      
         

      

    

    “GE Capital” means
General Electric Capital Corporation, a Delaware corporation.

     

    “GE Capital Fee
Letter” means that certain letter, dated as of October 4, 2007, between
GE Capital and Borrower with respect to certain Fees to be paid from time to
time by Borrower to GE Capital.

     

    “General Intangibles”
means “general intangibles,” as such term is defined in the Code, now owned or
hereafter acquired by any Credit Party, including all right, title and interest
that such Credit Party may now or hereafter have in or under any Contract, all
payment intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents,
and all applications therefor and reissues, extensions or renewals thereof,
rights in Intellectual Property, interests in partnerships, joint ventures and
other business associations, licenses, permits, copyrights, trade secrets,
proprietary or confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge, know-how,
software, data bases, data, skill, expertise, experience, processes, models,
drawings, materials and records, goodwill (including the goodwill associated
with any Trademark or Trademark License), all rights and claims in or under
insurance policies (including insurance for fire, damage, loss and casualty,
whether covering personal property, real property, tangible rights or intangible
rights, all liability, life, key man and business interruption insurance, and
all unearned premiums), uncertificated securities, chooses in action, deposit,
checking and other bank accounts, rights to receive tax refunds and other
payments, rights to receive dividends, distributions, cash, Instruments and
other property in respect of or in exchange for pledged Stock and Investment
Property, rights of indemnification, all books and records, correspondence,
credit files, invoices and other papers, including without limitation all tapes,
cards, computer runs and other papers and documents in the possession or under
the control of such Credit Party or any computer bureau or service company from
time to time acting for such Credit Party.

     

    “Goods” means any
“goods” as defined in the Code, now owned or hereafter acquired by any Credit
Party, wherever located, including embedded software to the extent included in
“goods” as defined in the Code, manufactured homes, standing timber that is cut
and removed for sale and unborn young of animals.

     

    “Governmental
Authority” means any nation or government, any state or other political
subdivision thereof, and any agency, department or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.

     

    “Guaranteed
Indebtedness” means, as to any Person, any obligation of such Person
guaranteeing, providing comfort or otherwise supporting any Indebtedness, lease,
dividend, or other obligation (“primary obligation”)
of any other Person (the “primary obligor”) in
any manner, including any obligation or arrangement of such Person to
(a) purchase or repurchase any such primary obligation, (b) advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor
or otherwise to maintain the net worth or solvency or any balance sheet
condition of the primary obligor, (c) purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, (d) protect the beneficiary of such

     

    
      
         

      

      
        A-13

        
          

        

      

      
         

      

    

    arrangement
from loss (other than product warranties given in the ordinary course of
business) or (e) indemnify the owner of such primary obligation against
loss in respect thereof.  The amount of any Guaranteed Indebtedness at
any time shall be deemed to be an amount equal to the lesser at such time of (x)
the stated or determinable amount of the primary obligation in respect of which
such Guaranteed Indebtedness is incurred and (y) the maximum amount for which
such Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect
thereof.

     

    “Guaranties” means,
collectively, the Holdings Guaranty, the Reading Guaranty, each Subsidiary
Guaranty and any other guaranty executed by any Guarantor in favor of Agent and
Lenders in respect of the Obligations.

     

    “Guarantors” means
Holdings, Reading, each Subsidiary of Borrower, and each other Person, if any,
that executes a guaranty or other similar agreement in favor of Agent, for
itself and the ratable benefit of Lenders, in connection with the transactions
contemplated by the Agreement and the other Loan Documents.

     

    “Hazardous Material”
means any substance, material or waste that is regulated by, or forms the basis
of liability now or hereafter under, any Environmental Laws, including any
material or substance that is (a) defined as a “solid waste,” “hazardous waste,”
“hazardous material,” “hazardous substance,” “extremely hazardous
waste,”  “restricted hazardous waste,” “pollutant,” “contaminant,”
“hazardous constituent,” “special waste,” “toxic substance” or other similar
term or phrase under any Environmental Laws, or (b) petroleum or any fraction or
by-product thereof, asbestos, polychlorinated biphenyls (PCB's), or any
radioactive substance.

     

    “Holdings” has the
meaning ascribed thereto in the recitals to the Agreement.

     

    “Holdings Guaranty”
means the guaranty of even date herewith executed by Holdings in favor of Agent
and Lenders.

     

    “Holdings Pledge
Agreement” means the Pledge Agreement of even date herewith executed by
Holdings in favor of Agent, on behalf of itself and Lenders, pledging all Stock
of Borrower and its other Subsidiaries and all Intercompany Notes owing to or
held by it.

     

    “Incremental Term Loan B
Facility” has the meaning ascribed to it in Section
1.1(c).

     

    “Incremental Facility
Effective Date” has the meaning ascribed to it in Section
1.1(c).

     

     “Indebtedness” means,
with respect to any Person, without duplication (a) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property payment
for which is deferred 6 months or more, but excluding (1) deferred compensation,
(2) film rent payable and (3) obligations to trade creditors incurred in the
ordinary course of business, (b) all reimbursement and other obligations with
respect to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under
any

     

    
      
         

      

      
        A-14

        
          

        

      

      
         

      

    

    conditional
sale or other title retention agreement with respect to property acquired by
such Person (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (e) all Capital Lease Obligations and the present value
(discounted at the Index Rate as in effect on the Closing Date) of future rental
payments under all synthetic leases, (f) all obligations of such Person under
commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.

     

    “Indemnified
Liabilities” has the meaning ascribed to it in Section
1.13.

     

    “Indemnified Person”
has the meaning ascribed to it in Section 1.13.

     

    “Index Rate” means,
for any day, a floating rate equal to the higher of (i) the rate publicly quoted
from time to time by The Wall Street Journal
as the “prime rate” (or, if The Wall Street
Journal ceases quoting a prime rate, the highest per annum rate of
interest published by the Federal Reserve Board in Federal Reserve statistical
release H.15 (519) entitled “Selected Interest Rates” as the Bank prime
loan rate or its equivalent), and (ii) the Federal Funds Rate plus 50 basis
points per annum.   Each change in any interest rate provided for
in the Agreement based upon the Index Rate shall take effect at the time of such
change in the Index Rate.

     

     “Index Rate Loan”
means a Loan or portion thereof bearing interest by reference to the Index
Rate.

     

    “Instruments” means
all “instruments,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, and, in any event, including all
certificated securities, all certificates of deposit, and all promissory notes
and other evidences of indebtedness, other than instruments that constitute, or
are a part of a group of writings that constitute, Chattel Paper.

     

    “Intellectual
Property” means any and all Licenses, Patents, Copyrights, Trademarks,
and the goodwill associated with such Trademarks.

     

    “Intercompany Notes”
has the meaning ascribed to it in Section
6.3.

     

    “Interest Coverage
Ratio” means, with respect to any Person for any period, the ratio of
EBITDA to Cash  Interest Expense.

     

    “Interest Expense”
means, with respect to any Person for any fiscal period, interest expense
(whether cash or non-cash) of such Person determined in accordance with GAAP for
the relevant period ended on such date, including interest expense with respect
to any 

     

    
      
         

      

      
        A-15

        
          

        

      

      
         

      

    

    Funded
Debt of such Person and interest expense for the relevant period that has been
capitalized on the balance sheet of such Person.

     

    “Interest Payment
Date” means (a) as to any Index Rate Loan, the last Business Day of each
quarter to occur while such Loan is outstanding, and (b) as to any LIBOR Loan,
the last day of the applicable LIBOR Period; provided, that in the
case of any LIBOR Period greater than three months in duration, interest shall
be payable at three month intervals and on the last day of such LIBOR Period;
and provided
further that,
in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an “Interest Payment
Date” with respect to any interest that has then accrued under the
Agreement.

     

     “Inventory” means any
“inventory,” as such term is defined in the Code, now owned or hereafter
acquired by any Credit Party, wherever located, and in any event including
inventory, merchandise, goods and other personal property that are held by or on
behalf of any Credit Party for sale or lease or are furnished or are to be
furnished under a contract of service, or that constitute raw materials, work in
process, finished goods, returned goods, supplies or materials of any kind,
nature or description used or consumed or to be used or consumed in such Credit
Party's business or in the processing, production, packaging, promotion,
delivery or shipping of the same, including all supplies and embedded
software.

     

    “Investment Property”
means all “investment property” as such term is defined in the Code now owned or
hereafter acquired by any Credit Party, wherever located, including (i) all
securities, whether certificated or uncertificated, including stocks, bonds,
interests in limited liability companies, partnership interests, treasuries,
certificates of deposit, and mutual fund shares; (ii) all securities
entitlements of any Credit Party,  including the rights of such Credit
Party to any securities account and the financial assets held by a securities
intermediary in such securities account and any free credit balance or other
money owing by any securities intermediary with respect to that account; (iii)
all securities accounts of any Credit Party; (iv) all commodity contracts of any
Credit Party; and (v) all commodity accounts held by any Credit
Party.

     

    “IRC” means the
Internal Revenue Code of 1986, as amended, and any successor statute thereto,
and all regulations promulgated thereunder.

     

    “IRS” means the
Internal Revenue Service.

     

    “Kahala Management
Agreement” means that certain Management Agreement, dated as of February
21, 2008, by and between Borrower and Consolidated Amusement Theatres, Inc., a
Hawaii corporation, in form and substance reasonably satisfactory to
Agent.

     

    “L/C Issuer” has the
meaning ascribed to it in Annex B.

     

    “L/C Sublimit” has the
meaning ascribed to it in Annex B.

     

    “Lease Expense” means,
with respect to any Person for any fiscal period, the aggregate rental
obligations of such Person determined in accordance with GAAP which are payable
in respect of such period under leases of real or personal property (net of
income from 

     

    
      
         

      

      
        A-16

        
          

        

      

      
         

      

    

     

    subleases
thereof, but including taxes, insurance, maintenance and similar expenses that
the lessee is obligated to pay under the terms of such leases), whether or not
such obligations are reflected as liabilities or commitments on a consolidated
balance sheet of such Person or in the notes thereto, excluding, however, any
such obligations under Capital Leases.

     

    “Lenders” means
(a)  GE Capital, the other Lenders named on the signature pages of the
Agreement, any Additional Lenders, and, if any such Lender shall decide to
assign all or any portion of the Obligations, such term shall include any
assignee of such Lender and (b) solely for the purpose of obtaining the benefit
of the Liens granted to the Agent for the benefit of the Lenders under the
Collateral Documents, a Person to whom any Obligations in respect of a Secured
Rate Contract are owed.  For the avoidance of doubt, any Person to
whom any Obligations in respect of a Secured Rate Contract are owed and which
does not hold any Loans or Commitments shall not be entitled to any other rights
as a “Lender” under this Agreement or any other Loan Document.

     

    “Letter of Credit Fee”
has the meaning ascribed to it in Annex B.

     

    “Letter of Credit
Obligations” means all outstanding obligations incurred by Agent and
Lenders at the request of Borrower, whether direct or indirect, contingent or
otherwise, due or not due, in connection with the issuance of Letters of Credit
by Agent or another L/C Issuer or the purchase of a participation as set forth
in Annex B with
respect to any Letter of Credit.  The amount of such Letter of Credit
Obligations shall equal the maximum amount that may be payable by Agent or
Lenders thereupon or pursuant thereto.

     

    “Letters of Credit”
means documentary or standby letters of credit issued for the account of
Borrower by any L/C Issuer, and bankers’ acceptances issued by Borrower, for
which Agent and Lenders have incurred Letter of Credit Obligations.

     

    “Letter-of Credit
Rights” means “letter-of-credit rights” as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, including rights to
payment or performance under a letter of credit, whether or not such Credit
Party, as beneficiary, has demanded or is entitled to demand payment or
performance.

     

    “Leverage Ratio”
means, with respect to Borrower, on a consolidated basis, the ratio of (a) Total
Debt as of any date of determination (including the average daily closing
balance of the Revolving Loan for the thirty (30) days preceding and including
any date of determination), to (b) EBITDA.  

     

    “LIBOR Business Day”
means a Business Day on which banks in the City of London are generally open for
interbank or foreign exchange transactions.

     

    “LIBOR Loan” means a
Loan or any portion thereof bearing interest by reference to the LIBOR
Rate.

     

    “LIBOR Period” means,
with respect to any LIBOR Loan, each period commencing on a LIBOR Business Day
selected by Borrower pursuant to the Agreement and ending one, two, three or six
months thereafter, as selected by Borrower's irrevocable notice to 

     

    
      
         

      

      
        A-17

        
          

        

      

      
         

      

    

     

    Agent as
set forth in Section
1.5(e); provided, that the
foregoing provision relating to LIBOR Periods is subject to the
following:

     

    (a)           if
any LIBOR Period would otherwise end on a day that is not a LIBOR Business Day,
such LIBOR Period shall be extended to the next succeeding LIBOR Business Day
unless the result of such extension would be to carry such LIBOR Period into
another calendar month in which event such LIBOR Period shall end on the
immediately preceding LIBOR Business Day;

     

    (b)           [reserved]

     

    (c)           any
LIBOR Period that begins on the last LIBOR Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such LIBOR Period) shall end on the last LIBOR Business Day
of a calendar month;

     

    (d)           Borrower
shall select LIBOR Periods so as not to require a payment or prepayment of any
LIBOR Loan during a LIBOR Period for such Loan; and

     

    (e)           Borrower
shall select LIBOR Periods so that there shall be no more than 6 separate LIBOR
Loans in existence at any one time.

     

    “LIBOR Rate” means for
each LIBOR Period, a rate of interest determined by Agent equal to:

     

    (a)           the
offered rate for deposits in United States Dollars for the applicable LIBOR
Period that appears on Reuters Screen LIBOR01 Page as of 11:00 a.m. (London
time), on the second full LIBOR Business Day next preceding the first day of
such LIBOR Period (unless such date is not a LIBOR Business Day, in which event
the next succeeding LIBOR Business Day will be used); divided by

     

    (b)           a
number equal to 1.0 minus the aggregate
(but without duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on the day that is two (2) LIBOR Business Days
prior to the beginning of such LIBOR Period (including basic, supplemental,
marginal and emergency reserves under any regulations of the Federal Reserve
Board or other Governmental Authority having jurisdiction with respect thereto,
as now and from time to time in effect) for Eurocurrency funding (currently
referred to as “Eurocurrency Liabilities” in Regulation D of the Federal Reserve
Board that are required to be maintained by a member bank of the Federal Reserve
System.

     

    If such
interest rates shall cease to be available from Reuters, the LIBOR Rate shall be
determined from such financial reporting service or other information as shall
be mutually acceptable to Agent and Borrower.

     

    “License” means any
Copyright License, Patent License, Trademark License or other license of rights
or interests now held or hereafter acquired by any Credit Party.

     

    
      
         

      

      
        A-18

        
          

        

      

      
         

      

    

     

    “Lien” means any
mortgage, deed of trust, deed to secure debt, pledge, hypothecation, collateral
assignment, deposit arrangement, lien, charge, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Code or comparable
law of any jurisdiction).

     

    “Litigation” has the
meaning ascribed to it in Section
3.13.

     

    “Loan Account” has the
meaning ascribed to it in Section
1.12.

     

    “Loan Documents” means
the Agreement, the Notes, the Collateral Documents, the Master Standby
Agreement, the GE Fee Capital Letter, and all other agreements, instruments,
documents and certificates identified in the Closing Checklist executed and
delivered to, or in favor of, Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter
of credit agreements and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to Agent or any Lender in connection with the
Agreement or the transactions contemplated thereby.  Any reference in
the Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.

     

    “Loans” means the
Revolving Loan and the Term Loan B.

     

    “Loan to Contributed Capital
Ratio” means as of any date of determination, the outstanding principal
amount of Loans as of such date divided by the amount of Contributed Capital as
of such date.

     

    “Lock Boxes” has the
meaning ascribed to it in Annex C.

     

    “Manville Theatre
Contribution” means the contribution of the theater located at 180 N.
Main Street, Manville, New Jersey, by Reading to Holdings and thereafter by
Holdings to Borrower on the Closing Date pursuant to the Manville Theatre
Contribution Documents.

     

    “Manville Theatre
Contribution Documents” means (i) that certain Unanimous Written Consent
of Reading International, Inc., dated on or about the date hereof, (ii) that
certain Joint Unanimous Written Consent of Directors and Sole Shareholder of
Citadel Cinemas, Inc., dated on or about the date hereof, (iii) that certain
Joint Unanimous Written Consent of Directors and Sole Shareholder of Reading
International Services Company, dated on or about the date hereof, (iv) that
certain Joint Unanimous Written Consent of Directors and Sole Shareholder of
Reading Consolidated Holdings, Inc., dated on or about the date hereof, and (v)
that certain Joint Unanimous Written Consent of Directors and Sole Shareholder
of Consolidated Amusement Holdings, Inc., dated on or about the date
hereof.

     

    “Margin Stock” has the
meaning ascribed to it in Section
3.10.

     

    
      
         

      

      
        A-19

        
          

        

      

      
         

      

    

     

     “Master Standby
Agreement” means the Master Agreement for Standby Letters of Credit dated
as of the Closing Date between Borrower, as Applicant, and GE Capital, as
Issuer.

     

    “Material Adverse
Effect” means a material adverse effect on (a) the business, assets,
operations, or financial or other condition of the Credit Parties taken as a
whole, (b) Borrower's ability to pay any of the Loans or any of the other
Obligations in accordance with the terms of the Agreement or the other Loan
Documents, or the ability of the Credit Parties to perform their obligations
under the Loan Documents, (c) the Collateral or Agent's Liens, on behalf of
itself and Lenders, on the Collateral or the priority of such Liens, or (d)
Agent's or any Lender's rights and remedies under the Agreement and the other
Loan Documents.  Without limiting the generality of the foregoing, any
event or occurrence adverse to one or more Credit Parties which results or could
reasonably be expected to result in losses, costs, damages, liabilities or
expenditures in excess of $1,500,000 shall constitute a Material Adverse
Effect.

     

    “Material Contracts”
means any agreement or arrangement to which any Credit Party is a party (other
than the Loan Documents) (a) for which breach, termination, nonperformance
or failure to renew could reasonably be expected to have a Material Adverse
Effect; or (b) that relates to Indebtedness in an
aggregate principal amount of $500,000 or more.

     

    “Maximum Amount”
means, as of any date of determination, an amount equal to the Revolving Loan
Commitment of all Lenders as of that date.

     

    “Mortgaged Properties”
has the meaning assigned to it in Annex D.

     

    “Mortgages” means each
of the mortgages, deeds of trust, deed to secure debt, leasehold mortgages,
leasehold deeds of trust, collateral assignments of leases or other real estate
security documents delivered by any Credit Party to Agent on behalf of itself
and Lenders with respect to the Mortgaged Properties, all in form and substance
reasonably satisfactory to Agent.

     

    “Multiemployer Plan”
means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA, and to
which any Credit Party or ERISA Affiliate is making, is obligated to make or has
made or been obligated to make, contributions on behalf of participants who are
or were employed by any of them.

     

    “Non-Funding Lender”
has the meaning ascribed to it in Section
9.9(a)(ii).

     

    “Notes” means,
collectively, the Revolving Notes and the Term B Notes.

     

    “Notice of
Conversion/Continuation” has the meaning ascribed to it in Section
1.5(e).

     

    “Notice of Revolving Credit
Advance” has the meaning ascribed to it in Section
1.1(a).

     

    “Obligations” means
all loans, advances, debts, liabilities and obligations for the performance of
covenants, tasks or duties or for payment of monetary amounts (whether or not
such performance is then required or contingent, or such amounts are liquidated
or determinable) 

     

    
      
         

      

      
        A-20

        
          

        

      

      
         

      

    

     

    owing by
any Credit Party to Agent, any Lender or any Secured Swap Provider, and all
covenants and duties regarding such amounts, of any kind or nature, present or
future, whether or not evidenced by any note, agreement, letter of credit
agreement or other instrument, arising under the Agreement, any of the other
Loan Documents or any Secured Rate Contract.  This term includes all
principal, interest (including all interest that accrues after the commencement
of any case or proceeding by or against any Credit Party in bankruptcy, whether
or not allowed in such case or proceeding), Fees, hedging obligations under
swaps, caps and collar arrangements provided by any Lender in accordance with
the terms of the Agreement, expenses, attorneys’ fees and any other sum
chargeable to any Credit Party under the Agreement, any of the other Loan
Documents or any Secured Rate Contract.

     

    “Patent License” means
rights under any written agreement now owned or hereafter acquired by any Credit
Party granting any right with respect to any invention on which a Patent is in
existence.

     

    “Patent Security
Agreements” means the Patent Security Agreements made in favor of Agent,
on behalf of itself and Lenders, by each applicable Credit Party.

     

    “Patents” means all of
the following in which any Credit Party now holds or hereafter acquires any
interest: (a) all letters patent of the United States or any other country, all
registrations and recordings thereof, and all applications for letters patent of
the United States or of any other country, including registrations, recordings
and applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State or any other country,
and (b) all reissues, continuations, continuations-in-part or extensions
thereof.

     

    “PBGC” means the
Pension Benefit Guaranty Corporation.

     

    “Pension Plan” means a
Plan described in Section 3(2) of ERISA.

     

     “Permitted
Encumbrances” means the following encumbrances: (a) Liens for taxes or
assessments or other governmental Charges not yet delinquent or that remain
payable without penalty or which are being contested in accordance with Section 5.2(b); (b)
pledges or deposits of money securing statutory obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of
money  securing bids, tenders, contracts (other than contracts for the
payment of money) or leases to which any Credit Party is a party as lessee made
in the ordinary course of business; (d) workers', mechanics'  or
similar liens arising in the ordinary course of business, so long as such Liens
attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business the assets in the possession of the beneficiary of
such liens; (f) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which any Credit Party is a party; (g) any attachment or
judgment lien not constituting an Event of Default under Section 8.1(i) so
long as any such attachment or judgment lien is subordinate to the Agent’s
Liens; (h) zoning restrictions, easements, licenses, or other restrictions on
the use of any Real Estate or other minor irregularities in title (including
leasehold title) thereto, so long as the same do not materially impair the use,
value, or marketability of such Real Estate; (i) presently existing or hereafter
created Liens in favor of Agent, on behalf of Lenders; (j) Liens expressly
permitted 

     

    
      
         

      

      
        A-21

        
          

        

      

      
         

      

    

     

    under
clauses (b) and
(c) of Section
6.7 of the Agreement; (k) Liens arising under leases, subleases, licenses
and rights to use granted to third parties and not interfering in any material
respect with the ordinary conduct of the business of the Credit Parties; (l) any
(1) interest or title of a lessor or sublessor under any lease not prohibited by
this Agreement, (2) Lien or restriction that the interest or title of such
lessor or sublessor may be subject to, or (3) subordination of the interest of
the lessee or sublessee under such lease to any Lien or restriction referred to
in the preceding clause (2), so long as the holder of such Lien or restriction
agrees to recognize the rights of such lessee or sublessee under such lease; (m)
non-material Liens described on a title report delivered in connection with a
Mortgage required to be delivered hereunder, so long as such Liens do not
secured Funded Debt; and (n) Liens arising solely by virtue of any statutory or
common law provision relating to banker’s liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained with a
creditor depository institution.

     

    “Permitted Tax
Distributions” shall mean, for any period in which Holdings and Borrower
are part of a group filing consolidated or combined federal, state and/or local
income tax returns of which a direct or indirect parent of Holdings is the
common parent, payments, dividends or distributions by Borrower to Holdings and
by Holdings to its parent company to permit the parent of such group to pay the
share of consolidated or combined federal, state or local income taxes
attributable to the income of Holdings, Borrower and/or its Subsidiaries (as the
case may be); provided that such payments are not in excess of the aggregate of
the maximum U.S. federal, state and local income tax liability of Holdings,
Borrower and their Subsidiaries (assuming that each is taxed at the maximum
permissible U.S. federal and applicable state and local rates, computed in
accordance with the Code as though each of Holdings, Borrower and their
Subsidiaries had filed a separate return.

     

    “Person” means any
individual, sole proprietorship, partnership, joint venture, trust,
unincorporated organization, association, corporation, limited liability
company, institution, public benefit corporation, other entity or government
(whether federal, state, county, city, municipal, local, foreign, or otherwise,
including any instrumentality, division, agency, body or department
thereof).

     

    “Plan” means, at any
time, an “employee benefit plan,” as defined in Section 3(3) of ERISA, that any
Credit Party or ERISA Affiliate maintains, contributes to or has an obligation
to contribute to on behalf of participants who are or were employed by any
Credit Party or ERISA Affiliate.

     

    “Pledge Agreements”
means the Borrower Pledge Agreement, the Holdings Pledge Agreement, and
any other pledge agreement entered into after the Closing Date by any Credit
Party (as required by the Agreement or any other Loan Document).

     

    “Prior Lender” means
Bank of America, N.A.

     

    “Prior Lender
Obligations” means those certain obligations owing to the Prior Lender as
of the date hereof.

     

    “Proceeds” means
“proceeds,” as such term is defined in the Code, including (a) any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to any Credit

     

    
      
         

      

      
        A-22

        
          

        

      

      
         

      

    

     

    Party
from time to time with respect to any of the Collateral, (b) any and all
payments (in any form whatsoever) made or due and payable to any Credit Party
from time to time in connection with any requisition, confiscation,
condemnation, seizure or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any Person acting under color of governmental
authority), (c) any claim of any Credit Party against third parties (i) for
past, present or future infringement of any Patent or Patent License,
or  (ii) for past, present or future infringement or dilution of any
Copyright, Copyright License, Trademark or Trademark License, or for injury to
the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to
payment or other property acquired upon the sale, lease, license, exchange or
other disposition of Collateral and all rights arising out of
Collateral.

     

    “Pro Forma” means the
unaudited consolidated balance sheet of Borrower and its Subsidiaries as of
January 1, 2008 after giving pro forma effect to the
Related Transactions.

     

    “Projections” means
Borrower's forecasted consolidated:  (a) profit and loss statements;
(b) cash flow statements; and (c) capitalization statements, all prepared on a
Subsidiary by Subsidiary or theatre by theatre basis, if applicable, and
otherwise consistent with the historical Financial Statements of Sellers with
respect to the Acquired Theatres and Reading with respect to the Manville
Theatre and the Dallas Theatre, together with appropriate supporting details and
a statement of underlying assumptions.

     

    “Pro Rata Share” means
with respect to all matters relating to any Lender (a) with respect to the
Revolving Loan, the percentage obtained by dividing (i) the Revolving Loan
Commitment of that Lender by (ii) the aggregate Revolving Loan Commitments of
all Lenders, (b) with respect to the Term Loan B, the percentage obtained by
dividing (i) the Term Loan B Commitment of that Lender by (ii) the aggregate
Term Loan B Commitments of all Lenders, as any such percentages may be adjusted
by assignments permitted pursuant to Section 9.1, (c) with
respect to all Loans, the percentage obtained by dividing (i) the aggregate
Commitments of that Lender by (ii) the aggregate Commitments of all Lenders, and
(d) with respect to all Loans on and after the Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Loans held by that Lender, by (ii) the outstanding principal balance of
the Loans held by all Lenders.

     

     “Qualified Plan” means
a Pension Plan that is intended to be tax-qualified under Section 401(a) of the
IRC.

     

    “Rate Contracts” means
swap agreements (as such term is defined in Section 101 of the Bankruptcy Code)
and any other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.

     

    “Reading” means
Reading International, Inc., a Nevada corporation.

     

    
      
         

      

      
        A-23

        
          

        

      

      
         

      

    

     

    “Reading Guaranty”
means the guaranty of even date herewith executed by Reading in favor of Agent
and Lenders.

     

    “Reading Management
Agreement” means that certain Management Agreement, dated as of May 30,
2007 by and between Borrower and Reading, in form and substance reasonably
satisfactory to Agent.

     

    “Reading Note” means
that certain Promissory Note, dated as of February 22, 2008, in the principal
amount of $21,000,000 made by Reading in favor of Nationwide Theatres Corp., as
be amended from time to time in accordance with the terms hereof.

     

    “Real Estate” has the
meaning ascribed to it in Section
3.6.

     

     “Register” has the
meaning ascribed to it in Section
1.9(h).

     

     “Related Transactions”
means the initial borrowing under the Revolving Loan, if any, and the Term Loan
B on the Closing Date, consummation of the Acquisition, the Closing Date Equity
Contribution, Manville Theatre Contribution, the Dallas Theatre Contribution,
the payment of all fees, costs and expenses associated with all of the foregoing
and the execution and delivery of all of the Related Transactions
Documents.

     

    “Related Transactions
Documents” means the Loan Documents, the Acquisition Agreement, the
Manville Theatre Contribution Documents, the Dallas Theatre Contribution
Documents, the Unanimous Written Consent of the Board of Directors of Reading
Consolidated Holdings, Inc., dated on or about the date hereof, and the
Unanimous Written Consent of the Board of Directors of Consolidated Amusement
Holdings, Inc., dated on or about the date hereof, and all other agreements or
instruments executed in connection with the Related Transactions.

     

    “Release” means any
release, threatened release, spill, emission, leaking, pumping, pouring,
emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal,
dumping, leaching or migration of Hazardous Material in the indoor or outdoor
environment, including the movement of Hazardous Material through or in the air,
soil, surface water, ground water or property.

     

    “Requirements of Law”
means, with respect to any Person, collectively, the common law and all federal,
state, local, foreign, multinational or international laws, statutes, codes,
treaties, standards, rules and regulations, guidelines, ordinances, orders,
judgments, writs, injunctions, decrees (including administrative or judicial
precedents or authorities) and the interpretation or administration thereof by,
and other determinations, directives, requirements or requests of, any
Governmental Authority, in each case whether or not having the force of law and
that are applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject.

     

    “Requisite Lenders”
means Lenders having (a) more than 50% of the Commitments of all Lenders,
or (b) if the Commitments have been terminated, more than 50% of the aggregate
outstanding amount of the Loans.

     

    
      
         

      

      
        A-24

        
          

        

      

      
         

      

    

     

    “Requisite Revolving
Lenders” means Lenders having (a) more than 50% of the Revolving
Loan Commitments of all Lenders, or (b) if the Revolving Loan Commitments have
been terminated, more than 50% of the aggregate outstanding amount of the
Revolving Loan.

     

    “Responsible Financial
Officer” means the Borrower’s chief financial officer.

     

    “Responsible Officer”
means the Borrower’s chief executive officer, chief operating officer or chief
financial officer.

     

    “Restricted Payment”
means, with respect to any Credit Party (a) the declaration or payment of
any dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of Stock; (b) any
payment on account of the purchase, redemption, defeasance, sinking fund or
other retirement of such Credit Party's Stock or any other payment or
distribution made in respect thereof, either directly or indirectly; (c) any
payment or prepayment of principal of, premium, if any, or interest, fees or
other charges on or with respect to, and any redemption, purchase, retirement,
defeasance, sinking fund or similar payment and any claim for rescission with
respect to, any subordinated debt; (d) any payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire Stock of such Credit Party now or hereafter
outstanding; (e) any payment of a claim for the rescission of the purchase or
sale of, or for material damages arising from the purchase or sale of, any
shares of such Credit Party's Stock or of a claim for reimbursement,
indemnification or contribution arising out of or related to any such claim for
damages or rescission; (f) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Credit Party other than
payment of compensation in the ordinary course of business to Stockholders who
are employees of such Credit Party; and (g) any payment of management fees (or
other fees of a similar nature) by such Credit Party to any Stockholder of such
Credit Party or its Affiliates.

     

    “Retiree Welfare Plan”
means, at any time, a Welfare Plan that provides for continuing coverage or
benefits for any participant or any beneficiary of a participant after such
participant's termination of employment, other than continuation coverage
provided pursuant to Section 4980B of the IRC and at the sole expense of the
participant or the beneficiary of the participant.

     

    “Revolving Credit
Advance” has the meaning ascribed to it in Section
1.1(a)(i).

     

    “Revolving Lenders”
means, as of any date of determination, Lenders having a Revolving Loan
Commitment.

     

    “Revolving Loan”
means, at any time, the sum of (i) the aggregate amount of Revolving Credit
Advances outstanding to Borrower plus (ii) the
aggregate Letter of Credit Obligations incurred on behalf of
Borrower.  Unless the context otherwise requires, references to the
outstanding principal balance of the Revolving Loan shall include the
outstanding balance of Letter of Credit Obligations.

     

    “Revolving Loan
Commitment” means (a) as to any Revolving Lender, the aggregate
commitment of such Revolving Lender to make Revolving Credit Advances or incur

     

    
      
         

      

      
        A-25

        
          

        

      

      
         

      

    

     

    Letter of
Credit Obligations as set forth on Annex J to the
Agreement or in the most recent Assignment Agreement executed by such Revolving
Lender and (b) as to all Revolving Lenders, the aggregate commitment of all
Revolving Lenders to make Revolving Credit Advances or incur Letter of Credit
Obligations, which aggregate commitment shall be Five Million Dollars and No/100
($5,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.

     

    “Revolving Note” has
the meaning ascribed to it in Section 1.1(a)(ii).

     

    “Sale” has the meaning
ascribed to it in Section
9.1(h).

     

    “Security Agreement”
means the Security Agreement of even date herewith entered into by and among
Agent, on behalf of itself and Lenders, and each Credit Party that is a
signatory thereto.

     

    “Secured Rate
Contract” means any Rate Contract between Borrower and a Secured Swap
Provider.

     

    “Secured Swap
Provider” means (i) a Lender or an Affiliate of a Lender (or a Person who
was a Lender or an Affiliate of a Lender at the time of execution and delivery
of a Rate Contract) who has entered into a Secured Rate Contract with Borrower,
or (ii) a Person with whom Borrower has entered into a Secured Rate Contract
provided or arranged by GE Capital or an Affiliate of GE Capital, and any
assignee thereof.

     

    “Sellers” means
collectively, Pacific Theaters Exhibition Corp., a California corporation, and
Consolidated Amusement Theaters, Inc., a Hawaii corporation.

     

    “Software” means all
“software” as such term is defined in the Code, now owned or hereafter acquired
by any Credit Party, other than software embedded in any category of Goods,
including all computer programs and all supporting information provided in
connection with a transaction related to any program.

     

    “Solvent” means, with
respect to any Person on a particular date, that on such date (a) the fair value
of the property of such Person is greater than the total amount of liabilities,
including contingent liabilities, of such Person; (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured; (c) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature; and (d) such Person is not engaged in
a business or transaction, and is not about to engage in a business or
transaction, for which such Person's property would constitute an unreasonably
small capital.  The amount of contingent liabilities (such as
litigation, guaranties and pension plan liabilities) at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can reasonably be expected to
become an actual or matured liability.

     

    “SPV” means any
special purpose-funding vehicle identified as such in a writing by any Lender to
Agent.

     

    
      
         

      

      
        A-26

        
          

        

      

      
         

      

    

     

    “Stock” means all
shares, options, warrants, general or limited partnership interests, membership
interests or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity whether
voting or nonvoting, including common stock, preferred stock or any other
“equity security” (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934).

     

    “Stockholder” means,
with respect to any Person, each holder of Stock of such Person.

     

     “Subsidiary” means,
with respect to any Person, (a) any corporation of which an aggregate of more
than 50% of the outstanding Stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether,
at the time, Stock of any other class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time, directly or indirectly, owned legally or beneficially by such Person
or one or more Subsidiaries of such Person, or with respect to which any such
Person has the right to vote or designate the vote of 50% or more of such Stock
whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than 50% or
of which any such Person is a general partner or may exercise the powers of a
general partner.  Unless the context otherwise requires, each
reference to a Subsidiary shall be a reference to a Subsidiary of the
Borrower.

     

    “Subsidiary Guaranty”
means the Subsidiary Guaranty of even date herewith executed by each Subsidiary
of Borrower in favor of Agent, on behalf of itself and Lenders.

     

     “Supporting
Obligations” means all “supporting obligations” as such term is defined
in the Code, including letters of credit and guaranties issued in support of
Accounts, Chattel Paper, Documents, General Intangibles, Instruments, or
Investment Property.

     

    "Target" has the
meaning ascribed to it in Section
6.1.

     

     “Taxes” means taxes,
levies, imposts, deductions, Charges or withholdings, and all liabilities with
respect thereto, excluding taxes imposed on or measured by the net income of
Agent or a Lender by the jurisdictions under the laws of which Agent and Lenders
are organized or conduct business or any political subdivision
thereof.

     

    “Termination Date”
means the date on which (a) the Loans have been repaid in full,
(b) all other Obligations under the Agreement and the other Loan Documents
have been completely discharged, (c) all Letter of Credit Obligations have
been cash collateralized, cancelled or backed by standby letters of credit in
accordance with Annex
B, and (d) Borrower shall not have any further right to borrow any
monies under the Agreement.

     

    “Term Lenders” means
those Lenders having Term Loan B Commitments.

     

    “Term Loan B” has the
meaning assigned to it in Section
1.1(b)(i).

     

    
      
         

      

      
        A-27

        
          

        

      

      
         

      

    

     

    “Term Loan B
Commitment” means (a) as to any Lender with a Term Loan B Commitment, the
commitment of such Lender to make its Pro Rata Share of the Term Loan as set
forth on Annex J to the
Agreement or in the most recent Assignment Agreement executed by such Lender,
and (b) as to all Lenders with a Term Loan B Commitment, the aggregate
commitment of all Lenders to make the Term Loan, which aggregate commitment
shall be Fifty Million Dollars and No/100 ($50,000,000) on the Closing
Date.  After advancing the Term Loan B, each reference to a Lender's
Term Loan B Commitment shall refer to that Lender's Pro Rata Share of the
outstanding Term Loan B.

     

    “Term B Note” has the
meaning assigned to it in Section
1.1(b)(i).

     

    “Theater Acquisition”
means, whether in a single transaction or a series of transactions, (a) any
purchase, lease, assumption of lease or other acquisition of, or any payment,
cash outlay, expense, expenditure or Capital Expenditure in respect of the
purchase or other acquisition of, an existing movie theater or cinema; (b) any
purchase, lease, assumption of lease or other acquisition of any Real Property
for the purpose of developing, building, or constructing any movie theater,
complex (whether single or multiple viewing screens) or cinema or (c) the
development, building or construction of any movie theater, complex (whether
single or multiple viewing screens) or cinema at any location where a movie
theater did not exist immediately prior to the commencement of such development,
building or construction.

     

    “Theatre Lease” means,
with respect to any Person, any lease of any property (whether real, personal or
mixed) by such Person for the purpose of operating a movie theater.

     

    “Title IV Plan” means
a Pension Plan (other than a Multiemployer Plan), that is covered by Title IV of
ERISA, and that any Credit Party or ERISA Affiliate maintains, contributes to or
has an obligation to contribute to on behalf of participants who are or were
employed by any of them.

     

    “Total Debt” means,
with respect to any Person, all Indebtedness of such Person as of the date of
determination (excluding therefrom (a) Indebtedness described in clauses (f) and
(g) of the definition of Indebtedness and (b) all operating
leases).

     

     “Trademark Security
Agreements” means the Trademark Security Agreements made in favor of
Agent, on behalf of Lenders, by each applicable Credit Party.

     

    “Trademark License”
means rights under any written agreement now owned or hereafter acquired by any
Credit Party granting any right to use any Trademark.

     

    “Trademarks” means all
of the following now owned or hereafter adopted or acquired by any Credit Party:
(a) all trademarks, trade names, corporate names, business names, trade styles,
service marks, logos, other source or business identifiers, prints and labels on
which any of the foregoing have appeared or appear, designs and general
intangibles of like nature (whether registered or unregistered), all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, 

     

    
      
         

      

      
        A-28

        
          

        

      

      
         

      

    

     

    extensions
or renewals thereof; and (c) all goodwill associated with or symbolized by any
of the foregoing.

     

    “Unfunded Pension
Liability” means, at any time, the aggregate amount, if any, of the sum
of (a) the amount by which the present value of all accrued benefits under each
Title IV Plan exceeds the fair market value of all assets of such Title IV Plan
allocable to such benefits in accordance with Title IV of ERISA, all determined
as of the most recent valuation date for each such Title IV Plan using the
actuarial assumptions for funding purposes in effect under such Title IV Plan,
and (b) for a period of five (5) years following a transaction which might
reasonably be expected to be covered by Section 4069 of ERISA, the liabilities
(whether or not accrued) that could be avoided by any Credit Party or any ERISA
Affiliate as a result of such transaction.

     

    “Welfare Plan” means a
Plan described in Section 3(i) of ERISA.

     

    “Working Capital”
means the average of Borrower's Current Assets less Current Liabilities for the
first three months of each Fiscal Year compared to the average of Borrower's
Current Assets less Current Liabilities for the last three months of such Fiscal
Year.

     

    Rules of
construction with respect to accounting terms used in the Agreement or the other
Loan Documents shall be as set forth in Annex
G.  All other undefined terms contained in any of the Loan
Documents shall, unless the context indicates otherwise, have the meanings
provided for by the Code to the extent the same are used or defined therein; in
the event that any term is defined differently in different Articles or
Divisions of the Code, the definition contained in Article or Division 9 shall
control.  Unless otherwise specified, references in the Agreement or
any of the Appendices to a Section, subsection or clause refer to such Section,
subsection or clause as contained in the Agreement.  The words
“herein,” “hereof” and “hereunder” and other words of similar import refer to
the Agreement as a whole, including all Annexes, Exhibits and Schedules, as the
same may from time to time be amended, restated, modified or supplemented, and
not to any particular section, subsection or clause contained in the Agreement
or any such Annex, Exhibit or Schedule.

     

    Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and the plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, feminine and
neuter genders.  The words “including”, “includes” and “include” shall
be deemed to be followed by the words “without limitation”; the word “or” is not
exclusive; references to Persons include their respective successors and assigns
(to the extent and only to the extent permitted by the Loan Documents) or, in
the case of governmental Persons, Persons succeeding to the relevant functions
of such Persons; and all references to statutes and related regulations shall
include any amendments of the same and any successor statutes and
regulations.  Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.

     

    
      
         

      

      
        A-29

        
          

        

      

      
         

      

    

    ANNEX
B (Section
1.2)

    to

    CREDIT
AGREEMENT

     

    LETTERS OF
CREDIT

     

    (a)           Issuance. Subject to
the terms and conditions of the Agreement, Agent and Revolving Lenders agree to
incur, from time to time prior to the Commitment Termination Date, upon the
request of Borrower and for Borrower's account, Letter of Credit Obligations by
causing Letters of Credit to be issued by GE Capital or a Subsidiary thereof or
a bank or other legally authorized Person selected by or acceptable to Agent in
its sole discretion (each, an “L/C Issuer”) for
Borrower's account and guaranteed by Agent; provided, that if the
L/C Issuer is a Revolving Lender, then such Letters of Credit shall not be
guaranteed by Agent but rather each Revolving Lender shall, subject to the terms
and conditions hereinafter set forth, purchase (or be deemed to have purchased)
risk participations in all such Letters of Credit issued with the written
consent of Agent, as more fully described in paragraph (b)(ii) below. The
aggregate amount of all such Letter of Credit Obligations shall not at any time
exceed the lesser of (i) One Million Dollars and No/100 ($1,000,000) (the “L/C Sublimit”), and
(ii) the Maximum Amount less the aggregate outstanding principal balance of
the Revolving Credit Advances.  No such Letter of Credit shall have an
expiry date that is more than one year following the date of issuance thereof,
unless otherwise determined by Agent in its sole discretion (including with
respect to customary evergreen provisions), and neither Agent nor Revolving
Lenders shall be under any obligation to incur Letter of Credit Obligations in
respect of, or purchase risk participations in, any Letter of Credit having an
expiry date that is later than the Commitment Termination Date.

     

    (b)(i)  Advances Automatic;
Participations.  In the event that Agent or any Revolving
Lender shall make any payment on or pursuant to any Letter of Credit Obligation,
such payment shall then be deemed automatically to constitute a Revolving Credit
Advance under Section
1.1(a) of the Agreement regardless of whether a Default or Event of
Default has occurred and is continuing and notwithstanding Borrower's failure to
satisfy the conditions precedent set forth in Section 2, and each
Revolving Lender shall be obligated to pay its Pro Rata Share thereof in
accordance with the Agreement.  The failure of any Revolving Lender to
make available to Agent for Agent's own account its Pro Rata Share of any such
Revolving Credit Advance or payment by Agent under or in respect of a Letter of
Credit shall not relieve any other Revolving Lender of its obligation hereunder
to make available to Agent its Pro Rata Share thereof, but no Revolving Lender
shall be responsible for the failure of any other Revolving Lender to make
available such other Revolving Lender's Pro Rata Share of any such
payment.

     

    (ii)           If
it shall be illegal or unlawful for Borrower to incur Revolving Credit Advances
as contemplated by paragraph (b)(i) above because of an Event of Default
described in Sections
8.1(g) or (h) or otherwise or if it shall be illegal or unlawful for any
Revolving Lender to be deemed to have assumed a ratable share of the
reimbursement obligations owed to an L/C Issuer, or if the L/C Issuer is a
Revolving Lender, then (A) immediately and without further action whatsoever,
each Revolving Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation equal to such Revolving Lender's Pro Rata Share
(based on the Revolving Loan Commitments) of the Letter of Credit Obligations in
respect of all 

     

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

     

    Letters
of Credit then outstanding and (B) thereafter, immediately upon issuance of any
Letter of Credit, each Revolving Lender shall be deemed to have irrevocably and
unconditionally purchased from Agent (or such L/C Issuer, as the case may be) an
undivided interest and participation in such Revolving Lender's Pro Rata Share
(based on the Revolving Loan Commitments) of the Letter of Credit Obligations
with respect to such Letter of Credit on the date of such
issuance.  Each Revolving Lender shall fund its participation in all
payments or disbursements made under the Letters of Credit in the same manner as
provided in the Agreement with respect to Revolving Credit
Advances.

     

    (c)           Cash
Collateral.  (i) If Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement,
including Section
8.2 of the Agreement, prior to the Commitment Termination Date, Borrower
will pay to Agent for the ratable benefit of itself and Revolving Lenders cash
or cash equivalents acceptable to Agent (“Cash Equivalents”) in
an amount equal to 105% of the maximum amount then available to be drawn under
each applicable Letter of Credit outstanding.  Such funds or Cash
Equivalents shall be held by Agent in a cash collateral account (the “Cash Collateral
Account”) maintained at a bank or financial institution acceptable to
Agent.  The Cash Collateral Account shall be in the name of Borrower
and shall be pledged to, and subject to the control of, Agent, for the benefit
of Agent and Lenders, in a manner satisfactory to Agent.  Borrower
hereby pledges and grants to Agent, on behalf of itself and Lenders, a security
interest in all such funds and Cash Equivalents held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all amounts due in respect of the Letter of Credit Obligations and other
Obligations, whether or not then due.  The Agreement, including this
Annex B, shall
constitute a security agreement under applicable law.

     

    (ii)           If
any Letter of Credit Obligations, whether or not then due and payable, shall for
any reason be outstanding on the Commitment Termination Date, Borrower shall
either (A) provide cash collateral therefor in the manner described above, or
(B) cause all such Letters of Credit and guaranties thereof, if any, to be
canceled and returned, or (C) deliver a stand-by letter (or letters) of credit
in guarantee of such Letter of Credit Obligations, which stand-by letter (or
letters) of credit shall be of like tenor and duration (plus thirty (30)
additional days) as, and in an amount equal to 105% of the aggregate maximum
amount then available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by a Person,
and shall be subject to such terms and conditions, as are satisfactory to Agent
in its sole discretion.

     

    (iii)           From
time to time after funds are deposited in the Cash Collateral Account by
Borrower, whether before or after the Commitment Termination Date, Agent may
apply such funds or Cash Equivalents then held in the Cash Collateral Account to
the payment of any amounts, and in such order as Agent may elect, as shall be or
shall become due and payable by Borrower to Agent and Lenders with respect to
such Letter of Credit Obligations of Borrower and, upon the satisfaction in full
of all Letter of Credit Obligations of Borrower, to any other Obligations then
due and payable.

     

    (iv)           Neither
Borrower nor any Person claiming on behalf of or through Borrower shall have any
right to withdraw any of the funds or Cash Equivalents held in the Cash
Collateral Account, except that upon the termination of all Letter of Credit
Obligations and the 

     

    
      
         

      

      
        B-2

        
          

        

      

      
         

      

    

     

    payment
of all amounts payable by Borrower to Agent and Lenders in respect thereof, any
funds remaining in the Cash Collateral Account shall be applied to other
Obligations then due and owing and upon payment in full of such Obligations any
remaining amount shall be paid to Borrower or as otherwise required by
law.  Interest earned on deposits in the Cash Collateral Account shall
be held as additional collateral.

     

    (d)           Fees and
Expenses.  Borrower agrees to pay to Agent for the benefit of
Revolving Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (i) all reasonable costs and expenses incurred
by Agent or any Lender on account of such Letter of Credit Obligations, and (ii)
for each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the “Letter of Credit
Fee”) in an amount equal to the Applicable LIBOR Margin from time to time
in effect multiplied by the maximum amount available from time to time to be
drawn under the applicable Letter of Credit.  Such fee shall be paid
to Agent for the benefit of the Revolving Lenders in arrears, on the last day of
each quarter and on the Commitment Termination Date.  In addition,
Borrower shall pay to any L/C Issuer, on demand, such customary fees (including
all per annum fees), charges and expenses of such L/C Issuer in respect of the
issuance, negotiation, acceptance, amendment, transfer and payment of such
Letter of Credit or otherwise payable pursuant to the application and related
documentation under which such Letter of Credit is issued.

     

    (e)           Request for Incurrence of
Letter of Credit Obligations.  Borrower shall give Agent at
least two (2) Business Days' prior written notice requesting the incurrence of
any Letter of Credit Obligation.  The notice shall be accompanied by
the form of the Letter of Credit (which shall be acceptable to the L/C Issuer)
and a completed Application for Standby Letter of Credit in the form Exhibit B-1 attached
hereto.  Notwithstanding anything contained herein to the contrary,
Letter of Credit applications by Borrower and approvals by Agent and the L/C
Issuer may be made and transmitted pursuant to electronic codes and security
measures mutually agreed upon and established by and among Borrower, Agent and
the L/C Issuer.

     

    (f)           Obligation
Absolute.  The obligation of Borrower to reimburse Agent and
Revolving Lenders for payments made with respect to any Letter of Credit
Obligation shall be absolute, unconditional and irrevocable, without necessity
of presentment, demand, protest or other formalities, and the obligations of
each Revolving Lender to make payments to Agent with respect to Letters of
Credit shall be unconditional and irrevocable.  Such obligations of
Borrower and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following:

     

    (i)           any
lack of validity or enforceability of any Letter of Credit or the Agreement or
the other Loan Documents or any other agreement;

     

    (ii)           the
existence of any claim, setoff, defense or other right that Borrower or any of
its Affiliates or any Lender may at any time have against a beneficiary or any
transferee of any Letter of Credit (or any Persons or entities for whom any such
transferee may be acting), Agent, any Lender, or any other Person, whether in
connection with the Agreement, the Letter of Credit, the transactions
contemplated herein or therein or any unrelated transaction (including any
underlying transaction between Borrower or any of its Affiliates and the
beneficiary for which the Letter of Credit was procured);

     

    
      
         

      

      
        B-3

        
          

        

      

      
         

      

    

     

    (iii)           any
draft, demand, certificate or any other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;

     

    (iv)           payment
by Agent (except as otherwise expressly provided in paragraph (g)(ii)(C) below)
or any L/C Issuer under any Letter of Credit or guaranty thereof against
presentation of a demand, draft or certificate or other document that does not
comply with the terms of such Letter of Credit or such guaranty;

     

    (v)           any
other circumstance or event whatsoever, that is similar to any of the foregoing;
or

     

    (vi)           the
fact that a Default or an Event of Default has occurred and is
continuing.

     

    (g)           Indemnification; Nature of
Lenders' Duties.

     

    (i)           In
addition to amounts payable as elsewhere provided in the Agreement, Borrower
hereby agrees to pay and to protect, indemnify, and save harmless Agent and each
Lender from and against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable attorneys' fees and
allocated costs of internal counsel) that Agent or any Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the issuance of any
Letter of Credit or guaranty thereof, or (B) the failure of Agent or any
Lender seeking indemnification or of any L/C Issuer to honor a demand for
payment under any Letter of Credit or guaranty thereof as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto government or Governmental Authority, in each case other than to the
extent as a result of the gross negligence or willful misconduct of Agent or
such Lender as finally determined by a court of competent
jurisdiction.

     

    (ii)           As
between Agent and any Lender and Borrower, Borrower assumes all risks of the
acts and omissions of, or misuse of any Letter of Credit by beneficiaries of any
Letter of Credit.  In furtherance and not in limitation of the
foregoing, to the fullest extent permitted by law neither Agent nor any Lender
shall be responsible for:  (A) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document issued by any party in
connection with the application for and issuance of any Letter of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit;
provided, that
in the case of any payment by Agent under any Letter of Credit or guaranty
thereof, Agent shall be liable to the extent such payment was made solely as a
result of its gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction in determining that the demand for payment under
such Letter of Credit or guaranty thereof complies on its face with any
applicable requirements for a demand for payment under such Letter of Credit or
guaranty thereof; (D) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or otherwise,
whether or not they 

     

    
      
         

      

      
        B-4

        
          

        

      

      
         

      

    

     

    may be in
cipher; (E) errors in interpretation of technical terms; (F) any loss or delay
in the transmission or otherwise of any document required in order to make a
payment under any Letter of Credit or guaranty thereof or of the proceeds
thereof; (G) the credit of the proceeds of any drawing under any Letter of
Credit or guaranty thereof; and (H) any consequences arising from causes beyond
the control of Agent or any Lender. None of the above shall affect, impair, or
prevent the vesting of any of Agent's or any Lender's rights or powers hereunder
or under the Agreement.

     

    (iii)           Nothing
contained herein shall be deemed to limit or to expand any waivers, covenants or
indemnities made by Borrower in favor of any L/C Issuer in any letter of credit
application, reimbursement agreement or similar document, instrument or
agreement between Borrower and such L/C Issuer, including an Application and
Agreement for Documentary Letter of Credit or a Master Documentary Agreement and
a Master Standby Agreement entered into with Agent.

     

    
      
         

      

      
        B-5

        
          

        

      

      
         

      

    

     

    ANNEX
C (Section
1.8)

    to

    CREDIT
AGREEMENT

     

    CASH MANAGEMENT
SYSTEM

     

    Each
Credit Party shall, and shall cause its Subsidiaries to, establish and maintain
the bank account arrangements described below:

     

    (a)           On
or before the Closing Date and until the Termination Date, Borrower and each
other Credit Party shall grant and maintain at all times a perfected Lien in all
of its bank accounts, other than its payroll, benefits, trust, petty cash, or
other local collection accounts (so long as the proceeds in such local
collection accounts are wire transferred at least weekly to a Blocked Account
over which Agent has a perfected Lien) or any other deposit account, when taken
together with all such other deposit accounts that are not otherwise the subject
of perfected Lien in favor of the Agent, where the aggregate credit balances in
all such other deposit accounts does not exceed $250,000 at any one time
outstanding (all such non-excluded accounts, the “Blocked Accounts”;
and, such excluded accounts, the “Excluded Accounts”),
to the Agent for the benefit of the Lenders.  All Blocked Accounts,
and the banks at which such Blocked Accounts are maintained (each, a “Relationship Bank”)
as of the Closing Date are set forth on Disclosure Schedule
(3.19).  Borrower shall, and shall cause each other Credit
Party to, deposit or cause to be deposited promptly, and in any event no later
than the fifth Business Day after the date of receipt thereof, all cash, checks,
drafts or other similar items of payment into one or more Blocked Accounts or
Excluded Accounts.

     

    (b)           On
the Closing Date (or such later date as Agent shall consent to in writing), all
Relationship Banks shall have entered into tri-party blocked account agreements
with Agent, for the benefit of itself and Lenders, and Borrower and the other
Credit Parties, as applicable, in form and substance reasonably acceptable to
Agent, which shall become operative on the Closing Date.  Each such
blocked account agreement shall provide, among other things, that (i) the
Relationship Bank will honor the instructions of the Agent with respect to all
Blocked Accounts and the funds therein, and not the instructions of the Credit
Parties, except that until the Activation Notice described below is delivered,
Credit Parties shall have access to the funds in the Blocked Accounts, and (ii)
the Relationship Bank executing such agreement has no rights of setoff or
recoupment or any other claim against such account, as the case may be, other
than as expressly set forth in such agreement.  If an Event of Default
has occurred and is continuing (any of the foregoing being referred to herein as
an “Activation
Event”), the Agent shall have the right to notify one or more
Relationship Banks that such Relationship Bank should no longer permit the
Credit Parties to have access to the funds in the Blocked Accounts (each such
notice, an “Activation
Notice”), and such notice may authorize the Relationship Banks to
immediately forward all amounts received in the Blocked Account to an account in
the name of Agent or any Lender specified in the Activation Notice or a
subsequent notice from Agent.  From and after the date Agent has
delivered an Activation Notice to any bank with respect to any Blocked
Account(s), Borrower shall not, and shall not cause or permit any other Credit
Party to, 

     

    
      
         

      

      
        C-1

        
          

        

      

      
         

      

    

     

    accumulate
or maintain cash in any payroll accounts or other accounts in which the Agent
does not have a perfected Lien as of any date of determination, other than
amounts maintained in the Excluded Accounts.

     

    (d)           So
long as no Event of Default has occurred and is continuing, Borrower may amend
Disclosure Schedule
(3.19) to add or replace a Relationship Bank or Blocked Account; provided, that (i)
Agent shall have consented in writing in advance to the opening of such account
with the relevant bank and (ii) prior to the time of the opening of such
account, Borrower or its Subsidiaries, as applicable, and such bank shall have
executed and delivered to Agent a tri-party blocked account agreement, in form
and substance reasonably satisfactory to Agent.

     

    (e)           The
Blocked Accounts shall be cash collateral accounts, with all cash, checks and
other similar items of payment in such accounts securing payment of the Loans
and all other Obligations, and in which Borrower and each Subsidiary thereof
shall have granted a Lien to Agent, on behalf of itself and Lenders, pursuant to
the Security Agreement.

     

    (f)           All
amounts deposited in the Collection Account shall be deemed received by Agent in
accordance with Section 1.10 and
shall be applied (and allocated) by Agent in accordance with Section
1.11.  In no event shall any amount be so applied unless and
until such amount shall have been credited in immediately available funds to the
Collection Account.

     

    (g)           Borrower
shall and shall cause its Subsidiaries, officers, employees, agents, directors
or other Persons acting for or in concert with Borrower (each a “Related Person”) to
(i) hold in trust for Agent, for the benefit of itself and Lenders, all checks,
cash and other items of payment received by Borrower or any such Related Person
in any case that constitute Collateral, and (ii) within five (5) Business Days
after receipt by Borrower or any such Related Person of any checks, cash or
other items of payment, deposit the same into a Blocked
Account.  Borrower on behalf of itself and each Related Person
acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the Collateral.  All
proceeds of the sale or other disposition of any Collateral shall be deposited
directly into Blocked Accounts.

     

    
      
         

      

      
        C-2

        
          

        

      

      
         

      

    

    

    ANNEX
D (Section
2.1(a))

    to

    CREDIT
AGREEMENT

     

    CLOSING
CHECKLIST

     

    In
addition to, and not in limitation of, the conditions described in Section 2.1 of the
Agreement, pursuant to Section 2.1(a), the
following items must be received by Agent in form and substance satisfactory to
Agent on or prior to the Closing Date (each capitalized term used but not
otherwise defined herein shall have the meaning ascribed thereto in Annex A to the
Agreement):

     

    A.           Appendices.  All
Appendices to the Agreement, in form and substance satisfactory to
Agent.

     

    B.           Revolving Notes and Term
Notes.  Duly executed originals of the Revolving Notes and Term
Notes for each applicable Lender, dated the Closing Date.

     

    C.           Security
Agreement.  Duly executed originals of the Security Agreement,
dated the Closing Date, and all instruments, documents and agreements executed
pursuant thereto, including without limitation, a power of attorney executed by
each Credit Party.

     

    D.           Security Interests and Code
Filings.  (a) Evidence satisfactory to Agent that Agent (for
the benefit of itself and Lenders) has a valid and perfected first priority
security interest in the Collateral, including (i) such documents duly executed
by each Credit Party (including financing statements under the Code and other
applicable documents under the laws of any jurisdiction with respect to the
perfection of Liens) as Agent may request in order to perfect its security
interests in the Collateral, (ii) copies of Code search reports listing all
effective financing statements that name any Credit Party as debtor, together
with copies of such financing statements (and those relating to the Prior Lender
Obligations which shall be terminated on the Closing Date) and Permitted
Encumbrances and (iii) a perfection certificate, duly executed on behalf of each
Person who is a Credit Party.

     

    (b)           Evidence
reasonably satisfactory to Agent, including copies, of all UCC-1 and other
financing statements filed in favor of Borrower or any other Credit Party with
respect to each location, if any, at which Inventory may be
consigned.

     

    (c)           Control
Letters from (i) all issuers of uncertificated securities and financial assets
held by Borrower, (ii) all securities intermediaries with respect to all
securities accounts and securities entitlements of Borrower, and (iii) all
futures commission agents and clearing houses with respect to all commodities
contracts and commodities accounts held by Borrower.

     

    F.           Intellectual Property
Security Agreements.  Duly executed originals of Trademark
Security Agreements, Copyright Security Agreements and Patent Security

     

    
      
         

      

      
        D-1

        
          

        

      

      
         

      

    

     

    Agreements,
each dated the Closing Date and signed by each Credit Party which owns
Trademarks, Copyrights and/or Patents, as applicable, all in form and substance
reasonably satisfactory to Agent, together with all instruments, documents and
agreements executed pursuant thereto.

     

    H.           Holdings
Guaranty.  Duly executed originals of the Holdings Guaranty,
dated as of the Closing Date, and all documents, instruments and agreements
executed pursuant thereto.

     

    I.           Subsidiary
Guaranties.  Guaranties executed by and each direct and
indirect Subsidiary of Borrower in favor of Agent, for the benefit of
Lenders.

     

    J.           Initial Notice of Revolving
Credit Advance.  Duly executed originals of a Notice of
Revolving Credit Advance, dated the Closing Date, with respect to the initial
Revolving Credit Advance to be requested by Borrower on the Closing
Date.

     

    K.           Letter of
Direction.  Duly executed originals of a letter of direction
from Borrower addressed to Agent, on behalf of itself and Lenders, with respect
to the disbursement on the Closing Date of the proceeds of the Term Loan B and
the initial Revolving Credit Advance.

     

    L.           Cash Management System;
Control Account Agreements.  Evidence satisfactory to Agent
that, as of the Closing Date, Cash Management Systems complying with Annex C to the
Agreement have been established and are currently being maintained in the manner
set forth in such Annex C, together
with copies of duly executed tri-party control account agreements, reasonably
satisfactory to Agent, with the banks as required by Annex C.

     

    M.           Charter and Good
Standing.  For each Credit Party, such Person's (a) charter and
all amendments thereto, (b) good standing certificates (including verification
of tax status) in its state of incorporation or organization and (c) good
standing certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized Governmental
Authority.

     

    N.           Bylaws and
Resolutions.  For each Credit Party, (a) such Person's bylaws,
partnership agreement or operating agreement, as the case may be, together with
all amendments thereto and (b) resolutions of such Person's Board of Directors,
approving and authorizing the execution, delivery and performance of the Loan
Documents to which such Person is a party and the transactions to be consummated
in connection therewith, each certified as of the Closing Date by such Person's
corporate secretary or an assistant secretary as being in full force and effect
without any modification or amendment.

     

    O.           Incumbency
Certificates.  For each Credit Party, signature and incumbency
certificates of the officers of each such Person executing any of the Loan
Documents, certified as of the Closing Date by such Person's corporate secretary
or an assistant secretary as being true, accurate, correct and
complete.

     

    
      
         

      

      
        D-2

        
          

        

      

      
         

      

    

     

    P.           Opinions of
Counsel.  Duly executed originals of opinions of (i) Gibson,
Dunn & Crutcher LLP, counsel for the Credit Parties, (ii) Kummer Kaempfer
Bonner Renshaw & Ferrario, special Nevada counsel for the Credit Parties,
(iii) Starn, O’Toole, Marcus & Fisher, special Hawaiian counsel for the
Credit Parties, and (iv) Gibson, Dunn & Crutcher LLP, special Texas counsel
to the Credit Parties, each in form and substance reasonably satisfactory to
Agent and its counsel, dated the Closing Date, which opinions shall include an
express statement to the effect that Agent and Lenders are authorized to rely on
such opinion.

     

    Q.           Payoff Letter; Termination
Statements.  Copies of a duly executed release documentation,
in form and substance reasonably satisfactory to Agent, evidencing that the
assets to be acquired upon the consummation of the Acquisition have been
acquired free and clear of all Liens.

     

    R.           Insurance.  Satisfactory
evidence that the insurance policies required by Section
5.4  are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as reasonably requested by Agent, in favor of Agent, on behalf of
Lenders.

     

    S.           Pledge
Agreements.  Duly executed originals of each of the Pledge
Agreements accompanied by (as applicable) (a) share certificates representing
all of the outstanding Stock being pledged pursuant to such Pledge Agreement and
stock powers for such share certificates executed in blank and (b) the original
Intercompany Notes and other instruments evidencing Indebtedness being pledged
pursuant to such Pledge Agreement, duly endorsed in blank.

     

    T.           Accountants'
Letter.  A letter from the Credit Parties to their independent
auditors authorizing the independent certified public accountants of the Credit
Parties to communicate with Agent and Lenders in accordance with Section
4.2.

     

    U.           Appointment of Agent for
Service.  An appointment of CT Corporation as each Credit
Party's agent for service of process.

     

    V.           Fee
Letter.  Duly executed originals of the GE Capital Fee
Letter.

     

    W.           Officer's
Certificate.  Agent shall have received duly executed originals
of a certificate of the Chief Executive Officer and Chief Financial Officer of
Borrower, dated the Closing Date, stating that, since June 30, 2007 (a) no event
or condition has occurred or is existing which could reasonably be expected to
have a Material Adverse Effect; (b) there has been no material adverse change in
the industry in which Borrower operates; (c) no Litigation has been commenced
which, if successful, would have a Material Adverse Effect or could challenge
any of the transactions contemplated by the Agreement and the other Loan
Documents; (d) there have been no Restricted Payments made by any Credit Party;
and (e) before and after giving effect to the transactions contemplated by the
Credit Agreement, each of the Borrower individually, and the Credit Parties
taken as a whole, will be Solvent, and (f) there has been no material increase
in liabilities, liquidated or contingent, and no material decrease in assets of
Borrower or any of its Subsidiaries.

     

    
      
         

      

      
        D-3

        
          

        

      

      
         

      

    

     

    X.           Waivers.  Agent,
on behalf of Lenders, shall have received landlord waivers and consents
(including consents to leasehold mortgages), bailee letters and mortgagee
agreements in form and substance satisfactory to Agent, in each case as required
pursuant to Section
5.9.

     

    Y.           Mortgages.  Mortgages
covering all of the Real Estate (the “Mortgaged
Properties”) together with: (a) title insurance policies, landlord
estoppel letters, if applicable, and certificates of occupancy, in each case
reasonably satisfactory in form and substance to Agent, in its sole discretion;
(b) evidence that counterparts of the Mortgages have been recorded in all places
to the extent necessary or desirable, in the judgment of Agent, to create a
valid and enforceable first priority lien (subject to Permitted Encumbrances) on
each Mortgaged Property in favor of Agent for the benefit of itself and Lenders
(or in favor of such other trustee as may be required or desired under local
law); and (c) an opinion of counsel in each state in which any Mortgaged
Property is located in form and substance and from counsel reasonably
satisfactory to Agent.

     

    Z.           
Reading Management
Agreement.  Agent and Lenders shall have received a true and
complete copy of the Reading Management Agreement.

     

    AA.           Reading Guaranty.
Duly executed originals of the Reading Guaranty, dated as of the Closing Date,
and all documents, instruments and agreements executed pursuant
thereto.

     

    BB.  Audited Financials;
Financial Condition.  Agent shall have received the Financial
Statements, Projections and other materials set forth in Section 3.4,
certified by a Responsible Financial Officer, in each case in form and substance
satisfactory to Agent, and Agent shall be satisfied, in its sole discretion,
with all of the foregoing.  Agent shall have further received a
certificate of a Responsible Financial Officer of Borrower, based on such Pro
Forma and Projections, to the effect that (a) Borrower will be Solvent upon the
consummation of the transactions contemplated herein; (b) the Pro Forma fairly
presents the financial condition of Borrower as of the date thereof after giving
effect to the transactions contemplated by the Loan Documents; (c) the
Projections are based upon estimates and assumptions stated therein, all of
which Borrower believes to be reasonable and fair in light of current conditions
and current facts known to Borrower and, as of the Closing Date, reflect
Borrower's good faith and reasonable estimates of its future financial
performance and of the other information projected therein for the period set
forth therein; and (s) containing such other statements with respect to the
solvency of Borrower and matters related thereto as Agent shall
request.

     

    CC.           Assignment of
Representations, Warranties, Covenants, Indemnities and Rights. Agent
shall have received a duly executed copy of an Assignment of Representations,
Warranties, Covenants, Indemnities and Rights in respect of Borrower's and
Reading’s rights under the Acquisition Agreement, which assignment shall be
expressly permitted under the Acquisition Agreement or shall have been consented
to by the Sellers and other parties to the Acquisition Agreement in
writing.

     

    DD.           Master Standby
Agreement.  A Master Agreement for Standby Letters of Credit
between Borrower and GE Capital.

     

    
      
         

      

      
        D-4

        
          

        

      

      
         

      

    

     

    EE.           Kahala Management
Agreement.  Agent and Lenders shall have received a true and
complete copy of the Kahala Management Agreement.

     

    FF.           Material
Contracts.  Agent and Lenders shall have received a true and
complete copy of each Material Contract.

     

    GG.           Collateral
Assignments.  Agent and Lenders shall have received duly
executed Collateral Assignments for each of the Kahala Management Agreement and
the Reading Management Agreement.

     

    HH.           Other
Documents.  Such other certificates, documents and agreements
respecting any Credit Party as Agent may reasonably request.

     

    
      
         

      

      
        D-5

        
          

        

      

      
         

      

    

    ANNEX
E (Section
4.1(a))

    to

    CREDIT
AGREEMENT

     

    FINANCIAL STATEMENTS AND
PROJECTIONS -- REPORTING

     

    Borrower
shall deliver or cause to be delivered to Agent, and upon the request of Agent,
to each Lender, the following:

     

    (a)           Monthly
Financials.  To Agent and each Lender, if requested by Agent,
within thirty (30) days after the end of each Fiscal Month (other than a Fiscal
Month that is also the end of a Fiscal Quarter), financial information regarding
Borrower and its Subsidiaries, certified by a Responsible Financial Officer of
Borrower, consisting of consolidated and, if applicable and if requested by
Agent, consolidating (i) unaudited balance sheets as of the close of such Fiscal
Month and the related statements of income and a summary of Capital Expenditures
in each case for that portion of the Fiscal Year ending as of the close of such
Fiscal Month; (ii) unaudited statements of income and cash flows for such Fiscal
Month for each site, setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
operating plan (as defined in Annex E, subsection (c)) for
such Fiscal Year, all prepared in accordance with GAAP (subject to normal
year-end adjustments); and (iii) a summary of the outstanding balance of all
Intercompany Notes as of the last day of that Fiscal Month.  Such
financial information shall be accompanied by the certification of a Responsible
Financial Officer of Borrower that (i) such financial information presents
fairly in accordance with GAAP (subject to normal year-end adjustments) the
financial position and results of operations of Borrower and its Subsidiaries,
on a consolidated and, if applicable and if requested by Agent, consolidating
basis, in each case as at the end of such Fiscal Month and for that portion of
the Fiscal Year then ended and (ii) any other information presented is true,
correct and complete in all material respects and that there was no Default or
Event of Default in existence as of such time or, if a Default or Event of
Default shall have occurred and be continuing, describing the nature thereof and
all efforts undertaken to cure such Default or Event of Default.

     

    (b)           Quarterly
Financials.  To Agent and each Lender, if requested by Agent,
within forty-five (45) days after the end of each Fiscal Quarter, consolidated
and, if applicable and if requested by Agent, consolidating financial
information regarding Borrower and its Subsidiaries, certified by the Chief
Financial Officer of Borrower, including (i) unaudited balance sheets as of the
close of such Fiscal Quarter and the related statements of income and cash flow
for that portion of the Fiscal Year ending as of the close of such Fiscal
Quarter and (ii) unaudited statements of income and cash flows for such Fiscal
Quarter, in each case setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
operating plan (as defined in Annex E, subsection (c)) for
such Fiscal Year, all prepared in accordance with GAAP (subject to normal
year-end adjustments).  Such financial information shall be
accompanied by (A) a statement in reasonable detail (each, a “Compliance
Certificate”) showing the calculations used in determining compliance
with each of the Financial Covenants that is tested on a quarterly basis and the
Loan to Contributed Capital Ratio and (B) the certification of the Chief
Financial Officer of Borrower that (i) such financial information presents
fairly in accordance with GAAP (subject to normal year-end adjustments) the
financial position, results of operations and statements of cash flows of
Borrower and its Subsidiaries, on a 

     

    
      
         

      

      
        E-1

        
          

        

      

      
         

      

    

     

    consolidated
and, if applicable and if requested by Agent, consolidating basis, as at the end
of such Fiscal Quarter and for that portion of the Fiscal Year then ended, (ii)
any other information presented is true, correct and complete in all material
respects and that there was no Default or Event of Default in existence as of
such time or, if a Default or Event of Default has occurred and is continuing,
describing the nature thereof and all efforts undertaken to cure such Default or
Event of Default.  In addition, Borrower shall deliver to Agent and
Lenders, within forty-five (45) days after the end of each Fiscal Quarter, a
management discussion and analysis that includes a comparison to budget for that
Fiscal Quarter and a comparison of performance for that Fiscal Quarter to the
corresponding period in the prior year.

     

    (c)           Operating
Plan.  To Agent and each Lender, if requested by Agent, as soon
as available, but not later than forty-five (45) days after the end of each
Fiscal Year, an annual operating plan for Borrower, approved by the Board of
Directors of Borrower, for the following Fiscal Year, which (i) includes a
statement of all of the material assumptions on which such plan is based, (ii)
includes monthly balance sheets and a monthly budget for the following year and
(iii) integrates sales, gross profits, operating expenses, operating
profit, cash flow projections and Borrowing Availability projections, all
prepared on a theater by theater basis and on the same basis and in similar
detail as that on which operating results are reported (and in the case of cash
flow projections, representing management's good faith estimates of future
financial performance based on historical performance), and including plans for
personnel, Capital Expenditures and facilities.

     

    (d)           Annual Audited
Financials. To Agent and each Lender, if requested by Agent, within
ninety (90) days after the end of each Fiscal Year, audited Financial Statements
for Borrower and its Subsidiaries on a consolidated and, if applicable and if
requested by Agent, (unaudited) consolidating basis, consisting of balance
sheets and statements of income and retained earnings and cash flows, setting
forth in comparative form in each case the figures for the previous Fiscal Year,
which Financial Statements shall be prepared in accordance with GAAP and
certified without qualification, by an independent certified public accounting
firm of national standing or otherwise acceptable to Agent.  Such
Financial Statements shall be accompanied by (i) a statement prepared in
reasonable detail showing the calculations used in determining compliance with
each of the Financial Covenants, (ii) a report from such accounting firm to the
effect that, in connection with their audit examination, nothing has come to
their attention to cause them to believe that a Default or Event of Default has
occurred with respect to the Financial Covenants (or specifying those Defaults
and Events of Default that they became aware of), it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) the annual letters to such accountants in connection with their
audit examination detailing contingent liabilities and material litigation
matters, and (iv) the certification of the Chief Executive Officer or Chief
Financial Officer of Borrower that all such Financial Statements present fairly
in accordance with GAAP the financial position, results of operations and
statements of cash flows of Borrower and its Subsidiaries on a consolidated and,
if applicable and if requested by Agent, consolidating basis, as at the end of
such Fiscal Year and for the period then ended, and that there was no Default or
Event of Default in existence as of such time or, if a Default or Event of
Default has occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Default or Event of Default.

     

    
      
         

      

      
        E-2

        
          

        

      

      
         

      

    

     

    (e)           Management
Letters.  To Agent and each Lender, if requested by
Agent,  within five (5) Business Days after receipt thereof by any
Credit Party, copies of all management letters, exception reports or similar
letters or reports received by such Credit Party from its independent certified
public accountants.

     

    (f)           Default
Notices.  To Agent and each Lender, if requested by Agent, as
soon as practicable, and in any event within five (5) Business Days after an
executive officer of Borrower has actual knowledge of the existence of any
Default, Event of Default or other event that has had a Material Adverse Effect,
telephonic or telecopied notice specifying the nature of such Default or Event
of Default or other event, including the anticipated effect thereof, which
notice, if given telephonically, shall be promptly confirmed in writing on the
next Business Day.

     

    (g)           SEC Filings and Press
Releases.  To Agent and each Lender, if requested by Agent,
promptly upon their becoming available, copies of:  (i) all Financial
Statements, reports, notices and proxy statements made publicly available by any
Credit Party to its security holders; (ii) all regular and periodic reports and
all registration statements and prospectuses, if any, filed by any Credit Party
with any securities exchange or with the Securities and Exchange Commission or
any governmental or private regulatory authority; and (iii) all press releases
and other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such
Person.

     

    (h)           Equity
Notices.  To Agent, as soon as practicable, copies of all
material written notices given or received by any Credit Party with respect to
any Stock of such Person.

     

    (i)           Supplemental
Schedules.  To Agent, supplemental disclosures, if any,
required by Section
5.6.

     

    (j)           Litigation.  To
Agent in writing, promptly upon the Chief Financial Officer, Chief Operating
Officer or General Counsel of Borrower learning thereof, notice of any
Litigation commenced or threatened against any Credit Party that (i) seeks
damages in excess of $500,000 over the amount of any applicable insurance
coverage, (ii) seeks injunctive relief, (iii) is asserted or instituted against
any Plan, its fiduciaries or its assets or against any Credit Party or ERISA
Affiliate in connection with any Plan, (iv) alleges criminal misconduct by any
Credit Party, (v) alleges the violation of any law regarding, or seeks remedies
in connection with, any Environmental Liabilities that, in any such case, would
reasonably be expected to result in liability in excess of $500,000 over any
applicable insurance coverage; or (vi) involves any product recall.

     

    (k)           Insurance
Notices.  To Agent, disclosure of losses or casualties required
by Section
5.4.

     

    (l)           Lease Default
Notices.  To Agent, (i) within two (2) Business Days after
receipt thereof, copies of any and all default or termination notices received
under or with respect to any Theatre Lease, (ii) monthly within three (3)
Business Days after payment thereof, evidence of payment of lease or rental
payments as to each Theatre Lease which a landlord or bailee waiver has not been
obtained, (iii) notice of termination of any Theatre Lease within 30

     

    
      
         

      

      
        E-3

        
          

        

      

      
         

      

    

     

    days
prior to the termination of such lease in accordance with its terms and (iv)
such other notices or documents as Agent may reasonably request.

     

    (m)           Lease
Amendments.  To Agent, within two (2) Business Days after
receipt thereof, copies of all material amendments to any Theatre
Lease.

     

    (n)           Hedging
Agreements.  To Agent within two (2) Business Days after
entering into such agreement or amendment, copies of all interest rate,
commodity or currency hedging agreements or amendments thereto.

     

    (o)           Commercial Tort
Claims.  To Agent, promptly and in any event within two (2)
Business Days after the same is acquired by it, notice of any commercial tort
claim (as defined in the Code) in excess of $100,000 acquired by it and unless
otherwise consented to by Agent, a supplement to this Security Agreement,
granting to Agent a Lien in such commercial tort claim.

     

    (p)           Good Standing
Certificates.  Upon Agent’s request, after an Event of Default
has occurred and is continuing, a good standing certificate from the
jurisdiction of incorporation or organization of each Credit Party dated as of a
recent date, certifying that such Credit Party is in good standing or in
existence, as applicable.

     

    (r)           Other
Documents.  To Agent and Lenders, such other financial and
other information respecting any Credit Party's business or financial condition
as Agent or any Lender shall, from time to time, reasonably
request.

     

    
      
         

      

      
        E-4

        
          

        

      

      
         

      

    

    ANNEX
F (Section
4.1(b))

    to

    CREDIT
AGREEMENT

     

    COLLATERAL
REPORTS

     

    Borrower
shall deliver or cause to be delivered the following:

     

    (a)           To
Agent, at the time of delivery of each of the annual Financial Statements
delivered pursuant to Annex E, a list of
any applications for the registration of any Patent, Trademark or Copyright
filed by any Credit Party with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in the prior
Fiscal Quarter;

     

    (b)           [Reserved];

     

    (c)           Borrower,
at its own expense, shall deliver to Agent such appraisals  of its
assets as Agent may request at any time after the occurrence and during the
continuance of a Default or an Event of Default, such appraisals to be conducted
by an appraiser, and in form and substance reasonably satisfactory to Agent;
and

     

    (d)           Such
other reports, statements and reconciliations with respect to the Collateral or
Obligations of any or all Credit Parties as Agent shall from time to time
request in its reasonable discretion.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
G (Section
6.10)

    to

    CREDIT
AGREEMENT

     

    FINANCIAL
COVENANTS

     

    Borrower
shall not breach or fail to comply with any of the following financial
covenants, each of which shall be calculated in accordance with GAAP
consistently applied:

     

    (a)           Maximum
Capital Expenditures.  Borrower and its
Subsidiaries on a consolidated basis shall not make Capital Expenditures during
any Fiscal Year that exceed $1,000,000 in the aggregate, provided, however, that
(i) to the extent that actual Capital Expenditures for any such Fiscal Year
shall be less than the maximum amount set forth above for such Fiscal Year, the
unused amounts from such prior Fiscal Year shall be available for Capital
Expenditures in the immediately succeeding Fiscal Year, and (ii) Borrower and
its Subsidiaries on a consolidated basis may make Capital Expenditures with
respect to the Kapolei facility for purposes of upgrading to stadium seating in
an amount not to exceed (x) $1,125,000 in the Fiscal Year ending December 31,
2008, (y) $1,500,000 the Fiscal Year ending December 31, 2009 and (z) $375,000
the Fiscal Year ending December 31, 2010.

     

     (b)           Minimum Fixed Charge
Coverage Ratio.  Borrower and its Subsidiaries shall have on a
consolidated basis at the end of each Fiscal Quarter, a Fixed Charge Coverage
Ratio for the 12-month period then ended of not less than 1.2:1.0.

     

    Notwithstanding
anything contained herein to the contrary, for purposes of calculating the Fixed
Charge Coverage Ratio, Fixed Charges (other than Capital Expenditures) shall
equal (i) for the first full Fiscal Quarter completed after the Closing Date,
that Fiscal Quarter’s Fixed Charges (other than Capital Expenditures) times four
(4), (ii) for the second Fiscal Quarter completed after the Closing Date, the
sum of the most recent two Fiscal Quarters’ Fixed Charges (other than Capital
Expenditures) times two (2) and (iii) for the third Fiscal Quarter completed
after the Closing Date, the sum of the most recent three Fiscal Quarters’ Fixed
Charges (other than Capital Expenditures) divided by three (3) and the result
multiplied by four (4).

     

    (c)           Maximum Leverage
Ratio.  Borrower and its Subsidiaries on a consolidated basis
shall have, at the end of each Fiscal Quarter set forth below, a Leverage Ratio
as of the last day of such Fiscal Quarter and for the 12-month period then ended
of not more than the following

     

    
      	
              Fiscal Quarter

            	
              Leverage Ratio

            
	
              March
      31, 2008, June 30, 2008

            	
              4.00:1.0

            
	
              September
      30, 2008, December 31, 2008, March 31, 2009 and June 30,
    2009

            	
              3.75:1.0

            
	
              September
      30, 2009, December 31, 2009, March 31, 2010 and June 30,
    2010

            	
              3.50:1.0

            
	
              September
      30, 2010 and each Fiscal Quarter thereafter

            	
              3.25:1.0

            

    

    

     

    

    (e)  Minimum Interest Coverage
Ratio.  Borrower and its Subsidiaries on a consolidated basis
shall have, at the end of each Fiscal Quarter set forth below, an Interest
Coverage Ratio as of the last day of such Fiscal Quarter and for the 12-month
period then ended of not less than:

     

    
      	
              Fiscal Quarter

            	
              Interest Coverage Ratio

            
	
              March
      31, 2008 and June 30, 2008,

            	
              2.00:1.0

            
	
              September
      30, 2008, December 31, 2008, March 31, 2009 and June 30,
    2009

            	
              2.25:1.0

            
	
              September
      30, 2009, December 31, 2009, March 31, 2010 and June 30,
    2010

            	
              2.50:1.0

            
	
              September
      30, 2010 and each Fiscal Quarter thereafter

            	
              3.0:1.0

            

    

     

    Notwithstanding
anything contained herein to the contrary, for purposes of calculating the
Interest Coverage Ratio, Interest Expense shall equal (i) for the first full
Fiscal Quarter completed after the Closing Date, that Fiscal Quarter’s Interest
Expense times four (4), (ii) for the second Fiscal Quarter completed after the
Closing Date, the sum of the most recent two Fiscal Quarters’ Interest Expense
times two (2) and (iii) for the third Fiscal Quarter completed after the Closing
Date, the sum of the most recent three Fiscal Quarters’ Interest Expense divided
by three (3) and the result multiplied by four (4).

     

    Unless
otherwise specifically provided herein, any accounting term used in the
Agreement shall have the meaning customarily given such term in accordance with
GAAP, and all financial computations hereunder shall be computed in accordance
with GAAP consistently applied.  That certain items or computations
are explicitly modified by the phrase “in accordance with GAAP” shall in no way
be construed to limit the foregoing.  If any “Accounting Changes” (as
defined below) occur and such changes result in a change in the calculation of
the financial 

     

    
      
         

      

      
        G-1

        
          

        

      

      
         

      

    

     

    covenants,
standards or terms used in the Agreement or any other Loan Document, then
Borrower, Agent and Lenders agree to enter into negotiations in order to amend
such provisions of the Agreement so as to equitably reflect such Accounting
Changes with the desired result that the criteria for evaluating Borrower's and
its Subsidiaries' financial condition shall be the same after such Accounting
Changes as if such Accounting Changes had not been made; provided, however,
that the agreement of Requisite Lenders to any required amendments of such
provisions shall be sufficient to bind all Lenders.  “Accounting Changes”
means (i) changes in accounting principles required by the promulgation of any
rule, regulation, pronouncement or opinion by the Financial Accounting Standards
Board of the American Institute of Certified Public Accountants (or successor
thereto or any agency with similar functions), (ii) changes in accounting
principles concurred in by Borrower's certified public accountants; (iii)
purchase accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the
application of the accounting principles set forth in FASB 109, including the
establishment of reserves pursuant thereto and any subsequent reversal (in whole
or in part) of such reserves; and (iv) the reversal of any reserves
established as a result of purchase accounting adjustments.  If Agent,
Borrower and Requisite Lenders agree upon the required amendments, then after
appropriate amendments have been executed and the underlying Accounting Change
with respect thereto has been implemented, any reference to GAAP contained in
the Agreement or in any other Loan Document shall, only to the extent of such
Accounting Change, refer to GAAP, consistently applied after giving effect to
the implementation of such Accounting Change.  If Agent, Borrower and
Requisite Lenders cannot agree upon the required amendments within thirty (30)
days following the date of implementation of any Accounting Change, then all
Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change.  For purposes of Section 8.1, a breach
of a Financial Covenant contained in this Annex G shall be
deemed to have occurred as of any date of determination by Agent or as of the
last day of any specified measurement period, regardless of when the Financial
Statements reflecting such breach are delivered to Agent.

     

    
      
         

      

      
        G-2

        
          

        

      

      
         

      

    

    ANNEX
H (Section 1.1(d))

    to

    CREDIT
AGREEMENT

     

    LENDERS'
WIRE TRANSFER INFORMATION

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
I (Section 11.10)

    to

    CREDIT
AGREEMENT

     

    NOTICE
ADDRESSES

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ANNEX
J (from Annex A - Commitments definition)

    to

    CREDIT
AGREEMENT

     

    

    
      	
              Lender(s)

            	 	
              Revolving
      Loan Commitment

            	 	 	
              Term
      Loan B Commitment

            	 
	
              General
      Electric Capital Corporation

               

            	 	$	1,636,363.64	 	 	$	16,363,636.36	 
	
              Bank
      of Hawaii

               

            	 	$	1,227,272.73	 	 	$	12,272,727.27	 
	
              Central
      Pacific Bank

               

            	 	$	1,227,272.73	 	 	$	12,272,727.27	 
	
              American
      Savings Bank

               

            	 	$	909,090.90	 	 	$	9,090,909.10exhibit10_73.htm

    READING
GUARANTY AGREEMENT

     

    

    This
READING GUARANTY AGREEMENT (this “Guaranty”), dated as
of February 21, 2008, by and between READING INTERNATIONAL, INC., a Nevada
corporation (“Guarantor”), and
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, individually
and as agent (in such capacity, “Agent”) for itself
and the lenders from time to time signatory to the Credit Agreement, as
hereinafter defined (“Lenders”).

     

    W
I T N E S S E T H:

     

    WHEREAS,
pursuant to that certain Credit Agreement dated as of the date hereof by and
among CONSOLIDATED AMUSEMENT THEATRES, INC., a Nevada corporation (“Borrower”), the
Persons named therein as Credit Parties, Agent and the Persons signatory thereto
from time to time as Lenders (as from time to time amended, restated,
supplemented or otherwise modified, the “Credit Agreement”)
Lenders have agreed to make Loans to, and incur Letter of Credit Obligations for
the benefit of, Borrower.

     

    WHEREAS,
Guarantor indirectly owns 100% of the outstanding Stock of Borrower and as such
will derive direct and indirect economic benefits from the making of the Loans
and other financial accommodations provided to Borrower pursuant to the Credit
Agreement; and

     

    WHEREAS,
in order to induce Agent and Lenders to enter into the Credit Agreement and
other Loan Documents and to induce Lenders to make the Loans and to incur Letter
of Credit Obligations as provided for in the Credit Agreement, Guarantor has
agreed to guarantee payment of the Obligations;

     

    NOW,
THEREFORE, in consideration of the premises and the covenants hereinafter
contained, and to induce Lenders to provide the Loans and other financial
accommodations under the Credit Agreement, it is agreed as follows:

     

    1.           DEFINITIONS.

     

    Capitalized
terms used herein shall have the meanings assigned to them in the Credit
Agreement, unless otherwise defined herein.

     

    References
to this “Guaranty” shall mean this Guaranty, including all amendments,
modifications and supplements and any annexes, exhibits and schedules to any of
the foregoing, and shall refer to this Guaranty as the same may be in effect at
the time such reference becomes operative.

     

    2.           THE
GUARANTY.

     

    2.1           Guaranty of Guaranteed
Obligations of Borrower.  Guarantor hereby unconditionally
guarantees to Agent and Lenders, and their respective successors, endorsees,
transferees and assigns, to but not including the Release Date (as defined
below), the prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of the

     

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    Obligations
of Borrower (hereinafter the “Guaranteed
Obligations”).  Guarantor agrees that this Guaranty is a
guaranty of payment and performance and not of collection, and that its
obligations under this Guaranty shall be primary, absolute and unconditional,
irrespective of, and unaffected by:

     

    (a)           the
genuineness, validity, regularity, enforceability or any future amendment of, or
change in this Guaranty, any other Loan Document or any other agreement,
document or instrument to which any Credit Party and/or Guarantor is or may
become a party;

     

    (b)           the
absence of any action to enforce this Guaranty or any other Loan Document or the
waiver or consent by Agent and/or Lenders with respect to any of the provisions
thereof;

     

    (c)           the
existence, value or condition of, or failure to perfect Agent’s Lien against,
any Collateral for the Guaranteed Obligations or any action, or the absence of
any action, by Agent in respect thereof (including, without limitation, the
release of any such security); or

     

    (d)           the
insolvency of any Credit Party; or

     

    (e)           any
other action or circumstances which might otherwise constitute a legal or
equitable discharge or defense of a surety or guarantor,

     

    it being
agreed by Guarantor that its obligations under this Guaranty shall not be
discharged until the earlier of Termination Date and the Release
Date.  Guarantor shall be regarded, and shall be in the same position,
as principal debtor with respect to the Guaranteed
Obligations.  Guarantor agrees that any notice or directive given at
any time to Agent which is inconsistent with the waiver in the immediately
preceding sentence shall be null and void and may be ignored by Agent and
Lenders, and, in addition, may not be pleaded or introduced as evidence in any
litigation relating to this Guaranty for the reason that such pleading or
introduction would be at variance with the written terms of this Guaranty,
unless Agent and Lenders have specifically agreed otherwise in
writing.  It is agreed among Guarantor, Agent and Lenders that the
foregoing waivers are of the essence of the transaction contemplated by the Loan
Documents and that, but for this Guaranty and such waivers, Agent and Lenders
would decline to enter into the Credit Agreement.

    

    2.2           Demand by Agent or
Lenders.  In addition to the terms of the Guaranty set forth in
Section 2.1
hereof, and in no manner imposing any limitation on such terms, it is expressly
understood and agreed that, if, at any time prior to the Release Date, the
outstanding principal amount of the Guaranteed Obligations under the Credit
Agreement (including all accrued interest thereon) is declared to be immediately
due and payable, then Guarantor shall, without demand, pay to the holders of the
Guaranteed Obligations the entire outstanding Guaranteed Obligations due and
owing to such holders.  Payment by Guarantor shall be made to Agent in
immediately available funds to an account, designated by Agent or at the address
set forth herein for the giving of notice to Agent or at any other address that
may be specified in writing from time to time by Agent, and shall be credited
and applied to the Guaranteed Obligations.

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    2.3           Enforcement of
Guaranty.  In no event shall Agent have any obligation
(although it is entitled, at its option) to proceed against Borrower or any
other Credit Party or any Collateral pledged to secure Guaranteed Obligations
before seeking satisfaction from the Guarantor, and Agent may proceed, prior or
subsequent to, or simultaneously with, the enforcement of Agent’s rights
hereunder, to exercise any right or remedy which it may have against any
Collateral, as a result of any Lien it may have as security for all or any
portion of the Guaranteed Obligations.

     

    2.4           Waiver.  In
addition to the waivers contained in Section 2.1 hereof,
Guarantor waives and agrees that it shall not at any time insist upon, plead or
in any manner whatever claim or take the benefit or advantage of, any appraisal,
valuation, stay, extension, marshaling of assets or redemption laws, or
exemption, whether now or at any time hereafter in force, which may delay,
prevent or otherwise affect the performance by Guarantor of its Guaranteed
Obligations under, or the enforcement by Agent or Lenders of, this Guaranty.
Guarantor hereby waives diligence, presentment and demand (whether for
non-payment or protest or of acceptance, maturity, extension of time, change in
nature or form of the Guaranteed Obligations, acceptance of further security,
release of further security, composition or agreement arrived at as to the
amount of, or the terms of, the Guaranteed Obligations, notice of adverse change
in Borrower’s financial condition or any other fact which might increase the
risk to Guarantor) with respect to any of the Guaranteed Obligations or all
other demands whatsoever and waives the benefit of all provisions of law which
are or might be in conflict with the terms of this
Guaranty.  Guarantor represents, warrants and agrees that, as of the
date of this Guaranty, its obligations under this Guaranty are not subject to
any offsets or defenses against Agent or Lenders or any Credit Party of any
kind. Guarantor further agrees that its obligations under this Guaranty shall
not be subject to any counterclaims, offsets or defenses against Agent or any
Lender or against any Credit Party of any kind which may arise in the
future.

     

    2.5           Benefit of
Guaranty.  The provisions of this Guaranty are for the benefit
of Agent and Lenders and their respective successors, transferees, endorsees and
assigns, and nothing herein contained shall impair, as between any Credit Party
and Agent or Lenders, the obligations of any Credit Party under the Loan
Documents.  In the event all or any part of the Guaranteed Obligations
are transferred, indorsed or assigned by Agent or any Lender to any Person or
Persons, any reference to “Agent” or “Lender” herein shall be deemed to refer
equally to such Person or Persons.

     

    2.6           Modification of Guaranteed
Obligations, Etc.  Guarantor hereby acknowledges and agrees
that Agent and Lenders may at any time or from time to time, with or without the
consent of, or notice to, Guarantor:

     

    (a)           change
or extend the manner, place or terms of payment of, or renew or alter all or any
portion of, the Guaranteed Obligations;

     

    (b)           take
any action under or in respect of the Loan Documents in the exercise of any
remedy, power or privilege contained therein or available to it at law, equity
or otherwise, or waive or refrain from exercising any such remedies, powers or
privileges;

     

    (c)           amend
or modify, in any manner whatsoever, the Loan Documents;

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (d)           extend
or waive the time for any Credit Party’s performance of, or compliance with, any
term, covenant or agreement on its part to be performed or observed under the
Loan Documents, or waive such performance or compliance or consent to a failure
of, or departure from, such performance or compliance;

     

    (e)           take
and hold Collateral for the payment of the Guaranteed Obligations guaranteed
hereby or sell, exchange, release, dispose of, or otherwise deal with, any
property pledged, mortgaged or conveyed, or in which Agent or Lenders have been
granted a Lien, to secure any Obligations;

     

    (f)           release
anyone who may be liable in any manner for the payment of any amounts owed by
Guarantor or any Credit Party to Agent or any Lender;

     

    (g)           modify
or terminate the terms of any intercreditor or subordination agreement pursuant
to which claims of other creditors of Guarantor or any Credit Party are
subordinated to the claims of Agent and Lenders; and/or

     

    (h)           apply
any sums by whomever paid or however realized to any amounts owing by Guarantor
or any Credit Party to Agent or any Lender in such manner as Agent or any Lender
shall determine in its discretion;

     

    and Agent
and Lenders shall not incur any liability to Guarantor as a result thereof, and
no such action shall impair or release the Guaranteed Obligations of Guarantor
under this Guaranty.

    

    2.7           Reinstatement.  This
Guaranty shall remain in full force and effect and continue to be effective
should any petition be filed by or against any Credit Party or Guarantor for
liquidation or reorganization prior to the Release Date, should any Credit Party
or Guarantor become insolvent or make an assignment for the benefit of creditors
or should a receiver or trustee be appointed for all or any significant part of
such Credit Party’s or Guarantor’s assets, in each case prior to the Release
Date.  Notwithstanding anything contained herein to the contrary, this
Guaranty shall be reinstated if at any time payment and performance of the
Guaranteed Obligations, or any part thereof, in each case which payment or
performance arose or occurred prior to the Release Date, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by Agent or any Lender, whether as a “voidable preference,” “fraudulent
conveyance,” or otherwise, all as though such payment or performance had not
been made.  In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Guaranteed Obligations shall be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned.

     

    2.8           Waiver of Subrogation,
Etc.  Notwithstanding anything to the contrary in this
Guaranty, or in any other Loan Document,  Guarantor
hereby:

     

    (a)           expressly
and irrevocably waives (until the earlier of the Termination Date and the
Release Date) the exercise of, on behalf of itself and its successors and
assigns (including any surety), any and all rights at law or in equity to
subrogation, to reimbursement, to exoneration, to contribution, to
indemnification, to set off or to any other rights that could accrue to a surety
against a principal, to a guarantor against a

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    
      principal,
to a guarantor against a maker or obligor, to an accommodation party against the
party accommodated, to a holder or transferee against a maker, or to the holder
of any claim against any Person, and which Guarantor may have or hereafter
acquire against any Credit Party in connection with or as a result of
Guarantor’s execution, delivery and/or performance of this Guaranty, or any
other documents to which Guarantor is a party or otherwise;
and

    

     

    (b)           acknowledges
and agrees (i) that this waiver is intended to benefit Agent and Lenders and
shall not limit or otherwise effect Guarantor’s liability hereunder or the
enforceability of this Guaranty, and (ii) that Agent, Lenders and their
respective successors and assigns are intended third party beneficiaries of the
waivers and agreements set forth in this Section 2.8 and their
rights under this Section 2.8 shall
survive payment in full of the Guaranteed Obligations.

     

    2.9           Election of
Remedies.   If Agent may, under applicable law, proceed to
realize benefits under any of the Loan Documents giving Agent and Lenders a Lien
upon any Collateral owned by any Credit Party, either by judicial foreclosure or
by non-judicial sale or enforcement, Agent may, at its sole option, determine
which of such remedies or rights it may pursue without affecting any of such
rights and remedies under this Guaranty.  If, in the exercise of any
of its rights and remedies, Agent shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Credit Party,
whether because of any applicable laws pertaining to “election of remedies” or
the like, Guarantor hereby consents to such action by Agent and waives any claim
based upon such action, even if such action by Agent shall result in a full or
partial loss of any rights of subrogation which Guarantor might otherwise have
had but for such action by Agent.  Any election of remedies which
results in the denial or impairment of the right of Agent to seek a deficiency
judgment against any Credit Party shall not impair Guarantor’s obligation to pay
the full amount of the Guaranteed Obligations.  In the event Agent
shall bid at any foreclosure or trustee’s sale or at any private sale permitted
by law or the Loan Documents, Agent may bid all or less than the amount of the
Guaranteed Obligations and the amount of such bid need not be paid by Agent but
shall be credited against the Guaranteed Obligations.  Except as
prohibited by applicable law, the amount of the successful bid at any such sale
shall be conclusively deemed to be the fair market value of the collateral and
the difference between such bid amount and the remaining balance of the
Guaranteed Obligations shall be conclusively deemed to be the amount of the
Guaranteed Obligations guaranteed under this Guaranty, notwithstanding that any
present or future law or court decision or ruling may have the effect of
reducing the amount of any deficiency claim to which Agent and Lenders might
otherwise be entitled but for such bidding at any such sale.

     

    2.10           Funds
Transfers.  If Guarantor shall engage in any transaction as a
result of which Borrower is required to make a mandatory prepayment with respect
to the Guaranteed Obligations under the terms of Section 1.3(b)(v) the Credit
Agreement, Guarantor shall distribute to, or make a contribution to the capital
of, the Borrower an amount equal to the mandatory prepayment required under the
terms of the Credit Agreement.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    3.           DELIVERIES.

     

    In a form
satisfactory to Agent, Guarantor shall deliver to Agent, reasonably concurrently
with the execution of this Guaranty, the Loan Documents and other instruments,
certificates and documents as are required to be delivered by Guarantor to Agent
under the Credit Agreement.

     

    4.           REPRESENTATIONS AND
WARRANTIES.

     

    To induce
Lenders to make the Loans and incur Letter of Credit Obligations under the
Credit Agreement, Guarantor makes the following representations and warranties
to Agent and each Lender, each of which is made as of the Closing Date, and each
and all of which shall survive the execution and delivery of this
Guaranty:

     

    4.1           Corporate Existence;
Compliance with Law.  Guarantor (i) is a corporation, limited
liability company, general partnership or limited partnership, as the case may
be, duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or organization; (ii) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to be so qualified would not result in exposure to
losses or liabilities which, alone or in the aggregate, could reasonably be
expected to have a Material Adverse Effect; (iii) has the requisite power and
authority and the legal right to own, pledge, mortgage or otherwise encumber and
operate its properties, to lease the property it operates under lease and to
conduct its business as now conducted or proposed to be conducted; (iv) has all
material licenses, permits, consents or approvals from or by, and has made all
material filings with, and has given all notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (v) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (vi) is in compliance
with all applicable provisions of law and regulation, except where the failure
to comply, alone or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.

     

    4.2           Intentionally
omitted.

     

    4.3           Corporate Power;
Authorization; Enforceable Guaranteed
Obligations.  The execution, delivery and performance of this
Guaranty and all instruments and documents to be delivered by Guarantor
hereunder and under the Credit Agreement (i) are within Guarantor’s power; (ii)
have been duly authorized by all necessary corporate, limited liability company,
general partnership or limited partnership action; (iii) do not contravene any
provision of Guarantor’s charter, by-laws, or partnership or operating agreement
as applicable; (iv) do not violate any law or regulation, or any order or decree
of any court or Governmental Authority; (v) do not conflict with or result in
the breach or termination of, constitute a default under or accelerate or permit
the acceleration of any performance required by, any indenture, mortgage, deed
of trust, Theatre Lease or other material lease, material agreement or other
material instrument to which Guarantor is a party or by which Guarantor or any
of its property is bound; (vi) do not result in the creation or imposition of
any Lien upon any of the property of Guarantor; and (vii) do not require the
consent or approval of any Governmental Authority or any other

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    Person,
except those referred to in Section 2.1(c) of the
Credit Agreement, all of which have been duly obtained, made or complied with
prior to the Closing Date.  On or prior to the Closing Date, this
Guaranty shall have been duly executed and delivered, and each shall then
constitute a legal, valid and binding obligation of Guarantor, enforceable
against Guarantor in accordance with its terms, except as enforceability may be
limited by (i) bankruptcy, insolvency, fraudulent conveyances, reorganization or
similar laws relating to or affecting the enforcement of creditors’ rights
generally, and (ii) general equitable principles (whether considered in a
proceeding in equity or at law).

     

    5.           FURTHER
ASSURANCES.

     

    Guarantor
agrees, upon the written request of Agent, to execute and deliver to Agent or
such Lender, from time to time, any additional instruments or documents
reasonably considered necessary by Agent to cause this Guaranty to be, become or
remain valid and effective in accordance with its terms.

     

    6.           PAYMENTS FREE AND CLEAR OF
TAXES.

     

    All
payments required to be made by Guarantor hereunder shall be made to Agent and
Lenders free and clear of, and without deduction for, any and all present and
future Taxes.  If Guarantor shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder, (a) the sum payable shall
be increased as much as shall be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 6)
Agent or Lenders, as applicable, receive an amount equal to the sum they would
have received had no such deductions been made, (b) Guarantor shall make such
deductions, and (c) Guarantor shall pay the full amount deducted to the relevant
taxing or other authority in accordance with applicable law.  Within
thirty (30) days after the date of any payment of Taxes, Guarantor shall furnish
to Agent the original or a certified copy of a receipt evidencing payment
thereof.  Guarantor shall indemnify and, within ten (10) days of
demand therefor, pay Agent and each Lender for the full amount of Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section 6) paid
by Agent or such Lender, as appropriate, and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally asserted.

     

    7.           OTHER
TERMS.

     

    7.1           Entire
Agreement.  This Guaranty constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements relating to a guaranty of the loans and advances under the Loan
Documents and/or the Guaranteed Obligations.

     

    7.2           Headings.  The
headings in this Guaranty are for convenience of reference only and are not part
of the substance of this Guaranty.

     

    7.3           Severability.  Whenever
possible, each provision of this Guaranty shall be interpreted in such a manner
to be effective and valid under applicable law, but if any provision of this
Guaranty shall be prohibited by or invalid under applicable law, such provision
shall be

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    ineffective
to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this
Guaranty.

     

    7.4           Notices.  Whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other party, or whenever any of the parties desires to
give or serve upon another any such communication with respect to this Guaranty,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be addressed to the party to be
notified as follows:

     

    (a)           If
to Agent, at:

     

    General
Electric Capital Corporation

    2325
Lakeview Parkway, Suite 700

    Alpharetta,
GA  30004

    Attention:
Consolidated Amusement Theatres, Inc. Account Manager

    Electronic
Transmission Address:

    Telecopier
No:  678-624-7903

    Telephone
No.:  678-624-7900

     

    with
copies to:

     

    King
& Spalding LLP

    1185
Avenue of the Americas

    New York,
New York 10036

    Attention:  Angela
L. Batterson, Esq.

    Telecopier
No.: 212-556-2106

    Telephone
No.: 212-556-2222

     

    and

     

    General
Electric Capital Corporation

    2325
Lakeview Parkway, Suite 700

    Alpharetta,
GA 30004

    Attention:  Corporate
Counsel-Media, Communications and Entertainment

    Telecopier
No.:  (678) 624-7902

    Telephone
No.:  (678) 624-7947

    

    (b)           If
to any Lender, at the address of such Lender specified in the Credit Agreement
or any Assignment Agreement.

     

    (c)           If
to Guarantor, at the address of such Guarantor specified on Schedule I
hereto.

     

    or at
such other address as may be substituted by notice given as herein
provided.  The giving of any notice required hereunder may be waived
in writing by the party entitled to receive such notice.  Every
notice, demand, request, consent, approval, declaration or other communication
hereunder shall be deemed to have been validly served, given or delivered (i)
upon the earlier of

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    actual
receipt and five (5) Business Days after the same shall have been deposited with
the United States mail, registered or certified mail, return receipt requested,
with proper postage prepaid, (ii) upon transmission, when sent by telecopy or
other similar facsimile transmission (with such telecopy or facsimile promptly
confirmed by delivery of a copy by personal delivery or United States mail as
otherwise provided in this Section 7.4), (iii)
one (1) Business Day after deposit with a reputable overnight carrier with all
charges prepaid, or (iv) when delivered, if hand-delivered by
messenger.

    

    7.5           Successors and
Assigns.  This Guaranty and all obligations of Guarantor
hereunder shall be binding upon the successors and assigns of Guarantor
(including a debtor-in-possession on behalf of Guarantor) and shall, together
with the rights and remedies of Agent, for itself and for the benefit of
Lenders, hereunder, inure to the benefit of Agent and Lenders, all future
holders of any instrument evidencing any of the Obligations and their respective
successors and assigns.  No sales of participations, other sales,
assignments, transfers or other dispositions of any agreement governing or
instrument evidencing the Obligations or any portion thereof or interest therein
shall in any manner affect the rights of Agent and Lenders
hereunder.  Guarantor may not assign, sell, hypothecate or otherwise
transfer any interest in or obligation under this Guaranty.

     

    7.6           No Waiver; Cumulative
Remedies; Amendments.  Neither Agent nor any Lender shall by
any act, delay, omission or otherwise be deemed to have waived any of its rights
or remedies hereunder, and no waiver shall be valid unless in writing, signed by
Agent and then only to the extent therein set forth.  A waiver by
Agent, for itself and the ratable benefit of Lenders, of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which Agent would otherwise have had on any future
occasion.  No failure to exercise nor any delay in exercising on the
part of Agent or any Lender, any right, power or privilege hereunder, shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or future exercise
thereof or the exercise of any other right, power or privilege.  The
rights and remedies hereunder provided are cumulative and may be exercised
singly or concurrently, and are not exclusive of any rights and remedies
provided by law.  None of the terms or provisions of this Guaranty may
be waived, altered, modified, supplemented or amended except by an instrument in
writing, duly executed by Agent and Guarantor.

     

    7.7           Termination.  This
Guaranty is a continuing guaranty and shall remain in full force and effect
until the earlier of (a) the Termination Date, or (b) the date upon which
Borrower and its Subsidiaries on a consolidated basis shall have a Leverage
Ratio on the last day of any Fiscal Quarter and for the 12-month period then
ended of less than or equal to 2.75:1.00 (the “Release
Date”).  Upon payment and performance in full of the Guaranteed
Obligations, or the occurrence of the Release Date or the Termination Date,
Agent shall deliver to Guarantor such documents as Guarantor may reasonably
request to evidence such termination.

     

    7.8           Counterparts.  This
Guaranty may be executed in any number of counterparts, each of which shall
collectively and separately constitute one and the same agreement.

     

    [signature page
follows]

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

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

     

    READING
INTERNATIONAL, INC.

    

    

    By:           /s/ Andrzej
Matyczynski                                                                

    Name:      Andrzej
Matyczynski

    Title:        CFO

    

    

    

    GENERAL
ELECTRIC CAPITAL

    CORPORATION,  as
Agent

    

    

    By:           /s/ General Electric Capital
Corporation

    Its Duly Authorized
Signatory

    

    
      
         

      

      
        10

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"}]]