Document:

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                                                                   EXHIBIT 10.45

                                    GUARANTY

      This Guaranty, made as of this 28th day of July, 2000, by Michael R.
Forman and James J. Cotter (collectively, the "Guarantors") in favor of Citadel
Cinemas, Inc. (including its successors and assigns, "Citadel Cinemas"), and
Citadel Realty, Inc. (including its successors and assigns, "FeeSub" and,
together with Citadel Cinemas, the "Beneficiaries").

                              W I T N E S S E T H:

      WHEREAS, Sutton Hill Capital, L.L.C. ("SHC") is acquiring certain
interests in various theatre properties in New York City, including the option
(the "Sutton/Murray Hill Fee Option") to acquire the fee interests in and to two
of such properties (the "Sutton & Murray Hill Fees");

      WHEREAS, Citadel Cinemas is subleasing from SHC certain of the theatre
properties, including the improvements and equipment located therein or thereon
(collectively, the "Leased Interests"), pursuant to the provisions of a certain
Lease Agreement, dated as of the date hereof (the "Lease Agreement"), between
SHC, as lessor, and Citadel Cinemas, as lessee;

      WHEREAS, included in the Lease Agreement is an option in favor of Citadel
Cinemas (the "Lease Option") to acquire from SHC the Leased Interests;

      WHEREAS, pursuant to an agreement, dated the date hereof (the "Fee Option
Agreement"), between FeeSub and SHC, SHC is granting to FeeSub the right (the
"Fee Option Right"), subject to the exercise by Citadel Cinemas of the Lease
Option and payment by Citadel Cinemas of the exercise price under the Lease
Option, to require SHC to exercise the Sutton/Murray Hill Fee Option and direct
the delivery of title to the Sutton & Murray Hill Fees to or as directed by
FeeSub, upon payment by FeeSub or its designee of the exercise price under the
Sutton/Murray Hill Fee Option;

      WHEREAS, the Guarantors are indirect owners of the membership interest in
SHC and will benefit by the execution and delivery by SHC of the Lease Agreement
and the Fee Option Agreement;

      WHEREAS, it is the intention of the Guarantors in executing and delivering
this Guaranty to (i) assure to Citadel Cinemas, if it exercises the Lease
Option, that it will acquire title to the Leased Interests subject only to the
Permitted Liens (as hereinafter defined) and (ii) assure to FeeSub, if it
exercises the Fee Option Right, that no Insolvency or Liquidation Proceeding (as
hereinafter defined) will cause to be stayed or otherwise impede such exercise
and that, when and if it acquires title to the Sutton & Murray Hill Fees, there
will be no Liens arising from any action of SHC or its Affiliates, except for
Liens existing on the date hereof listed on Exhibit A attached hereto or liens
resulting from a Tenant Event;

      NOW, THEREFORE, the Guarantors hereby agree, for the benefit of the
Beneficiaries, as follows:

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      1. Unless otherwise defined herein, terms that are defined in the Lease
Agreement and used herein are so used as so defined. In addition, the following
terms shall have the following meanings:

      "Bad Faith Determination" with respect to a Beneficiary Proceeding means
the entry of one or more Final Orders (i) (a) dismissing such Beneficiary
Proceeding if (I) neither Nationwide nor SHC consented to such Beneficiary
Proceeding and at least one of Nationwide or SHC opposed such Beneficiary
Proceeding and (II) such Final Order is based on a finding by the court that (A)
in the case of a Beneficiary Proceeding under the Federal bankruptcy laws, the
criteria in 11 U.S.C. ss.303(b) are not satisfied or (B) in any other case, the
relevant statutory criteria for bringing such Beneficiary Proceeding are not
satisfied and (b) finding that the Beneficiary or Beneficiaries or Affiliate of
any Beneficiary which is a Petitioning Creditor in such Beneficiary Proceeding,
at the time such petition or other action was filed or taken, initiated such
Beneficiary Proceeding in "bad faith" (or words of similar import) or (ii)
granting judgment against a Petitioning Creditor therein which is a Beneficiary
under 11 U.S.C. ss.303(i)(2) (as any such statutory section referenced herein
may hereafter be modified, restated or amended).

      "Beneficiaries" has the meaning set forth in the recitals hereto.

      "Beneficiary Proceeding" means an Insolvency or Liquidation Proceeding in
which a Beneficiary or any Affiliate of a Beneficiary is a Petitioning Creditor.

      "Certificate of Title" means a title search or report provided by a title
insurance company or agency licensed to do business in the state where the
Leased Interests are located.

      "Citadel Cinemas" means Citadel Cinemas, Inc., a Nevada corporation, and
its successors and assigns.

      "Covered Asset" means any material component of real estate comprising the
Leased Interests and the Sutton & Murray Hill Fees, if to be transferred as
herein described.

      "Cure" (including grammatical alternatives thereof) means (i) the removal
of the Lien or Title Impairment in question, either of record or by arrangement
for the title company insuring the interest of the transferee to "omit" the Lien
or Title Impairment in question, or (ii) the causing of the title company
involved to insure against collection or to insure against loss or forfeiture of
title with respect to the Lien or Title Impairment in question, provided, that,
in the case of a Cure described in clause (ii) hereof, the title company must
agree to "omit" such Lien or Title Impairment in question in connection with any
mortgagee title insurance policy with respect to any third party financing.

      "Designated Payments" means the amounts (if any) required to be paid to
satisfy the principal amount of the Nationwide Indebtedness.

      "Fee Option Agreement" has the meaning set forth in the recitals hereto.

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      "Fee Option Right" has the meaning set forth in the recitals hereto.

      "FeeSub" means Citadel Realty, Inc., a Nevada corporation, and its
successors and assigns.

      "Final Order" means a judgment by a court of competent jurisdiction, not
subject to further appeal or with respect to which the time to appeal has
lapsed.

      "Insolvency or Liquidation Proceeding" means:

            (i) the entry of a decree or order for relief in respect of SHC by a
      court having jurisdiction in the premises, or the appointment of a
      receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
      similar official) of SHC or of any substantial part of its property, or
      ordering the winding up or liquidation of its affairs, in an involuntary
      case under the Federal bankruptcy laws, as now or hereafter constituted,
      or any other applicable Federal or state bankruptcy, insolvency or other
      similar law; or the commencement against SHC of an involuntary case under
      the Federal bankruptcy laws, as now or hereafter constituted, or any other
      applicable Federal or state bankruptcy, insolvency or other similar law;
      or

            (ii) the commencement by SHC of a voluntary case under the Federal
      bankruptcy laws, as now or hereafter constituted, or any other applicable
      Federal or state bankruptcy, insolvency or other similar law, or the
      consent by it to the entry of an order for relief in an involuntary case
      under any such law or the consent by it to the appointment of or taking
      possession by a receiver, liquidator, assignee, custodian, trustee,
      sequestrator (or other similar official) of SHC or of any substantial part
      of its property, or the making by it of a general assignment for the
      benefit of creditors, or the taking of any action in furtherance of any of
      the foregoing;

provided, however, that, if any of the events described in clauses (i) and (ii)
of this definition shall arise as a result of a Tenant Event, then such an event
shall not constitute an Insolvency or Liquidation Proceeding.

      "Lease Agreement" has the meaning set forth in the recitals hereto.

      "Leased Interests" has the meaning set forth in the recitals hereto.

      "Lease Option" has the meaning set forth in the recitals hereto.

      "Nationwide Accrual" means interest on the principal of the Nationwide
Indebtedness (i) relating to any period in respect of which either (A) Citadel
Cinemas has failed to pay any amount of Basic Rent or Additional Rent (each as
defined in the Lease Agreement) or (B) as a result of the failure by Citadel
Cinemas to perform any of its obligations under the Lease Agreement or any of
the Other Lease Documents, SHC has applied Basic Rent received by it to perform
such obligations, in each case under clause (A) or (B) limited to the lesser of
(x) the amount which Citadel Cinemas has failed to so pay or the amount which
SHC has so applied, as the case may be, and (y) the amount of

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such interest, or (ii) which remains unpaid and accruing on such principal (or,
but for the filing of a Beneficiary Proceeding, that would have accrued on such
principal) during the pendency of a Beneficiary Proceeding if there is a Bad
Faith Determination with respect to such Beneficiary Proceeding.

      "Permitted Liens" means the following Liens and other matters affecting
the title of any Leased Interest: (i) Liens securing the payment of taxes,
assessments and other governmental charges or levies which are not yet
delinquent to the extent not the obligations of the Tenant pursuant to the Lease
Agreement; (ii) Legal Requirements, zoning and planning restrictions,
subdivision and platting restrictions, easements, rights-of-way, licenses,
reservations, covenants, conditions, waivers, or restrictions on the use of any
Covered Asset which exist on the date hereof and either are set forth in the
title insurance policy delivered to Citadel Cinemas in connection with the Lease
Agreement or are not disclosed therein; (iii) encroachments or irregularities of
title none of which materially impairs the current use or value of the affected
Theatre Property; (iv) the Liens created pursuant to the Nationwide Agreement,
provided that the amount secured by such Liens shall not exceed the sum of (A)
$11,300,000 or the principal amount of the Nationwide Indebtedness, whichever is
less, and (B) the Nationwide Accrual, and provided, further, that the principal
amount of the Nationwide Indebtedness secured by such Liens is paid with the
applicable Designated Payment; (v) leases and licenses in effect with respect to
any Theatre Property which are permitted by the Lease Agreement; (vi) mechanics'
and materialmen's liens or Liens not disclosed in the title insurance policy and
existing on the date hereof; (vii) exceptions to the title of any such Covered
Asset as set forth in the title insurance policy delivered to Citadel Cinemas
hereunder or in connection with the Lease Agreement; (viii) existing Liens
listed on Exhibit A attached hereto; (ix) any Lien which is or results from a
Tenant Event or is approved by the Tenant for purposes of the Lease Agreement;
(x) Liens, including Legal Requirements, zoning and planning restrictions,
subdivision and platting restrictions and any of the matters affecting title,
which result from acts of Governmental Authority from and after the date hereof
not caused by or resulting from a Landlord Act; and (xi) such other or
additional matters as may be approved in writing by Citadel Cinemas in its sole
discretion.

      "Petitioning Creditor" with respect to any Insolvency or Liquidation
Proceeding means the creditors that filed the petition to commence or otherwise
commenced such Insolvency or Liquidation Proceeding.

      "Prepared" means that the Person in question is ready, willing and able to
consummate the transaction in question, recognizing that such Person shall be
Prepared to close even if such Person must satisfy typical closing conditions
for a financing to provide a portion of the price so long as such Person can
show its ability to comply with such conditions in the ordinary course.

      "SHC" means Sutton Hill Capital, L.L.C., a New York limited liability
company and its successors and assigns, including without limitation any trustee
in bankruptcy, receiver, debtor-in-possession, or other person or entity
controlling any of the foregoing.

      "Sutton & Murray Hill Fees" has the meaning set forth in the recitals
hereto.

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      "Sutton/Murray Hill Fee Option" has the meaning set forth in the recitals
hereto.

      "Title Impairment" means a claim, charge or other matter affecting title
to an Asset or interest therein, other than a Lien, which materially impairs the
intended use or value of the Asset (or interest therein) in question excluding,
however, the matters affecting title as of the date hereof, the Site Leases and
the terms and conditions thereof and matters which constitute Tenant Events.

      2.(a) (i) If, at the time title to the Leased Interests is to be conveyed
by SHC to or as directed by Citadel Cinemas by reason of the timely and proper
exercise of the Lease Option (or if, at the time notice of such exercise would
be required to be given, such timely and proper exercise is stayed by an
Insolvency or Liquidation Proceeding), title to any Covered Asset shall be
subject to a Lien other than a Permitted Lien or to a Title Impairment and
provided the Beneficiaries are able to provide to the Guarantors evidence
reasonably satisfactory to the Guarantors that the respective Beneficiaries are
then Prepared to close, then the Guarantors shall be obligated to pay, bond, or
otherwise Cure such Lien and to Cure such Title Impairment.

            (ii) Not less than ten days prior to the date of the anticipated
transfer described in paragraph (i) of this Section 2, Citadel Cinemas shall
deliver to the Guarantors a Certificate of Title with respect to the asset or
assets to be transferred indicating whether or not any Liens encumbering such
title constitute Liens other than Permitted Liens and whether there exist any
Title Impairments, together with evidence that Citadel Cinemas is then Prepared
to close as aforesaid. At the Closing (as such term is defined in the Lease
Agreement), the Guarantors shall have the right to instruct the transferee to
pay, to or as the Guarantors may direct, any excess of the cash amount paid by
Citadel Cinemas as part of the Acquisition Cost (such cash amount having given
effect to any offsets to which Citadel Cinemas is entitled) over that amount
necessary to satisfy Designated Payments.

      (b)(i) If, at the time title to the Sutton & Murray Hill Fees is to be
conveyed to or as directed by FeeSub by reason of the timely and proper exercise
of the Fee Option Right (or if, at the time notice of such exercise would be
required to be given, such timely and proper exercise is stayed by an Insolvency
or Liquidation Proceeding), title to any part of the Sutton & Murray Hill Fees
shall be subject to a Lien or to a Title Impairment, in either case arising
solely from or relating to any action or omission by SHC or an Affiliate which
is not a Tenant Event and provided the Beneficiaries are able to provide to the
Guarantors evidence reasonably satisfactory to the Guarantors that the
respective Beneficiaries are then Prepared to close, then the Guarantors shall
be obligated to pay, bond, or otherwise Cure such Lien and to Cure such Title
Impairment.

            (ii) Not less than ten days prior to the date of the anticipated
transfer described in paragraph (b)(i) of this Section 2, FeeSub shall deliver
to the Guarantors a Certificate of Title with respect to the asset or assets to
be transferred indicating whether or not any Liens encumbering such title
constitute such Liens other than Permitted Liens and whether there exist any
such Title Impairments, each as described in paragraph (b)(i) of this Section 2,
together with evidence of FeeSub's ability to close as aforesaid.

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      (c) If by reason of the occurrence of an Insolvency or Liquidation
Proceeding, (i) SHC shall fail to convey or cause to be conveyed title to any of
the Leased Interests, at the time provided in the Lease Agreement, (ii) Citadel
Cinemas shall be stayed from exercising the Lease Option on a timely basis,
(iii) SHC shall fail to cause the Sutton/Murray Hill Fee Option to be exercised
on a timely basis or to cause the Sutton & Murray Hill Fees to be delivered to
or as directed by FeeSub at the time provided in the Sutton/Murray Hill Fee
Option and the Fee Option Agreement, or (iv) FeeSub shall be stayed from
exercising the Fee Option Right on a timely basis, then, provided all conditions
to such transfer or exercise, as the case may be, which then should have been
satisfied by Citadel Cinemas or FeeSub, as the case may be, have been satisfied
(excluding, however, those conditions which could not have been satisfied by
reason of such Insolvency or Liquidation Proceeding), the Guarantors shall cause
such Insolvency or Liquidation Proceeding to be terminated or otherwise to be
resolved as promptly as practicable and in a manner such that, or take such
other actions as may be necessary so that, the applicable transaction can be
consummated in accordance with its terms. Any such action may include causing
SHC to apply to any liability or claim, or distribute to its member for
application to any liability or claim of, funds available or to be available to
SHC in connection with consummation of the applicable transactions or otherwise,
after payment of any obligations owing by it to either Beneficiary or any
Affiliates of either Beneficiary. All times referred to in this Section 2(c)
shall be determined without regard to any additional time that may be permitted
or authorized under any statute or order entered in or applicable to such
Insolvency or Liquidation Proceeding.

      (d) Any provisions of subsection 2(c) or Section 3 hereof to the contrary
notwithstanding, if an Insolvency or Liquidation Proceeding is a Beneficiary
Proceeding, then (i) each of the Beneficiaries shall defer claims or actions
hereunder against either of the Guarantors and the exercise of its rights
pursuant to said Section 3 until the earliest of (A) the issuance of a Final
Order in connection with such Insolvency or Liquidation Proceeding precluding,
or with the result of precluding, the consummation of the Closing with respect
to the transfer of the Leased Interest or the Sutton & Murray Hill Fees, as the
case may be, or otherwise declaring as null and void or otherwise unenforceable
the Lease Option or the Fee Option Agreement (assuming in any such instance that
the applicable Beneficiary had properly exercised its rights pursuant to the
Lease Option or the Fee Option Agreement, as applicable, or had been stayed from
so doing by reason of the filing of the Insolvency or Liquidation Proceeding),
(B) the rejection of the Lease Option or the Fee Option Agreement as an
executory obligation of SHC, (C) the issuance of a Final Order inconsistent with
a Bad Faith Determination, (D) 30 days after such Insolvency or Liquidation
Proceeding is dismissed, (E) such Insolvency or Liquidation Proceeding is
converted, (F) a plan is confirmed in any such Insolvency or Liquidation
Proceeding (unless such plan provides for the consummation of the Closing of the
transfer of the Leased Interest or the Sutton & Murray Hill Fees, or both, as
the case may be), and (G) the termination of the term of the Lease Agreement
(after giving effect to any extension of the Lease Term, so long as the periods
to exercise and consummate the transactions contemplated by the Lease Option and
Fee Option Agreement have also been extended for the same period) and (ii) any
statute of limitations or similar defense applicable to such deferred claims or
actions against the Guarantors hereunder is deemed tolled during such Insolvency
or Liquidation Proceeding; provided, however, that, if a Bad Faith Determination
is issued with respect to such

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Beneficiary Proceeding, then the statute of limitations and similar defenses
will not be deemed tolled.

      3. In the event the Guarantors do not timely perform any of the above
obligations, any Beneficiary may, after written demand to perform has been
served upon the Guarantors and the Guarantors have been given 15 days to
perform, perform said obligations at the Guarantors' sole cost and expense;
provided, however, that no Beneficiary shall exercise its option to perform said
obligations for up to 90 days if within said 15-day period the Guarantors have
commenced to perform the obligation or obligations in question and thereafter to
the reasonable satisfaction of such Beneficiary continue to perform such
obligation or obligations with reasonable diligence; and provided, further, that
such 15-day period, and the preceding proviso, shall not apply if such
Beneficiary reasonably concludes that delay in exercising its right hereunder
would materially and adversely affect the ability of the parties to consummate
the closing on a timely basis in accordance with the Lease Agreement or the
closing of the transfer of the Sutton & Murray Hill Fees in accordance with the
Fee Option Agreement or the Sutton/Murray Hill Fee Option. The Beneficiaries'
exercise of or failure to exercise their rights under this Section 3 shall not
relieve the Guarantors of their obligations under this Agreement. The Guarantors
shall, upon written demand from a Beneficiary, reimburse such Beneficiary for
all costs, including reasonable attorney's fees and out-of-pocket expenses, and
all liabilities incurred by such Beneficiary by reason of the foregoing, with
interest thereon at the Reimbursement Rate.

      4. The obligations, covenants, agreements and duties of the Guarantors
under this Agreement shall in no way be affected or impaired by reason of the
occurrence from time to time of any of the following with respect to the Lease
Agreement, the Fee Option Agreement or this Agreement, even though notice may
not have been given to, or received from, the Guarantors or the further consent
of either Guarantor thereto may not have been obtained: (a) any amendment,
modification, waiver or termination of or supplement to the Lease Agreement, or
the Fee Option Agreement or any agreement, instrument or document executed or
delivered pursuant thereto or in connection therewith (collectively the
"Documents"); (b) the validity or enforceability of any of the Documents; or (c)
any exercise or non-exercise of any right, power or remedy under or in respect
of any of the Documents or arising at law.

      5. Except as expressly set forth herein, the agreements of each of the
Guarantors set forth in this Agreement constitute the absolute, present,
primary, continuing, irrevocable, unlimited and unconditional obligations of the
Guarantors in accordance with the terms hereof, without limitation, and are not
conditioned or contingent upon any effort to attempt to seek payment or
performance from the other Guarantor or any other person or entity (whether or
not pursuant to this Agreement) or upon any other condition or contingency;
provided, however, that nothing herein shall obligate the Guarantors hereunder
if Citadel Cinemas or FeeSub, as applicable, shall fail to satisfy the
conditions for proper and timely exercise of the Lease Option or the Fee Option
Right, as applicable (excepting only those conditions which cannot reasonably be
satisfied by reason of an Insolvency or Liquidation Proceeding). The obligations
of the Guarantors set forth herein constitute full recourse obligations of each
Guarantor enforceable against him to the full extent of all his assets and
properties, notwithstanding any provision in the Lease Agreement or Fee Option
Agreement

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limiting the liability of any Person. Without limiting the foregoing, it is
agreed and understood that repeated and successive demands for performance
hereunder may be made and this Agreement shall remain in full force and effect
and shall apply to each and every subsequent event to which it applies by its
terms. The Guarantors assume full responsibility for being and staying informed
as to all facts and circumstances bearing upon the risk of nonperformance of the
obligations guaranteed hereunder, and the Guarantors agree that the
Beneficiaries shall have no obligation to advise the Guarantors or any of them
of information known to the Beneficiaries regarding such condition or any other
circumstance.

      6. The Guarantors irrevocably waive (i) any and every right they may have
to injunctive relief, (ii) any and every right they may have to have any suit,
action or proceeding brought by the Beneficiaries on this Agreement consolidated
with any other or separate suit, action or proceeding, and (iii) the right, in
such suit, action, proceeding or counterclaim, to interpose any counterclaims
(except to the extent that such counterclaims are compulsory and may not be
brought in a separate action) or setoffs of any kind or description.

      7 Except as to applicable statutes of limitation, no delay on the part of
any Beneficiary in exercising any power or right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any power or right
hereunder or the failure to exercise same in any instance preclude other or
further exercise thereof or the exercise of any other power or right; nor shall
any Beneficiary be liable for exercising or failing to exercise any such power
or right. The rights and remedies hereunder expressly specified are cumulative
and not exclusive of any rights or remedies which any Beneficiary may or will
otherwise have.

      8 The obligations of the Guarantors hereunder shall be joint and several
obligations.

      9 In case any Document or obligation thereunder shall be terminated or
rejected by any trustee, receiver or liquidating agent of SHC or any of its
properties in any Insolvency or Liquidation Proceeding, the Guarantors'
obligations hereunder shall continue to the same extent as if such Document had
not been so rejected or terminated. The Guarantors agree that this Agreement
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment or performance by SHC is rescinded or must otherwise be
returned as a result of any Insolvency or Liquidation Proceeding.

      10 The obligations of the Guarantors hereunder shall not be subject to any
counterclaim, setoff, deduction or defense (other than payment, performance or
affirmative discharge, release or termination of this Agreement by the
Beneficiaries in writing) based upon any claim the Guarantors or SHC may have
against any Beneficiary (except for claims that may not be asserted in a
separate action or proceeding) or the Guarantors may have against SHC or any
other Person and shall remain in full force and effect without regard to, and
shall not be released, discharged, reduced or in any way affected by, any
circumstance or condition (whether or not the Guarantors shall have any
knowledge or notice thereof) whatsoever which might constitute a legal or
equitable discharge or defense; provided, however, that the Guarantors shall not
be precluded from asserting, whether by way of defense or otherwise, the failure
by Citadel Cinemas or FeeSub, as applicable, to satisfy the conditions to the
proper and timely exercise of the Lease Option or the Fee Option Right, as the
case

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may be (excepting those conditions which could not be so satisfied by reason of
an Insolvency or Liquidation Proceeding).

      11 Except as specifically provided herein, the Guarantors unconditionally
waive: (a) notice of any of the matters referred to in Section 4 or 10 hereof;
(b) all notices which may be required by statute, rule of law or otherwise to
preserve any rights against the Guarantors hereunder, including notice of the
acceptance of this Agreement; (c) except as otherwise specifically set forth
herein, any requirement for the enforcement, assertion or exercise of any right,
remedy, power or privilege under or in respect of any Document, including
diligence in collection or protection of or realization upon any obligations or
any part thereof or any collateral therefor; (d) any requirement of diligence;
(e) any requirement to mitigate the damages resulting from a default under any
Document, except that this shall not relieve the Beneficiaries of any such
obligation; or (f) the occurrence of every other condition precedent to which
the Guarantors or SHC may otherwise be entitled, except as provided in any
Document.

      12 Any Beneficiary may, at its election, exercise any right or remedy it
might have against SHC or any security held by such Beneficiary, including the
right to foreclose upon any such security by judicial or nonjudicial sale,
without affecting or impairing in any way the liability of the Guarantors
hereunder, and the Guarantors waive any defense arising out of the absence,
impairment or loss of any right of reimbursement, contribution or subrogation or
any other right or remedy of the Guarantors against SHC or any such security,
whether resulting from such election by a Beneficiary or otherwise. The
Guarantors waive any defense arising by reason of any disability or other
defense of SHC (which may nevertheless be asserted in a separate action or
proceeding against the Beneficiaries or any other party), or by reason of the
cessation from any cause whatsoever of the liability, either in whole or in
part, of SHC to a Beneficiary (other than as a result of payment, performance or
affirmative discharge, release or termination of this Agreement by the
Beneficiaries).

      13 The Guarantor understands that the Beneficiaries' exercise of certain
rights and remedies contained in the Documents may affect or eliminate the
Guarantors' rights of subrogation against SHC and that the Guarantors may
therefore incur partially or totally nonreimbursable liability hereunder;
nevertheless, the Guarantors hereby authorize and empower the Beneficiaries to
exercise, in its or their sole discretion, any rights and remedies, or any
combination thereof, which may then be available, it being the purpose and
intent of each Guarantor that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances.

      14 Each Guarantor represents and warrants to the Beneficiaries that, as to
himself, the following statements are true and correct in all material respects
as of the date hereof:

            (a) Guarantor has full power and authority to execute, deliver and
      perform its obligations under this Agreement. No consent of any other
      person, and no authorization of, notice to, or other act by or in respect
      of the Guarantor by or with any Governmental Authority, is required in
      connection with the execution, delivery, performance, validity or
      enforceability of this Agreement. This Agreement has been duly executed
      and delivered by the Guarantor and constitutes a legal, valid and binding
      obligation of the Guarantor,

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      enforceable against the Guarantor in accordance with its terms, except as
      the enforceability of this Agreement may be limited by the effect of any
      applicable bankruptcy, insolvency, reorganization, moratorium, or similar
      laws affecting creditors' rights generally and by general principles of
      equity.

            (b) Neither the execution, delivery or performance by the Guarantor
      of this Agreement will violate any provision or any existing Law
      applicable to the Guarantor or any order or decree applicable to the
      Guarantor of any court, arbitrator or governmental authority, or of any
      mortgage, indenture, lease, contract or other agreement or undertaking to
      which the Guarantor is a party or by which the Guarantor or any of his
      properties or assets is bound, or will result in the creation or
      imposition of any lien, charge, encumbrance or security interest on any of
      the properties or assets of the Guarantor pursuant to the provisions of
      any of the foregoing.

            (c) There is no action, suit, proceeding or investigation at law or
      in equity by or before any court, governmental body, agency, commission or
      other tribunal now pending or threatened in writing against or affecting
      the Guarantor or any property or rights of the Guarantor or questioning
      the enforceability of this Agreement which, if adversely determined, could
      reasonably be expected to have a material adverse effect on (a) the
      business, assets, properties, revenues, financial condition, operations or
      prospects of the Guarantor or (b) the ability of the Guarantor to perform
      its obligations under this Agreement in a timely manner.

      15 In no event shall the Guarantors have any liability to any Beneficiary
hereunder for any lost or prospective profits or any other special, punitive,
exemplary, consequential, incidental or indirect losses or damages (in tort,
contract or otherwise). The parties further agree that no claim for direct
damages by a party hereunder shall include any amounts for which such party has
been reimbursed or is entitled to be reimbursed under any insurance required to
be obtained under the Lease Agreement or acquired in connection therewith.

      16 Except as provided in the last sentence of Section 9 hereof, this
Agreement, and the obligations of the Guarantors hereunder, shall expire,
terminate and be of no further force and effect on and after the earlier of the
end of the Initial Term or the date of the Closing provided SHC complies with
its obligations in respect thereof.

      17 The Guarantor will not exercise any rights which it may acquire by way
of subrogation hereunder, by any payment made hereunder or otherwise, until all
of the obligations of SHC to the Beneficiaries under the Documents have been
indefeasibly paid in full in cash and performed in full. If any amount shall be
paid to the Guarantor on account of such subrogation rights at any time when all
of such obligations shall not have been paid in full in cash, such amount shall
be held in trust for the benefit of the Beneficiaries and shall forthwith be
paid as provided herein to be credited and applied upon such obligations, in
accordance with the terms of the Documents.

                                       10
<PAGE>

      18 All covenants and agreements made herein and in statements or
certificates delivered pursuant hereto shall survive any investigation or
inspection made by or on behalf of the Beneficiaries and shall continue in full
force and effect until all of the obligations of the Guarantors under this
Agreement shall be fully performed in accordance with the terms hereof.

      19 THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW
YORK. THE GUARANTORS AGREE THAT, TO THE MAXIMUM EXTENT PERMITTED BY THE LAWS OF
THE STATE OF NEW YORK, THIS AGREEMENT, AND THE RIGHTS AND DUTIES OF THE
GUARANTORS HEREUNDER, SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (INCLUDING, WITHOUT LIMITATION, SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW) IN ALL RESPECTS, IN
RESPECT OF ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.

      20 EACH GUARANTOR HEREBY IRREVOCABLY SUBMITS, FOR HIMSELF AND HIS
PROPERTIES, TO THE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK AND THE SUPREME COURT OF THE STATE OF NEW YORK IN
THE COUNTY OF NEW YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND
RELATED TO OR IN CONNECTION WITH THIS AGREEMENT, AND TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH GUARANTOR HEREBY WAIVES AND AGREES NOT TO ASSERT BY WAY OF
MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY
CLAIM THAT HE IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT, THAT
THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT THE
VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT OR
THE SUBJECT MATTER HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURT. THIS
SUBMISSION TO JURISDICTION IS NONEXCLUSIVE AND DOES NOT PRECLUDE ANY BENEFICIARY
FROM OBTAINING JURISDICTION OVER THE GUARANTORS IN ANY COURT OTHERWISE HAVING
JURISDICTION.

      21 TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH GUARANTOR AGREES NOT TO
SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT
BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO
GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EACH GUARANTOR AGREES THAT SERVICE OF
PROCESS MAY BE MADE UPON IT BY CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR
NOTICES SET FORTH IN THIS AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW
YORK.

      EACH GUARANTOR AND EACH BENEFICIARY EXPRESSLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM

                                       11
<PAGE>

RELATED TO THIS AGREEMENT. THE GUARANTORS AND BENEFICIARIES ACKNOWLEDGE THAT THE
PROVISIONS OF SECTIONS 19, 20 AND 21 HAVE BEEN BARGAINED FOR AND THAT THEY HAVE
BEEN REPRESENTED BY COUNSEL IN CONNECTION THEREWITH.

      22 All notices or other communications required or permitted to be given
hereunder shall be deemed to have been satisfactorily given or served for all
purposes when sent by United States registered mail, return receipt requested,
postage prepaid as follows:

                           If to the Guarantors:

                           Michael R. Forman
                           120 North Robertson Boulevard
                           Los Angeles, California 90048

                           James J. Cotter
                           120 North Robertson Boulevard
                           Los Angeles, California 90048

      With a copy of all notices under this Section 22 to a Guarantor to be
simultaneously sent to the following addresses:

                           Howard Peskoe, Esq.
                           Whitman Breed Abbott & Morgan LLP
                           200 Park Avenue
                           New York, New York 10166

If to Citadel Cinemas:

                           Citadel Cinemas, Inc.
                           550 South Hope Street
                           Suite 1825
                           Los Angeles, CA 90071
                           Facsimile: (213) 239-0548
                           Attention: President

                                       12
<PAGE>

If to FeeSub:

                           Citadel Realty, Inc.
                           550 South Hope Street
                           Suite 1825
                           Los Angeles, CA 90071
                           Facsimile: (213) 239-0548
                           Attention: President

With a copy of all notices under this Section 22 to a Guarantor to be
simultaneously sent to the following addresses:

                           Michael Margulis, Esq.
                           Duane, Morris & Heckscher LLP
                           380 Lexington Avenue
                           New York, New York 10168

or to such other address with respect to any party as such party or holder shall
notify the other in writing. All such notices shall be deemed given three (3)
Business Days after delivery to the United States Post Office registry clerk.

      23 This Agreement shall bind the Guarantors and their respective
successors and assigns and shall inure to the benefit of the Beneficiaries and
their respective successors and assigns (including, without limitation, (a) any
successor to Citadel Cinemas as tenant under the Lease Agreement, and (b) any
person to whom FeeSub shall assign the Fee Option Right).

      24 This instrument represents the entire agreement between the parties
with respect to the subject matter hereof and may not be modified or amended
except by a writing duly executed by the party sought to be charged.

      25 Neither this Agreement nor any uncertainty or ambiguity herein shall be
construed against any particular party, whether under any rule of construction
or otherwise. On the contrary, this Agreement has been reviewed by each of the
parties and their counsel and shall be construed and interpreted according to
the ordinary meaning of the words so used as to fairly accomplish the purposes
and intentions of all parties hereto.

      26 In the event that a Beneficiary for any reason whatsoever shall deem it
necessary to refer this Agreement to an attorney for the enforcement thereof or
of any rights hereunder, by suit or otherwise and prevails therein, there shall
be immediately due from the Guarantors to such Beneficiary, in addition to the
sums due and payable hereunder, reasonable attorneys' fees and disbursements,
together with all costs and expenses of such action, which costs, expenses, fees
and disbursement shall be deemed part of the obligation hereunder. If such
Beneficiary initiates such legal action and does not prevail in such action, the
Guarantors shall be entitled to recover from such Beneficiary all of such costs
incurred by Guarantors in connection therewith.

                                       13
<PAGE>

      27 In the event that any provision of this Agreement or the application
thereof to a Guarantor or any circumstance in any jurisdiction governing this
Agreement shall, to any extent, be invalid or unenforceable under any applicable
statute, regulation, or rule of law, then such provision shall be deemed
inoperative to the extent that it may conflict therewith and shall be deemed
modified to conform to such statute, regulation or rule of law, and the
remainder of this Agreement and the application of any such invalid or
unenforceable provision to parties, jurisdictions or circumstances other than to
whom or to which it is held invalid or unenforceable, shall not be affected
thereby nor shall same affect the validity or enforceability of any other
provision of this Agreement.

      28 This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original and it shall not be necessary in making proof
of this Agreement to produce or account for more than one such counterpart.

                                       14
<PAGE>

      IN WITNESS WHEREOF, this Agreement was duly executed and delivered by the
undersigned as of the 28th day of July, 2000.

                                            CITADEL CINEMAS, INC.

                                            By:     /s/ Andrzej Matyczynski
                                                --------------------------------
                                                Name: Andrzej Matyczynski
                                                Title: Chief Financial Officer

                                            CITADEL REALTY, INC.

                                            By:     /s/ Andrzej Matyczynski
                                                --------------------------------
                                                Name: Andrzej Matyczynski
                                                Title: Chief Financial Officer

                                            GUARANTORS:

                                                    /s/ James J. Cotter
                                            ------------------------------------
                                                    James J. Cotter

                                                    /s/ Michael R. Forman
                                            ------------------------------------
                                                    Michael R. Forman

                                       15<PAGE>
                                                                   EXHIBIT 10.46

                              AMENDED AND RESTATED
                      AGREEMENT WITH RESPECT TO FEE OPTION

      The Agreement originally made on the 28th day of July, 2000, by and
between Sutton Hill Capital, L.L.C., a New York limited liability company,
having an office at 120 North Robertson Boulevard, Los Angeles, California 90048
("Option Holder"), and Citadel Realty, Inc., a Nevada corporation, having an
office at 550 South Hope Street, Suite 1825, Los Angeles, CA 90071 ("Optionee")
(as amended, modified and supplemented from time to time, the "Agreement") is
hereby amended and restated as of this 29th day of January, 2002.

                                    WHEREAS:

      (A) Option Holder has entered into a certain Lease Agreement ("Lease
Agreement"), dated as of July 28, 2000, with Citadel Cinemas, Inc., as tenant
(the "Tenant"), pursuant to which the Tenant has leased from the Option Holder
certain Theatre Properties, including the Sutton Theatre and Murray Hill Theatre
as amended and restated as of January 29, 2002;

      (B) Option Holder holds an option ("Fee Option") to purchase the land
described on Exhibit "A", being the land underlying the Sutton Theatre (the
"Underlying Fee");

      (C) Pursuant to the provisions of the Lease Agreement, the Tenant has a
Purchase Option to acquire the Purchased Assets;

      (D) Option Holder has agreed that, if the Tenant exercises the Purchase
Option pursuant to the Lease Agreement and closes thereunder in accordance with
the terms thereof and if Optionee complies with the terms hereof, Optionee shall
have an option to purchase the Underlying Fee in connection with and at the time
of the closing of the Purchase Option pursuant to the Lease Agreement; and

      (E) Certain capitalized terms are defined in Section 8 hereof.

      NOW, THEREFORE, in consideration of the premises and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:

      1. Purchase Option; Fee Price. Subject to the satisfaction of the
Conditions Precedent (as defined in Section 4 hereof), Optionee shall have the
option ("Optionee Fee Option") to acquire the Underlying Fee by funding the
Purchase Price of the Fee Option.

                                       1
<PAGE>

      2. Procedure for Exercise of Purchase Option. (a) To exercise the Optionee
Fee Option, Optionee shall give written notice ("Notice") to Option Holder by
January 5, 2010 but no earlier than the date on which the Tenant gives notice to
the Option Holder pursuant to the Lease Agreement of the exercise by Tenant of
the Purchase Option thereunder.

      (b) Upon the receipt by Option Holder of the Notice, Option Holder shall
provide notice to the owner of the Underlying Fee of the exercise by Option
Holder of the Fee Option.

      3. Closing. (a) The closing of the acquisition of the Underlying Fee shall
occur simultaneously with the closing on the Purchased Assets pursuant to the
Purchase Option (the "Closing"). At the Closing, Option Holder shall direct the
transferor of the Underlying Fee to deliver title thereto directly to Optionee;
provided, however, at the election of Optionee, exercised by written notice to
Option Holder given not less than 5 days prior to the anticipated date of the
Closing, Option Holder shall direct the transferor of the Underlying Fee to
deliver title to the Underlying Fee as the Optionee shall direct in such notice.

      (b) At the Closing, title to the Underlying Fee will be transferred in
accordance with the Fee Option. The transfer of the Underlying Fee shall be on
an as-is, non-installment sale basis, without warranty by, or recourse to, the
Option Holder, except that such title shall be free of any Liens resulting from
the Option Holder's act or omission; provided, however, that nothing herein
shall obligate the Option Holder to cause any such Lien to be removed or cured
if arising from a Tenant Event.

      (c) The Optionee shall pay the Purchase Price of the Fee Option at the
Closing by wire transfer or certified funds, as the Option Holder shall
determine in its sole discretion by notice to Optionee no less than two days
prior to the anticipated date of the Closing.

      4. Conditions Precedents to Optionee's Rights. (A) OPTIONEE RECOGNIZES,
ACKNOWLEDGES AND AGREES THAT, SUBJECT TO PARAGRAPH 4(B), IF THE FOLLOWING TWO
CONDITIONS ARE NOT STRICTLY ADHERED TO TIMELY (THE "CONDITIONS PRECEDENT"),
OPTIONEE SHALL HAVE NO RIGHT TO ACQUIRE THE UNDERLYING FEE IF THE TENANT UNDER
THE LEASE AGREEMENT: (1) DOES NOT EXERCISE ITS PURCHASE OPTION THEREUNDER OR
DOES NOT HAVE THE RIGHT TO EXERCISE THE PURCHASE OPTION BY REASON OF THE
OCCURRENCE OF A DEFAULT UNDER SECTION 18(F) OF THE LEASE AGREEMENT OR (2)
EXERCISES ITS PURCHASE OPTION, AND IS NOT IN DEFAULT UNDER SECTION 18(F) OF THE
LEASE AGREEMENT BUT FAILS TO SATISFY ITS OBLIGATIONS TO CLOSE IN ACCORDANCE WITH
THE TERMS AND PROVISIONS OF THE LEASE AGREEMENT.

      (b) If, at any time during the Term of the Lease Agreement an Affiliate of
the Optionee shall succeed to the interest of the Option Holder under the Lease
Agreement, then the Conditions Precedent shall be deemed of no further force and
effect.

                                       2
<PAGE>

      5. Relationship of Optionee to Tenant. Optionee recognizes and
acknowledges that, while it is now an Affiliate of the Tenant, there is no
assurance or requirement that it will in fact be an Affiliate of the Tenant at
the time the Optionee Fee Option is exercised and, even if it is then not an
Affiliate of the Tenant, Optionee does not have an independent right to exercise
the Optionee Fee Option unless and until, as described in paragraph 4(a) hereof
(but subject to paragraph 4(b) hereof), the Tenant (whether or not then an
Affiliate of Optionee) duly and properly exercises the Purchase Option and, as
aforesaid, consummates the transaction and closes.

      6. SS 1031 "Like-Kind" Exchange. Option Holder hereby notifies Optionee
that, if Optionee exercises the Optionee Fee Option in accordance with this
Agreement, the Underlying Fee may be sold pursuant to the like kind exchange
provisions of the Code. Optionee agrees to execute at the Closing all reasonable
and customary documents necessary to accomplish the sale under the like kind
exchange rules as prepared by Option Holder's attorney, provided, however, that
Optionee shall not be required to execute any document that would or might
require Optionee to incur any cost or expense; require Optionee to take title to
any property other than the Underlying Fee (except for the Purchased Assets); or
require Optionee to incur any liability, whether current, accrued or contingent.
Option Holder shall be responsible for all costs of such documentation and
guarantees that no terms or conditions in this Agreement shall change due to the
execution of the like kind exchange documents, nor shall Closing be delayed
thereby. As aforesaid, Optionee will not be required to purchase any property
(other than the Underlying Fee and Purchased Assets), but may be required to pay
the Purchase Price (or some portion thereof, as the Option Holder may direct
prior to the Closing) into an escrow fund established for the purpose of the
like kind exchange. Option Holder shall defend, indemnify and save Optionee
harmless from any loss, expense, claims or damages in connection with Optionee
executing any such documents. The provisions of this Section 6 shall survive
Closing.

      7. Notice. Any notices, consents, or other communications between Option
Holder and Optionee may be oral or in writing, so long as the Option Holder
remains Sutton Hill Capital, L.L.C. or an Affiliate thereof and the Optionee
remains an Affiliate or a direct or indirect Subsidiary of Reading
International, Inc.; provided, however, that, if this Agreement specifically
provides that a notice, consent or communication must be in writing, then such
provision controls. Subject to the preceding sentence, all notices, offers,
acceptances, approvals, waivers, requests, demands and other communications
hereunder or under any other instrument, certificate or other document delivered
in connection with the transactions described herein shall be in writing, shall
be addressed as provided below and shall be considered as properly given (a) if
delivered in person, (b) if sent by express courier service (including, without
limitation, Federal Express, Emery, DHL, Airborne Express, and other similar
express delivery services), (c) in the event overnight delivery services are not
readily available, if mailed by United States Postal Service, postage prepaid,
registered or certified with return receipt requested, or (d) if sent by
telecopy and confirmed; provided, that in the case of a notice by telecopy, the
sender shall in addition confirm such notice by writing sent in the manner
specified in clause (a), (b) or (c) of this Section 7. All notices shall be
effective upon receipt by the addressee; provided, however, that if any notice
is tendered to an addressee and the delivery thereof is refused by such
addressee, such notice shall be effective upon such tender. For the purposes of

                                       3
<PAGE>

notice, the addresses of the parties shall be as set forth below; provided,
however, that any party shall have the right to change its address for notice
hereunder to any other location by giving written notice to the other party in
the manner set forth herein. The initial addresses of the parties hereto are as
follows:

                  If to the Option Holder:
                  Sutton Hill Capital, L.L.C.
                  120 North Robertson Boulevard
                  Los Angeles, California 90048
                  Attention: Legal Department
                  Telecopy: (310) 652-6490

With a copy of all notices under this Section 7 to be simultaneously given,
delivered or served to Ira Levin, at the following address:

                  Pacific Theatres
                  120 North Robertson Boulevard
                  Los Angeles, CA 90048
                  Telecopier: (310) 652-6490
                  Attention: Ira Levin

                  If to the Optionee:
                  Citadel Realty, Inc.
                  550 South Hope Street
                  Suite 1825
                  Los Angeles, California 90071;
                  Attention: President
                  Telecopy: (213) 235-2229

With a copy of all notices under this Section 7 to be simultaneously given,
delivered or served to:

                  Reading International, Inc.
                  550 South Hope Street
                  Suite 1825
                  Los Angeles, California 90071;
                  Attention: Chief Financial Officer
                  Telecopy: (213) 235-2229

                                       4
<PAGE>

      and to S. Craig Tompkins. at the following address:

                  Reading International, Inc.
                  550 South Hope Street
                  Suite 1825
                  Los Angeles, California 90071;
                  Telecopy: (213) 235-2229

      8. Certain Definitions. As used herein the following terms shall have the
respective meanings as set forth below:

      (a) "Affiliate" of any Person means any other Person controlling,
controlled by or under direct or indirect common control with such Person. For
the purposes of this definition, "control," when used with respect to any
specified Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have the meanings correlative to the foregoing. Notwithstanding the
foregoing: (i) the Option Holder and its Affiliates (the "Option Holder's
Affiliates") shall not include Reading International, Inc. and its direct or
indirect Subsidiaries; (ii) Reading International, Inc. and its direct or
indirect Subsidiaries (including the Tenant), on the one hand, and the Option
Holder and the Option Holder's Affiliates, on the other hand, shall not be
considered Affiliates of each other; and (iii) Nationwide and its Affiliates
shall not be considered an Affiliate of any of Reading International, Inc. or
any of its direct or indirect Subsidiaries or the Tenant or any of its
Affiliates.

      (b) "[Intentionally Omitted]

      (c) "Contract" shall mean any contract, agreement, indenture, loan or
credit agreement, receivable sales or financing agreement, capital note,
mortgage, security agreement, bond or note (or any guarantee of any of the
foregoing).

      (d) "Code" means the Internal Revenue Code of 1986, as heretofore and
hereafter amended from time to time, or any successor code as in effect from
time to time.

      (e) "Indemnity Guarantee" means the guarantee, dated as of July 28, 2000,
entered into by and among the Messrs. Forman and Cotter, Citadel Cinemas, Inc.
and Optionee.

      (f) "Insolvency or Liquidation Proceeding" means:

            (i) The entry of a decree or order for relief in respect of SHC by a
      court having jurisdiction in the premises, or the appointment of a
      receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
      similar official) of SHC or of any substantial part of its property, or
      ordering the winding up or liquidation of its affairs, in an involuntary
      case under the Federal bankruptcy laws, as now or hereafter constituted,
      or any other applicable Federal

                                       5
<PAGE>

      or state bankruptcy, insolvency or other similar law; or the commencement
      against SHC of an involuntary case under the Federal bankruptcy laws, as
      now or hereafter constituted, or any other applicable Federal or state
      bankruptcy, insolvency or other similar law; or

            (ii) The commencement by SHC of a voluntary case under the Federal
      bankruptcy laws, as now or hereafter constituted, or any other applicable
      Federal or state bankruptcy, insolvency or other similar law, or the
      consent by it to the entry of an order for relief in an involuntary case
      under any such law or the consent by it to the appointment of or taking
      possession by a receiver, liquidator, assignee, custodian, trustee,
      sequestrator (or other similar official) of SHC or of any substantial part
      of its property, or the making by it of a general assignment for the
      benefit of creditors, or the taking of any action in furtherance of any of
      the foregoing;

provided, however, that, if any of the events described in clauses (i) and (ii)
of this definition shall arise as a result of a Tenant Event, then such an event
shall not constitute an Insolvency or Liquidation Proceeding.

      (g) "Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, encumbrance, lien (statutory or other), or other security agreement
of any kind or nature whatsoever (including, without limitation, any conditional
sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction in respect of any of the foregoing).

      (h) "Nationwide" means Nationwide Theatres Corp., a California
corporation, and its successors.

      (i) "Nationwide Agreement" means the agreements, documents and instruments
evidencing or securing the Nationwide Indebtedness, as any thereof may be
amended, restated, modified or supplemented from time to time.

      (j) "Nationwide Indebtedness" means any and all indebtedness, obligations
and liabilities of Option Holder from time to time outstanding under the
Nationwide Agreement, whether now existing or hereafter arising, fixed or
contingent, due or not due, liquidated or unliquidated, determined or
undetermined, and whether for principal, premium, interest, fees, indemnities,
costs, expenses or otherwise.

      (k) "Person" means any individual, corporation, partnership, limited
liability company, private limited company, joint venture, association,
joint-stock company, trust, unincorporated organization of government or any
agency or political subdivision thereof.

                                       6
<PAGE>

      (l) "Pledge Agreement" means the agreement, dated as of July 28, 2000,
entered into between Sutton Hill Associates, as pledgor, and Reading
International, Inc., as pledgee, as amended and restated as of January 29, 2002
as the same may be amended, restated, modified or supplemented from time to
time.

      (m) "Purchased Assets" has the meaning set forth in paragraph (a) of
Section 12 of the Lease Agreement.

      (n) "Purchase Option" means Tenant's right to purchase the Purchased
Assets as set forth in paragraph (a) of Section 12 of the Lease Agreement.

      (o) "Purchase Price" means four million dollars ($4,000,000).

      (p) "Subsidiary" of any Person shall mean any corporation, partnership,
limited liability company, joint venture, trust or estate of which (or in which)
more than 50% of

            (i) the outstanding capital stock having voting power to elect a
      majority of the board of directors of such corporation (irrespective of
      whether at the time capital stock of any other class or classes of such
      corporation shall or might have voting power upon the occurrence of any
      contingency),

            (ii) the interest in the capital or profits of such partnership or
      joint venture, or

            (iii) the beneficial interest of such trust or estate

is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's Subsidiaries.

      (q) "Tenant Event" shall mean an event arising from or attributable to an
action or inaction of, or a condition or event relating to, Tenant or any of its
Affiliates (or the agents, officers, directors or employees of the Tenant or any
such Affiliate), or initiated by Tenant or any of its Affiliates (or any such
Person), unless such action, inaction, or event was or resulted from an action
by Tenant or any of its Affiliates to enforce any rights or remedies under the
Lease Agreement or any other Contract or Applicable Law so long as such action
so to enforce was initiated in good faith.

      (r) "Underlying Lease" shall mean that certain Ground Lease dated as of
August 16, 1985, between Sutcin Holding Corp., as landlord, and Sutton Hill
Associates, as tenant, covering the premises at 205 East 57th Street, New York,
New York 10022, containing the Sutton Theatre, as amended by the First Addendum
to Ground Lease, dated as of January 1, 1992, between Sutcin Holding Corp. and
Sutton Hill Associates, Second Addendum to Ground Lease, dated as of January 1,
1995, between Sutcin Holding Corp. and Sutton Hill Associates, Third Addendum to
Ground Lease, dated as of July 1, 1996, between Nationwide
(successor-in-interest to Sutcin Holding Corp.) and Sutton Hill Associates, and
Fourth Addendum to Ground Lease, dated as of July 28, 2000,

                                       7
<PAGE>

between Nationwide and Sutton Hill Associates, and Fifth Addendum to Ground
Lease dated as of January 29, 2002, between Nationwide and Sutton Hill
Associates.

      9. Representations and Warranties

      (a) Option Holder hereby represents and warrants to Optionee that as of
the date hereof:

            (i) The signatory for Option Holder hereto is in all respects
      authorized and qualified to enter into this Agreement on behalf of Option
      Holder and Option Holder has authorized the assumption of the obligations
      described herein.

            (ii) Option Holder has previously delivered a true and correct copy
      of the option agreement to which Option Holder has been granted the Fee
      Option. The Fee Option is in full force and effect. To the knowledge of
      Option Holder, there is no default under the Fee Option.

      (b) Optionee hereby represents and warrants to Option Holder that as of
the date hereof:

            (i) The signatory for Optionee hereto is in all respects authorized
      and qualified to enter into this Agreement on behalf of Optionee and
      Optionee has authorized the assumption of the obligations described
      herein.

      10. Indemnities.

      (a) Option Holder shall and hereby does indemnify, defend, protect and
hold harmless Optionee, any successor or successors and any Affiliate of the
foregoing parties, and their respective officers, directors, incorporators,
shareholders, partners, members, employees, agents and servants from and against
all liabilities, losses, obligations, claims, penalties, causes of action,
suits, demands, damages, costs and expenses (including, without limitation,
reasonable attorneys' and accountants' fees and expenses) or judgments of any
nature arising out of or otherwise in respect of a breach of any (i)
representation or (ii) covenant or agreement made by Option Holder hereunder.

      (b) Notwithstanding anything to the contrary contained herein, all claims
for indemnification under paragraph (a) of this Section 10 shall be made in
accordance with the procedures set forth in Section 11 of the Lease, shall, in
the case of claims under clause (i) of such paragraph (a), be included in
computing claims for indemnification subject to the limitations set forth in
paragraph (c) of Section 11 of the Lease Agreement, which limits claims brought
under clause (ii) of paragraph (b) of Section 11 of the Lease Agreement, and
shall be subject to the other provisions of paragraph (h) of said Section 11.

      (c) Optionee shall and hereby does indemnify, defend, protect and hold
harmless Option Holder, any successor or successors and any Affiliate of the
foregoing parties, and their respective officers, directors, incorporators,
shareholders, partners, members, employees, agents and servants from and against
all liabilities, losses, obligations, claims, penalties, causes of action,
suits, demands,

                                       8
<PAGE>

damages, costs and expenses (including, without limitation, reasonable
attorneys' and accountants' fees and expenses) or judgments of any nature
arising out of or otherwise in respect of (A) the use or occupancy of the
Underlying Fee or any Element (as such term is defined in the Lease Agreement)
of any thereof by the Optionee or any Person claiming under the Optionee; (B)
any activity, work, or thing done or permitted by the Optionee in or about any
of the Underlying Fee; (C) any acts, omissions, or negligence of the Optionee,
or any Person claiming under the Optionee, or the employees, agents,
contractors, invitees or visitors of the Optionee or any such Person; (D) any
breach, violation, or nonperformance by the Optionee, or any Person claiming
under the Optionee, or the employees, agents, contractors, invitees, or visitors
of the Optionee or any such Person, of any term, covenant or provision of this
Agreement, the Underlying Lease to the extent the performance of obligations
thereunder has become an obligation of the Optionee pursuant to the terms hereof
or any law, ordinance or governmental requirement of any kind; or (E) any injury
or damage to the Person, property, or business of the Optionee, its employees,
agents, contractors, invitees, visitors or any other Person entering upon any of
the Underlying Fee, as to all of the foregoing to the extent arising from and
after the Closing.

                                       9
<PAGE>

      11. Miscellaneous

      (a) All agreements, indemnities, representations and warranties shall
survive the expiration or other termination hereof.

      (b) This Agreement and the instruments, documents or agreements referred
to herein constitute the entire agreement between the parties relating to the
subject mater hereof and no representations, warranties, promises, guarantees or
agreements, oral or written, express or implied, have been made by any party
hereto with respect to this Agreement.

      (c) This Agreement may not be amended, modified or terminated, nor may any
obligation hereunder be waived orally, and no such amendment, modification,
termination or waiver shall be effective for any purpose unless it is in
writing, signed by the party against whom enforcement thereof is sought. The
consent or approval by the Option Holder to or of any act by the Optionee
requiring the Option Holder's consent or approval shall not be deemed to have
been waived by the Option Holder unless such waiver is in writing signed by the
Option Holder waiving such covenant or condition.

      (d) The captions in this Agreement are for convenience of reference only,
and shall not be deemed to affect the meaning or construction of any of the
provisions hereof. Any provision of this Agreement which is prohibited by law or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and the parties hereto shall negotiate in good
faith appropriate modifications to reflect such changes as may be required by
law, and, as nearly as possible, to produce the same economic, financial and tax
effects as the provision which is prohibited or unenforceable; and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, the Option Holder and the Optionee hereby waive any
provision of law which renders any provision hereof prohibited or unenforceable
in any respect.

      (e) THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN THE STATE OF NEW
YORK. THE OPTION HOLDER AND THE OPTIONEE AGREE THAT, TO THE MAXIMUM EXTENT
PERMITTED BY THE LAW OF THE STATE OF NEW YORK, THIS AGREEMENT, AND THE RIGHTS
AND DUTIES OF THE OPTION HOLDER AND THE OPTIONEE HEREUNDER, SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
IN ALL RESPECTS, INCLUDING, WITHOUT LIMITATION, IN RESPECT OF ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE. EACH OF THE OPTION HOLDER AND THE
OPTIONEE HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND THE SUPREME COURT OF THE STATE OF NEW YORK IN THE COUNTY OF NEW
YORK IN ANY ACTION, SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN
CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, AND TO
THE

                                       10
<PAGE>

EXTENT PERMITTED BY APPLICABLE LAW, HEREBY WAIVES AND AGREES NOT TO ASSERT BY
WAY OF MOTION, AS A DEFENSE OR OTHERWISE IN ANY SUCH SUIT, ACTION OR PROCEEDING,
ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF SUCH COURT,
THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM, THAT
THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS IMPROPER, OR THAT THIS AGREEMENT
OR ANY DOCUMENT OR ANY INSTRUMENT REFERRED TO HEREIN OR THE SUBJECT MATTER
HEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURT. THIS SUBMISSION TO JURISDICTION
IS NONEXCLUSIVE AND DOES NOT PRECLUDE EITHER PARTY FROM OBTAINING JURISDICTION
OVER THE OTHER IN ANY COURT OTHERWISE HAVING JURISDICTION. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE OPTION HOLDER AND THE OPTIONEE AGREES
NOT TO SEEK AND HEREBY WAIVES THE RIGHT TO ANY REVIEW OF THE JUDGMENT OF ANY
SUCH COURT BY ANY COURT OF ANY OTHER NATION OR JURISDICTION WHICH MAY BE CALLED
UPON TO GRANT AN ENFORCEMENT OF SUCH JUDGMENT. EACH OF THE OPTION HOLDER AND THE
OPTIONEE AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY CERTIFIED OR
REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS AGREEMENT OR ANY
METHOD AUTHORIZED BY THE LAWS OF NEW YORK.

      (f) THE OPTION HOLDER AND THE OPTIONEE HEREBY WAIVE THEIR RESPECTIVE RIGHT
TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, COUNTERCLAIM OR CROSS COMPLAINT
IN ANY ACTION, PROCEEDING AND/OR HEARING BROUGHT BY EITHER THE OPTION HOLDER
AGAINST THE OPTIONEE OR THE OPTIONEE AGAINST THE OPTION HOLDER ON ANY MATTER
WHATSOEVER ARISING OUT OF, OR IN ANY WAY CONNECTED WITH THIS AGREEMENT, OR THE
RELATIONSHIP OF THE OPTION HOLDER AND THE OPTIONEE, OR ANY CLAIM OF INJURY OR
DAMAGE, OR THE ENFORCEMENT OF ANY REMEDY UNDER ANY LAW, STATUTE OR REGULATION,
EMERGENCY OR OTHERWISE, NOW OR HEREAFTER IN EFFECT. THE OPTION HOLDER AND THE
OPTIONEE ACKNOWLEDGE THAT THE PROVISIONS OF THIS PARAGRAPH (F) OF SECTION 11
HAVE BEEN BARGAINED FOR AND THAT THEY HAVE BEEN REPRESENTED BY COUNSEL IN
CONNECTION THEREWITH.

      (g) This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.

      (h) One or more waivers of any covenant or condition by the Option Holder
shall not be construed as a waiver of a subsequent breach of the same covenant
or condition. The giving by the Option Holder of any consent or approval
hereunder (whether affirmatively or by inaction) shall not be deemed a waiver of
the requirement for Optionee to seek such consent or approval in the future

                                       11
<PAGE>

for the same or a dissimilar event. Each and every covenant contained herein
shall be deemed separate and independent and not dependent upon other provisions
of this Lease.

      (i) This Agreement has been prepared by the Option Holder and its
professional advisors and reviewed by the Optionee and its professional
advisors. The Option Holder, the Optionee and their separate advisors believe
that this Agreement is the product of all of their efforts, that it expresses
their agreement, and that it should not be interpreted in favor of either the
Option Holder or the Optionee or against the Option Holder or the Optionee
merely because of their efforts in preparing it.

      (j) This Agreement shall be binding on the parties hereto and their
respective successors and assigns but the foregoing shall not affect, alter or
limit the provisions of Section 5 hereof.

      (k) This Agreement shall expire and become unenforceable against Option
Holder if the Optionee Fee Option is not exercised on or before the earlier to
occur of (i) February 1, 2010 (subject to extension if the Optionee is precluded
from exercising by reason of an Insolvency or Liquidation Proceeding affecting
Option Holder and in such event is extended until the time when such exercise is
not longer so precluded and for five days thereafter) or (ii) the termination of
the Lease Agreement.

      (l) Except to the extent of and under the circumstances specifically
provided for in Section 5 of the Pledge Agreement and the Indemnity Guarantee,
no recourse hereunder or any other amount due under this Agreement, or for any
claim based thereon or otherwise in respect thereof or hereof, shall be had
against any direct or indirect partner or owner of the Option Holder or any
incorporator, partner, shareholder, officer, member, Affiliate or director, as
such, past, present or future, of any such direct or indirect partner. Nothing
contained in this paragraph (l) shall be construed to limit the exercise or
enforcement, in accordance with the terms of this Agreement and the other
documents referred to herein, of rights and remedies against the assets of the
limited liability company, or any other Person expressly undertaking in writing
obligations in connection with the transactions contemplated hereby.

                                       12
<PAGE>

      IN WITNESS WHEREOF, the Option Holder and the Optionee have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the day and year first above written.

         Option Holder:                Sutton Hill Capital, L.L.C., a New York
                                           limited liability company

                                         By:____________________________________
                                             Name: James J. Cotter
                                             Title: Operating Manager

         Optionee:                       Citadel Realty, Inc., a
                                           Nevada corporation

                                         By:____________________________________
                                             Name: Andrzej Matyczynski
                                             Title: Chief Financial Officer

                                       13
<PAGE>

                                   EXHIBIT "A"
                       Legal Description of Underlying Fee

                               The Sutton Theatre
                              205 East 57th Street
                                Block 1331, Lot 3
                             New York City, New York

                                       14

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