Document:

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                                                                   Exhibit 10.47

                          THEATER MANAGEMENT AGREEMENT

This theater management agreement (the "AGREEMENT") is entered into effective as
of the 1st day of January 2002, by and between Liberty Theaters, Inc., a New
York corporation ("OWNER"), and OBI, LLC. ("MANAGER") with reference to the
following facts:

      WHEREAS, Owner is in the business of owning and, through its subsidiaries
      (the "OPERATING SUBSIDIARIES"), operating Off-Broadway style live theaters
      in Manhattan and Chicago,

      WHEREAS, Manager is in the business of providing various executive
      management, booking and public relations services, and

      WHEREAS, Owner desires to retain Manager to perform such executive
      management, booking and public relations services for the benefit of the
      theaters owned by the Owner and operated by the Operating Subsidiaries,

the parties hereto, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, do hereby agree as follows:

1.    DEFINITIONS. The following terms have the meanings set forth below:

MANAGEMENT SERVICES means and includes the following services:

      (a) The executive management of each of the Theaters. The Theaters are
      currently managed by separate management companies owned by the Owner,
      which are responsible for the day-to-day operations of the Theaters and
      which employ all personnel used in connection with the operation of the
      Theaters, including, without limitation, ushers, maintenance employees,
      concession stand employees, and box office employees. Manager will be
      responsible for the executive supervision of these employees. A designee
      of the Manager, acceptable to the Owner, will serve at the pleasure of the
      Board of Directors of the respective Operating Subsidiaries, as the Chief
      Executive Officer of each of the Operating Subsidiaries, and at the
      pleasure of the Board of Directors of the Owner, as the President of the
      Owner. This individual (the "DESIGNATED OBI EXECUTIVE ") will receive no
      compensation or other employee benefits

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      for serving in such capacities, other than such compensation as he or she
      may receive from the Manager, and will not be deemed to be an employee of
      the Owner, or any of its subsidiaries, for any purpose. This individual
      will initially be Ms. Margaret Cotter.

      (b) The negotiation of terms with respect to and the recommendation to the
      Owner of productions for the Theaters and for the use of the Theaters for
      ancillary revenue generation purposes;

      (c) The publicity of the Theaters and the maintenance of appropriate
      community relations between the Theaters and their neighbors;

      (d) The oversight of the general condition and repair of the Theaters,
      including the making of recommendations to the Owner with respect to any
      needed maintenance and repair of the Theaters and, upon the direction of
      the Owner, the retention and oversight of appropriate persons to affect
      such maintenance and to make such repairs as may be so approved by the
      Owner;

      (e) The preparation, in conjunction with the Owner, of an annual operating
      budget for each of the Theaters; and

      (f) Such other duties as the parties may from time to time determine, and
      memorialize in a writing signed by both parties to this Agreement.

PRODUCTION OCCUPANCY PERIOD has the meaning set forth in clause 3.1(b), below.

SERVICE PACKAGE PERIOD has the meaning set forth in clause 3.1(a), below.

TERM. This Agreement will have an initial term of through and including December
31, 2003, and thereafter, unless earlier terminated pursuant to the provisions
of Section 4, will automatically renew for additional twelve month terms,
[unless notice to terminate is given by either party to the other not less than
six months prior to the expiration of the then existing term of such party's
determination not to renew this Agreement.]

THEATERS means the Minetta Lane, Orpheum, and Union Square Theaters located in
Manhattan and the Royal George Theater Complex in Chicago, and such additional
theaters as the parties may specify from time to time by amendment to this
agreement.

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THEATER CASH FLOW means the earnings before income taxes, depreciation and
amortization from any particular theater (or in the case of the Royal George,
from the entire theater complex), calculated in accordance with generally
accepted accounting principles, applied on a consistent basis, and before
deduction of the incentive fee applicable to that theater or theater complex.
Notwithstanding the above, in the case of any capital expenditures with respect
to any particular theatre made during the term of this Agreement, Theatre Cash
Flow will be determined after deduction of the cost of the depreciation of such
capital expenditure as calculated for book purposes in accordance with generally
accepted accounting principles consistently applied. Furthermore, Theater Cash
Flow for each Theater will also include all profits and losses made by the Owner
(or any one or more of its corporate affiliates) in its capacity as the
"producer" or "financier" of any play appearing in such Theater, calculated as
follows;

      -     First, 100% of cash flow paid to the Owner and/or such one or more
            affiliates will be applied against the Owner's investment in such
            play, until such investment has been fully recouped.

      -     Thereafter, 100% of cash flow paid to Owner and/or such one or more
            affiliates will be treated as Theater Cash Flow.

      -     In the event that the Owner and/or such one or more affiliates, at
            the time of the closing of the play, has not recouped its
            investment, such loss will be deducted from Theater Cash flow for
            the year in which such show closes.

2.    RETENTION OF MANAGER.

      2.1. Performance of Management Services: Owner hereby retains the Manager,
      as an independent contractor, to perform and Manager hereby covenants to
      perform, again as an independent contractor, the Management Services for
      the Theaters for the Term of this Agreement, pursuant to the terms and
      provisions set forth in this Agreement. Manager agrees, in performing the
      Management Services, to act in good faith in the best interests of the
      Owner as such interests are reasonably understood by the Manager, and to
      use the same degree of care and to exercise the same level of loyalty as
      would be required by an executive officer of a corporation organized under
      the laws of the State of Delaware.

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      2.2. Key Employees: It is acknowledged and agreed that Margaret Cotter is
      a Key Employees, and that Manager will make Ms. Cotter available to the
      Company on a full time basis and that Ms. Cotter will serve, at the
      pleasure of the Owner, as the Designated OBI Executive.

      2.3. Exclusivity: It is acknowledged and agreed that Manager will serve on
      an exclusive basis for the areas of Metropolitan New York and Chicago.
      Manager is free to represent other theater interests in other areas.
      However, in the event that Manager learns of any opportunities for the
      acquisition of live theaters in other areas, it will promptly advise the
      Owner of such fact. Further, Manager will keep Owner advised as to the
      identities of any other theaters for which it may from time be performing
      services. This provision will not be interpreted from preventing Manager,
      or its employees, from engaging in other aspects of the live theater
      business, including, by way of example, the production of plays.

      2.4. Confidentiality: Manager agrees that all information it obtains in
      the course of its performance of services under this Agreement and which
      is not already or at such time otherwise publicly available will be
      maintained in confidence by Manager and its employees to the same extent
      as though such information were the confidential information of the
      Manager.

      2.5. Participation in Productions: Except to the extent of its right to
      participate in Theater Cash Flow, as provided in this Agreement, neither
      the Manager, nor any of its personnel or affiliates, will make any
      investment in, or participate in the profits or in the cash flow or in any
      other benefits from any production or person utilizing the Theaters,
      without the prior written approval of the Owner.

      2.6. Bank Accounts: All revenues generated by the Theaters shall be
      deposited as directed by the Owner in bank accounts maintained in the name
      of and for the benefit of the Owner. The Operating Subsidiaries and
      Manager will be paid directly by the Owner. The Owner will have complete
      discretion over the signatories to such accounts.

      2.7. Nature of Relationship Between the Parties: The parties acknowledge
      and agree that the services being performed by Manager hereunder are those
      of an independent contractor, that the relationship between the parties is
      not that of a partnership or joint venture, and that the Manager shall not
      hold itself out as having any power or authority to

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      bind the Owner or any of the Operating Subsidiaries or any of the
      Theaters. All agreements pertaining to the use or occupancy of any of the
      Theaters or the provision of any services to or for the benefit of the
      Owner or any of the Theaters must be signed, and will only be valid if
      signed or otherwise authorized, by an executive officer designated by the
      Owner from time to time (the "Designated Owner Executive") or by another
      duly authorized officer of the Owner or the Operating Subsidiary, as the
      case may be. The Designated Owner Executive shall initially be James J.
      Cotter. Nothing in this Agreement shall be deemed to grant to the Manager
      any rights with respect to or interest in the Theater or in any contract
      or agreement relating to the Theater, and nothing in this Agreement shall
      be in any way binding upon any successor in interest to any one or more of
      the Theaters.

3.    COMPENSATION. In consideration of the performance of the Management
Services, the Owner will pay to the Manager the following amounts:

      3.1.  Orpheum Theater:

            (a) A weekly pay package of $900 per week, to be adjusted on a pro
            rata basis for any partial week, for each week, or portion thereof,
            to the extent that the production leasing the Theater pays a weekly
            service package to the Theater sufficient to cover (i) such amount
            plus (ii) wages and benefits paid to persons employed at the Theater
            with respect to such period (the "SERVICE PACKAGE PERIOD").

            (b) A monthly pay package of $1,578 per month, to be adjusted on a
            pro rata basis for any partial month, for each month, or portion
            thereof, that a production is in occupancy of the Theater, including
            the load-in, rehearsal, performance and load-out periods (the
            "PRODUCTION OCCUPANCY PERIOD").

            (c) An incentive fee equal to 20% of the Theater Cash Flow, if any,
            after a breakpoint of $208,686.

      3.2.  Union Square Theater:

            (a) A weekly package of $900 per week, to be adjusted on a pro rata
            basis for any partial week, during the Service Package Period to the
            extent that the production leasing the Theater pays a weekly

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            service package to the Theater sufficient to cover (i) such amount
            plus (ii) wages and benefits paid to persons employed at the Theater
            with respect to such period.

            (b) A monthly package of $2,186 per week, to be adjusted on a pro
            rata basis for any partial month, during the Production Occupancy
            Period.

            (c) An incentive fee equal to 20% of the Theater Cash Flow, after a
            breakpoint of $307,144.

      3.3.  Minetta Lane Theater:

            (a) A weekly package of $900 per week, to be adjusted on a pro rata
            basis for any partial week, during the Service Package Period to the
            extent that the production leasing the Theater pays a weekly service
            package to the Theater sufficient to cover (i) such amount plus (ii)
            wages and benefits paid to persons employed at the Theater with
            respect to such period.

            (b) A monthly package of $2,294 per month, to be adjusted on a pro
            rata basis for any partial month, during the Production Occupancy
            Period.

            (c) An incentive fee equal to 20% of the Theater Cash Flow, after a
            breakpoint of $302,863.

      3.4.  Royal George Theater Complex.

            (a) An annual base fee of $35,000 (payable in arrears in equal
            monthly installments).

            (b) An incentive fee equal to 20% of the Theater Cash Flow, if any,
            after a breakpoint of $300,000.

            (c) Manager will be entitled to reimbursement for the reasonable
            costs of transportation between Chicago and New York and meals and
            lodging in Chicago, to the extent such costs are incurred in
            connection with the execution of Manager's duties and
            responsibilities with respect to the Royal George Theater Complex.
            Reimbursed costs must be in accordance with the Owner's travel

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            reimbursement policies, as the same may be amended form time to
            time, upon reasonable notice to the Manager. A copy of the Owners
            current travel reimbursement policies has been previously provided
            to the Manager.

      3.5.  Certain Provisions Relating to Payment of Incentive Compensation:

            (a) Incentive Compensation shall be calculated in all cases on a
            calendar year basis.

            (b) Owner may, but shall be under no obligation to, allow for
            advances against such Incentive Compensation, in its discretion.

            (c) All weekly and monthly packages and all annual base fees, and in
            the case of any incentive fee, the amount of the breakpoint, will be
            adjusted annually to reflect any increase, in the consumer price
            index, all urban consumers, for the city in which the Theater in
            question is located; but only to the extent that the license fees
            charged with respect to such one or more Theaters have been likewise
            adjusted. The first adjustment will be made effective January 1,
            2003, and shall be adjusted, (i) with respect to the New York
            Theaters, by the difference between the Northeast Urban Consumer
            Price Index between the period November 30, 2000 and November 30,
            2002 and (ii) with respect to the Chicago Theater, by the difference
            between the Midwest Urban Consumer Price Index between the period
            November 30, 2000 and November 30, 2002. Thereafter, subject to the
            limitations specified above, such amounts will be increased annually
            by the increase in such index between the November 30 immediately
            prior to and immediately following the date of the last adjustment.

      3.6.  Expenses: Manager will be responsible for all of Manager's general
      and administrative costs and expenses with respect to the booking of plays
      into the Theaters. Direct costs related to the operation of the Theaters
      will be treated as direct expenses of and be paid directly by the relevant
      Operating Subsidiary or charged back to the relevant Operating Subsidiary
      against delivery of appropriate documentation.

      3.7   Use of Village East Office Facilities: During the term of this
      Agreement, and so long as such facilities are not required for other use
      by the Owner or its affiliates, Manager will be permitted to make use,
      without

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      charge, of the office facilities located at the Village East Cinemas.
      Owner agrees, so long as Manager maintains offices at the Village East
      Office Facilities, to reimburse to Manager an amount equal to 50% of the
      salary and other employee benefits of one full-time administrative
      employee to be employed by Manager, and officed at the Village East Office
      Facilities, provided that not less than 50% of the time of such individual
      is dedicated specifically to the management of the Theaters and that the
      costs of such individual are mutually agreeable to the parties.

4.    TERMINATION. This Agreement can be terminated at any time, as follows:

      4.1.  Termination by the Owner:

            (a) For Cause: This Agreement may be terminated at any time by the
            Owner for cause; provided, however, that in the event of any cause
            not exposing the Owner, in its determination, to material loss,
            damage or liability, Owner shall allow Manager a reasonable period
            of time to cure such default, following notice and demand for cure.
            No such notice or cure period need be allowed, however, for
            persistent or repetitive breach. Such termination will be effective
            upon the date specified by the Owner in its notice of termination.

            (b) Without Cause: This Agreement also may be terminated at any time
            by the Owner without cause. Such termination will be effective upon
            the date specified by the Owner in its notice of termination.
            However, any such termination without cause will not relieve the
            Owner of its obligations under Section 3.1 through 3.6 of this
            Agreement with respect to that period of time between the effective
            date of such termination and the date on which this Agreement would
            have terminated had either party timely exercised its right to
            terminate the contract as of the end of its initial or any then
            applicable renewal term. The amounts payable under Section 3 of this
            Agreement will be paid on a monthly basis, for the remainder of such
            initial or renewal term, as the case may be.

            (c) In the event of the sale of a Theater: Notwithstanding any other
            provision of this Agreement, this Agreement may be terminated on 60
            days notice with respect to any Theater which is sold to a third
            party.

            (d) In the event of any termination by the Owner without cause,

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            or any failure of the Owner to renew this Agreement, other than for
            cause, Manager will be entitled to continue to receive the incentive
            fees set out in Section 3 with respect to any production booked into
            a Theater during the term of this Agreement.

      4.2.  Termination by Manager:

            (a) For Cause: This Agreement may be terminated at any time by the
            Manager for cause, provided, however, that in the event of
            immaterial breach, Manager shall allow Owner a reasonable period of
            time to cure such default, following notice and demand for cure. No
            such notice or cure period need be allowed, however, for persistent
            or repetitive breach. Such termination will be effective upon the
            date specified by the Manager in its notice of termination.

            (b) Without Cause: Manager will have no right to terminate this
            Agreement without cause, except on not less that ninety (90) day's
            prior written notice, provided that Owner may at any time after the
            receipt of any such notice immediately terminate this Agreement
            without further liability to the Manager.

      4.3.  Effect of Termination: No termination of this Agreement will relieve
any party from liability to the other party (a)for antecedent breach or (b)
under any indemnity provided for under this Agreement, to the extent that the
act or omission giving rise to such claim of indemnity occurred prior to the
date of such termination.

5.    INDEMNITY.

      5.1.  Indemnity by Owner:

            (a) Insurance: Owner will acquire and maintain in full force and
            effect the insurance described in Schedule 5 to this Agreement (the
            "INSURANCE POLICIES"), and will maintain Manager and its, owners,
            officers, directors and employees (collectively "the COVERED
            PERSONS"), as additional insureds under such policies, with
            provisions for waiver of subrogation. Manager will not engage in any
            conduct or course of action, or to do or refrain from doing any act,
            and will not permit any persons under its supervision or control to
            engage in any conduct or course of action, or to do or refrain from
            doing any act, which creates a risk of increase in the cost of any
            one or more

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            of the Insurance Policies or the cancellation of any one or more of
            the Insurance Policies.

            (b) Indemnity: To the extent of any liability not covered by the
            Insurance Policies, which is the result of any act or omission on
            the part of the Owner, its owners, officers, directors, employees,
            agents or contractors ("OWNERS' AGENTS"), Owner will indemnify and
            hold the Covered Persons harmless against any such liability, except
            to the extent that such liability was the result o the default,
            negligence or willful misconduct of such Covered Person.

            (c) Indemnity Procedures: Manager will give the Owner prompt notice
            of any claim for indemnity under this Agreement (provided that the
            failure to give such notice on a timely basis will not relieve the
            Owner of its obligations under this section in the absence of actual
            prejudice resulting from such delay).

            (d) Owner, at its election, will be entitled to provide a defense
            for any Covered Person(s) claiming a right to indemnity under this
            Agreement, and by providing such defense will not be deemed to have
            conceded any obligation on its part to indemnify such person with
            respect to such claim, so long as the Owner gives notice in writing
            to such person of such reservation of rights.

      5.2.  Indemnity by Manager: Manager will indemnify Owner against any and
      all liabilities resulting from its breach of this Agreement.

6.    GENERAL PROVISIONS.

      6.1.  Choice of Law; Attorney's Fees. This Agreement shall be interpreted
      in accordance with the Laws of the State of New York, as those laws
      pertain to contracts made and to be performed entirely within such state.
      In the event of any litigation between the parties with respect to this
      Agreement, the prevailing party shall be entitled to recover its
      reasonable attorneys fees.

      6.2.  Assignment. The rights and obligations of the parties to this
      Agreement are not assignable.

      6.3.  Notices: All notices required or permitted to be given under this
      Agreement shall be in writing, and shall be deemed given (a) when

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      personally delivered to the other party, or (2) two business days after
      deposit, delivery fees prepaid, with a nationally recognized courier
      service, or (c) five business day after deposit in the US Mail if sent
      certified or registered mail, postage prepaid, or (d) immediately upon
      receipt by the other party if sent by fax or by E-Mail, provided that the
      transmitting party receives a verification of receipt of such fax or
      E-Mail transmission. Any such notices shall be directed as follows:

            If to Owner:

                  Liberty Theaters, Inc.
                  550 S. Hope Street
                  Los Angeles, California  90071

                  Attention: Chief Financial Officer

            If to Manager

                  OBI, LLC
                  189 Second Avenue, Suite 3S
                  New York, New York  10003

      Provided, that the above addresses may be changed at any time by such
      party, pursuant to notice given pursuant to this section.

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      6.4.  Counterparts: This Agreement may be signed in counterparts.

      6.5.  No Third Party Beneficiaries: There are no third party beneficiaries
      to this Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be entered
into as of the date fist set forth above.

LIBERTY THEATERS, INC.,                   OBI, LLC

By: /s/Andrzej Matyczynski                By: /s/ Margaret Cotter
   ------------------------------------      -----------------------------------
Its:  Chief Financial Officer/Treasurer   Its:  President
      ---------------------------------       ----------------------------------

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                                                                   Exhibit 10.48

                           READING INTERNATIONAL, INC.

                      NON-QUALIFIED STOCK OPTION AGREEMENT

THIS NON-QUALIFIED STOCK OPTION AGREEMENT ("this Agreement") is made and entered
into as of this 11th day of July 2002, by and between READING INTERNATIONAL,
INC., a Nevada corporation (the "Company"), and JAMES J. COTTER ("Mr. Cotter"),

                               W I T N E S S E T H

      NOW, THEREFORE, in consideration of the mutual promises and covenants made
herein and the mutual benefits to be derived herefrom, the parties hereto agree
as follows:

      1. Grant of Option. The Company grants to Mr. Cotter the right and option
to purchase, on the terms and conditions hereinafter set forth, all or any part
of an aggregate of 975,000 shares (the "Shares") of the Class A Non-Voting
Common Stock (the "Class A Common Stock") of the Company at an exercise price
(the "Exercise Price") of $3.80 per Share (the "Option"), such option to have a
term of three (3) years, exercisable from time to time subject to the provisions
of this Agreement prior to the close of business on July 11, 2005 (the
"Expiration Date"). The Option is intended to be a nonqualified stock option.
The parties acknowledge that, at the present time, the Company has two classes
of common stock outstanding: The Class A Common Stock and the Class B Voting
Common Stock, which two classes of common stock are referred to here generally
and without distinction as "Common Stock."

      2. Exercisability of Option. Except as otherwise provided in this
Agreement, 575,000 shares shall vest immediately, 200,000 shares shall vest at
July 11, 2003, and 200,000 shares shall vest on July 11, 2004.

      3. Method of Exercise of Option and Payment of Exercise Price. The Option
shall be exercisable by the delivery to the Secretary of the Company of a
written notice stating the number of shares to be purchased pursuant to the
Option and accompanied by payment of the Exercise Price in full (i) in cash,
(ii) by check made payable to the order of the Company, (iii) by delivery by Mr.
Cotter or a Permitted Transferee (as hereinafter defined) of shares of Common
Stock already owned by Mr. Cotter or such Permitted Transferee with a fair
market value on the date of exercise equal to the aggregate Exercise Price of
the Shares as to which the Option is being exercised, (iv) by means of so-called
cashless exercises as permitted under applicable rules and regulations of the
Securities and Exchange Commission and the Federal Reserve Board, or (v) by a
combination of the foregoing means of payment. Fractional Share interests shall
be cashed out at that price equal to the fair market value of a single share
multiplied by the fraction representing the fractional Share which, but for this
sentence, would otherwise have been issuable.

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      4. Continuance of Consulting Agreement. Nothing contained in this
Agreement shall confer upon Mr. Cotter any right with respect to the
continuation of his status as an officer, director or consultant of the Company
and/or any one or more of its subsidiaries.

      5. Non-Assignability of Option. During Mr. Cotter's lifetime, the Option
and any other rights hereunder may be exercised only by Mr. Cotter or by a
Permitted Transferee. The term "Permitted Transferee" shall mean (i) any trust
or any corporation, limited liability company or partnership for the benefit of
or owned directly or indirectly by Mr. Cotter and/or anyone or more of his
children or other heirs and (ii) any foundation, trust or not-for-profit
corporation established by Mr. Cotter for charitable purposes. In the event of
the death of Mr. Cotter, the Option in addition may be exercised in whole or in
part by the person or persons (including individuals and trusts, corporations,
partnership and other entities) to whom Mr. Cotter's rights under this Option
shall pass by will or by the applicable laws of descent at any time on or prior
to the Expiration Date. The Option and such rights shall not be offered, sold,
transferred, assigned, pledged, hypothecated or otherwise disposed of in any way
(whether by operation of law or otherwise) except by will or the laws of descent
and distribution or to a Permitted Transferee, and shall not be subject to
execution, attachment or similar process. In the event of the death of Mr.
Cotter, each recipient of all or any portion of this Option, and/or each
Permitted Transferee, will have and succeed to the rights and obligations of Mr.
Cotter under the Option. No sale, transfer, assignment, pledge, hypothecation or
other disposition of all or any portion of the Option by Mr. Cotter to a
Permitted Transferee or by a Permitted Transferee to another Permitted
Transferee shall be effective unless and until the Company shall have received
an agreement in writing executed by the Permitted Transferee agreeing to be
bound by all the terms and conditions of this Agreement.

      6. Adjustment and Other Rights. If the outstanding shares of Class A
Common Stock are increased, decreased or changed into, or exchanged for, a
different number or kind of shares or securities of the Company through
reorganization, merger, combination, recapitalization, reclassification,
stock/split, reverse stock split, stock dividend, stock consolidation or
otherwise, or a dividend or other distribution is made with respect to the Class
A Common Stock either in Class B Common Stock or Class A Common Stock or any
other security of which the Company or any affiliate of the Company is the
issuer, or otherwise, an appropriate and proportionate adjustment shall be made
in the unexercised portion of the Option or portions thereof that Mr. Cotter or
a Permitted Transferee shall be entitled to receive the number and kind of
securities which he or such Permitted Transferee owned or would have been
entitled to receive immediately after the happening of any of the events
described above, had the Option been exercised immediately prior to the
happening of such event or any record date with respect thereto.

      In the event of an extraordinary dividend of cash or other property (other
than securities), the Board of Directors will consider the extent to which it
would be equitable under the circumstances to reduce the Exercise Price to
reflect the extraordinary nature of

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such dividend. If the Board determines that such an adjustment would be
equitable under the circumstances, an appropriate reduction in the Exercise
Price will be made, the amount of such adjustment to be in the discretion of the
Board.

      If the Company proposes to dissolve, or to liquidate or proposes in one or
more transactions to combine, merge or consolidate with or into any other
corporation, or to sell, all or substantially all of its assets whether for
cash, securities, notes or any other property or consideration, the Option shall
be adjusted effective as of the closing of such transaction so as to apply to
the cash, securities, notes or other property or consideration to which a holder
of the number of shares of Class A Common Stock subject to the unexercised
portion of the Option would have been entitled by reason of such transaction. In
the event the consideration to be received by holders of Common Stock in any
such transaction is other than exclusively cash and/or publicly traded common
stock listed on the New York stock Exchange, the American Stock Exchange or the
NASDAQ Stock Market and having voting rights no less than those granted to any
other class or series of the voting securities of such surviving corporation,
and in the further even that, upon consummation, the holders of Class B Common
Stock hold a minority of the outstanding voting equity of the surviving entity,
then the Option may be exercised a the option of Mr. Cotter without the payment
of any exercise price, by the netting of the exercise price against the cash,
securities, notes or other property or consideration to be received in
connection with or as a result of such transaction.

      The Company and Mr. Cotter or a Permitted Transferee will meet and confer
in good faith to determine any appropriate adjustments which may be required in
order to carry out the intent of the immediately preceding paragraphs; provided,
however, that if the parties are unable to agree as to such adjustments within a
period of five (5) days or such longer period as they may mutually agree, the
matter shall be resolved by binding arbitration conducted in Los Angeles,
California under the rules of the American Arbitration Association (the "AAA").
The arbitration will be chosen from one or more panels proposed by the AAA as
follows: the Company and Mr. Cotter or a Permitted Transferee will each select
one arbitrator and those two arbitrators will then select a third arbitrator
from the panel. The parties shall use their good faith efforts to resolve such
arbitration within a period of forty-five (45) days following selection of the
arbitration panel. All costs of arbitration will be paid for by the Company,
unless the arbitration panel determines that the last adjustment proposed by the
Company was the correct adjustment, in which case the cost of arbitration will
be borne by Mr. Cotter or such Permitted Transferee. Until such determination is
made, all such costs will be advanced by the Company. The determination of the
arbitrators will be final and non-appealable, but may be enforced in any court
of competent jurisdiction. If the arbitration results in a delay in the receipt
by Mr. Cotter or Permitted Transferee of any cash, securities, notes, property
or other consideration due to exercise of all or any portion of this Option
prior to the completion of such arbitration, the arbitrator will also award to
Mr. Cotter or such Permitted Transferee, in the event he is the prevailing
party, such amount in cash as will fairly compensate Mr. Cotter or such
Permitted Transferee for such delay.

                                   Page 3 of 5
<PAGE>
      7. Limitation of Mr. Cotter's Rights. In no event shall Mr. Cotter or a
Permitted Transferee have any of the rights or privileges of a shareholder of
the Company in respect of any Shares issuable upon exercise of this Option
unless and until such Option shall have been exercised by Mr. Cotter or such
Permitted Transferee.

      8. Effect of Agreement. This Agreement shall be assumed by binding upon
and inure to the benefits of any successor corporation to the Company.

      9. Representations of Mr. Cotter. Mr. Cotter represents, agrees and
certificates that:

            a. If Mr. Cotter or a Permitted Transferee exercised the Option in
      whole or in pat at a time when there is not in effect under the Securities
      Act of 1933, as amended (the "Act"), a registration statement relating to
      the Shares issuable upon exercise hereof and available for delivery to him
      a prospectus meeting the requirements of Section 10(a) (3) of the Act, Mr.
      Cotter or such Permitted Transferee will acquire the Shares issuable upon
      such exercise for the purposes of investment and not with a view to their
      resale or distribution and, upon each exercise of this Option, Mr. Cotter
      or such Permitted Transferee will furnish to the Company a written
      statement to such effect, reasonably satisfactory in form and substance to
      the Company and its counsel;

            b. If and when Mr. Cotter or a Permitted Transferee proposes to
      offer to sell Shares which are issued to Mr. Cotter or such Permitted
      Transferee upon exercise of this Option at a time when there is not in
      effect under the Act a registration statement relating to the resale of
      such Shares and available for delivery a prospectus meeting the
      requirements of Section 10(a) (3) of the Act, Mr. Cotter or such Permitted
      Transferee will notify the company prior to and such offering or sale and
      will not offer or sell such Shares without first delivering to the Company
      an opinion of counsel reasonably acceptable to the Company to the effect
      that such offering and sale should not constitute a violation of such laws
      for which the Company would be liable; and

            c. No Shares may be acquired hereunder pursuant to exercise of the
      Option granted hereby unless and until any then applicable requirements of
      the Securities and Exchange Commission, the California Department of
      Corporations, other regulatory agencies, including any other state
      securities law commissioners, having jurisdiction over the company or such
      issuance, and any exchanges upon which Common Stock of the Company may be
      listed shall have been fully satisfied. The Company undertakes, at its own
      cost, to promptly satisfy all such then applicable requirements and to
      promptly reimburse Mr. Cotter or a Permitted Transferee for any costs
      which he may incur (including, without limitation, reasonable attorneys
      fees and expenses) in satisfying all such then applicable requirements.

                                   Page 4 of 5
<PAGE>
      Mr. Cotter and each Permitted Transferee understands that the certificate
or certificates representing any Shares acquired upon the exercise, in whole or
in part, of the Option may bear a legend referring to the foregoing matters and
any limitations under the Act and state securities laws with respect to the
transfer of such Shares, and the Company may impose stop transfer instructions
to implement such limitations, if applicable.

      10. Notices. Any notice to be given under the terms of this Agreement
shall be in writing and addressed to the Secretary of the Company at its
principal office and to Mr. Cotter's signature hereto, or at such other address
as either party or any Permitted Transferee, if any, may hereinafter designate
in writing to the other.

      11. Laws Applicable to Construction. The interpretation, performance and
enforcement of this Agreement and all rights and obligations of the parties
hereunder shall be governed by the laws of the State of California.

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed on its
behalf by a duly authorized officer and Mr. Cotter has hereunto set his hand.

                                       READING INTERNATIONAL, INC.

                                       By:  ___________________________________
                                            William C. Soady

                                       By:  ___________________________________
                                            James J. Cotter
                                            120 North Robertson Boulevard
                                            Los Angeles, CA  90048

                                   Page 5 of 5

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