<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ............... to ...............
COMMISSION FILE NUMBER 333-13413
READING ENTERTAINMENT, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 23-2859312
(State of incorporation) (I.R.S. Employer Identification No.)
30 South Fifteenth Street, Suite 1300
Philadelphia, Pennsylvania 19102-4813
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER: 215-569-3344
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes x No
There were 7,449,364 shares of Common Stock outstanding as of August 10, 1998.
<PAGE>
INDEX
READING ENTERTAINMENT, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
PART I. - FINANCIAL INFORMATION PAGE
- ------------------------------- ----
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -- June 30, 1998
(Unaudited) and December 31, 1997.......................................................... 3-4
Condensed Consolidated Statements of Operations -- Three Months and Six Months
Ended June 30, 1998 and 1997 (Unaudited)................................................... 5
Condensed Consolidated Statements of Cash Flows -- Six Months
Ended June 30, 1998 and 1997 (Unaudited)................................................... 6
Notes to Condensed Consolidated Financial Statements (Unaudited).............................. 7-11
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations......... 12-16
PART II. - OTHER INFORMATION
- ----------------------------
Item 6. Exhibits and Reports on Form 8-K.............................................................. 17
Signatures.............................................................................................. 20
</TABLE>
-2-
<PAGE>
PART I - Financial Information
Item 1. Financial Statements
Reading Entertainment, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
(Unaudited)
June 30, December 31,
1998 1997*
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents $77,275 $92,870
Amounts receivable 1,528 1,195
Restricted cash 1,191 4,755
Inventories 234 194
Note receivable 0 721
Prepayments and other current assets 861 568
- --------------------------------------------------------------------------------------------------------------------------------
Total current assets 81,089 100,303
- --------------------------------------------------------------------------------------------------------------------------------
Investments in unconsolidated affiliates 9,497 6,511
Net investment in leased equipment 2,127 2,125
Property and equipment - net 54,118 40,312
Notes receivable from joint venture partners 2,314 1,771
Other assets 2,048 2,033
Intangible assets:
Beneficial leases - net of accumulated amortization of $3,654
in 1998 and $3,197 in 1997 13,254 13,711
Cost in excess of assets acquired - net of accumulated
amortization of $1,106 in 1998 and $791 in 1997 10,931 11,246
- --------------------------------------------------------------------------------------------------------------------------------
94,289 77,709
- --------------------------------------------------------------------------------------------------------------------------------
$175,378 $178,012
================================================================================================================================
</TABLE>
* The balance sheet at December 31, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See Notes to Consolidated Financial Statements.
-3-
<PAGE>
Reading Entertainment, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets (continued)
(in thousands, except share and per share amounts)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
(Unaudited)
June 30, December 31,
1998 1997*
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable $2,396 $2,464
Accrued taxes 247 657
Accrued property costs and other 1,904 3,319
Film rent payable 1,590 1,637
Note payable 145 645
Purchase commitments 6,264 3,516
Other liabilities 1,020 939
Dividends Payable 894 0
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities 14,460 13,177
- ---------------------------------------------------------------------------------------------------------------------------
Capitalized lease, less current portion 506 509
Note payable 1,005 1,100
Other liabilities 4,079 3,735
- ---------------------------------------------------------------------------------------------------------------------------
Total long term liabilities 5,590 5,344
- ---------------------------------------------------------------------------------------------------------------------------
Minority interests 1,999 2,006
Reading Entertainment Convertible Redeemable Series A Preferred Stock, par value $.001 per 7,000 7,000
share, stated value $7,000; Authorized, issued and outstanding - 70,000 shares
Shareholders' Equity
Reading Entertainment Series B Preferred Stock, par value $.001 per share,
stated value $55,000; Authorized, issued and outstanding - 550,000 shares 1 1
Reading Entertainment preferred stock, par value $.001 per share:
Authorized -9,380,000 shares: None issued 0 0
Reading Entertainment common stock, par value $.001 per share:
Authorized -25,000,000 shares: Issued and outstanding -7,449,364 shares 7 7
Other capital 138,637 138,637
Retained earnings 13,601 16,163
Accumulated other comprehensive income (5,917) (4,323)
- --------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity 146,329 150,485
- --------------------------------------------------------------------------------------------------------------------------
$175,378 $178,012
==========================================================================================================================
</TABLE>
* The balance sheet at December 31, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See Notes to Condensed Consolidated Financial Statements.
-4-
<PAGE>
Reading Entertainment, Inc. and Subsidiaries
Consolidated Statements of Operations
(in thousands, except shares and per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Endedd
June 30, June 30,
- --------------------------------------------------------------------------------------------------------------------------------
1998 1997 1998 1997
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
REVENUES:
Theater:
Admissions $6,187 $4,807 $12,597 $9,059
Concessions 1,874 1,542 3,930 2,852
Advertising and other 328 223 565 433
Real estate 170 63 212 100
Interest and dividends 1,154 2,429 2,482 4,864
- --------------------------------------------------------------------------------------------------------------------------------
9,713 9,064 19,786 17,308
- --------------------------------------------------------------------------------------------------------------------------------
EXPENSES:
Theater costs 6,130 4,769 12,357 9,145
Theater concession costs 420 328 857 626
Depreciation and amortization 894 616 1,742 1,233
General and administrative 2,358 2,655 4,474 4,273
- --------------------------------------------------------------------------------------------------------------------------------
9,802 8,368 19,430 15,277
- --------------------------------------------------------------------------------------------------------------------------------
Income from operations (88) 696 356 2,031
Equity in earnings of affiliates (8) 70 110 136
Other income (expense), net 185 9 (447) 238
- --------------------------------------------------------------------------------------------------------------------------------
Income before minority interests and
income taxes 89 775 19 2,405
Minority interests 65 58 159 104
- --------------------------------------------------------------------------------------------------------------------------------
Income (loss) before income taxes 24 717 (140) 2,301
Income taxes 214 162 407 321
- --------------------------------------------------------------------------------------------------------------------------------
Net (loss) income (190) 555 (547) 1,980
Less: Preferred stock dividends and amortization
of asset put option (1,076) (1,077) (2,155) (2,153)
- --------------------------------------------------------------------------------------------------------------------------------
Net loss applicable to common
shareholders ($1,266) ($522) ($2,702) ($173)
================================================================================================================================
Basic and diluted per share information:
- --------------------------------------------------------------------------------------------------------------------------------
Net loss applicable to common shareholders
after preferred stock dividends
and amortization of asset put option ($0.17) ($0.07) ($0.36) ($0.02)
================================================================================================================================
Weighted average common shares outstanding 7,449,364 7,449,364 7,449,364 7,449,364
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
-5-
<PAGE>
Reading Entertainment, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Unaudited)
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
- -------------------------------------------------------------------------------------------------------------
1998 1997
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net (loss) income ($547) $1,980
Adjustments to reconcile net (loss) income to
net cash used in operating activities:
Depreciation 970 462
Amortization 772 771
Deferred rent expense 56 484
Loss (Gain) on disposal of assets 423 (26)
Equity in earnings of affiliates (110) (136)
Minority interests 158 104
Changes in operating assets and liabilities:
(Increase) decrease in amounts receivable (314) 1,906
Increase in dividends receivable 0 (3,788)
Increase in inventories (43) (5)
Decrease (increase) in prepayments and other current assets 430 (176)
Decrease in accounts payable and accrued expenses (1,835) (5,464)
(Decrease) increase in film rent payable (40) 352
Increase (decrease) in other liabilities, net 118 (3)
Other, net 0 (151)
- -------------------------------------------------------------------------------------------------------------
Net cash (provided by) operating activities 38 (3,690)
- -------------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Net proceeds from sale of real estate 0 30
Purchase of property and equipment (16,644) (2,244)
Decrease in restricted cash 3,474 1,596
Decrease in due to affiliate 0 (156)
Increase in purchase commitment 3,056 0
Investment in Joint Venture (3,508) 0
- -------------------------------------------------------------------------------------------------------------
Net cash used in investing activities (13,622) (774)
- -------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Payments of Stock Transactions issuance costs 0 (366)
Minority interest distributions (161) (181)
Decrease in note payable (574) (1,500)
Payment of preferred stock dividends (1,121) (2,153)
- -------------------------------------------------------------------------------------------------------------
Net cash used in financing activities (1,856) (4,200)
- -------------------------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash and cash equivalents (155) (1,039)
- -------------------------------------------------------------------------------------------------------------
(Decrease) in cash and cash equivalents (15,595) (9,703)
Cash and cash equivalents at beginning of year 92,870 48,680
- -------------------------------------------------------------------------------------------------------------
Cash and cash equivalents at end of period $77,275 $38,977
=============================================================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
-6-
<PAGE>
READING ENTERTAINMENT, INC. AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
NOTE 1 -- BASIS OF PRESENTATION
Reading Entertainment, Inc. ("REI" or "Reading Entertainment" and
collectively, with its subsidiaries and predecessors, "Reading" or the
"Company") is in the business of developing and operating multiplex cinemas in
the United States, Puerto Rico, and Australia and of developing, and eventually
operating, entertainment centers in Australia. The Company operates its cinemas
through various subsidiaries under the Angelika Film Centers and Reading Cinemas
names in the mainland United States (the "Domestic Cinemas"); through Reading
Cinemas of Puerto Rico, Inc., a wholly owned subsidiary, under the CineVista
name in Puerto Rico ("CineVista" or the "Puerto Rico Circuit"); and through
Reading Australia Pty., Limited (collectively with its subsidiaries referred to
herein as "Reading Australia") under the Reading Cinemas name in Australia (the
"Australia Circuit"). The Company's entertainment center development activities
in Australia are also conducted through Reading Australia, under the Reading
Station name.
In April 1998, the Company entered the New Zealand market through
investments representing a fifty percent ownership in certain joint ventures
("NZ JV's") for approximately $2,930,000. The Company is also a participant in
two real estate joint ventures in Philadelphia, Pennsylvania and holds certain
property for sale located primarily in Philadelphia and owns certain leased
equipment which it leases to third parties.
The financial statements have been prepared in accordance with generally
accepted accounting principles for interim information. Accordingly, they do
not include all information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments of a recurring nature considered necessary for a
fair presentation of the results for the interim periods presented have been
included. Operating results for the six months ended June 30, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1997.
Certain amounts in previously issued financial statements have been
reclassified to conform with the current period presentation.
NOTE 2 -- COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130").
SFAS 130 establishes rules for the reporting and presentation of comprehensive
income and its components. SFAS 130 requires foreign currency translation
adjustments which, prior to adoption, were reported separately in shareholders'
equity to be included in other comprehensive income. The accumulated foreign
currency translation adjustment as of December 31, 1997 has been reclassified to
conform to the requirements of SFAS 130 and has been reflected as "Accumulated
other comprehensive income" in the Condensed Consolidated Balance Sheets. The
adoption of SFAS 130 did not impact the Company's net loss or total
shareholders' equity.
-7-
<PAGE>
READING ENTERTAINMENT, INC. AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
The following sets forth the Company's comprehensive (loss) income for the
periods shown:
<TABLE>
<CAPTION>
Three Months Ended Six Months
June 30, Ended
June 30,
1998 1997 1998 1997
-------------------------------------------------------------
<S> <C> <C> <C> <C>
Net (loss) income $ (190) $ 555 $ (547) $ 1,980
Other comprehensive loss net of tax (2,088) (1,058) (1,594) (1,383)
--------------------------------------------------------------
Comprehensive income $(2,278) $ (503) $(2,141) $ 597
=============================================================
</TABLE>
NOTE 3 -- INVESTMENTS IN UNCONSOLIDATED AFFILIATES
The Company owns 1,564,473 shares of common stock of Citadel Holding
Corporation (together with its consolidated subsidiaries "Citadel") which
represented an ownership interest of approximately 23.5% at June 30, 1998 and
1997, respectively. In December, 1997 Citadel distributed 100% of the stock in
Big 4 Ranch, Inc. ("BRI") to its shareholders. The Company received 1,564,473
shares of BRI representing an ownership interest of approximately 23.5%. BRI
owns a 40% interest in three agricultural partnerships which own agricultural
land located in California. Citadel also owns 40% of the partnerships. The
Company accounts for its investment in the Citadel and BRI common stock by the
equity method. Citadel's net earnings for the six months ended June 30, 1998
were $563,000 and the Company's share of such earnings was $90,000, which amount
is included in the Condensed Consolidated Statement of Operations for the six
months ended June 30, 1998 as "Equity in earnings of affiliates." Citadel's
assets and liabilities totaled $29,340,000 and $10,724,000, respectively, at
June 30, 1998. BRI's net loss for the six months ended June 30, 1998 totaled
$147,000, and the Company's share of such loss, $34,000, has been included in
the Condensed Consolidated Statement of Operations for the six months ended June
30, 1998 as "Equity in earnings of affiliates." BRI's assets and liabilities
totaled $1,064,000 and $10,000, respectively, at June 30, 1998. The closing
price of Citadel's common stock on the American Stock Exchange at June 30, 1998
was $4.94 per share, approximately $2,770,000 in excess of the carrying value at
June 30, 1998. Management believes that the June 30, 1998 carrying value of the
BRI investment approximates its fair value.
Reading Australia owns a 50% interest in the Whitehorse Property Group Unit
Trust ("WPG"). WPG owns a shopping center located near Melbourne, Australia.
WPG's net earnings for the six months ended June 30, 1998 were $108,000 and the
Company's $54,000 share of the net earnings has been included in the Condensed
Consolidated Statement of Operations for the six months ended June 30, 1998 as
"Equity in earnings of affiliate." WPG's assets and liabilities totaled
$10,611,000 and $7,621,000, respectively, at June 30, 1998. The carrying
amount of the Company's 50% interest approximates half of the appraised value of
WPG.
During the second quarter of 1998, the Company formed certain 50/50 joint
ventures with two companies doing business in New Zealand (the "NZ JVs"). These
joint ventures either operate existing cinemas, own land on which existing
cinemas are currently operating, or own land (or options to acquire land) on
which it is currently anticipated that cinemas or entertainment centers will be
constructed. In connection with one of these real estate joint ventures, the
Company has made a loan to one of its joint venture partners of $578,000. The
results of operations of these joint ventures were immaterial for the three and
six month period ending June 30, 1998.
-8-
<PAGE>
READING ENTERTAINMENT, INC. AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
The carrying value of each of the Company's equity investments was as
follows:
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
1998 1997
----------------- -------------------
<S> <C> <C>
Citadel $4,731 $4,640
BRI 228 263
WPG* 1,608 1,608
NZ JV's** 2,930 0
------ ------
Total $9,497 $6,511
====== ======
</TABLE>
* Does not include loan to joint venture partner of approximately $1,736,000.
** Does not include loan to joint venture partner of approximately $578,000.
The carrying value of the Company's foreign currency denominated assets
will fluctuate due to changes in the exchange rate between the Australian, New
Zealand and U.S. dollars.
NOTE 4 -- PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
1998 1997
--------------------- ---------------------
<S> <C> <C>
Land - Cinemas $ 382 $ 0
Property under development 7,890 4,137
Land held for development 15,633 10,978
Buildings 1,878 1,959
Capitalized premises lease 538 538
Leasehold improvements 20,811 13,480
Equipment 8,807 7,611
Construction-in-progress and property development costs 1,996 4,599
------- -------
57,935 43,302
Less: Accumulated depreciation (3,817) (2,990)
------- -------
$54,118 $40,312
======= =======
</TABLE>
-9-
<PAGE>
READING ENTERTAINMENT, INC. AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
The carrying value of Reading Australia's assets will fluctuate due to
changes in the exchange rate between the Australian and U.S. dollar.
NOTE 5 -- INCOME TAXES
The Company recorded $31,000 and $100,000 in state and local income tax
expense for the six months ended June 30, 1998 and 1997, respectively, related
to earnings from the Domestic Cinemas. The Company recorded tax provisions of
$376,000 and $221,000 for the six months ended June 30, 1998 and 1997,
respectively, related to foreign withholding taxes which will be paid if certain
inter-company loans are repaid.
NOTE 6 -- COMMON STOCK TRANSFER RESTRICTIONS
REI common stock (par value $.001) ("Common Stock") is traded on the NASDAQ
National Market under the symbol RDGE and the Philadelphia Stock Exchange under
the symbol RDG. The Company's Articles of Incorporation include restrictions on
the transfer of Common Stock which are intended to reduce the risk that an
"ownership change" within the meaning of Section 382(g) of the Internal Revenue
Code of 1986, as amended, will occur, which change could reduce the amount of
federal tax net loss carryforwards available to offset taxable income. The
restrictions provide that any attempted sale, transfer, assignment or other
disposition of any shares of Common Stock to any person or group who, prior to
the transfer owns (within the meaning of the Code and such regulations) shares
of Common Stock or any other securities of REI which are considered "stock" for
purposes of Section 382, having a fair market value equal to or greater than
4.75% of the value of all outstanding shares of REI "stock" shall be void ab
initio, unless the Board of Directors of the Company shall have given its prior
written approval. The transfer restrictions will continue until January 1, 2003
(unless earlier terminated by the Company's Board of Directors).
NOTE 7 -- (LOSS ) EARNINGS PER SHARE
Net (loss) applicable to common stock shareholders reflects the reduction
for dividends declared on the Company's Series A Voting Cumulative Convertible
Redeemable Preferred Stock (the "Series A Preferred Stock") and Series B Voting
Cumulative Convertible Preferred Stock (the "Series B Preferred Stock"),
collectively the "Convertible Preferred Stock" and for amortization of the value
of an estimate of an asset put option (the "Asset Put Option").
The weighted average number of shares used in the computation of basic
(loss) earnings per share were 7,449,364 for both the three and six months ended
June 30, 1998 and 1997. Diluted (loss) earnings per share is calculated by
dividing net (loss) income by the weighted average common shares outstanding for
the period plus the dilutive effect of stock options, convertible securities and
the Asset Put Option. During the three and six-month periods ending June 30,
1998, the Company recorded a net loss applicable to shareholders of $1,268,000
and $2,702,000, respectively, and therefore, stock options, the Convertible
Preferred Stock and the Asset Put Option were anti-dilutive. During the three
months and six months ended June 30, 1997, the Company recorded a net loss
applicable to common shareholders of $522,000 and $173,000, respectively, and
therefore, stock options, the Convertible Preferred Stock and the Asset Put
Option were anti-dilutive.
-10-
<PAGE>
READING ENTERTAINMENT, INC. AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
NOTE 8 -- COMMITMENTS
In April, 1998, Reading Australia entered into a purchase agreement to
acquire a twelve acre site in the Melbourne metropolitan area for a total
purchase price of approximately $7 million. Pursuant to the sale agreement, a
deposit has been made and closing is scheduled to occur in September, 1998.
Under the provisions of the purchase agreement, all risks of ownership have
passed to Reading Australia. Accordingly, the land has been reflected in the
Company's June 30, 1998 Condensed Consolidated Balance Sheet as "Property Under
Development" with the remaining purchase price of approximately $6,264,000
presented as "Purchase Commitment" in the Condensed Consolidated Balance Sheet.
In May, 1998, Reading Australia entered into an agreement with a
transportation authority pursuant to which Reading Australia agreed to make
certain infrastructure improvements to the Frankston Train Station located in
the Melbourne, Australia metropolitan area. Reading Australia has been granted
the right to construct a combination 12 screen cinema and retail entertainment
center together with certain parking facilities on the site and will receive a
permanent license to use, or title to, a 350-space parking garage adjacent to
the site upon completion of the improvements. Pursuant to its agreement with the
authority, Reading Australia is required to post a letter of credit totaling
approximately $3 million to guarantee completion of the improvements.
In addition to the Frankston Train Station construction commitment the
Company has six committed lease agreements for theater facilities with a total
of approximately 60 screens which were then under construction or for which
construction is anticipated to be completed no later than mid 2000. The
aggregate anticipated costs remaining to complete construction for the seven
facilities totaled approximately $55 million.
-11-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company has elected to focus its theater development and related real
estate development activities in two principal areas: the development and
operation of state of the art multiplex cinemas in Puerto Rico, the United
States, New Zealand and Australia; and the development and operation in
Australia of entertainment centers typically consisting of a multiplex cinema,
complementary restaurant and retail uses, and self-contained parking.
RESULTS OF OPERATIONS
Due to the nature of the Company's development and acquisition activities
and the timing associated with the results of such activities, the effect of
litigation awards and settlements and the results of operations of six new
cinemas opened in the last two years, historical revenues and earnings have
varied significantly. The Company's entertainment center developments are in the
early stage of development and generally will not produce income or cash flow
for at least eighteen to twenty-four months from the time that all land use
approvals have been secured. Management believes that historical financial
results may not be indicative of future operating results.
Revenue
- -------
Theater Revenue is comprised of Admissions, Concessions and Advertising and
other revenues and totaled the amounts set forth below in each of the three six-
month periods ended June 30, inclusive of minority interest:
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Six Months $17,092,000 $12,344,000
Three Months $ 8,390,000 $ 6,572,000
</TABLE>
CineVista's Theater Revenues increased approximately 15% to $8,275,000 in
the six months ended June 30, 1998 from $7,173,000 in the corresponding prior
year period, primarily as a result of more favorable film product in the first
quarter of 1998. CineVista's Theater Revenue decreased approximately 5% to
$3,903,000 in the three months ended June 30, 1998 from $4,128,000 in the
corresponding prior year period. The decrease in the current year quarter
resulted from a decrease of approximately $608,000 or 15% due to the closure of
four screens during the second quarter of 1997, and the closure of four
additional screens during the first quarter of 1998; offset by an increase in
Theater Revenue of $254,000 or 6% related to the opening of a new eight-plex
theater in June, 1998 and an increase of $146,000 or 4% in cinemas open
throughout each of the respective periods. CineVista is presently in
negotiations to build an additional 10 screens at an existing location and will
commence construction activities for a new leased 12 screen multiplex in the San
Juan metropolitan area in the third quarter of 1998. At June 30, 1998 and 1997,
CineVista operated 50 screens at 8 locations and 44 screens at 7 locations,
respectively.
Domestic Cinemas' Theater Revenues increased approximately 54% to
$5,512,000 for six months ended June 30, 1998 from $3,569,000 in the
corresponding prior year period. Two Domestic cinemas commenced operations in
December, 1997 and accounted for 41% of the increase with the other 13% increase
resulting from more favorable film product at the cinema which was open
throughout the respective periods. These same reasons attributed to an increase
in Theater Revenues of approximately 74% to $2,854,000 for the three months
ended June 30, 1998 from $1,643,000 in the corresponding prior year period.
Reading is currently constructing a new 12 screen cineplex in New Jersey,
scheduled to open in the second quarter of 1999. At June 30, 1998 and 1997
Reading operated 19 screens at 3 locations and 6 screens at 1 location,
respectively.
Theater Revenues for Australian operations increased in excess of 100% to
$3,288,000 for the six months ended June 30, 1998 from $1,602,000 in the
corresponding prior year period, primarily as a result of Reading Australia's
acquisition of a four screen cinema in July, 1997 and the opening of an
additional six screen cinema in December, 1997. These same reasons primarily
contributed to an increase in Theater Revenues in excess of 100% to $1,621,000
for the
-12-
<PAGE>
three months ended June 30, 1998 from $801,000 in the corresponding prior year
period. Reading Australia currently has 54 screens at 6 locations under
development in Australia.
Real estate revenues include rental income and the net proceeds of sales of
the Company's historic railroad related real estate in the United States which
the Company is liquidating. Future real estate revenues may increase as larger
properties are sold, however, the Company anticipates its total revenues from
such sales will not be material.
"Interest and dividend" revenues were as follows in each of the three and
six-month periods ended June 30.
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Six Months $2,482,000 $4,864,000
Three Months $1,154,000 $2,429,000
</TABLE>
"Interest and dividend" revenues decreased for both the three and six-month
periods ended June 30, 1998, as compared to the corresponding prior year
periods, primarily as a result of reduced yields realized on the proceeds of the
Stater Bros. Holdings Corporation Series B Preferred Stock (the "Stater
Preferred Stock") which preferred stock was owned by the Company during the
three and six-month periods ended June 30, 1997. The Stater Preferred Stock
accumulated dividends at a rate of 10.5% on the par value of $69,365,000. Upon
redemption of the Stater Preferred Stock in the third quarter of 1997, the
proceeds, par value plus accumulated dividends, were invested in money market
instruments which provided an average yield of approximately 5.5% in the three
and six-month periods ended June 30, 1998.
Expenses
- --------
"Theater costs," "Theater concession costs" and "Depreciation and
amortization," collectively "Theater Operating Expenses," reflect the direct
theater costs of CineVista, the Domestic Cinemas and Reading Australia's theater
operations. Theater Operating Expenses increased approximately 36% to
$14,956,000 for the six months ended June 30, 1998 from $11,004,000 in the
corresponding prior year period, due primarily to the inclusion in the current
year of approximately $3,275,000 of Theater Operating Expenses associated with
two Domestic cinemas which opened in December, 1997 and the two Australian
cinemas which opened in July, 1997 and December, 1997. The remaining increase of
$677,000 is attributable to expense items which vary in proportion to the
increased Theater Revenues. Theater Operating Expenses increased approximately
30% to $7,444,000 in the three-month period ended June 30, 1998 from $5,713,000
in the corresponding prior year period, due primarily to the inclusion in the
current year quarter of Theater Operating Expenses associated with the two
additional Domestic Cinemas and the two additional theaters in Australia.
Theater Operating Expenses as a percentage of Theater Revenues remained constant
for the three and six months ended June 30, 1998 as compared to the
corresponding prior year period.
"General and administrative" expenses for the three and six-month periods
ended June 30, 1998 and 1997 include the following components:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
1998 1997 1998 1997
----------------------------- ------------------------------
<S> <C> <C> <C> <C>
CineVista $ 216,000 $ 161,000 $ 608,000 $ 385,000
Domestic Cinemas 155,000 125,000 288,000 251,000
Australia 720,000 1,214,000 1,383,000 1,555,000
Other 1,266,000 1,155,000 2,195,000 2,082,000
---------- ---------- --------- ----------
Total $2,357,000 $2,655,000 $4,474,000 $4,273,000
========== ========== ========== ==========
</TABLE>
-13-
<PAGE>
CineVista's "General and administrative" expenses in the six-month period
ended June 30, 1998 include a $165,000 charge relating to the closing of four
screens during the period. The charge is comprised of a $395,000 loss on
leasehold improvements net of the reversal of a $230,000 provision for deferred
rent.
Australia's "General and administrative" expenses decreased 11% to
$1,383,000 in the six-month period ended June 30, 1998 from $1,555,000 in the
corresponding prior year period, primarily due to a decrease of approximately
$400,000 in write-offs of previously capitalized property development costs
offset by increased payroll costs, office expenses and carrying costs of land
held for development associated with the continued expansion of operations and
development activities in Australia. Development costs are expensed upon
management's determination that development of the related theater locations
will not be pursued to completion. These same reasons primarily contributed to a
decrease in general and administrative expenses of approximately 41% to $720,000
in the three months ended June 30, 1998 from $1,214,000 in the corresponding
prior year period.
"General and administrative" expenses for the Domestic Cinemas and the
"Other" remained consistent with prior year.
Equity in Earnings of Affiliate
- -------------------------------
"Equity in earnings of affiliates" include earnings from the Company's
investment in Citadel, BRI, WPG and the NZ JV's. The investments in WPG and the
NZ JV's were made in the fourth quarter of 1997 and second quarter of 1998,
respectively, and the Company received its investment in BRI in December 1997;
"Equity in earnings of affiliates" decreased 19% or $26,000 to $110,000 in the
six months ended June 30, 1998 from $136,000 in the corresponding prior year
period primarily due to a decrease in Citadel's net income. "Equity in earnings
of affiliates" decreased in excess of 100% to a loss $8,000 for the three-month
period ended June 30, 1998 from income of $70,000 for the corresponding prior
year period. The results of operations of the NZ JV's were immaterial for the
three and six month period ended June 30, 1998.
Other (expense) Income
- ----------------------
"Other expense" totaled $447,000 in the six months ended June 30, 1998, as
compared to "other income" of $238,000 for the six-month period ended June 30,
1997. Other expense in the current year is comprised primarily of losses on
foreign currency derivative contracts. The Company does not presently have any
foreign currency derivative positions. "Other income" in the six-month period
ended June 30, 1997 was comprised primarily of amounts received from a third
party as reimbursement of certain acquisition related expenditures which were
expensed by the Company in prior periods.
Minority Interests
- ------------------
"Minority interests" for the three and six months ended June 30, 1998
include $65,000 and $159,000, respectively, from minority shares in a Domestic
Cinema's net income, and from minority interests in a Reading Australia cinema's
net income. "Minority interests" for the three and six months ended June 30,
1997 include $58,000 and $104,000, respectively, which reflects minority shares
in a Domestic Cinema's net income and minority interests in a Reading Australia
cinema's net income.
Income Tax Provision
- --------------------
Income tax expense in the six-month period ended June 30, 1998 includes an
accrual for foreign withholding taxes of $376,000 which will be paid if certain
intercompany loans are repaid and state and local taxes of $31,000. Income tax
expense in the six-month period ended June 30, 1997 includes a $222,000
provision for foreign withholding taxes and $100,000 for state and local taxes.
Income tax expense in the three-month period ended June 30, 1998 includes an
accrual for foreign withholding taxes of $197,000 and state and local taxes of
$17,000. Income tax expense
-14-
<PAGE>
in the three-month period ended June 30, 1997 includes an accrual for foreign
withholding taxes of $112,000 and state and local taxes of $50,000.
Net loss
- --------
As a result of the above described factors, the Company recorded a "Net
loss" of $547,000 for the six months ending June 30, 1998 and "Net income" of
$1,980,000 in the corresponding prior year period, a reduction in income of
approximately $2,527,000 comprised primarily of an increase in Theater Operating
Income of $796,000 (Theater Revenues less Theater Operating Expenses), less a
$2,382,000 reduction in "Interest and dividend" revenue and a decrease of
$749,000 in "Other income."
Comprehensive Income
- --------------------
The Company had losses in Comprehensive income (Note 3) of $2,088,000 and
$1,594,000 in the three and six month periods ended June 30, 1998. The losses
in the corresponding periods last year were $1,058,000 and $1,383,000,
respectively. The losses reflect the change in Shareholder's equity resulting
from changes in the exchange rate between the U.S. and Australian dollar.
Foreign currency exchange rates in general and in the Pacific Rim countries in
particular (including Australia, New Zealand) have been subject to significant
weakness and volatility during 1998 due to the currency crisis in South East
Asia. The Company's business and operating results may be impacted by the
effects of future foreign currency fluctuations.
In the past the Company has utilized derivative contracts in order
to offset the weakening Australian dollar. No such positions are presently in
place or contemplated by management. The Company's foreign investments are long
term in nature and not readily hedged under normal means. Management believes
that the foreign denominated investments which are presently comprised primarily
of undeveloped real assets are currently hedged by the anticipated foreign
dollar investments which will be required to develop the assets to income
producing levels and that no further hedging is required at this time.
Net Income Applicable to Common Stockholders
- --------------------------------------------
In the three and six-month periods ended June 30,1998 and 1997,
respectively, "Net (loss) income applicable to common stockholders" has been
reduced by the 6.5% per annum dividend on the $62,000,000 stated value of the
Company's convertible preferred stock outstanding and amortization of an asset
put option issued to Citadel.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company had liquid funds of $77,275,000. If the
Company is successful in its efforts to develop all of the projects which it is
presently considering in Australia, New Zealand, Puerto Rico and the domestic
market, its capital requirements over the next two years will exceed its
existing cash balances and existing borrowing arrangements. However, the
Company believes that additional funding could be realized through, among other
things, bank borrowings, sale-leaseback transactions and the issuance/sale of
additional equity either of Reading Entertainment, Inc., or at a subsidiary or
the project level. The Company does not presently have property purchase or
development commitments which exceed its liquid funds.
At June 30, 1998, the Company has a construction commitment and six
committed lease agreements for theater facilities with a total of approximately
60 screens which were then under construction or for which construction is
anticipated to be completed no later than mid 2000. The aggregate anticipated
costs remaining to complete construction for the seven facilities totaled
approximately $55 million.
The following summarizes the major sources and uses of cash funds in the
six months ended June 30:
1998:
- ----
"Unrestricted cash and cash equivalents" decreased $15,595,000 from
$92,870,000 at December 31, 1997 to $77,275,000 at June 30, 1998. Working
capital decreased $20,497,000 from $87,126,000 at December 31, 1997 to
$66,629,000 at June 30, 1998.
While not necessarily indicative of results of operations determined under
generally accepted accounting principles, Theater Revenues less direct theater,
general and administrative expenses before interest, depreciation and
amortization ("Theater EBITDA") (inclusive of income from minority interest of
$159,000) totaled $2,820,000 in the six months ended June 30, 1998 versus
Theater EBITDA of $1,705,000 in the corresponding six-month prior year period.
Other principal sources of liquid funds in the current year six-month period
were $2,482,000 in "Interest and
-15-
<PAGE>
dividend" income, a net decrease in "Prepayments and other current assets" of
$430,000, a net decrease in "Restricted cash" of $3,474,000 and a net increase
in "Purchase commitments" of $3,056,000.
In addition to other General & Administrative expenses, other uses of
liquid funds in the six months ended June 30, 1998 included $16,644,000 of
property and equipment purchases, a net decrease in "Accounts payable and
accrued expenses" of $1,835,000, an investment in joint ventures (inclusive of
loans to joint venture partners) of $3,508,000, payment of preferred stock
dividends of $1,121,000, and a net decrease in "Notes payable" of $574,000.
1997:
- ----
"Unrestricted cash and cash equivalents" decreased $9,703,000 from
$48,680,000 at December 31, 1996 to $38,977,000 at June 30, 1997. Working
capital increased $66,162,000 from $42,729,000 at December 31, 1996 to
$108,891,000 at June 30, 1997 largely as a result of the reclassification of the
Stater Preferred Stock investment from non-current assets to current assets at
June 30, 1997.
Theater EBITDA (inclusive of minority interest of $104,000) of $1,705,000
contributed to the Company's liquid funds for the six months ended June 30,
1997. Other principal sources of liquid funds in the current year six-month
period were $1,009,000 in "Interest and dividend" income, a net decrease in
"Amounts receivable" of $1,906,000, and a net decrease in restricted cash of
$1,596,000.
In addition to other General & Administrative expenses, other uses of
liquid funds in the six months ended June 30, 1997 included $2,244,000 of
property and equipment purchases, a net decrease in "Accounts payable and
accrued expenses," of $5,464,000, a net increase in "Dividends receivable" of
$3,788,000, payment of preferred stock dividends of $2,153,000, and a net
decrease in "Notes payable" of $1,500,000.
FORWARD-LOOKING STATEMENTS
From time to time, the Company or its representatives have made or may make
forward-looking statements, orally or in writing, including those contained
herein. Such forward-looking statements may be included in, without limitation,
reports to stockholders, press releases, oral statements made with the approval
of an authorized executive officer of the Company and filings with the
Securities and Exchange Commission. The words or phrases "anticipates,"
"expects," "will continue," "estimates," "projects," or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995.
The results contemplated by the Company's forward-looking statements are
subject to certain risks, trends, and uncertainties that could cause actual
results to vary materially from anticipated results, including without
limitation, delays in obtaining leases and permits for new multiplex locations,
construction risks and delays, the lack of strong film product, the impact of
competition, market and other risks associated with the Company's investment
activities and other factors described herein.
-16-
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
2.1 Agreement and Plan of Merger Among Reading Company, Reading
Entertainment, Inc., and Reading Merger Co. (Incorporated by
reference to Exhibit A to the Proxy Statement/Prospectus included in
Reading Entertainment, Inc.'s Registration Statement on Form S-4,
File No. 333-13413.)
3(i) Certificate of Incorporation of Reading Entertainment, Inc., as
amended. (Incorporated by reference to Exhibit B to the Proxy
Statement/Prospectus included in Reading Entertainment, Inc.'s
Registration Statement on Form S-4, File No. 333-13413.)
3(ii) By-laws of Reading Entertainment, Inc., as amended.
4.1 Certificate of Designations, Preferences and Rights of Series A
Voting Cumulative Convertible Preferred Stock and Series B Voting
Cumulative Convertible Preferred Stock of Reading Entertainment, Inc.
(Incorporated by reference to Exhibit G to the Proxy
Statement/Prospectus included in Reading Entertainment, Inc.'s
Registration Statement on Form S-4, File No. 333-13413.)
10.1* Reading Company 1992 Nonqualified Stock Option Plan, as amended.
10.2* Service Deed between Australia Cinema Management Pty Limited and
John Rochester dated May 7, 1996. (Incorporated by reference to
Exhibit 10.20 to Reading Company's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1996.)
10.3 Exchange Agreement among Reading Company, Reading Entertainment Inc.,
Craig Corporation, Craig Management Inc., Citadel Holding
Corporation, and Citadel Acquisition Corp., Inc. (Incorporated by
reference to Exhibit F to the Proxy Statement/Prospectus included in
Reading Entertainment, Inc.'s Registration Statement on Form S-4,
File No. 333-13413.)
10.4 Asset Put and Registration Rights Agreement dated October 15, 1996 by
and among Reading Entertainment, Inc., Citadel Holding Corporation,
and Citadel Acquisition Corp., Inc. (Incorporated by reference to
Exhibit 10.15 to Reading Entertainment, Inc.'s Annual Report on Form
10-K for the year ended December 31, 1996.)
10.5 Certificate of Designation of the Series B 3% Cumulative Voting
Convertible Preferred Stock of Citadel Holding Corporation.
(Incorporated by reference to Exhibit 10.16 to Reading Entertainment,
Inc.'s Annual Report on Form 10-K for the year ended December 31,
1996.)
10.6 Preferred Stock Purchase Agreement dated November 10, 1994, between
Citadel Holding Corporation and Craig Corporation. (Incorporated by
reference to Exhibit 2 to Citadel Holding Corporation's Report on
Form 8-K dated November 14, 1994.)
10.7 The Sale Agreement dated as of July 1, 1996, by and among Reading
Investment Company, Inc., as Purchaser, AFCI, as Seller, and Houston
Cinema, Inc., with all Exhibits and Schedules omitted. (Incorporated
by reference to Exhibit 2(a) to Reading Company's Report on Form 8-K
dated August 27, 1996.)
10.8 Amendment to the Sale Agreement made and entered into as of July 27,
1996 by and among Reading Investment Company, Inc., AFCI and Houston
Cinema, Inc. (Incorporated by reference to Exhibit 2(b) to Reading
Company's Report on Form 8-K dated August 27, 1996.)
-17-
<PAGE>
10.9 $2,000,000.00 Non-Negotiable Secured Promissory Note dated as of
August 27, 1996 (the "Holdback Note") by AFC, as Maker, to AFCI, as
Payee. (Incorporated by reference to Exhibit 2(c) to Reading
Company's Report on Form 8-K dated August 27, 1996.)
10.10 Pledge Agreement dated August 27, 1996 by and among AFCI, as Secured
Party, and AFC, as Debtor, concerning the cash security for the
Holdback Note. (Incorporated by reference to Exhibit 2(d) to Reading
Company's Report on Form 8-K dated August 27, 1996.)
10.11 Limited Liability Company Agreement between Angelika Cinemas, Inc.
and Sutton Hill Associates dated August 27, 1996. (Incorporated by
reference to Exhibit 10.32 to Reading Entertainment, Inc.'s
Registration Statement on Form S-4, File No. 333-13413.)
10.12 Management Agreement dated as of August 27, 1996 between Angelika
Film Centers, LLC and City Cinemas Corporation. (Incorporated by
reference to Exhibit 10.33 to Reading Entertainment, Inc.'s
Registration Statement on Form S-4, File No. 333-13413.)
10.13 Purchase Agreement between Equipment Leasing Associates 1995-VI
Limited Partnership and FA, Inc. effective December 20, 1996.
(Incorporated by reference to Exhibit 10.27 to Reading Entertainment,
Inc.'s Annual Report on Form 10-K for the year ended December 31,
1996.)
10.14 Master Lease Agreement between FA, Inc. and Equipment Leasing
Associates 1995-VI Limited Partnership dated December 20, 1996.
(Incorporated by reference to Exhibit 10.28 to Reading Entertainment,
Inc.'s Annual Report on Form 10-K for the year ended December 31,
1996.)
10.15 Nonrecourse Promissory Note between FA, Inc. and Equipment Leasing
Associates 1995-VI Limited Partnership effective December 20, 1996.
(Incorporated by reference to Exhibit 10.29 to Reading Entertainment,
Inc.'s Annual Report on Form 10-K for the year ended December 31,
1996.)
10.16 Lease Rental Purchase Agreement between FA, Inc. and Ralion
Financial Services, Inc. dated December 31, 1996. (Incorporated by
reference to Exhibit 10.30 to Reading Entertainment, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1996.)
10.17*Non-Qualified Stock Option Agreement dated April 18, 1997 by and
between Reading Entertainment, Inc. and James J. Cotter.
(Incorporated by reference to Exhibit 10.1 to Reading Entertainment,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30,
1997.)
10.18*Reading Entertainment, Inc. Incentive Compensation Plan.
(Incorporated by reference to Exhibit 10.1 to Reading Entertainment,
Inc.'s Quarterly Report on Form 10-Q for the quarter ended September
30, 1997.)
10.19*Reading Entertainment, Inc. 1997 Equity Incentive Plan.
(Incorporated by reference to Exhibit A to Reading Entertainment,
Inc.'s Definitive Proxy Statement on Schedule 14A as filed with the
Securities and Exchange Commission on August 21, 1997.)
10.20 Master Management Agreement between Angelika Holding, Inc. and City
Cinemas Corporation dated November 26, 1997. (Incorporated by
reference to Exhibit 10.29 to Reading Entertainment, Inc.'s Annual
Report on Form 10-K for the year ended December 31, 1997.)
-18-
<PAGE>
10.21 Agreement by and among Pubic Transport Corporation, Reading
Properties Pty Ltd, and Mackie Group Pty Ltd for development at the
Frankston Railway Station dated May 28, 1998.
10.22 Contract for Sale of Land in Auburn, New South Wales, Australia,
between Nissan Motor Co. (Australia) Pty Limited and Reading
Properties Pty Limited dated April 17, 1998.
27 Financial Data Schedule for the quarter ended June 30, 1998.
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the reporting period.
* These exhibits constitute the executive compensation plans and arrangements of
the Company.
-19-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
READING ENTERTAINMENT, INC. REGISTRANT
Date: August 14, 1998 By: /s/ James A. Wunderle
--------------- -------------------------------------------
James A. Wunderle
Executive Vice President, Chief Financial
Officer and Treasurer
(Duly Authorized Officer and
Principal Financial Officer)
Date: August 14, 1998 By: /s/ David J. Brown
--------------- -------------------------------------------
David J. Brown
Controller
(Principal Accounting Officer)
-20-
<PAGE>
BY-LAWS
of
READING ENTERTAINMENT, INC.
As amended through September 16, 1997
<PAGE>
READING ENTERTAINMENT, INC.
A Delaware Corporation
BY-LAWS
ARTICLE I
Stockholders
Section 1.1 Annual Meeting.
An annual meeting of stockholders for the purpose of electing directors and
of transacting such other business as may come before it shall be held each year
at such date, time, and place, either within or without the State of Delaware,
as may be specified by the Board of Directors.
Section 1.2 Special Meetings.
Special meetings of stockholders for any purpose or purposes may be held at
any time upon call of the Chairman or Vice Chairman of the Board, if any, the
Chief Executive Officer, the President, or any three or more members of the
Board of Directors, at such time and place either within or without the State of
Delaware as may be stated in the notice. A special meeting of stockholders
shall be called by the President or the Secretary upon the written request,
stating time, place, and the purpose or purposes of the meeting, of stockholders
who together own of record shares of stock entitling them to cast a majority of
the votes entitled to be cast by the holders of the outstanding stock of all
classes entitled to vote at such meeting.
Section 1.3 Notice of Meetings.
Written notice of stockholders meetings, stating the place, date, and hour
thereof, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be given by the Chairman or Vice Chairman of
the Board, if any, the Chief Executive Officer, the President, any Vice
President, the Secretary, or an Assistant Secretary, to each stockholder
entitled to vote thereat at least ten days but not more than sixty days before
the date of the meeting, unless a different period is prescribed by law.
Section 1.4 Quorum.
Except as otherwise provided by law or in the Certificate of Incorporation
or these By-Laws, at any meeting of stockholders, the holders of shares of stock
entitling them to cast a majority of the votes entitled to be cast at the
meeting shall be present or represented by proxy in order to constitute a quorum
for the transaction of any business. In the absence of a quorum, a majority in
interest of the stockholders present or the chairman of the meeting may adjourn
the meeting from time to time in the manner provided in Section 1.5 of these By-
Laws until a quorum shall attend.
<PAGE>
Section 1.5 Adjournment.
Any meeting of stockholders, annual or special, may adjourn from time to
time to reconvene at the same or some other place, and notice need not be given
of any such adjourned meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken. At the adjourned meeting, the
Corporation may transact any business which might have been transacted at the
original meeting. If the adjournment is for more than thirty days, or if after
the adjournment a new record date is fixed for the adjourned meeting, a notice
of the adjourned meeting shall be given to each stockholder of record entitled
to vote at the meeting.
Section 1.6 Organization.
The Chairman of the Board, if any, or in his absence the Vice Chairman of
the Board, if any, or in their absence the Chief Executive Officer, or in their
absence the President, or in their absence any Vice President, shall call to
order meetings of stockholders and shall act as chairman of such meetings. The
Board of Directors or, if the Board fails to act, the stockholders may appoint
any stockholder, director, or officer of the Corporation to act as chairman of
any meeting in the absence of the Chairman of the Board, the President, and all
Vice Presidents.
The Secretary of the Corporation shall act as secretary of all meetings of
stockholders, but, in the absence of the Secretary, the chairman of the meeting
may appoint any other person to act as secretary of the meeting.
Section 1.7 Voting.
Except as otherwise provided by law or in the Certificate of Incorporation
or these By-Laws and except for the election of directors, at any meeting duly
called and held at which a quorum is present, a majority of the votes cast at
such meeting upon a given question by the holders of outstanding shares of stock
of all classes of stock of the Corporation entitled to vote thereon who are
present in person or by proxy shall decide such question. At any meeting duly
called and held for the election of directors at which a quorum is present,
directors shall be elected by a plurality of the votes cast by the holders
(acting as such) of shares of stock of the Corporation entitled to elect such
directors.
Section 1.8 Action By Consent of Stockholders.
Unless otherwise restricted by the Certificate of Incorporation, any action
required or permitted to be taken at any annual or special meeting of the
stockholders may be taken without a meeting, without prior notice and without a
vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and shall be delivered (by hand or by certified or registered mail, return
receipt requested) to the Corporation by delivery to its registered office in
the State of Delaware, its principal place of business, or an officer or agent
of the Corporation having custody of the book in which proceedings of minutes of
stockholders are recorded. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
-2-
<PAGE>
ARTICLE II
Board Of Directors
Section 2.1 Number and Term of Office.
The business, property, and affairs of the Corporation shall be managed by
or under the direction of a Board of seven directors; provided, however, that
the Board, by resolution adopted by vote of a majority of the then authorized
number of directors, may increase or decrease the number of directors. The
directors shall be elected by the holders of shares entitled to vote thereon at
the annual meeting of stockholders, and each shall serve (subject to the
provisions of Article IV) until the next succeeding annual meeting of
stockholders and until his respective successor has been elected and qualified.
Section 2.2 Nomination of Stockholders
No stockholder shall be permitted to nominate a candidate for election as a
director at any annual meeting unless such stockholder shall provide in writing,
not later than 120 days before the first anniversary of the preceding annual
meeting of stockholders, to the Nominating Committee of the Board of Directors
or, in the absence of such committee, to the Secretary of the Corporation,
information about such candidate which, were such candidate a nominee of the
Board of Directors for whom the Corporation solicited proxies, would be required
to be disclosed in the proxy materials pursuant to which such proxies would be
solicited as set forth in Items 7-8 of Schedule 14A promulgated by the
Securities and Exchange Commission or any successor provisions.
Section 2.3 Chairman and Vice Chairman of the Board.
The directors may elect one of their members to be Chairman of the Board of
Directors and may elect one of the members to be the Vice Chairman of the Board
of Directors. The Chairman and Vice Chairman shall be subject to the control of
and may be removed by the Board of Directors. The Chairman and Vice Chairman
shall perform such duties as may from time to time be assigned to them by the
Board.
Section 2.4 Meetings.
Regular meetings of the Board of Directors may be held without notice at
such time and place as shall from time to time be determined by the Board.
Special meetings of the Board of Directors shall be held at such time and
place as shall be designated in the notice of the meeting whenever called by the
Chairman or Vice Chairman of the Board, if any, the Chief Executive Officer, the
President, or by any three of the directors then in office.
Section 2.5 Notice of Special Meetings.
The Secretary, or in his absence any other officer of the Corporation,
shall give each director notice of the time and place of holding of special
meetings of the Board of Directors by telecopy or electronic mail at least 48
hours before the meeting, or by mail at least two days before the meeting, or
by telegram, cable, radiogram, or personal service at least two days before the
meeting. Unless otherwise stated in the notice thereof, any and all business
may be transacted at any meeting without specification of such business in the
notice.
-3-
<PAGE>
Section 2.6 Quorum and Organization of Meetings.
A majority of the total number of members of the Board of Directors as
constituted from time to time shall constitute a quorum for the transaction of
business, but, if at any meeting of the Board of Directors (whether or not
adjourned from a previous meeting) there shall be less than a quorum present, a
majority of those present may adjourn the meeting to another time and place, and
the meeting may be held as adjourned without further notice or waiver. Except
as otherwise provided by law or in the Certificate of Incorporation or these By-
Laws, a majority of the directors present at any meeting at which a quorum is
present may decide any question brought before such meeting. Meetings shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in their absence by the Chief Executive
Officer, or in their absence by the President, or in the absence of all of the
foregoing by such other person as the directors may select. The Secretary of
the Corporation shall act as secretary of the meeting, but in his absence the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 2.7 Committees.
The Board of Directors may designate one or more committees, each committee
to consist of one or more of the directors of the Corporation. The Board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee. In
the absence or disqualification of a member of a committee, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in place of any such absent or
disqualified member. Any such committee, to the extent provided in the
resolution of the Board of Directors, shall have and may exercise all the powers
and authority of the Board of Directors in the management of the business,
property, and affairs of the Corporation, and may authorize the seal of the
Corporation to be affixed to all papers which may require it; but no such
committee shall have power or authority in reference to (i) approving or
adopting, or recommending to stockholders, any action or matter expressly
required by law to be submitted to stockholders for approval or (ii) adopting,
amending, or repealing these By-Laws. Each committee which may be established
by the Board of Directors pursuant to these By-Laws may fix its own rules and
procedures. Notice of meetings of committees, other than of regular meetings
provided for by the rules, shall be given to committee members. All action
taken by committees shall be recorded in minutes of the meetings.
Section 2.8 Action Without Meeting.
Nothing contained in these By-Laws shall be deemed to restrict the power of
members of the Board of Directors or any committee designated by the Board to
take any action required or permitted to be taken by them without a meeting.
Section 2.9 Telephone Meetings.
Nothing contained in these By-Laws shall be deemed to restrict the power of
members of the Board of Directors, or any committee designated by the Board, to
participate in a meeting of the Board, or committee, by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other.
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<PAGE>
ARTICLE III
Officers
Section 3.1 Executive Officers.
The executive officers of the Corporation shall be a Chief Executive
Officer or a President, or both, one or more Vice Presidents, a Treasurer, and a
Secretary, each of whom shall be elected by the Board of Directors. The Board of
Directors may elect or appoint such other officers (including a Controller and
one or more Assistant Treasurers and Assistant Secretaries) as it may deem
necessary or desirable. Each officer shall hold office for such term as may be
prescribed by the Board of Directors from time to time. Any person may hold at
one time two or more offices.
Section 3.2 Powers and Duties.
The Chairman of the Board, if any, or, in his absence, the Vice Chairman of
the Board, or in their absence the Chief Executive Officer, or in their absence
the President, shall preside at all meetings of the stockholders and of the
Board of Directors. The officers and agents of the Corporation shall each have
such powers and authority and shall perform such duties in the management of the
business, property, and affairs of the Corporation as generally pertain to their
respective offices, as well as such powers and authorities and such duties as
from time to time may be prescribed by the Board of Directors.
ARTICLE IV
Resignations, Removals, And Vacancies
Section 4.1 Resignations.
Any director or officer of the Corporation, or any member of any committee,
may resign at any time by giving written notice to the Board of Directors, the
Chairman or Vice Chairman of the Board, the Chief Executive Officer, the
President, or the Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein or, if the time be not specified therein,
then upon receipt thereof. The acceptance of such resignation shall not be
necessary to make it effective.
Section 4.2 Removals.
The Board of Directors, by a vote of not less than a majority of the entire
Board, at any meeting thereof, or by written consent, at any time, may, to the
extent permitted by law, remove with or without cause from office or terminate
the employment of any officer or member of any committee and may, with or
without cause, disband any committee.
Any director or the entire Board of Directors may be removed, with or
without cause, by the holders of a majority of the shares entitled at the time
to vote at an election of directors.
-5-
<PAGE>
Section 4.3 Vacancies.
Any vacancy in the office of any director or officer through death,
resignation, removal, disqualification, or other cause, and any additional
directorship resulting from increase in the number of directors, may be filled
at any time by a majority of the directors then in office (even though less
than a quorum remains) or, in the case of any vacancy in the office of any
director, by the stockholders, and, subject to the provisions of this Article
IV, the person so chosen shall hold office until his successor shall have been
elected and qualified; or, if the person so chosen is a director elected to fill
a vacancy, he shall (subject to the provisions of this Article IV) hold office
for the unexpired term of his predecessor.
ARTICLE V
Capital Stock
Section 5.1 Stock Certificates.
The certificates for shares of the capital stock of the Corporation shall
be in such form as shall be prescribed by law and approved, from time to time,
by the Board of Directors.
Section 5.2 Transfer of Shares.
Shares of the capital stock of the Corporation may be transferred on the
books of the Corporation only by the holder of such shares or by his duly
authorized attorney, upon the surrender to the Corporation or its transfer agent
of the certificate representing such stock properly endorsed.
Section 5.3 Fixing Record Date.
In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof
or to express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion, or exchange of stock, or for the purpose of any other lawful action,
the Board of Directors may fix, in advance, a record date, which, unless
otherwise provided by law, shall not be more than sixty nor less than ten days
before the date of such meeting, nor more than sixty days prior to any other
action.
Section 5.4 Lost Certificates.
The Board of Directors or any transfer agent of the Corporation may direct
a new certificate or certificates representing stock of the Corporation to be
issued in place of any certificate or certificates theretofore issued by the
Corporation, alleged to have been lost, stolen, or destroyed, upon the making of
an affidavit of that fact by the person claiming the certificate to be lost,
stolen, or destroyed. When authorizing such issue of a new certificate or
certificates, the Board of Directors (or any transfer agent of the Corporation
authorized to do so by a resolution of the Board of Directors) may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen, or destroyed certificate or certificates, or his
legal representative, to give the Corporation a bond in such sum as the Board of
Directors (or any transfer agent so authorized) shall direct to indemnify the
Corporation against any claim that may be made against the Corporation with
respect to the certificate alleged to have been
-6-
<PAGE>
lost, stolen, or destroyed or the issuance of such new certificates, and such
requirement may be general or confined to specific instances.
Section 5.5 Regulations.
The Board of Directors shall have power and authority to make all such
rules and regulations as it may deem expedient concerning the issue, transfer,
registration, cancellation, and replacement of certificates representing stock
of the Corporation.
ARTICLE VI
Miscellaneous
Section 6.1 Corporate Seal.
The corporate seal shall have inscribed thereon the name of the Corporation
and shall be in such form as may be approved from time to time by the Board of
Directors, the year of its organization, and the words "Corporate Seal" and
"Delaware".
Section 6.2 Fiscal Year.
The fiscal year of the Corporation shall be determined by resolution of the
Board of Directors.
Section 6.3 Notices and Waivers Thereof.
Whenever any notice whatever is required by law, the Certificate of
Incorporation, or these By-Laws to be given to any stockholder, director, or
officer, such notice, except as otherwise provided by law, may be given
personally, or by mail, or, in the case of directors or officers, by telecopy,
electronic mail, telegram, cable, or radiogram, addressed to such address as
appears on the books of the Corporation. Any notice given by telecopy,
electronic mail, telegram, cable, or radiogram shall be deemed to have been
given when it shall have been delivered for transmission and any notice given by
mail shall be deemed to have been given when it shall have been deposited in
the United States mail with postage thereon prepaid.
Whenever any notice is required to be given by law, the Certificate of
Incorporation, or these By-Laws, a written waiver thereof, signed by the person
entitled to such notice, whether before or after the meeting or the time stated
therein, shall be deemed equivalent in all respects to such notice to the full
extent permitted by law. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened.
Section 6.4 Stock of Other Corporations or Other Interests.
Unless otherwise ordered by the Board of Directors, the Chief Executive
Officer, the President, the Secretary, and such attorneys or agents of the
Corporation as may be from time to time authorized by the Board of Directors or
the President, shall have full power and authority on behalf of this Corporation
to attend and to act and vote in person or by proxy at any meeting of the
holders of securities of any
-7-
<PAGE>
corporation or other entity in which this Corporation may own or hold shares or
other securities, and at such meetings shall possess and may exercise all the
rights and powers incident to the ownership of such shares or other securities
which this Corporation, as the owner or holder thereof, might have possessed
and exercised if present. The Chief Executive Officer, the President, the
Secretary, or such attorneys or agents, may also execute and deliver on behalf
of this Corporation powers of attorney, proxies, consents, waivers, and other
instruments relating to the shares or securities owned or held by this
Corporation.
ARTICLE VII
Amendments
The holders of shares entitled at the time to vote for the election of
directors shall have power to adopt, amend, or repeal the By-Laws of the
Corporation by vote of not less than a majority in interest of such shares, and
except as otherwise provided by law, the Board of Directors shall have power
equal in all respects to that of the stockholders to adopt, amend, or repeal
the By-Laws by vote of not less than a majority of the entire Board. However,
any By-Law adopted by the Board may be amended or repealed by vote of the
holders of a majority of the shares entitled at the time to vote for the
election of directors.
ARTICLE VIII
Indemnification
Section 8.1 Indemnification Generally.
The Corporation shall indemnify each person who was or is made a party or
is threatened to be made a party to or is involved in any threatened, pending,
or completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (hereinafter a "Proceeding"), by reason of the
fact that he or she, or a person of which he or she is the legal representative,
is or was a director or officer, or had agreed to serve as a director or
officer, of the Corporation or is or was serving or has agreed to serve at the
request of the Corporation as a director, officer, employee, or agent of another
corporation or of a partnership, joint venture, trust, or other enterprise,
including service with respect to employee benefit plans, or by reason of any
act alleged to have been taken or omitted in such capacity, whether the basis of
such Proceeding is alleged action in an official capacity as a director,
officer, employee, or agent or alleged action in any other capacity while
serving as a director, officer, employee, or agent, to the maximum extent
authorized by the General Corporation Law of the State of Delaware, as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), against all cost, expense, liability, and loss (including
attorneys' fees, judgments, fines, ERISA excise taxes or penalties, and amounts
paid or to be paid in settlement) reasonably incurred by such person or on his
or her behalf in connection with such Proceeding, and such indemnification shall
continue as to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of his or her heirs, executors, and
administrators. The right to indemnification conferred in this Article Eighth
shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such Proceeding in advance of
its final disposition; provided that, if the General Corporation Law so
requires, the payment of such expenses incurred by a director or officer in
advance of the final disposition of a Proceeding shall be made only
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<PAGE>
upon receipt by the Corporation of an undertaking by or on behalf of such person
to repay all amounts so advanced if it shall ultimately be determined that such
person is not entitled to be indemnified by the Corporation as authorized in
this Article Eighth or otherwise and provided that the Corporation shall not be
required to advance expenses in connection with a Proceeding (or part thereof)
alleging liability under Section 16(b) of the Securities Exchange Act of 1934,
as amended (a "16(b) Claim"). The termination of any Proceeding by judgment,
order, settlement, or conviction, or upon a plea of nolo contendre or its
equivalent, shall not, of itself, create a presumption that the person did not
meet any standard of conduct for indemnification imposed by the General
Corporation Law. The Corporation shall be required to indemnify a person in
connection with a Proceeding (or part thereof) initiated by such person only if
such Proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
Section 8.2 Indemnification for Costs, Charges, and Expenses for
Successful Party.
Notwithstanding the other provisions of this Article Eighth, to the extent
that a director or officer of the Corporation has been successful on the merits
or otherwise, including, without limitation, the dismissal of an action without
prejudice, in defense of any Proceeding referred to in Section 8.1, or in the
defense of any claim, issue, or matter therein, he shall be indemnified against
all costs, charges, and expenses (including attorneys' fees) actually and
reasonably incurred by him or on his behalf in connection therewith.
Section 8.3 Determination of Right to Indemnification.
Any indemnification under Section 8.1 or 8.2 (unless ordered by a court)
shall be paid by the Corporation unless a determination is made (a) by the Board
of Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit, or proceeding, or (b) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (c) by the
stockholders, that indemnification of the director or officer is not proper in
the circumstances because he has not met the applicable standards of conduct set
forth in the General Corporation Law.
Section 8.4 Advance of Costs, Charges and Expenses.
Costs, charges, and expenses (including attorneys' fees) incurred by a
person referred to in section 8.1 of this Article Eighth in defending a civil or
criminal Proceeding (including investigations by any government agency and all
costs, charges, and expenses incurred in preparing for any threatened
Proceeding) shall be paid by the Corporation in advance of the final disposition
of such Proceeding; provided, however, that the payment of such costs, charges,
and expenses incurred by a director or officer in his or her capacity as a
director or officer (and not in any other capacity in which service was or is
rendered by such person while a director or officer) in advance of the final
disposition of such Proceeding shall be made only upon receipt of an undertaking
by or on behalf of the director or officer to repay all amounts so advanced if
it shall ultimately be determined that such director or officer is not entitled
to be indemnified by the Corporation as authorized in this Article Eighth and
provided that the Corporation shall not be required to advance expenses in
connection with a 16(b) Claim. No security shall be required for such
undertaking and such undertaking shall be accepted without reference to the
recipient's financial ability to make repayment. The Board of Directors may, in
the manner set forth above, and subject to the approval of such director or
officer, authorize the Corporation's counsel to represent such person in any
Proceeding, whether or not the Corporation is a party to such Proceeding.
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<PAGE>
Section 8.5 Procedure for Indemnification.
Any indemnification under Section 8.1 or advance of costs, charges, and
expenses under Section 8.4 shall be made promptly, and in any event within 60
days, upon the written request of the director or officer directed to the
Secretary of the Corporation. The right to indemnification or advances as
granted by this Article Eighth shall be enforceable by the director or officer
in any court of competent jurisdiction if the Corporation denies such request,
in whole or in part, or if no disposition thereof is made within 60 days. Such
person's costs and expenses incurred in connection with successfully
establishing his or her right to indemnification or advances, in whole or in
part, in any such action shall also be indemnified by the Corporation. It shall
be a defense to any such action (other than an action brought to enforce a claim
for the advance of costs, charges, and expenses under Section 8.4 where the
required undertaking, if any, has been received by the Corporation) that the
claimant has not met the standard of conduct, if any, set forth in the General
Corporation Law, but, to the extent permitted by applicable law, the burden of
proving that such standard of conduct has not been met shall be on the
Corporation. To the extent permitted by applicable law, neither the failure of
the Corporation (including its Board of Directors, its independent legal
counsel, and its stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct,
if any, set forth in the General Corporation Law, nor the fact that there has
been an actual determination by the Corporation (including its Board of
Directors, its independent legal counsel, and its stockholders) that the
claimant has not met such applicable standard of conduct, shall be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.
Section 8.6 Other Rights; Continuation of Right of Indemnification.
The indemnification provided by this Article Eighth shall not be deemed
exclusive of any other rights to which a person seeking indemnification may be
entitled under any law (common or statutory), agreement, vote of stockholders or
disinterested directors, or otherwise, both as to action in his or her official
capacity and as to action in another capacity while holding office, and shall
continue as to a person who has ceased to be a director or officer and shall
inure to the benefit of the estate, heirs, executors, and administrators of such
person. All rights to indemnification under this Article Eighth shall be deemed
to be a contract between the Corporation and each director and officer of the
Corporation who serves or served in such capacity at any time while this Article
Eighth is in effect. No amendment or repeal of this Article Eighth or of any
relevant provisions of the General Corporation Law or any other applicable laws
shall adversely affect or deny to any director or officer any rights to
indemnification which such person may have, or change or release any obligations
of the Corporation under this Article Eighth with respect to any costs,
charges, expenses (including attorneys' fees), judgments, fines, and amounts
paid in settlement which arise out of an Proceeding based in whole or
substantial part on any act, actual or alleged, which takes place before or
while this Article Eighth is in effect. The provisions of this Section 8.6
shall apply to any such Proceeding whenever commenced, including any such
Proceeding commenced after any amendment or repeal of this Article Eighth. The
right to indemnification and advancement of expenses conferred on any person by
this Article Eighth shall not limit the Corporation from providing any other
indemnification permitted by law.
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<PAGE>
Section 8.7 Definitions.
For purposes of this Article Eighth:
"the Corporation" includes any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or merger which, if
its separate existence continued, would have had power and authority to
indemnify its directors or officers, so that any person who is or was a director
or officer of such constituent corporation, or is or was serving at the request
of such constituent corporation as a director, officer, employee, or agent of
another corporation, partnership, joint venture, trust, or other enterprise,
shall stand in the same position under the provisions of this Article Eighth
with respect to the resulting or surviving corporation ass he would have with
respect to such constituent corporation if its separate existence had continued;
"other enterprises" includes employee benefit plans, including but not
limited to any employee benefit plans of the Corporation;
"serving at the request of the Corporation" includes, but is not limited
to, any service which imposes duties on, or involves services by, a director or
officer of the Corporation with respect to an employee benefit plan, its
participants, or beneficiaries, including acting as a fiduciary there;
"fines" shall include any penalties and any excise or similar taxes
assessed on a person with respect to an employee benefit plan;
a person who acted in good faith and in a manner he reasonably believed to
be in the interest of the participants and beneficiaries of an employee benefit
plan shall be deemed to have acted in a manner "not opposed to the best
interests of the Corporation" as referred to in Section 8.1; and
service as a partner, trustee, or member of management or similar committee
of a partnership or joint venture, or as a director, officer, employee, or agent
of a corporation which is a partner, trustee, or joint venturer, shall be
considered service as a director, officer, employee, or agent of the
partnership, joint venture, trust, or other enterprise.
Section 8.8 Saving Clause.
If this Article Eighth or any portion hereof shall be invalidated on any
ground by a court of competent jurisdiction, then the Corporation shall
nevertheless indemnify each director and officer of the Corporation as to costs,
charges, expenses (including attorneys' fees), judgments, fines, and amounts
paid in settlement with respect to any action, suit, or proceeding, whether
civil, criminal, administrative, or investigative, including an action by or in
the right of the Corporation, to the full extent permitted by any applicable
portion of this Article Eighth that shall not have been invalidated and to the
full extent permitted by applicable law.
Section 8.9 Indemnification of Other Persons.
If authorized by the Board of Directors, the Corporation may indemnify and
advance expenses to any other person whom it has the power to indemnify under
the General Corporation Law to the fullest extent permitted by such statute.
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<PAGE>
Section 8.10 Insurance.
The Corporation may purchase and maintain insurance, at its expense, to
protect itself and any director, officer, employee, or agent of the Corporation
or another corporation, partnership, joint venture, trust, or other enterprises
against any expense, liability or claim, whether or not the Corporation would
have the power to indemnify such person under the General Corporation Law.
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<PAGE>
READING COMPANY
---------------
NONQUALIFIED STOCK OPTION PLAN
------------------------------
1. Purpose. The purpose of the Reading Company Nonqualified Stock Option Plan
-------
(the "Plan") is to further the growth, development and financial success of
Reading Company (the "Company") and any subsidiary by providing additional
incentives to those officers, key employees and outside directors who are
responsible for the management of the business affairs of the Company and
any subsidiary, and which will enable them to participate directly in the
growth of the capital stock of the Company. The Company intends that the
Plan will facilitate securing, retaining, and motivating management
employees and outside directors of high caliber and potential.
2. Administration.
--------------
(a) The Executive Committee of the Company's Board of Directors (the
"Board") shall, subject to the provisions of the Plan, have full and final
authority, in its sole discretion, to interpret the provisions of the Plan
and to decide all questions of fact arising in its application; to
determine the employees and outside directors to whom options shall be
granted under the Plan; to determine the time when options shall be
granted; and to make all other determinations necessary or advisable for
the administration of the Plan.
(b) All decisions, determinations, and interpretations of the
Executive Committee (the "Committee") shall be final and binding on all
optionees. All actions of the Committee shall be taken by a majority vote
of its members. The Committee may appoint a secretary to keep minutes of
its meetings and shall make rules and regulations for their conduct as it
shall deem advisable.
3. Stock Subject to the Plan. The shares that may be issued under the Plan
-------------------------
shall not exceed in the aggregate 500,000 shares of Class A common stock,
par value $.01, of the Company (the "Common Stock"). Such shares may be
authorized and unissued shares or shares issued and subsequently reacquired
by the Company. Except as otherwise provided herein, any shares subject to
an option which for any reason expires or is terminated unexercised as to
such shares shall again be available under the Plan. The Committee may
grant to holders of outstanding options, in exchange for the surrender and
cancellation of such options, new options having purchase prices lower than
provided in the options so surrendered and cancelled, and containing such
other terms and conditions as the Committee may prescribe in accordance
with the provisions of the Plan, without regard to the price, period of
exercise, or any other terms or conditions of the option surrendered.
Shares delivered under the Plan shall be fully paid and non-assessable.
4. Eligibility to Receive Options. Persons eligible to receive stock options
------------------------------
under the Plan shall be limited to those officers, key employees and
directors of the Company and any subsidiary (as defined in Section 424 of
the Internal Revenue Code of 1986 (the "Code"), or any amendment or
substitute thereto), who are in positions in which their decisions, actions
and counsel significantly impact upon the profitability and success of the
Company and any subsidiary.
5. Form of Grants. Grants may be made at any time and from time to time by
--------------
the Committee in the form of stock options to purchase shares of Common
Stock. These stock options are not intended to qualify as incentive stock
options within the meaning of Section 422 of the Code.
6. Stock Option Agreements. Stock options for the purchase of Common Stock
-----------------------
("Options") shall be evidenced by written agreements in such form not
inconsistent with the Plan as the Committee shall approve from time to time
and which shall contain in substance the following terms and conditions:
(a) Type of Option. Each option agreement shall identify the Options
--------------
represented thereby as nonqualified stock options.
(b) Option Price. The purchase price of the Common Stock subject to an
------------
Option shall not be less than 100% of the fair market value of such stock
on the date the Option is granted, as determined by the Committee. In no
event shall the purchase price per share be less than the par value of such
share. For this purpose, fair market value on any date shall mean the
closing price of the Common Stock,
<PAGE>
as reported in the Wall Street Journal (or if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated
Quotation (NASDAQ) System), or if the Common Stock is not reported by
NASDAQ, the fair market value shall be as determined by the Committee.
(c) Exercise Term. Unless the Committee in its discretion determines
-------------
otherwise, each option agreement shall state that the Option is exercisable
in three (3) cumulative installments with one-third (1/3) of the shares
covered by the Option becoming exercisable commencing on the date of grant
and another one-third (1/3) of such shares becoming exercisable on each
anniversary of the date of grant thereafter until the Option becomes fully
exercisable. Moreover, the Committee, in its discretion, may have each
option agreement provide that any unexercisable portion of the Option will
become exercisable at the time an optionee ceases to be an employee of the
Company or any subsidiary for any reason other than resignation or a
discharge for cause or at the time an optionee no longer serves as a member
of the Board for any reason other than resignation or removal for cause.
Anything in the foregoing to the contrary notwithstanding, no Option shall
be exercisable after ten years from the date of grant thereof and no Option
shall be exercisable with respect to fractional shares. Subject to the
foregoing, the Committee shall have the power, at or prior to the time
Options are granted, to determine in its discretion any conditions to be
met before Options become exercisable with respect to all or any part of
the shares covered thereby, including the time or times of exercise and
performance standards to be met by the optionees. The Committee shall have
the power to permit an acceleration of previously established exercise
terms, subject to the requirements set forth herein, upon such
circumstances and subject to such terms and conditions as the Committee
deems appropriate.
(d) Exercise and Payment for Shares. Options may be exercised in whole or
-------------------------------
in part, from time to time, by giving written notice of exercise to the
Secretary or his office, specifying the number of shares to be purchased.
The purchase price of the shares with respect to which an Option is
exercised shall be payable in full with the notice of exercise by certified
check, by delivery of shares of Common Stock already owned by the optionee
at fair market value, including shares obtained through exercise of an
Option granted hereunder, or a combination thereof, as the Committee may
determine from time to time and subject to such terms and conditions as may
be prescribed by the Committee for such purpose.
(e) Conditions Upon Issuance of Shares. Shares shall not be issued
----------------------------------
pursuant to the exercise of an Option unless the exercise of such Option
and the issuance and delivery of such shares pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Securities and Exchange Act of 1934
(the "Exchange Act"), the rules and regulations promulgated thereunder and
the requirements of any stock exchange upon which the Common Stock may then
be listed, and shall be further subject to the approval of counsel for the
Company with respect to such compliance. As a condition to the exercise of
an Option, the Company may require the person exercising such Option to
represent and warrant at the time of any such exercise that the shares are
being purchased only for investment and without any present intention to
sell or distribute such sharesif, in the opinion of counsel for the
Company, such a representation is required by any of the aforementioned
relevant provisions of law.
(f) Rights Upon Termination of Service. In the event an optionee resigns
----------------------------------
as an employee of the Company or any subsidiary or as a director of the
Company or is discharged by the Company or any subsidiary for cause or is
removed as a director for cause, the Optionee shall have no further right
to exercise the Option following such resignation, discharge or removal.
In the event that an optionee ceases to be an employee of the Company or
any subsidiary for any reason other than resignation or a discharge for
cause or in the event that an optionee no longer serves as a member of the
Board for any reason other than resignation or removal for cause, the
optionee shall have the right to exercise the Option within a period of
sixty (60) days after such termination of employment or such termination of
service on the Board (but in no event after the expiration of the term of
the Option) to the extent that the Option was exercisable at the time of
such termination, or within such other period, and subject to such terms
and conditions, as may be specified by the Committee.
(g) Nontransferability. Each option agreement shall state that the Option
------------------
is not transferable other than by will or by the laws of descent and
distribution, and that during the lifetime of the optionee the Option is
exercisable only by him.
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<PAGE>
(h) Substitution of Options. Options may be granted under the Plan from
-----------------------
time to time in substitution for stock options held by employees of other
corporations who are about to become and who do concurrently with the grant
of such options become employees of the Company or a subsidiary as a result
of a merger or consolidation of the employing corporation with the Company
or a subsidiary, or the acquisition by the Company or a subsidiary of the
assets of the employing corporation or the acquisition by the Company or a
subsidiary of the stock of the employing corporation. The terms and
conditions of the substitute options so granted may vary from the terms and
conditions set forth in this Section 6 of the Plan to such extent as the
Committee at the time of grant may deem appropriate to conform, in whole or
in part, to the provisions of the stock options in substitution for which
they are granted.
(i) Other Provisions. Each option agreement shall contain such other
----------------
provisions not inconsistent with the Plan as the Committee shall deem
advisable.
7. Date of Grant. The initial grant of Options under this Plan shall be made on
-------------
the effective date set forth in Section 23(f), below. Thereafter, the date
on which an Option shall be deemed to have been granted under this Plan shall
be the date of the Committee's authorization of the Option or such later date
as may be determined by the Committee at the time the Option is authorized.
Notice of the determination shall be given to each individual to whom an
Option is so granted within a reasonable time after the date of such grant.
8. General Restrictions. Each Option under the Plan shall be subject to the
--------------------
requirement that if at any time the Committee shall determine that (i) the
listing, registration or qualification of the shares of Common Stock subject
or related thereto upon any securities exchange or under any state or federal
law, or (ii) the consent or approval of any government regulatory body, or
(iii) an agreement by the recipient of an Option with respect to the
disposition of shares of Common Stock is necessary or desirable as a
condition of or in connection with the granting of such Option or the
issuance or purchase of shares of Common Stock thereunder, such Option shall
not be consummated in whole or in part unless such listing, registration,
qualification, consent, approval, or agreement shall have been effected or
obtained free of any conditions not acceptable to the Committee.
9. Single or Multiple Agreements. The Options granted hereunder may be
-----------------------------
evidenced by a single agreement or by multiple agreements, as determined by
the Committee, in its sole discretion.
10. Rights of a Shareholder. The recipient of any Option under the Plan, unless
-----------------------
otherwise provided by the Plan, shall have no rights as a shareholder with
respect thereto unless and until certificates for shares of Common Stock are
issued and delivered to him.
11. Right to Terminate Service. Nothing in the Plan nor in any agreement
--------------------------
entered into pursuant to the Plan shall confer upon any optionee the right
to continue in the service of the Company or any subsidiary or affect any
right which the Company or any subsidiary may have to terminate the
employment of such optionee.
12. Withholding. Whenever the Company proposes or is required to issue or
-----------
transfer shares of Common Stock under the Plan, the Company shall have the
right to require the recipient to remit to the Company an amount sufficient
to satisfy any federal, state or local withholding tax requirements prior to
the delivery of any certificate or certificates for such shares. Whenever
under the Plan payments are to be made in cash, such payments shall be net
of an amount sufficient to satisfy any federal, state or local withholding
tax requirements. If and to the extent authorized by the Committee, in its
sole discretion, an optionee may make an election, by means of a form of
election to be prescribed by the Committee, to have shares of Common Stock
which are acquired upon exercise of an Option withheld by the Company or to
tender other shares of Common Stock or other securities of the Company owned
by the optionee to the Company at the time of exercise of an Option to pay
the amount of tax that would otherwise be required by law to be withheld by
the Company as a result of any exercise of an Option from amounts payable to
such optionee. Any such election shall be irrevocable and shall be subject
to the disapproval of the Committee at any time. Any securities so withheld
or tendered will be valued by the Committee as of the date of exercise.
13. Non-Assignability. No Option under the Plan shall be assignable or
-----------------
transferable by the recipient thereof except by will or by the laws of
descent and distribution or by such other means as the Committee may
approve. During the life of the recipient such Option shall be exercisable
only by such person or by such person's guardian or legal representative.
-3-
<PAGE>
14. Non-Uniform Determinations. The Committee's determinations under the Plan
--------------------------
(including without limitation determinations of the persons to receive
grants of Options, the form, amount and timing of such grants, the terms and
provisions of such grants, and the agreements evidencing same) need not be
uniform and may be made selectively among persons who receive, or are
eligible to receive, grants of Options under the Plan whether or not such
persons are similarly situated.
15. Adjustments Upon Changes in Capitalization or Merger. Subject to any
----------------------------------------------------
required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as
to which no Options have yet been granted or which have been returned to the
Plan upon cancellation or expiration of an Option, as well as the price per
share of Common Stock covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock
split, stock dividend, combination or reclassification of the Common Stock,
or any other increase or decrease in the number of issued shares of Common
Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall
not be deemed to have been "effected without receipt of consideration."
Such adjustment shall be made by the Committee, whose determination in that
respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class,
or securities convertible into shares of stock of any class, shall affect,
and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company, the
Committee shall declare that each outstanding Option shall terminate as of a
date fixed by the Committee and shall give each optionee the right to
exercise his Option as to all or any part of the optioned Common Stock,
including shares as to which the Option would not otherwise be exercisable.
In the event of the merger of the Company or any subsidiary with or into
another corporation, the affected Options shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation, provided that the successor
corporation consents to such assumption or substitution. Moreover, the
Committee may determine, in the exercise of its sole discretion and in lieu
of such assumption or substitution, that the affected optionees shall have
the right to exercise their Options as to all of the optioned Common Stock,
including shares as to which the Option would not otherwise be exercisable.
If the Committee makes an Option fully exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Committee shall
notify the optionee that the Option shall be fully exercisable for a period
of thirty (30) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
16. Amendment or Termination. The Committee may terminate or amend the Plan at
------------------------
any time. The termination or any modification or amendment of the Plan
shall not, without the consent of an optionee, affect his rights under an
Option previously granted.
17. Effect on Other Plans. Participation in this Plan shall not affect any
---------------------
employee's eligibility to participate in any other benefit or incentive plan
of the Company or any subsidiary. Any Options granted pursuant to this Plan
shall not be used in determining the benefits provided under any other plan
of the Company or any subsidiary unless specifically provided.
18. Duration of the Plan. The Plan shall remain in effect until all Options
--------------------
granted under the Plan have been satisfied by the issuance of shares, but no
Option shall be granted more than ten years after the earlier of the date
the Plan is adopted by the Company or is approved by the Company's
shareholders.
19. Forfeiture for Dishonesty. Notwithstanding anything to the contrary in this
-------------------------
Plan, if the Committee finds, by a majority vote, after full consideration
of the facts presented on behalf of both the Company and any optionee, that
the optionee has been engaged in fraud, embezzlement, theft, commission of a
felony or other dishonest conduct which damaged the Company or any
subsidiary or that the optionee has disclosed trade secrets of the Company
or any subsidiary, the optionee shall forfeit all unexercised Options and
all exercised Options under which the Company has not yet delivered the
certificates. The decision of the Committee as to the cause of an
optionee's discharge and the damage done to the Company or any subsidiary
shall be final. No decision of the Committee, however, shall affect the
finality of the discharge of such optionee by the Company or any subsidiary
in any manner.
-4-
<PAGE>
20. No Prohibition on Corporate Action. No provision of this Plan shall be
----------------------------------
construed to prevent the Company or any officer or director thereof from
taking any corporate action deemed by the Company or such officer or
director to be appropriate or in the Company's best interest, whether or not
such action could have an adverse effect on the Plan or any Options granted
hereunder, and no optionee or optionee's estate, personal representative or
beneficiary shall have any claim against the Company or any officer or
director thereof as a result of the taking of such action.
21. Use of Proceeds. The proceeds received by the Company from the exercise of
---------------
any Option issued pursuant to the Plan shall be used for general corporate
purposes.
22. Indemnification. With respect to the administration of the Plan, the
---------------
Company shall indemnify each present and future member of the Committee and
the Board against, and each member of the Committee and the Board shall be
entitled without further act on his part to indemnity from the Company for
all expenses (including the amount of judgments and the amount of approved
settlements made with a view to the curtailment of costs of litigation,
other than amounts paid to the Company itself) reasonably incurred by him in
connection with or arising out of, any action, suit or proceeding in which
he may be involved by reason of his being or having been a member of the
Committee and the Board, whether or not he continues to be such member of
the Committee and the Board at the time of incurring such expenses;
provided, however, that such indemnity shall not include any expenses
incurred by any such member of the Committee and the Board (i) in respect of
matters as to which he shall be finally adjudged in any such action, suit or
proceeding to have been guilty of gross negligence or willful misconduct in
the performance of his duty as such member of the Committee and the Board;
or (ii) in respect of any matter in which any settlement is effected for an
amount in excess of the amount approved by the Company on the advice of its
legal counsel; and provided further that no right of indemnification under
the provisions set forth herein shall be available to or enforceable by any
such member of the Committee and the Board unless within 60 days after
institution of any such action, suit or proceeding, he shall have offered
the Company in writing the opportunity to handle and defend same at its own
expense. The foregoing right of indemnification shall inure to the benefit
of the heirs, executors or administrators of each such member of the
Committee and the Board and shall be in addition to all other rights to
which such member of the Committee and the Board may be entitled as a matter
of law, contract or otherwise.
23. Miscellaneous Provisions.
------------------------
(a) No optionee or other person shall have any right with respect to the
Plan, the Common Stock reserved for issuance under the Plan or in any Option
until written evidence of the Option shall have been delivered to the optionee
and all the terms, conditions and provisions of the Plan and the Option
applicable to such optionee (and each person claiming under or through him)
have been met.
(b) No shares of Common Stock, other securities or property of the
Company, or other forms of payment shall be issued hereunder with respect to
any Option unless counsel for the Company shall be satisfied that such
issuance will be in compliance with applicable federal, state, local and
foreign legal, securities exchange and other applicable requirements.
(c) The Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Option under the Plan, and rights to the
payment of Options shall be no greater than the rights of the Company's
general creditors.
(d) By accepting any Option or other benefit under the Plan, each
optionee and each person claiming under or through him shall be conclusively
deemed to have indicated his acceptance and ratification of, and consent to,
any action taken under the Plan by the Company, the Board or the Committee or
its delegates.
(e) The masculine pronoun shall include the feminine and neuter, and the
singular shall include the plural, where the context so indicates.
(f) This Plan shall be effective as of May 4, 1992, subject to the
approval of the Company's shareholders at the first annual meeting of
shareholders next following such effective date. If the
-5-
<PAGE>
shareholders do not approve the Plan, the Plan shall not be effective. No
Option shall be granted pursuant to this Plan after May 3, 2002.
TO RECORD the adoption of this Plan, the Board has caused this instrument to
be executed on this 4th day of May, 1992.
READING COMPANY
By: /s/ James J. Cotter
---------------------------------
Chairman
-6-
<PAGE>
READING ENTERTAINMENT, INC.
---------------------------
AMENDMENTS TO READING COMPANY NONQUALIFIED STOCK OPTION PLAN
------------------------------------------------------------
The 1992 Nonqualified Stock Option Plan (the "Plan") of Reading Company
("Reading"), as previously adopted and assumed by Reading Entertainment, Inc.
("Reading Entertainment" or the "Company"), is hereby amended as follows:
i. To reflect the assumption of the Plan by Reading Entertainment, (a)
the reference to "Reading Company" in Section 1 of the Plan is deleted
and the phrase "Reading Entertainment, Inc." is inserted in its stead
and (b) the phrase "Class A common stock, par value $.01" is deleted
and the phrase "Common Stock, par value $.001 per share" is inserted
in its stead.
ii. The phrase "Executive Committee" in Sections 2(a) and (b) is hereby
deleted and the phrase "Compensation Committee" is inserted in its
stead.
iii. The first sentence of Section 6(c) is amended in its entirety to read
as follows:
Unless the Committee in its discretion determines otherwise, each option
agreement shall state that the Option is exercisable in four (4) cumulative
installments with one-fourth (1/4) of the shares covered by the Option
becoming exercisable commencing on the first anniversary of the date of
grant and another one-fourth (1/4) of such shares becoming exercisable on
each anniversary of the date of grant thereafter until the Option becomes
fully exercisable.
iv. Section 6(f) is amended in its entirety to read as follows:
(f) Rights Upon Termination of Service. Unless otherwise provided by the
----------------------------------
Committee (at the time of grant of an Option, the time of termination
of employment, or otherwise), (i) in the event an optionee resigns as
an employee of the Company or any subsidiary or as a director of the
Company or is discharged by the Company or any subsidiary for cause or
is removed as a director for cause, the Optionee shall have no further
right to exercise the Option following such resignation, discharge or
removal, and (ii) in the event that an optionee ceases to be an
employee of the Company or any subsidiary for any reason other than
resignation or a discharge for cause or in the event that an optionee
no longer serves as a member of the Board for any reason other than
resignation or removal for cause, the optionee shall have the right to
exercise the Option within a period of sixty (60) days after such
termination of employment or such termination of service on the Board
(but in no event after the expiration of the term of the Option) to
the extent that the Option was exercisable at the time of such
termination.
v. This Amendment shall be effective when adopted by the Board of
Directors. This Amendment shall not affect the rights of an option
holder under any option previously granted.
TO RECORD the adoption of this Amendment, the Board has caused this
instrument to be executed on this 16/th/ day of November, 1997.
READING ENTERTAINMENT, INC.
By: /s/ James J. Cotter
--------------------------------
Chairman
-7-
<PAGE>
READING ENTERTAINMENT, INC.
---------------------------
SECOND AMENDMENT TO READING ENTERTAINMENT, INC. 1992 NONQUALIFIED
-----------------------------------------------------------------
STOCK OPTION PLAN
-----------------
The 1992 Nonqualified Stock Option Plan (the "Plan") of Reading Company
("Reading"), as previously adopted and assumed by Reading Entertainment, Inc.
("Reading Entertainment" or the "Company"), is hereby amended as follows:
Section 6(g) of the 1992 Plan is amended and restated as follows:
Nontransferability. Unless otherwise approved by the Committee, each
------------------
option agreement shall state that the Option is not transferrable
other than by will or by the laws of descent and distribution, and
that during the lifetime of the optionee the Option is exercisable
only by him.
TO RECORD the adoption of this Amendment, the Compensation Committee of the
Board of Directors has caused this instrument to be executed on this 21/st/ day
of April, 1998.
READING ENTERTAINMENT, INC.
By: /s/ John W. Sullivan
--------------------------------------
Chairman, Compensation Committee
<PAGE>
PUBLIC TRANSPORT CORPORATION
("PTC")
- and -
READING PROPERTIES PTY LTD ACN 071 195 429
("Developer")
- and -
MACKIE GROUP PTY LTD ACN 006 524 456
("Mackie")
AGREEMENT
<PAGE>
1
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Clause Page
<S> <C>
RECITALS................................................................................. 1
1. DEFINITIONS AND INTERPRETATION.................................................. 2
1.1 DEFINITIONS............................................................. 2
1.2 INTERPRETATION.......................................................... 8
1.3 CONTENTS AND HEADINGS................................................... 9
1.4 PRECEDENCE.............................................................. 9
2. GENERAL OBLIGATIONS............................................................. 9
2.1 DEVELOPER'S OBLIGATIONS................................................. 9
2.2 PTC'S OBLIGATIONS....................................................... 10
2.3 INDEPENDENCE OF DEVELOPER............................................... 11
2.4 ASSIGNMENT.............................................................. 11
2.5 EXERCISE OF PTC'S POWERS................................................ 11
3. NON DEVELOPMENT OBLIGATIONS..................................................... 12
3.1 CAR PARK AGREEMENT...................................................... 12
3.2 SECTION 173 AGREEMENT................................................... 12
3.3 LICENCE FOR ACCESS...................................................... 12
4. ENGAGEMENT OF CONSULTANTS....................................................... 12
4.1 DEVELOPER'S CONSULTANTS................................................. 12
4.2 PERIOD OF ENGAGEMENT.................................................... 12
4.3 NO DIMINISHING OF RESPONSIBILITY........................................ 12
5. PROJECT DOCUMENTATION........................................................... 12
5.1 DEVELOPMENT OF PROJECT DOCUMENTATION.................................... 12
5.2 SUBMISSION OF DOCUMENTATION TO PTC'S REPRESENTATIVE..................... 12
5.3 APPROVAL OF DOCUMENTATION BY PTC'S REPRESENTATIVE....................... 13
5.4 DOCUMENTATION TO BE INCORPORATED INTO THE CONTRACT...................... 13
5.5 COPIES OF DOCUMENTATION................................................. 13
6. PROGRAMME AND REVIEW OF CONSTRUCTION PROGRESS................................... 13
6.1 DEVELOPER TO PREPARE PROGRAMME.......................................... 13
6.2 FORM OF PROGRAMME....................................................... 13
6.3 APPROVAL OF PROGRAMME BY PTC'S REPRESENTATIVE........................... 14
6.4 MEETINGS AND REPORTS.................................................... 14
6.5 CONSTRUCTION PROGRAMME REVIEW PROCESS................................... 14
7. THE SITE........................................................................ 15
7.1 DEVELOPER'S OBLIGATIONS................................................. 15
7.2 DEVELOPER'S WARRANTIES AND ACKNOWLEDGMENTS.............................. 15
7.3 ACCESS TO THE SITE...................................................... 16
7.4 ACCESS TO MAKE GOOD..................................................... 16
7.5 ACCESS FOR PTC'S REPRESENTATIVE......................................... 17
7.6 ACCESS TO ADJOINING PTC LAND............................................ 17
7.7 SITE CONDITIONS......................................................... 17
7.8 SITE ESTABLISHMENT AND CLEANING......................................... 17
7.9 CHANGES TO SITE......................................................... 18
7.10 CONDITION OF THE LAND................................................... 18
</TABLE>
<PAGE>
2
<TABLE>
<S> <C>
8. SUBCONTRACTS.................................................................... 19
8.1 SUBCONTRACTING.......................................................... 19
8.2 DEVELOPER'S RESPONSIBILITY.............................................. 19
9. ROLE OF PTC'S REPRESENTATIVE.................................................... 19
9.1 AGENT OF PTC............................................................ 19
9.2 PTC'S REPRESENTATIVE'S AUTHORITY........................................ 19
9.3 EMPLOYMENT OF OTHERS ON DEVELOPER'S DEFAULT............................. 20
10. EXECUTION OF THE WORKS.......................................................... 20
10.1 SCOPE OF THE WORKS...................................................... 20
10.2 PROVISION OF MATERIALS AND LABOUR....................................... 20
10.3 CONSTRUCTION METHODS AND QUALITY ASSURANCE.............................. 21
10.4 SUPERVISION............................................................. 21
10.5 REQUIREMENTS OF AUTHORITIES............................................. 21
10.6 SETTING OUT INFORMATION................................................. 21
10.7 SETTING OUT THE WORKS................................................... 22
10.8 MATERIALS AND WORKMANSHIP............................................... 22
10.9 OPENING UP THE WORKS.................................................... 23
10.10 QUALITY OF WORK AND MATERIALS........................................... 23
11. PTC SAFETY AWARENESS............................................................ 24
11.1 SAFETY AWARENESS TRAINING COURSE........................................ 24
11.2 DEVELOPER TO NOMINATE PERSONNEL......................................... 25
11.3 COMPLIANCE WITH SAFEWORKING INSTRUCTIONS................................ 25
11.4 SAFEWORKING INSTRUCTIONS PRESENTATIONS.................................. 25
12. GENERAL ENGINEERING AND OPERATIONAL CONDITIONS.................................. 25
12.1 COMPLIANCE WITH GENERAL ENGINEERING AND OPERATIONAL CONDITIONS.......... 25
12.2 NOTICE OF ABSOLUTE OCCUPATIONS.......................................... 25
12.3 PTC NOT LIABLE.......................................................... 26
12.4 DEVELOPER TO NOTIFY RELEVANT AUTHORITIES................................ 26
12.5 PTC FLAGMEN............................................................. 26
12.6 ABSOLUTE OCCUPATION DAMAGE.............................................. 26
12.7 PTC COSTS............................................................... 26
12.8 CHANGES TO PROGRAMME.................................................... 27
13. PTC INFRASTRUCTURE.............................................................. 27
13.1 PTC INFRASTRUCTURE WORKS MODIFICATIONS.................................. 27
13.2 PTC INFRASTRUCTURE WORKS................................................ 27
14. TIME............................................................................ 27
14.1 NOTIFICATION OF DELAYS.................................................. 27
14.2 NOTICE OF CLAIMED EXTENSION............................................. 28
14.3 PTC'S REPRESENTATIVE'S DETERMINATION.................................... 28
14.4 CONDITION PRECEDENT TO EXTENSION OF TIME................................ 28
14.5 PRACTICAL COMPLETION.................................................... 28
14.6 DEFECTS LIABILITY PERIOD................................................ 29
14.7 DEVELOPER TO RECTIFY.................................................... 29
14.8 TIME FOR MAKING GOOD.................................................... 30
14.9 SUBMISSION OF CERTIFICATES, SURVEY PLANS AND OPERATING DOCUMENTS........ 30
</TABLE>
<PAGE>
3
<TABLE>
<S> <C>
15. INDEMNITIES AND INSURANCE....................................................... 30
15.1 DEVELOPER'S INDEMNITY................................................... 30
15.2 DEVELOPER'S INSURANCE................................................... 30
15.3 INSURANCE REQUIREMENTS.................................................. 31
15.4 INSURANCE CONDITIONS FOR JOINT POLICIES................................. 32
15.5 COPIES OF POLICIES...................................................... 32
15.6 PAYMENT OF PREMIUMS..................................................... 32
15.7 CERTIFICATES OF CURRENCY................................................ 32
16. BANK GUARANTEE.................................................................. 32
16.1 DEVELOPER TO PROVIDE BANK GUARANTEE..................................... 32
16.2 TERMINATION OF CONTRACT................................................. 32
16.3 RELEASE OF BANK GUARANTEE............................................... 33
16.4 RELEASE OF DEFECTS GUARANTEE............................................ 33
16.5 DRAWDOWN................................................................ 33
16.6 PTC'S OTHER RIGHTS NOT PREJUDICED....................................... 33
16.7 REPLACEMENT BANK GUARANTEE.............................................. 33
17. DEFAULT AND TERMINATION......................................................... 34
17.1 DEFAULT EVENTS.......................................................... 34
17.2 OCCURRENCE OF DEFAULT EVENT............................................. 34
17.3 CURE PERIOD............................................................. 34
17.4 EXTENSION TO CURE PERIOD................................................ 34
17.5 REMEDIES FOR DEFAULT EVENTS............................................. 35
17.6 RIGHTS AND LIABILITIES OF THE PARTIES FOLLOWING TERMINATION BY PTC...... 36
17.7 WAIVER.................................................................. 37
18. ASSIGNMENT OF INTEREST BY MACKIE................................................ 37
19. CONSENT BY PTC.................................................................. 37
20. DISPUTE RESOLUTION.............................................................. 37
21. NOTICES......................................................................... 38
21.1 NOTICE REQUIREMENTS..................................................... 38
21.2 NOTICES ON PTC'S REPRESENTATIVE......................................... 39
21.3 TIME OF EFFECT OF NOTICE................................................ 39
21.4 RECEIPT OF NOTICE....................................................... 39
21.5 NOTICES TO US PARENT.................................................... 39
21.6 FAILURE TO SERVE NOTICE................................................. 39
22. COSTS........................................................................... 39
22.1 LEGAL COSTS............................................................. 39
22.2 COSTS ON DEFAULT........................................................ 39
23. MISCELLANEOUS................................................................... 40
23.1 CERTIFICATE............................................................. 40
23.2 EXERCISE OF RIGHTS...................................................... 40
23.3 SINGLE OR PARTIAL EXERCISE.............................................. 40
23.4 FAILURE OR DELAY IN EXERCISE............................................ 40
23.5 NO LIABILITY............................................................ 40
23.6 WAIVER AND VARIATION.................................................... 40
</TABLE>
<PAGE>
4
<TABLE>
<S> <C>
23.7 WAIVER DOES NOT EXTEND TO ANOTHER....................................... 40
23.8 ACCEPTANCE OF PAYMENT................................................... 40
23.9 SUPERVENING LEGISLATION................................................. 40
23.10 REMEDIES CUMULATIVE..................................................... 41
23.11 SET-OFF................................................................. 41
23.12 REDUCTION OF AMOUNT PAYABLE............................................. 41
23.13 INDEMNITIES............................................................. 41
23.14 ENFORCEMENT OF INDEMNITY................................................ 41
23.15 FURTHER ASSURANCES...................................................... 41
23.16 ANTECEDENT BREACHES AND OBLIGATIONS..................................... 41
23.17 ENTIRE AGREEMENT........................................................ 41
24. SEVERABILITY.................................................................... 42
25. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS.............................. 42
25.1 GOVERNING LAW........................................................... 42
25.2 JURISDICTION............................................................ 42
25.3 SERVICE OF PROCESS...................................................... 42
26. GOOD FAITH...................................................................... 42
SCHEDULE 1
STANDARDS FOR PTC WORKS.................................................................. 44
SCHEDULE 2
PUBLIC TRANSPORT CORPORATION GENERAL CRITERIA
for Developments at Railway Locations
Railway Operations and Engineering Design and Construction Aspects
ENG-AD-STD-0001. Dated 29.7.97........................................................... 45
SCHEDULE 3
PROCEDURES FOR CONTRACTORS WORKING ON PUBLIC TRANSPORT CORPORATION'S
Property and Facilities.................................................................. 46
SCHEDULE 4
SITE PLAN - BEVERIDGE WILLIAMS (JOB NO: MSM-576)......................................... 47
SCHEDULE 5
CAR PARK AGREEMENT....................................................................... 48
SCHEDULE 6
Reading Development Plans (McGauran Soon Plans).......................................... 49
SCHEDULE 7
PTC INFRASTRUCTURE WORKS................................................................. 50
SCHEDULE 8
SECTION 173 AGREEMENT.................................................................... 51
SCHEDULE 9
PTC SITE SPECIFIC REQUIREMENTS........................................................... 52
SCHEDULE 10
LICENCE FOR CARPARKING (CLAUSE 2.2B)..................................................... 53
SCHEDULE 11
LICENCE FOR ACCESS TO ADJACENT PTC LAND (CLAUSE 3.3)..................................... 54
</TABLE>
<PAGE>
5
APPENDIX
ITEM 1 PUBLIC TRANSPORT CORPORATION
ITEM 2 DEVELOPER
READING PROPERTIES PTY LTD ACN 071 195 429
ITEM 3 PTC'S REPRESENTATIVE
MANAGER, COMMERCIAL DEVELOPMENT SERVICES, BAYSIDE TRAINS PUBLIC
TRANSPORT CORPORATION
ITEM 4 SITE
LAND ADJACENT TO FRANKSTON RAILWAY STATION
(REFERENCE PLAN ATTACHED)
ITEM 5 COMMENCEMENT DATE
THE DATE OF THIS AGREEMENT
ITEM 6 DATE FOR PRACTICAL COMPLETION
36 MONTHS FROM THE COMMENCEMENT DATE
ITEM 7 DEFECTS LIABILITY PERIOD
12 MONTHS FROM DATE OF PRACTICAL COMPLETION OF PTC INFRASTRUCTURE WORKS
ITEM 8 BANK GUARANTEE
AMOUNT $5 MILLION
ITEM 9 NOTICE REQUIREMENTS
PTC -
LEVEL 10
589 COLLINS STREET
MELBOURNE 3000
ATTN. MANAGER, COMMERCIAL DEVELOPMENT SERVICES BAYSIDE TRAINS
TELEPHONE: 9619 1990
FAX: 9619 1979
DEVELOPER -
READING PROPERTIES PTY LTD
6 BAY STREET
PORT MELBOURNE 3207
TELEPHONE: (03) 9646 1955
FAX: (03) 9646 1185
<PAGE>
6
AND
READING ENTERTAINMENT INC -
ONE PENN SQUARE WEST
30 SOUTH FIFTEENTH STREET
PHILADELPHIA PA 19102-4813
ATTENTION: MR JAMES WUNDERLE
BUS.TEL: 215 569 5166
BUS. FAX: 215 569 2862
E-MAIL: 103424,3310
MACKIE -
MACKIE GROUP PTY LTD
11-13 CRANBOURNE ROAD
FRANKSTON 3199
TELEPHONE: (03) 9781 4066
FAX: (03) 9783 1157
ITEM 10 DEFECTS GUARANTEE
$50,000.00
<PAGE>
THIS Agreement is made on 28th day of May 1998.
BETWEEN :
PUBLIC TRANSPORT CORPORATION of 589 Collins Street,
Melbourne, Victoria, 3000 (PTC)
and
READING PROPERTIES PTY LTD ACN 071 195 429 of Level 9,
66 Hunter Street, Sydney, New South Wales (DEVELOPER)
and
MACKIE GROUP PTY LTD ACN 006 524 456 of 11-13 Cranbourne Road, Frankston,
Victoria (MACKIE)
RECITALS
A. PTC is or is entitled to be registered as proprietor of the Land, as
successor to the State Transport Authority under the Transport Act 1983.
B. Under the Brief PTC requested the registration of interest of developers
for the development of the Site referred to in the PFFA at the Frankston
Railway Station.
C. PTC and Mackie entered into the PFFA.
D. PTC, the Developer and Mackie entered into the Heads of Agreement to
enable the Developer and Mackie to complete the milestones remaining
outstanding under the PFFA and the Developer to establish whether it is
feasible to proceed with the proposed development.
E. The Developer has completed the Preliminary Work under the PFFA including,
without limitation, its obligations under CLAUSE 10.1 of the PFFA and all
elements of the Fourth Milestone under CLAUSE 20 of the PFFA except
executing a development agreement and the Developer has satisfied itself
that it is feasible to proceed with the Development as contemplated by
this Agreement.
F. The parties agree to enter into this Agreement for the development of the
Works.
<PAGE>
2
G. Mackie has agreed to assign all of its right, title and interest in and to
the PFFA the Heads of Agreement and this Agreement to the Developer and PTC has
consented to such assignment.
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
The following words have these meanings in this Agreement, unless
the contrary intention appears:
"ABSOLUTE OCCUPATION" means suspending the movement of trains over
the whole or part of any railway running line in the whole of the
area of the Frankston Railway Station Site for a defined period of
time.
"AGREEMENT" means this Agreement between PTC the Developer and
Mackie and includes the Appendix and each Schedule.
"AUTHORISED OFFICER" means in the case of any party, a person
appointed by that party to act on its behalf under this Agreement.
"AUTHORITY" includes all Commonwealth and State Governments and
instrumentalities and their departments, municipalities and any
other public authority or provider of services having jurisdiction
over the Works or the Land or any part of the Works or the Land.
"BANK GUARANTEE" has the meaning given to it in CLAUSE 16.1.
"BRIEF" means the Registration of Interest Brief dated October 1993
issued by PTC for the commercial development of the Site.
"CAR PARK AGREEMENT" means the agreement substantially in the form
attached to this Agreement as SCHEDULE 5.
"COMMENCEMENT DATE" means the date in ITEM 5.
"CONTAMINATION" means a solid, liquid, gas, odour, heat, sound,
vibration, radiation or substance of any kind which makes or may
make the Land unsafe, unfit or harmful for habitation, use or
occupation by any person or animal or is such that any part of the
Land does not satisfy the contamination criteria or standards
published or adopted by the Victorian Environment Protection
Authority from time to time and the word Contaminant has a
corresponding meaning.
"CONSTRUCTION COMMENCEMENT DATE" means the date the Developer is
first granted access to the Site for the purposes of commencing
construction under this Agreement.
"CONTRACT OF SALE" means the contract for the sale and purchase of
the Land to be entered into on the same date as this Agreement.
"CURE PERIOD" means in respect of a Default Event, such period of
time from and including the date of service of a Default Notice as,
in all
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3
circumstances, is a reasonable period of time specified by the PTC
in the Default Event Notice in which to cure the Default Event to
which the Default Event Notice relates or any greater period as may
be allowed in CLAUSE 17.4 but in any case not less than thirty (30)
days.
"CURE PLAN" means a plan by the Developer to remedy a Default Event
which:
(a) is proposed during the Cure Period; and
(b) details:
(i) if and why an extension of the Cure Period is
required;
(ii) the time required to cure the relevant Default
Event: and
(iii) a work plan setting out each task to be undertaken
to cure the relevant Default Event and the time for
each task to be completed.
"DATE FOR PRACTICAL COMPLETION" means the date specified in ITEM 6.
"DATE OF PRACTICAL COMPLETION" means the date PTC's Representative
issues a Notice of Practical Completion.
"DEFAULT EVENT" means an event described in CLAUSE 17.1. "DEFAULT
EVENT NOTICE" means a notice given by the PTC under CLAUSE 17.2.
"DELAY EVENTS" means:
(a) loss or damage by fire, explosion, earthquake, lightning,
storm, tempest, civil commotion of any kind and not caused
by the Developer or the Developer's employees, servants,
contractors or subcontractors;
(b) industrial disputes, strikes or lockouts resulting from
industry-wide third party disputes and not caused directly
by the Developer;
(c) unusual delays in obtaining approvals by any relevant
Authority including any delay occasioned by any demanded
resubmission of requests where consent has been refused ;
(d) inclement weather;
(e) any matter beyond the reasonable control of the Developer
which results in a delay of the Works;
(f) any prohibition or embargo imposed under or by virtue of any
Law;
(g) any delay in PTC giving its consent approval to or
authorisation of any matter thing or action under this
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4
Agreement including any delay occasioned by demanded
resubmission;
(h) any interruption of access to the Site under CLAUSE 7.3; and
(i) dispute resolution proceedings instigated by either party
under CLAUSE 20
"DEVELOPER" means the person named in ITEM 2 bound to execute the
Works under this Agreement and includes the Developer's employees,
agents, contractors, consultants and invitees where the context
permits.
"DEVELOPER'S CONSULTANT" means such consultant as is agreed between
Reading and PTC in writing.
"GENERAL CRITERIA FOR DEVELOPMENT AT RAILWAY LOCATIONS, RAILWAY
OPERATIONS AND ENGINEERING DESIGN ASPECTS AND CONSTRUCTION ASPECTS,
ENG-AD-STD-0001" dated 29/7/97, means the guidelines, a copy which
is attached to this Agreement as SCHEDULE 2, as amended from time to
time.
"HEADS OF AGREEMENT" means the Heads of Agreement between Mackie,
the Developer and PTC dated 28 May 1997.
"INFRASTRUCTURE DOCUMENTATION" means the drawings, programs, plans,
specifications and schedules of finishes which are required to
construct and complete the PTC Infrastructure Works as are approved
by PTC's Representative.
"INSOLVENCY EVENT" means the happening of any of these events and
such events not being rectified within 30 days of the Developer
becoming aware of the occurrence of the event:
(a) an application is made to a court for an order or an order
is made that a body corporate be wound up; or
(b) an application is made to a court for an order appointing a
liquidator or provisional liquidator in respect of a body
corporate, or one of them is appointed whether or not under
an order; or
(c) except to reconstruct or amalgamate while solvent on terms
approved by PTC, a body corporate enters into, or resolves
to enter into, a scheme of arrangement, deed of company
arrangement or composition with, or assignment for the
benefit of, all or any class of its creditors, or it
proposes a reorganisation, moratorium or other
administration involving any of them; or
(d) a body corporate resolves to wind itself up, or otherwise
dissolve itself, or gives notice of intention to do so,
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5
except to reconstruct or amalgamate while solvent on terms
approved by PTC or is otherwise wound up or dissolved; or
(e) a body corporate is or states that it is insolvent; or
(f) as a result of the operation of section 459F(1) of the
Corporations Law, a body corporate is taken to have failed
to comply with a statutory demand; or
(g) a resolution is passed to appoint an Administrator or an
Administrator is appointed to a body corporate; or
(h) a Receiver and Manager is appointed to a body corporate; or
(i) a mortgagee takes possession of any one of the assets or
undertakings of a body corporate.
"INSURED" has the meaning given to it in CLAUSE 15.2.
"LAND" means Lot 2 on unregistered plan of subdivision no 414499C (a
copy of which is attached to the Contract of Sale) and being part of
the land described in certificates of title Volume 10248 Folio 656,
Volume 1272 Folio 356, Volume 1806 Folio 184, Volume 5350 Folio 831,
Volume 5365 Folio 824 and Volume 10104 Folio 349.
"LAW" means the law in force in Victoria including, without
limitation, all statutes, rules, regulations, ordinances, by-laws,
instruments, directives and proclamations made under the authority
either direct or indirect of any statute (including any Commonwealth
statute), rules of common law and equity and the legal requirements
of any Authority.
"NOTICE OF PRACTICAL COMPLETION" means the notice issued by PTC's
Representative under CLAUSE 14.5(B)(I).
"PFFA" means the Project Feasibility and Facilitation Agreement
dated 30 June 1995 between PTC and Mackie.
"PLANNING PERMIT" means permit number 96-432 issued on 29 April 1997
by the City of Frankston.
"POLLUTANT" means a discharge, emission or deposit which brings
about a detrimental change in the condition of the environment which
creates any one or more of the conditions of environment referred to
in sections 39(1), 41(1) or 45(1) of the Environmental Protection
Act and the word Pollution has a corresponding meaning.
"PRACTICAL COMPLETION" means, in respect of the PTC Infrastructure
Works, the state of being completed in accordance with the Standards
and fit for use and occupation by PTC and after:
(a) an Occupancy Permit or evidence of compliance with the
requirements of all relevant Authorities is submitted to
PTC's Representative;
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6
(b) all plant and equipment forming part of the PTC
Infrastructure Works are tested and operational;
(c) all omissions and defects have been rectified other than
items:
(i) the immediate making good of which by the Developer
is not practicable;
(ii) which do not prevent the PTC Infrastructure Works
from being reasonably capable of being used for
their intended purpose;
(iii) the rectification of which will not prejudice the
convenient use of the PTC Infrastructure Works; and
(iv) which do not cause any legal impediment to PTC's use
or occupation of the PTC Infrastructure Works;
(d) those tests which are required by this Agreement to be
carried out and passed before the PTC Infrastructure Works
reach Practical Completion have been carried out and passed;
and
(e) the Developer has delivered to PTC a certificate from the
Developer's Consultant that all aspects of the PTC
Infrastructure Works are completed in accordance with sub-
clauses (a) to (d), the drawings, plans, specifications and
schedules of finishes contained in the Infrastructure
Documentation and the Standards, and that the PTC
Infrastructure Works are fit for use and occupation by the
PTC.
PRACTICAL COMPLETION means in respect of the Reading Development:
the state of being completed;
(a) to comply with the safety and operational requirements under
this Agreement;
(b) after an Occupancy Permit or evidence of compliance with the
requirements of all relevant Authorities is submitted to
PTC's Representative; and
(c) after a statement from the Developer's Consultant certifying
that the Reading Development has reached Practical
Completion in accordance with the plans and specifications
approved by PTC is submitted to PTC's Representative.
"PROGRAMME" means the design and construction programme prepared
under CLAUSES 6.1 AND 6.2 and approved by PTC's Representative .
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7
"PROJECT CONTROL MEETINGS" has the meaning given to it in CLAUSE
6.4.
"PROJECT DOCUMENTATION" means the drawings, programs, plans,
specifications and schedules of finishes which are required to
construct and complete the Works as are approved by PTC's
Representative.
"PTC" means the person named in ITEM 1 and includes that person's
successors and assigns.
"PTC INFRASTRUCTURE WORKS" means the part of the Works to be
constructed in accordance with CLAUSE 13.2.
"PTC'S REPRESENTATIVE" means the person named in ITEM 3 or other
person from time to time appointed by PTC to be PTC's Representative
and notified to the Developer in writing or that person's delegate
which person is acting as an employee and as agent of PTC and whose
directions will bind PTC.
"PTC SITE SPECIFIC REQUIREMENTS" means the requirements set out in
SCHEDULE 9.
"READING DEVELOPMENT" means the proposed development of a multi-
screen cinema complex and entertainment centre depicted in the plans
specified in SCHEDULE 6 and which includes:
- 500 carparking spaces (the subject of the Car Park Agreement and
the Section 173 Agreement) in compliance with all relevant
Australian Standards
- aerobridge with escalators
- lifts and stairs
- "kiss and ride" facilities
- bus "drop-off" at Fletcher Road
- concourse improvements
- full fencing of carpark site boundaries
"SAFEWORKING INSTRUCTIONS" means Procedures for Contractors Working
on Public Transport Corporation Property and Facilities a copy of
which is attached to this Agreement as SCHEDULE 3, as amended from
time to time.
"SECTION 173 AGREEMENT" means the agreement substantially in the
form attached to this Agreement as SCHEDULE 8.
"SITE" means the land described in ITEM 4 and being the areas
delineated on the Site Plan and any other land or places made
available to the Developer by PTC for the purpose of this Agreement.
"SITE PLAN" means the plan attached to this Agreement as SCHEDULE 4.
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8
"STANDARDS" means the standards attached to this Agreement as
SCHEDULES 1, 2 AND 3 and any subsequent modification directed or the
use of which has been permitted by PTC's Representative under this
Agreement.
"SUBCONTRACT" means any contract between the Developer and a
subcontractor to carry out any part of the Works.
"SUBCONTRACTOR" means Mackie or such other subcontractor as is
agreed between PTC and Reading.
"WORKS" means the PTC Infrastructure Works and the Reading
Development.
1.2 INTERPRETATION
In this Agreement, unless the contrary intention appears:
(a) a reference to this Agreement or another instrument includes
any variation or replacement of any of them; and
(b) a reference to a statute, ordinance, code or other Law
includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of
any of them; and
(c) the singular includes the plural and vice versa; and
(d) "person" includes a firm, a body corporate, an
unincorporated association or a responsible authority, as
constituted from time to time; and
(e) a reference to a person includes a reference to the person's
executors, administrators, successors, substitutes, assigns,
employees, servants, agents, contractors, subcontractors or
consultants; and
(f) an agreement, representation or warranty on the part of or
in favour of two or more persons binds or is for the benefit
of them jointly and severally; and
(g) words importing any gender include all other genders, as
applicable; and
(h) a reference to any thing (including, without limitation, any
amount) is a reference to the whole or any part of it and a
reference to a group of persons is a reference to any one or
more of them; and
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9
(i) a reference to a CLAUSE, SCHEDULE OR APPENDIX is to a
CLAUSE, SCHEDULE OR APPENDIX in or to this Agreement and a
reference to an ITEM is to an item in the APPENDIX to this
Agreement; and
(j) a reference to a day must be interpreted as the period of
time commencing at midnight and ending 24 hours later; and
(k) a reference to the payment of money within a specified time
is a reference to the full clearance of any personal cheque
into the account of the payee within that time.
1.3 CONTENTS AND HEADINGS
The table of contents and headings are inserted for convenience and
do not affect the interpretation of this Agreement.
1.4 PRECEDENCE
If this Agreement contains any discrepancy or inconsistency, it must
be interpreted giving precedence to those documents listed below in
the following order:
(a) these terms and conditions;
(b) the Standards;
(c) the other Schedules to this Agreement;
(d) the Project Documentation; and
(e) documents referred to or incorporated in the Schedules to
this Agreement.
2. GENERAL OBLIGATIONS
2.1 DEVELOPER'S OBLIGATIONS
The Developer must;
(a) diligently proceed to execute and complete the Works on and
from the Construction Commencement Date in accordance with
this Agreement to the stage of Practical Completion on or
before the Date for Practical Completion;
(b) provide temporary car-parking facilities during construction
(the details of which will be included in the Programme) to
replace, as a minimum, the 350 existing car parks available
to PTC and PTC users such facilities to be secure, well lit
and with adequate at-grade access to the reasonable
satisfaction of the PTC's Representative;
(c) complete the Works:
(1) in accordance with the Planning Permit;
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10
(2) in accordance with the Programme (3)in accordance
with the Project Documentation and Standards
referred to in this Agreement;
(4) in a professional and workmanlike manner; and
(5) in accordance with all applicable Laws and the
requirements of the relevant public Authorities
(including PTC but subject to CLAUSE 2.2(C)); and
(d) co-operate with PTC to facilitate appropriate signage for
PTC users provided that PTC must ensure that such signage
meets the requirements and standards for signage in the
Reading Development.
2.2 PTC'S OBLIGATIONS
PTC must:
(a) provide the Developer with access to the Site to carry out
the Developer's obligations under this Agreement;
(b) subject to the Developer performing the Developer's
obligations under this Agreement perform its obligations
under CLAUSES 3.1, 3.2 AND 3.3 and grant to the Developer a
licence of the area located at the south end of the Site
(and identified on the Site Plan in SCHEDULE 4) for use as a
car park, for a period of one year and at a licence fee of
$1.00 per annum in a form attached as SCHEDULE 10 not more
than 14 days after the Date of Practical Completion of the
whole of the Works. PTC will also grant to the Developer a
right of first refusal in the event of any proposed sale or
lease in respect of the licensed area other than for
operational purposes or as part of any corporatisation or
privatisation process.
(c) in relation to the Reading Development approve such plans as
are submitted by the Developer and in carrying out its
obligations and exercising its rights under this Agreement
make no objection or refuse any request or generally prevent
the Developer from proceeding with the Reading Development
unless to grant such approval or to withhold such objections
or refusal would breach the safety and operational
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11
requirements of the Standards, any Law or this Agreement
with the intent that PTC will limit its supervision and
control of the Reading Development to ensure only that such
Works comply with such safety and operational requirements
under the Standards and also complies with all applicable
Laws and this Agreement.
2.3 INDEPENDENCE OF DEVELOPER
The Developer acknowledges that:
(a) it is an independent developer and not the agent of PTC in
executing the Works and must execute the Works in accordance
with its own methods, subject to compliance with this
Agreement;
(b) nothing contained in this Agreement or any Subcontract
creates any contractual relationship between any
subcontractor (other than Mackie) and PTC or PTC's
Representative;
(c) PTC and its agents, employees, consultants and
representatives, including PTC's Representative, are not
liable in contract or tort (including negligence) or to the
extent legally possible, under any statute or other
principle of law upon any claim in connection with any
information provided by PTC or for any errors or omissions
with respect to information given to the Developer;
(d) it enters into this Agreement based on its own
investigations and determinations; and
(e) in entering into this Agreement and in the execution of the
Works, the Developer and its employees, subcontractors and
suppliers have and must continue to use commercially
reasonable trade practices and exercise the standard of
skill, care and diligence appropriate to the nature of the
Works.
2.4 ASSIGNMENT
The Developer must not assign this Agreement or any payment or other
right or benefit or interest under this Agreement without the prior
written consent of PTC except that the Developer will be entitled to
assign this Agreement or any payment or other right or benefit under
this Agreement to its holding company or any subsidiary of its
holding company. The Developer must notify PTC of any assignment
under this clause.
2.5 EXERCISE OF PTC'S POWERS
The parties acknowledge that PTC will be entitled to exercise its
powers in relation to matters where it has jurisdiction as a
statutory authority only in accordance with the Transport Act 1983.
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12
3. NON DEVELOPMENT OBLIGATIONS
3.1 CAR PARK AGREEMENT
PTC and the Developer will enter into the Car Park Agreement within
14 days after the date when the whole of the Works reach the stage
of Practical Completion.
3.2 SECTION 173 AGREEMENT
PTC and the Developer will enter into the Section 173 Agreement with
the City of Frankston within 14 days after the date when the whole
of the Works reach the stage of Practical Completion.
3.3 LICENCE FOR ACCESS
PTC and the Developer will enter into the Licence for Access to
adjacent PTC Land substantially in the form attached as SCHEDULE 11
within 14 days after the date when the whole of the Works reach the
stage of Practical Completion.
4. ENGAGEMENT OF CONSULTANTS
4.1 DEVELOPER'S CONSULTANTS
The Developer must engage only such consultants to carry out such
functions as it may require in relation to the PTC Infrastructure
Works on terms to be agreed between the Developer and the
Developer's Consultants and which are approved by PTC.
4.2 PERIOD OF ENGAGEMENT
The Developer must engage the consultants referred to in CLAUSE 4.1
to the end of the Defects Liability Period.
4.3 NO DIMINISHING OF RESPONSIBILITY
The engagement of consultants does not create any assumption of
responsibility or risk on PTC or lessen any responsibility of the
Developer under this Agreement.
5. PROJECT DOCUMENTATION
5.1 DEVELOPMENT OF PROJECT DOCUMENTATION
The Developer must develop the Project Documentation to provide full
working construction drawings to fully incorporate the Standards and
embodying all other matters required by this Agreement in accordance
with all Laws and to the extent that the Standards do not deal with
or are unclear on any matter, to the satisfaction of PTC's
Representative.
5.2 SUBMISSION OF DOCUMENTATION TO PTC'S REPRESENTATIVE
The Developer must submit certified copies of all the Project
Documentation to PTC's Representative for review and approval as
soon as reasonably practicable after preparation and, in any event,
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13
on or before the prescribed date for that task in the Programme.
PTC must use its reasonable endeavours to procure PTC's
Representative to notify the Developer of its approval or rejection
under this clause within the time period after the Project
Documentation is submitted as contemplated by CLAUSE 19.
5.3 APPROVAL OF DOCUMENTATION BY PTC'S REPRESENTATIVE
If PTC's Representative rejects the whole or any part of the Project
Documentation, the Developer must revise the Project Documentation
as soon as practicable and resubmit it to PTC's Representative for
approval under the preceding clause.
5.4 DOCUMENTATION TO BE INCORPORATED INTO THE CONTRACT
The Project Documentation will, on approval by PTC's Representative,
be incorporated into this Agreement and all documentation in
relation to the PTC Infrastructure Works will become the property of
PTC.
5.5 COPIES OF DOCUMENTATION
The Developer must provide PTC's Representative with three full
copies of the complete Infrastructure Documentation and one full
copy of the Reading Development documentation immediately after it
is approved under CLAUSE 5.3. The Developer must ensure that a full
copy of the Infrastructure Documentation is kept at the Site and
made available to PTC's Representative upon request.
6. PROGRAMME AND REVIEW OF CONSTRUCTION PROGRESS
6.1 DEVELOPER TO PREPARE PROGRAMME
The Developer must, not less than 20 business days prior to the
Construction Commencement Date, prepare and provide PTC's
Representative with the Programme for commencement, carrying out and
completion of the Works.
6.2 FORM OF PROGRAMME
The Developer must ensure the Programme:
(a) is in the form of a bar chart and provides a sequence for
the Works which conforms with the sequence requirements for
completion of the Works set out in the Standards;
(b) identifies milestones for various stages comprising the
Works;
(c) sets out a project calendar for the Works which must contain
reasonable allowances for public holidays, Christmas shut-
down, rostered days off, overtime and other contingencies;
and
(d) can be reviewed at each Project Control Meeting.
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14
6.3 APPROVAL OF PROGRAMME BY PTC'S REPRESENTATIVE
PTC must procure PTC's Representative to approve or reject the
Programme within 7 days after it is submitted by the Developer. The
Developer must immediately revise and resubmit the Programme to
PTC's Representative if it is rejected in any way.
6.4 MEETINGS AND REPORTS
The Developer must:
(a) ensure that meetings (PROJECT CONTROL MEETINGS) are held at
least fortnightly and at other times as may be reasonably
required by PTC's Representative;
(b) invite and allow PTC's Representative to participate in all
Project Control Meetings;
(c) give at least 5 business days' written notice to PTC's
Representative of the time, place and agenda of all Project
Control Meetings;
(d) ensure that its project and construction managers attend
Project Control Meetings and are available to discuss
matters with PTC's Representative at all reasonable times;
(e) prepare accurate minutes of all Project Control Meetings and
submit them to PTC's Representative within 4 business days
after the meeting; and
(f) at the reasonable request of PTC's Representative, provide
evidence of the implementation of any action arising out of
a Project Control Meeting.
6.5 CONSTRUCTION PROGRAMME REVIEW PROCESS
Before each Project Control Meeting, the Developer must provide to
PTC's Representative a status report showing:
(a) progress made in execution of the Works since the previous
Project Control Meeting;
(b) the current status of the Works in relation to the
Programme;
(c) whether progress is being maintained in accordance with the
Programme;
(d) a list of planned activities to be carried out during the
following month;
(e) a list of matters which require a decision to be made by
PTC;
(f) a list of activities that are behind their planned start or
completion dates with reasons for any discrepancy; and
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15
(g) at the request of PTC's Representative, a proposed
management solution to correct the activities behind
schedule.
7. THE SITE
7.1 DEVELOPER'S OBLIGATIONS
The Developer must, at its own cost and expense:
(a) ensure that the Works are constructed within the external
title boundaries of the Site, except only for parts of the
Works specifically required by this Agreement to be outside
those boundaries; and
(b) provide all allowances and take all necessary steps and
measures that may be required in the execution of the Works
for working in or close to or diverting any service line or
installations of any relevant Authority, including power
lines, high tension lines and related structures in, on,
above, below or adjacent to the Site.
7.2 DEVELOPER'S WARRANTIES AND ACKNOWLEDGMENTS
The Developer warrants at the date of this Agreement and
acknowledges it has and is deemed to have:
(a) examined and checked this Agreement, the Standards and all
documentation mentioned in either;
(b) examined and taken into consideration all information which
is relevant to the risks, contingencies and other
circumstances which would in any way affect its obligations
under this Agreement;
(c) examined the Site and its surroundings;
(d) informed itself of all relevant physical conditions above
and below the surface of the Site and the climatic
conditions at and near the Site;
(e) informed itself of the nature of the Works and materials and
constructional plant and equipment necessary for the
execution of the Works, the facilities at the Site, the
times permitted by the relevant authorities for the
construction of the Works and the means of access to and
egress from the Site;
(f) informed itself as to the availability of labour and the
accommodation required and all labour conditions and
conditions of employment relevant to the execution of the
Works;
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16
(g) satisfied itself as to the correctness and sufficiency of
the cost allowed by the Developer for completing the Works
and to cover the cost of performing all of its obligations
under and in connection with this Agreement in the manner
prescribed by this Agreement;
(h) made its own independent enquiries and assessments as to the
ability, suitability and financial standing of any
Subcontractor engaged by the Developer in the execution of
the Works; and
(i) made its own interpretation as to the difficulties of
executing the Works.
7.3 ACCESS TO THE SITE
Unless PTC's Representative directs otherwise, PTC authorises the
Developer to have reasonable access to the Site for the purposes of
carrying out its obligations under this Agreement from the
Construction Commencement Date until Practical Completion of the
whole of the Works or until PTC lawfully terminates this Agreement
(whichever is earlier). The parties acknowledge that the
Developer's access to the Site will be subject to compliance with
the General Criteria for Development at Railway Locations Railway
Operations and Engineering Design and Construction Aspects ENG-AD-
STD-0001 in SCHEDULE 2. With respect to the Reading Development PTC
will only be able to deny the Developer access due to operational
and safety issues under such criteria. If access is denied at any
time the Developer will be granted a reasonable extension of time
taking into account the circumstances and at least equal to the
period during which access has been denied.
If the Developer requires access prior to the Construction
Commencement Date PTC must use its reasonable endeavours to allow
such access subject to compliance with reasonable conditions
required by PTC.
7.4 ACCESS TO MAKE GOOD
Following Practical Completion of the PTC Infrastructure Works, PTC
must allow the Developer access to the Site for making good defects
as required under this Agreement.
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17
7.5 ACCESS FOR PTC'S REPRESENTATIVE
Subject to CLAUSE 7.3 the Developer must allow PTC's Representative
access at all reasonable times to the Site and the Works and to
places other than the Site where Works are being performed.
7.6 ACCESS TO ADJOINING PTC LAND
The Developer must at its own cost and expense:
(a) obtain any necessary or appropriate permission to work on,
to, in, over or under any adjoining or neighbouring PTC
land; and
(b) make all arrangements for any access to any adjoining or
neighbouring PTC land,
and the Developer indemnifies PTC against any cost damage loss or
liability incurred or suffered in connection with the Developer's
access to adjoining or neighbouring land provided that PTC will use
its best endeavours to ensure that all such permission and
arrangements are obtained if the adjoining or neighbouring land is
owned by PTC.
7.7 SITE CONDITIONS
The Developer assumes the risk of all increased costs, losses and
expenses caused or contributed to by the physical condition or
characteristics of the Site (including, without limitation, sub-
surface, latent conditions or hidden defects or contamination of any
kind) and its surroundings suffered or incurred by the Developer in
or about the execution of the Works. PTC will co-operate with the
Developer in providing all information possible in relation to Site
conditions provided that no legal consequences can arise out of the
provision of any such information.
7.8 SITE ESTABLISHMENT AND CLEANING
The Developer must, at its own cost and expense:
(a) establish and maintain Site hoardings and a Site Office
suitable for holding Project Control Meetings connected with
electricity, accommodation and storage area for plant and
equipment and materials in such areas of the Site in a
manner from time to time approved by PTC's Representative;
(b) regularly remove all rubbish and debris from the Site
created or caused by the execution of the Works and at other
times in accordance with procedures approved by the PTC's
Representative; and
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18
(c) prior to Practical Completion of the PTC Infrastructure
Works or the Reading Development (whichever is the latter),
remove from the Site any hoardings, the Site Office, all
plant and equipment and other material as may be required by
PTC's Representative to enable PTC to quietly and peaceably
enjoy and occupy the PTC Infrastructure Works.
7.9 CHANGES TO SITE
If the Site changes for the purposes of this Agreement the Developer
will submit an amended plan for the purposes of SCHEDULE 4.
7.10 CONDITION OF THE LAND
(a) The Developer releases the PTC and its officers or agents
and indemnifies them against any claims, costs, losses,
damages, expenses, judgements, suits, awards and liabilities
whatever arising out of or in respect of:-
(i) any Contamination or Pollution caused or contributed
by the Developer or its servants, agents, employees
or contractors or any work performed by or for the
Developer on the Land which results in the release
or disturbance of Contamination or Pollution; and
(ii) complying with any notice, order or requirement
issued after the Commencement Date by or of any
Authority requiring any Contaminant or Pollutant in,
on or under or which has emanated from the Land
after the Commencement Date to be cleaned up,
contained, removed, diluted or dealt with in any
manner whatsoever.
(b) The Developer may at its option take over and conduct, at
its cost, in the name of any party to whom indemnity has
been given the defence of any claim brought by any person
against the Developer, the PTC or any other person or their
servants, agents, employees or contractors and arising out
of or relating to the indemnity provided in SUB-CLAUSE
7.10(A) and the PTC will use all reasonable endeavours to
ensure that it and any other person affected by this clause
fully co-operates in that defence.
(c) The release and indemnity in SUB-CLAUSE 7.10(A) survives
termination of this Agreement.
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8. SUBCONTRACTS
8.1 SUBCONTRACTING
The Developer may subcontract any part of the Works, provided
however, that in the case of the PTC Infrastructure Works such
subcontracting will be subject to the PTC's approval.
8.2 DEVELOPER'S RESPONSIBILITY
The Developer:
(a) by subcontracting any part of the PTC Infrastructure Works
is not relieved from any of its liabilities or obligations
under this Agreement;
(b) assumes the risk for all delays, cost increases, losses and
expenses caused or contributed to by any act or omissions of
a Subcontractor; and
(c) remains responsible to perform its obligations under this
Agreement, even if a Subcontract is terminated, disclaimed
or repudiated for any reason,
provided that the Developer will not be liable for any such matters
which are the direct result of any breach of this Agreement by the
PTC, its servants, agents or the PTC's Representative.
9. ROLE OF PTC'S REPRESENTATIVE
9.1 AGENT OF PTC
PTC's Representative will act for and on behalf of PTC as its agent
for the purposes of this Agreement and the Developer must comply
promptly with all reasonable written instructions and directions of
PTC's Representative.
9.2 PTC'S REPRESENTATIVE'S AUTHORITY
PTC and the Developer agree that PTC's Representative may subject to
CLAUSE 2.2(C) issue reasonable instructions or directions to the
Developer or be the sole independent assessor, valuer or certifier,
acting reasonably, concerning any of the following matters:
(a) the Works;
(b) any ambiguity, error or other fault in documents;
(c) substitute materials or workmanship;
(d) testing of materials or Works;
(e) Practical Completion of the PTC Infrastructure Works; and
(f) making good of any defects in the Works.
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20
9.3 EMPLOYMENT OF OTHERS ON DEVELOPER'S DEFAULT
If the Developer does not comply with a reasonable instruction or
direction of PTC's Representative which has been confirmed to the
Developer in writing;
(a) PTC's Representative may issue a notice to the Developer
requiring compliance within a specified time which is
reasonable having regard to the circumstances;
(b) if the Developer does not comply with the notice within the
specified time, PTC may employ and pay others to execute the
work which may be necessary to give effect to the relevant
instruction or direction;
(c) all costs incurred by PTC in doing so may be recovered by
PTC as a debt due to PTC by the Developer or may be deducted
by PTC from any money payable to the Developer under this
Agreement or the Bank Guarantee; and
(d) the Developer remains responsible to PTC for any work
executed by others as if it had been executed by the
Developer under this Agreement.
10. EXECUTION OF THE WORKS
10.1 SCOPE OF THE WORKS
The scope of the Works includes:
(a) all necessary work required to alter and add to existing PTC
infrastructure (in accordance with the Standards) to enable
construction of the Reading Development;
(b) all items of work obviously to be inferred from this
Agreement for the proper execution and completion of the
Works,
whether or not such items have been shown or described in this
Agreement.
10.2 PROVISION OF MATERIALS AND LABOUR
The Developer must provide at its own cost and expense everything
necessary for the proper execution of the Works and for the proper
performance by the Developer of its obligations under this
Agreement.
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10.3 CONSTRUCTION METHODS AND QUALITY ASSURANCE
The Developer is and remains responsible for:
(a) all construction means, methods, techniques, sequences and
procedures employed and to be employed by the Developer and
its Subcontractors in and concerning the execution of the
Works and for co-ordinating the execution of all portions of
the Works; and
(b) ensuring that all quality assurance procedures required to
be undertaken by the Developer under this Agreement are
properly implemented and carried out by the Developer to the
satisfaction of PTC's Representative.
10.4 SUPERVISION
The Developer is responsible for the supervision of the Works so as
to ensure that the Works are executed in accordance with this
Agreement. For the purposes of supervision, the Developer must
ensure that a competent person to supervise the Works is always
present on the Site when works are being carried out who will
respond to reasonable requests and directions from PTC's
Representative.
10.5 REQUIREMENTS OF AUTHORITIES
The Developer must, at its own cost and expense:
(a) apply for and obtain all permits, approvals and consents
necessary for the Works;
(b) comply with the requirements of all Laws and the lawful
requirements of all relevant Authorities which arise by
reason of the execution of the Works, including, without
limitation, obtaining registration and effecting and
maintaining insurance for building practitioners as
prescribed by the Building Act 1993;
(c) pay all fees in connection with the execution of the Works
which have not been paid by PTC prior to entering into this
Agreement; and
(d) provide, on reasonable request from PTC's Representative, a
true copy of any document in its possession issued by or
evidencing the approval of Authorities in connection with
the Works.
10.6 SETTING OUT INFORMATION
The Developer is responsible for obtaining all such information to
enable the Developer:
(a) to accurately set out the Works in accordance with this
Agreement; and
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22
(b) to establish levels for the Works by reference to some
established datum or benchmark on or adjacent to the Works.
10.7 SETTING OUT THE WORKS
The Developer must correctly set out and establish the levels for
the Works in accordance with the information referred to in CLAUSE
10.6 and:
(a) must, at its own cost and expense, rectify any error arising
from its own inaccurate setting out and establishment of
levels;
(b) is not relieved of any of its responsibility by any check or
examination by PTC's Representative;
(c) after setting out and establishing the levels for the Works,
give PTC's Representative a certificate from a licensed
surveyor certifying that the setting out and levels are in
accordance with this Agreement; and
(d) must, in accordance with CLAUSE 14.9 give PTC's
Representative:
(i) a certificate and survey plan signed by a licensed
surveyor stating that the whole of the Works are
within the title boundaries of the Site except only
for parts of the Works specifically required by this
Agreement to be outside those boundaries and
detailing the location of the Works on the Site; and
(ii) a certificate signed by a chartered engineer stating
that structural elements of the Works are within the
tolerances specified.
10.8 MATERIALS AND WORKMANSHIP
10.8.1 All materials used in the PTC Infrastructure Works and the
standard of workmanship must be in conformity with the
provisions of this Agreement provided that:
(a) in the absence of a provision in the Contract
specifying a material or standard of workmanship,
the Developer must ensure that the material or
standard of workmanship used or employed is both
suitable for its purpose and consistent with the
nature and character of that part of the PTC
Infrastructure Works for which it is used;
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23
(b) any materials not otherwise specified (except in the
case of temporary works) must be new and of
appropriate quality;
(c) the Developer must provide PTC's Representative with
full details of suitable and appropriate substitutes
and seek the direction of PTC's Representative in
relation to any substitute material or standard of
workmanship; and
(d) the Developer must produce evidence to the
reasonable satisfaction of PTC's Representative that
materials used in connection with the PTC
Infrastructure Works comply with the provisions of
this Agreement.
10.8.2 The quality of work to be carried out by the Developer and
materials used in the Reading Development will be to a
commercially reasonable standard and will comply with the
guidelines and standards set out in SCHEDULES 2 AND 3
relating to operational and safety issues and access for PTC
customers.
10.9 OPENING UP THE WORKS
If PTC's Representative instructs the Developer to open up for
inspection any work covered up or to arrange for or carry out any
testing of any materials or goods (whether already incorporated in
the Works or not) or of any executed work, the cost of that opening
up or testing (including the cost of making good any damage) must be
paid to the Developer unless:
(a) the opening up or testing is consequent upon a failure of
the Developer to comply with any provision of this
Agreement;or
(b) the opening up or testing shows that work, materials or
goods are not in accordance with this Agreement; or
(c) the cost of opening up or testing has been included in the
Standards.
10.10 QUALITY OF WORK AND MATERIALS
If PTC's Representative considers, acting reasonably, that the
quality of any work or material in respect to the PTC Infrastructure
Works is not in accordance with the requirements of this Agreement:
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24
(a) PTC's Representative may instruct the Developer to remove or
re-execute or replace that work or material or to make good
any defect; and
(b) the Developer must carry out any instruction without the
right to any extension of time or any compensation unless
the Developer establishes that the work originally carried
out has been executed in accordance with the requirements of
this Agreement, in which case the cost of re-executing or
replacing that work will be borne by PTC.
11. PTC SAFETY AWARENESS
11.1 SAFETY AWARENESS TRAINING COURSE
(a) Except as otherwise provided in this CLAUSE 11, the
Developer and any of its employees, agents, consultants or
Subcontractors involved in work on or beside railway
property (SITE PERSONNEL) must complete a Safety Awareness
Training Course (THE COURSE) presented by PTC at the
Developer's expense, before commencing any work within 6
metres of the centre line of any railway track or overhead
facility in accordance with the Safeworking Instructions as
amended from time to time.
(b) The Developer must erect a 1.8 metre high fence, not less
than 2.5 metres from the centre line of the nearest railway
track, to protect the Site. Site Personnel who are not
required to work on the railway track side of this fence,
(EXEMPT PERSONNEL), do not have to attend the Course.
However, Exempt Personnel will be required to attend a site
induction meeting, which will include extensive information
provided at the Course.
(c) All Site Personnel, (including Exempt Personnel), who:
(i) have a supervisory role; or
(ii) are in charge of or operate plant within 6 metres of
the centre line of the nearest railway track; or
(iii) are in charge of or operate plant that may interfere
with any overhead electric cabling,
will be required to attend the PTC's "Electrical and
Overhead Appreciation Course". This requirement applies to
and includes site foremen, project managers, piling rig
operators, crane operators, dogmen, excavator operators and
"cherry picker" operators.
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25
11.2 DEVELOPER TO NOMINATE PERSONNEL
The Developer must nominate personnel required to complete the
course referred to in CLAUSE 11.1 and PTC will arrange for enrolment
in a suitable course. All personnel required to complete the course
referred to in CLAUSE 11.1 must sign an acknowledgment that he or
she has been informed of the safety procedures in accordance with
this CLAUSE 11.
11.3 COMPLIANCE WITH SAFEWORKING INSTRUCTIONS
The Developer and any of its employees, agents, consultants or
Subcontractors involved in work on or beside trains or buses must,
before commencing any work on or beside trains or buses:
(a) read the Safeworking Instructions as amended from time to
time and any other documents provided to the Developer by
PTC; and
(b) attend one or more presentations on-site by PTC for that
purpose in relation to particular classes of trains or
buses.
11.4 SAFEWORKING INSTRUCTIONS PRESENTATIONS
The Developer must nominate personnel required to attend the
presentation referred to in CLAUSE 11.3 and PTC will arrange for the
presentation to take place. All personnel required to read the
materials and attend the presentation in accordance with CLAUSE 11.3
must sign an acknowledgment that he or she has been informed of the
safety procedures in accordance with this CLAUSE 11.
12. GENERAL ENGINEERING AND OPERATIONAL CONDITIONS
12.1 COMPLIANCE WITH GENERAL ENGINEERING AND OPERATIONAL CONDITIONS
The Developer must and must ensure that its servants agents and
Subcontractors comply with the General Criteria for Development at
Railway Locations, Railway Operations and Engineering Design and
Construction Aspects ENG-AD-STD-0001 as set out in SCHEDULE 2.
12.2 NOTICE OF ABSOLUTE OCCUPATIONS
The Developer must give PTC's Representative at least 20 Business
Days notice in writing when it requires each Absolute Occupation
specified in the Programme. The Developer must specify in the
notice the dates, times and location of Absolute Occupation
required. The granting of Absolute Occupation by PTC will be
dependent on train running requirements.
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26
12.3 PTC NOT LIABLE
PTC is not liable for any consequences arising from being unable to
grant Absolute Occupation on dates or at times requested unless an
Absolute Occupation has been previously requested by the Developer
and agreed by PTC.
12.4 DEVELOPER TO NOTIFY RELEVANT AUTHORITIES
With respect to each train track Absolute Occupation the Developer
must give all Authorities proper notice to facilitate compliance
with relevant Laws.
12.5 PTC FLAGMEN
With respect to railway lines, notwithstanding any arrangements to
commence an Absolute Occupation at a specified time, the Developer
must not commence to obstruct the rail track until PTC's
Representative has confirmed in writing that the Absolute Occupation
has commenced and is being protected by a PTC or approved flagman
and has authorised the track to be obstructed.
12.6 ABSOLUTE OCCUPATION DAMAGE
The Developer will be liable for and indemnifies PTC if the
Developer or its subcontractors in the execution of the Works or
Absolute Occupation damage property, cause any loss claim proceeding
or injury in respect of any injury or damage to any real or personal
property or person including but not limited to public utilities and
services and property on or adjacent to the Land (unless such injury
or damage has been due to the negligence or wilful default of PTC
its servants or agents) and must promptly repair and make good the
damage and pay any compensation which the law requires the Developer
or PTC to pay.
12.7 PTC COSTS
The Developer must pay or reimburse PTC on monthly invoice the cost
of:
(a) the Absolute Occupations specified in the Programme;
(b) any PTC supervision to ensure that construction of the PTC
Infrastructure Works is carried out in compliance with this
Agreement;
(c) any train stabling, bus substitution and
like operations costs; and
(d) delay costs, arising from disruption caused by the Developer
or its employees, agents, contractors or consultants to
train services;
at the rates set out in SCHEDULE 9.
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27
12.8 CHANGES TO PROGRAMME
If the nature or length of an Absolute Occupation mentioned in
CLAUSE 12.2 changes or a further Absolute Occupation is agreed
between the parties the Developer must pay PTC a sum equivalent to
the increase in cost of the change or further Absolute Occupation on
demand in addition to the amount paid under CLAUSE 12.7.
13. PTC INFRASTRUCTURE
13.1 PTC INFRASTRUCTURE WORKS MODIFICATIONS
The Developer is to carry out at its own cost and expense and to
PTC's reasonable satisfaction all necessary PTC Infrastructure Works
modifications which are required to build the Reading Development.
The Developer acknowledges that the onus of identifying all
necessary PTC Infrastructure Works modifications rests with the
Developer.
13.2 PTC INFRASTRUCTURE WORKS
(a) The Developer must construct PTC Infrastructure Works as
detailed in SCHEDULE 7 and any other infrastructure
necessarily required to enable the development to proceed
and which is required to be modified to enable the
construction of the Reading Development to be completed or
as otherwise agreed between the parties.
The PTC Infrastructure Works must be constructed in
accordance with the guidelines and standards set out in
SCHEDULES 1, 2 AND 3.
(b) PTC must use all reasonable endeavours to work and co-
operate with the Developer to minimise the cost of the PTC
Infrastructure Works.
14. TIME
14.1 NOTIFICATION OF DELAYS
If progress of the Works is delayed by any Delay Event in a manner
which might reasonably be expected to result in a delay in the Works
reaching Practical Completion, the Developer must, if it wishes to
claim an extension of time for Practical Completion of the Works, as
soon as practicable and, in any event, not later than 14 days after
the Delay Event occurs, give a notice in writing to PTC's
Representative stating the nature, the cause and, where possible,
the extent of the delay.
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28
14.2 NOTICE OF CLAIMED EXTENSION
As soon as practicable, but not later than 14 days after the notice
under CLAUSE 14.1 is issued, the Developer must give a further
notice in writing to PTC's Representative stating a fair and
reasonable time by which, in its opinion, the time for Practical
Completion of the Works should be extended together with a statement
of facts on which it bases its claim.
14.3 PTC'S REPRESENTATIVE'S DETERMINATION
Subject to the Developer having complied with the provisions of
CLAUSE 14.1 and 14.2, PTC's Representative must as soon as
practicable determine what, if any, extension of time for Practical
Completion of the Works will be granted to the Developer and must
notify in writing the Developer accordingly. The Developer
acknowledges that the Delay Events constitute the only grounds upon
which the Developer is entitled to claim an extension of time for
Practical Completion.
14.4 CONDITION PRECEDENT TO EXTENSION OF TIME
Notwithstanding the preceding provisions of this CLAUSE 14, the
Developer is not entitled to any extension of time unless it has
taken proper and reasonable steps both to preclude the occurrence of
the cause of delay and to avoid or minimise the consequences of the
delay.
14.5 PRACTICAL COMPLETION
(a) When the Developer is of the opinion that either the PTC
Infrastructure Works or the Reading Development have reached
Practical Completion, the Developer must give written notice
to PTC's Representative specifying which of the Works have
reached Practical Completion. The notice must be accompanied
by any necessary documentary evidence demonstrating that the
requirements for achieving Practical Completion have been
satisfied.
(b) Within 7 days of receipt of the Developer's notice in
accordance with CLAUSE 14.5(A), PTC's Representative must
undertake a joint inspection of the relevant Works with the
Developer and either:
(i) issue to PTC and the Developer a notice which shall
state the date on which the relevant Works reached
Practical Completion;
(ii) issue to the Developer written notice of matters and
things required to be done before the relevant Works
shall reach Practical Completion; or
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29
(iii) issue to the Developer written notice that the
relevant Works are too far from Practical Completion
and requiring the Developer to continue with the
execution of the relevant Works in accordance with
this Agreement.
Provided that in relation to the Reading Development the
PTC's Representative's requirements under this sub-clause to
inspect the Reading Development will be limited only to
safety and operational requirements as set out in CLAUSE
2.2(C).
(c) If PTC's Representative issues to the Developer a written
notice under either of CLAUSE 14.5(B)(II) or (III), the
Developer must upon compliance with that notice give to
PTC's Representative further written notice that the
Developer has so complied and that further notice is deemed
to be a notice given by the Developer under CLAUSE 14.5(A)
and CLAUSES 14.5(B) and (C) shall reapply until such time as
PTC's Representative shall issue a Notice of Practical
Completion.
(d) Upon the issue of a Notice of Practical Completion or upon
the PTC Infrastructure Works being deemed to have reached
Practical Completion PTC may take possession of the PTC
Infrastructure Works.
14.6 DEFECTS LIABILITY PERIOD
The Defects Liability Period commences on the date the PTC
Infrastructure Works reach or are deemed to reach Practical
Completion under this Agreement and will continue for the period
stated in ITEM 7.
14.7 DEVELOPER TO RECTIFY
If at any time during the Defects Liability Period, any fault,
omission, shrinkage or other failure to comply with this Agreement
is apparent:
(a) the Developer must make good those defects which are
notified to it by PTC's Representatives within the time
prescribed in the notice at no cost to PTC; and
(b) if the defect is not made good within the specified time,
PTC may have the defect made good itself and the cost of
doing so shall be a debt due from the Developer to PTC which
PTC may draw down on the Defects Guarantee referred to in
ITEM 10 or the Bank Guarantee referred to in ITEM 8 (if the
Bank Guarantee has not been returned to the Developer).
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14.8 TIME FOR MAKING GOOD
Subject to CLAUSES 7.4 AND 14.7, the Developer must complete the
making good of all defects within a reasonable time of the end of
the Defects Liability Period.
14.9 SUBMISSION OF CERTIFICATES, SURVEY PLANS AND OPERATING DOCUMENTS
The Developer will submit to PTC's Representative within 28 days
from the Date of Practical Completion the certificates and survey
plan in accordance with CLAUSES 10.7(C) and (D) and all operating
manuals, warranties, guarantees, as-built drawings and other
documents and information required under this Agreement which, in
the opinion of PTC's Representative, are necessary for the use,
operation and maintenance of the PTC Infrastructure Works.
15. INDEMNITIES AND INSURANCE
15.1 DEVELOPER'S INDEMNITY
The Developer indemnifies PTC against all costs, liability, loss or
damage incurred or suffered in connection with the Developer's
obligations under this Agreement which results in or may result in:
(a) any damage to any real or personal property; or
(b) the death of or injury to any person,
caused or contributed to by any act, omission, negligence or default
of the Developer its employees, agents, contractors, subcontractors
or invitees unless such damage death or injury has been due to the
act or default of PTC its servants or agents.
15.2 DEVELOPER'S INSURANCE
The Developer must ensure that the following insurances are effected
on and from the Construction Commencement Date and maintained until
the expiry of the Defects Liability Period in the joint names of PTC
the Developer and the Subcontractor (together THE INSURED) for their
respective rights, interests and liabilities:
(a) Contractor's all risk insurance on terms and conditions
(including, without limitation, any exclusions or excesses)
reasonably required by PTC for the whole of the Works
(including, without limitation, any associated temporary
works, material incorporated or to be incorporated in the
Works and the property of the Insured or for which they are
responsible and any insurance required by the Building Act
1993) concerning loss or destruction of or damage to the
property insured (whether caused by the Developer, PTC or
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31
any other person) for its full reinstatement and replacement
cost;
(b) public liability insurance for liability to all persons
(including PTC) for a sum of not less than $ 20,000,000 for
any one event concerning personal injury to or death arising
by accident of any person (not being a person who at the
time of the accident is defined as a worker of the Insured
under any law concerning workers' compensation insurance)
and concerning any injury, loss or damage to any property
(real or personal) caused (directly or indirectly) by the
execution of the Works (whether by the Developer, PTC, a
Subcontractor, PTC's Representative or any other person);
(c) insurance for an unlimited sum against any loss, cost,
damage, liability or other detriment (whether arising under
a law concerning workers' compensation or employer's
liability or at common law) suffered or incurred by any of
its employees in or about the execution of the Works; and
(d) products liability insurance and professional indemnity
insurance for liability to all persons (including PTC)
concerning loss, costs, damage, liability or other detriment
suffered or incurred (directly or indirectly) in connection
with the execution of the Works.
15.3 INSURANCE REQUIREMENTS
All insurances required under CLAUSE 15 must:
(a) be effected with an insurance office or company approved by
PTC; and
(b) provide for payment of such amounts, cover such risks and
contain such conditions, endorsements and exclusions as are
acceptable to or required by PTC, acting reasonably; and
(c) contain a requirement that no exclusions, endorsements or
alterations may be made in or to that insurance, unless
first approved in writing by PTC; and
(d) be endorsed (to the extent permitted by Law) with a waiver
by the insurer of its right to avoid the policy or any
liability under that policy by reason of any non-disclosure
or any inaccurate disclosure relating to that policy.
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15.4 INSURANCE CONDITIONS FOR JOINT POLICIES
The policies for the insurance required under this CLAUSE 15 which
are effected in joint names must provide that:
(a) all insuring agreements and endorsements (excluding limits
of liability) operate in the same manner as if there was a
separate policy of insurance covering each Insured;
(b) the insurer waives all rights and remedies to which it may
become entitled by subrogation against any one or more of
the Insured; and
(c) failure by an Insured to observe and fulfil the terms of the
policy will not prejudice the insurance for any other
Insured.
15.5 COPIES OF POLICIES
The Developer must on or before the Construction Commencement Date
deliver certified copies of all insurance policies required under
THIS CLAUSE 15 and all renewal certificates, cover notes,
certificates of insurance, premiums and endorsement slips to PTC's
Representative.
15.6 PAYMENT OF PREMIUMS
The Developer must punctually pay (or cause to be punctually paid)
all premiums and other sums payable concerning the insurance
required under this CLAUSE 15 on or before the due date for payment
and produce to PTC receipts or other proof of payment to PTC's
satisfaction of those sums upon request by PTC.
15.7 CERTIFICATES OF CURRENCY
The Developer must deliver to PTC's Representative certificates of
currency for the insurances required under this CLAUSE 15, promptly
after receipt of a request from PTC's representative.
16. BANK GUARANTEE
16.1 DEVELOPER TO PROVIDE BANK GUARANTEE
The Developer must deliver to the PTC, on or before the Construction
Commencement Date, as security for the Developer's obligations to
construct the Works in the manner prescribed by this Agreement, an
irrevocable bank guarantee (BANK GUARANTEE) for the amount specified
in ITEM 8 in a form approved by the PTC.
16.2 TERMINATION OF CONTRACT
If the Developer does not deliver the Bank Guarantee to PTC in
accordance with CLAUSE 16.1, PTC may immediately terminate this
Agreement without prejudice to any of its other remedies under this
Agreement.
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16.3 RELEASE OF BANK GUARANTEE
PTC must release the Bank Guarantee (to the extent it is not drawn
down) to the Developer or make it available for collection by the
Developer in exchange for an irrevocable bank guarantee in a sum
equal to the amount specified in ITEM 10 (DEFECTS GUARANTEE) in the
form and from a Bank agreed to by PTC immediately after the Date of
Practical Completion of the whole of the Works.
If the parties are in dispute as to whether the whole of the Works
have reached Practical Completion, they must negotiate in good faith
for the substitution of the Bank Guarantee with a bank guarantee for
the value of the Works in dispute.
16.4 RELEASE OF DEFECTS GUARANTEE
PTC must release the Defects Guarantee to the Developer or make it
available for collection by the Developer within five business days
after the expiry of the Defects Liability Period (as it may be
extended).
16.5 DRAWDOWN
PTC is authorised and may draw down the whole or any part of the
Bank Guarantee whenever;
(a) expressly provided by this Agreement;
(b) either of the events described in CLAUSE 17.5(B) occur ; or
(c) PTC is entitled to reimbursement of money paid by it to
others and for which the Developer is primarily liable under
this Agreement and in all such cases as if the Bank
Guarantee were a sum of money due to PTC by the Developer.
16.6 PTC'S OTHER RIGHTS NOT PREJUDICED
A drawdown by PTC under the Bank Guarantee will not prevent PTC from
seeking alternative or additional remedies or from claiming from the
Developer losses, expenses, costs or damages in excess of the amount
drawn down.
16.7 REPLACEMENT BANK GUARANTEE OR DEFECTS GUARANTEE
If PTC calls on the Bank Guarantee or Defects Guarantee, then, no
later than seven business days after PTC gives the Developer a
notice asking for it, the Developer must deliver to the PTC a
replacement or additional Bank Guarantee or Defects Guarantee so
that the amount available under the Bank Guarantee or Defects
Guarantee is equal or greater than specified in ITEMS 8 OR 10
(whichever is relevant).
<PAGE>
34
17. DEFAULT AND TERMINATION
17.1 DEFAULT EVENTS
A Default Event occurs if:
(a) there is a substantial or material breach of any of the
Developer's obligations under this Agreement;
(b) the Developer fails to remedy any breach of this Agreement
within 28 days after receiving written notice from PTC or
PTC's Representative specifying the breach;
(c) an Insolvency Event occurs in relation to the Developer; or
(d) the Developer wholly suspends the carrying out of the Works
before Practical Completion.
17.2 OCCURRENCE OF DEFAULT EVENT
If a Default Event occurs, PTC may give the Developer a notice in
writing specifying :
(a) that the Default Event has occurred;
(b) reasonable details of the event or circumstance constituting
the Default Event; and
(c) the Cure Period.
17.3 CURE PERIOD
Upon receipt of a Default Event Notice, the Developer will be
permitted to cure that Default Event within the Cure Period.
17.4 EXTENSION TO CURE PERIOD
(a) If the Developer requires an extension to the Cure Period
(other than for a failure to pay money) it must, as soon as
possible (but no later than the expiration of the current
Cure Period) provide to PTC:
(i) a Cure Plan or revised Cure Plan, as applicable; and
(ii) evidence that:
(A) the Developer has diligently pursued and
is continuing to diligently pursue a
feasible and practicable programme of
rectification; and
(B) the Default Event cannot, with reasonable
diligence, be cured within the current
Cure Period.
(b) PTC must not unreasonably refuse to grant an extension of
the Cure Period where the Developer has satisfied the
requirements of this CLAUSE 17.4.
<PAGE>
35
(c) Irrespective of whether PTC grants any request by the
Developer for an extension of a Cure Period, the Developer
must diligently pursue implementation of each Cure Plan.
(d) The Developer is not entitled to apply for an extension to
the Cure Period for a failure to pay money.
17.5 REMEDIES FOR DEFAULT EVENTS
(a) If a Default Event occurs and the Default Event is not
capable of being cured, the Developer must:
(i) within the Cure Period, comply with any reasonable
requirements of PTC; and
(ii) reimburse PTC for any loss or damage suffered or
incurred arising out of the Default Event within ten
Business Days of service on the Developer of the
Default Event Notice specifying the Default Event
and reasonable details of the reasonable
requirements of PTC.
(b) If a Default Event occurs and the Default Event is:
(i) capable of being cured but is not cured in
accordance with the Cure Plan for that Default
Event, or, if there is no Cure Plan, to PTC's
reasonable satisfaction (which may include the
payment of compensation) within the Cure Period; or
(ii) not capable of being cured and the Developer fails
to comply with CLAUSE 17.5(A),
PTC may (without prejudice to any other rights under this
Agreement) take one or any number of the following actions:
A sue the Developer for compensation;
B have recourse to any security for performance of the
Developer's obligations under this Agreement held by
PTC;
C seek other available legal and equitable remedies
except termination, cancellation, rescission or
repudiation of this Agreement; or
D by notice in writing, terminate this Agreement (but
without prejudice to any other rights under this
Agreement).
<PAGE>
36
17.6 RIGHTS AND LIABILITIES OF THE PARTIES FOLLOWING TERMINATION BY PTC
(a) If PTC terminates this Agreement in accordance with CLAUSE
17.5 the PTC may:
(i) require the Developer to cease works immediately;
(ii) have recourse to any security for performance of the
Developer's obligations under this Agreement;
(iii) exercise all legal and equitable rights available to
PTC;
(iv) require the Developer to:
(A) novate or assign to PTC or its nominee
without payment any agreement or the
benefit of any agreement for the supply of
materials or goods or for the execution of
any Works; and
(B) deliver all documentation necessary to
enable PTC to bring the Works to Practical
Completion.
(b) The Developer, for the purposes of any transfer or
assignment under this CLAUSE 17.6, irrevocably appoints PTC
as its attorney with full power and authority to execute
that transfer or assignment on behalf of the Developer.
(c) If this Agreement is terminated in accordance with CLAUSE
17.5, the rights and liabilities of the parties are the same
as at common law if the Developer had wrongfully repudiated
this Agreement and PTC had elected to treat this Agreement
as at an end and recover damages.
(d) All costs, loss, damage, liability or other detriment
suffered or incurred by PTC in or in relation to causing the
Works to reach Practical Completion is a debt due and
payable to PTC which may be deducted from the proceeds of
any security for performance of the Developer's obligations
under this Agreement.
<PAGE>
37
17.7 WAIVER
If this Agreement between PTC and the Developer is terminated due to the
Default Event, the Developer waives any rights it may have to pursue a
claim of restitution of any kind, including without limitation, a claim
of unjust enrichment.
18. ASSIGNMENT OF INTEREST BY MACKIE
18.1 Mackie hereby assigns all of its right title and interest in and to the
PFFA the Heads of Agreement and this Agreement to the Developer.
18.2 The Developer hereby indemnifies Mackie against all claims and
liabilities which may be imposed on Mackie as Developer under the PFFA,
the Heads of Agreement or this Agreement.
18.3 PTC consents to the assignment of rights from Mackie to the Developer.
19. CONSENT BY PTC
19.1 In the event that the consent approval or satisfaction of PTC (whether
acting directly or through PTC's Representative) is required for any
reason whatsoever under any provision of this Agreement, such consent
approval or satisfaction will be not unreasonably withheld and will be
given taking into account the provisions of CLAUSE 2.2(C).
19.2 Where action is required of PTC (whether acting directly or through PTC's
Representative) such action will, unless some other time period is
specifically provided for elsewhere in this Agreement, be taken within 15
business days except in respect of resubmissions of requests where
consent has been refused in which case it will be taken within 7 business
days.
19.3 In all cases PTC will use all reasonable endeavours to act as quickly as
possible and the Developer will use all reasonable endeavours to make any
requests for approval of plans and specifications on a staged basis.
19.4 In the event that consent approval or notice of satisfaction is not given
or refused within the respective periods referred to in CLAUSE 19.2, it
will be deemed to have been given.
20. DISPUTE RESOLUTION
20.1 Except as otherwise provided in this Agreement should any dispute or
difference arise between the parties either during the term of this
Agreement or after the termination or breach of this Agreement as to the
construction of this Agreement or as to any other matter arising under
<PAGE>
38
this Agreement the parties must prior to issuing legal proceedings send a
notice and a copy of this Agreement to the President of the Law Institute
of Victoria or his or her nominee.
20.2 The notice shall:
(a) specify the nature of the dispute or the difference;
(b) request that a mediator be appointed promptly; and
(c) state that if the dispute or difference is not resolved
within 28 days of the mediator's written confirmation of
appointment, the dispute or difference shall be referred to
a court of competent jurisdiction.
20.3 A mediator shall endeavour to resolve the dispute or difference within 28
days of his or her nomination.
20.4 If the mediator is able to assist the parties in reaching an agreement,
the agreement shall be embodied in writing, signed by the parties and
shall be binding on them.
20.5 If the mediator is unable to resolve the dispute or difference within the
prescribed period, or within any extended period agreed to in writing by
the parties, the dispute shall be referred to a court of competent
jurisdiction.
20.6 The costs of the mediator shall be shared by the parties to the dispute.
20.7 The parties may engage solicitors or consultants to assist with the
preparation of their presentations for the mediation conference and may
engage those persons to appear on their behalf at the mediation.
21. NOTICES
21.1 NOTICE REQUIREMENTS
A notice, approval, consent or other communication concerning this
Agreement:
(a) may be given by a party or its Authorised Officer; and
(b) must be in writing; and
(c) must be left at the address of the addressee or sent by prepaid
ordinary post (airmail if posted to or from a place outside
Australia) to the address of the addressee or sent by facsimile
to the facsimile number of the addressee which is set out in ITEM
9 or if the addressee notifies another address or facsimile
number then to that address or facsimile number.
<PAGE>
39
21.2 NOTICES ON PTC'S REPRESENTATIVE
The Developer must serve PTC's Representative with a copy of any notice
to PTC on the same day or as close as reasonably possible to the day on
which the notice is served on PTC.
21.3 TIME OF EFFECT OF NOTICE
A notice, approval, consent or other communication takes effect from the
time it is received, unless a later time is specified in it.
21.4 RECEIPT OF NOTICE
A letter or facsimile is taken to be received:
(a) in the case of a posted letter, on the third day after
posting; and
(b) in the case of a facsimile, on production of a transmission
report by the machine from which the facsimile was sent which
indicates that the facsimile was sent in its entirety to the
facsimile number of the recipient.
21.5 NOTICES TO US PARENT
PTC agrees to use its best endeavours to deliver a copy of any notice it
issues under CLAUSE 17 to Reading Entertainment Inc at the address
specified in ITEM 9 or such other address as is notified to PTC in
writing. PTC will use its best endeavours to confirm by telephone service
of any such notice.
21.6 FAILURE TO SERVE NOTICE
Neither the failure by PTC to deliver a copy of a notice in accordance
with CLAUSE 21.5 nor failing to contact Reading Entertainment Inc by
telephone will constitute a breach of this Agreement or operate to delay
or prolong any time period specified in this Agreement.
22. COSTS
22.1 LEGAL COSTS
Each party must bear its own legal costs of and incidental to the
preparation negotiation and execution of this Agreement and the Developer
must pay any stamp duty payable on this Agreement.
22.2 COSTS ON DEFAULT
Either party must pay or reimburse the other on request all costs
incurred or payable by the other in connection with the contemplated or
actual enforcement or preservation of any rights under this Agreement
including, without limitation, legal costs and disbursements on a
solicitor and client basis.
<PAGE>
40
23. MISCELLANEOUS
23.1 CERTIFICATE
A certificate signed by PTC or PTC's Representative about a matter
concerning this Agreement is sufficient evidence of the matter stated in
the certificate, unless the matter is proved to be false.
23.2 EXERCISE OF RIGHTS
Either party may exercise a right, power or remedy at its discretion
and separately or concurrently with another right, power or remedy.
23.3 SINGLE OR PARTIAL EXERCISE
A single or partial exercise of a right, power or remedy by either party
does not prevent a further exercise of that or an exercise of any other
right, power or remedy.
23.4 FAILURE OR DELAY IN EXERCISE
Failure by either party to exercise or delay in exercising a right,
power or remedy does not prevent its exercise.
23.5 NO LIABILITY
PTC is not liable for any loss caused by the exercise, attempted
exercise, failure to exercise or delay in exercising a right, power
or remedy.
23.6 WAIVER AND VARIATION
A provision of or a right created under this Agreement may not be
waived or varied except in writing signed by the party to be bound.
23.7 WAIVER DOES NOT EXTEND TO ANOTHER
If any party waives a provision of or a right created under or
implied in this Agreement, that waiver does not extend to:
(a) a breach by any other party of the same or any other
provision; or
(b) the future exercise by such party of that right.
23.8 ACCEPTANCE OF PAYMENT
The acceptance of a payment under this Agreement will not be taken
to constitute a waiver of any provision of or a right created under
or implied in this Agreement, except the right to demand that
payment.
23.9 SUPERVENING LEGISLATION
Any present or future legislation which operates to:
(a) vary the obligations of any party under this Agreement; or
(b) adversely affect any party's rights, powers or remedies
(including, without limitation, by way of delay or postponement) is
excluded, except to the extent that its exclusion is prohibited or
rendered ineffective by law.
<PAGE>
41
23.10 REMEDIES CUMULATIVE
The rights, powers and remedies provided in this Agreement are cumulative
with and not exclusive of the rights, powers or remedies provided by law
independently of this Agreement.
23.11 SET-OFF
PTC may apply (without notice) any credit balance in any currency in
any account of the Developer with PTC towards satisfaction of any
amount then payable by the Developer to PTC under this Agreement.
23.12 REDUCTION OF AMOUNT PAYABLE
PTC may by notice to the Developer reduce the amount payable at any
time by PTC to the Developer by the amount payable at that time by
the Developer to PTC under this Agreement. The Developer is taken
to have paid PTC that part of the amount then payable by the
Developer equal to the amount of the reduction.
23.13 INDEMNITIES
Each indemnity in this Agreement is a continuing obligation,
separate and independent from the other obligations of either party
and survives expiry or termination of this Agreement.
23.14 ENFORCEMENT OF INDEMNITY
No party need incur expense or make payment before enforcing a right
of indemnity under this Agreement.
23.15 FURTHER ASSURANCES
If PTC requests, the Developer must execute and cause its successors
to execute documents and do everything else necessary or appropriate
to bind the Developer and its successors under this Agreement.
23.16 ANTECEDENT BREACHES AND OBLIGATIONS
The expiry or termination of this Agreement does not affect:
(a) any party's rights for a breach of this Agreement by another
party before the expiry or termination; or
(b) any party's obligation to make a payment under this
Agreement for periods before the expiry or termination.
23.17 ENTIRE AGREEMENT
The Developer acknowledges:
(a) no information, representation or warranty by or on behalf
of PTC was supplied or made concerning this transaction,
in relation to the Developer's taxation liability or
any other matter, with the intention or knowledge that it
would be relied upon by the Developer; and
(b) no information, representation or warranty has been relied
upon; and
<PAGE>
42
(c) this Agreement and all documents mentioned or contemplated
by this Agreement constitute the entire agreement between
the parties concerning the Works and supersedes all previous
negotiations and agreements concerning this transaction.
24. SEVERABILITY
If the whole or any part of a provision of this Agreement is void,
unenforceable or illegal in a jurisdiction it is severed for that
jurisdiction. The remainder of this Agreement has full force and effect
and the validity or enforceability of that provision in any other
jurisdiction is not affected. This clause has no effect if the severance
alters the basic nature of this Agreement or is contrary to public
policy.
25. GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
25.1 GOVERNING LAW
This Agreement is governed by the law of Victoria.
25.2 JURISDICTION
Each party irrevocably and unconditionally submits to the exclusive
jurisdiction of the courts of Victoria and courts of appeal from them.
Each party waives any right it has to object to an action being brought
in those courts including, without limitation, by claiming that the
action has been brought in an inconvenient forum or that those courts do
not have jurisdiction.
25.3 SERVICE OF PROCESS
Without preventing any other mode of service, any document in an
action (including, without limitation, any writ of summons or other
originating process or any third or other party notice) may be
served on any party by being delivered to or left for that party at
its address for service of notices under this Agreement.
26. GOOD FAITH
The parties will act in good faith to ensure that they effect the intent
of the parties evidenced by this deed.
<PAGE>
43
EXECUTION PAGE
EXECUTED as a deed (SEAL)
THE OFFICIAL SEAL of the PUBLIC TRANSPORT )
CORPORATION was hereunto affixed in )
the presence of: )
/s/ Geralding Sharman /s/ Tony Sabatino
..................................... ..................................
Authorised signatory Authorised signatory
.....................................
Secretary
THE COMMON SEAL of READING PROPERTIES )
PTY LTD ACN 071 195 429 is affixed in )
accordance with its Articles of Association )
in the presence of: )
/s/ B. John Rochester
...................................... (SEAL)
Director
/s/ Jonathan Altson
......................................
Secretary
THE COMMON SEAL of MACKIE GROUP PTY )
LTD ACN 006 524 456 is affixed in accordance )
with its Articles of Association in )
the presence of: )
/s/ Ralph Mackie
...................................... (SEAL)
Director
/s/ Graham Duckitt
......................................
Secretary
<PAGE>
CONTRACT FOR THE SALE OF LAND - 1992 EDITION
(comprising this page, the following cooling off notice, the
following provisions, Schedule 1 and anything attached)
(a choice printed in BLOCK CAPITALS applies unless a different choice is marked)
<TABLE>
<CAPTION>
TERM MEANING OF TERM
<S> <C>
VENDOR'S AGENT Nil
VENDOR NISSAN MOTOR CO (AUSTRALIA) PTY LIMITED
ACN 004 663 156
250-284 Frankston Road, Dandenong, Vic
VENDOR'S SOLICITOR MINTER ELLISON
44 Martin Place, Sydney 2000
Phone: 9210 4444 Fax: 9235 2711 DX
117 Sydney
Ref: Mr WJ Colman
DEPOSITHOLDER Vendor's Solicitor
Invest deposit - Yes (clause 3)
COMPLETION DATE The date being 17 September 1998
PROPERTY The following land and the following
furnishings and chattels:
LAND Address: 100 Parramatta Road, Auburn, NSW
Improvements: Car show-rooms, administrative offices,
sales offices, warehouse and garaging
accommodation and automotive workshops.
Plan: Lot 2 DP562344 and Lots 5, 6 & 8 DP230253
(copies attached)
Title: Real Property Act 1900 (Torrens Title)
Folio Identifiers 2/562344, 5/230253,
6/230253 and 8/230253 (copies attached)
FURNISHINGS & CHATTELS Nil
PURCHASER READING PROPERTIES PTY LIMITED
ACN 071 195 429
Level 17, Chifley Tower, 2 Chifley Square,
Sydney, NSW
PURCHASER'S SOLICITOR ALLEN ALLEN & HEMSLEY
Chifley Tower, 2 Chifley Square, Sydney,
NSW
Phone: 9230-4000 Fax: 9233-7022 DX 105
Sydney Ref: Ms J Mutton
PRICE Price in words: Eleven Million Two Hundred
and Forty Thousand Dollars
Price $11,240,000.00
Deposit $ 1,124,000.00
Balance $10,116,000.00
DATED 17 April 1998
----------------------------------------
</TABLE>
<PAGE>
Page 1
- -------------------------------------------------------------------------------
COOLING OFF PERIOD
(PURCHASER'S RIGHTS)
1. THIS IS THE STATEMENT REQUIRED BY SECTION 66x OF THE cONVEYANCING aCT 1919
AND APPLIES TO A CONTRACT FOR THE SALE OF RESIDENTIAL PROPERTY.
2. THE PURCHASER MAY RESCIND THE CONTRACT AT ANY TIME BEFORE 5PM. ON THE FIFTH
BUSINESS DAY AFTER THE DAY ON WHICH THE CONTRACT WAS MADE, EXCEPT IN THE
CIRCUMSTANCES LISTED IN PARAGRAPH 3.
3. THERE IS NO COOLING OFF PERIOD:
(A) IF, AT OR BEFORE THE TIME THE CONTRACT IS MADE, THE PURCHASER GIVES TO THE
VENDOR (OR THE VENDOR S SOLICITOR OR AGENT) A CERTIFICATE THAT COMPLIES
WITH SECTION 66W OF THE ACT; OR
(B) IF THE PROPERTY IS SOLD BY PUBLIC AUCTION; OR
(C) IF THE CONTRACT IS MADE ON THE SAME DAY AS THE PROPERTY WAS OFFERED FOR
SALE BY PUBLIC AUCTION BUT PASSED IN; OR
(D) IF THE CONTRACT IS MADE IN CONSEQUENCE OF THE EXERCISE OF AN OPTION TO
PURCHASE THE PROPERTY, OTHER THAN AN OPTION THAT IS VOID UNDER SECTION 66ZG
OF THE ACT.
4. A PURCHASER EXERCISING THE RIGHT TO COOL OFF BY RESCINDING THE CONTRACT
WILL FORFEIT TO THE VENDOR 0.25% OF THE PURCHASE PRICE OF THE PROPERTY. THE
VENDOR IS ENTITLED TO RECOVER THE AMOUNT FORFEITED FROM ANY AMOUNT PAID BY
THE PURCHASER AS A DEPOSIT UNDER THE CONTRACT AND THE PURCHASER IS ENTITLED
TO A REFUND OF ANY BALANCE.
- -------------------------------------------------------------------------------
The vendor sells and the purchaser purchases the property for the price under
these provisions instead of Schedule 3 Conveyancing Act 1919, subject to any
legislation which cannot be excluded.
<TABLE>
<S> <C>
1. Definitions
In this contract, these terms (in any form) mean -
'adjustment date' the earlier of the giving of possession to the purchaser or completion;
'bank' a bank as defined in the Banking Act 1959, the Reserve Bank or a State bank;
'business day' any day except a bank or public holiday throughout NSW or a Saturday or Sunday;
'date of this contract' the date on which the contract is made, whether by exchange of contracts or not;
'document of title' document of title or evidence relevant to the title or the passing of title;
'legislation' an Act or a by-law, ordinance, regulation or rule made under an Act;
'normally' subject to any other provision of this contract;
`party' each of the vendor and the purchaser;
'protected tenancy' a tenancy affected by Part 2, 3, 4 or 5 Landlord and Tenant (Amendment)
Act 1948;
'rescind' rescind this contract from the beginning;
</TABLE>
<PAGE>
Page 2
'serve' serve in writing on the other party;
'terminate' terminate this contract for breach.
2 DEPOSIT AND OTHER PAYMENTS BEFORE COMPLETION
2.1 It is an essential provision that on the making of this contract the
purchaser must pay the deposit to the depositholder as stakeholder.
2.2 The deposit (or any part of it) can be paid by cash or cheque.
2.3 The deposit is taken to be paid on time if the vendor, the vendor's agent
or the vendor's solicitor holds cash or a cheque for the deposit or any
part of it as depositholder or for sending to the depositholder and the
amounts so held total the deposit.
2.4 If the deposit is not paid on time or a cheque for the deposit (or any part
of it) is not honoured on presentation, the vendor can terminate but only
before the deposit is paid.
2.5 If any of the deposit or of the balance of the price is paid before
completion to the vendor or as the vendor directs, it is a charge on the
land in favour of the purchaser until termination by the vendor or
completion.
3 INVESTMENT OF DEPOSIT
If this contract states that the deposit is to be invested then the parties
direct the depositholder to -
3.1 invest the deposit (at the risk of the party who becomes entitled to it)
with a bank or a permanent building society, in an interest-bearing account
in NSW, payable at call, with interest to be reinvested; and
3.2 pay the net interest, after deduction of all proper bank, building society
or government charges, fees or taxes, to the parties equally if this
contract is completed, and otherwise to the party entitled to the deposit.
4 TRANSFER
4.1 The purchaser must serve the form of transfer within 28 days after the date
of this contract.
4.2 Serving a transfer does not of itself imply an acceptance of the property
or of the title.
4.3 If any information needed for the form of transfer is not disclosed in this
contract, is not served by the vendor and is requested in writing by the
purchaser, the vendor must serve it within a reasonable time after that
request.
5 OBJECTIONS, REQUISITIONS AND QUESTIONS
5.1 If the purchaser is or becomes entitled to make an objection or requisition
(other than a claim), the purchaser can make it only by serving it
5.1.1 if it arises out of this contract - within 21 days after the date of
this contract; 5 1.2 if it arises out of anything served by the
vendor on the purchaser - within 21 days after the later of the date
of this contract and that service; and
5.1.3 in any other case - within reasonable time.
5.2 If the purchaser is entitled to ask any general question about the property
or the title, the purchaser can ask it only by serving it within 21 days
after the date of this contract.
<PAGE>
Page 3
6 ERROR OR MISDESCRIPTION
The purchaser can (but only before completion) claim compensation for an
error or misdescription in this contract (whether as to the property or as
to the title or not).
7 CLAIMS BY PURCHASER
The purchaser can make a claim (whether for compensation or not) before
completion only by serving it with a statement of the amount claimed, and
if the purchaser makes one or more claims before completion.
7.1 The vendor can rescind if in the case of claims which are not claims for
delay
7.1.1 the total amount claimed exceeds 5% of the price;
7.1.2 the vendor serves notice of intention to rescind; and
7.1.3 the purchaser does not serve notice waiving the claims within 14
days after that service; and
7.2 If this contract is completed
7.2.1 the lesser of the total amount claimed and 10% of the price must be
paid out of the price to and held by the depositholder until the
claims are finalised or lapse;
7.2.2 the amount held is to be invested in accordance with clause 3.1;
7.2.3 if the vendor disputes the validity or the amount of the claims,
the dispute must be finalised by an arbitrator agreed upon by the
parties or, failing agreement within 1 month of completion, by an
arbitrator appointed by the president of the Law Society of NSW
at the request of either party;
7.2.4 the purchaser is not entitled in respect of the claims to an amount
greater than the total amount claimed;
7.2.5 any net interest on the amount held must be paid to the parties in
the same proportion as the amount held is paid; and
7.2.6 if the parties do not agree upon an arbitrator and neither party
requests appointment of an arbitrator within 3 months after
completion, the claims lapse.
8 VENDOR'S RIGHT TO RESCIND
The vendor can rescind if
8.1 the vendor is, on reasonable grounds, unable or unwilling to comply with an
objection or requisition (other than a claim);
8.2 the vendor serves notice of intention to rescind which specifies the
objection or requisition and those grounds; and
8.3 the purchaser does not serve a notice waiving the objection or requisition
within 14 days after that service.
9 PURCHASER'S DEFAULT
If the purchaser does not comply with this contract (or a notice under or
relating to it) in an essential respect, the vendor can terminate by
serving a notice and then -
9.1 keep or recover the deposit (except so much of it as exceeds 10% of the
price);
<PAGE>
Page 4
9.2 hold any other money paid by the purchaser under this contract as security
for anything recoverable under this clause -
9.2.1 for 12 months, or
9.2.2 If the vendor commences proceedings under this clause within 12
months, until those proceedings are concluded; and
9.3 sue the purchaser -
9.3.1 to recover damages for breach of contract; or
9.3.2 where the vendor has resold the property under a contract made
within 12 months after termination, to recover the deficiency on
resale (with credit for any of the deposit kept or recovered),
and the reasonable costs and expenses arising out of the
purchaser's noncompliance with this contract and of resale and
any attempted resale.
10 RESTRICTIONS ON RIGHTS OF PURCHASER
10.1 The purchaser cannot make a claim, objection or requisition or rescind or
terminate in respect of
10.1.1 the ownership or location of any fence as defined in the Dividing
Fences Act 1991;
10.1.2 a service for the property being a joint service or passing though
another property, or any service for another property passing
though the property ('service' includes air, communication,
drainage, electricity, garbage, gas, oil, radio, sewerage,
telephone, television or water service);
10.1.3 whether a wall is or is not a party wall in any sense of that
term;
10.1.4 any change in the property due to fair wear and tear before
completion;
10.1.5 a promise, representation or statement about this contract, the
property or the title, not set out or referred to in this contract;
10.1.6 a condition, exception, reservation or restriction in a Crown
grant;
10.1.7 the existence of any license or permit to prospect or test for
gas, minerals or petroleum;
10.1.8 any easement or restriction on use the substance of either of which
is disclosed in this contract or any non-compliance; or
10.1.9 everything else the substance of which is disclosed in this
contract.
10.2 The purchaser cannot rescind or terminate only because of a defect in the
title to or quality of the furnishings and chattels.
11 COMPLIANCE WITH NOTICES AND ORDERS
11.1 In this clause, notice means a valid notice or order which requires work
to be done or money to be spent on or in relation to the property or any
adjoining footpath or road
11.2 The vendor must by completion comply with a notice issued on or before
the date of this contract and if this contract is completed the purchaser
must comply with any other notice.
<PAGE>
Page 5
11.3 If the purchaser incurs expense in or towards compliance with a notice and
this contract is rescinded or terminated, the vendor must reimburse the
purchaser to the extent that the expense is reasonable.
12 CERTIFICATES AND INSPECTIONS
The vendor authorises the purchaser, subject to the rights of any tenant -
12.1 to have the property inspected to obtain any certificate or report
reasonably required;
12.2 to apply (if necessary in the name of the vendor) for any statutory
certificate or a copy of any statutory approval, certificate or consent in
respect of the property; and
12.3 to make 1 pre-completion inspection of the property.
13 APPLICATION FOR BUILDING CERTIFICATE WITHIN 14 DAYS
13.1 In this clause, 'notice' means the same as in clause 11.
13.2 If the purchaser applies for a building certificate from the local
council within 14 days after the date of this contract and the council
issues a notice, refuses to issue the certificate for any reason or informs
the purchaser of work to be done before it will issue the certificate, the
purchaser can (but only before completion) make a requisition requiring the
vendor to comply with the notice, remedy the reason or do the work.
13.3 This clause does not affect any other rights of the parties.
14 ADJUSTMENTS
14.1 Normally, the vendor is entitled to the rents and profits and will be
liable for all rates, water and sewerage service charges, land tax and
other periodic outgoings up to and including the adjustment date after
which the purchaser will be entitled and liable.
14.2 The parties must allow or pay any necessary adjustment on completion.
14.3 If an amount adjustable under this clause has been reduced by any
authority and cannot (in the absence Or fraud or error) be written back,
the parties must calculate the adjustment on the reduced amount.
14.4 The vendor can require a land tax adjustment for the year current at the
adjustment date only if
14.4.1 this contract indicates that a land tax adjustment is required;
14.4.2 the vendor or a predecessor in title has paid or is liable to pay
land tax for that year; and
14.4.3 the land has a separate 'adjusted value' (as used in the Land Tax
Management Act 1956).
14.5 The amount to be adjusted for land tax is to be calculated as if at the
start of that year
14.5.1 the person who owned the land owned no other land;
14.5.2 the land was not subject to a special trust; and
14.5.3 the land was not owned by a non-concessional company.
14.6 Normally, the vendor can direct the purchaser to produce a bank cheque on
completion to pay an amount adjustable under this clause and if so -
<PAGE>
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14.6.1 the amount is to be treated as if it were paid; and
14.6.2 the cheque must be forwarded to the payee immediately after
completion (by the purchaser if the cheque relates only to the
property or by the vendor in any other case).
14.7 If the land is not subject to a separate assessment for an amount
adjustable under this clause (other than land tax), adjustment is on a
proportional area basis, even if a later apportionment is made by an
authority.
14.8 The vendor is liable for any amount recoverable for work started by any
competent authority on or before the date of this contract on the property
or any adjoining footpath or road.
15 COMPLETION DATE
15.1 The parties must complete by the completion date (being a fixed but
inessential date).--;
15.2 If the parties do not complete by the completion date, a party can serve
a notice to complete if that party is otherwise entitled to do so.
16 COMPLETION
16.1 The legal title to the property passes on completion.
16.2 Normally, by completion the vendor must
16.2.1 give the purchaser all documents of title for the property which
relate only to the property;
16.2.2 clear any certificate served by the purchaser before completion
disclosing a land tax charge on the property; and
16.2.3 otherwise cause the unencumbered legal title to the property to
pass to the purchaser, subject to any necessary registration.
16.3 If at completion the vendor has possession or control of a document of
title which relates also to other property, the vendor must produce it as
and where necessary.
16.4 On completion the purchaser must
16.4.1 pay by cash (up to $2,000) or unendorsed bank cheque the balance of
the price and any other amount payable by the purchaser to the
vendor under this contract, and
16.4.2 give the vendor an order signed by the purchaser or the
purchaser's solicitor authorising the depositholder to account to
the vendor for the deposit.
16.5 On completion the deposit becomes the vendor's property.
17 POSSESSION
17.1 Normally, the vendor must give the purchaser vacant possession of the
property on completion.
17.2 Normally, the purchaser can claim compensation (before or after
completion) or rescind if any of the land is affected by a protected
tenancy.
<PAGE>
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THIS IS AN ANNEXURE TO THE CONTRACT FOR SALE OF LAND BETWEEN
NISSAN MOTOR CO (AUSTRALIA) PTY LIMITED (AS VENDOR) AND
READING PROPERTIES PTY LIMITED (AS PURCHASER)
DATED
PROPERTY: 100 PARRAMATTA ROAD, AUBURN
IMPORTANT NOTICE TO VENDORS AND PURCHASERS:
THE CONVEYANCING ACT 1919 (SECTION 52A) AND THE CONVEYANCING (SALE OF LAND)
REGULATION 1995 CREATE SIGNIFICANT RIGHTS AND OBLIGATIONS AFFECTING THIS
CONTRACT. YOU SHOULD REFER TO THESE PROVISIONS IN CONJUNCTION WITH THE
PREPARATION AND SIGNATURE OF THIS CONTRACT.
22. AMENDMENTS TO PRINTED FORM
22.1 For every purpose of this contract, the terms of clauses 1 to 21 as
printed on pages 2, 3, 4 and 5 of the form of contract to which these
clauses are annexed are taken to be amended as follows:
22.1.1 CLAUSE 10 - add the following subclause:
`10.3 For the purposes of this clause 10, the vendor discloses
all of the material appearing in the copy documents attached to
this contract whether specified in schedule 1 or not'.
22.1.2 CLAUSE 13 - delete entire clause;
22.1.3 CLAUSE 14.4 - delete paragraph 14.4.1 and paragraph 14.4.3;
22.1.4 CLAUSE 14 - add the following subclause:
`14.9 Where the relevant authority has not issued
accounts for water and sewerage usage up to the adjustment date,
the vendor must allow an adjustment calculated by multiplying the
number of days from the end of the last billing period to (and
including) the adjustment date by the average daily usage charge
during that last billing period'.
22.1.5 CLAUSE 19.2.2 - delete entire clause;
22.1.6 CLAUSE 20.6 - delete paragraph 20.6.4 (see NOTICES below);
22.1.7 CLAUSE 20.12 - delete the words "referred to in this contract"
from the first line and add at the end of the paragraph the words
"but in the event of any conflict between CLAUSES A1 - A6 and any
typed clause in this contract, the typed clause prevails".
22.2 The property is not residential property as defined in section 66Q of the
Conveyancing Act 1919 and, accordingly, the cooling off period notice on
page 2 is deleted.
23. PURCHASER'S ACKNOWLEDGMENTS
23.1 The purchaser agrees that no reliance has been made on any warranty or
representation by the vendor or any person on behalf of the vendor
except as expressly provided in this contract, that this contract
constitutes the whole contract between the parties and that the
purchaser has relied entirely on the purchaser's own enquiries
relating to, and inspection of, the property,
<PAGE>
Page 8
all improvements and any items of furnishings and chattels referred to on the
front page of the contract and the use to which the property may be put.
23.2 The purchaser acknowledges that the purchaser is purchasing the property in
its present state of repair and condition. The purchaser may not make any
objection, requisition or claim for compensation concerning the state of
repair or condition of the property or any latent or patent defect in
quality in the property.
23.3 The purchaser acknowledges that the items listed in the attached Inventory
of Excluded Items are not owned by the vendor and are not included in the
sale of the property. Such items are the property of the Dealer and the
purchaser must permit the Dealer to remove all or any of such items from
the property on or before completion. The vendor will advise the Dealer
that, any items left on the property by the Dealer after completion are
deemed to have been abandoned by the Dealer. The vendor indemnifies the
purchaser against all costs or damages arising from any claim or action
made or taken by the Dealer against the purchaser for the removal or
destruction of any items left on the property by the Dealer after
completion except to the extent that the purchaser has not complied with
this clause.
23.4 The purchaser acknowledges that the vendor is not obliged to remove from
the title to the property on or prior to completion any caveat lodged on
behalf of the purchaser.
23.5 The purchaser acknowledges that in entering into this contract the
purchaser has made its own enquiries as to any existing development consent
or consents and the planning controls affecting the use and development of
the property and has examined these and all other documents, matters and
things relating to the planning controls affecting the property and has not
relied on any promise, representation or warranty in that regard made by or
on behalf of the vendor which is not expressly set out in this contract.
24. STAMP DUTY
The purchaser must pay all stamp duty payable in respect of this contract
and must ensure that this contract is duly stamped under the Stamp Duties
Act 1920 within the time permitted by that Act. If the purchaser fails to
perform this clause the vendor may do so and recover from the purchaser all
stamp duty, fines and other money properly paid. The vendor is responsible
for the payment of any stamp duty relating to the purchaser's agreement to
grant the Leases.
25. COMPLETION
25.1 Completion of this contract must take place by 3.30pm on the completion
date.
26. NOTICES
In addition to the provisions contained in CLAUSE 20.6, a notice or
document (`NOTICE') is sufficiently served for the purposes of this
contract if the Notice is sent by facsimile transmission to a party's
solicitor. The Notice is taken to have been received when the transmission
has been completed except where:
<PAGE>
Page 9
26.1 The sender's machine indicates a malfunction in transmission or the
recipient immediately notifies the sender of an incomplete transmission,
in which case the Notice is taken not to have been given or received; or
26.2 The time of dispatch is later than 5.00pm on a business day in the place
to which the Notice is sent, in which case the Notice is taken to have been
received at 9.00am on the next business day at that place.
27. SURVEY REPORT
27.1 The vendor discloses all of the information appearing on the copy survey
report dated 9 October 1989 by PW Rygate & West and the copy building
certificate issued by Auburn Council attached to this contract and for the
purposes of this contract all measurements shown on the survey report are
taken to be a little more or less. The vendor does not warrant that the
survey report is accurate or complete.
27.2 The purchaser must not require the vendor to apply for or do anything
(including compliance with the requirements of the Council) towards
obtaining a building certificate under s172 of the Local government Act
1993 in respect of the property. The purchaser acknowledges that this
contract is not conditional on the issue of a building certificate.
28. NOTICE REQUIRING SUBMISSION OF A FORM OF TRANSFER OR COMPLETION OF THIS
CONTRACT OR BOTH
If this contract is not completed on the completion date by the time
referred to in CLAUSE 25:
28.1 The vendor may by notice in writing served on the purchaser, including a
notice served after 3.30pm on the completion date:
28.1.1 if the purchaser has failed to tender the appropriate form of
transfer of the property, require the purchaser to do so within a
period of at lease 2 business days after service of the notice;
and/or
28.1.2 require the purchaser to complete this contract within a period of
at least 14 days after service of the notice and make time an
essential condition of this contract in this respect both at law
and in equity;
28.2 The purchaser may by notice in writing served on the vendor require the
vendor to complete this contract within a period of at least 14 days after
service of the notice and make time an essential condition of this
contract in this respect both at law and in equity.
29. INTEREST FOR LATE COMPLETION
If completion of this contract takes place after the completion date for
any reason not due to the default of the vendor, it is an essential
condition of this contract that the purchaser pay to the vendor on
completion, in addition to the other money payable under this contract, the
amount obtained by applying a simple interest formula of 10% per annum to
the balance of the price and calculated on a daily basis from the day after
completion date to and including the date on which this contract is
completed.
<PAGE>
Page 11
30. INVESTMENT OF DEPOSIT AND RELEASE OF DEPOSIT
30.1 If this contract states that the deposit is to be invested, then the
depositholder must invest the deposit in accordance with clause 3.1 with
Westpac Banking Corporation.
30.2 Despite any other provision of this contract, the parties direct the
depositholder to:
30.2.1 account to the vendor for the deposit; and
30.2.2 pay the net interest on the deposit in accordance with CLAUSE 3.2
to the parties equally, as from the date the Dealer vacates the
property but not before 17 August 1998.
30.3 A letter from the vendor to the depositholder signed by the secretary of
the vendor certifying that the Dealer has vacated the property shall be
conclusive evidence that the depositholder is entitled to account for the
deposit in accordance with clause 30.2.
30.4 Provided the deposit is not released to the vendor under clause 30.2 before
17 August 1998 (or such other date as may be agreed between the parties),
the deposit will under no circumstances be refundable to the purchaser
unless the vendor fails to complete in default of its obligations under
this contract.
31. INSURANCE - PASSING OF RISK
The provisions of Part 4 Division 7 of The Conveyancing Act 1919 do not
apply to this contract and risk in respect of damage to the property passes
to the purchaser on the date of this contract.
32. FIRB APPROVAL
32.1 In this clause 32:
"FIRB" means Foreign Investment Review Board;
"FIRB APPROVAL" means written advice from or on behalf of the Treasurer
that the Commonwealth Government does not object to the transaction
contemplated by this contract proceeding or to the purchaser entering into
this contract (as the case may be) where that advice is:
(a) not subject to any conditions;
(b) subject only to conditions which would not entitle the purchaser to
rescind this contract under clause 32.5.2; or
"FIRB NOTICE DAY" means the date on which the Treasurer receives a notice
from the purchaser given in accordance with CLAUSE 32.7 of if that date
precedes the date of this contract, then the date of this contract;
"TAKEOVERS ACT" means the Foreign Acquisition & Takeovers Act 1975 (Cth);
"TREASURER" means the Treasurer of the Commonwealth of Australia.
<PAGE>
Page 11
32.2 Deleted.
32.3 This contract is conditional on the purchaser receiving FIRB Approval
within 90 days of the FIRB Notice Day.
32.4 For the purpose of this contract, FIRB Approval is taken to have been
received by the purchaser if within 40 days of the FIRB Notice Day, the
Treasurer:
32.4.1 does not make an order in relation to the acquisition of the
property under the Takeovers Act; or
32.4.2 does not give advice that the Commonwealth Government has no
objection to the proposed transaction or the entry into the
contract (as the case may be) subject to compliance with state
conditions.
32.5 Subject to clause 32.6, if within the period of 90 days after the FIRB
Notice Day:
32.5.1 the Treasurer does make an order in relation to the acquisition of
the property under the Takeovers Act, either party may rescind this
contract by notice in writing to the other party or its solicitors
within 7 days of receiving notice of the order given and this
contract will be thereupon rescinded ab initio'
32.5.2 the Treasurer does give advice that the Commonwealth Government has
no objection to the proposed transaction or the entry into the
contract (as the case may be) subject to compliance with one or
more conditions, the party affected by any condition may rescind
this contract by notice in writing to the other party or its
solicitors given within 7 days of receiving notice of the order and
this contract will thereupon be rescinded ad initio. The party
affected by any condition may only rescind if the condition or
conditions:
(a) detrimentally affect that party; and
(b) are not reasonably acceptable to that party
32.6 The right of the purchaser to rescind this contract under clause 32.5 is
conditional on the purchaser complying with its obligations under clauses
32.7 and 32.8. If the purchaser does not so comply and the Treasure does
either of the things mentioned in clause 32.5.1 and 32.5.2, the purchaser
will be in breach of this contract and the vendor may by notice in writing
to the purchaser or its solicitors within 7 days of receiving notice of the
Treasurer's action, terminate this contract.
32.7 The purchaser must (either itself or through its agents) before or within 7
days of the date of this contract give notice to the Treasure, in the form
prescribed by the Takeovers Act and Regulations made under it (if so
required by the Treasurer), of the entry into this contract and provide all
information required by the Takeovers Act and Regulations made under it and
by the FIRB.
32.8 Each party must:
32.8.1 on the request of the other, provide the other with all available
information and make every reasonable effort to provide
assistance, where that information or assistance is necessary or
reasonably desirable for the purpose of making or giving the
applications or notices required under this clause;
32.8.2 use its best efforts to obtain or assist in obtaining the
authorities and approvals referred to in this clause as soon as
possible;
<PAGE>
Page 12
32.8.3 immediately on receiving a request for information from the
Treasurer, provide such of that information as it is reasonably
capable of providing in accordance with that request; and
32.8.4 provide to the other party a copy of each application or notice
made or given in accordance with this clause.
33. FURTHER DEFINITIONS
In this contract these terms mean:
"DEALER" Capital Automative Group Pty Limited ACN 003 924 650
"ENVIRONMENTAL EXPERT" ADI Limited
"ENVIRONMENTAL LAWS" all planning, environmental, health, toxic and
hazardous substances, waste disposal or pollution
laws and regulations, orders, notices, ordinances or
requirements and all licenses, approvals, consents,
permissions or permits issued under the same.
34. ENVIRONMENTAL AUDIT
34.1 The parties acknowledge that the purchaser has engaged the Environmental
Expert to undertake a stage 2 environmental audit of the property, and that
the Environmental Expert has issued certificates addressed to both the
vendor and the purchaser certifying details of any remediation works which
the Environmental Expert considers must be carried out on the property to
ensure that the property complies with all relevant Environmental Laws.
35. A copy of the audit by the Environment Expert is attached to this contract
and the purchaser acknowledges that the purchaser is not entitled to raise
any objection, requisition or claim for compensation or delay completion by
reason of anything disclosed in such audit.
<PAGE>
Page 13
INDEMNITY
35.1 As from the date of this contract, the purchaser must keep the vendor
indemnified against any claim for commission, brokerage fees or any other
fees in any way relating to the sale of the property which may be made at
any time against the vendor by Elm Square Pty Limited or by Jonathon
Altson.
35.2 This clause will not merge on completion.
<PAGE>
Page 14
THIS IS AN ANNEXURE TO THE CONTRACT FOR SALE OF LAND BETWEEN NISSAN MOTOR CO
(AUSTRALIA) PTY LIMITED (AS VENDOR) AND READING PROPERTIES PTY LIMITED (AS
PURCHASER) DATED 1998
PROPERTY: 100 PARRAMATTA ROAD, AUBURN
Copies of the following documents specified in SCHEDULE 1 are attached to this
contract:
(a) certificate under s149(2) of the Environmental Planning & Assessment Act
1979 issued by Auburn Council;
(b) sewerage service diagram (if sewer is available);
(c) sewer reference sheet;
(d) computer folio certificates in respect of certificates of title folio
identifiers 2/562344, 5/230253, 6/230253 and 8/230253;
(e) deposited plans 562344 and 230253;
(f) the following dealings:
B215538 - right of way appurtenant to part of the land affecting the land
shown as right of way in DP312222 (copy attached);
C717950 - right of way appurtenant to part of the land affecting the land
shown in DP188498 (copy attached);
Right of way created by D484492, D531803 and D567232 appurtenant to the
land affecting the land shown in DP432647 (copy attached) and the land
shown in plan with D567232 (copy attached);
D845386 - easement for stormwater channel affecting part of the land shown
in DP562344;
G160087 - easement for passage of effluent waters appurtenant to part of
the land affecting the land shown in DP437380 (copy attached) see also
dealing F922104;
H198524 - easement for water supply and stormwater drainage affecting part
of the land shown in DP562344;
H257721 - easement for gas supply affecting part of the land shown in
DP562344;
H548956 - easement for electricity purposes affecting part of the land
shown in DP562344;
H618014 - easement for underground cables affecting part of the land shown
in DP562344;
H873409 - right of way appurtenant to the land affecting the land shown in
DP432647 (copy attached);
R686100 - easement for water supply affecting the land shown in DP452468
(copy attached);
K484741 - covenant;
K484741 - easement for railway purposes appurtenant to the land affecting
land in Lots 2, 3 and 4 DP230253;
<PAGE>
Page 15
DP230253 - easement to drain water 5 feet wide (K454178);
(g) survey report by P W Rygate & West dated 9 October 1989;
(h) building certificate or s317AE certificate issued by Auburn Council;
together with copies of the following documents:
Inventory of Excluded Items
Audit of Environmental Expert
<PAGE>
Page 16
18 POSSESSION BEFORE COMPLETION
If the vendor gives the purchaser possession of the property before
completion -
18.1 the purchaser must not before completion
18.1.1 let or part with possession of any of the property;
18.1.2 make any structural alteration or addition to it; or
18.1.3 contravene any agreement between the parties or any instrument,
legislation, notice or order affecting the property;
18.2 the purchaser must until completion
18.2.1 keep the property in good condition and repair having regard to
its condition at the giving of possession ;and
18.2.2 allow the vendor or the vendor's authorised representative to
enter and inspect it at all reasonable times;
18.3 the risk in respect of damage to the property passes to the purchaser
immediately after the purchaser enters into possession;
18.4 if the purchaser does not comply with this clause, then without affecting
any right of the vendor, the vendor can before completion, without notice,
remedy the non-compliance and the purchaser must pay to the vendor the
reasonable cost of doing so with interest on that cost at the rate
mentioned in Schedule J Supreme Court Rules 1970 on all amounts as paid by
the vendor from time to time;
18.5 if this contract is rescinded or terminated the purchaser must immediately
vacate the property;
18.6 if the parties or their solicitors on their behalf do not agree in
writing to a fee or rent, none is payable; and
18.7 the taking of possession does not of itself imply an acceptance of the
property or of the title.
19 RESCISSION OF CONTRACT
19.1 If this contract expressly gives a party a right to rescind, the party
can exercise the right
19.1.1 only by serving a notice before completion; and
19.1.2 in spite of any making of (or attempt to satisfy) a claim,
objection or requisition, any negotiation or litigation or any
giving or taking of possession.
19.2 Normally, if a party exercises a right to rescind expressly given by this
contract or any legislation
19.2.1 the deposit and any other money paid by the purchaser under this
contract must be refunded;
19.2.2 a party can claim for a just and equitable adjustment if the
purchaser has been in possession;
19.2.3 a party can claim for damages, costs or expenses arising out of a
breach of this contract; and
19.2.4 a party will not otherwise be liable to pay any damages, costs or
expenses.
<PAGE>
Page 18
20 MISCELLANEOUS
20.1 The parties acknowledge that anything stated in this contract to be
attached was attached to this contract by the vendor before the purchaser
signed it and is part of this contract.
20.2 Any attached copy of a computer folio certificate or a manual folio of
the Register must be read subject to the Crown Lands (Continued Tenures)
Act 1989.
20.3 An area or dimension in this contract is only an approximate area or
dimension.
20.4 If a party consists of 2 or more persons, this contract benefits and
binds them jointly and separately.
20.5 A party's solicitor can receive or direct in writing the payment of any
money payable to the party under this contract.
20.6 A document under or relating to this contract is
20.6.1 signed by a party if it is signed by that party or that party's
solicitor;
20.6.2 served by or on a party if it is served by or on that party's
solicitor;
20.6.3 served if it is served in any manner provided in s170 Conveyancing
Act 1919;
20.6.4 served on a party on, but not before, the next business day after
it is sent by facsimile transmission to the fax number stated in
this contract for the party's solicitor; and
20.6.5 served on a deceased person if it is served on the person's
solicitor named in this contract, or the person's legal personal
representative, or if neither exists, the Public Trustee.
20.7 If the time for something to be done or to happen is not a business day,
the time is extended to the next business day, except in the case of clause
2 (deposit) and clause 21 (auction).
20.8 If there are conflicting times for something to be done or to happen, the
latest of those times applies.
20.9 The time for doing one thing does not of itself affect the time for doing
anything else.
20.10 The term 'within' in relation to a period means at any time at all
before the end of the period.
20.11 Normally, if a party must do something within a time, the time is not
essential.
20.12 Normally, clauses A1 -A6 referred to in this contract apply in the form
last published by the Law Society of NSW and the Real Estate Institute of
NSW, even if not attached.
20.13 Rights under clauses 11,14,17 and A2 continue after completion, whether
or not other rights continue.
21 AUCTION
If the property is sold by auction -
21.1 subject to this clause, the highest bidder is the purchaser;
21.2 if a bid is disputed the auctioneer is the sole arbitrator and the
auctioneer's decision is final;
21.3 the auctioneer can refuse to accept any bid, which in the auctioneer's
opinion is not in the best interests of the vendor
<PAGE>
Page 19
21.4 the sale is subject to a reserve price and the right to make 1 bid by or
on behalf of the vendor is reserved;
21.5 a bidder is deemed to be a principal unless, prior to the bidding, the
bidder has given the auctioneer a copy of a written authority to bid for or
on behalf of a person; and
21.6 as soon as practicable after the fall of the hammer the purchaser must
sign this contract.
<PAGE>
Page 20
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<TABLE>
<CAPTION>
SCHEDULE 1
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<S> <C> <C> <C> <C>
DOCUMENTS (copy of document attached if box marked - some required by legislation)
x1. certificate issued under s149(2) Environmental Planning and Assessment Act 1979
x2. sewerage service diagram or sanitary drainage diagram
x3. sewer reference sheet
x4. any document creating/purporting to create an easement, restriction on use or other interest disclosed in this
contract.
5. any document which is to be lodged with any relevant unregistered plan
6. in the case of land affected by a positive covenant - certificate under s88G Conveyancing Act 1919
x7. survey report
x8. building certificate or s317A certificate 9 certificate under s24 Swimming Pools Act 1992
10 Crown tenure card 11 Crown statement of account
12 computer folio certificate for common property 13 development statement 14 management statement
15 computer folio certificate for neighbourhood property 16 development contract 17 management statement
18 folio certificate - precinct 19 precinct plan 20 development contract 21 management statement
22 folio certificate - community 23 community plan 24 development contract 25 management statement
26 in the case of a leasehold strata scheme - the lease of the lot and the lease of the common property
- ------------------------------------------------------------------------------------------------------------------------------------
Adjoining land owned by vendor x NO yes - purchaser cannot require vendor to contribute to fencing work
Covenant/easement to be in transfer x NO yes - wording (including description of land benefited) attached
Consent to transfer required x NO yes (clause A5)
Land tax adjustment required NO x yes (clause 14)
- ------------------------------------------------------------------------------------------------------------------------------------
Possession: x VACANT subject to the following tenancies under the vendor (clause A2)
part occupied tenant's name nature of expiry option rent
(e.g. room number) (show full name) tenancy date period (show weekly/monthly)
(not protected tenancies unless otherwise indicated)
(a copy of each lease is attached - a residential lease must be read subject to the Residential Tenancies Act 1987)
- ------------------------------------------------------------------------------------------------------------------------------------
Strata/community managing agent
(or if non, secretary)
Name, address, phone
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
SIGNED by ANGUS EDWARD PAINE and
GEOFFREY MARK SCHONEWILLE as attorneys
for NISSAN MOTOR CO (AUSTRALIA) PTY LIMITED
under Power of Attorney dated 15 April 1998
registered Book 4198 No. 248
in the presence of:
.../s/ Angus Edward Paine.
- --------------------------
ANGUS EDWARD PAINE
SIGNED BY THE VENDOR.................. SIGNED BY THE PURCHASER................
IN THE PRESENCE OF Vendor Purchaser
Witness /s/ Geoffrey Mark Schonewille Witness...........................
-----------------------------
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
IMPORTANT NOTICE TO VENDORS AND PURCHASERS: The Conveyancing Act 1919 (section 52A) and the Conveyancing (Vendor Disclosure and
Warranty) Regulation 1986 create significant rights and obligations affecting this contract. You should refer to these provisions in
conjunction with the preparation and signature of this contract. WARNING Various Acts of Parliament and other matters can affect the
rights of the parties to this contract. Some important matters are actions, claims, decisions, notices, orders or proposals
involving owners of adjoining properties, or -
<S> <C> <C>
Australian Gas Light Company Heritage Council Rural Lands Protection Board
Building Services Corporation Housing Department School Education Department
Council Mine Subsidence Board State Pollution Control Commission
County Council Mineral Resources Department State Rail
Department of Conservation and Land Pacific Power Telecom
Management Pipelines Authority Water Board or local water authority
Environmental Protection Authority Public Works Department
Health Department Roads and Traffic Authority
- ---------------------------------------------------------------------------------------------------------------------------------
NOTES
1 The purchaser is liable to pay stamp duty on this contract within 2 months after the date of the making of this contract and
may incur fines if stamp duty is not paid within that period.
2 If there is a dispute between the parties, they are encouraged to use informal procedures such as negotiation, mediation or
independent expert appraisal under guidelines or rules of the Law Society.
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
21
3 The copies mentioned in this form are in some cases required by legislation to
be attached - a solicitor can advise you.
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7,000
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