<PAGE>
                                                                   EXHIBIT 10.16
 
                          FIFTH AMENDMENT AND WAIVER
                                      TO
                             AMENDED AND RESTATED
                               CREDIT AGREEMENT

     FIFTH AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT, dated
as of August 14, 1998 (this "Fifth Amendment"), to the Amended and Restated
                             ---------------                               
Credit Agreement dated as of August 7, 1997, as amended by the First Amendment
and Waiver to Amended and Restated Credit Agreement dated as of November 13,
1997, the Second Amendment and Waiver to Amended and Restated Credit Agreement
dated as of December 13, 1997, the Third Amendment to Amended and Restated
Credit Agreement dated as of January 7, 1998, the Fourth Amendment to the
Amended and Restated Credit Agreement dated as of May 22, 1998 (as so amended,
the "Credit Agreement"), among Hollywood Theater Holdings, Inc. (the "Parent"),
     ----------------                                                 ------   
Hollywood Theaters, Inc. (the "Company"), the banks and other financial
                               -------                                 
institutions parties thereto (collectively, the "Banks"; individually, a
                                                 -----                  
"Bank"), and Bank of America National Trust and Savings Association, as
 ----                                                                  
Administrative Agent for the Banks (the "Administrative Agent").
                                         --------------------   

                             W I T N E S S E T H:
                             ------------------- 

     WHEREAS, pursuant to the Credit Agreement, the Banks have agreed to make,
and have made, certain loans and other extensions of credit to the Borrower; and

     WHEREAS, Parent and the Company have requested that the Administrative
Agent and the Banks waive certain terms and conditions under the Credit
Agreement as more fully set forth herein; and

     NOW, THEREFORE, the parties hereto hereby agree as follows:

          I.   Defined Terms.  Capitalized terms defined in the Credit Agreement
               -------------                                                    
and not otherwise defined herein shall have the meanings given to them in the
Credit Agreement.

          II.  Amendments to Credit Agreement.  A.  Section 1.1 of the Credit
               ------------------------------                                
Agreement is hereby amended by adding thereto the following definitions in the
appropriate alphabetical order:

          "Additional Equity Issuance":  shall mean an issuance and sale by the
           --------------------------                                          
     Parent or the Company of a minimum of an additional $50,000,000 of its
     Capital Stock, either through private placement or public offering..

          "Fifth Amendment":  that Fifth Amendment and Waiver to Amended and
           ---------------                                                  
     Restated Credit Agreement among the Parent, the Company, the Administrative
     Agent and the Banks parties thereto.

          "Monthly Test Period":  as defined in the definition of "Monthly
           -------------------                                     -------
     Compliance Certificate".
     ----------------------  
<PAGE>
 
                                                                               2



          B.   Section 1.1 of the Credit Agreement is hereby amended by adding
the following language at the end of the definition of "Capital Expenditures":
                                                        --------------------  

          "Notwithstanding the foregoing, there shall be excluded from the
           annual Capital Expenditures Cap expenditures made in connection with
           (i) reprogramming required to permit the proper functioning (but only
           to the extent that such proper functioning would otherwise be
           impaired by the occurrence of the year 2000) in and following the
           year 2000 of computer systems and other equipment containing embedded
           microchips, in either case owned or operated by the Company or used
           or relied upon in the conduct of the Company's business, (ii) the
           testing of all such systems and other equipment as so reprogrammed,
           and (iii) the purchase and installation of related systems and
           related equipment, as well as training on such reprogrammed and/or
           modified computer systems and equipment. The aggregate of the
           expenditures made in connection with the previous sentence shall in
           no event exceed $2,000,000 over the course of the term of the Loans
           (approximately $700,000 of which has been spent as of the date of the
           Fifth Amendment)."

          C.   Section 1.1 of the Credit Agreement is hereby amended by deleting
therefrom the definition of "Monthly Compliance Certificate" in its entirety and
                             ------------------------------                     
substituting the following therefor:

                    "Monthly Compliance Certificate": a certificate duly
                    --------------------------------
          executed by a Responsible Officer of the Parent and the Company, which
          certificate will contain such financial calculations and other
          information required thereby covering the period of the calendar month
          for which the Monthly Compliance Certificate is being delivered (the
          "Monthly Test Period"), and shall be substantially in the form of
          Exhibit A to the Third Amendment (with appropriate adjustments to
          reflect that the test period to which such Monthly Compliance
          Certificate is applicable is a Monthly Test Period and ends as of the
          last day of a calendar month rather than a fiscal quarter and such
          other changes thereto as may be agreed upon from time to time by the
          Administrative Agent and the Parent and the Company), and including
          therein, among other things, calculations supporting compliance with
          Article VII. For purposes of determining the financial calculations
          required by the Monthly Compliance Certificate, financial ratio terms
          which are defined in the Credit Agreement with reference to the end of
          the applicable fiscal quarter (e.g., Consolidated Fixed Charge
                                         - -
          Coverage Ratio, Consolidated Interest Coverage Ratio, etc.) shall be
          redefined for such purposes only to refer to the end of the applicable
          calendar month."

          D.   Section 2.1 of the Credit Agreement is hereby amended by adding
at the end thereof the following:
<PAGE>

                                                                               3


          "Notwithstanding the foregoing, the Maximum Available Revolving Loan
          Commitments for the Revolving Loan Cap Period from April 1, 1998
          through September 30, 1998 (the final day of the last Revolving Loan
          Cap Period) shall equal the aggregate amount of all Revolving Loan
          Commitments, provided, that for any Revolving Loan advances in excess
          of $38,672,500, Beacon shall deliver for the benefit of the
          Administrative Agent a letter of credit in form and substance
          reasonably acceptable to the Administrative Agent and in an amount of
          not less than the amount advanced to the Company, but in no event
          shall that amount exceed $15,000,000; provided, however, if the
                                                --------  -------        
          Additional Equity Issuance is consummated on or prior to October 31,
          1998, the Administrative Agent is directed to release such letter of
          credit and return such letter of credit to the issuing bank."

          E.    Section 7.1(e) of the Credit Agreement is hereby amended by
deleting Section 7.1(e) in its entirety and substituting therefore the
following:

          "(e)  Minimum Consolidated Operating Cash Flow.
                ---------------------------------------- 

     Commencing on the Third Amendment Effective Date and ending on October 30,
     1998, at the end of any calendar month during such period of time, permit
     Consolidated Operating Cash Flow for prior twelve month period to be less
     than the amount set forth below for the corresponding period during which
     such fiscal quarter ends:


          Period                                    Minimum Consolidated
          ------                                    --------------------
                                                    Operating Cash Flow
                                                    --------------------

     
          Third Amendment Effective Date            $ 13,000,000
            to March 31, 1998

          April 1, 1998 to                          $ 16,000,000
          June 30, 1998

          July 1, 1998 to                           $17,000,000"
          October 30, 1998

          F.   Exhibit A to the Third Amendment is hereby amended by deleting
Exhibit A in its entirety and substituting therefor Exhibit A attached hereto.

               III. Waivers. The Administrative Agent and the Banks hereby grant
                    -------
the following waivers on the following terms: 

               A.   the provisions of subsection 2.7(d) hereby are waived
beginning on the date hereof and ending at 11:59 p.m. on October 30, 1998 (the
Additional Equity Issuance Waiver Period") solely to permit the Additional
-----------------------------------------                                  
Equity Issuance to be consummated on or prior to
<PAGE>
 
                                                                               4

October 31, 1998, without a corresponding mandatory prepayment of the Loans and
reduction of the Revolving Loan Commitments;

               B.   the provisions of the first sentence of subsection
4.3(f) are hereby waived until the end of the Additional Equity Issuance Waiver
Period; provided, however, that if the Additional Equity Issuance shall not have
        --------  -------                                                       
occurred prior to the end of the Additional Equity Issuance Waiver Period, the
Parent shall affect a Required Equity Contribution within forty-five (45) days
after the end of the Additional Equity Issuance Waiver Period in an amount not
less than the aggregate amount of all Construction Advances in excess of
$12,000,000 made from and after the Third Amendment Effective Date to and
including the last day of the Additional Equity Issuance Waiver Period, and any
failure of Parent to affect such Required Equity Contribution shall be an Event
of Default;

               C.   the provisions of subsection 7.1(a), 7.1(b) and subsection
7.1(d) are hereby waived until the end of the Additional Equity Issuance Waiver
Period, after which period of the foregoing waiver shall terminate and the
provisions of subsection 7.1(a), 7.1(b) and 7.1(d) shall be reinstated with full
force and effect.

               IV.  Payment of Expenses.  The Company agrees to pay or reimburse
                    -------------------                                         
the Administrative Agent for all of its out-of-pocket costs and reasonable
expenses incurred in connection with the negotiation, preparation and
distribution of documents prepared in connection herewith and the transactions
contemplated hereby, including, without limitation, the reasonable fees and
disbursements of counsel to the Administrative Agent.

               V.   No Other Amendments; Confirmation.  Except as expressly
                    ---------------------------------                      
amended, modified and supplemented hereby, the provisions of the Credit
Agreement and the other Loan Documents are and shall remain in full force and
effect.

               VI.  Affirmation of Guarantees.  The Parent hereby consents to
                    -------------------------                                
the execution and delivery of this Fifth Amendment and reaffirms its obligations
under Article X of the Credit Agreement.

               VII. Counterparts.  This Fifth Amendment may be executed in any
                    ------------                                              
number of separate counterparts, each of which, when so executed, shall be
deemed an original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument.

               VIII. GOVERNING LAW AND JURISDICTION.  THIS FIFTH AMENDMENT SHALL
                     ------------------------------                             
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK, WITHOUT CONSIDERATION IF ITS CONFLICT OF LAWS PRINCIPLES, AND APPLICABLE
FEDERAL LAW.
<PAGE>
 
          IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Amendment to be duly executed and delivered by their respective proper and duly
authorized officers as of the day and year first above written.

                                
                                HOLLYWOOD THEATER HOLDINGS, INC.


                                By: /s/ James R. Featherstone
                                   ----------------------------------------
                                     James R. Featherstone
                                     Vice President

                                HOLLYWOOD THEATERS, INC.


                                By: /s/ James R. Featherstone
                                   ----------------------------------------
                                     James R. Featherstone
                                     Vice President

                                
                                BANK OF AMERICA NATIONAL TRUST AND SAVINGS
                                ASSOCIATION, as Administrative Agent and as a
                                Bank


                                By: /s/ Carl F. Salas
                                   ----------------------------------------
                                     Carl F. Salas
                                     Vice President
                                
<PAGE>
 
                                THE BANK OF NOVA SCOTIA, as a Bank


                                By: /s/ Vincent J. Fitzgerald
                                   -----------------------------------------
                                Name: Vincent J. Fitzgerald, Jr.
                                Title: Authorized Signatory
<PAGE>
 
                                THE SUMITOMO BANK, LIMITED, as a Bank


                                By: /s/ H. W. Redding
                                   -----------------------------------------
                                Name: H. W. Redding
                                Title: Vice President and Manager


                                By: /s/ Stan Marciniak
                                   -----------------------------------------
                                Name: Stan Marciniak
                                Title: Vice President and Manager 
                                       Operations
<PAGE>
 
                                BANK ONE TEXAS, N.A., as a Bank


                                By: /s/ Gina Norris
                                   -----------------------------------------
                                Name: Gina Norris 
                                Title: Vice President
<PAGE>
 
                                                    EXHIBIT A TO THIRD AMENDMENT
                                                    ----------------------------

                                    FORM OF
                            COMPLIANCE CERTIFICATE



TO:  Bank of America National
     Trust and Savings Association,
     as Administrative Agent


Ladies/Gentlemen:

          We refer to the Amended and Restated Credit Agreement, dated as of
August 7, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the undersigned, HOLLYWOOD THEATER
           ----------------                                            
HOLDINGS, INC., as guarantor thereunder, HOLLYWOOD THEATERS, INC., as borrower
thereunder (the "Company"), the Banks parties thereto, and BANK OF AMERICA
                 -------                                                  
NATIONAL TRUST AND SAVINGS ASSOCIATION, as Administrative Agent.  Terms defined
in the Credit Agreement are used herein as therein defined, and Section and
subsection references are to Sections and subsections in the Credit Agreement.

          The undersigned hereby certifies and warrants to you and each Bank
that the following is a true and correct computation in respect of the fiscal
quarter ending     _____ ______, 19___ (the "Computation Date") of the following
                                             ----------------                   
ratios and/or financial restrictions with respect to the Parent, the Company and
all Subsidiaries on a consolidated basis contained in Section 7 for the
Computation Date:

I.   Consolidated Total Leverage Ratio (subsection 7.1(a))/*/
     -----------------------------------------------------   
     (a)  Indebtedness for borrowed money without duplica-
          tion in the other items listed in (a) through (h)     $_______________

_____________________

     /*/  With respect to determination of Consolidated Total Leverage Ratio,
          Consolidated Interest Coverage Ratio, Consolidated Fixed Charge
          Coverage Ratio and Consolidated Senior Leverage Ratio, (i) the
          calculation of Consolidated Cash Interest and Consolidated Fixed
          Charges in respect of periods ending prior to the first anniversary of
          the Effective Date and (ii) the calculation of Consolidated Operating
          Cash Flow in respect of newly constructed theaters shall, in each
          case, be determined as provided in the Credit Agreement.

  
<PAGE>
 
                                                                               2

     (b)  Obligations issued, undertaken or assumed as the
          deferred purchase price of property or services
          (other than trade payables in the ordinary course
          of business)                                      $__________________

     (c)  Non-contingent reimbursement or payment
          obligations with respect to Surety Instruments
          without duplication in the other items listed
          in (a) through (h)                                $__________________

     (d)  Obligations evidenced by notes, bonds, debentures
          or similar instruments, including obligations so
          evidenced incurred in connection with the
          acquisition of property, assets or businesses
          without duplication in the other items listed
          in (a) through (h)                                $__________________

     (e)  Indebtedness created or arising under any
          conditional sale or other title retention
          agreement, or incurred as financing, in either
          case with respect to property acquired without
          duplication in the other items listed in (a)
          through (h)                                       $__________________

     (f)  Obligations with respect to Capital Leases
          without duplication in the other items
          listed in (a) through (h)                         $__________________
                                                          

     (g)  Obligations as a lessee under synthetic or
          leveraged leases without duplication in the
          other items listed in (a) through (h)             $__________________

     (h)  Indebtedness referred to in (a) through (g)
          above secured by (or for which the holder of
          such Indebtedness has an existing right,
          contingent or otherwise, to be secured by) any
          Lien upon or in property owned by the Parent, the
          Company or any Subsidiary (even though the Person
          owning such property has not assumed or become
          liable for the payment of such Indebtedness), but
          only to the extent of the value of such property,
          without duplication in the other items listed in
          (a) through (g)                                   $__________________
<PAGE>
 
                                                                               3


     (i)  Guaranty Obligations in respect of 
          indebtedness or obligations of others 
          (other than a Hollywood Entity) of the 
          kinds referred to in (a) through (h) 
          and not included in (a) through (h)        $_________________________

     (j)  Subtotal of (a) through (i)                $_________________________

     (k)  Consolidated Net Income for prior 
          12 month period ending __________          $_________________________

     (l)  Total income tax expense for such 
          prior 12 month period without duplication 
          in (k)                                     $_________________________

     (m)  Interest expense, amortization or writeoff 
          of debt discount or debt insurance costs 
          and commissions, discounts and other fees 
          and charges associated with Indebtedness 
          (including the Loans) for such prior 12 
          month period without duplication in (k)    $_________________________

     (n)  Depreciation and amortization expense and 
          amortization of intangibles (including 
          goodwill) and organization costs for such 
          prior 12 month period without duplication
          in (k)                                     $_________________________

     (o)  Extraordinary expenses or losses for such 
          prior 12 month period without duplication 
          in (k)                                     $_________________________

     (p)  Other non-cash charges (excluding inventory 
          writedowns) for such prior 12 month period 
          without duplication in (k)                 $_________________________
                                             

     (q)  Subtotal of (k) through (p)                $_________________________

     (r) Non-cash interest income for such prior 12 
         month period (to the extent included in 
         (k))                                        $_________________________

     (s) Extraordinary income and gains for such 
         prior 12 month period (to the extent 
         included in (k))                            $_________________________

     (t) Other non-cash income for such prior 12 
         month period (to the extent included in 
         (k))                                        $_________________________

     (u) Subtotal (r) through (t)                    $_________________________
 
<PAGE>
 
                                                                               4


     (v) (q) minus (u)   $                   $_________________________________
 
     (w) Ratio of (j) to (v)                 $_________________________________ 
 
     (x) Maximum ratio permitted under 
         subsection 7.1(a)                   $_________________________________
 

II.  Consolidated Interest Coverage Ratio (subsection 7.1(b))/**/
     ----------------------------------------------------------
 
     (a) Part I. item (v)                    $_________________________________


     (b) Aggregate interest expense for prior 
         12 month period ending              $_________________________________
 
     (c) Non-cash interest expenses included 
         in (b)                              $_________________________________

     (d) (b) minus (c)                       $_________________________________
 
     (e) Ratio of (a) to (d)                 $_________________________________
 
     (f) Minimum ratio permitted by 
         subsection 7.1(b)                   $_________________________________
 
III. Consolidated Fixed Charge Coverage Ratio (subsection 7.2(c))/***/
     ---------------------------------------------------------------
 
     (a)    Part I, item (v)                 $_________________________________



____________________

/**/  /  With respect to determination of Consolidated Total Leverage Ratio,
         Consolidated Interest Coverage Ratio, Consolidated Fixed Charge
         Coverage Ratio and Consolidated Senior Leverage Ratio, the calculation
         of Consolidated Cash Interest and Consolidated Fixed Charges in respect
         of periods ending prior to the first anniversary of the Effective Date
         and Consolidated Operating Cash Flow in respect of newly constructed
         theaters shall each be determined as provided in the Credit Agreement.

/***/  /  With respect to determination of Consolidated Total Leverage Ratio,
          Consolidated Interest Coverage Ratio, Consolidated Fixed Charge
          Coverage Ratio and Consolidated Senior Leverage Ratio, the calculation
          of Consolidated Cash Interest and Consolidated Fixed Charges in
          respect of periods ending prior to the first anniversary of the
          Effective Date and Consolidated Operating Cash Flow in respect of
          newly constructed theaters shall each be determined as provided in the
          Credit Agreement.
<PAGE>

                                                                               5

     (b)  Rental expense (including payments 
          under real property operating 
          leases) for prior 12 month period
          ending  ____________________       $_________________________________
 
     (c)  Part II, item (d)                  $_________________________________
 
     (d)  Capital Expenditures for such prior 
          12 month period                    $_________________________________
   
     (e)  Required principal repayments on 
          all Indebtedness for such prior 12 
          month period                       $_________________________________

     (f) Permitted Restricted Payments made 
         pursuant to subsection 7.12(a)(iii) 
         for such prior 12 month period      $_________________________________
   
     (g)  Subtotal (b) through (f)           $_________________________________
 
     (h)  Ratio of (a) to (g)                $_________________________________
 
     (i)  Minimum ratio permitted by 
          subsection 7.1(c)                  $_________________________________

IV.  Consolidated Senior Leverage Ratio (subsection 7.1(d))/****/
     ------------------------------------------------------   

     (a)  Part I, item (j), other than 
          Indebtedness in respect of the 
          Senior Subordinated Notes and the 
          Senior Subordinated Indenture      $_________________________________ 
 
     (b)  Part I, item (v)                   $_________________________________
 
     (c)  Ratio of (a) to (b)                $_________________________________
 
     (d)  Maximum ratio permitted under 
          subsection 7.1(d)                  $_________________________________ 

V.   Minimum Consolidated Operating Cash Flow (subsection 7.1(e))
     -----------------------------------------------------------

_______________________

/****/  / With respect to determination of Consolidated Total Leverage Ratio,
          Consolidated Interest Coverage Ratio, Consolidated Fixed Charge
          Coverage Ratio and Consolidated Senior Leverage Ratio, the calculation
          of Consolidated Cash Interest and Consolidated Fixed Charges in
          respect for periods ending prior to the first anniversary of the
          Effective Date and Consolidated Operating Cash Flow in respect of
          newly constructed theaters shall each be determined as provided in the
          Credit Agreement.
<PAGE>

                                                                               6


      (a)  Part I, item (v)                  $_________________________________
 
      (b)  Minimum amount permitted under 
           subsection 7.1(e)                 $_________________________________

VI.   Liens (subsection 7.2)
      ----------------------

      (a)  Purchase money security interests 
           not to exceed $5,000,000 in the 
           aggregate (subsection 7.2(i))     $_________________________________
  
      (b)  Liens securing obligations in 
           respect of Capital Leases not to 
           exceed $5,000,000 in the aggregate 
           (subsection 7.1(j))               $_________________________________
   
      (c)  [Omitted]                         $_________________________________
     

VII.  Dispositions (subsection 7.3)
      -----------------------------

      (a)   Dispositions pursuant to 
            subsection 7.3(g) for fiscal year 
            to _____________                 $_________________________________
   

VIII. Investments (subsection 7.5)
      ----------------------------

      (a)  Total Investments in the form of 
           cash equivalents (subsection 
           7.5(a))                           $_________________________________

      (b)  Acquisitions not to exceed 
           Acquisition Costs of $40,000,000 
           in the aggregate for such prior 12
           month period (subsection 7.5(c))  $_________________________________

      (c)  Investments pursuant to subsection 
           7.5(e) not to exceed Acquisition 
           Costs of $3,000,000 at any time 
           outstanding                       $_________________________________


IX.   Indebtedness (subsection 7.6)
      -----------------------------

      (a)  Indebtedness pursuant to 
           subsection 7.6(c) not to exceed an 
           outstanding principal amount of
           $5,000,000 in the aggregate at any 
           time outstanding                  $_________________________________

      (b)  Indebtedness pursuant to 
           subsection 7.6(d)                 $_________________________________

      (c)  [Omitted]                         $_________________________________
<PAGE>
                                                                               7


     (d)  Intercompany Indebtedness pursuant 
          to subsection 7.6(f) not to exceed 
          an outstanding principal amount of 
          $5,000,000 in the aggregate        $_________________________________

     (e)  Indebtedness pursuant to subsection 
          7.6(g) not to exceed an outstanding 
          principal amount of $5,000,000 in 
          the aggregate                      $_________________________________

     (f)  [Omitted]                          $_________________________________

     (g)  Indebtedness pursuant to the Senior
          Subordinated Notes and the Senior 
          Subordinated Indenture (subsection 
          7.6(i))                            $_________________________________

X.   Contingent Obligations (subsection 7.9)
     ---------------------------------------

     (a)  Permitted Swap Obligations 
          outstanding (subsection 7.9(b))    $_________________________________

     (b)  Contingent Obligations with respect 
          to Surety Obligation (other than 
          the Letters of Credit issued 
          pursuant to Section 2.17 of the 
          Credit Agreement) not to exceed at 
          any time $5,000,000 in the 
          aggregate (subsection 7.9(d))      $_________________________________

XI.  Leases (subsection 7.11)
     ------------------------

     (a)  Aggregate amount to be paid under 
          Capital Leases not to exceed 
          $5,000,000 (subsection 7.11(b))    $_________________________________

XII. Restricted Payments (subsection 7.12)
     -------------------------------------

     For current fiscal year to date beginning after December 31, 1998, provided
     that the Consolidated Leverage Ratio is less than 4.0 to 1 at the time of
     such payments, and the following payments in any fiscal year do not exceed
     25% of Excess Cash Flow for the prior fiscal year:

     (a)  Restricted Payments made 
          (subsection 7.12(a)(iv):           
          [described]                        $_________________________________

     (b)  Undistributed Restricted Payments 
          applied toward Capital Expenditures 
          (subsection 7.12(b))               $_________________________________
<PAGE>

                                                                               8

XIII. Capital Expenditures (subsection 7.16)
      --------------------------------------

      (a)  Capital Expenditures for fiscal 
           year to                           $_________________________________

      (b)  Cap Ex Shortfall from most recent 
           fiscal year ending prior to 
           Computation Date (not to exceed
           $500,000)                         $_________________________________

      (c)  Expenditures made in connection 
           with (i) reprogramming required to 
           permit the prior functioning (but 
           only to the extent that such
           proper functioning would otherwise 
           be impaired by the occurrence of 
           the year 2000) in and following 
           the year 2000 of computer systems 
           and other equipment containing 
           embedded microchips, in either 
           case owned or operated by the 
           Company or used or relied upon in 
           the conduct of the Company's 
           business, (ii) the testing of all 
           such systems and other equipment 
           as so reprogrammed, and (iii) the 
           purchase and installation of 
           related systems and related 
           equipment, as well as training on 
           such reprogrammed and/or modified 
           computer systems and equipment    $_________________________________

      (d)  (a) minus (c)                     $_________________________________
 
      (e)  Maximum amount permitted          $_________________________________

      (f)  Aggregate of all expenditures made in connection
           with (c)
  
      (g)  Maximum amount of expenditures permitted to be
           made in the aggregate in connection with (c)             $2,000,000
 
XIV.  Construction of New Screens (subsection 7.18)
      ---------------------------------------------

      (a) Movie screens under construction    _________________________________

      (b)  Movie screens in operation for 6 
           months or less by any Person 
           (excluding (a))                    _________________________________

      (c)  Subtotal of (a) and (b)            _________________________________
<PAGE>
 
                                                                               9

     (d)  Total of all movie screens under 
          construction and in operation      _________________________________

     (e)  (d) dividend by (c) expressed as a 
          percentage                         _________________________________

     (f)  Maximum percentage permitted       _________________________________

The Company, on behalf of itself and each of the other Loan Parties, hereby
further certifies and warrants to you and each Bank that no Default or Event of
Default has occurred and is continuing.

IN WITNESS WHEREOF, the Company has caused this Certificate to be duly executed
and delivered by a Responsible Officer this ______________ day of         ,
__________.

                                     Responsible Officer of the Company:


                                     By:
                                        ___________________________________
                                        Name:
                                        Title: