<PAGE>   1
                                                                  EXHIBIT 10.34


                  SECOND AMENDMENT TO THEATER RIGHTS AGREEMENT

         This Second Amendment to Theater Rights Agreement (this "Amendment")
is made as of December 31, 1995 by and among Showscan Entertainment Inc., a
Delaware corporation formerly known as Showscan Corporation ("Showscan"),
Showscan/United Artists Theatres Joint Venture, a Colorado general partnership
(the "Joint Venture"), and United Artists Theatre Circuit, Inc., a Maryland
corporation ("United Artists").


                                    RECITALS

         A.      Showscan, the Joint Venture and United Artists are currently
         party to that certain Theater Rights Agreement, dated as of August 19,
         1994, as amended by that certain First Amendment to Theater Rights
         Agreement, dated as of March 30, 1995 (as so amended, the
         "Agreement").  Capitalized terms used in this Amendment without
         definition shall have the meanings given thereto in the Agreement.

         B.      Showscan, the Joint Venture and United Artists now desire to
         modify and amend the Agreement in the manner and on the terms and
         conditions set forth in this Amendment.


                                   AGREEMENT

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

         1.      Amendment of Sections 3.2(a) and (b).  Sections 3.2 (a) and
(b) of the Agreement shall be amended in their entirety to read as follows:

                 "(a)     During the period from the date of this Agreement
         until the fifth anniversary of the date of this Agreement (the "Offer
         Period"), United Artists agrees (i) to offer to the Joint Venture the
         opportunity to Install Simulator Theater Units in an aggregate of 24
         sites designated by United Artists, and (ii) to Install a total of 24
         Simulator Theater Units with an aggregate of 576 seats in the sites
         offered to the Joint Venture which are rejected by the Joint Venture
         (which Simulator Theater Units may be Owned or co-Owned by United
         Artists but which do not include Simulator Theater Units owned by
         Showscan or the Joint Venture).  The Joint Venture agrees to accept
         during the Offer Period at least one of the sites offered to it by
         United Artists pursuant to Section 2.10 or clause (a)(i) above.  If by
         the end of the Offer Period, the Joint Venture has not satisfied its
         obligations pursuant to the immediately preceding sentence, then
         Showscan shall pay to United Artists liquidated damages in an amount
         equal to {text redacted}.


Portions of this Exhibit have been granted confidential treatment by the
Securities and Exchange Commission.  The confidential portions are indicated in
the text by the marking "{text redacted}."  The omitted portions have been
filed separately with the Securities and Exchange Commission.


















                                       43
<PAGE>   2

                 (b)      If by the end of the Offer Period United Artists has
         not either (i) satisfied its obligations pursuant to clause (a)(ii)
         above either directly or by satisfaction of its obligations pursuant
         to clause (a)(i) above, or (ii) actually paid to Showscan at least
         {text redacted} in the aggregate for (A) Equipment Installed or to be
         Installed in Simulator Theater Units pursuant to Section 3.2(a)(ii)
         above, and any labor, shipping and related expenses (other than
         travel, hotel, per diem, and other reimbursement items) with respect
         to the Installation of such Equipment, and (B) equipment, labor,
         shipping and related expenses (other than travel, hotel, per diem and
         other reimbursement items) (collectively, the "ShowMax Cost") with
         respect to the sale of ShowMax 15/70 theater systems (a "ShowMax
         System") to United Artists pursuant to Section 2.7 hereof, provided,
         however, that for the purposes of this Section 3.2(b)(ii)(B) only 50%
         of the ShowMax Cost of each of the first {text redacted} ShowMax
         Systems ordered by United Artists shall be counted and only if, in the
         case of the {text redacted} ShowMax System only, such ShowMax System
         is ordered on or before {text redacted}, then United Artists will pay
         to Showscan liquidated damages in the amount of {text redacted} for
         each Simulator Theater Unit which has not been Installed as required
         by 3.2(a) above, and United Artists will be deemed to have Installed
         one Simulator Theater Unit with an aggregate of 24 seats each time
         such damages are paid.  If United Artists has Installed 24 Simulator
         Theater Units in 24 locations but all locations in which it has
         Installed such Units collectively have fewer than 576 seats, United
         Artists will pay to Showscan liquidated damages in an amount equal to
         the number of seats which have not been Installed multiplied by {text
         redacted}.  The parties agree that such liquidated damages reflect a
         reasonable estimate of the damages which Showscan would incur based on
         the parties' current estimate of the economic detriment to Showscan
         from the loss of profits it otherwise could have expected from the
         Installation of such Simulator Theater Units, and that such liquidated
         damages will be Showscan's sole remedy for any failure by United
         Artists to satisfy its obligations pursuant to clause (a)(ii) above,
         either directly or by satisfaction of its obligations pursuant to
         clause (a)(i) above, by the end of the Offer Period.  Notwithstanding
         any other provision of this Section 3.2, the time periods for United
         Artists' performance of an obligation pursuant to Section 3.2(a) will
         be extended by any period during which a Force Majeure Event exists or
         an act or failure to act by Showscan materially impairs United
         Artists' ability to comply with its obligations, and liquidated
         damages will be payable to Showscan pursuant to this paragraph only if
         United Artists does not comply with its obligations within such
         extended period of time."

         2.      Amendment of Section 3.3(f).  Section 3.3(f) of the Agreement
shall be amended in its entirety to read as follows:

         "(f)    In any case where United Artists presents to the Joint Venture
         a proposal relating to a Potential Site, the proposal will include a
         proposed development fee that would be payable to United Artists
         pursuant to the Development Agreements of the lesser of (a) {text
         redacted} and {text redacted} of the {text redacted} of such
         development (as more particularly described in the Development
         Agreements), or (b) an amount not more than (i) if the Potential Site
         would involve new construction of a stand-alone Theater,









                                       2

<PAGE>   3
         {text redacted} for the first {text redacted} such Potential Sites
         that the Joint Venture participates in during the Offer Period and
         {text redacted} for each such Potential Site thereafter, or (ii) if
         the Potential Site would involve new construction of an integrated
         Theater or the renovation of an integrated or stand-alone Theater,
         {text redacted} for the first {text redacted} such Potential Sites
         that the Joint Venture participates in during the Offer Period and
         {text redacted} for each such Potential Site thereafter."

         3.      Amendment of Section 3.7.  Section 3.7 of the Agreement shall
be amended in its entirety to read as follows:

                 "Section 3.7   [This Section intentionally left blank]"


         4.      Amendment of Section 3.8.  Section 3.8 of the Agreement shall
be amended in its entirety to read as follows:

                 "Section 3.8   [This Section intentionally left blank]"

         5.      Receivable/Payable.  In connection with this Amendment, United
Artists hereby promises to pay to Showscan Six Hundred Sixty Thousand Dollars
($660,000) (the "Payable") in the manner and with the interest set forth below.
Interest shall accrue on the unpaid balance outstanding of the Payable from
January 1, 1996 until paid in full at a rate per annum equal to seven and
one-half percent (7.5%).  Accrued and unpaid interest shall compound annually
and be added to the balance of the Payable.  The outstanding balance of the
Payable and all accrued and unpaid interest thereon shall be paid in full on or
before December 31, 1996 (the "Maturity Date"); provided, however, that if on
or prior to the Maturity Date the Joint Venture has not yet accepted (the
"Joint Venture Acceptance Date") at least one of the sites offered to it by
United Artists pursuant to Section 2.10 or Section 3.2(a)(i) of the Agreement,
then the Maturity Date shall be extended to the day which is thirty (30) days
after the Joint Venture Acceptance Date, but in no event shall it be extended
later than August 19, 1999.  Showscan, at its election, may accelerate the
Maturity Date if United Artists shall breach and fail to cure for a period of
15 days any provision of the Agreement as amended by this Amendment.

         6.      Malaysia/Asia Territory.  If at any time or from time to time
during the Offer Period Showscan shall sell to a third party (e.g., not to
Showscan, United Artists, the Joint Venture or any affiliate of the foregoing)
a Simulator Theater Unit which will be Installed in the state of Malaysia or in
the Asia Territory as set forth on Exhibit 3.7 to the Agreement, then Showscan
shall pay to United Artists an amount equal to {text redacted} of the {text
redacted} of the Equipment sold to such third party during the Offer Period.
Showscan shall make the payments called for by this Section 6 within fifteen
(15) days of receipt of payment in full for such Equipment.  Showscan shall
have no further obligations under this Section 6 once the aggregate payments
made hereunder equal {text redacted}.

         7.      ShowMax Pricing.  If at any time during the Offer Period UATC
shall purchase from Showscan one or more ShowMax Systems, then for the first
{text redacted} such ShowMax Systems purchased, Showscan shall establish the
ShowMax Cost for each such















                                       3


<PAGE>   4
ShowMax System by reducing by {text redacted} the then {text redacted} that
Showscan has provided a similarly configured ShowMax System.

         8.      No Other Modifications.  Except as expressly set forth in this
Amendment, the Agreement shall remain unmodified and in full force and effect.

         9.      Equality of Consideration.  Each of Showscan, the Joint
Venture and UATC acknowledge and agree that the value of the rights under the
Agreement relinquished by UATC pursuant to the terms of this Amendment equal or
exceed the value of the rights under the Agreement relinquished by Showscan
pursuant to the terms of this Amendment, including, without limitation, the
right to require the construction of certain Simulation Theater Units by a
certain date or receive liquidated damages therefore.

          10.    Miscellaneous.

                 10.1     Further Assurances.  Each party agrees to perform all
such acts, including without limitation, the execution of documents, as may
reasonably be requested by any party in order to more fully effectuate the
purposes of this Amendment.

                 10.2     Successors and Assigns.  Except as otherwise
expressly provided in this Amendment, all covenants and agreements contained in
this Amendment by or on behalf of any of the parties will bind and inure to the
benefit of the respective successors and assigns of the parties whether so
expressed or not.

                 10.3     Severability.  Whenever possible, each provision of
this Amendment will be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Amendment is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Amendment.

                 10.4     Counterparts.  This Amendment may be executed in two
or more counterparts, each of which will be deemed an original, but all of
which together will constitute one and the same instrument.

                 10.5     Choice of Law.  This Amendment shall be interpreted
in accordance with the substantive law of the State of Colorado without regard
to its choice of law provisions.












                                       4

<PAGE>   5
         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first above written.

                                    UNITED ARTISTS THEATRE CIRCUIT, INC.


                                    By:  /s/  John R. Neal
                                       ----------------------------------------
                                    Title:   Senior Vice President



                                    SHOWSCAN ENTERTAINMENT INC.


                                    By:   /s/  Dennis Pope
                                       ----------------------------------------
                                    Title:   Executive Vice President and Chief
                                             Financial Officer



                                    SHOWSCAN/UNITED ARTISTS THEATRES
                                    JOINT VENTURE
                                    By:      Showscan Entertainment Inc. as
                                             Managing Partner


                                             By:  /s/  Dennis Pope
                                             ----------------------------------
                                             Title: Executive Vice President
                                                    and Chief Financial Officer



















                                       5