Document:

<PAGE>

                                                                   Exhibit 10.27

                    AMENDMENT NO. 3 dated as of August 18, 1999 to the Amended
                    and Restated Credit and Guaranty Agreement dated as of July
                    9, 1997, as amended and restated as of August 10, 1998,
                    among ARTISAN PICTURES INC. ("Pictures"), ARTISAN HOME
                    ENTERTAINMENT INC. ("Home Entertainment"; and together with
                    Pictures, collectively, the "Borrower"), the Guarantors
                    named therein, the Lenders referred to therein and THE CHASE
                    MANHATTAN BANK, as Administrative Agent and as Fronting Bank
                    for the Lenders (the "Agent") (as the same may be amended,
                    supplemented or otherwise modified, the "Credit Agreement").

                            INTRODUCTORY STATEMENT
                            ----------------------

          The Lenders have made available to the Borrower a credit facility
pursuant to the terms of the Credit Agreement.

          Artisan Entertainment Inc. or one of its subsidiaries, together with
other unaffiliated investors, will arrange for the formation of Artisan Film
Investors ("AFI"), an unaffiliated Delaware business trust to be formed solely
for the purpose of acquiring completed theatrical feature films to be
distributed by Pictures, all as described in the Term Sheet attached hereto as
Exhibit A (the "AFI Transaction").

          The Borrower, the Guarantors, the Lenders and the Agent have agreed to
amend the Credit Agreement in order to permit Pictures to enter into, and
perform its obligations in connection with, the AFI Transaction, all on the
terms and subject to the conditions hereinafter set forth.

          Therefore, the parties hereto hereby agree as follows:

          Section 1.  Defined Terms.  Capitalized terms used herein and not
                      -------------
otherwise defined herein shall have the meaning given them in the Credit
Agreement.

          Section 2.  Amendments to the Credit Agreement.  Subject to the
                      ----------------------------------
satisfaction of the conditions precedent set forth in Section 4 hereof, the
Credit Agreement is hereby amended as of the Effective Date (as hereinafter
defined) as follows:

                                      -1-
<PAGE>

     (A)  Article 1 of the Credit Agreement is hereby amended by adding the
following definition in the appropriate alphabetical sequence:

          "AFI" shall mean Artisan Film Investors, a Delaware business trust to
          be formed in connection with the AFI Transaction.

          "AFI Transaction" shall mean the transaction described in the Term
          Sheet attached as Exhibit A to Amendment No. 3 to the Credit
          Agreement.

     (B)  The definitions of "Affiliate" and "Subsidiary" appearing in Article 1
of the Credit Agreement are each hereby amended by adding the following sentence
at the end of each definition:

          "For the avoidance of doubt, AFI shall not be deemed to be an
          'Affiliate' or a 'Subsidiary' of a Credit Party unless and until such
          time that a Credit Party acquires an equity or membership interest in
          AFI."

     (C)  The definition of "Borrowing Base" appearing in Article 1 of the
Credit Agreement is hereby amended to add the following clause at the end of the
existing text:

          "(iii)  the Borrowing Base shall not include any distribution fees
          earned with respect to, or any other component attributable to, any
          Picture owned by AFI."

     (D)  The definition of "Indebtedness" appearing in Article 1 of the Credit
Agreement is hereby amended by adding the following sentence at the end thereof:

          "For the avoidance of doubt, the Indebtedness incurred by AFI in
          connection with the AFI Transaction shall not be deemed to be
          'Indebtedness' of a Credit Party under this Credit Agreement."

     (E)  The definition of "Off-Balance Sheet Commitments" appearing in Article
1 of the Credit Agreement is hereby amended by adding the following proviso at
the end thereof:

          "; provided, further, that with respect to an item of Product for
          which Pictures has committed to provide a portion of the production
          costs in connection with an item of Product subject to the AFI
          Transaction, Off-Balance Sheet Commitments in respect of Pictures'
          commitment for such item of Product shall be reduced (but not below
          zero) by any amounts in the approved budget of such Product (e.g.
          overhead costs and producers' fees) which are payable to Pictures for
          its own account.

                                      -2-
<PAGE>

     (F)  Section 6.1 of the Credit Agreement is hereby amended by adding the
          following clause (p) at the end thereof:

          "(p)  Indebtedness incurred by a Credit Party arising from (i) the
          theatrical exhibition of "Blair Witch Project" in the United States
          and Canada and (ii) prior to the earlier to occur of December 31, 1999
          and the closing of the AFI Transaction, the theatrical exhibition of
          Pictures other than  "Blair Witch Project" in the United States and
          Canada; provided that such Indebtedness is non-recourse to any Credit
          Party except for customary representations and warranties in form and
          substance acceptable to the Administrative Agent and security
          interests in the receivables from the exhibition of such Pictures
          granted in connection with the incurrence of such Indebtedness."

     (G)  Section 6.2 of the Credit Agreement is hereby amended by adding the
          following clauses (v) and (w) at the end thereof:

          "(v)  Liens securing the obligations of Pictures and the other Credit
          Parties in connection with the AFI Transaction; provided that the
          secured party of such Lien shall have entered into an intercreditor
          agreement with the Collateral Agent in form and substance satisfactory
          to the Administrative Agent; and

          "(w)  Liens on certain theatrical receivables as contemplated by
          Section 6.1(p)."

     (H)  Section 6.3 of the Credit Agreement is hereby amended by (1) adding
          the words ", (vii) Guarantees of the obligations of Pictures under the
          AFI Transaction, and" after the word "hereunder" appearing in clause
          (vi) therein and (2) changing the reference to the existing clause
          (vii) from "(vii") to "(viii)".

     (I)  Section 6.8 of the Credit Agreement is hereby amended in its entirety
          to read as follows:

          "SECTION 6.8.  Receivables.  Sell, discount or otherwise dispose of
                         -----------
          notes, accounts receivable or other obligations owing to any Credit
          Party except (i) for the purpose of collection in the ordinary course,
          (ii) the factoring on a fully non-recourse basis (except for customary
          representations and warranties in form and substance acceptable to the
          Administrative Agent) of receivables arising from the theatrical
          exhibition of "Blair Witch Project" in the United States and Canada
          and (iii) prior to the earlier to occur of December 31, 1999 and the
          closing of the AFI Transaction, the factoring on a fully non-recourse
          basis (except for customary representations and warranties in form and
          substance acceptable to the Administrative Agent) of receivables
          arising from the theatrical exhibition of Pictures other than  "Blair
          Witch Project" in the United States and Canada."

                                      -3-
<PAGE>

     (J)  Section 6.9 of the Credit Agreement is hereby amended by adding the
          phrase "Except pursuant to the AFI Transaction," at the beginning of
          the existing text.

     (K)  Section 6.13(a) of the Credit Agreement is hereby amended by adding
          the following clause (z) at the end thereof:

          "or (z) any term or provision of the AFI Transaction in a manner which
          would change or alter any material term of the transaction set forth
          on the Term Sheet attached as Exhibit A to Amendment No. 3 to the
          Credit Agreement, and which change or alteration could reasonably be
          expected to (i) materially and adversely affect the financial
          condition of Pictures, (ii) materially and adversely affect the rights
          of the Lenders under this Credit Agreement, the other Fundamental
          Documents and any other agreements contemplated hereby, or (iii)
          materially decrease the value of the Collateral."

     (L)  Section 6.19 (Leverage Ratio) of the Credit Agreement is hereby
          amended in its entirety to read as follows:

          "SECTION 6.19.   Leverage Ratio.  Permit the ratio (the "Leverage
                           --------------                          --------
          Ratio") of (i) the sum of Consolidated Senior Debt plus Off-Balance
          -----
          Sheet Commitments (excluding, in the case of each transaction in which
          the applicable Credit Party has provided no monetary commitment other
          than a print and advertising commitment, the first $3,000,000 of the
          amount of such print and advertising commitment) less all Off-Balance
          Sheet Receivables and Borrowing Base credits that relate to items of
          Product that are the subject of such Off-Balance Sheet Commitments
          (but not more with respect to any particular items of Product than the
          related amount of Off-Balance Sheet Commitments (without taking into
          account the $3,000,000 deduction permitted above)) to (ii)
          Consolidated Capital Base, all as determined as of each quarter end,
          to be greater than (x) 5.5:1 for the quarter ending September 30,
          1999, (y) 5.0:1 for the quarters ending December 31, 1999, March 31,
          2000, and June 30, 2000, and (z) 4.0:1 for the quarter ending
          September 30, 2000 and each quarter thereafter.

     (M)  Section 10.1(c) of the Credit Agreement is hereby amended by adding
          the following clause (xii) at the end thereof:

          "(xii)  to enter into an intercreditor agreement (in such form as the
          Administrative Agent may deem appropriate) to implement the
          allocations of gross receipts and the security interest granted by
          Pictures and certain of its affiliates, each in connection with the
          AFI Transaction (as described in the Term Sheet attached to Amendment
          No. 3 to the Credit Agreement)."

                                      -4-
<PAGE>

     (N)  The Schedule of Commitments appearing in Schedule 1 to the Credit
          Agreement is hereby replaced in its entirety by Schedule 1 (Revised)
          attached to this Amendment No. 3.

          Section 3.   Consent.  The Borrower has requested that the Lenders
                       -------
consent to a waiver of compliance by the Credit Parties with respect to (i)
Section 2.7 of the Credit Agreement which requires any partial reduction of the
Revolving Credit Commitments to be made among the Lenders in accordance with
their respective Percentages and (ii) Section 10.2 of the Credit Agreement which
requires that any payment of interest and repayment of principal in respect of
any Loans be made pro rata among the Lenders in accordance with their respective
Percentages.  At the request of the Borrower, each Lender by its signature
hereto hereby (i) consents to the reduction of the Revolving Credit Commitment
of City National Bank by $2,500,000 and (ii) waives the requirements of Section
2.7 in connection with such reduction in the Revolving Credit Commitments.  In
connection with such reduction, each Lender hereby authorizes and directs the
Administrative Agent to allocate subsequent repayments and/or prepayments by the
Borrower of Revolving Credit Loans such that after giving effect to such
repayment or prepayment, the outstanding Revolving Credit Loans attributable to
each Lender shall be in proportion to such Lender's Percentage of the Revolving
Credit Commitments of all the Lenders after giving effect to this Amendment.

          The waiver contained in this Section 3 is limited to the specific
provision provided above and shall not in any way be construed as entitling the
Credit Parties to any waiver of any matters other than as specifically provided
above or to any future waivers regarding similar matters or otherwise.

          Section 4.  Conditions to Effectiveness.  The effectiveness of this
                      ---------------------------
Amendment is subject to the satisfaction in full of each of the conditions
precedent set forth in this Section 4 (the date on which all such conditions
have been satisfied being herein called the "Effective Date"):

          (A)  the Agent shall have received counterparts of this Amendment
which, when taken together, bear the signatures of the Borrower, each Guarantor,
the Agent and such of the Lenders as are required by the Credit Agreement;

          (B)  the Agent shall have received the written consent of the holders
of the Secured Subordinated Notes; and

          (C)  all legal matters incident to this Amendment shall be
satisfactory to Morgan, Lewis & Bockius LLP, counsel for the Agent.

          Section 5.  Fees.  In consideration for the Lenders and the Agent
                      ----
entering into this Amendment, on the Effective Date, the Borrower agrees to pay
the Agent for the account of each

                                      -5-
<PAGE>

of the Lenders an aggregate fee equal to 0.125% of the aggregate Commitment of
each Lender under the Credit Agreement after giving effect to the provisions of
this Amendment.

          Section 6.  Representations and Warranties.  Each Credit Party
                      ------------------------------
represents and warrants that:

          (A)  after giving effect to this Amendment, the representations and
warranties contained in the Credit Agreement are true and correct in all
material respects on and as of the date hereof as if such representations and
warranties had been made on and as of the date hereof (except to the extent that
any such representations and warranties specifically relate to an earlier date);
and

          (B)  after giving effect to this Amendment, no Event of Default or
Default will have occurred and be continuing on and as of the date hereof.

          Section 7.  Further Assurances.  At any time and from time to time,
                      ------------------
upon the Agent's request and at the sole expense of the Credit Parties, each
Credit Party will promptly and duly execute and deliver any and all further
instruments and documents and take such further action as the Agent reasonably
deems necessary to effect the purposes of this Amendment.

          Section 8.  Fundamental Documents.  This Amendment is designated a
                      ---------------------
Fundamental Document by the Agent.

          Section 9.  Full Force and Effect.  Except as expressly amended
                      ---------------------
hereby, the Credit Agreement and the other Fundamental Documents shall continue
in full force and effect in accordance with the provisions thereof on the date
hereof.  As used in the Credit Agreement, the terms "Agreement", "this
Agreement", "herein",  "hereafter", "hereto", "hereof", and words of similar
import, shall, unless the context otherwise requires, mean the Credit Agreement
as amended by this Amendment.

          Section 10.  APPLICABLE LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND
                       --------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          Section 11.  Counterparts.  This Amendment may be executed in two or
                       ------------
more counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one instrument.

          Section 12.  Expenses.  The Borrower agrees to pay all out-of-pocket
                       --------
expenses incurred by the Agent in connection with the preparation, execution and
delivery of this Amendment, including, but not limited to, the reasonable fees
and disbursements of counsel for the Agent.

                                      -6-
<PAGE>

          Section 13.  Headings.  The headings of this Amendment are for the
                       --------
purposes of reference only and shall not affect the construction of or be taken
into consideration in interpreting this Amendment

          IN WITNESS WHEREOF, the parties hereby have caused this Amendment to
be duly executed as of the date first written above.

                              ARTISAN PICTURES INC.
                              ARTISAN ENTERTAINMENT INC.
                              ARTISAN HOME ENTERTAINMENT INC.
                              ARTISAN RELEASING INC.
                              ARTISAN MUSIC INC.
                              BE MINE PRODUCTIONS, INC.
                              BEACH DANCE PRODUCTIONS, INC.
                              DETENTION PRODUCTIONS, INC.
                              HEATWAVE PRODUCTIONS, INC.
                              LIVE AMERICA INC.
                              LIVE VENTURES INC.
                              LIVENET INC.
                              MILK MISSION PRODUCTIONS INC.
                              SWEET TIME PRODUCTIONS, INC.
                              VESTRON INC.
                              WISH AGAIN PRODUCTIONS, INC.

                              By  /s/ Mark Curcio
                                  -------------------------------------
                                  Name:
                                  Title: Authorized Signatory for each of the
                                         foregoing

                              FILM HOLDINGS CO.

                              By  /s/ Geoff Rehnert
                                  -------------------------------------
                                  Name:
                                  Title: Principal

                                      -7-
<PAGE>

                              SILENT DEVELOPMENT CORP.
                              TONGUE-TIED INC.

                              By  /s/ Ken Schapiro
                                  -------------------------------------
                                  Name:
                                  Title:

                              LENDERS:

                              THE CHASE MANHATTAN BANK,
                              individually and as Administrative Agent

                              By  /s/ Constance M. Coleman
                                  -------------------------------------
                                  Name:  Constance M. Coleman
                                  Title: Vice President

                              SOCIETE GENERALE

                              By  /s/ Maureen E. Kelly
                                  -------------------------------------
                                  Name:  Maureen E. Kelly
                                  Title: Director

                              UNION BANK OF CALIFORNIA

                              By  /s/ Thomas P. Garry, Jr.
                                  -------------------------------------
                                  Name:  Thomas P. Garry, Jr.
                                  Title: Vice President

                              COMERICA BANK -- CALIFORNIA

                              By  /s/ Carmen Carpenter
                                  -------------------------------------
                                  Name:  Carmen Carpenter
                                  Title: AVP

                                      -8-
<PAGE>

                              FLEET BANK, N.A.

                              By  /s/ Eric S. Meyer
                                  -------------------------------------
                                  Name:  Eric S. Meyer
                                  Title: Vice President

                              PACIFIC CENTURY BANK, N.A.

                              By  /s/ David K. Henry
                                  -------------------------------------
                                  Name:  David K. Henry
                                  Title: Vice President

                              BANQUE INTERNATIONALE A LUXEMBOURG

                              By  /s/ E. Rolin
                                  -------------------------------------
                                  Name:  E. Rolin
                                  Title: General Manager

                              By  /s/ N. Weaver
                                  -------------------------------------
                                  Name:  N. Weaver
                                  Title: Asst. Director

                              NATEXIS BANQUE BFCE

                              By  /s/ Bennett C. Pozil
                                  -------------------------------------
                                  Name:  Bennett C. Pozil
                                  Title: Vice President and Group Manager
                                         Entertainment Finance

                              By  /s/ Mark A. Harrington
                                  -------------------------------------
                                  Name:  Mark A. Harrington
                                  Title: Senior Vice President
                                         and Regional Manager

                                      -9-
<PAGE>

                              CITY NATIONAL BANK

                              By  /s/ Norman B. Starr
                                  -------------------------------------
                                  Name:  Norman B. Starr
                                  Title: Vice President

                              DE NATIONALE INVESTERINGSBANK N.V.

                              By  /s/ C. Mulder
                                  -------------------------------------
                                  Name:  C. Mulder
                                  Title: Legal Counsel

                              By  /s/ P.N.S. Luttjehuizen
                                  -------------------------------------
                                  Name:  P.N.S. Luttjehuizen
                                  Title: Senior Executive Vice President

                              BANQUE NATIONALE DE PARIS

                              By  /s/ Janice Ho
                                  -------------------------------------
                                  Name:  Janice Ho
                                  Title: Vice President

                              By  /s/ Mitch Ozawa
                                  -------------------------------------
                                  Name:  Mitch Ozawa
                                  Title: Vice President

                              THE FUJI BANK, LTD.

                              By  /s/ Hiromitsu Ugawa
                                  -------------------------------------
                                  Name:  Hiromitsu Ugawa
                                  Title: Senior Vice President

                                      -10-
<PAGE>

                              PARIBAS

                              By  /s/ David J. Pastre    / /s/ Thomas G. Brandt
                                  -----------------------/  --------------------
                                  Name:  David J. Pastre /     Thomas G. Brandt
                                  Title: Vice President  /     Director

                                      -11-
<PAGE>

                                                                      Schedule 1
                                                 (Revised as of August 18, 1999)

                            Schedule of Commitments

<TABLE>
<CAPTION>
                                                                   Revolving         Revolving           Term             Term
                                                 Total             Credit             Credit             Loan             Loan
            Banks                             Commitment         Commitment         Percentage        Commitment       Percentage
<S>                                         <C>                <C>                <C>               <C>               <C>
  1.  Chase                                 $ 20,242,104.00    $ 17,968,422.00        12.203753%    $ 2,273,682.00      12.000000%

  2.  Societe Generale                        17,350,374.86      15,401,504.57        10.460360%      1,948,870.29      10.285714%

  3.  Union Bank of California                17,350,374.86      15,401,504.57        10.460360%      1,948,870.29      10.285714%

  4.  Fleet Bank                              17,350,374.86      15,401,504.57        10.460360%      1,948,870.29      10.285714%

  5.  Comeria Bank-California                 14,458,645.71      12,834,587.14         8.716967%      1,624,058.57       8.571429%

  6.  California United Bank                  14,458,645.71      12,834,587.14         8.716967%      1,624,058.57       8.571429%

  7.  Natexis Banque                           9,639,097.14       8,556,391.43         5.811311%      1,082,705.71       5.714286%

  8.  BIL                                      9,639,097.14       8,556,391.43         5.811311%      1,082,705.71       5.714286%

  9.  De National Investeringsbank             9,639,097.14       8,556,391.43         5.811311%      1,082,705.71       5.714286%

  10. Banque National de Paris                 9,639,097.14       8,556,391.43         5.811311%      1,082,705.71       5.714286%

  11. The Fuji Bank, Ltd.                      9,639,097.14       8,556,391.43         5.811311%      1,082,705.71       5.714286%

  12. Banque Paribas                           9,639,097.14       8,556,391.43         5.811311%      1,082,705.71       5.714286%

  13. City National Bank                       7,139,097.14       6,056,391.43         4.113367%      1,082,705.71       5.714286%

  TOTAL                                     $166,184,199.98    $147,236,850.00              100%    $18,947,349.98            100%
</TABLE>

                                      -12-<PAGE>

                                                                   EXHIBIT 10.28

                    AMENDMENT NO. 4 dated as of September 30, 1999 to the
                    Amended and Restated Credit and Guaranty Agreement dated as
                    of July 9, 1997, as amended and restated as of August 10,
                    1998, among ARTISAN PICTURES INC. ("Pictures"), ARTISAN HOME
                    ENTERTAINMENT INC. ("Home Entertainment"; and together with
                    Pictures, collectively, the "Borrower"), the Guarantors
                    named therein, the Lenders referred to therein and THE CHASE
                    MANHATTAN BANK, as Administrative Agent and as Fronting Bank
                    for the Lenders (the "Agent") (as the same may be amended,
                    supplemented or otherwise modified, the "Credit Agreement").

                            INTRODUCTORY STATEMENT
                            ----------------------

          The Lenders have made available to the Borrower a credit facility
pursuant to the terms of the Credit Agreement.

          The Borrower and Guarantors have requested certain modifications to
the Credit Agreement to, among other things, temporarily increase the
Commitments under the Credit Agreement to $191,350,000 in order to allow the
Borrower to have up to $185,000,000 in Loans outstanding at any given time.  As
a result of the increase in the Commitments, as the amount outstanding under the
Term Loan Commitments is reduced by scheduled installment payments, the Borrower
will be able to access additional loans under the Revolving Credit Commitments,
subject to the $185,000,000 limit on the aggregate amount of Loans outstanding.

          In addition, the Borrower and Guarantors have requested that the Agent
and the Lenders consent to the Credit Parties entering into Amendment No. 3 to
the note purchase agreement governing the Secured Subordinated Notes ("Amendment
No. 3") to facilitate the requested increase in the Commitments.

          The Lenders and the Agent have agreed to increase the Commitments
under the Credit Agreement and to make certain other revisions to the Credit
Agreement, all on the terms and subject to the conditions hereinafter set forth.

          Therefore, the parties hereto hereby agree as follows:

                                      -1-
<PAGE>

          Section 1.  Defined Terms.  Capitalized terms used herein and not
                      -------------
otherwise defined herein shall have the meaning given them in the Credit
Agreement.

          Section 2.  Amendments to the Credit Agreement.  Subject to the
                      ----------------------------------
satisfaction of the conditions precedent set forth in Section 5 hereof, the
Credit Agreement is hereby amended as of the Effective Date (as hereinafter
defined) as follows:

     (A)  Article 1 of the Credit Agreement is hereby amended by adding the
following definitions in the appropriate alphabetical sequence:

          "Change in Management" shall mean (i) both Kenneth Schapiro and Mark
           --------------------
          Curcio shall cease for any reason, including, without limitation,
          termination of employment, death or disability, to perform the
          functions and services currently being performed by such Person and
          (ii) the Borrower shall have failed to appoint a replacement for
          Kenneth Schapiro or Mark Curcio, as the case may be, who is reasonably
          acceptable to the Required Lenders within 180 days of such
          discontinuance.  For purposes hereof, a replacement shall be deemed to
          be acceptable to the Required Lenders in the event the Administrative
          Agent or Required Lenders do not object to a proposed replacement
          within 30 days after the Administrative Agent and Lenders receive
          written notice (which notice makes explicit reference to this
          definition) from the Borrower informing them of such proposed
          replacement.

          "Major Studio" shall mean Universal Pictures, a division of Universal
           ------------
          City Studios, Inc., Warner Bros., a division of Time Warner
          Entertainment Company, L.P., Twentieth Century Fox Film Corporation,
          Sony Pictures Entertainment, Paramount Pictures Corporation, and The
          Walt Disney Company.

     (B)  The definitions of "Bain Related Party" and "Change in Control"
appearing in Article 1 of the Credit Agreement are each hereby amended and
restated in its entirety to read as follows:

          "Bain Related Party" or "Bain Related Parties" shall mean individually
           ------------------      --------------------
          or collectively, as the context may require, (i) Bain Capital, (ii)
          any Affiliate of Bain Capital, (iii) Geoffrey Rehnert, Geoffrey
          Rehnert and Marc Wolpow, or a corporation, partnership or other entity
          of whom at least 50% of the voting stock or similar equity interests
          are collectively held by Geoffrey Rehnert and Marc Wolpow, and (iv)
          any trust, corporation, partnership or other entity of whom at least
          80% of the voting stock or all of the general partnership interests or
          other controlling interests are held, directly or indirectly, solely
          by persons referred to in the preceding clauses of this definition.

                                      -2-
<PAGE>

          "Change in Control" shall mean (i) the failure for any reason of the
           -----------------
          Bain Related Parties to own at least 75% of Holdings' voting stock
          owned by them as of September 16, 1999, (ii) any Person or group (such
          term being used as defined in Section 13(d) and 14(d) of the
          Securities Exchange Act of 1934, as amended) acquires ownership or
          control of voting stock of Holdings having voting power greater than
          the voting power at the time controlled by the Bain Related Parties,
          (iii) if at any time, individuals who at September 16, 1999,
          constituted the Board of Directors of Holdings (together with any new
          directors whose election by such Board of Directors or whose
          nomination for election by the shareholders of Parent was approved by
          a vote of the majority of the directors then still in office who were
          either directors at September 16, 1999 or whose election or nomination
          for election was previously so approved) cease for any reason to
          constitute a majority of the Board of Directors of Holdings then in
          office, (iv) prior to the consummation of an initial public offering
          by Parent, the sale or other disposition of any of the voting stock of
          Parent to anyone other than a Bain Related Party; provided, however,
                                                            --------  -------
          that the sale of 100% of the stock of Parent to either (x) a Major
          Studio or (y) a public company with an investment grade rating from
          Standard & Poor's or Moody's and total market equity value of at least
          $1,000,000,000 shall not constitute a Change of Control hereunder, (v)
          after any initial public offering by Parent, that any person or group
          (such term being used as defined in Section 13(d) and 14(d) of the
          Securities Exchange Act of 1934, as amended) acquires ownership or
          control of voting stock of Parent having voting power greater than the
          voting power of Holdings and its Affiliates, as a group, or (vi) the
          failure of Parent to be the sole direct or indirect shareholder of the
          Borrower and the other Credit Parties.

     (C)  Section 2.1 (e) of the Credit Agreement is hereby amended in its
entirety to read as follows:

          "(e)  Notwithstanding anything to the contrary above, a Lender shall
          not be obligated to make any additional Loans or incur any incremental
          L/C Exposure if, as a result thereof, the aggregate principal amount
          of all Loans then outstanding plus the then current L/C Exposure plus
                                        ----                               ----
          the unused portion of the Special Production Tranche for each
          Designated Picture, exceeds the lesser of (x) the Borrowing Base or
          (y) the lesser of the Total Commitments then in effect or
          $185,000,000."

     (D)  Section 2.7 of the Credit Agreement is hereby amended by inserting the
following clause (c) at the end thereof:

          "(c)  The Revolving Credit Commitments shall be automatically and
          permanently reduced on the earlier to occur of:

                                      -3-
<PAGE>

               (x)  the consummation of the AFI Transaction, in which case the
                    Revolving Credit Commitments shall be reduced by (i)
                    reducing the Revolving Credit Commitment of City National
                    Bank by $7,500,000 ($2,500,000 of which constitutes the
                    reduction referenced in Section 3 of Amendment No. 3 to this
                    Credit Agreement), (ii) reducing the Revolving Credit
                    Commitment of DeNationale Investeringsbank N.V. by
                    $5,000,000, (iii) reducing the Revolving Credit Commitment
                    of The Chase Manhattan Bank by $12,665,800.02, and (iv)
                    reducing the Revolving Credit Commitments of all Lenders in
                    accordance with their respective Percentages (after giving
                    effect to the reductions set forth in clauses (i), (ii) and
                    (iii) above) by an amount such that the Total Commitments
                    equal $165,000,000 after giving effect to such reduction;

               (y)  July 1, 2000, in which case the Revolving Credit Commitments
                    shall be reduced by (i) reducing the Revolving Credit
                    Commitment of The Chase Manhattan Bank by $12,665,800.02,
                    and (ii) reducing the Revolving Credit Commitments of all
                    Lenders in accordance with their respective Percentages
                    (with such Percentages determined after giving effect to the
                    reduction set forth in clause (i) above) by an amount such
                    that the Total Commitments equal $160,000,000 after giving
                    effect to such reduction.

          Simultaneously with such reduction of the Revolving Credit
          Commitments, the Borrower shall pay to the Administrative Agent, for
          the benefit of each Lender whose Revolving Credit Commitment is
          reduced in accordance with the preceding sentence, all accrued an
          unpaid Commitment Fees on the amount of the Revolving Credit
          Commitment of each such Lender so reduced through the date of such
          reduction."

     (E)  Clause (i) of Section 7 of the Credit Agreement is hereby amended in
its entirety to read as follows:

          "(i) a Change on Control or a Change in Management shall occur;"

     (F)  The Schedule of Commitments appearing in Schedule 1 to the Credit
Agreement is hereby replaced in its entirety by Schedule 1 (Revised) attached to
this Amendment No. 4.

     (G)  Schedule 2.1 (Acceptable Obligors/Allowable Amounts) to the Credit
Agreement is hereby amended by adding the following Approved Account Debtors and
their respective Amounts:

                                      -4-
<PAGE>

<TABLE>
<CAPTION>
                                        Name of Approved
     Debtor Category                    Account Debtor                          Allowable Amount
     ---------------                    --------------                          ----------------
     <S>                                <C>                                     <C>
     Foreign Account Debtor             Egmont (Scandinavia)                    $1,000,000

     Foreign Account Debtor             Asmilk Corporation (Japan)              $2,000,000

     Foreign Account Debtor             Highlight Video (Germany)               $5,000,000

     Foreign Account Debtor             Laurenfilm S.A. (Spain)                 $1,000,000

     Acceptable Domestic Account        Pearson Television (Basic cable)        $2,000,000
     Debtor (Basic Cable)
</TABLE>

     (H)  Schedule 2.1 (Acceptable Obligors/Allowable Amounts) to the Credit
Agreement is hereby further amended by increasing the Allowable Amount for the
following account debtors to the amounts set forth opposite such account
debtor's name below:

<TABLE>
<CAPTION>
                                        Name of Approved
     Debtor Category                    Account Debtor                          Allowable Amount
     ---------------                    --------------                          ----------------
     <S>                                <C>                                     <C>
     Acceptable Major Account Debtor    20th Century Fox Film Corporation       $60,000,000 (but only
                                                                                until 6/30/2000, at
                                                                                which time the
                                                                                Allowable Amount for
                                                                                20th Century Fox
                                                                                shall automatically
                                                                                and permanently be
                                                                                reduced to
                                                                                $40,000,000)

     Acceptable Domestic Account        USA Networks/SciFi Channel              $10,000,000
     Debtor (Basic Cable)

     Acceptable Domestic Account        Comedy Central                          $ 1,000,000
     Debtor (Basic Cable)

     Acceptable Domestic Account        Discovery Network                       $ 1,000,000
     Debtor (Basic Cable)

     Acceptable Domestic Account        FX                                      $25,000,000
     Debtor (Basic Cable)

     Acceptable Domestic Account        Lifetime                                $ 1,000,000
     Debtor (Basic Cable)

     Acceptable Domestic Account        Romance Classics                        $ 1,000,000
     Debtor (Basic Cable)
</TABLE>

                                      -5-
<PAGE>

     (I)  Schedule 2.2 (Home Video Model) to the Credit Agreement is hereby
replaced in its entirety by Schedule 2.2 (Revised) attached to this Amendment
No. 4.

          Section 3.  Consent.  The Borrower has requested that the Agent and
                      -------
the Lenders consent to a waiver of compliance by the Debtors with Section 6.13
of the Credit Agreement which prohibits the Credit Parties from modifying any
indenture or note purchase agreement governing the Secured Subordinated Notes.
At the request of the Borrower, each Lender by its signature hereto hereby
consents to the Credit Parties entering into Amendment No. 3 to the Note & Stock
Purchase Agreement dated as of July 9, 1997 between Canyon and the Credit
Parties, in the form attached hereto as Exhibit A.

          The waiver contained in this Section 3 is limited to the specific
provision provided above and shall not in any way be construed as entitling the
Borrower to any waiver of any matters other than as specifically provided above
or to any future waivers regarding similar matters or otherwise.

          Section 4.  Increase in Commitments.
                      -----------------------

          (a)  As of the Effective Date, the Total Commitments shall be
increased by $22,665,800.02, by (x) the addition of Far East National Bank ("Far
East"), as a party to this Credit Agreement, with a Total Commitment of
$10,000,000, and (y) a $12,665,800.02 increase in the Revolving Credit
Commitment of The Chase Manhattan Bank ("Chase"; and together with Far East, the
"Assuming Banks").  On or prior to the Effective Date, Far East shall execute
and deliver to the Agent, for its acceptance and recording in the Register, an
Assumption Agreement in the form of Exhibit B attached hereto.  Upon such
execution, delivery, acceptance and recording, from and after the Effective
Date, Far East shall be a party to the Credit Agreement and shall have all of
the rights and obligations of a Lender thereunder.

          (b)  On the Effective Date, Far East shall purchase from Chase a
portion of its outstanding Term Loans such that after giving effect thereto Far
East and Chase will hold Term Loans in the amounts set forth on Schedule 1
(Revised) to this Amendment No. 4.  Each Assuming Bank shall be deemed to have
irrevocably and unconditionally purchased and received from each of the other
Lenders (including, in the case of Far East, Chase) a participation in each
outstanding Letter of Credit such that after giving effect thereto, each of the
Lenders holds a participation in all outstanding Letters of Credit in proportion
with the Revolving Credit Commitments as set forth of Schedule 1 (Revised) to
this Amendment No. 4.

          (c)  For purposes of Section 2.10(b) of the Credit Agreement, the
reallocation of the Commitments set forth in clause (b) above shall be treated
as prepayments of the Loans and the Borrower shall be subject to reimbursement
obligations set forth in Section 2.10(b) for losses incurred by the Lenders in
the reemployment of any Eurodollar Loans affected by such reallocation.

                                      -6-
<PAGE>

          Section 5.  Conditions to Effectiveness.  The effectiveness of this
                      ---------------------------
Amendment is subject to the satisfaction in full of each of the conditions
precedent set forth in this Section 5 (the date on which all such conditions
have been satisfied being herein called the "Effective Date"):

          (A)  the Agent shall have received counterparts of this Amendment
which, when taken together, bear the signatures of the Borrower, each Guarantor,
the Agent and such of the Lenders as are required by the Credit Agreement;

          (B)  the Agent shall have received an Assumption Agreement (in form of
Exhibit B hereto), duly executed by Far East National Bank;

          (C)  the Agent shall have received a new Revolving Credit Note
executed by the Borrower for each of The Chase Manhattan Bank and Far East
National Bank in the face amount of such Lender's Revolving Credit Commitment
and a Term Note executed by Pictures for Far East National Bank in the face
amount of such Lender's Term Loan Commitment, in each case after giving effect
to this Amendment No. 4;

          (D)  all fees contemplated by the Fee Letter dated of even date
herewith between the Borrower and the Agent shall have been paid; and

          (E)  all legal matters incident to this Amendment shall be
satisfactory to Morgan, Lewis & Bockius LLP, counsel for the Agent.

          Section 6.  Representations and Warranties.  Each Credit Party
                      ------------------------------
represents and warrants that:

          (A)  after giving effect to this Amendment, the representations and
warranties contained in the Credit Agreement are true and correct in all
material respects on and as of the date hereof as if such representations and
warranties had been made on and as of the date hereof (except to the extent that
any such representations and warranties specifically relate to an earlier date);
and

          (B)  after giving effect to this Amendment, no Event of Default or
Default will have occurred and be continuing on and as of the date hereof.

          Section 7.  Further Assurances.  At any time and from time to time,
                      ------------------
upon the Agent's request and at the sole expense of the Credit Parties, each
Credit Party will promptly and duly execute and deliver any and all further
instruments and documents and take such further action as the Agent reasonably
deems necessary to effect the purposes of this Amendment.

          Section 8.  Fundamental Documents.  This Amendment is designated a
                      ---------------------
Fundamental Document by the Agent.

                                      -7-
<PAGE>

          Section 9.   Full Force and Effect.  Except as expressly amended
                       ---------------------
hereby, the Credit Agreement and the other Fundamental Documents shall continue
in full force and effect in accordance with the provisions thereof on the date
hereof.  As used in the Credit Agreement, the terms "Agreement", "this
Agreement", "herein",  "hereafter", "hereto", "hereof", and words of similar
import, shall, unless the context otherwise requires, mean the Credit Agreement
as amended by this Amendment.

          Section 10.  APPLICABLE LAW.  THIS AMENDMENT SHALL BE GOVERNED BY AND
                       --------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

          Section 11.  Counterparts.  This Amendment may be executed in two or
                       ------------
more counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one instrument.

          Section 12.  Expenses.  The Borrower agrees to pay all out-of-pocket
                       --------
expenses incurred by the Agent in connection with the preparation, execution and
delivery of this Amendment, including, but not limited to, the reasonable fees
and disbursements of counsel for the Agent.

          Section 13.  Headings.  The headings of this Amendment are for the
                       --------
purposes of reference only and shall not affect the construction of or be taken
into consideration in interpreting this Amendment

                                      -8-
<PAGE>

          IN WITNESS WHEREOF, the parties hereby have caused this Amendment to
be duly executed as of the date first written above.

                                        ARTISAN PICTURES INC.
                                        ARTISAN ENTERTAINMENT INC.
                                        ARTISAN HOME ENTERTAINMENT INC.
                                        ARTISAN RELEASING INC.
                                        ARTISAN MUSIC INC.
                                        BE MINE PRODUCTIONS, INC.
                                        BEACH DANCE PRODUCTIONS, INC.
                                        DETENTION PRODUCTIONS, INC.
                                        HEATWAVE PRODUCTIONS, INC.
                                        LIVE AMERICA INC.
                                        LIVE VENTURES INC.
                                        LIVENET INC.
                                        MILK MISSION PRODUCTIONS INC.
                                        SWEET TIME PRODUCTIONS, INC.
                                        VESTRON INC.
                                        WISH AGAIN PRODUCTIONS, INC.

                                        By  /s/ Ken Schapiro
                                            ---------------------------------
                                            Name:   Ken Schapiro
                                            Title:  Authorized Signatory for
                                                    each of the foregoing

                                        FILM HOLDINGS CO.

                                        By  /s/ Geoff Rehnert
                                            ---------------------------------
                                            Name:  Geoff Rehnert
                                            Title: Principal

                                        SILENT DEVELOPMENT CORP.
                                        TONGUE-TIED INC.

                                        By  /s/ Ken Schapiro
                                            --------------------------------
                                            Name:  Ken Schapiro
                                            Title: EVP

                                      -9-
<PAGE>

                                        LENDERS:

                                        THE CHASE MANHATTAN BANK,
                                        individually and as Administrative
                                        Agent

                                        By  /s/ William E. Rottino
                                            -----------------------------------
                                            Name:   William E. Rottino
                                            Title:  Vice President

                                        SOCIETE GENERALE

                                        By  /s/ Brian McDonald
                                            -----------------------------------
                                            Name:   Brian McDonald
                                            Title:  Vice President

                                        UNION BANK OF CALIFORNIA

                                        By  /s/ Thomas P. Garry, Jr.
                                            -----------------------------------
                                            Name:   Thomas P. Garry, Jr.
                                            Title:  Vice President

                                        COMERICA BANK -- CALIFORNIA

                                        By  /s/ Carmen Carpenter
                                            -----------------------------------
                                            Name:   Carmen Carpenter
                                            Title:  VP

                                        FLEET BANK, N.A.

                                        By  /s/ Eric S. Meyer
                                            -----------------------------------
                                            Name:   Eric S. Meyer
                                            Title:  Vice President

                                      -10-
<PAGE>

                              PACIFIC CENTURY BANK, N.A.

                              By /s/ David K. Henry
                                ----------------------------------
                                 Name:  David K. Henry
                                 Title: Vice President

                              BANQUE INTERNATIONALE A
                              LUXEMBOURG

                              By /s/ E. Rolin
                                ----------------------------------
                                 Name:  E. Rolin
                                 Title: Senior Manager

                              By /s/ N. Weaver
                                ----------------------------------
                                  Name:  N. Weaver
                                  Title: Assistant Director

                              NATEXIS BANQUE BFCE

                              By /s/ Bennett C. Pozil
                                ----------------------------------
                                 Name:  Bennett C. Pozil
                                 Title: Vice President and Group Manager
                                             Entertainment Finance

                              By /s/ Mark A. Harrington
                                ----------------------------------
                                 Name:  Mark A. Harrington
                                 Title: Senior Vice President and
                                        Regional Manager

                              CITY NATIONAL BANK

                              By /s/ Norman B. Starr
                                 ---------------------------------
                                 Name:  Norman B. Starr
                                 Title: Vice President

                                      -11-
<PAGE>

                              DE NATIONALE INVESTERINGSBANK N.V.

                              By /s/ Eric H. Snaterse
                                 ------------------------------------
                                 Name:  Eric H. Snaterse
                                 Title: Senior Vice President

                              By /s/ Joseph L. Piek
                                 ------------------------------------
                                 Name: Joseph L. Piek
                                 Title: V.P.

                              BANQUE NATIONALE DE PARIS

                              By /s/ Clive Bettles
                                 ------------------------------------
                                 Name:  Clive Bettles
                                 Title: SVP and Manager

                              By /s/ Janice S.H. Ho
                                 ------------------------------------
                                 Name:  Janice S.H. Ho
                                 Title: Vice President

                              THE FUJI BANK, LTD.

                              By /s/ Masahito Fukuda
                                 ------------------------------------
                                 Name:  Masahito Fukuda
                                 Title: Senior Vice President

                              PARIBAS

                              By /s/ Thomas G. Brandt
                                 ------------------------------------
                                 Name:  Thomas G. Brandt
                                 Title: Managing Director

                              By /s/ Ching Linn
                                 ------------------------------------
                                 Name:  Ching Lim
                                 Title: Vice President

                                      -12-
<PAGE>

                              FAR EAST NATIONAL BANK

                              By /s/ CHC
                                 -----------------------------------
                                 Name:
                                 Title: R.V.P.

                                      -13-
<PAGE>

                                                                      Schedule 1
                                              (Revised as of September 30, 1999)

                            Schedule of Commitments

<TABLE>
<CAPTION>
                                                                    Revolving          Revolving           Term             Term
                                                   Total             Credit             Credit             Loan             Loan
            Banks                               Commitment         Commitment         Percentage        Commitment       Percentage
 <S>                                        <C>                <C>                <C>               <C>               <C>
 1.   Chase                                  $ 32,907,904.02    $ 31,757,465.91        18.420521%    $ 1,150,438.11       6.071763%

 2.   Societe Generale                         17,350,374.86      15,401,504.57         8.933450%      1,948,870.29      10.285714%

 3.   Union Bank of California                 17,350,374.86      15,401,504.57         8.933450%      1,948,870.29      10.285714%

 4.   Fleet Bank                               17,350,374.86      15,401,504.57         8.933450%      1,948,870.29      10.285714%

 5.   Comerica Bank-California                 14,458,645.71      12,834,587.14         7.444542%      1,624,058.57       8.571429%

 6.   Pacific Century Bank                     14,458,645.71      12,834,587.14         7.444542%      1,624,058.57       8.571429%

 7.   Far East National Bank                   10,000,000.00       8,876,756.09         5.148851%      1,123,243.91       5.928238%

 8.   Natexis Banque                            9,639,097.14       8,556,391.43         4.963028%      1,082,705.71       5.714286%

 9.   BIL                                       9,639,097.14       8,556,391.43         4.963028%      1,082,705.71       5.714286%

 10.  De National Investeringsbank              9,639,097.14       8,556,391.43         4.963028%      1,082,705.71       5.714286%

 11.  Banque National de Paris                  9,639,097.14       8,556,391.43         4.963028%      1,082,705.71       5.714286%

 12.  The Fuji Bank, Ltd.                       9,639,097.14       8,556,391.43         4.963028%      1,082,705.71       5.714286%

 13.  Banque Paribas                            9,639,097.14       8,556,391.43         4.963028%      1,082,705.71       5.714286%

 14.  City National Bank                        9,639,097.14       8,556,391.43         4.963028%      1,082,705.71       5.714286%

TOTAL                                        $191,350,000.00    $172,402,650.00              100%    $18,947,350.00            100%
</TABLE>

                                      -14-
<PAGE>

                                                                    Schedule 2.2
                                              (Revised as of September 30, 1999)

                                Home Video Model

           Box Office Gross             Video Units       Sell-Through Units

             $0-3,000,000                   50,000                     0

        3,000,001 - 5,000,000               75,000                     0

        5,000,001 - 10,000,000             100,000               900,000

       10,000,001 - 15,000,000             125,000             1,300,000

       15,000,001 - 20,000,000             150,000             1,300,000

       20,000,001 - 25,000,000             175,000             1,700,000

       25,000,001 - 30,000,000             200,000             1,700,000

       30,000,001 - 40,000,000             225,000             1,700,000

       40,000,001 - 50,000,000             250,000             2,100,000

       50,000,001 - 70,000,000             300,000             2,800,000

       70,000,001 - 100,000,000            350,000             2,800,000

             *100,000,000                  400,000             3,000,000

* = greater than

                                      -15-
<PAGE>

                                                                       EXHIBIT A
                                                              to Amendment No. 4

       [Attach Amendment No. 3 to Canyon Note & Stock Purchase Agreement]

                                      -16-

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