Document:

Exhibit 10.15

                                           Execution Counterpart

                       AMENDED AND RESTATED
               REIMBURSEMENT AND SECURITY AGREEMENT

                              Between

                      HARCOURT GENERAL, INC.

                                and

                        GC COMPANIES, INC.

                   Dated as of January 26, 1999

<PAGE>
                         TABLE OF CONTENTS

                                                              Page

1.  Background; Amendment and Restatement; Definitions . . . . . 1
     1.1.  Background. . . . . . . . . . . . . . . . . . . . . . 1
     1.2.  Amendment and Restatement . . . . . . . . . . . . . . 1
     1.3.  Definitions; Certain Rules of Construction. . . . . . 1

2.  Payment Provisions . . . . . . . . . . . . . . . . . . . . .21
     2.1.  Reimbursement and Indemnification . . . . . . . . . .21
     2.2.  Guarantor's Fee . . . . . . . . . . . . . . . . . . .21
     2.3.  Interest on Overdue Payments. . . . . . . . . . . . .21

3.  General Covenants. . . . . . . . . . . . . . . . . . . . . .21
     3.1.  Financial Statements and Reports. . . . . . . . . . .21
          3.1.1.  Annual Reports . . . . . . . . . . . . . . . .21
          3.1.2.  Quarterly Reports. . . . . . . . . . . . . . .22
          3.1.3.  Public Reports . . . . . . . . . . . . . . . .23
          3.1.4.  Notice of Litigation; Notice of Defaults . . .23
          3.1.5.  Management Letters . . . . . . . . . . . . . .23
          3.1.6.  South American Financing Documents . . . . . .23
          3.1.7.  Other Information. . . . . . . . . . . . . . .24
     3.2.  Liens . . . . . . . . . . . . . . . . . . . . . . . .24
     3.3.  Distributions . . . . . . . . . . . . . . . . . . . .26
     3.4.  Merger, Consolidation and Dispositions of Assets. . .27
     3.5.  Issuance of Stock by Theatre Subsidiaries; Subsidiary
          Distributions. . . . . . . . . . . . . . . . . . . . . . . . . .30
          3.5.1.  Issuance of Stock by Theatre Subsidiaries. . .30
          3.5.2.  No Restrictions on Subsidiary Distributions. .30
     3.6.  Guaranteed Leases and Transferred Leases. . . . . . .30
          3.6.1.  No Transfer. . . . . . . . . . . . . . . . . .30
          3.6.2.  Amendments, Renewals, Extensions, etc. . . . .30
     3.7.  Conduct of Theatre Business . . . . . . . . . . . . .31
          3.7.1.  Theatre Subsidiaries . . . . . . . . . . . . .31
          3.7.2.  Theatre Business . . . . . . . . . . . . . . .31
     3.8.  No Extension of Credit Agreement. . . . . . . . . . .31

4.  First Tier Covenants . . . . . . . . . . . . . . . . . . . .31
     4.1.  Consolidated Net Worth. . . . . . . . . . . . . . . .31
     4.2.  Consolidated Adjusted Cash Flow to Consolidated Fixed
          Charges. . . . . . . . . . . . . . . . . . . . . . . .31
     4.3.  Consolidated Adjusted EBITDA to Consolidated Interest
          Charges. . . . . . . . . . . . . . . . . . . . . . . .31
     4.4.  Consolidated Total Adjusted Debt to Consolidated Adjusted
          EBITDA . . . . . . . . . . . . . . . . . . . . . . . .32
     4.5.  Core Theatre Adjusted EBITDA to Core Theatre Fixed Charges32
     4.6.  Problem Theatre Adjusted EBITDA.. . . . . . . . . . .32
     4.7.  South American Adjusted EBITDA. . . . . . . . . . . .32
     4.8.  Investments and Acquisitions. . . . . . . . . . . . .32
     4.9.  Capital Expenditures. . . . . . . . . . . . . . . . .33

5.  Second Tier Covenants. . . . . . . . . . . . . . . . . . . .33
     5.1.  Investments and Acquisitions. . . . . . . . . . . . .33
     5.2.  Financing Debt. . . . . . . . . . . . . . . . . . . .34
     5.3.  Distributions . . . . . . . . . . . . . . . . . . . .34
     5.4.  Capital Expenditures. . . . . . . . . . . . . . . . .35
     5.5.  Payment of Theatre Obligations. . . . . . . . . . . .36

6.  Representations and Warranties . . . . . . . . . . . . . . .36
     6.1.  Organization and Business . . . . . . . . . . . . . .36
          6.1.1.  The Company. . . . . . . . . . . . . . . . . .36
          6.1.2.  Subsidiaries . . . . . . . . . . . . . . . . .36
          6.1.3.  Qualification. . . . . . . . . . . . . . . . .36
     6.2.  Authorization and Enforceability. . . . . . . . . . .36
     6.3.  No Legal Obstacle to Agreements . . . . . . . . . . .37
     6.4.  Delivery of Collateral. . . . . . . . . . . . . . . .37

7.  Defaults . . . . . . . . . . . . . . . . . . . . . . . . . .37
     7.1.  Events of Default . . . . . . . . . . . . . . . . . .37
          7.1.1.  Payment. . . . . . . . . . . . . . . . . . . .37
          7.1.2.  Specified Covenants. . . . . . . . . . . . . .38
          7.1.3.  Other Covenants. . . . . . . . . . . . . . . .38
          7.1.4.  Representations and Warranties . . . . . . . .38
          7.1.5.  Cross-Defaults, etc. . . . . . . . . . . . . .38
          7.1.6.  Ownership; Liquidation; etc. . . . . . . . . .38
          7.1.7.  Enforceability, etc. . . . . . . . . . . . . .39
     7.2.  Certain Payments Upon an Event of Default . . . . . .40
     7.3.  Enforcement of Payment; Collateral; Setoff. . . . . .40
     7.4.  Specific Performance; Exercise of Rights. . . . . . .40
     7.5.  Cumulative Remedies . . . . . . . . . . . . . . . . .40
     7.6.  Annulment of Defaults . . . . . . . . . . . . . . . .40
     7.7.  Waivers . . . . . . . . . . . . . . . . . . . . . . .41
     7.8.  Obligations Absolute. . . . . . . . . . . . . . . . .41

8.  Security . . . . . . . . . . . . . . . . . . . . . . . . . .41
     8.1.  Collateral. . . . . . . . . . . . . . . . . . . . . .41
          8.1.1.  Pledged Stock. . . . . . . . . . . . . . . . .41
          8.1.2.  Pledged Rights . . . . . . . . . . . . . . . .42
          8.1.3.  Proceeds and Products. . . . . . . . . . . . .42
     8.2.  Representations, Warranties and Covenants with Respect to
          the Collateral . . . . . . . . . . . . . . . . . . . .42
          8.2.1.  Pledged Stock. . . . . . . . . . . . . . . . .42
          8.2.2.  No Liens or Restrictions on Transfer or Change of
               Control. . . . . . . . . . . . . . . . . . . .  .42
          8.2.3.  Perfection of the Collateral . . . . . . . . .42
     8.3.  Administration of Collateral. . . . . . . . . . . . .43
          8.3.1.  Distributions on Pledged Securities. . . . . .43
          8.3.2.  Voting of Pledged Securities . . . . . . . . .43
     8.4.  Right to Realize upon Collateral. . . . . . . . . . .43
          8.4.1.  General Authority. . . . . . . . . . . . . . .43
          8.4.2.  Marshaling, etc. . . . . . . . . . . . . . . .44
          8.4.3.  Sales of Collateral. . . . . . . . . . . . . .45
          8.4.4.  Sale Without Registration. . . . . . . . . . .45
          8.4.5.  Application of Proceeds. . . . . . . . . . . .46
     8.5.  Custody of Collateral . . . . . . . . . . . . . . . .46

9.  Expenses; Indemnity. . . . . . . . . . . . . . . . . . . . .47
     9.1.  Expenses. . . . . . . . . . . . . . . . . . . . . . .47
     9.2.  General Indemnity . . . . . . . . . . . . . . . . . .47

10.  Successors and Assigns. . . . . . . . . . . . . . . . . . .47

11.  Confidentiality . . . . . . . . . . . . . . . . . . . . . .47

12.  Notices . . . . . . . . . . . . . . . . . . . . . . . . . .48

13.  Course of Dealing; Amendments and Waivers . . . . . . . . .48

14.  Termination and Defeasance. . . . . . . . . . . . . . . . .49

15.  General . . . . . . . . . . . . . . . . . . . . . . . . . .49

                       AMENDED AND RESTATED
               REIMBURSEMENT AND SECURITY AGREEMENT

  This Amended and Restated Reimbursement and Security Agreement,
dated as of January 26, 1999, is between Harcourt General, Inc., a
Delaware corporation ("Harcourt"), and GC Companies, Inc., a Delaware
corporation (the "Company").  The parties agree as follows:

1.  Background; Amendment and Restatement; Definitions.

  1.1.  Background.  Prior to December 14, 1993, the Company was a
Wholly-Owned Subsidiary (as defined below) of Harcourt.  On
December 14, 1993, pursuant to a transaction approved by the Board of
Directors of Harcourt, (a) Harcourt transferred its theatre business
to the Company, (b) Harcourt distributed all of the shares of capital
stock of the Company to the stockholders of Harcourt and (c) the
Company became a publicly-owned corporation (collectively, the
"Spinoff").  Notwithstanding the Spinoff, Harcourt (i) has secondary
liability with respect to certain theatre leases assigned by Harcourt
to the Company and, in turn, assigned by the Company to certain
Subsidiaries (as defined below) of the Company and (ii) has
guaranteed the obligations of certain Subsidiaries of the Company
under certain theatre leases to which such Subsidiaries are parties.
Hence, in connection with the Spinoff, the parties entered into a
Reimbursement and Security Agreement dated as of December 14, 1993
(the "Prior Agreement") pursuant to which, among other things, the
Company (A) agreed to reimburse and indemnify Harcourt for all
amounts paid by Harcourt in respect of any such secondary liability
on, or guarantee of, any such theatre lease and (B) pledged to
Harcourt all of the capital stock of the Theatre Subsidiaries (as
defined below) to secure the payment and performance of the Company's
obligations under the Prior Agreement.  The Company recently has
adopted a new business plan and, in order to implement such new
business plan, has requested that Harcourt amend certain provisions
of the Prior Agreement.

  1.2.  Amendment and Restatement.  Effective as of the date hereof,
this Agreement amends and restates in its entirety the Prior
Agreement.

  1.3.  Definitions; Certain Rules of Construction.  Certain
capitalized terms are used in this Agreement with the specific
meanings defined below in this Section 1.  Except as otherwise
explicitly specified to the contrary or unless the context clearly
requires otherwise, (a) the capitalized word "Section" refers to
sections of this Agreement, (b) the capitalized word "Exhibit" refers
to exhibits to this Agreement, (c) references to a particular Section
include all subsections thereof, (d) the word "including" shall be
construed as "including without limitation", (e) accounting terms not
otherwise defined herein have the meaning provided under GAAP, (f)
terms defined in the UCC and not otherwise defined herein have the
meaning provided under the UCC, (g) references to a particular
statute or regulation include all rules and regulations thereunder
and any successor statute, regulation or rules, in each case as from
time to time in effect, and (h) references to a particular Person
include such Person's successors and assigns to the extent not
prohibited by this Agreement.

       1.3.1.  "Administrative Agent" means the administrative agent
  under the Credit Agreement.

       1.3.2.  "Affiliate" means, with respect to the Company (or
  any other specified Person), any other Person directly or
  indirectly controlling, controlled by or under direct or indirect
  common control with the Company (or such specified Person);
  provided, however, that the Company and its Subsidiaries, on the
  one hand, and Harcourt and its Subsidiaries, on the other hand,
  shall not be deemed Affiliates of each other for purposes of this
  Agreement.

       1.3.3.  "Argentina Credit Facility" means the Guaranteed
  Secured Credit Agreement dated as of December 18, 1998 among the
  Argentina Subsidiary, the lenders from time to time party thereto
  and BankBoston, N.A., Nassau Branch, as agent.

       1.3.4.  "Argentina Subsidiary" means each of General Cinema
  de Argentina S.A. and Hoyts Cinema de Argentina S.A.

       1.3.5.  "Asset-Specific EBITDA" means, with respect to any
  sale of assets or Equity Interests by the Company or any of its
  Theatre Subsidiaries, the lesser of (a) the amount of Consolidated
  Adjusted EBITDA during the four fiscal quarters of the Company
  most recently ended prior to the date of such sale that is
  attributable to such assets or Equity Interests and (b) $1.

       1.3.6.  "B Theatres" means the theatres listed on Exhibit
  1.3A.

       1.3.7.  "Bankruptcy Code" means Title 11 of the United States
  Code.

       1.3.8.  "Bankruptcy Default" means an Event of Default
  referred to in Section 7.1.8.

       1.3.9.  "Brazil Credit Facility" means a credit facility
  among the Brazil Subsidiary and its senior lenders that contains
  terms which are not significantly less favorable to the Company,
  the Brazil Subsidiary and the other Subsidiaries of the Company
  than the terms contained in the Argentina Credit Facility.

       1.3.10.  "Brazil Subsidiary" means General Cinema do Brasil
  Empreendimentos Ltda.

       1.3.11.  "Capital Expenditures" means, for any period,
  amounts added or required to be added to the property, plant and
  equipment or other fixed assets account on the Consolidated
  balance sheet of the Company (or other specified Person) and its
  Subsidiaries (or other group of specified Persons), prepared in
  accordance with GAAP.

       1.3.12.  "Capitalized Lease" means any lease which is
  required to be capitalized on the balance sheet of the lessee in
  accordance with GAAP, including Statement Nos. 13 and 98 of the
  Financial Accounting Standards Board.

       1.3.13.  "Capitalized Lease Obligations" means the amount of
  the liability reflecting the aggregate discounted amount of future
  payments under all Capitalized Leases calculated in accordance
  with GAAP, including Statement Nos. 13 and 98 of the Financial
  Accounting Standards Board.

       1.3.14.  "Cash Equivalents" means:

       (a)  negotiable certificates of deposit, time deposits
  (including sweep accounts), demand deposits and bankers'
  acceptances issued by any United States financial institution
  having capital and surplus and undivided profits aggregating at
  least $100,000,000 and rated both Prime-1 by Moody's and A-1 by
  S&P;

       (b)  short-term corporate obligations rated both Prime-1 by
  Moody's and A-1 by S&P;

       (c)  any direct obligation of the United States of America or
  any agency or instrumentality thereof, or of any state or
  municipality thereof, (i) which has a remaining maturity at the
  time of purchase of not more than one year or (ii) which is
  subject to a repurchase agreement with any financial institution
  referred to in clause (a) above, exercisable within one year from
  the time of purchase and (iii) which, in the case of obligations
  of any state or municipality, is rated Aa or better by Moody's or
  AA or better by S&P;

       (d)  any mutual fund or other pooled investment vehicle rated
  Aa or better by Moody's or AA or better by S&P which invests
  principally in obligations described above; and

       (e)  any repurchase agreement with any financial institution
  described in clause (a) above with respect to any obligations
  described in clause (c) above.

       1.3.15.  "Chile Credit Facility" means a credit facility
  among the Chile Subsidiary and its senior lenders that contains
  terms which are not significantly less favorable to the Company,
  the Chile Subsidiary and the other Subsidiaries of the Company
  than the terms contained in the Argentina Credit Facility.

       1.3.16.  "Chile Subsidiary" means Hoyts Cinema de Chile S.A.

       1.3.17.  "Cinema Ventures" means Cinema Ventures, LLC, a
  Delaware limited liability company.

       1.3.18.  "Collateral" means all assets now or from time to
  time hereafter subjected to a security interest, mortgage or
  charge (or intended or required so to be subjected pursuant to
  this Agreement) to secure the payment or performance of any of the
  Obligations, including the assets described in Sections 8.1.1
  through 8.1.3.

       1.3.19.  "Company" is defined in the preamble hereto.

       1.3.20.  "Computation Covenant" means each of Sections 3.2.10
  through 3.2.15, 3.3.2, 3.4.5, 3.4.13, 4.1 through 4.7, 4.8.4,
  4.8.5, 4.9 and, if applicable, Sections 5.1.6, 5.2.2, 5.2.4 and
  5.4.

       1.3.21.  "Consolidated" and "Consolidating", when used with
  reference to any term, mean that term as applied to the accounts
  of the Company (or other specified Person) and all of its
  Subsidiaries (or other specified group of Persons), or such of its
  Subsidiaries as may be specified, consolidated (or combined) or
  consolidating (or combining), as the case may be, in accordance
  with GAAP and with appropriate deductions for minority interests
  in Subsidiaries.

       1.3.22.  "Consolidated Adjusted Cash Flow" means, for any
  period, the sum of (a) Consolidated Adjusted EBITDA for such
  period plus (b) the aggregate amount of all rental expense for
  real property operating leases of the Company and its Majority-
  Owned Subsidiaries for such period, all as determined on a
  Consolidated basis in accordance with GAAP.

       1.3.23.  "Consolidated Adjusted EBITDA" means, for any
  period, the total of:

       (a)  Consolidated Net Income for such period; plus

       (b)  without duplication and only to the extent reflected as
  a charge in the statement of Consolidated Net Income for such
  period, the sum of:

            (i) Consolidated Interest Charges, taxes, depreciation
       and amortization expenses of the Company and its Majority-
       Owned Subsidiaries for such period; plus

            (ii)  expenses or losses from any Permitted Non-Theatre
       Investments; plus

            (iii)  any extraordinary, unusual or non-recurring
       expenses or losses for such period; plus

            (iv)  all general and administrative expenses of GCCI
       and its Majority-Owned Subsidiaries for such period;
       provided, however, that if the general and administrative
       expenses of GCCI and its Majority-Owned Subsidiaries for such
       period exceed $4,250,000, then only $4,250,000 of such
       expenses shall be added to Consolidated Net Income for such
       period pursuant to this clause (iv); minus

       (c)  without duplication and only to the extent reflected as
  an addition (or, as the case may be, reduction) in the statement
  of Consolidated Net Income for such period, the sum of:

            (i)  any income or gains from any Permitted Non-Theatre
       Investments; plus

            (ii)  any extraordinary, unusual or non-recurring income
       or gains; plus

            (iii)  the part of Consolidated Net Income for such
       period that is attributable to the Consolidated net income
       (or loss) of all Foreign Subsidiaries of the Company for such
       period;

  all as determined on a Consolidated basis in accordance with GAAP.

       1.3.24.  "Consolidated Excess Cash Flow" means, for any
  period, the total of:

       (a)  Consolidated Adjusted EBITDA for such period; plus

       (b)  the net cash proceeds paid to or for the account of the
  Company during such period in respect of the issuance of
  additional Equity Interests of the Company; minus

       (c)  Consolidated Interest Charges for such period; minus

       (d)  Capital Expenditures of the Company and its Majority-
  Owned Subsidiaries for such period; minus

       (e)  all regularly scheduled payments of principal of
  Consolidated Total Financing Debt (other than Foreign Non-Recourse
  Debt) payable during such period; minus

       (f)  Distributions made by the Company during such period;
  minus

       (g)  cash taxes paid by the Company and its Majority-Owned
  Subsidiaries during such period;

  all as determined on a Consolidated basis in accordance with GAAP.

       1.3.25.  "Consolidated Excess Theatre Cash Flow" means, for
  any period, the total of:

       (a)  Consolidated Excess Cash Flow for such period; minus

       (b)  without duplication and only to the extent reflected as
  an addition to Consolidated Excess Cash Flow for such period, any
  income or gains from any Permitted Non-Theatre Investments for
  such period; plus

       (c)  without duplication and only to the extent reflected as
  a charge to Consolidated Excess Cash Flow during such period, any
  expenses or losses from any Permitted Non-Theatre Investments for
  such period.

       1.3.26.  "Consolidated Fixed Charges" means, for any period,
  the sum of:

       (a)  all regularly scheduled payments of principal of
  Consolidated Total Financing Debt (other than Foreign Non-Recourse
  Debt) payable during such period; plus

       (b)  Consolidated Interest Charges for such period; plus

       (c)  the aggregate amount of all rental expense for real
  property operating leases of the Company and its Majority-Owned
  Subsidiaries for such period;

  all as determined on a Consolidated basis in accordance with GAAP.

       1.3.27.  "Consolidated Interest Charges" means, for any
  period, the total of (a) the aggregate amount of interest,
  including interest expense under Capitalized Leases, paid or
  accrued by the Company or any of its Majority-Owned Subsidiaries
  during such period, minus (b) the aggregate amount of interest,
  including interest expense under Capitalized Leases, paid or
  accrued by any of the Majority-Owned Subsidiaries of the Company
  which are Foreign Subsidiaries during such period on or in respect
  of any Foreign Non-Recourse Debt, all as determined on a
  Consolidated basis in accordance with GAAP.

       1.3.28.  "Consolidated Net Income" means, for any period, the
  Consolidated net income (or loss) of the Company and its Majority-
  Owned Subsidiaries for such period, determined in accordance with
  GAAP on a Consolidated basis.

       1.3.29.  "Consolidated Net Investment Cash Flow" means, for
  any period, the total of:

       (a)  Net Cash Proceeds received by the Company or any of its
  Majority-Owned Subsidiaries during such period from the sale or
  other transfer of any Permitted Non-Theatre Investments; plus

       (b)  without duplication, all cash income and other cash
  gains, including cash interest, cash dividends and other cash
  Distributions, received by the Company or any of its Majority-
  Owned Subsidiaries from Permitted Non-Theatre Investments during
  such period; minus

       (c)  all cash expenses and cash losses incurred or sustained
  by the Company or any of its Majority-Owned Subsidiaries from
  Permitted Non-Theatre Investments during such period; plus

       (d)  without duplication, non-cash losses realized by the
  Company or any of its Majority-Owned Subsidiaries during such
  period from Permitted Non-Theatre Investments to the extent of any
  write-downs or write-offs of any thereof taken by the Company or
  any of its Majority-Owned Subsidiaries in such period;

  all as determined on a Consolidated basis in accordance with GAAP.

       1.3.30.  "Consolidated Net Worth" means, at any date,
  stockholders' equity of the Company and its Majority-Owned
  Subsidiaries, determined on a Consolidated basis in accordance
  with GAAP; provided, however, that for purposes of determining the
  Consolidated Net Worth, the amount thereof shall be adjusted so as
  to eliminate the effect of any unrealized gains or any unrealized
  losses in the total market value as at such date of the
  Investments of the Company and its Majority-Owned Subsidiaries in
  the Equity Interests of each of Global Telesystems Group, Inc. and
  GrandVision relative to the total market value of such Investments
  as reflected on the audited Consolidated balance sheet of the
  Company and its Subsidiaries as at October 31, 1998.

       1.3.31.  "Consolidated Total Adjusted Debt" means, at any
  date, the total of (a) Consolidated Total Financing Debt as at
  such date, minus (b) to the extent included in Consolidated Total
  Financing Debt as at such date, the Foreign Non-Recourse Debt of
  the Foreign Subsidiaries of the Company as at such date, minus (c)
  the aggregate of the Eligible Securities Values of all Eligible
  Securities as at such date.

       1.3.32.  "Consolidated Total Financing Debt" means, at any
  date, the Financing Debt of the Company and its Majority-Owned
  Subsidiaries outstanding on and as of such date, determined on a
  Consolidated basis.

       1.3.33.  "Core Theatre" means, at any date, each theatre
  which (a) is owned or operated by the Company or any of its
  Subsidiaries and (b) is located in the Northeast or Midwest
  regions of the United States, including the theatres listed on
  Exhibit 1.3B.

       1.3.34.  "Core Theatre Adjusted EBITDA" means, at any date,
  the total of:

       (a)  Consolidated net income of the Core Theatres for such
  period; plus

       (b)  without duplication and only to the extent reflected as
  a charge in the statement of Consolidated net income of the Core
  Theatres for such period, the sum of:

            (i)  the aggregate amount of interest, including
       interest expense under Capitalized Leases, paid or accrued by
       the Core Theatres during such period; plus

            (ii)  income taxes, depreciation and amortization
       expenses of the Core Theatres for such period; plus

            (iii)  non-operating expenses of the Core Theatres for
       such period; plus

            (iv)  lease expenses of the Core Theatres for such
       period; minus

       (c)  without duplication and only to the extent reflected as
  an addition (or, as the case may be, reduction) in the statement
  of Consolidated net income of the Core Theatres for such period,
  all non-operating income of the Core Theatres for such period;

  all as determined on a Consolidated basis in accordance with GAAP.

       1.3.35.  "Core Theatre Fixed Charges" means, for any period,
  the sum of:

       (a)  all regularly scheduled payments of principal of
  Financing Debt of the Core Theatres payable during such period;
  plus

       (b)  the aggregate amount of interest, including interest
  expense under Capitalized Leases, paid or accrued by the Core
  Theatres during such period; plus

       (c)  lease expenses of the Core Theatres for such period;

  all as determined on a Consolidated basis in accordance with GAAP.

       1.3.36.  "Credit Agreement" means the Revolving Credit
  Agreement dated as of January 26, 1999 among the Company, the
  lenders from time to time party thereto, BancBoston Robertson
  Stephens, Inc., as syndication agent and arranger, The Bank of
  Nova Scotia, as documentation agent, and BankBoston, N.A., as
  administrative agent.

       1.3.37.  "Cumulative Excess Theatre Cash Flow" means, on any
  date, the aggregate of the Consolidated Excess Theatre Cash Flows
  for all fiscal years of the Company ending on or after October 31,
  1998 but prior to such date; provided, however, that Consolidated
  Excess Theatre Cash Flow for any such particular fiscal year of
  the Company shall not, for purposes of this definition, be added
  to and included in Cumulative Excess Theatre Cash Flow until the
  later of (a) the first business day after delivery to Harcourt of
  the financial statements required to be delivered by the Company
  to Harcourt pursuant to Section 3.1.1 or (b) if any First Tier
  Default or Default shall exist when such financial statements are
  delivered to Harcourt, the first business day thereafter on which
  no First Tier Default or Default shall exist.

       1.3.38.  "Cumulative Net Investment Cash Flow" means, on any
  date, the aggregate of the Consolidated Net Investment Cash Flows
  for all fiscal quarters of the Company ending on or after October
  31, 1998 but prior to such date; provided, however, that
  Consolidated Net Investment Cash Flow for any such particular
  fiscal quarter of the Company shall not, for purposes of this
  definition, be added to and included in Cumulative Net Investment
  Cash Flow until the later of (a) the first business day after
  delivery to Harcourt of the financial statements required to be
  delivered by the Company to Harcourt pursuant to Section 3.1.2 or
  (b) if any First Tier Default or Default shall exist when such
  financial statements are delivered to Harcourt, the first business
  day thereafter on which no First Tier Default or Default shall
  exist.

       1.3.39.  "Default" means any Event of Default and any event
  or condition which with the passage of time or giving of notice,
  or both, would become an Event of Default.

       1.3.40.  "Distribution" means, with respect to the Company
  (or other specified Person):

       (a)  the declaration or payment of any dividend or
  distribution on or in respect of any shares of any class of
  capital stock of or other equity interest in the Company (or such
  specified Person);

       (b)  the purchase, redemption or other retirement of any
  shares of any class of capital stock of or other equity interest
  in the Company (or such specified Person) or of options, warrants
  or other rights for the purchase of such shares, directly,
  indirectly through a Subsidiary or otherwise;

       (c)  any other distribution on or in respect of any shares of
  any class of capital stock of or equity or other beneficial
  interest in the Company (or such specified Person);

       (d)  any prepayment, purchase, redemption or defeasance of
  any Subordinated Indebtedness of the Company (or such specified
  Person); and

       (e)  any payment, loan or advance by the Company (or such
  specified Person) to, or any other Investment by the Company (or
  such specified Person) in, any beneficial owner of 5% or more of
  any class of capital stock of or other equity interest in the
  Company (or such specified Person) or any Affiliate of such
  beneficial owner;

  provided, however, that the term "Distribution" shall not include
  (i) dividends payable in common stock of or other equity interests
  in the Company (or such specified Person) or (ii) payments in the
  ordinary course of business in respect of (A) reasonable
  compensation paid to employees, officers and directors, (B)
  advances and reimbursements to employees for travel expenses,
  drawing accounts, relocation costs and similar expenditures, (C)
  rent paid to, or accounts payable for services rendered or goods
  sold by, non-Affiliates that own capital stock of or other equity
  interests in the Company (or such specified Person) or
  (D) intercompany accounts payable and real property leases to
  non-Affiliates that own capital stock of or other equity interests
  in the Company (or such specified Person).

       1.3.41.  "Eligible Securities" means, with respect to any
  particular marketable Securities of any particular issuer:

       (a)  at any date prior to the date on which the Credit
  Agreement terminates, marketable Securities of such issuer that
  (i) are owned by the Company or by any of its Majority-Owned
  Subsidiaries as at such date free and clear of all Liens and (ii)
  are determined by the Administrative Agent in its sole and
  complete discretion to be "Eligible Securities" as at such date
  for the purposes of this Agreement, each such determination by the
  Administrative Agent to be in each case final and binding on the
  Company for all purposes of this Agreement; and

       (b)  at any date on or after the date on which the Credit
  Agreement terminates, marketable Securities of such issuer that
  (i) are owned by the Company or by any of its Majority-Owned
  Subsidiaries as at such date free and clear of all Liens and (ii)
  are determined by Harcourt in its sole and complete discretion to
  be "Eligible Securities" as at such date for the purposes of this
  Agreement, each such determination by Harcourt to be in each case
  final and binding on the Company for all purposes of this
  Agreement.

       1.3.42.  "Eligible Securities Value" means, with respect to
  any particular Eligible Securities of any particular issuer:

       (a)  at any date prior to the date on which the Credit
  Agreement terminates, the product of (i) the Fair Market Value of
  such Eligible Securities as at such date, as such Fair Market
  Value shall be determined by mutual agreement of the Company and
  the Administrative Agent, multiplied by (ii) the percentage used
  or to be used by the Administrative Agent in calculating the
  Eligible Securities Value of such Eligible Securities as at such
  date, which percentage (A) shall be no greater than 50% and
  (B) shall be determined by the Administrative Agent in its sole
  and complete discretion, each such determination by the
  Administrative Agent to be in each case final and binding on the
  Company for all purposes of this Agreement; provided, however,
  that the percentage which shall be so used by the Administrative
  Agent for the marketable Securities of each of Global Telesystems
  Group, Inc. and GrandVision shall, as determined by the
  Administrative Agent on or as of the date hereof, be and remain
  50%; and

       (b)  at any date on or after the date on which the Credit
  Agreement terminates, the product of (i) the Fair Market Value of
  such Eligible Securities as at such date, as such Fair Market
  Value shall be determined by mutual agreement of the Company and
  Harcourt, multiplied by (ii) the percentage used or to be used by
  Harcourt in calculating the Eligible Securities Value of such
  Eligible Securities as at such date, which percentage (A) shall be
  no greater than 50% and (B) shall be determined by Harcourt in its
  sole and complete discretion, each such determination by Harcourt
  to be in each case final and binding on the Company for all
  purposes of this Agreement; provided, however, that the percentage
  which shall be so used by Harcourt for the marketable Securities
  of each of Global Telesystems Group, Inc. and GrandVision shall,
  as determined by Harcourt on or as of the date hereof, be and
  remain 50%.

       1.3.43.  "Equity Interests" means:  (a) in the case of any
  corporation, any corporate capital stock of any class or series;
  (b) in the case of any association or business entity, any shares,
  interests, participations, rights or other equivalents (howsoever
  designated) of corporate capital stock; (c) in the case of any
  partnership or limited liability company, partnership or
  membership interests (whether general or limited); and (d) any
  warrants, options or other rights to purchase or otherwise acquire
  any capital stock, shares or interests of the kind described in
  clause (a), (b) or (c) above.

       1.3.44.  "Event of Default" is defined in Section 7.1.

       1.3.45.  "Exchange Act" means the federal Securities Exchange
  Act of 1934.

       1.3.46.  "Fair Market Value" means, with respect to any
  Securities or other property, the price which could be negotiated
  in an arm's-length, free-market transaction between a willing
  seller and a willing and able buyer, neither of whom is under
  undue pressure or compulsion to complete the transaction.

       1.3.47.  "Fee Percentage" means:

       (a)  on any date prior to the Reset Date:

            (i)  if the Lease Exposure on such date is greater than
       $400,000,000, 0.0625%;

            (ii)  if the Lease Exposure on such date is less than or
       equal to $400,000,000 but greater than $350,000,000, 0.045%;

            (iii)  if the Lease Exposure on such date is less than
       or equal to $350,000,000 but greater than $250,000,000,
       0.030%; and

            (iv)  if the Lease Exposure on such date is less than or
       equal to $250,000,000, 0.015%; and

       (b)  on the Reset Date and any date thereafter, 0.015%.

       1.3.48.  "First Tier Default" means any failure by the
  Company to perform or observe any of the provisions of Section 4.

       1.3.49.  "Financing Debt" means each of the items described
  in clauses (a) through (g) of the definition of the term
  "Indebtedness" and, without duplication, any guarantees of such
  items.

       1.3.50.  "Foreign Non-Recourse Debt" means, with respect to
  any Foreign Subsidiary of the Company at any time, all or any
  portion of the Financing Debt of such Foreign Subsidiary at such
  time:

       (a)  as to which neither the Company nor any of its
  Subsidiaries (other than Foreign Subsidiaries) (i) provides any
  credit support of any kind (including any undertaking, agreement
  or instrument that would constitute a guarantee), (ii) is directly
  or indirectly obligated or liable (as a guarantor under a
  guarantee or otherwise) or (iii) constitutes the lender or obligor
  thereof;

       (b)  with respect to which neither the Company nor any of its
  Subsidiaries (other than Foreign Subsidiaries) has granted any
  Liens to secure the payment or performance of all or any part
  thereof; and

       (c)  no default with respect to which (including any rights
  that the holders thereof may have to take any Enforcement Action
  (as defined in the Intercreditor Agreement) against any Foreign
  Subsidiary) would permit (upon notice or lapse of time or both)
  any holder of any Financing Debt (other than Financing Debt under
  the Credit Agreement) of the Company or of any of its Subsidiaries
  to declare a default on such other Financing Debt or cause the
  payment thereof to be accelerated or payable prior to its stated
  maturity.

       1.3.51.  "Foreign Subsidiary" means each Subsidiary that is
  organized under the laws of, and conducting its business primarily
  in, a jurisdiction outside of the United States of America and
  that is not domesticated or dually incorporated under the laws of
  the United States of America or any state thereof.

       1.3.52.  "GAAP" means generally accepted accounting
  principles as from time to time in effect, including the
  statements and interpretations of the United States Financial
  Accounting Standards Board, applied on a consistent basis (except
  for changes concurred with by the independent public accountants
  of the Company) with the most recent audited consolidated
  financial statements of the Company and its Majority-Owned
  Subsidiaries delivered to Harcourt pursuant to Section 3.1.1;
  provided, however, that if any party notifies the other party that
  such party wishes to determine compliance with any covenant
  contained in Section 3.3.2, 3.4.13, 4.1 through 4.7, 4.8.4, 4.9 or
  5.4 to eliminate or otherwise modify the effect of any change in
  generally accepted accounting principles after October 31, 1998,
  then until the earlier of (a) the date on which such notice is
  withdrawn and (b) the date on which such covenant is amended in a
  manner mutually satisfactory to Harcourt and the Company, for
  purposes of determining compliance with such covenant and the
  related definitions, "GAAP" means generally accepted accounting
  principles as in effect immediately prior to the effectiveness of
  such change.

       1.3.53.  "GCCI" means GCC Investments, Inc., a Delaware
  corporation and Wholly-Owned Subsidiary of the Company.

       1.3.54.  "Guaranteed Lease" means each lease of real
  property, as from time to time in effect, which Harcourt has
  guaranteed pursuant to a Guarantee.

       1.3.55.  "Guarantees" means the respective guarantees
  provided by Harcourt to lessors of real property leased by
  Subsidiaries of the Company, as from time to time in effect.

       1.3.56.  "Harcourt" is defined in the preamble hereto.

       1.3.57.  "HGC South America" means Hoyts General Cinema South
  America, Inc., a Cayman Islands corporation.

       1.3.58.  "Indebtedness" means all obligations, contingent or
  otherwise, which in accordance with GAAP are required to be
  classified upon the balance sheet of the Company (or other
  specified Person) as liabilities, but in any event including
  (without duplication):

       (a)  borrowed money;

       (b)  Indebtedness evidenced by notes, debentures or similar
  instruments;

       (c)  Capitalized Lease Obligations;

       (d)  the deferred purchase price of assets, services or
  Securities, including related noncompetition, consulting and stock
  repurchase obligations (other than normal trade accounts payable
  in the ordinary course of business);

       (e)  mandatory redemption or dividend rights on capital stock
  (or other equity);

       (f)  reimbursement obligations, whether contingent or
  matured, with respect to letters of credit, bankers' acceptances,
  surety bonds, other financial guarantees and Interest Rate
  Protection Agreements (without duplication of other Indebtedness
  supported or guaranteed thereby);

       (g)  unfunded pension liabilities;

       (h)  obligations that are immediately and directly due and
  payable out of the proceeds of or production from property;

       (i)  liabilities secured by any Lien existing on property
  owned or acquired by the Company (or such specified Person),
  whether or not the liability secured thereby shall have been
  assumed; and

       (j)  all guarantees and endorsements in respect of
  Indebtedness of others.

       1.3.59.  "Indemnified Party" is defined in Section 9.2.

       1.3.60.  "Intercreditor Agreement" means the Intercreditor
  Agreement dated as of January 26, 1999, as amended and in effect
  from time to time, among BankBoston, N.A., as administrative agent
  for itself and the other lenders under the Credit Agreement,
  Harcourt and the Company.

       1.3.61.  "Interest Rate Protection Agreement" means any
  interest rate swap, interest rate cap, interest rate hedge or
  other contractual arrangement that converts variable interest
  rates into fixed interest rates, fixed interest rates into
  variable interest rates or other similar arrangements.

       1.3.62.  "Investment" means, with respect to the Company (or
  other specified Person):

       (a)  any share of capital stock, partnership or other equity
  interest, evidence of Indebtedness or other security issued by any
  other Person;

       (b)  any loan, advance or extension of credit to, or
  contribution to the capital of, any other Person;

       (c)  any guarantee of the Indebtedness of any other Person;

       (d)  any acquisition of all or any part of the business of
  any other Person or the assets comprising such business or part
  thereof;

       (e)  any commitment or option to make any Investment if the
  consideration for such commitment or option exceeds $1,000; and

       (f)  any other similar investment.

       The investments described in the foregoing clauses
  (a) through (f) shall be included in the term "Investment" whether
  they are made or acquired by purchase, exchange, issuance of stock
  or other Securities, merger, reorganization or any other method;
  provided, however, that the term "Investment" shall not include
  (i) current trade and customer accounts receivable for property
  leased, goods furnished or services rendered in the ordinary
  course of business and payable in accordance with customary trade
  terms, (ii) deposits, advances and prepayments to suppliers for
  property leased, goods furnished and services rendered in the
  ordinary course of business, (iii) advances to employees for
  travel expenses, drawing accounts, relocation costs and similar
  expenditures, (iv) stock or other Securities acquired in
  connection with the satisfaction or enforcement of Indebtedness or
  claims due to the Company (or such specified Person) or as
  security for any such Indebtedness or claim or (v) demand deposits
  in banks or similar financial institutions.

       1.3.63.  "Lease Exposure" means, at any time, the sum of (a)
  all present and future rental payments and other amounts
  guaranteed by Harcourt under the Guarantees plus (b) all present
  and future rental payments and other amounts owing under the
  Transferred Leases.

       1.3.64.  "Lien" means, with respect to the Company (or any
  other specified Person):

       (a)  any lien, encumbrance, mortgage, pledge, charge or
  security interest of any kind upon any property or assets of the
  Company (or such specified Person), whether now owned or hereafter
  acquired, or upon the income or profits therefrom;

       (b)  any arrangement or agreement which prohibits the Company
  (or such specified Person) from creating encumbrances, mortgages,
  pledges, liens, charges or security interests;

       (c)  the acquisition of, or the agreement to acquire, any
  property or asset upon conditional sale or subject to any other
  title retention agreement, device or arrangement (including a
  Capitalized Lease);

       (d)  the sale, assignment, pledge or transfer for security of
  any accounts, general intangibles or chattel paper of the Company
  (or such specified Person), with or without recourse;

       (e)  the transfer of any tangible property or assets for the
  purpose of subjecting such items to the payment of Indebtedness in
  priority to payment of the general creditors of the Company (or
  such specified Person); and

       (f)  the existence for a period of more than 90 consecutive
  days of any Indebtedness against the Company (or such specified
  Person) which if unpaid would by law or upon a Bankruptcy Default
  be given any priority over general creditors.

       1.3.65.  "Majority-Owned Subsidiary" means any Subsidiary of
  which a majority of the outstanding capital stock (or other shares
  of beneficial interest) entitled to vote generally (other than
  directors' qualifying shares and, in the case of Foreign
  Subsidiaries, nominal shares required by applicable law to be held
  by foreign nationals) is owned by the Company (or other specified
  Person) directly or indirectly through one or more Majority-Owned
  Subsidiaries; provided, however, that except (a) for purposes of
  Sections 3.1.1 and 3.1.2 and (b) as and to the extent otherwise
  required by GAAP, none of (i) Cinema Ventures and its Subsidiaries
  and (ii) Sundance and its Subsidiaries  shall constitute a
  Majority-Owned Subsidiary of the Company or any of its
  Subsidiaries.

       1.3.66.  "Moody's" means Moody's Investor Service, Inc.

       1.3.67.  "Net Cash Proceeds" means, with respect to any sale
  or transfer of any Investment or other property by any Person, the
  cash portion of the Net Proceeds from such sale or transfer,
  including all such cash paid from time to time under any
  instruments evidencing or securing any obligations to pay all or
  any part of the purchase price or other consideration payable in
  connection with such sale or transfer.

       1.3.68.  "Net Proceeds" means, with respect to any sale or
  transfer of any Investment or other property by any Person, all
  cash and other property (including instruments evidencing or
  securing indebtedness and Equity Interests or other Securities)
  payable to or receivable by such Person from such sale or
  transfer, net of (a) all income, sales, use, transfer or other
  taxes (state, federal or local) solely attributable to such sale
  or transfer and reasonably estimated to be payable in cash by such
  Person for the taxable year in which such sale or transfer
  occurred, (b) all sales or other similar commissions and fees,
  costs and other expenses incurred in connection with such sale or
  transfer and (c) appropriate amounts to be provided by such Person
  as a reserve, in accordance with GAAP, against any liabilities
  associated with such Investment or property and retained by such
  Person after such sale or transfer, or against any indemnification
  obligations associated with the sale or transfer of such
  Investment or other property.

       1.3.69.  "Non-Theatre Subsidiary" means each Subsidiary of
  the Company that is not a Theatre Subsidiary.

       1.3.70.  "Obligations" means all present and future
  liabilities, obligations and Indebtedness of the Company owing to
  Harcourt under or in connection with this Agreement, including
  interest and fees under Section 2, reimbursement, indemnification
  and guarantee obligations under Section 2, payment obligations
  under Sections 7.2 and 9 and other charges, indemnities and
  expenses from time to time owing hereunder (all whether accruing
  before or after a Bankruptcy Default and regardless of whether
  allowed as a claim in bankruptcy or similar proceedings).

       1.3.71.  "Payment Default" means any failure by the Company
  to perform or observe any of the provisions of Section 2 or 7.2.

       1.3.72.  "Permitted Non-Theatre Investments" means each of
  (a) Investments made by the Company in GCCI or any of the
  Majority-Owned Subsidiaries of GCCI and (b) Investments made by
  GCCI or any of its Majority-Owned Subsidiaries in any other
  Person.

       1.3.73.  "Person" means any present or future natural person
  or any corporation, association, partnership, joint venture,
  limited liability, joint stock or other company, business trust,
  trust, organization, business or government or any governmental
  agency or political subdivision thereof.

       1.3.74.  "Pledged Rights" is defined in Section 8.1.2.

       1.3.75.  "Pledged Securities" means, collectively, the
  Pledged Stock and the Pledged Rights.

       1.3.76.  "Pledged Stock" is defined in Section 8.1.1.

       1.3.77.  "Pledged Theatre Subsidiary" means each present or
  future Theatre Subsidiary; provided, however, that none of (a) the
  Foreign Subsidiaries of HGC South America, (b) Cinema Ventures and
  its Subsidiaries and (c) Sundance and its Subsidiaries shall
  constitute a Pledged Theatre Subsidiary.

       1.3.78.  "Present Value Lease Exposure" means, at any time,
  the sum of the then present values of (a) all present and future
  rental payments and other amounts guaranteed by Harcourt under the
  Guarantees plus (b) all present and future rental payments and
  other amounts owing under the Transferred Leases, calculated by
  discounting each such rental payment and each such other amount
  from its payment date to the date of calculation of such present
  value at a per annum interest rate equal to the sum of (i) the
  then prevailing rate of interest on debt Securities customarily
  issued by the Treasury of the United States having a 10-year
  maturity date plus (ii) 0.75%.

       1.3.79.  "Prior Agreement" is defined in Section 1.1.

       1.3.80.  "Problem Theatres" means the theatres listed on
  Exhibit 1.3C.

       1.3.81.  "PPI" means the Producer Price Index for Finished
  Goods published by the Bureau of Labor Statistics (1982 = 100).

       1.3.82.  "Reset Date" means the date on which:

       (a)  no First Tier Default or Default exists;

       (b)  Consolidated Adjusted Cash Flow during the period of
  four consecutive fiscal quarters of the Company most recently
  ended equals or exceeds 130% of Consolidated Fixed Charges during
  such period of four consecutive fiscal quarters; and

       (c)  Consolidated Adjusted EBITDA during the period of four
  consecutive fiscal quarters of the Company most recently ended
  equals or exceeds 350% of Consolidated Interest Charges during
  such period of four consecutive fiscal quarters.

       1.3.83.  "S&P" means Standard & Poor's, a division of The
  McGraw Hill Companies, Inc.

       1.3.84.  "Securities" means any Equity Interests, bonds,
  debentures, notes or other evidences of indebtedness for borrowed
  money, whether secured or unsecured, and whether convertible,
  subordinated or otherwise, or, in general, any instruments
  commonly known as "securities".

       1.3.85.  "Securities Act" means the federal Securities Act of
  1933.

       1.3.86.  "Smith Family Group" means the group of Persons
  originally party to the Smith-Lurie/Marks Stockholders Agreement
  dated as of December 15, 1993 (whether or not such agreement is
  terminated) and the progeny of each such Person.

       1.3.87.  "South American Adjusted EBITDA" means, for any
  period, the total of:

       (a)  Consolidated net income of the South American
  Subsidiaries for such period; plus

       (b)  without duplication and only to the extent reflected as
  a charge in the statement of Consolidated net income of the South
  American Subsidiaries for such period, the sum of:

            (i)  the aggregate amount of interest, including
       interest expense under Capitalized Leases, paid or accrued by
       the South American Subsidiaries during such period; plus

            (ii)  taxes, depreciation and amortization expenses of
       the South American Subsidiaries for such period; plus

            (iii)  any extraordinary, unusual or non-recurring
       expenses or losses for such period; minus

       (c)  without duplication and only to the extent reflected as
  an addition (or, as the case may be, reduction) in the statement
  of Consolidated net income of the South American Subsidiaries for
  such period, any extraordinary, unusual or non-recurring income or
  gains for such period;

  all as determined on a Consolidated basis in accordance with GAAP.

       1.3.88.  "South American Subsidiaries" means each of HGC
  South America, the Argentina Subsidiary, the Brazil Subsidiary,
  the Chile Subsidiary, the Uruguay Subsidiary and the other
  Subsidiaries of HGC South America which are Foreign Subsidiaries
  and Theatre Subsidiaries.
       1.3.89.  "Spinoff" is defined in Section 1.1.

       1.3.90.  "Subordinated Indebtedness" means Indebtedness of
  the Company (or other specified Person) which by its terms or any
  agreement is subordinated to the prior payment of any Financing
  Debt of the Company (or such specified Person).

       1.3.91.  "Subsidiary" means any Person of which the Company
  (or other specified Person) shall at the time, directly or
  indirectly through one or more of its Subsidiaries, (a) own at
  least 50% of the outstanding capital stock (or other shares of
  beneficial interest) entitled to vote generally, (b) hold at least
  50% of the partnership, joint venture or similar interests or
  (c) be a general partner or joint venturer.

       1.3.92.  "Sundance" means Sundance Cinema Circuit, LLC, a
  Delaware limited liability company.

       1.3.93.  "Theatre Subsidiary" means each present and future
  Subsidiary of the Company that is engaged in whole or in part in
  the business of (a) motion picture exhibition or (b) managing the
  motion picture exhibition or concession business of any other
  Person.

       1.3.94.  "Transferred Lease" means each theatre lease
  transferred by Harcourt to the Company and, in turn, by the
  Company to a Subsidiary of the Company in connection with the
  Spinoff, as from time to time in effect.

       1.3.95.  "UCC" means the Uniform Commercial Code as in effect
  in Massachusetts; provided, however, that with respect to the
  perfection of Harcourt's Lien on the Collateral and the effect of
  perfection or nonperfection thereof, the term "UCC" means the
  Uniform Commercial Code as in effect in any jurisdiction the laws
  of which are made applicable by Section 9-103 of the Uniform
  Commercial Code as in effect in Massachusetts.

       1.3.96.  "Uruguay Credit Facility" means a credit facility
  among the Uruguay Subsidiary and its senior lenders that contains
  terms which are not significantly less favorable to the Company,
  the Uruguay Subsidiary and the other Subsidiaries of the Company
  than the terms contained in the Argentina Credit Facility.

       1.3.97.  "Uruguay Subsidiary" means Telnir S.A.

       1.3.98.  "Wholly-Owned Subsidiary" means any Subsidiary of
  which all of the outstanding capital stock (or other shares of
  beneficial interest) entitled to vote generally (other than
  directors' qualifying shares and, in the case of Foreign
  Subsidiaries, nominal shares required by applicable law to be held
  by foreign nationals) is owned by the Company (or other specified
  Person) directly or indirectly through one or more Wholly-Owned
  Subsidiaries.

2.  Payment Provisions.

  2.1.  Reimbursement and Indemnification.  The Company hereby
unconditionally and irrevocably agrees (a) to pay Harcourt,
immediately upon written notice by Harcourt, any and all amounts paid
by Harcourt pursuant to, or in respect of, any Guarantee or
Transferred Lease and (b) to indemnify, defend and hold harmless
Harcourt and its Affiliates and their respective directors, officers,
employees and agents from and against any and all claims, losses,
liabilities, damages, cost and expenses (including reasonable
attorneys' fees and expenses) arising from or in connection with any
Guarantee or Transferred Lease.

  2.2.  Guarantor's Fee.  Commencing on February 1, 1999, the
Company will pay to Harcourt a quarterly guarantor's fee, payable in
advance on the first business day of each February, May, August and
November in an amount equal to the product of (a) the Fee Percentage
multiplied by (b) the Present Value Lease Exposure as of such day.

  2.3.  Interest on Overdue Payments.  The Company will, on demand,
pay to Harcourt interest on any overdue payment required to be made
under this Agreement at a per annum rate equal to the sum of (a) 2%
plus (b) the rate of interest from time to time announced by
BankBoston, N.A. as its "base rate".

3.  General Covenants.  The Company covenants that it will, and it
will cause its Subsidiaries to, comply with the following provisions:

  3.1.  Financial Statements and Reports.

       3.1.1.  Annual Reports.  The Company will furnish to Harcourt
  as soon as available, and in any event within 110 days after the
  end of each fiscal year of the Company, the Consolidated balance
  sheet of the Company and its Majority-Owned Subsidiaries as at the
  end of such fiscal year and the Consolidated statements of income,
  of changes in shareholders' equity and of cash flows of the
  Company and its Majority-Owned Subsidiaries for such fiscal year
  and the last fiscal quarter of such fiscal year (all in reasonable
  detail), all accompanied by:

       (a)  reports of Deloitte & Touche (or, if they cease to be
  auditors of the Company and its Majority-Owned Subsidiaries, other
  independent certified public accountants of recognized national
  standing), containing no material qualification, to the effect
  that they have audited the foregoing Consolidated financial
  statements (other than the financial statements for the last
  quarter of such fiscal year) in accordance with generally accepted
  auditing standards and that such audited Consolidated financial
  statements present fairly, in all material respects, the financial
  position of the Company and its Majority-Owned Subsidiaries
  covered thereby at the date thereof and the results of their
  operations for the period covered thereby in conformity with GAAP;

       (b)  the statement of such accountants that they have caused
  this Agreement to be reviewed and that in the course of their
  audit of the Company and its Majority-Owned Subsidiaries no facts
  have come to their attention that cause them to believe that any
  First Tier Default or Default exists or, if such is not the case,
  specifying such First Tier Default or Default and the nature
  thereof; provided, however, that this statement is furnished by
  such accountants with the understanding that the examination of
  such accountants cannot be relied upon to give such accountants
  knowledge of any such First Tier Default or Default except as it
  relates to accounting or auditing matters within the scope of
  their audit;

       (c)  a certificate of the Company signed by the chief
  financial officer or treasurer of the Company to the effect that
  such officer has caused this Agreement to be reviewed and has no
  knowledge of any First Tier Default or Default, or if such officer
  has such knowledge, specifying such First Tier Default or Default
  and the nature thereof and what action the Company has taken, is
  taking or proposes to take with respect thereto;

       (d)  computations by the Company demonstrating, as of the end
  of such fiscal year and the last fiscal quarter of such fiscal
  year, compliance with the Computation Covenants; and

       (e)  in reasonable detail, management's discussion and
  analysis of (i) the results of operations and the financial
  condition of the Company and its Subsidiaries as at the end of and
  for each of (A) such fiscal year and (B) the last fiscal quarter
  of such fiscal year and (ii) the progress of the Company in
  implementing its new business plan as presented by the Company to
  the Special Committee of the Board of Directors of Harcourt on
  November 15, 1998.

       3.1.2.  Quarterly Reports.  The Company will furnish to
  Harcourt as soon as available and, in any event within 55 days
  after the end of each of the first three fiscal quarters of each
  fiscal year of the Company, the internally prepared Consolidated
  balance sheet of the Company and its Majority-Owned Subsidiaries
  as of the end of such fiscal quarter and the Consolidated
  statements of income, of changes in shareholders' equity and of
  cash flows of the Company and its Majority-Owned Subsidiaries for
  such month and for the portion of the fiscal year then ended (all
  in reasonable detail), all accompanied by:

       (a)  a certificate of the Company signed by the chief
  financial officer or treasurer of the Company to the effect that
  such financial statements have been prepared in accordance with
  GAAP and present fairly, in all material respects, the financial
  position of the Company and its Majority-Owned Subsidiaries
  covered thereby at the dates thereof and the results of their
  operations for the periods covered thereby, subject only to normal
  year-end audit adjustments and the addition of footnotes;

       (b)  a certificate of the Company signed by the chief
  financial officer or treasurer of the Company to the effect that
  such officer has caused this Agreement to be reviewed and has no
  knowledge of any First Tier Default or Default, or if such officer
  has such knowledge, specifying such First Tier Default or Default
  and the nature thereof and what action the Company has taken, is
  taking or proposes to take with respect thereto;

       (c)  computations by the Company demonstrating, as of the end
  of such fiscal quarter, compliance with the Computation Covenants;
  and

       (d)  in reasonable detail, management's discussion and
  analysis of (i) the results of operations and the financial
  condition of the Company and its Subsidiaries as at the end of and
  for such fiscal quarter and (ii) the progress of the Company in
  implementing its new business plan as presented by the Company to
  the Special Committee of the Board of Directors of Harcourt on
  November 15, 1998.

       3.1.3.  Public Reports.  The Company will promptly furnish to
  Harcourt such registration statements, proxy statements and
  reports, including Forms 10-K, 10-Q and 8-K, as may be filed by
  the Company with the Securities and Exchange Commission.

       3.1.4.  Notice of Litigation; Notice of Defaults.  The
  Company will promptly furnish to Harcourt notice of (i) any notice
  or other communication from any lessor that the Company or any
  Theatre Subsidiary is in default under any Guaranteed Lease or any
  Transferred Lease; (ii) any litigation or administrative or
  arbitration proceeding commenced, or to the knowledge of the
  Company, threatened, relating to any Guaranteed Lease or any
  Transferred Lease; and (iii) any other litigation or
  administrative or arbitration proceeding commenced, or to the
  knowledge of the Company, threatened, against or relating to the
  Company or any of its Subsidiaries if the damages claimed in such
  proceeding are $5,000,000 or more or if such proceeding may result
  in a material adverse change in the business or assets or in the
  condition, financial or otherwise, of the Company and its
  Subsidiaries on a Consolidated basis or of the Company on an
  individual basis.  Promptly upon acquiring knowledge thereof, the
  Company will notify Harcourt of the existence of any First Tier
  Default or Default, specifying the nature thereof and what action
  the Company or any Subsidiary has taken, is taking or proposes to
  take with respect thereto.

       3.1.5.  Management Letters.  The Company will promptly
  furnish to Harcourt any management letters furnished to the
  Company or any of its Subsidiaries by the Company's auditors.

       3.1.6.  South American Financing Documents.  The Company will
  promptly furnish to Harcourt any agreement relating to any
  Financing Debt of any South American Subsidiary and all financial
  statements and financial compliance certificates required to be
  delivered from time to time by the Company or any South American
  Subsidiary to any lender under such agreement.

       3.1.7.  Other Information.  From time to time upon request of
  any authorized officer of Harcourt, each of the Company and its
  Subsidiaries will furnish to Harcourt such other information
  regarding the business, assets, financial condition, income or
  prospects of the Company and its Subsidiaries as such officer may
  reasonably request.  Harcourt's authorized officers and
  representatives shall have the right during normal business hours
  upon reasonable notice and at reasonable intervals to examine the
  books and records of the Company and its Subsidiaries, to make
  copies, notes and abstracts therefrom and to make an independent
  examination of such books and records for the purpose of verifying
  the accuracy of the reports delivered by the Company and its
  Subsidiaries pursuant to this Section 3.1 and ascertaining
  compliance with or obtaining enforcement of this Agreement.

  3.2.  Liens.  Neither the Company nor any of its Subsidiaries
shall create, incur or enter into, or suffer to be created or
incurred or to exist, any Lien (including any arrangement or
agreement which prohibits it from creating any Lien), except the
following:

       3.2.1.  Liens on the Collateral that secure the Obligations
  for the benefit of Harcourt.

       3.2.2.  Liens to secure taxes and assessments and other
  governmental charges if (a) the validity or amount of such tax,
  assessment or other governmental charge is being contested in good
  faith by the Company or any of its Subsidiaries by appropriate
  proceedings and (b) the Company or such Subsidiary, in accordance
  with GAAP, has set aside on its books adequate reserves with
  respect thereto; provided, however, that each of the Company and
  its Subsidiaries will pay or bond, or cause to be paid or bonded,
  all such taxes, assessments or other governmental charges
  immediately upon the commencement of proceedings to foreclose any
  Lien which may have attached as security therefor (except to the
  extent such proceedings have been dismissed or stayed).

       3.2.3.  Deposits or pledges made (a) in connection with, or
  to secure payment of, workers' compensation, unemployment
  insurance, old age pensions or other social security, (b) in
  connection with casualty insurance, (c) to secure the performance
  of bids, tenders, contracts (other than contracts relating to
  Financing Debt) or leases, (d) to secure statutory obligations or
  surety or appeal bonds or (e) to secure indemnity, performance or
  other similar bonds in the ordinary course of business.

       3.2.4.  Liens in respect of judgments or awards (a) which
  have been in force for less than the applicable appeal period or
  (b) in respect of which the Company or any of its Subsidiaries
  shall at the time in good faith be prosecuting an appeal or
  proceeding for review and, in the case of each of clauses (a) and
  (b), the Company or such Subsidiary shall have taken appropriate
  reserves therefor in accordance with GAAP and execution of such
  judgment or award shall not be levied.

       3.2.5.  Liens of carriers, warehousemen, mechanics and
  similar Liens, which in each case (a) are being contested in good
  faith by the Company or any Subsidiary in appropriate proceedings
  (so long as the Company or such Subsidiary shall, in accordance
  with GAAP, have set aside on its books adequate reserves with
  respect thereto) and (b) do not materially detract from the value
  of any asset or other property material to the operations or
  business of the Company or any of its Subsidiaries or impair the
  use thereof in the business of the Company or any of its
  Subsidiaries.

       3.2.6.  Encumbrances in the nature of (a) zoning
  restrictions, (b) easements, (c) restrictions of record on the use
  of real property, (d) landlords' and lessors' Liens on rented
  premises and (e) restrictions on transfers or assignment of
  leases, which in each case do not materially detract from the
  value of any asset or other property material to the operations or
  business of the Company or any of its Subsidiaries or impair the
  use thereof in the business of the Company or any of its
  Subsidiaries.

       3.2.7.  Restrictions under federal and state securities laws
  on the transfer of Securities.

       3.2.8.  Liens constituting (a) purchase money security
  interests existing or created on the date on which such property
  is acquired, and (b) the renewal, extension or refunding of any
  security interest referred to in the foregoing clause (a) in an
  amount not to exceed the amount thereof remaining unpaid
  immediately prior to such renewal, extension or refunding;
  provided, however, that each such security interest shall attach
  solely to the particular item of property so acquired, and the
  principal amount of Indebtedness (including Indebtedness in
  respect of Capitalized Lease Obligations) secured thereby shall
  not exceed the cost (including all such Indebtedness secured
  thereby, whether or not assumed) of such item of property.

       3.2.9.  Liens consisting of covenants contained in agreements
  relating to senior  Financing Debt of the Company prohibiting the
  Company and its Subsidiaries from creating encumbrances,
  mortgages, liens, charges or security interests on their assets
  (other than Liens on the Collateral which secure the Obligations
  for the benefit of Harcourt).

       3.2.10.  Liens on the capital stock of the
  Argentina Subsidiary granted to BankBoston, N.A., Nassau Branch,
  as agent under the Argentina Credit Facility, to secure up to
  $75,000,000 of obligations of the Argentina Subsidiary under the
  Argentina Credit Facility.

       3.2.11.  Liens on the capital stock of the Brazil Subsidiary
  granted to the senior lenders of the Brazil Subsidiary to secure
  up to $17,250,000 in obligations of the Brazil Subsidiary under
  the Brazil Credit Facility.

       3.2.12.  Liens on the capital stock of the Chile Subsidiary
  granted to the senior lenders of the Chile Subsidiary to secure up
  to $15,000,000 in obligations of the Chile Subsidiary under the
  Chile Credit Facility.

       3.2.13.  Liens on the capital stock of the Uruguay Subsidiary
  granted to the senior lenders of the Uruguay Subsidiary to secure
  up to $5,000,000 in obligations of the Uruguay Subsidiary under
  the Uruguay Credit Facility.

       3.2.14.  If any South American Subsidiaries combine their
  respective credit facilities into a joint senior credit facility,
  Liens on the capital stock of such combining South American
  Subsidiaries granted to their senior lenders to secure their
  obligations under such joint senior credit facility; provided,
  however, that the aggregate amount of obligations of such South
  American Subsidiaries secured pursuant to Sections 3.2.10 through
  3.2.13 and this Section 3.2.14 shall not exceed the aggregate
  amount of obligations of such South American Subsidiaries
  permitted to be secured pursuant to Sections 3.2.10 through
  3.2.13.

       3.2.15.  Liens granted by the Theatre Subsidiaries on theatre
  assets acquired after the date hereof and located in the United
  States to secure the financing used to acquire such theatre
  assets; provided, however, that (a) each such Lien shall attach
  solely to the particular item of property so acquired, (b) the
  principal amount of such financing secured thereby shall not
  exceed the cost (including all such financing secured thereby,
  whether or not assumed) of such item of property and (c) the
  aggregate amount of financing secured by all such Liens shall not
  exceed $10,000,000.

       3.2.16.  Liens on the capital stock and assets of each of
  Cinema Ventures, Sundance and their respective Subsidiaries.

  3.3.  Distributions.  Neither the Company nor any of its
Subsidiaries shall make any Distribution, except the following:

       3.3.1.  Any Subsidiary of the Company may make Distributions
  to its equityholders which (a) are in proportion to the respective
  Equity Interests of such Subsidiary owned by such equityholders or
  (b) are disproportionately favorable to the Company or any of its
  other Subsidiaries based on the respective Equity Interests owned
  by the equityholders of such Subsidiary.

       3.3.2.  At any time after the delivery by the Company to
  Harcourt of the financial statements required to be delivered
  pursuant to Section 3.1.1 for the fiscal year of the Company
  ending on October 31, 1999, so long as immediately before and
  after giving effect thereto no First Tier Default or Default
  exists, the Company may make Distributions to its stockholders;
  provided, however, that the aggregate amount of all such
  Distributions shall not exceed the total of (a) 50% of Cumulative
  Excess Theatre Cash Flow minus (b) to the extent included in
  clause (a) above, gains from the sale of assets of the Theatre
  Subsidiaries.

  3.4.  Merger, Consolidation and Dispositions of Assets.  Neither
the Company nor any of the Theatre Subsidiaries shall (a) become a
party to any merger or consolidation or shall sell, lease, sell and
leaseback, sublease or otherwise dispose of any of its assets, or (b)
contract, or make other arrangements, with any Person (other than a
Theatre Subsidiary) to manage the theatre business of, or provide
concession services to, any Theatre Subsidiary, except the following:
       3.4.1.  Any Theatre Subsidiary may sell or otherwise dispose
  of (a) inventory in the ordinary course of business, (b) tangible
  assets to be replaced in the ordinary course of business by other
  tangible assets of equal or greater value and (c) tangible assets
  that are no longer used or useful in the business of the Company
  or such Theatre Subsidiary.

       3.4.2.  Any Theatre Subsidiary may merge or liquidate into
  any other Theatre Subsidiary so long as after giving effect
  thereto the surviving company is a directly owned Wholly-Owned
  Subsidiary of the Company.

       3.4.3.  The Company may sell or otherwise dispose of
  Investments other than Investments in Theatre Subsidiaries which
  are not South American Subsidiaries.

       3.4.4.  The Theatre Subsidiaries may sell the assets of the
  Theatre Subsidiaries listed on Exhibit 3.4.4.

       3.4.5.  The Company and the Theatre Subsidiaries may transfer
  the assets or Equity Interests of any Problem Theatre so long as
  (a) such transfer effects a release of Harcourt from all
  obligations under each Guaranteed Lease and Transferred Lease
  relating to such assets or Equity Interests or (b) such assets or
  Equity Interests are transferred to a transferee having a
  Consolidated net worth of at least $10,000,000 and the aggregate
  amount of buyout payments made by the Company and its Subsidiaries
  to such transferee in connection with such transfer does not
  exceed the product of (i) four multiplied by (ii) the negative
  cash flow generated by the assets of such Problem Theatre during
  the period of four consecutive fiscal quarters of the Company most
  recently ended; provided, however, that the aggregate amount of
  all buyout payments made by the Company and its Subsidiaries in
  connection with transfers of assets and Equity Interests pursuant
  to this clause (b) shall not exceed $15,000,000.

       3.4.6.  The Company and the Theatre Subsidiaries may sell the
  assets or Equity Interests of any B Theatre so long as (a) such
  sale effects a release of Harcourt from all obligations under each
  Guaranteed Lease and Transferred Lease relating to such assets or
  Equity Interests or (b) such assets are sold to a buyer having a
  Consolidated net worth of at least $10,000,000 and the cash
  consideration received by the Company and its Subsidiaries in
  connection with such sale equals or exceeds the product of
  (i) four multiplied by (ii) the cash flow generated by the assets
  of such B Theatre during the period of four consecutive fiscal
  quarters of the Company most recently ended.

       3.4.7.  The Company and the Theatre Subsidiaries may transfer
  the assets or Equity Interests of any Problem Theatre or B Theatre
  to any transferee having a Consolidated net worth of at least
  $10,000,000 in exchange for theatre assets of such transferee
  having substantially the same cash flow during the period of four
  consecutive fiscal quarters of the Company most recently ended as
  the assets of such Problem Theatre or B Theatre.

       3.4.8.  Any South American Subsidiary may merge or liquidate
  into any other South American Subsidiary.

       3.4.9.  Any South American Subsidiary may merge into any
  Person (other than any other Theatre Subsidiary which is not a
  Foreign Subsidiary) so long as contemporaneously with such merger
  (a) an amount of Financing Debt (other than Foreign Non-Recourse
  Debt) of such South American Subsidiary equal to the lesser of
  (i) the Net Cash Proceeds received by such South American
  Subsidiary in connection with such merger and (ii) the Financing
  Debt (other than Foreign Non-Recourse Debt) of such South American
  Subsidiary, is indefeasibly discharged in full and (b) guarantees
  by the Company and any of its Subsidiaries of an amount of
  Indebtedness (including Financing Debt) of such South American
  Subsidiary equal to the lesser (i) the Net Cash Proceeds received
  by such South American Subsidiary in connection with such merger
  and (ii) the Financing Debt (other than Foreign Non-Recourse Debt)
  of such South American Subsidiary, are irrevocably terminated;
  provided, however, that if such South American Subsidiary and any
  other South American Subsidiary are co-obligors with respect to
  any Financing Debt (other than Foreign Non-Recourse Debt), then
  for purposes of determining the amount of such Financing Debt
  (A) which is required to be indefeasibly discharged in full
  pursuant to clause (a) above and (B) in respect of which all
  guarantees are required to be irrevocably terminated pursuant to
  clause (B) above, each co-obligor shall be deemed to be the sole
  obligor in respect of its equitable proportion of such Financing
  Debt, which apportionment shall be based on the relative portions
  of South American Adjusted EBITDA during the period of four
  consecutive fiscal quarters of the Company most recently ended
  that are attributable to such co-obligors.

       3.4.10.  Any South American Subsidiary may sell all or any
  portion of its assets or all or any portion of its Equity
  Interests in any other Person, in each case so long as
  contemporaneously with such sale (a) an amount of Financing Debt
  (other than Foreign Non-Recourse Debt) of such South American
  Subsidiary equal to the lesser of (i) the Net Cash Proceeds
  received by such South American Subsidiary in connection with such
  sale and (ii) the Financing Debt (other than Foreign Non-Recourse
  Debt) of such South American Subsidiary, is indefeasibly
  discharged in full and (b) guarantees by the Company and any of
  its Subsidiaries of an amount of Indebtedness (including Financing
  Debt) of such South American Subsidiary equal to the lesser of (i)
  the Net Cash Proceeds received by such South American Subsidiary
  in connection with such sale and (ii) the Financing Debt (other
  than Foreign Non-Recourse Debt) of such South American Subsidiary,
  are irrevocably terminated; provided, however, that if such South
  American Subsidiary and any other South American Subsidiary are
  co-obligors with respect to any Financing Debt (other than Foreign
  Non-Recourse Debt), then for purposes of determining the amount of
  such Financing Debt (A) which is required to be indefeasibly
  discharged in full pursuant to clause (a) above and (B) in respect
  of which guarantees are required to be irrevocably terminated
  pursuant to clause (b) above, each co-obligor shall be deemed to
  be the sole obligor in respect of its equitable proportion of such
  Financing Debt, which apportionment shall be based on the relative
  portions of South American Adjusted EBITDA during the period of
  four consecutive fiscal quarters of the Company most recently
  ended that are attributable to such co-obligors.

       3.4.11.  Each of Cinema Ventures, Sundance and their
  respective Subsidiaries may merge or be liquidated into any other
  Person.

       3.4.12.  Each of Cinema Ventures, Sundance and their
  respective Subsidiaries may sell all or any portion of its assets
  or all or any portion of its Equity Interests in any other Person.

       3.4.13.  In addition to the foregoing, (a) the Company may
  sell any (but not substantially all) of its assets or all of its
  Equity Interests in any Theatre Subsidiary and (b) any Theatre
  Subsidiary (other than any South American Subsidiary) may sell all
  or any of its assets, in each case so long as:

            (i)  either (A) such sale effects a release of Harcourt
       from all obligations under each Guaranteed Lease and
       Transferred Lease relating to such assets or Equity Interests
       or (B) such assets or Equity Interests are transferred to a
       transferee having a Consolidated net worth of at least
       $10,000,000;

            (ii)  the consideration received by the Company or such
       Theatre Subsidiary in exchange for such assets or Equity
       Interests equals or exceeds the Fair Market Value of such
       assets or Equity Interests;

            (iii)  immediately before and after giving effect to
       such sale, no First Tier Default or Default exists; and

            (iv)  immediately before and after giving effect to any
       such sale, the aggregate amount of Asset-Specific EBITDA
       attributable to all of the assets and Equity Interests sold
       pursuant to this Section 3.4.13 shall not exceed 10% of
       Consolidated Adjusted EBITDA of the Company and its Majority-
       Owned Subsidiaries for the period of four consecutive fiscal
       quarters of the Company most recently ended for which
       financial statements have been delivered by the Company to
       Harcourt pursuant to Section 3.1.1 or 3.1.2.

  3.5.  Issuance of Stock by Theatre Subsidiaries; Subsidiary
Distributions.

       3.5.1.  Issuance of Stock by Theatre Subsidiaries.  No
  present Majority-Owned Subsidiary of the Company which is a
  Theatre Subsidiary shall issue or sell any shares of its capital
  stock or other evidence of beneficial ownership to any Person
  other than (a) to the Company or any of its Wholly-Owned
  Subsidiaries which is a Theatre Subsidiary and (b) as required by
  applicable law or licensing authorities.

       3.5.2.  No Restrictions on Subsidiary Distributions.  Except
  for this Agreement and agreements relating to Financing Debt of
  the Company, the South American Subsidiaries, Cinema Ventures,
  Sundance and the respective Subsidiaries of Cinema Venture and
  Sundance, neither the Company nor any of its Subsidiaries shall
  enter into or be bound by any agreement (including covenants
  requiring the maintenance of specified amounts of net worth or
  working capital) restricting the right of any such Subsidiary to
  make Distributions or extensions of credit to the Company
  (directly or indirectly through another Subsidiary of the
  Company).

  3.6.  Guaranteed Leases and Transferred Leases.

       3.6.1.  No Transfer.  No Theatre Subsidiary shall transfer,
  assign or sublease any Guaranteed Lease or any Transferred Lease
  to any other Person (other than another Theatre Subsidiary)
  without the prior written consent of Harcourt; provided, however,
  that the Theatre Subsidiaries may transfer and assign any
  Guaranteed Lease or Transferred Lease in connection with any sale
  of assets or Equity Interests permitted under Section 3.4.4,
  3.4.5, 3.4.6 or 3.4.7 or 3.4.13.

       3.6.2.  Amendments, Renewals, Extensions, etc.  No Theatre
  Subsidiary shall (a) amend, modify or terminate any Guaranteed
  Lease or Transferred Lease if, as a result of such amendment,
  modification or termination, Harcourt's liability with respect to
  such Guaranteed Lease or Transferred Lease shall be increased or
  the time period for which Harcourt has any liability for such
  Guaranteed Lease or Transferred Lease shall be extended or
  (b) renew or extend the term of any Guaranteed Lease or
  Transferred Lease unless Harcourt shall not be liable for any
  Theatre Subsidiary's obligations with respect to such renewed or
  extended term.

  3.7.  Conduct of Theatre Business.

       3.7.1.  Theatre Subsidiaries.  The Theatre Subsidiaries will
  engage only in the business of owning and operating theatres for
  motion picture exhibition and other activities incidental thereto;
  provided, however, that Cinema Ventures may also engage in the
  business of owning and operating full-service restaurants in its
  theatres.

       3.7.2.  Theatre Business.  The Company's motion picture
  exhibition business in the United States and activities incidental
  thereto will be conducted only by the Theatre Subsidiaries.  The
  Company shall own and hold all interests in (a) the Theatre
  Subsidiaries which are not Foreign Subsidiaries directly or
  indirectly through General Cinema Theatres, Inc. and (b) the
  Theatre Subsidiaries which are Foreign Subsidiaries directly or
  indirectly through General Cinema International, Inc.; provided,
  however, that each of Knights Holding Corp., Knights Realty Corp.
  and Knights Theatre Corp. may be owned indirectly by the Company
  so long as it is inactive and does not engage in any operations or
  activities or own any material assets.

  3.8.  No Extension of Credit Agreement.  Prior to the date on
which the Intercreditor Agreement terminates, without the prior
written consent of Harcourt, the Company shall not (a) extend the
maturity date of any Financing Debt under the Credit Agreement or any
other Loan Document (as defined in the Credit Agreement) beyond
January 26, 2002 or (b) extend the term of the commitment of any
lender under the Credit Agreement or any other Loan Document (as
defined in the Credit Agreement) to make extensions of credit to the
Company or any of its Subsidiaries beyond January 26, 2002.

4.  First Tier Covenants.  The Company covenants that, at any time
when Consolidated Net Worth is less than the then Present Value Lease
Exposure, it will comply with the following provisions:

  4.1.  Consolidated Net Worth.  Consolidated Net Worth shall at all
times equal or exceed the sum of (a) $135,000,000 plus (b) 50% of
Consolidated Net Income (if positive) for each fiscal year of the
Company ending on or after October 31, 1998.

  4.2.  Consolidated Adjusted Cash Flow to Consolidated Fixed
Charges.  On the last day of each fiscal quarter of the Company,
Consolidated Adjusted Cash Flow during the period of four consecutive
fiscal quarters then ended shall equal or exceed 100% of Consolidated
Fixed Charges during such period of four consecutive fiscal quarters.

  4.3.  Consolidated Adjusted EBITDA to Consolidated Interest
Charges.  On the last day of each fiscal quarter of the Company,
Consolidated Adjusted EBITDA during the period of four consecutive
fiscal quarters then ended shall equal or exceed 230% of Consolidated
Interest Charges during such period of four consecutive fiscal
quarters.

  4.4.  Consolidated Total Adjusted Debt to Consolidated Adjusted
EBITDA.  On the last day of each fiscal quarter of the Company,
Consolidated Total Adjusted Debt shall not exceed 420% of
Consolidated Adjusted EBITDA during the period of four consecutive
fiscal quarters then ended.

  4.5.  Core Theatre Adjusted EBITDA to Core Theatre Fixed Charges.
On the last day of each fiscal quarter of the Company, Core Theatre
Adjusted EBITDA during the period of four consecutive fiscal quarters
then ended shall equal or exceed 105% of Core Theatre Fixed Charges
during such period of four consecutive fiscal quarters.

  4.6.  Problem Theatre Adjusted EBITDA.  The portion of
Consolidated Adjusted EBITDA that is attributable to the Problem
Theatres owned by the Company or any of its Subsidiaries on October
31, 2000 shall not be less than negative $10,000,000 for the fiscal
year of the Company ending on October 31, 2000.

  4.7.  South American Adjusted EBITDA.  On each of October 31, 1999
and October 31, 2000, South American Adjusted EBITDA during the
period of four consecutive fiscal quarters then ended shall equal or
exceed $1.

  4.8.  Investments and Acquisitions.  On or prior to the Reset
Date, neither the Company nor any of its Subsidiaries shall have
outstanding, acquire, hold or commit itself to acquire any Investment
(including any Investment consisting of the acquisition of any
business), except the following:

       4.8.1.  Investments of the Company and its Subsidiaries
  outstanding immediately prior to the date hereof; provided,
  however, that unless permitted pursuant to Section 4.8.4, neither
  the Company nor any of its Subsidiaries shall exercise any option
  to make an Investment held by it prior to the date hereof.

       4.8.2.  Investments of the Company and its Subsidiaries in
  the Theatre Subsidiaries (other than Cinema Ventures, Sundance and
  their respective Subsidiaries).

       4.8.3.  Investments of the Company and its Subsidiaries in
  Cash Equivalents.

       4.8.4.  Permitted Non-Theatre Investments of the Company,
  GCCI and the Subsidiaries of GCCI; provided, however, that no such
  Permitted Non-Theatre Investment shall be acquired if immediately
  before or after giving effect to such Permitted Non-Theatre
  Investment any First Tier Default or Default shall exist; and
  provided, further, that the aggregate amount of all such Permitted
  Non-Theatre Investments shall not exceed the total of (a)
  $125,000,000 minus (b) the aggregate amount of Permitted Non-
  Theatre Investments outstanding immediately prior to the date
  hereof, including the Permitted Non-Theatre Investments listed on
  Exhibit 4.8.4, plus (c) 50% of Cumulative Excess Theatre Cash Flow
  plus (d) Cumulative Net Investment Cash Flow.

       4.8.5.  Investments of the Company and its Majority-Owned
  Subsidiaries in Cinema Ventures, Sundance or any of their
  respective Subsidiaries; provided, however, that no such
  Investment shall be acquired if immediately before or after giving
  effect to such Investment any First Tier Default or Default shall
  exist; and provided, further, that the aggregate amount of all
  such Investments after the date hereof shall not exceed
  $25,000,000.

  4.9.  Capital Expenditures.  On or prior to the Reset Date,
neither the Company nor any of its Majority-Owned Subsidiaries shall
make any Capital Expenditures, except for Capital Expenditures in an
aggregate amount not to exceed the lesser of (a) the aggregate amount
of Capital Expenditures which the Company and its Majority-Owned
Subsidiaries are permitted to make under the Credit Agreement, as
amended and in effect from time to time, and (b) the sum of (i) the
aggregate amount of Capital Expenditures which the Company and its
Majority-Owned Subsidiaries are permitted to make under the Credit
Agreement as in effect on the date hereof, plus (ii) $10,000,000.

5.  Second Tier Covenants.  The Company covenants that it will, and
it will cause its Subsidiaries to, comply with the provisions of this
Section 5 during the period from the date on which any First Tier
Default occurs to the date on which the Company is in compliance with
each of the provisions of Section 4 as are then applicable.

  5.1.  Investments and Acquisitions.  Neither the Company nor any
of its Subsidiaries shall have outstanding, acquire, hold or commit
itself to acquire any Investment (including any Investment consisting
of the acquisition of any business), except the following:

       5.1.1.  Investments of the Company and its Subsidiaries
  outstanding immediately prior to the date of such First Tier
  Default; provided, however, that unless permitted pursuant to
  Section 5.1.6, neither the Company nor any of its Subsidiaries
  shall exercise any option to make an Investment held by it prior
  to the date of such First Tier Default.

       5.1.2.  Cash equity investments of the Company in, and loans
  from the Company to, Theatre Subsidiaries; provided, however, that
  the proceeds of such Investments and loans shall be applied by the
  Theatre Subsidiaries solely as provided in Section 5.5.

       5.1.3.  Loans from Non-Theatre Subsidiaries to the Company
  and the Theatre Subsidiaries; provided, however, that (a) in the
  case of loans to the Company, (i) such loans shall be subordinated
  on terms satisfactory to Harcourt to the prior payment of the
  Obligations and (ii) the proceeds of such loans shall be used
  solely to pay the Obligations or to make Investments in Theatre
  Subsidiaries permitted by Section 5.1.2 and (b) in the case of
  loans to the Theatre Subsidiaries, the proceeds of such loans
  shall be applied by the Theatre Subsidiaries solely as provided in
  Section 5.5.

       5.1.4.  Loans from Theatre Subsidiaries to other Theatre
  Subsidiaries; provided, however, that the proceeds of such loans
  shall be applied by the Theatre Subsidiaries solely as provided in
  Section 5.5.

       5.1.5.  Investments of the Company and its Subsidiaries in
  Cash Equivalents.

       5.1.6.  Follow-on equity Investments of the Company and the
  Non-Theatre Subsidiaries which maintain the proportionate equity
  interest of the Company or any Non-Theatre Subsidiary in Persons
  that are not Wholly-Owned Subsidiaries in which the Company or
  such Non-Theatre Subsidiary held an equity Investment immediately
  prior to the date of such First Tier Default; provided, however,
  that the aggregate amount of all such follow-on Investments made
  during each period when the provisions of Section 5 apply shall
  not exceed $10,000,000.

  5.2.  Financing Debt.  Neither the Company nor any of its
Subsidiaries shall create, incur, assume or otherwise become or
remain liable with respect to any Financing Debt, except the
following:

       5.2.1.  Financing Debt outstanding immediately prior to such
  First Tier Default.

       5.2.2.  Financing Debt of the Company incurred under the
  Credit Agreement after such First Tier Default; provided, however,
  that the aggregate amount of Financing Debt incurred pursuant to
  this Section 5.2.2 shall not exceed $5,000,000.

       5.2.3.  Financing Debt consisting of inter-company loans and
  advances among the Company and its Subsidiaries which are not
  prohibited by Section 5.1.

       5.2.4.  Additional Financing Debt of the Company consisting
  of Indebtedness for borrowed money, the proceeds of which are used
  to finance Investments permitted by Section 5.1.6; provided,
  however, that the aggregate amount of Financing Debt outstanding
  pursuant to this Section 5.2.4 shall not at any one time exceed
  $10,000,000.

  5.3.  Distributions.  Neither the Company nor any of its
Subsidiaries shall make any Distribution, except the following:

       5.3.1.  Distributions by Non-Theatre Subsidiaries to the
  Company or any Wholly-Owned Subsidiary of the Company.

       5.3.2.  Distributions in cash by any Theatre Subsidiary to
  its equityholders which (a) are in proportion to the respective
  Equity Interests of such Subsidiary owned by such equityholders or
  (b) are disproportionately favorable to the Company or any of its
  other Subsidiaries based on the respective Equity Interests owned
  by the equityholders of such Subsidiary; provided, however, that
  the Company shall use the proceeds of all such Distributions
  received by the Company to make:  (i) payments of principal of and
  interest on Financing Debt owing to the lenders under the Credit
  Agreement; (ii) regularly scheduled payments of principal of and
  interest on Financing Debt owing to non-Affiliates and permitted
  under Section 5.2.1 as required by the terms of such Financing
  Debt as in effect immediately prior to the date of such First Tier
  Default; (iii) regularly scheduled payments of principal of and
  interest on Financing Debt permitted under Section 5.2.4;
  (iv) payments of general and administrative expenses, taxes,
  assessments and other expenses (other than principal of and
  interest on Financing Debt) incurred in the ordinary course of
  business consistent with past practice; or (v) payments to
  Harcourt pursuant to Sections 2, 7.2 or 9.

  5.4.  Capital Expenditures.  Neither the Company nor any of its
Subsidiaries shall make any Capital Expenditures, except (a) Capital
Expenditures necessary to (i) maintain facilities operated by the
Company and its Subsidiaries immediately prior to the date of such
First Tier Default or (ii) equip new theatres under commitments made
by Theatre Subsidiaries prior to the date of such First Tier Default
with customary theatre equipment and facilities and (b) Capital
Expenditures made for purposes of remaining competitive with other
theatre operators; provided, however, that the aggregate amount of
such Capital Expenditures made by the Company and its Subsidiaries at
any time that the provisions of this Section 5 apply shall not exceed
the amount equal to the product of (A) $5,000,000 multiplied by (B)
the sum of (1) one plus (2) the percentage increase (expressed as a
decimal) in the PPI during the period from December 31, 1993 to the
month immediately preceding the date of such First Tier Default; and
provided, further, that in the event that the provisions of this
Section 5 apply during two or more nonconsecutive periods during any
12-month period, the aggregate amount of such Capital Expenditures
made during such 12-month period shall not exceed the product of
(x) $5,000,000 multiplied by (y) the sum of (1) one plus (2) the
percentage increase in the PPI during the period from December 31,
1993 to the month immediately preceding the commencement of such 12-
month period.  For purposes of this Section 5.4, Capital Expenditures
to increase the number of auditoriums in a facility or otherwise
expand such facility or to improve the quality of seats, carpeting,
refreshment stands or other amenities within a facility may only be
made for purposes of remaining competitive with other theatre
operators and shall not be considered Capital Expenditures made
solely to maintain facilities pursuant to clause (a)(1) above.

  5.5.  Payment of Theatre Obligations.  The Theatre Subsidiaries
shall use cash generated from operations, cash reserves, proceeds of
borrowings and other funds of the Theatre Subsidiaries only to pay
obligations of the Theatre Subsidiaries under leases of real
property, (b) to make Distributions permitted under Section 5.3.2,
(c) to make Capital Expenditures permitted under Section 5.4, (d) to
make Investments permitted under Section 5.1.4 and (e) to pay
accounts payable, taxes, assessments and other expenses of the
Theatre Subsidiaries incurred in the ordinary course of business.

6.  Representations and Warranties.  In order to induce Harcourt to
enter into this Agreement, the Company represents and warrants as
follows:

  6.1.  Organization and Business.

       6.1.1.  The Company.  The Company is a duly organized and
  validly existing corporation, in good standing under the laws of
  Delaware, with all power and authority, corporate or otherwise,
  necessary to (a) enter into and perform this Agreement, (b) grant
  the security interests in the Collateral to secure the Obligations
  and (c) own its properties and carry on the business now conducted
  or proposed to be conducted by it.

       6.1.2.  Subsidiaries.  Each Subsidiary of the Company is duly
  organized, validly existing and in good standing under the laws of
  the jurisdiction in which it is organized, with all power and
  authority, corporate or otherwise, necessary to own its properties
  and carry on the business now conducted or proposed to be
  conducted by it.  Exhibit 6.1.2A lists each Theatre Subsidiary as
  of the date hereof.  Exhibit 6.1.2B lists each Pledged Theatre
  Subsidiary as of the date hereof.

       6.1.3.  Qualification.  Each of the Company and its
  Subsidiaries is duly and legally qualified to do business as a
  foreign corporation or other entity and is in good standing in
  each state or jurisdiction in which such qualification is required
  and is duly authorized, qualified and licensed under all laws,
  regulations, ordinances or orders of public authorities, or
  otherwise, to carry on its business in the places and in the
  manner in which it is conducted, except for failures to be so
  qualified, authorized or licensed which would not in the aggregate
  have, or create a material risk of having, any material adverse
  effect on the Company and its Subsidiaries taken as a whole.

  6.2.  Authorization and Enforceability.  The Company has taken all
corporate action required to execute, deliver and perform this
Agreement.  No consent of stockholders of the Company is necessary in
order to authorize the execution, delivery or performance of this
Agreement.  This Agreement constitutes the legal, valid and binding
obligation of the Company and is enforceable against the Company in
accordance with its terms.

  6.3.  No Legal Obstacle to Agreements.  Neither the execution and
delivery of this Agreement, nor the securing of the Obligations with
the Collateral, nor the consummation of any transaction referred to
in or contemplated by this Agreement, nor the fulfillment of the
terms hereof or of any other agreement or instrument contemplated by
this Agreement, has constituted or resulted in or will constitute or
result in:

       (a)  any breach or termination of the provisions of any
  agreement, instrument, deed or lease to which the Company or any
  of its Subsidiaries is a party or by which it is bound, or of the
  charter or by-laws of the Company or any of its Subsidiaries;

       (b)  the violation of any law, statute, judgment, decree or
  governmental order, rule or regulation applicable to the Company
  or any of its Subsidiaries;

       (c)  the creation under any agreement, instrument, deed or
  lease of any Lien (other than Liens on the Collateral which secure
  the Obligations) upon any of the assets of the Company or any of
  its Subsidiaries; or

       (d)  any redemption, retirement or other repurchase
  obligation of the Company or any of its Subsidiaries under any
  charter, by-law, agreement, instrument, deed or lease.

No approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any
other Person is required to be obtained or made by the Company in
connection with the execution, delivery and performance of this
Agreement, the transactions contemplated hereby or the securing of
the Obligations with the Collateral (other than filings necessary to
perfect Harcourt's security interest in the Collateral).

  6.4.  Delivery of Collateral.  The Company has delivered to
Harcourt in pledge as part of the Collateral certificates
representing all the Equity Interests owned by the Company in the
Pledged Theatre Subsidiaries listed on Exhibit 6.1.2B, accompanied by
stock transfer powers therefor executed by the Company.

7.  Defaults.

  7.1.  Events of Default.  The following events are referred to as
"Events of Default":

       7.1.1.  Payment.  The Company shall fail to make any payment
  in respect of amounts required under Section 2 as the same shall
  become due.

       7.1.2.  Specified Covenants.  The Company or any of its
  Subsidiaries shall fail to perform or observe any of the
  provisions of Sections 3.2 through 3.7 or, if applicable, Section
  5.

       7.1.3.  Other Covenants.  The Company or any of its
  Subsidiaries shall fail to perform or observe any other covenant,
  agreement or provision to be performed or observed by it under
  this Agreement (other than Section 4), and such failure shall not
  be rectified or cured to the written satisfaction of Harcourt
  within 30 days after the earlier of (a) notice thereof by Harcourt
  to the Company or (b) the date on which the Company shall have
  actual knowledge thereof.

       7.1.4.  Representations and Warranties.  Any representation
  or warranty of or with respect to the Company or any of its
  Subsidiaries made to Harcourt in, pursuant to or in connection
  with this Agreement shall be materially false on the date as of
  which it was made.

       7.1.5.  Cross-Defaults, etc.  The Company or any of its
  Subsidiaries shall fail to make any payment when due (after giving
  effect to any applicable grace periods) in respect of any
  Financing Debt outstanding in an aggregate amount of principal and
  accrued interest exceeding $1,000,000;

       (a)  the Company or any of its Subsidiaries shall fail to
  perform or observe the terms of any agreement relating to such
  Financing Debt, and such failure shall continue, without having
  been duly cured, waived or consented to, beyond the period of
  grace, if any, specified in such agreement, and such failure shall
  permit the acceleration of such Financing Debt;

       (b)  all or any part of such Financing Debt of the Company or
  any of its Subsidiaries shall be accelerated or become due or
  payable prior to its stated maturity  (except with respect to
  voluntary prepayments thereof) for any reason whatsoever;

       (c)  any Lien on any property of the Company or any of its
  Subsidiaries securing any such Financing Debt shall be enforced by
  foreclosure or similar action; or

       (d)  any holder of any such Financing Debt shall exercise any
  right of rescission with respect to the issuance thereof.

       7.1.6.  Ownership; Liquidation; etc.  Except as permitted by
  Section 3.4:

       (a)  the Company shall cease to own directly all the capital
  stock of the Theatre Subsidiaries that were Wholly-Owned
  Subsidiaries as of the date of the Spinoff;

       (b)  any Person (other than a member of the Smith Family
  Group), together with "affiliates" and "associates" of such Person
  within the meaning of Rule 12b-2 of the Exchange Act, shall become
  the beneficial owner within the meaning of Rule 13d-3 of the
  Exchange Act of more voting stock or total equity capital of the
  Company than that beneficially owned by the Smith Family Group and
  such Person, together with such "affiliates" and "associates", is
  also the beneficial owner within the meaning of Rule 13d-3 of the
  Exchange Act of at least 15% of either the voting stock or total
  equity capital of the Company; or

       (c)  the Company or any Theatre Subsidiary shall initiate any
  action to dissolve, liquidate or otherwise terminate its
  existence.

       7.1.7.  Enforceability, etc.  This Agreement shall cease for
  any reason (other than the scheduled termination thereof in
  accordance with its terms) to be in full force and effect; or any
  party hereto shall so assert in a judicial or similar proceeding;
  or the security interests created by this Agreement shall cease to
  be enforceable and of the same effect and priority purported to be
  created hereby.

       7.1.8.  The Company or any of its Subsidiaries shall:

       (a)  commence a voluntary case under the Bankruptcy Code or
  authorize, by appropriate proceedings of its board of directors or
  other governing body, the commencement of such a voluntary case;

       (b)  have filed against it a petition commencing an
  involuntary case under the Bankruptcy Code which shall not have
  been dismissed within 30 days after the date on which said
  petition is filed, or file an answer or other pleading within said
  30-day period admitting or failing to deny the material
  allegations of such a petition or seeking, consenting to or
  acquiescing in the relief therein provided;

       (c)  have entered against it an order for relief in any
  involuntary case commenced under the Bankruptcy Code;

       (d)  seek relief as a debtor under any applicable law, other
  than the Bankruptcy Code, of any jurisdiction relating to the
  liquidation or reorganization of debtors or to the modification or
  alteration of the rights of creditors, or consent to or acquiesce
  in such relief;

       (e)  have entered against it an order by a court  of
  competent jurisdiction (i) finding it to be bankrupt or insolvent,
  (ii) ordering or approving its liquidation, reorganization or any
  modification or alteration of the rights of its creditors or
  (iii) assuming custody of, or appointing a receiver or other
  custodian for, all or a substantial portion of its property; or

       (f)  make an assignment for the benefit of, or enter into a
  composition with, its creditors, or appoint, or consent to the
  appointment of, or suffer to exist a receiver or other custodian
  for, all or a substantial portion of its property.

  7.2.  Certain Payments Upon an Event of Default.  If one or more
Events of Default shall occur and be continuing, then Harcourt may by
notice in writing to the Company require the Company immediately to
deposit with Harcourt in cash an amount equal to the then Present
Value Lease Exposure (which cash shall be held by Harcourt and
applied to the payment of the Company's Obligations under Section 2)
and thereupon such amount shall become immediately due and payable
without presentation, protest or further demand or notice of any
kind, all of which are hereby expressly waived; provided, however,
that if a Bankruptcy Default shall have occurred, such amount shall
automatically become immediately due and payable.

  7.3.  Enforcement of Payment; Collateral; Setoff.  If any one or
more Payment Defaults shall occur, Harcourt (a) may proceed to
enforce payment of the Obligations in such manner as it may elect and
to realize upon any and all rights in the Collateral and (b) may
offset and apply toward the payment of the Obligations (and/or toward
the curing of any Event of Default) any Indebtedness from Harcourt to
the Company or any of its Subsidiaries, regardless of the adequacy of
any security for the Obligations.  Harcourt shall have no duty to
determine the adequacy of any such security in connection with any
such offset.

  7.4.  Specific Performance; Exercise of Rights.  If any one or
more Events of Default has occurred and is continuing or if one or
more Payment Defaults shall occur, Harcourt may proceed to protect
and enforce its rights by suit in equity, action at law and/or other
appropriate proceeding, either for specific performance of any
covenant or condition contained in this Agreement or in any
instrument or assignment delivered pursuant to this Agreement, or in
aid of the exercise of any power granted in this Agreement or any
such instrument or assignment.

  7.5.  Cumulative Remedies.  To the extent not prohibited by
applicable law which cannot be waived, all of the Harcourt's rights
hereunder and under, or with respect to, each Guarantee and
Transferred Lease shall be cumulative.

  7.6.  Annulment of Defaults.  A First Tier Default or a Payment
Default shall be deemed not to have occurred or to exist for any
purpose hereunder, and an Event of Default shall be deemed not to
have occurred and be continuing for any purpose hereunder, in each
case if Harcourt shall have waived it in writing, stated in writing
that it has been cured to Harcourt's reasonable satisfaction or
entered into an amendment to this Agreement which by its express
terms cures such First Tier Default or such Event of Default.  No
such action by Harcourt shall extend to or affect any subsequent
First Tier Default or Event of Default or impair any rights of
Harcourt upon the occurrence thereof.

  7.7.  Waivers.  To the extent that such waiver is not prohibited
by the provisions of applicable law that cannot be waived, the
Company waives:

       (a)  all presentments, demands for performance, notices of
  nonperformance (except to the extent required by the provisions of
  this Agreement), protests, notices of protest and notices of
  dishonor;

       (b)  any requirement of diligence or promptness on the part
  of Harcourt in the enforcement of its rights under this Agreement;

       (c)  any and all notices of every kind and description which
  may be required to be given by any statute or rule of law; and

       (d)  any defense (other than indefeasible payment in full)
  which it now or hereafter may have with respect to its liability
  under this Agreement or with respect to the Obligations.

  7.8.  Obligations Absolute.  The obligations of the Company under
Sections 2.1, 2.2, 7.2 and 9 are absolute and unconditional and,
without limiting the generality of the foregoing, shall not be
released, discharged or otherwise affected by:

       (a)  the invalidity, unenforceability or irrecoverability of
  any obligations under any Guarantee, any Guaranteed Lease or any
  Transferred Lease;

       (b)  any change in the terms of, any amendment to or any
  waiver, consent or modification of, any Guarantee, any Guaranteed
  Lease or Transferred Lease; or

       (c)  any other circumstance which might constitute a defense
  available to, or a discharge of, Harcourt or the Company (other
  than, in the case of the Company, indefeasible payment in full).

8.  Security.

  8.1.  Collateral.  As security for the payment and performance of
the Obligations, the Company hereby mortgages, pledges and
collaterally grants and assigns to Harcourt, and hereby creates a
security interest in favor of Harcourt in, all of the Company's
right, title and interest in and to (but none of its obligations or
liabilities with respect to) the items and types of present and
future property described in Sections 8.1.1 through 8.1.3, whether
now owned or hereafter acquired, all of which shall be included in
the term "Collateral":

       8.1.1.  Pledged Stock.  All Equity Interests in any Pledged
  Theatre Subsidiary.  All such Equity Interests are collectively
  referred to as the "Pledged Stock".

       8.1.2.  Pledged Rights.  All rights to receive profits or
  surplus of, or other Distributions (including income, return of
  capital and liquidating distributions) from, any Pledged Theatre
  Subsidiary that is a partnership, joint venture or limited
  liability company, including any distributions by any such Person
  to partners, joint venturers or members.  All such rights are
  collectively referred to as the "Pledged Rights".

       8.1.3.  Proceeds and Products.  All proceeds, including
  insurance proceeds, and products of the items of Collateral
  described or referred to in Sections 8.1.1 and 8.1.2 and, to the
  extent not included in the foregoing, all Distributions with
  respect to the Pledged Securities.

  8.2.  Representations, Warranties and Covenants with Respect to
the Collateral.  The Company hereby represents, warrants and
covenants that:

       8.2.1.  Pledged Stock.  All shares of capital stock, limited
  partnership interests, membership interests and similar Securities
  included in the Pledged Stock are and shall be at all times duly
  authorized, validly issued, fully paid and (in the case of capital
  stock and limited partnership interests) nonassessable.  The
  Company will deliver to Harcourt certificates representing the
  Pledged Stock, registered, if Harcourt so requests, in the name of
  Harcourt or its nominee, as pledgee, or accompanied by a stock
  transfer power executed in blank and, if Harcourt so requests,
  with the signature guaranteed, all in form and manner reasonably
  satisfactory to Harcourt.  Pledged Stock that is not evidenced by
  a certificate will be registered in the name of Harcourt or its
  nominee, as pledgee, on the issuer's records, all in form and
  substance reasonably satisfactory to Harcourt.  Upon the
  occurrence of a Default, Harcourt may transfer into its name or
  the name of its nominee, as pledgee, any Pledged Securities.

       8.2.2.  No Liens or Restrictions on Transfer or Change of
  Control.  All Collateral shall be free and clear of any Liens and
  restrictions on the transfer thereof, except for Liens permitted
  by Section 3.2.  None of the Pledged Stock is subject to any
  options to purchase or similar rights of any Person.  Except with
  the written consent of Harcourt, neither the Company nor any
  Pledged Theatre Subsidiary is, and neither Harcourt nor any
  Pledged Theatre Subsidiary will be, party to or bound by any
  agreement, license or franchise which restricts the change of
  control or ownership of any Pledged Theatre Subsidiary.

       8.2.3.  Perfection of the Collateral.  Upon Harcourt's
  request from time to time, the Company will make, execute,
  acknowledge and deliver, and file and record in the proper filing
  and recording places, all such instruments, and will take all such
  other action, as Harcourt deems advisable for confirming to it the
  Collateral or to carry out any other purpose of this Agreement.

  8.3.  Administration of Collateral.  The Collateral shall be
administered as follows, and if a Payment Default shall have
occurred, Section 8.4 shall also apply.

       8.3.1.  Distributions on Pledged Securities.

       (a)  Until an Event of Default shall occur and be continuing,
  the Company shall be entitled, to the extent permitted by this
  Agreement, to receive all Distributions on or with respect to the
  Pledged Securities (other than Distributions constituting
  additional Pledged Securities).  All Distributions constituting
  additional Pledged Securities will be retained by Harcourt (or if
  received by the Company shall be held by the Company in trust and
  shall be immediately delivered by the Company to Harcourt in the
  original form received, endorsed in blank) and held by Harcourt as
  part of the Collateral.

       (b)  If an Event of Default shall have occurred and be
  continuing, all Distributions on or with respect to the Pledged
  Securities shall be retained by Harcourt (or if received by the
  Company shall be held by the Company in trust and shall be
  immediately delivered by it to Harcourt in the original form
  received, endorsed in blank) and held by Harcourt as part of the
  Collateral or applied by Harcourt in accordance with Section
  8.4.5.

       8.3.2.  Voting of Pledged Securities.

       (a)  Until an Event of Default shall occur and be continuing,
  the Company shall be entitled to vote or consent with respect to
  the Pledged Securities in any manner not inconsistent with the
  terms of this Agreement, and Harcourt will, if so requested,
  execute appropriate revocable proxies therefor.

       (b)  If an Event of Default shall have occurred and be
  continuing, if and to the extent that Harcourt shall so notify the
  Company in writing, only Harcourt shall be entitled to vote or
  consent or take any other action with respect to the Pledged
  Securities and the Company will, if so requested, execute or cause
  to be executed appropriate proxies therefor.

  8.4.  Right to Realize upon Collateral.  Except to the extent
prohibited by applicable law that cannot be waived, this Section 8.4
shall govern Harcourt's right to realize upon the Collateral if any
Payment Default shall have occurred.  The provisions of this
Section 8.4 are in addition to any rights and remedies available at
law or in equity.

       8.4.1.  General Authority.  To the extent specified in
  written notice from Harcourt to the Company, the Company grants
  Harcourt full and exclusive power and authority, subject to the
  other terms hereof and applicable law, to take any or all of the
  following actions (for the sole benefit of Harcourt but at the
  Company's expense):

       (a)  to ask for, demand, take, collect, sue for and receive
  all payments in respect of any Pledged Securities which the
  Company could otherwise ask for, demand, take, collect, sue for
  and receive for its own use.

       (b)  to extend the time of payment of Pledged Securities and
  to make any allowance or other adjustment with respect thereto;

       (c)  to settle, compromise, prosecute or defend any action or
  proceeding with respect to Pledged Securities and to enforce all
  rights and remedies thereunder which the Company could otherwise
  enforce.;

       (d)  to enforce the payment of any Pledged Securities, either
  in the name of the Company or in its own name, and to endorse the
  name of the Company on all checks, drafts, money orders and other
  instruments tendered to or received in payment of any Collateral;

       (e)  to notify the third party payor with respect to any
  Pledged Securities of the existence of the security interest
  created hereby and to cause all payments in respect thereof
  thereafter to be made directly to Harcourt; provided, however,
  that whether or not Harcourt shall have so notified such payor,
  the Company will at its expense render all reasonable assistance
  to Harcourt in collecting such items and in enforcing claims
  thereon; and

       (f)  to sell, transfer, assign or otherwise deal in or with
  any Collateral or the proceeds thereof, as fully as the Company
  otherwise could do.

       8.4.2.  Marshaling, etc.  Harcourt shall not be required to
  make any demand upon, or pursue or exhaust any of its rights or
  remedies against, the Company or any guarantor, pledgor or any
  other Person with respect to the payment of the Obligations or to
  pursue or exhaust any of its rights or remedies with respect to
  any collateral therefor or any direct or indirect guarantee
  thereof.  Harcourt shall not be required to marshal the Collateral
  or any guarantee of the Obligations or to resort to the Collateral
  or any such guarantee in any particular order, and all of its
  rights hereunder or otherwise shall be cumulative.  To the extent
  it may lawfully do so, the Company hereby absolutely and
  irrevocably waives and relinquishes the benefit and advantage of,
  and covenants not to assert against Harcourt, any valuation, stay,
  appraisement, extension, redemption or similar laws now or
  hereafter existing which, but for this provision, might be
  applicable to the sale of any Collateral made under the judgment,
  order or decree of any court, or privately under the power of sale
  conferred by this Agreement, or otherwise.  Without limiting the
  generality of the foregoing, the Company (a) agrees that it will
  not invoke or utilize any law which might prevent, cause delay in
  or otherwise impede the enforcement of the rights of Harcourt in
  the Collateral, (b) waives all such laws and (c) agrees that it
  will not invoke or raise as a defense to any enforcement by
  Harcourt of its rights and remedies relating to the Collateral or
  the Obligations any legal or contractual requirement with which
  Harcourt may have in good faith failed to comply.  In addition,
  the Company hereby waives any right to prior notice (except to the
  extent expressly required by this Agreement) or judicial hearing
  in connection with foreclosure on or disposition of any
  Collateral, including any such right which the Company would
  otherwise have under the Constitution of the United States of
  America or of any state or territory thereof or any other
  jurisdiction.

       8.4.3.  Sales of Collateral.  All or any part of the
  Collateral may be sold for cash or other value in any number of
  lots at public or private sale, without demand, advertisement or
  notice; provided, however, that Harcourt shall give the Company 10
  days' prior written notice of the time and place of any public
  sale, or the time after which a private sale may be made, which
  notice each of the Company and Harcourt hereby agrees to be
  reasonable.  At any sale or sales of Collateral, Harcourt or any
  of its officers acting on its behalf, or Harcourt's assigns, may
  bid for and purchase all or any part of the property and rights so
  sold, may use all or any portion of the Obligations owed to
  Harcourt as payment for the property or rights so purchased, and
  upon compliance with the terms of such sale may hold and dispose
  of such property and rights without further accountability to the
  Company, except for the proceeds of such sale or sales pursuant to
  Section 8.4.5.  The Company acknowledges that any such sale will
  be made by Harcourt on an "as is" basis with disclaimers of all
  warranties, whether express or implied, to the extent permitted by
  applicable law.  The Company agrees that (a) Harcourt may, in its
  sole discretion, restrict any such sale to one or more purchasers
  who will agree to guarantee the payment and performance of the
  Guaranteed Leases and Transferred Leases of Pledged Theatre
  Subsidiaries, the Pledged Securities of which are included in such
  sale and who, in the reasonable judgment of Harcourt, are
  financially capable of performing such guarantee and (b) such
  manner of disposition is commercially reasonable notwithstanding
  the possibility that a substantially higher price might be
  realized if such sale were not so restricted.  The Company will
  execute and deliver or cause to be executed and delivered such
  instruments, documents, assignments, waivers, certificates and
  affidavits, will supply or cause to be supplied such further
  information and will take such further action as Harcourt shall
  require in connection with any such sale.

       8.4.4.  Sale Without Registration.  The Company agrees that
  if, at any time when Harcourt shall determine to exercise its
  rights hereunder to sell all or part of the Securities included in
  the Collateral, the Securities in question shall not be
  effectively registered under the Securities Act (or other
  applicable law), Harcourt may, in its sole discretion, sell such
  Securities by private or other sale not requiring such
  registration in such manner and in such circumstances as Harcourt
  may deem necessary or advisable in order that such sale may be
  effected in a commercially reasonable manner in accordance with
  applicable law without such registration and the related delays,
  uncertainty and expense.  Without limiting the generality of the
  foregoing, in any event Harcourt may, in its sole discretion, (a)
  approach and negotiate with a single purchaser or one or more
  possible purchasers to effect such sale, (b) restrict such sale to
  one or more purchasers each of whom will represent and agree that
  such purchaser is purchasing for its own account, for investment
  and not with a view to the distribution or sale of such Securities
  and (c) cause to be placed on certificates representing the
  Securities in question a legend to the effect that such Securities
  have not been registered under the Securities Act (or other
  applicable law) and may not be disposed of in violation of the
  provisions thereof.  The Company hereby agrees that such manner of
  disposition is commercially reasonable, that it will upon
  Harcourt's request give any such purchaser access to such
  information regarding the issuer of the Securities in question as
  Harcourt may reasonably request and that Harcourt shall not incur
  any responsibility for selling all or part of the Securities
  included in the Collateral at any private or other sale not
  requiring such registration, notwithstanding the possibility that
  a substantially higher price might be realized if the sale were
  deferred until after registration under the Securities Act (or
  other applicable law) or until made in compliance with certain
  other rules or exemptions from the registration provisions under
  the Securities Act (or other applicable law).  The Company
  acknowledges that there is no adequate remedy at law for breach by
  it of this Section 8.4.4 and that such breach would not be
  adequately compensable in damages and therefore agrees that this
  Section 8.4.4 may be specifically enforced.

       8.4.5.  Application of Proceeds.  The proceeds of all sales
  and collections in respect of any Collateral or other assets of
  the Company, all funds collected from the Company and any cash
  contained in the Collateral, the application of which is not
  otherwise specifically provided for herein, shall be applied as
  follows:

       (a)  first, to the payment of the costs and expenses of such
  sales and collections, the reasonable expenses of Harcourt and the
  reasonable fees and expenses of its special counsel;

       (b)  second, any surplus then remaining to the payment of the
  Obligations in such order and manner as Harcourt may in its sole
  discretion determine; and

       (c)  third, any surplus then remaining shall be paid to the
  Company, subject, however, to the rights of the holder of any then
  existing Lien of which Harcourt has actual notice.

  8.5.  Custody of Collateral.  Except as provided by applicable law
that cannot be waived, Harcourt will have no duty as to the custody
and protection of the Collateral, the collection of any part thereof
or of any income thereon or the preservation or exercise of any
rights pertaining thereto, including rights against prior parties,
except for the use of reasonable care in the custody and physical
preservation of any Collateral in its possession.  Harcourt will not
be liable or responsible for any loss or damage to any Collateral, or
for any diminution in the value thereof, by reason of the act or
omission of any agent selected by Harcourt acting in good faith.

9.  Expenses; Indemnity.

  9.1.  Expenses.  The Company will pay:

       (a)  all recording and filing fees and transfer and
  documentary stamp and similar taxes at any time payable in respect
  of this Agreement or any Collateral; and

       (b)  all other reasonable expenses incurred by Harcourt in
  connection with the enforcement of any rights hereunder, including
  costs of collection and reasonable attorneys' fees and expenses.

  9.2.  General Indemnity.  The Company hereby agrees to indemnify
Harcourt, each of the directors, officers, employees and agents of
Harcourt, and each Person, if any, who controls Harcourt (Harcourt
and each of such directors, officers, employees, agents and control
Persons is referred to as an "Indemnified Party"), and hold each of
them harmless from and against any and all claims, damages,
liabilities and reasonable expenses (including reasonable fees and
disbursements of counsel with whom any Indemnified Party may consult
in connection therewith and all reasonable expenses of litigation or
preparation therefor) which any Indemnified Party may incur or which
may be asserted against any Indemnified Party in connection with (a)
the existence or exercise of any security rights with respect to the
Collateral in accordance with this Agreement or (b) this Agreement or
any transaction contemplated hereby, except for (i) litigation
commenced by the Company against Harcourt which seeks enforcement of
any of the rights of the Company hereunder and is determined
adversely to Harcourt in a final nonappealable judgment and (ii) the
extent such claims, damages, liabilities and expenses result from the
gross negligence or willful misconduct of Harcourt.

10.  Successors and Assigns.  Any reference in this Agreement to any
party hereto shall be deemed to include the successors and assigns of
such party, and all covenants and agreements by or on behalf of the
Company or Harcourt that are contained in this Agreement shall bind
and inure to the benefit of their respective successors and assigns;
provided, however, that the Company may not assign its rights or
obligations under this Agreement.

11.  Confidentiality.  Harcourt agrees that it will make no
disclosure of confidential information furnished to it by the Company
or any of its Subsidiaries unless such information shall have become
public, except:

       (a)  in connection with operations under or the enforcement
  of this Agreement;

       (b)  pursuant to any statutory or regulatory requirement or
  any mandatory court order, subpoena or other legal process;

       (c)  to its counsel, auditors and other professional advisors
  with an instruction to such Person to keep such information
  confidential; and

       (d)  with the prior written consent of the Company, to any
  other Person.

12.  Notices.  Except as otherwise specified in this Agreement, any
notice required to be given pursuant to this Agreement shall be given
in writing.  Any notice, demand or other communication in connection
with this Agreement shall be deemed to be given if given in writing
(including telex, telecopy or similar teletransmission) addressed as
provided below (or to the addressee at such other address as the
addressee shall have specified by notice actually received by the
addressor), and if actually delivered in fully legible form to such
address (evidenced in the case of a telex by receipt of the correct
answerback).

  If to Harcourt, to it at:

       27 Boylston Street
       Chestnut Hill, Massachusetts  02167
       Telecopy No.:  (617) 278-5567
       Attention:  General Counsel

  If to the Company, to it at:

       1300 Boylston Street
       Chestnut Hill, Massachusetts  02167
       Telecopy No.:  (617) 264-8206
       Attention:  General Counsel

13.  Course of Dealing; Amendments and Waivers.  No course of dealing
between Harcourt, on one hand, and the Company, any of its
Subsidiaries or any of their respective Affiliates, on the other
hand, shall operate as a waiver of any of the rights of Harcourt
under this Agreement or with respect to the Obligations.  The Company
acknowledges that if Harcourt, without being required to do so by
this Agreement, gives any notice or information to the Company, any
of its Subsidiaries or any of their respective Affiliates, Harcourt
shall not by implication have amended, waived or modified any
provision of this Agreement, or created any duty to give any such
notice or information or to obtain any such consent on any future
occasion.  No delay or omission on the part of Harcourt in exercising
any right under this Agreement or with respect to the Obligations
shall operate as a waiver of such right or any other right hereunder
or thereunder.  A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any future occasion.
No waiver, consent or amendment with respect to this Agreement shall
be binding unless it is in writing and signed by Harcourt and, in the
case of an amendment, signed by the Company.  Although Harcourt shall
have no duty to agree to any waiver, consent or amendment with
respect to this Agreement, Harcourt shall give due consideration in
accordance with its business judgment to each request made by the
Company for any such waiver, consent or amendment.

  Any waiver, consent, amendment or notice of termination entered
into by any party for any of the following purposes need not be
specifically authorized or approved by the Board of Directors of such
party (or any duly appointed committee of the Board of Directors of
such party with authority to act for such purposes) if such waiver,
consent, amendment or notice of termination is approved by an officer
of such party who is authorized to approve such type of waiver,
consent, amendment or notice of termination:  (a) to cure any
ambiguity herein; (b) to cure, correct or supplement any defect or
inconsistent provision contained herein; or (c) to make any provision
in regard to matters or questions arising hereunder which is not
inconsistent with the provisions of this Agreement and which does not
adversely affect the interests of such party.

14.  Termination and Defeasance.  This Agreement may be terminated at
any time by Harcourt in its sole discretion by providing written
notice to the Company.  This Agreement shall terminate at such time
as the Present Value Lease Exposure is less than $50,000,000 if at
such time no First Tier Default, Payment Default or Event of Default
has occurred and is continuing; provided, however, that Sections 2,
3.1, 3.6, 9, 10, 11 and 12 and Sections 7.3 through 7.8 (insofar as
they relate to Sections 2, 3.1 and 3.6) shall survive the termination
of this Agreement.  Upon any such termination, the Collateral shall
revert to the Company and the right, title and interest of Harcourt
therein shall terminate.  Thereupon, on the Company's demand and at
its cost and expense, Harcourt shall execute proper instruments,
acknowledging satisfaction of and discharging this Agreement, and
shall redeliver to the Company any Collateral then in its possession.

15.  General.  The invalidity or unenforceability of any provision
hereof shall not affect the validity or enforceability of any other
provision hereof.  The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning
hereof.  This Agreement constitutes the entire understanding of the
parties with respect to the subject matter hereof and thereof and
supersedes all prior and current understandings and agreements,
whether written or oral, with respect to such subject matter.  This
Agreement may be executed in any number of counterparts which
together shall constitute one instrument.  This Agreement shall be
governed by and construed in accordance with the laws (other than the
conflict of laws rules) of The Commonwealth of Massachusetts, except
as may be required by the UCC with respect to matters involving the
perfection of Harcourt's Lien on the Collateral and the enforcement
of such Lien.

     Each of the undersigned has caused this Agreement to be executed
and delivered by its duly authorized officer as an agreement under
seal as of the date first above written.

                           HARCOURT GENERAL, INC.

                           By /s/ Eric P. Geller

                           Senior Vice President,
                           General Counsel and Secretary

                           GC COMPANIES, INC.

                           By /s/ Philip Szabla

                           Vice President and General Counsel

<PAGE>
                                                      Exhibit 1.3A

                         B MARKET THEATRES

          Unit # Name                 Market

          410    Pga                  West Palm
          448    County Seat          Gary
          450    Willowbrook          Houston
          466    Dublin Place         No. Calif
          467    Birdcage Walk        No. Calif
          468    Solano Mall          No. Calif
          484    Point Nasa           Houston
          488    University Park      S. Bend
          491    Kitsap Mall          Seattle
          507    Janaf                Norfolk
          514    Lakeside             New Orleans
          521    Southland            No. Calif
          544    The Galleria         Ft. Lauderdale
          655    South Park           Charlotte
          656    Everett Mall         Seattle
          720    Avco                 Los Angeles
          761    Riviera Cinema       Miami
          781    Perimeter Mall       Atlanta
          833    Sherman Oaks         Los Angeles
          834    Lakeside             New Orleans
          853    Merchants Walk       Atlanta
          875    Southlake            Gary
          882    Everett Mall         Seattle
          887    Colonial             Orlando
          893    Cielo Vista          El Paso
          894    Mall of Memphis      Memphis
          918    Gateway Center       Seattle
          925    Fountains 8          Ft. Lauderdale
          936    Renton Village       Seattle
          938    Beverly              Los Angeles
          939    Altamonte 8          Orlando
          943    Hollywood            Los Angeles
          953    Fashion Square       Orlando
          957    Glendale             Los Angeles
          973    Meyerland            Houston
          975    Sherman Oaks         Los Angeles
          977    Pacific Place        Seattle
          980    South Bay            Los Angeles
          982    Barton Creek         Austin
          984    Irving Mall          Dallas
          992    Parkway Point        Atlanta
                                                      Exhibit 1.3B

                      General Cinema Theatres
                        Threatre Listing

                          CORE THEATRES

          Unit #   Name                Market

          408 Citadel Mall             Charleston
          418 Christiana Mall          Philadelphia
          445 University               Buffalo
          453 Har Mar                  Minneapolis
          462 Lansing Mall             Lansing
          472 Canton Cinema            Detroit
          480 Mckinley Mall            Buffalo
          492 Cross Pointe             Fayettville
          496 Plaza At Chapel          Akron
          516 Parmatown                Cleveland
          579 Central Plaza            Westchester
          581 Greenwood                Indianapolis
          654 No. Dartmouth            No. Dartmouth
          662 Wyoming Valley           Scranton
          680 Har Mar                  Minneapolis
          691 Columbia City            Baltimore
          700 Viewmont                 Scranton
          723 Owings Point - Premium   Baltimore
          724 Mayfair Mall - Premium   Wauwatoosa
          793 Eastgate Indpls          Indianapolis
          804 Crosscreek Mall          Fayettville
          809 Shelard Park             Minneapolis
          825 Chestnut Hill            Boston
          828 Maine Mall               Portland
          829 Mercer Mall              Philadelphia
          837 Hanes Mall               Winston-Salem
          841 Wyoming Valley           Scranton
          843 Castleton Sq.            Indianapolis
          846 Lafayette Sq.            Indianapolis
          849 Deptford                 Philadelphia
          858 Lehigh Valley            Allentown
          863 Security Square          Baltimore
          895 Woodgrove Fstvl          Chicago
          902 Bay Plaza                Bronx
          904 Westwood Town            Cleveland
          905 Bridgewater              No. New Jersey
          909 Novi Town Ctr            Detroit

                                                    Exhibit 1.3B

                     General Cinema Theatres
                        Threatre Listing

                    CORE THEATRES (Continued)

          914 Northwoods              Charleston
          917 Ridge Park              Cleveland
          924 Westgate, 6             Cleveland
          927 West Market             Akron
          940 Ford City               Chicago
          941 Midway Mall             Cleveland
          942 Centennial              Minneapolis
          951 Clifton Commons         No. New Jersey
          952 Canton Cinema           Canton
          955 Pittsford               Rochester
          958 Walden Galleria         Buffalo
          963 Tyngsboro               Tyngsboro
          965 Franklin Mills          Philadelphia
          966 Towson Commons          Baltimore
          967 Mall of America         Minneapolis
          968 Clearwater              Indianpolis
          969 Braintree               Boston
          971 Burlington              Boston
          972 Framingham              Boston
          974 Yorktown Premium        Chicago
          976 Randhurst               Chicago
          978 Northbrook              Chicago
          979 Yorktown                Chicago
          981 Plymouth Meeting        Philadelphia
          983 Essex Green             No. New Jersey
          988 Mayfair Mall            Wauwatoosa
          991 Owings Point            Baltimore
          994 Dutch Square            Columbia

<PAGE>
                                                      Exhibit 1.3C

                         PROBLEM THEATRES

          Unit     Name        Market

          412 Four Season      Greensboro
          414 Gwinnett Place   Atlanta
          422 Rancho           Los Angeles
          423 Montclair        Los Angeles
          431 Town East        Dallas
          435 Cinema V         Ft. Worth
          438 Greenwood        Indianapolis
          446 Hickory Ridge    Memphis
          449 Galleria         Dallas
          457 Furneaux Creek   Dallas
          458 Raleigh Cinema   Memphis
          459 Deerbrook        Houston
          463 West Oaks Center Houston
          471 Coral Square     Ft. Lauderdale
          474 Central Park     Ft. Worth
          476 Northland        Columbus
          477 Burnhaven        Minneapolis
          483 The Park         El Paso
          486 Tower Place      Charlotte
          490 Copperfield      Houston
          493 Regency          Augusta
          553 Northeast        Philadelphia
          626 Thruway Mall     Buffalo
          635 Warwick Mall     Providence
          704 Lakehurst        Waukegan
          713 Rutgers          No. New Jersey
          716 Deerbrook        Chicago
          744 Galleria Cinema  Los Angeles
          801 Town East Mall   Dallas
          806 Eric Commons     Cleveland
          815 Lincoln Mall     Providence
          817 Altamonte Mall   Orlando
          856 University Park  South Bend
          860 Fremont Hub      No. Calif
          861 San Mateo        Albuquerque
          867 Springfield      Washington DC
          869 Sandy Springs 8  Atlanta
          870 Lincoln Mall     Chicago
          872 Summit Park      Buffalo
          876 Columbia Mall    Columbia

                 PROBLEM THEATRES - (Continued)

          Unit     Name        Market

          879 Intracoastal     Miami
          883 Westland         Columbus
          888 Arlington Park   Ft. Worth
          889 Ridgmer Town Sq. Ft. Worth
          906 Cinema 10        Miami
          908 Lincoln Plaza 8  Seattle
          910 Esplanade Mall   New Orleans
          912 Highland 10      Austin
          913 Fallbrook 10     Los Angeles
          915 Pembroke         Ft. Lauderdale
          921 Mission Bay      Ft. Lauderdale
          922 Deerfield 8      Ft. Lauderdale
          923 Hairston         Atlanta
          928 Richardson       Dallas
          930 Pleasant Valley  Raleigh
          933 Sunland Park     El Paso
          934 Great Hills      Austin
          947 Lake Mary        Orlando
          954 Market 7         Rochester

                                                   Exhibit 3.4.4

                 PERMITTED SALES OF THEATRE ASSETS

1.  Novi Town Center

2.  Lansing Mall West

3.  Canton

4.  Central Park Plaza

                                                     Exhibit 4.8.4

                        GC Companies, Inc.

           Existing Permitted Non-theatre Investments

                                                             (In Thousands)

           Global TeleSystems                                    $  25,000

           GrandVision                                               8,179

           American Capital Access                                  30,000

           Kabelmedia                                               13,369

           Fuelman                                                  11,042

           Teletrac                                                  8,273

                                                                __________
                                                                $   95,863
                                                                __________

                         Exhibit 6.1.2A

                       GC COMPANIES, INC.
                      THEATRE SUBSIDIARIES

General Cinema Theatres, Inc.
--------------------------------------

G.C. Theatre Corp. of California
GC Grill Holdings, Inc.
General Cinema Corp. of Georgia
General Cinema Corp. of Indiana
General Cinema Corp. of Louisiana
General Cinema Corp. of Maryland, Inc.
General Cinema Corp. of Massachusetts
General Cinema Corp. of Michigan
General Cinema Corp. of Minnesota, Inc.
General Cinema Corp. of New York, Inc.
General Cinema Corp. of North Carolina
General Cinema Corp. of Owings Mills
General Cinema Corp. Parkway Pointe
General Cinema Corp. of Pennsylvania
General Cinema Corp. of Plymouth Meeting
General Cinema Corp. of Rhode Island
General Cinema Corp. of South Carolina
General Cinema Corp. of Tennessee
General Cinema Corp. of Texas
General Cinema Corp. of Virginia
General Cinema Corp. of Washington
General Cinema of Arizona, Inc.
General Cinema of New Mexico, Inc.
General Cinema Theatre of Columbia, Inc.
General Cinema Theatre of Yorktown, Inc.
General Cinema Theatres of Delaware, Inc.
General Cinema Theatres of Florida, Inc.
General Cinema Theatres of Illinois, Inc.
General Cinema Theatres of New Jersey, Inc.
General Cinema Theatres of Ohio, Inc.
General Cinema Specialty Film, Inc.
Joliet Cinema, Inc.
Louis Joliet Cinema, Inc.

General Cinema International, Inc.
------------------------------------

Arrendadora Inmobiliaria Cinematografica
    S.A. de C.V. (Formerly
Cinemas United Artists,
     S.A. de C.V.)
Operadora de Cinemas, S.A. de C.V.
Servicios Especializados Cinematograficos,
    S.A. de C.V.

Hoyts General Cinema South America, Inc.
----------------------------------------

GCC/Hoyts Brazil, Inc.
   General Cinema do Brasil Empreendimentos, Ltda.
Boca Holdings, Inc.
   General Cinema de Argentina, S.A.
   Hoyts Cinema de Argentina, S.A.

                         Exhibit 6.1.2B

                       GC COMPANIES, INC.
                  PLEDGED THEATRE SUBSIDIARIES

General Cinema Theatres, Inc.
--------------------------------

G.C. Theatre Corp. of California
GC Grill Holdings, Inc.
General Cinema Corp. of Georgia
General Cinema Corp. of Indiana
General Cinema Corp. of Louisiana
General Cinema Corp. of Maryland, Inc.
General Cinema Corp. of Massachusetts
General Cinema Corp. of Michigan
General Cinema Corp. of Minnesota, Inc.
General Cinema Corp. of New York, Inc.
General Cinema Corp. of North Carolina
General Cinema Corp. of Owings Mills
General Cinema Corp. Parkway Pointe
General Cinema Corp. of Pennsylvania
General Cinema Corp. of Plymouth Meeting
General Cinema Corp. of Rhode Island
General Cinema Corp. of South Carolina
General Cinema Corp. of Tennessee
General Cinema Corp. of Texas
General Cinema Corp. of Virginia
General Cinema Corp. of Washington
General Cinema of Arizona, Inc.
General Cinema of New Mexico, Inc.
General Cinema Theatre of Columbia, Inc.
General Cinema Theatre of Yorktown, Inc.
General Cinema Theatres of Delaware, Inc.
General Cinema Theatres of Florida, Inc.
General Cinema Theatres of Illinois, Inc.
General Cinema Theatres of New Jersey, Inc.
General Cinema Theatres of Ohio, Inc.
General Cinema Specialty Film, Inc.
Joliet Cinema, Inc.
Louis Joliet Cinema, Inc.

General Cinema International, Inc.
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Arrendadora Inmobiliaria Cinematografica
    S.A. de C.V. (Formerly Cinemas United Artists,
          S.A. de C.V.)
Operadora de Cinemas, S.A. de C.V.
Servicios Especializados Cinematograficos,
    S.A. de C.V.

Hoyts General Cinema South America, Inc.
----------------------------------------Exhibit 10.3

                                                           (As amended 08/09/00)

                             WINN-DIXIE STORES, INC.
                         Key Employee Stock Option Plan

                                   ARTICLE I.

                         Designation and Purpose of Plan

     The Plan shall be known as the "Winn-Dixie Key Employee Stock Option Plan".
The purpose of the Plan is to promote in the Company's key employees  additional
incentive by inducing and enabling them to become part owners of the business or
to increase their share of its ownership through the exercise of options granted
pursuant to the Plan.

                                   ARTICLE II.

                                   Definitions

     The following  words and phrases  wherever  used herein  shall,  unless the
context otherwise indicates, have the following meanings:

1.   "Board" or "Board of  Directors"  shall mean the Board of  Directors of the
     Company.

2.   A "Change in Control" shall mean:

     (i)  any person (as such term is used in  Section  13(d) of the  Securities
          Exchange  Act of 1934 (the  "Act"),  excluding  (A) those  persons and
          entities  included in the joint  Schedule  13(G) filing filed with the
          Securities  and Exchange  Commission  on February  12,  1999,  and all
          current or future heirs, successors and affiliates to such persons and
          all  trusts or other  entities  established  or  maintained,  or to be
          established or  maintained,  for the benefit of such persons and their
          heirs, successors and affiliates  (collectively,  the "Davis Family"),
          (B) any employee benefit plan or related trust sponsored or maintained
          by the Company, and (C) a corporation or other entity owned,  directly
          or indirectly,  by all or substantially all of the shareholders of the
          Company immediately prior to the transaction in substantially the same
          proportions  as their  ownership of stock of the Company  ("Person")),
          becoming the beneficial owner, directly or indirectly,  of twenty-five
          (25)  percent or more of the  outstanding  voting stock of the Company
          requiring  the filing of a report  with the  Securities  and  Exchange
          Commission under Section 13(d) of the Act; provided, that, at the time
          of  the  acquisition  of  such  beneficial  ownership  interest,  such
          Person's beneficial  ownership interest in the Company exceeds that of
          the Davis Family.

     (ii) consummation of a merger, consolidation, liquidation or dissolution of
          the Company,  or the sale of all or substantially all of the assets of
          the  Company  (a  "Business  Combination"),   in  each  case,  unless,
          following such Business  Combination,  all or substantially all of the
          shareholders  of  the  Company  immediately  prior  to  such  Business
          Combination beneficially own, directly or indirectly,  more than fifty
          (50)  percent of the then  outstanding  shares of common stock and the
          combined  voting  power  of the  then  outstanding  voting  securities
          entitled  to  vote  generally  in the  election  of  directors  of the
          corporation resulting from such Business Combination; or

     (iii)during any period of 24  consecutive  months,  individuals  who at the
          beginning of such period  constitute  the Board and any new  directors
          whose  election  by  the  Board  or  nomination  for  election  by the
          Company's  shareholders  was approved by a vote of at least 2/3 of the
          directors  then  still in office  who  either  were  directors  at the
          beginning of the period or whose  election or nomination  for election
          was  previously  so  approved,  cease for any reason to  constitute  a
          majority of the Board.

3.   "Committee" shall mean a committee of at least two persons appointed by the
     Board of Directors of the Company each of whom shall be an outside director
     of the Company.

4.   "Company" shall mean Winn-Dixie Stores, Inc.

5.   "Eligible  Employee"  shall mean an officer  or other key  employee  of the
     Company or its  subsidiaries  who,  in the  judgment of the  Committee,  is
     significantly  responsible for or materially contributes to the management,
     growth or profitability of the business of the Company or its subsidiaries.

6.   "Option"  shall mean any option  granted or held pursuant to the provisions
     of the  Plan.  Options  shall  be  evidenced  by  forms  prescribed  by the
     Committee.

7.   "Optionee"  shall  mean any person  who at the time in  question  holds any
     Option which then remains unexercised in whole or in part and which has not
     expired or terminated.

8.   "Plan" shall mean this Winn-Dixie Key Employee Stock Option Plan.

9.   "Return on Equity" shall mean the percentage  which the net earnings of the
     Company for a particular  fiscal year bears to the average net  shareholder
     equity for such fiscal year,  in each case as  reflected  in the  financial
     statements of the Company for such fiscal year as reported in the Company's
     Annual Report to its stockholders.

10.  "Stock" shall mean the Company's Common Stock,  having a par value of $1.00
     per share, as constituted on June 1, 1998, whether presently authorized and
     unissued or held in the Company's treasury,  or hereafter reacquired by the
     Company.  In the event that any change in the  outstanding  shares of Stock
     (including  an  exchange  of the  Stock for  stock or other  securities  of
     another  corporation)  occurs  by  reason  of a Stock  dividend  or  split,
     recapitalization, merger, consolidation, combination, exchange of shares or
     other similar  corporate  changes,  the remaining number of shares of Stock
     which may thereafter be sold pursuant to the Plan and the remaining  number
     of shares of Stock  which  may  thereafter  be  purchased  pursuant  to the
     exercise of any Option then outstanding shall be appropriately  adjusted by
     the Committee,  whose determination shall be conclusive;  provided, however
     that fractional  shares shall be rounded to the nearest whole share. In the
     event of any other  change in the Stock,  the  Committee  shall in its sole
     discretion determine whether such change equitably requires a change in the
     number  or  type  of  shares  subject  to any  outstanding  Option  and any
     adjustment made by the Committee shall be conclusive.

                                  ARTICLE III.

                          Shares Available for Purchase

     Subject to the  anti-dilution  provisions  contained in the  definition  of
Stock in Article II hereof,  except as  provided  in  Article  VII  hereof,  the
maximum  number of shares of Stock which may be sold pursuant to the exercise of
Options shall be 5,000,000. Except as provided in Article VII hereof, at no time
shall  there be Options  outstanding  for the  purchase  of more than  5,000,000
shares of Stock (subject to said  anti-dilution  provisions) less such number of
shares as have previously  been sold pursuant to the exercise of Options.  If an
Option shall for any reason terminate or expire,  any shares of Stock covered by
such Option  immediately  prior to its  termination  or  expiration  shall again
become  available for sale pursuant to the exercise of other Options  granted or
to be granted pursuant to the Plan.

                                   ARTICLE IV.

                 Granting Expiration and Termination of Options

     The Committee  shall, by a vote of a majority  thereof,  have the exclusive
power to grant Options to purchase shares of Stock to Eligible  Employees.  Such
Options  may be  granted  at any  time and  from  time to time to such  Eligible
Employees,  for such number of shares as the  Committee  in its sole  discretion
deems advisable,  but in no event more than one-half (1/2) of the maximum number
of shares  authorized under the Plan to any single "Eligible  Employee".  In all
cases the option  price per share shall be the fair market value of the Stock on
the date on which the  Option is  granted  (but not less than  $1.00),  and such
Option  shall be  exercisable,  subject to the  provisions  of Article V hereof,
within the option period,  at the end of which period it shall expire and become
void to the extent that it then remains  unexercised.  The option  period within
which each Option granted  hereunder shall be exercisable shall commence on such
date as the Committee  shall determine and shall end on December 31, 1998, as to
Options  granted after June 1, 1992 and prior to May 31, 1994; and shall end not
later than January 15th  following the sixth full fiscal year after the grant as
to Options granted on May 31, 1994 or thereafter.

     Subject to the  provisions of Article V hereof,  if the Optionee to whom an
Option was originally  granted shall cease to be employed by the Company for any
reason other than death he or she may,  within the three months next  succeeding
such cessation of employment (unless such Option shall sooner expire),  exercise
such Option to the extent  that he or she was  entitled to exercise it as of the
date of such  cessation,  and at the  expiration of such three months (unless it
shall have sooner  expires)  such Option shall  terminate and become void to the
extent  that it then  remains  unexercised.  Leaves of absence may be granted to
Optionees who are employees of the Company  because of illness or for such other
reasons as the Committee may determine,  without being  considered a termination
or cessation of employment.

     The Plan shall not confer upon any  Eligible  Employee or any  Optionee any
right with respect to  continuance  of employment  by the Company,  nor shall it
interfere in any way with his or her right, or the Company's right, to terminate
his or her employment at any time.

     In the  event of the  death,  while in the  employ  of the  Company,  of an
Optionee  to whom an  option  was  originally  granted,  such  Option  shall  be
exercisable (to the extent provided in Article V hereof) within one year of such
date of death  (unless it shall  sooner  expire),  but only (a) by the person or
persons to whom such Option  shall pass by such  Optionee's  will or the laws of
descent  and  distribution,  and  (b) if and to the  extent  that  he or she was
entitled to exercise such Option at the date of his or her death.  At the end of
such one year  period the Option  (unless it shall have  sooner  expired)  shall
terminate and become void to the extent that it then remains unexercised.

                                   ARTICLE V.

                               Exercise of Options

     Each Option granted pursuant to the Plan prior to June 1, 1998 shall become
exercisable  on and after such date as the  Committee  shall  determine,  to the
extent of 50% of the shares of Stock  covered  thereby at any time after the end
of a fiscal year of the Company for which the Company  earned a Return on Equity
of 20% or more, if such Option was outstanding throughout such fiscal year. Each
such Option shall become  exercisable  as to the  remaining 50% of the shares of
Stock covered thereby at any time after the end of the second consecutive fiscal
year of the Company in each of which two  consecutive  fiscal  years the Company
earned  a Return  on  Equity  of 20% or more,  if such  Option  was  outstanding
throughout such period of two consecutive years.

     Each Option  granted  pursuant to the Plan on June 1, 1998  through May 30,
2000 shall  become  exercisable  on and after such date as the  Committee  shall
determine  that the  Company  has earned an  average  Return on Equity for three
consecutive  fiscal years equal to or exceeding a percentage rate established by
the Committee at the time the Option is granted,  if such Option was outstanding
throughout such period of three consecutive years.

     Each Option  granted  pursuant  to the Plan on June 1, 2000 and  thereafter
shall  vest and  become  exercisable  on such date and in  accordance  with such
requirements as the Committee shall determine,  in its sole  discretion,  at the
time of grant.

     All Options  granted  pursuant to the Plan that are outstanding at the time
of a Change in Control shall  immediately vest upon the occurrence of the Change
in Control.

     Subject to this  Article V, any  Optionee  shall have the right to exercise
his or her  Option in whole at any time or in part  from time to time  (provided
that each exercise  shall be for 1,000 shares of Stock,  as  constituted  at the
date of such exercise,  or any multiple  thereof unless such Option shall be for
less than  1,000  shares,  in which  event such  exercise  shall be for the full
number of shares  represented  by such  Option)  by  submitting  written  notice
thereof to the Company or its duly authorized agent or  representative,  on such
form or forms as may be provided by the Company, accompanied by payment in full,
in cash, for the shares to be purchased.

                                   ARTICLE VI.

                               Rights of Optionees

     An Optionee  shall not have any rights as a  stockholder  of the Company by
virtue of any Option until the date of issue of the  certificate or certificates
for the shares of Stock purchased pursuant to its exercise.

     No Option or any right  thereunder  of an Optionee  to  purchase  shares of
Stock  pursuant  to the Plan  may be  sold,  pledged,  assigned  or  transferred
otherwise than by will or the laws of descent and distribution,  and such Option
shall be exercisable, during the lifetime of the Optionee, only by the Optionee.

                                  ARTICLE VII.

                    Effectiveness, Interpretation, Amendment,
                     Suspension and Termination of the Plan

     The  effectiveness  of this Plan is subject to the condition  that it shall
have been approved by the Shareholders of the Company within twelve months after
its adoption. Unless such approval by the Shareholders shall have been obtained,
this Plan and any  Option  granted  pursuant  hereto  shall be null and void and
without effect.

     Determinations  of the  Committee as to any  question  which may arise with
respect to the  interpretation  or  administration of any provisions of the Plan
shall be final  unless  otherwise  determined  by the  Board of  Directors.  The
Committee  may  require  Eligible  Employees  to meet  certain  share  ownership
obligations  to receive  grants under the Plan. The Committee may also prescribe
administrative  rules  under  the  Plan  and may in its  discretion  appoint  an
independent  agent to act as Option  Agent for Options  granted  pursuant to the
Plan and may  empower  such  Option  Agent to handle  any or all  administrative
maters with regard to Options granted by the Committee.

     Unless shareholder  approval otherwise is required by applicable law or the
rules of the New York Stock  Exchange,  the  Committee or the Board of Directors
each  shall  have the power at any time to add to,  amend or  repeal  any of the
provisions of the Plan  (including  the power to increase the maximum  number of
shares of Stock which may be sold  pursuant  to the  exercise  of  Options),  to
suspend the  operation  of the entire  Plan or of any  provision  or  provisions
thereof for any period or periods or to terminate  the Plan in whole or in part.
No such addition,  amendment, repeal, suspension or termination shall in any way
affect the rights of the holders of  outstanding  Options to purchase  shares of
Stock in accordance with the provisions hereof.

     Notwithstanding the foregoing, unless authorized or ratified by the holders
of a  majority  of the  shares  of  Common  Stock  of  the  Company  present  or
represented  at a  meeting  thereof  at which a  quorum  shall  be  present,  no
amendment  to the Plan shall  become  effective  which shall  extend the maximum
period within which an Option may be exercisable to any date later than December
31, 1998, as to Options granted after June 1, 1992 but prior to May 31, 1994.

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