Exhibit 10.4 to
Form 10-Q
SECOND AMENDMENT TO DEVELOPMENT, PRODUCTION AND
DOMESTIC DISTRIBUTION AGREEMENT
This Second Amendment to Development, Production and Domestic Distribution
Agreement ("Amendment") is entered into as of July 22, 1996 between Beacon
Communications Corp. ("Beacon") and Sony Pictures Entertainment, Inc. ("SPE")
and amends that certain Development, Production and Domestic Distribution
Agreement ("Agreement") between the parties dated as of April 15, 1993, as
amended.
Unless otherwise noted, all terms defined in the Agreement shall have the same
meanings in this Amendment.
1. Acquisition Term. Paragraph 1(a) of the Agreement is amended to
provide that the "Acquisition Term" shall end on August 31, 1996.
2. Overhead Reimbursement for "Playing God." Notwithstanding any contrary
provision of Paragraph 13(b) of the Agreement, Beacon shall
Overhead Reimbursement to SPE with respect to motion picture entitled "Playing
God."
3. Overhead Reimbursement - "AFO." Notwithstanding any contrary provision
of the Agreement, SPE shall be entitled to recoup
of "Unrecouped Overhead" (in lieu of
) under Paragraph 9(b)(i)(c) of the Agreement in connection with the Picture
tentatively entitled "AFO," which has been acceptedby SPE for co-financing and
distribution under the Agreement.
4. Unproduced Projects at End of Acquisition Term. Paragraph 18(a) of the
Agreement is modified as follows: Beacon shall furnish to SPE a preliminary list
of Developed Projects, containing the information and documentation required by
Paragraph 18(a) of the Agreement, immediately following the date of this
Amendment and shall furnish SPE with a final list of Developed Projects,
including all information and documentation required under Paragraph 18(a) of
the Agreement, as soon as practicable after August 31, 1996, but in no event
later than 30 days after such date.
b. Further Development of Projects Accepted by SPE. Paragraph
18.C(ii) shall be deleted and replaced with the following:
"(A) Joint Development Projects. If SPE accepts a Developed Project for
joint development (a "Joint Development Project"), SPE shall pay to Beacon
an amount equal to
of all previously incurred development costs for such
Developed Project, and
of going forward development costs on such project
(with the balance of such costs to be paid by Beacon) until such time, if
ever, as SPE or Beacon elects to abandon further development of such Joint
Development Project. Beacon and SPE shall co-own all rights (including the
copyright) in and to each such project and Beacon shall execute such
documents as may be necessary to reflect and perfect SPE's co-ownership.
(B) Control of Further Development. Beacon shall control the further
development of each Joint Development Project in the same manner as
Pictures developed during the Acquisition Term. Beacon shall consult fully
and meaningfully with SPE on an on-going basis regarding the development
of all Joint Development Projects (including full consultation, in
advance, as to creative direction and with respect to each and every
proposed spending commitment with respect to each Joint Development
Project), with Beacon's decision being final.
(C) Abandonment by SPE. If at any time SPE gives Beacon written notice of
SPE's election to abandon any Joint Development Project, Beacon shall have
no further obligation to SPE with respect to such Joint Development
Project, and SPE shall have no further obligation to fund further
development costs with respect to such Joint Development Project. SPE
shall quitclaim its interest in such abandoned Joint Development Project
to Beacon, subject to a first priority lien to secure reimbursement of
SPE's investment with respect to such Joint Development Project plus
interest thereon, payable in full upon commencement of principal
photography of such Joint Development Project by Beacon or a third party.
(D) Abandonment by Beacon. If at any time Beacon elects to abandon further
development of any Joint Development Project, Beacon shall give SPE
written notice thereof. If within 30 days thereafter SPE gives Beacon
written notice of SPE's desire to continue developing such Joint
Development Project, Beacon shall quitclaim such Joint Development Project
to SPE (prior to putting the project into turnaround or reversion to any
third party). Beacon shall have no obligation to fund further development
costs and SPE shall have no further obligation to Beacon with respect to
such Joint Development Project, provided that Beacon shall have a first
priority lien to secure reimbursement of Beacon's
investment with respect to such Joint Development Project plus interest
thereon, payable in full upon commencement of principal photography of the
applicable Joint Development Project by SPE or a third party.
(E) Submission by Beacon. At such time, if ever, as Beacon deems any Joint
Development Project to be ready for production and the required elements
are known, Beacon shall submit such Joint Development Project to SPE for
possible co-financing and distribution by SPE pursuant to the terms of
this Agreement, notwithstanding the expiration of the Acquisition Term.
SPE shall have no obligation to accept any Picture for co-financing and/or
distribution (i.e. there shall be no "puts") after the expiation of te
Acquisition Term. If SPE accepts (i.e. agrees to co-finance and
distribute) a Joint Development Project submitted by Beacon for
co-financing and distribution under the Agreement, Beacon shall produce
and co-finance and SPE shall co-finance and distribute such Picture (and
the revenues from such distribution shall be applied) in the same manner
as a Picture submitted under this Agreement during the Acquisition Term.
If SPE rejects a Joint Development Project submitted by Beacon for
possible co-financing distribution, all rights in such Joint Development
Project shall be owned by Beacon (and SPE shall quitclaim its interest
therein to SPE), subject to Beacon's obligation (secured by a first
priority lien, which shall be subordinate only to prior development liens,
if any) to repay SPE an development costs advanced b SPE if and when the
Picture is accepted by a third party for further development, production
or distribution and subject to subparagraph 18(3) below.
5. Limitation on Post Term Overhead Recoupment. Paragraph 18(e)
shall be deleted and replaced by the following:
"SPE shall be entitled to receive the sum of
as a reimbursement for Unrecouped Overhead, with respect to the
motion picture entitled "A Thousand Acres" and the sum of
as a reimbursement for Unrecouped Overhead, with respect to the first
motion picture co-financed and distributed by SPE after the end of the
Acquisition Term based upon a Developed Project. With respect to the first
Picture based upon Joint Development Projects which are co-financed and
distributed by SPE, SPE shall recoup such amount in the manner provided
for in Paragraph 9(b)(i)(c) of the Agreement. With respect to "A Thousand
Acres" such
shall be payable on commencement of principal photography
thereof (such obligation to be secured by a first priority lien, which
shall be subordinate only to prior development liens, if any)."
SONY PICTURES ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Its: Executive Vice President, Legal Affairs
BEACON COMMUNICATIONS CORP.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Its: Executive Vice President