MCA UNIVERSAL CITY STUDIOS, INC., 100 UNIVERSAL CITY PLAZA, UNIVERSAL CITY, CALIFORNIA 91608

Exhibit 10.5 to
Form 10-Q

                                      MCA
    UNIVERSAL CITY STUDIOS, INC., 000 XXXXXXXXX XXXX XXXXX, XXXXXXXXX XXXX,
                                XXXXXXXXXX 00000







as of July 10, 1996
Xxxxxx Xxxxxxxxx, Chairman
BEACON PICTURES
c/o Warner-Hollywood Studios
0000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000

Dear Armyan:

      This letter sets forth the basic terms of the  agreement  reached  between
Universal Pictures,  a division of Universal City Studios,  Inc.  ("Universal"),
and Beacon Pictures ("Beacon"),  with respect to the acquisition by Universal of
exclusive  distribution  rights to all theatrical  motion  pictures  produced by
Beacon.

1.    TERM: Five (5) years commencing on September 1, 1996 ("Term").

2.    PICTURES: Beacon will deliver to Universal and Universal will
      accept up to twenty (20) theatrical motion pictures during the
      Term (individually "Picture" and collectively "Pictures"), but
      Universal will not be obligated to accept delivery of more than
      four (4) Pictures per year, and each Picture must conform to
      Universal's customary production specifications (including,
      without limitation, MPAA rating, running time, cover shots for
      television and other versions, compliance with laws, timely
      delivery and delivery requirements).  With respect to running
      time requirements, each Picture must have a running time of not
      less than ninety (90) minutes and not more than one hundred
      twenty (120) minutes (exclusive of main and end titles);
      provided, however, that not more than once per year Universal
      will consider increasing the running time for a Picture directed
      by a director who has previously been accorded final cutting
      rights by a major studio, and on an occasional basis during the
      Term, Universal will consider Beacon's request to increase a
      Picture's running time due to the Picture's scope and/or subject
      matter.  Universal will only be obligated to accept Pictures
      which commence principal photography during the Term; provided,
      however, that in no event will Universal be obligated to accept
      a Picture which is delivered more than one (1) year after the
      conclusion of the Term.  Attached hereto as Exhibit "1" is a
      list of theatrical motion pictures (for which the distribution
      rights for the Territory [as defined below] are owned or
      controlled by a third party) which shall be deemed excluded from
      this agreement.
3.    PRODUCER SERVICES: Xxxxxx Xxxxxxxxx must actually and actively
      render producing services on each Picture (it being acknowledged
      that the parties contemplate Beacon delivering four (4) Pictures
      per year to Universal, each of which will be produced by Xx.
      Xxxxxxxxx), and must receive appropriate producer or executive
      producer in connection with each Picture.  If at any time, for
      any reason, Xx. Xxxxxxxxx ceases or fails to render producer
      services on a Picture, or becomes incapable of rendering
      producer services on future pictures, or is no longer an
      employee or principal of Beacon, Universal shall have the right
      in its sole discretion to terminate this agreement.

4.    DISTRIBUTION TERRITORY: United States, Canada and their
      respective territories and possessions (including without
      limitation, Guam, American Samoa, U.S. Virgin Islands, British
      Virgin Islands, Netherland Antilles, West Indies, Saipan,
      Bahamas Islands, Bermuda and Puerto Rico) ("Territory").  The
      Territory shall include, without limitation, any and all
      military and diplomatic installations or facilities, common
      carriers, (e.g. airlines, ships at sea, trains, etc.),
      industrial installations (e.g. drilling platforms, oil rigs,
      construction sites, company theaters etc.), educational
      institutions, libraries, prisons, museums and churches flying
      the flag of any nation within the Territory (regardless of where
      situated) or located in any nation within the Territory, and
      catalog rental companies shipping from a fulfillment site within
      the Territory.  Beacon agrees to advise all licensees of
      distribution rights outside the Territory of the specific
      territories which have been licensed to Universal hereunder as
      part of the Territory.

5.    DISTRIBUTION  TERM: For each Picture, a minimum of two (2) full television
      syndication cycles (based on Universal's  customary  sequential pattern of
      release),  extendible  for such period as is  necessary  for  Universal to
      recoup the Advance (see  Paragraph 10. below) with respect to the Picture,
      but not to exceed  twenty-one  (21) years from the  theatrical  release of
      each Picture.

6.    DISTRIBUTION RIGHTS: The sole and exclusive motion picture,
      television, video, allied and ancillary distribution rights
      (including, without limitation, the publishing, derivative
      distribution and commercial tie-up rights) in and to the
      Pictures, during the Distribution Term, in the Territory,
      subject to the Reserved Rights (see Paragraph 7. below)
      ("Distribution Rights").  The rights granted to Universal include
      the right to exploit the Pictures on hotel pay-per-view services
      (excluding hotels serviced by the "On Command" service [see
      Paragraph 7.d. below]).

7.    RESERVED RIGHTS:

      a.    Soundtrack Album: Beacon will retain all soundtrack album
            rights in the Pictures; provided, however, that MCA
            Records will be accorded a right of first refusal to
            distribute the soundtrack album for each Picture, in the





            Territory,  during the Term, and in such other  territories in which
            Beacon  desires to  distribute  a soundtrack  album.  If MCA Records
            distributes the soundtrack  album,  the revenues  derived  therefrom
            will be accounted for separately.

      b.    Music Publishing: Beacon will retain all music publishing
            rights in the Pictures; provided, however, that MCA's
            music publishing company will administer such rights for
            each Picture in the Territory, during the Term, for which
            it will receive         
            administrative fee.  All revenue
            derived from the exploitation of music publishing rights
            will be paid to Beacon, on a separate accounting basis,
            after the deduction of (i) the administrative fee, (ii)
            all out-of-pocket costs and expenses and (iii) all third
            party royalties.  The parties agree to negotiate in good
            faith an appropriate advance of music publishing revenue.

      c.    Merchandising: Beacon will retain all merchandising rights
            in the Pictures; provided, however, that Universal's
            merchandising affiliate will administer such rights for
            each Picture in the Territory, during the Term, for which
            it will receive         
            administrative fee.  All revenue
            derived from the exploitation of merchandising rights will
            be paid to Beacon, on a separate accounting basis, after
            the deduction of (i) the administrative fee, (ii) all
            out-of-pocket costs and expenses and (iii) all third party
            royalties.

      d.    Hotels Utilizing On Command Pay-Per-View Service: Beacon
            will retain the right to exploit the Pictures in hotel
            rooms in the Territory utilizing the On Command
            pay-per-view service.  Upon execution of this agreement,
            Beacon will provide Universal with a list of the hotel
            rooms serviced by On Command.  Beacon's gross proceeds
            from the exercise of such rights shall be included in
            calculating (i) the escalation of Universal's Non-Video
            Distribution Fee under Paragraph 12.b and (ii) Beacon's
            Non-Video Participation (as defined in Paragraph 13.) from
            which Universal may be entitled to recoup the Advance (as
            defined in Paragraph 13.)

   
8.    OVERHEAD/DEVELOPMENT CONTRIBUTION: Beacon will receive
       during each year of the Term, payable monthly in
      arrears, as an overhead/development contribution ("Overhead
      Contribution").  The Overhead Contribution will be recoupable by
      Universal during each year of the Term as a distribution expense
        If during any
      year of the Term Beacon does not deliver four (4) Pictures, the unrecouped
      portion of the  Overhead  Contribution  will be  reallocated  to  Pictures
      delivered in subsequent years;  provided,  however, that such reallocation
      shall not exceed an additional .
    





9.    CONCEPT APPROVAL: As a condition precedent to Universal's
      obligation to accept delivery of a Picture hereunder, Beacon
      agrees to obtain Universal's approval of the concept of each
      theatrical motion picture project ("Project") Beacon
      contemplates producing during the Term ("Concept Approval").  To
      obtain Concept Approval, at such time as Beacon chooses in its
      sole discretion, Beacon agrees to submit to the Motion Picture
      Group Chairman (presently Xxxxx Xxxxxx) or his designee, the
      concept of the Project, plus any additional material information
      about the project then known.  Universal agrees to approve or
      disapprove the Project based on the information provided within        
      .  If Universal disapproves, Beacon will have the
      right to offer the Project to another distributor.  If the
      concept as presented to Universal materially changes, Beacon
      will resubmit the Project to Universal for Concept Approval.

   
10.   ADVANCE: Upon delivery to Universal of a Picture which meets the
      production specifications and delivery requirements set forth in
      Paragraph 2. above, Universal will advance to Beacon an amount
      equal to .  The actual amount advanced to
      Beacon for each Picture plus interest thereon at
      is hereinafter referred to as "the Advance".  The budget for
      each Picture hereunder may not include a producing fee for
      Beacon in excess of .  Notwithstanding the
      foregoing, if prior to the commencement of principal
      photography, Beacon provides Universal with evidence that a
      Picture is bonded and has adequate insurance coverage, Beacon
      may elect to have Universal cash flow such Picture up to the
      amount of the Advance (exclusive of interest), in lieu of paying
      the Advance upon acceptance of delivery of the Picture.  If
      Universal does not cash flow the Picture, the actual production
      cost of the Picture may include interest at a rate not to exceed
      Universal's (or MCA's) then applicable internal rate of
      borrowing.  With respect to Pictures for which the total
      "all-in" direct cost budget exceeds  the parties will
      negotiate in good faith an appropriate adjustment of the Advance.

11.   BEACON PARTICIPATION: With respect to each Picture, Beacon will
      receive all proceeds from the exercise by Universal of the
      Distribution Rights after the deduction by Universal of (i) the
      applicable distribution fee (see Paragraph 12. below), (ii)
      customary distribution expenses (including, without limitation,
      marketing, manufacturing and distribution expenses with respect
      to home video), and subject further to Universal's recoupment of
      the Advance (see Paragraph 13. below).  In calculating customary
      distribution expenses, Universal agrees                         .
    






      At Beacon's  request,  Universal  will act as the  paymaster for all third
      party  participations  which will be  deducted as a  distribution  expense
      (non-video  and  video  on a fully  cross-collateralized  basis)  from the
      proceeds  payable to Beacon.  In addition,  as an accommodation to Beacon,
      Universal  will  advance  all guild  residuals  due,  and will  deduct all
      residuals  advanced from the proceeds  payable to Beacon as a distribution
      expense (on a  non-cross-collateralized  basis).  Universal  will  provide
      appropriate documentation to the applicable guild or labor union.

12.   DISTRIBUTION FEES:       
      for all media (including home video distribution) escalating as follows:

      a.    Video Distribution Fee: The distribution fee for home
            video will escalate        
            the applicable Picture.

      b.    Non-Video Distribution Fee: The distribution fee for all
            other media will escalate        
            the applicable Picture.

   
13.   RECOUPMENT OF ADVANCE: In connection with each Picture, the
      Advance will be deemed initially an advance against Beacon's
      participation in the proceeds

      If Universal  determines  based on internal  projections  (calculated in a
      manner consistent with generally accepted accounting  principles) that the
      Advance will not be fully  recouped from , Universal will be entitled to 
      recoup  the Advance from Beacon's
      participation in  as follows:
    

      a.    Universal  will be entitled to establish  appropriate  reserves from
            Beacon's        
            which  will be used to  enable  Universal  to  recoup  the
            Advance,  such reserves to be subject to  liquidation  on a periodic
            basis.

      b.    Solely for purposes of determining whether Universal can        
            to recoup the Advance,       
            will be re-calculated without the deduction of the
            distribution fee or interest on the Advance.


      c.    Universal will be entitled to recoup the Advance from        


      d.    Universal will not be entitled to recoup the Advance or
            its distribution expenses from one Picture from Beacon's        
            on any other Picture hereunder.

      e.    Beacon  will be  entitled  to review  the  documentation  upon which
            Universal's  projections are based at such time Universal determines
            (if ever) that a reserve  should be  established,  and thereafter at
            reasonable times and intervals.

   
14.   CONSULTATION:  Beacon will  consult  with  Universal  with  respect to all
      material creative and production matters,  including,  without limitation,
      screenplay, budget, director, principal cast, production schedule, filming
      location, post-production schedule, and delivery date.
    

             
     Universal  will consult fully and in good faith with Beacon with respect to
     all  material  marketing  and  distribution  matters,  including,   without
     limitation,  the  advertising/publicity   campaign,  marketing  budget  and
     release  pattern for the initial  theatrical and home video release of each
     Picture in the  Territory.  Universal  agrees that each Picture will have a
     print and advertising budget comparable to that expended by Universal, on a
     non-discriminatory  basis, for comparable  pictures that are fully financed
     by Universal, and in an amount sufficient to qualify for Universal's output
     arrangements.  Universal  will also  consult  with Beacon  with  respect to
     television syndication  arrangements and the initial sale of the home video
     units for each Picture (i.e. rental vs. sell through).

15.   CREDIT: In addition to the producer credit which must be
      accorded to Xxxxxx Xxxxxxxxx pursuant to Paragraph 3. above,
      Beacon will be accorded a presentation credit (including logo
      credit) on screen and in paid advertising in connection with
      each Picture accepted for delivery by Universal, whenever and
      wherever Universal's credit (including logo credit) appears.
      All other credits will be accorded by Beacon in its sole
      discretion subject to guild requirements and Universal's
      customary credit policies.

16.   KEY ART: Beacon will be accorded free access to all available
      key art and related advertising material (including trailer
      materials) created by Universal for use by Beacon in connection
      with the exploitation of the Pictures outside the Territory.





17.   REMAKES AND  SEQUELS:  If Beacon  intends to produce a remake or sequel of
      any Picture for release in the  Territory  after the  expiration  of Term,
      Beacon will accord Universal a right of first negotiation/last  refusal to
      acquire  Distribution  Rights  in the  Territory  to each  such  remake or
      sequel.

18.   COPYRIGHT: As between Universal and Beacon, Beacon will be the
      sole and exclusive owner of the copyright in the Pictures.

19.   MUSIC: Universal and Beacon will discuss in good faith the
      possibility of establishing a co-venture to exploit the
      soundtrack album and music publishing rights in the Pictures,
      but unless and until such co-venture is established (as to which
      no commitment has been made by Universal), the provisions of
      Paragraphs 7.a. and b. will govern the soundtrack album and
      music publishing rights, respectively, in the Pictures.

20.   PRESS RELEASE: Universal and Beacon will mutually approve all
      press and publicity releases with respect to this agreement.

      Since  this   letter  will  serve  as  our   agreement   until  long  form
documentation is prepared, please acknowledge your agreement to the foregoing by
signing where indicated below.

                                   Sincerely,

                        Universal Pictures, a division of
                          Universal City Studios, Inc.



                               By:/s/ Xxxx Xxxxxxx
                               Its:Executive Vice President


AGREED TO AND ACCEPTED:

BEACON PICTURES


By: /s/ B. Xxxxxx Xxxxxxxxx
Its: Chairman