Production and Development. From and after the Closing Date, Metromedia will provide the Surviving Corporation with a revolving credit facility in the aggregate principal amount of $20,000,000 to be utilized by the Surviving Corporation solely for the production and acquisition (including by way of a negative pick-up) of Motion Picture Product (as hereinafter defined). Motion Picture Product shall mean full-length feature films with budgeted negative costs (including all costs customarily included in connection with the preparation, production and completion, both above-the-line and below-the-line, of such product) not in excess of $5,000,000 (provided that one film per fiscal year may have a budgeted negative cost not in excess of $7,000,000) which is, (i) with respect to Motion Picture Product produced by the Surviving Corporation, approved in advance by the Office of the Chairman of Metromedia and (ii) with respect to Motion Picture Product acquired by the Surviving Corporation, is either approved in advance or is a feature film included in an acquisition plan or acquisition strategy for a film festival or similar event the acquisition costs of which were pre- approved by the Office of the Chairman of Metromedia. In addition, Metromedia will provide the Surviving Corporation with a revolving development fund for the development of Motion Picture Product which will not exceed at any time $1,000,000 for the one year period from the Effective Time to the first anniversary of the Effective Time, increasing by $250,000 per year thereafter to a maximum of $2,000,000. As projects are "greenlighted" by Metromedia, the amount of development costs for such Motion Picture Product shall be included in the budgeted negative cost for such project and the amount of the Surviving Corporation's development fund shall be increased (up to the applicable maximum amount) by the amount of such development costs that become included in the budgeted negative costs for projects. In addition, the Surviving Corporation may expend amounts for the development of television product (other than deficit-financed television product) as such amounts are approved by the Office of the Chairman of Metromedia.
Production and Development. 46 ARTICLE 5
