Definitions

In this Facility letter, the following expressions shall have the following meanings, unless the context otherwise requires. 'Insurance Policies' 'Interparty Agreement' 'Laboratory' 'Laboratory Pledgeholder's Agreement' 'Production Agreements' 'Production Finance Facility' 'Repayment Date' 'Repayment Schedule' 'Rights' 'Sales Agency Agreement' 'Sales Estimates' (Gap deals only) The definitions section is self-evident, but operates to set out the full meaning of any defined terms that are used...

Banks and Security Documents An Introduction

This chapter looks at the form and content of the agreements that a bank typically will require a borrower to enter into in connection with a secured loan facility for the purposes of financing a film transaction. This chapter is written on the basis that a film production partnership, or company, is the borrower and that the bank, as security for its loan facility, requires a charge and assignment over the borrower's rights in the film and key contracts in connection with the film. The content...

Bb Joint Responsibility

Except as otherwise provided in this Agreement, the Co-producers shall have joint responsibility for managing all aspects of the production of the Film, including all financial and creative decisions. In the event that the Co-producers shall fail to agree on any matter after reasonable consultation then, subject always to the provisions of this Agreement and the requirements of the Treaty and any special conditions imposed by the Relevant Authority, and to the constraints of the Budget and the...

Date [ [ Notes to the Agreement

This letter is by way of Acknowledgement of the Notice of Assignment and payment instructions and serves as evidence to the Bank that the legal requirement to serve Notice of Assignment has been complied with. The Acknowledgement creates a direct contractual link between the Bank and the relevant party to the Agreement that has been assigned. The Bank will usually require that the Acknowledgement of Notice of Assignment contains certain acknowledgements and undertakings on the part of the...

Dd Engagement of Individuals

Each of the Co-producers shall be primarily responsible for the engagement (on terms to be agreed between them) of the respective nationals whose services are required and utilized for the production, completion and delivery of the Film. All such engagements as aforesaid must be within the financial and other terms as required and stipulated by the Budget and the Production Schedule. If the terms of such engagements cannot be agreed between the Co-producers the decision of shall be final. All...

Duration and Extent of Rights Granted

The agreement must contain a clause that sets out how long the producer can exploit the underlying rights. For feature films it is advisable to acquire as many rights as possible for the full period of copyright. A short duration will ultimately affect the sales agent's or distributor's ability to exploit the finished film. Most financiers or end users such as distributors will not acquire rights in a film unless the producer has all rights in the underlying work and subsequent film for the...

Enterprise Investment Schemes EIS

EIS schemes encourage small, higher risk, unquoted trading companies to raise finance by issuing full risk ordinary shares to investors who are resident and ordinarily resident for tax purposes in the UK. They can provide a much needed and valuable source of equity to UK film production companies. Finance is sourced by the issue of a prospectus to the public and the sale of new, ordinary shares to investors in a 'qualifying' public limited company. The production of feature films is classed as...

Financial Services Regime

Many LLPs, utilized as film fund vehicles will, unless the members have had the responsibility for the 'day to day' running of the LLP (which recent case law states must be actual involvement as opposed to the right to be consulted over the more material matters of the business of the LLP), constitute an unregulated 'collective investment scheme' (CIS) for purposes of the Financial Services and Markets Acts 2000 (FSMA) and the Financial Services Authority (FSA). The implications of an LLP being...

HDistribution Rights

It is hereby acknowledged that all distribution rights in the Film in the Remaining Territory shall be granted to a mutually agreed sales agent. For the avoidance of doubt any and all receipts and revenues derived by the Co-producers arising from the exploitation of the Film and all allied and ancillary rights in the Remaining Territory shall be allocated to the Co-producers in the same proportions as their contributions respectively. i. Principal photography of the Film is scheduled to...

Interpretation

1.1 In this Charge, the following expressions shall have the following meanings unless the context otherwise requires 'Bank' includes persons deriving title under the Bank 'Borrower' includes persons deriving title under the Borrower or entitled to redeem this security 'Charge' means this charge and any and all schedules, annexures and exhibits attached to it or incorporated by reference 'Charged Assets' means, to the extent of the Borrower's right in and title to such assets, the Film, the...

Termination and force majeure

I. commit a material breach of this Agreement and (if capable of remedy) shall fail to remedy the same within 7 days of written notice notifying the breach and requiring its remedy or ii. go into liquidation (other than for the purposes of solvent amalgamation or reconstruction) or become insolvent or bankrupt or have a liquidator, receiver, administrator or other similar official appointed over any of its assets or fail to satisfy any final judgement within 7 days thereof or shall cease to...

Representations warranties and indemnity

In many respects, the purpose of this clause correlates with the purpose of the conditions precedent clause. A bank will lend on the basis of a certain set of facts as presented to it by the borrower. Whilst the conditions precedent constitute documentary evidence of those facts, the representations and warranties are statements made by the borrower confirming the set of facts is true. Again, as with conditions precedent, the nature of the representations to be made by the borrower will closely...

L Covenants

This clause contains covenants that are essentially promises by the borrower in favour of the bank to do or undertake certain actions. Covenants will vary in subject matter in accordance with the nature of the borrower's business and the purposes for which the facility is required. Some covenants may aid the flow of information between the bank and the borrower, for example a covenant by the borrower to provide the bank with specified information regarding the progress of the film covenants by...

Matters pertaining to the licence agreement

1.1 The Producer and the Licensee each represent and warrant that, as of the date hereof, no default exists under the Licence Agreement, that the Licence Agreement is in full force and effect and that the Licence Fee (as hereinafter defined) shall be payable to the Bank in the manner set forth therein, as herein modified. 1.2 The Licensee hereby acknowledges, for the benefit of the Bank and the Completion Guarantor only, that it has approved all elements of the Film over which the Licensee has...

N Governing law

This Agreement shall be construed and performed in all respects in accordance with, and shall be governed by, the laws of and the parties irrevocably submit to the exclusive jurisdiction of the Court of . IN WITNESS whereof the parties hereto have executed this instrument the day, month and year first above written. SIGNED and DELIVERED by UK CO-PRODUCER Schedule 1. Production specifications The Film shall be a 35 mm sound and colour film provisionally entitled ' ' originally recorded in the...

Notes to the Agreement

In order for an assignment of the benefit of any agreement or other assets to be legally effective, the party assigning its rights must give written notice to the other party or parties to the agreement. In this particular example, the Notice includes a payment instruction that the other party to the agreement should pay all amounts payable under that agreement direct to the Bank. For example, if giving notice to a distributor following assignment of the benefit of a Distribution Agreement, the...

Obligations of the Parties

Each of the Parties agrees with FCAM, FCustody and with the other Parties 5.1 that they will not during the term of this Agreement authorize or permit any third party to collect or administer Gross Receipts nor will any Party interfere with, frustrate or take any action contrary to the terms of this Agreement 5.2 to provide FCAM promptly with copies of all SubDistribution Agreements, other relevant agreements, irrevocable instructions or other information FCAM may reasonably request in order to...

Other acceptable security

At the time of writing (March 2004) there is an active market in providing advance funding on the net producer benefit arising out of a UK sale and leaseback agreement. Some banks are prepared to look at these agreements in the same way as they look at distribution agreements and it may be possible to obtain up to 100 per cent of the estimated net producer benefit. The principal conditions applying will be the issuance of preliminary approval of co-production status by the Department for...

Representations and warranties

The Producer hereby represents and warrants to Y with respect to f. Except as set out above, it has not sold, transferred, assigned or otherwise disposed of any of its right, title and interest in and to the Screenplay. g. It has the right and capacity to enter into and perform this Agreement. h. There are no liens or encumbrances on the Screenplay, and no claims have been made or litigation instituted or, to the best of its knowledge, threatened with respect thereto. i. It has not produced or...

Schedule B Form of LC Demand Certificate

Irrevocable Letter of Credit No Dated 200 issued by In favour of We refer to the above Letter of Credit (the 'Letter of Credit'). Terms defined in the Letter of Credit have the same meanings when used in this L C Demand certificate. We are not in receipt of the Certificate of Delivery. Accordingly we hereby demand the amount of ( pounds sterling). This payment is demanded in accordance with, and is due under, Clause 2 of the Letter of Credit. Yours faithfully (Authorized Signatory) Schedule 2...

Schedule Definitions

In this Agreement the following words and expressions shall have the meanings hereby ascribed to them which meanings shall apply to this Agreement and the Schedules hereto 'Accounting Currency' 'Beneficiary (ies)' 'Completion Guarantor' 'Delivery Date' those persons, firms or entities specified in Schedule 4 any day excluding Saturdays, Sundays and any days which are public holidays in the country in which any of the Parties has its principal place of business a designated bank account held in...

Schedule II Definitions

Budget the final budget of the Film dated , 200 , which has been approved in writing by the Producer, the Guarantor and, if required, the Distributor(s) and Financier. Guarantor hereby acknowledges its receipt and approval of the Budget. Budget Costs the projected production costs of the Film as set forth in the Budget. Budget Funds the monies needed to pay the Budget Costs. Complete and Deliver the Film the term 'Complete and Deliver the Film' shall have the meaning specified in Schedule I....

Territory

Reference to the manner or place or means by which the Film is exploited and which have been notified to FCAM in writing all copyright and similar rights in and to the Film and all ancillary or associated rights thereto or in the underlying rights thereof the proceeds from the exploitation of which are intended by the Parties to be collected and distributed pursuant to the terms hereof a statement by FCAM specifying the sources from which Collected Gross Receipts have been derived and their...

The Completion Agreement

The completion guarantor will enter into a separate agreement with the producer that gives the guarantor certain rights of control in relation to the production so that it can perform its obligations to the financier or bank. The completion agreement ensures that the producer undertakes to deliver the film on budget and on time and according to the specifications of all the various financiers and or distributors. The main focus of the completion agreement is that the completion guarantor will,...

The Insiders Guide to Film Finance

Philip Alberstat BSc BA LLB (London) AMSTERDAM BOSTON HEIDELBERG LONDON NEW YORK OXFORD PARIS SAN DIEGO SAN FRANCISCO SINGAPORE SYDNEY TOKYO Focal Press is an imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP 30 Corporate Drive, Burlington MA 01803 Copyright 2004, Philip Alberstat. All rights reserved The right of Philip Alberstat to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 No part of this publication...

The [ Territory

Sums amounting in the aggregate to per cent of the Budget or of the Cost of Production which is the estimated cost of producing and delivering the Film as the same shall be approved by the Co-producers annexed hereto as Schedule 2 the cashflow schedule for the Film as approved by the parties hereto and annexed hereto as Schedule 3 the British Contribution and or the Contribution as the context permits the final total aggregate cost of all items included in the original Budget actually incurred...

The Coproducers Contributions

The Co-producers shall each be responsible for advancing or causing to be advanced a proportion of the monies required for the financing of the cost of the production of the Film shall advance or cause to be advanced not less than the Contribution, being ( ) net of all taxes, levies and duties, if applicable, in accordance with the Cashflow Schedule UK CO-PRODUCER shall advance or cause to be advanced not less than the British Contribution, being ( ) net of all taxes, levies and duties, if...

Vesting of rights acknowledgements of priority

5.1 Notwithstanding anything to the contrary set forth in the Licence Agreement, the grant of all rights to the Licensee in respect of the Film (including, without limitation, the copyright interests therein) pursuant to the Licence Agreement or any security agreements or copyright assignments executed in connection therewith shall be subject in all events to the Licensee's indefeasible and irrevocable payment in full of the Licence Fee in accordance with the terms hereof, and the Licensee...

What are the costs of the transaction

From the gross benefit, there are three areas of expenditure the producer must take into account and for which he is responsible i. Payment of the guarantee fee to the guarantee bank (referred to in the business as the defeasance bank). Rates that are independently negotiated by the producer are approximately 0.4-0.5 per cent depending on which bank the producer selects. Again, it is a highly important tax principle that the producer must arrange and negotiate the terms of his own guarantee....

What costs are allowable in calculating production expenditure

The UK does not have a formal accounting standard covering the film industry. However, production expenditure should, nevertheless, be identified by reference to normal accountancy principles, subject to the specific issues outlined below. It is not possible to list comprehensively what constitutes production expenditure. What follows is a guide. The cost of underlying rights used for a film salaries, fees, benefits (and living expenses) and all associated costs (such as NIC and payroll taxes)...

What rights does a producer give away

The producer sells the master negative and licenses worldwide distribution rights to the partnership. In order to achieve this, standard form documentation will include a laboratory pledgeholder letter that effectively passes on the ownership of the master negative to the partnership. That is the critical issue for the tax efficiency of this transaction combined with the licence of distribution rights. The licence transfers the worldwide exploitation rights to the partnership by way of licence....

Registration of Security

Where a company (that is a company formed under the Companies' Acts) or a limited liability partnership ('LLP') creates a registerable security interest over its property and assets then, under section 395 of the Companies' Act, that mortgage, charge or security document must be registered at Companies' House within 21 days of the date of its creation. Section 396 of the Companies' Act 1985 lists what constitutes a registerable security interest. A charge and assignment by way of security as...

Books

Independent Producers' Guide to Film & TV Contracts. Focal Press. Andersen, Arthur, 1996. The European Film Production Guide Finance, Tax, Legislation, France, Germany, Italy, Spain, UK (Blueprint Media Business School S.) Routledge. Baumgarten, Paul A., 1992. Producing, Financing and Distributing Film A Comprehensive Legal and Business Guide. Limelight Editions Campisi, Gabriel, 2003. The Independent Filmmaker's Guide to Writing a Business Plan for Investors....

Schedule Distribution of Collected Gross Receipts

To FCAM in payment of FCAM's Remuneration and the FCAM Expenses and thereafter 2. any Residuals as notified to FCAM and thereafter 3. the Completion Guarantor in respect of monies paid out (if any) pursuant to the terms of the Completion Guarantee and thereafter 4. the Distributor in respect of such fees, commissions and expenses as shall have been notified to FCAM pursuant to Clause 5.5 of FCAM's Standard Terms of Agreement and thereafter 5. pari passu the deferees as follows c. Name as to USD...

Sale and Leaseback Transactions

Although sale and leaseback transactions will come to a close in July 2005, it is worthwhile looking at the scheme because of its importance over the last few years to the British film industry. At the time of writing this book, the scheme will be replaced with a transferable tax credit system. Some feel that this type of transferable tax credit system will be similar to the one used in Luxembourg. Check the Department for Culture, Media and Sports DCMS website for further details.

How are sale and leaseback transactions structured

The leasing structure developed in the UK enables a qualifying film to be sold by a producer to a partnership. That partnership is a see-through vehicle for tax purposes and enables tax losses to be passed on to the individual partners in that partnership. The partnership then enters into a finance lease, usually for a period of 15 years, leasing back the distribution rights to either the original producer or a third party. As far as the producer is concerned, the distribution rights will be...

Film Finances Sample Completion Guarantee

We have been informed by referred to herein as 'Producer' that you have agreed to advance to Producer to pay for the production costs of the Film upon the terms and conditions of that certain agreement between yourselves and 'Producer' dated as of , 200 the 'Financing Agreement' . The Producer has also informed us that as a condition to your advancing the funds, you have required the Producer to procure for you a guaranty of completion of the production and delivery of the Film. The Producer...

Rob Sherr

Rob is the Commercial Banking Manager and an Assistant General Manager at Bank Leumi UK plc. He has been in banking for 27 years during which time he has largely been involved with commercial lending. He joined Bank Leumi in 1999 as Head of Media, having spent the previous nine years working at Coutts amp Co. In 1993 he became one of the founding managers of Coutts' Media Banking Office. Under Rob's guidance, Bank Leumi participated in the development of completion bonded finance to video games...

Schedule III Notice Cure and Arbitration Agreement

With respect to any dispute relating to the delivery of the Film the following provisions will apply a. Distributor shall issue a notice 'Objection Notice' specifying the defects in the Completion and Delivery of the Film as defined in the Completion Guaranty to which this Schedule III is attached hereafter 'Delivery' b. The Objection Notice shall specify with particularity and in detail the purported defects in Delivery of the Film, and all items that must be corrected, delivered or...

Cut Through

If the completion guarantor is not part of a large insurance company, then it will obtain re-insurance from a third party insurance broker such as Lloyds of London. The re-insurance is a way for the completion guarantor to spread its risk on a production. A bank participating in financing of a film will require that they are insured directly with the insurance company rather than the third party broker. In these circumstances, the completion guarantor will arrange a 'cut through letter', which...

Security Interest

To the extent, if any, that the Producer owns any right, title or interest in the Collateral, the Producer hereby grants to the Guarantor a security interest in the Collateral to secure repayment of the Secured Sums, if any. Said security interest shall be subject to the Prior Rights, but shall have priority over any other rights or security interests of any other person, company or entity in or with respect to the Collateral, including deferments and gross receipts or net profit...

Schedule Form of Certificate of Delivery

The undersigned, 'Guarantor' hereby certifies and confirms to ' ' the following in respect of the feature length theatrical film tentatively entitled ' ' 'the Film' . 1. The Film stars as ' ', as ' ', as ' ' or substitute actresses and or actors engaged in accordance with the terms of the Interparty Agreement relating to the Film between, inter alia, and Guarantor. The Film is directed by or a substitute director engaged in accordance with the terms of the Interparty Agreement relating to the...

Schedule Insurance

Cast Insurance in an amount equal to at least 100 per cent of the amount of the Budget to cover, among other things, extra expense necessary to complete the principal photography of the Film due to the death, injury or sickness of any principal performer or the director. b. Negative Insurance in an amount equal to at least 100 per cent of the amount of the Budget to cover, among other things, all risks of direct physical loss, damage or destruction of raw film stock, exposed film, whether...

FCAMS Standard Terms of Agreement

1.1 Any Party owning or controlling any Rights hereby undertakes with FCAM and the other Parties hereto to issue irrevocable instructions to Sub-Distributors in a form approved in writing by FCAM to pay all Gross Receipts directly into the Collection Account. 1.2 The Producer hereby undertakes to procure that the Distributor or, if no Distributor is appointed, the Producer itself will promptly notify FCAM of delivery of the Film to the respective Sub-Distributor s and, to the extent known, the...

Foreword

Barely a day goes by without some film-related story making the pages of the average newspaper. We are not just talking about the reviews ghetto, but the lifestyle, travel and business sections. With some films and film companies having become brands in their own right, the corporate divorce between Disney and Pixar was treated to front page treatment. What does this tell us Film has become big news, big business and dominated by the studio big-boys. Maybe. But at the same time part of its...

Gross Receipts

The Recoupment Schedule set out below reflects a sales agency agreement between a sales agent and a producer in relation to an advance of funds to the producer for certain rights in a film. The term 'Advance' will also be defined in the agreement with the producer. Other terms such as 'Deferred Fees', 'Sales Agent Costs', 'Excluding Sales Agent Costs', 'Gross Receipts', 'Net Receipts', 'Film', 'Producer' and others will also be defined within the agreement. The example below reflects an...

Financing Intellectual Property Rights

One of the fundamental elements of the film business is the buying and selling of rights rights in books, scripts, treatments, magazine articles, short stories and various other forms of intellectual property. It is customary for a producer or production company to initially option the underlying rights in a project that is based on an existing form of intellectual property. For economic reasons, the cost of an option is much less than buying the rights. As a rule of thumb, producers generally...

About the Author

Philip Alberstat is a media finance and production lawyer specializing in film, television and broadcasting. He has worked on films such as The 51st State, Goodbye Mr Steadman, Beyond The Sea and numerous television programmes and series. He is on the editorial board of Entertainment Law Review and is the author of the Independent Producers' Guide to Film and TV Contracts 2000 , and Law and the Media 2002 . Philip is involved in raising finance for film and television productions and...

Gap Financing

If you think gap financing is to fix your kids' teeth, think again. Lewis Horowitz, well-known film financier and banker Gap financing, is a form of lending whereby a bank lends money against the value of unsold rights to a film. For example, if the budget for a film is three million pounds 3 m and two million pounds 2 m of the budget is already covered by pre-sales, tax funds, public subsidies and other collateral, the remaining one million pounds 1 m that is not covered by any collateral, is...

Stichting Freeway Custody

This Agreement shall be construed and performed in all respects in accordance with and shall be governed by English Law and the parties irrevocably submit to the arbitration procedure contained in Clause 8. AS WITNESS the hands of the parties hereto the day and year first above written. EXECUTED and unconditionally delivered as its Agreement by FREEWAY CAM B.V. EXECUTED and unconditionally delivered as its Agreement by STICHTING FREEWAY CUSTODY EXECUTED and unconditionally delivered as its...

Net Profits

As a general rule of thumb, a film producer should try to retain 50 per cent of net profits for himself and use the other 50 per cent to pay investors in the film. Producers will be required to pay talent, such as writers, actors and the director, a share of the net profits as part of their overall payment. The balance retained by the producer is sometimes known as 'Producer's Net Profits'. During the deal-making process, it is important to define what the producer is actually offering. Those...

Banking Documents Lucy Walker and Philip Alberstat

Banks and Security Documents - An Introduction 54 Notice of Assignment and Irrevocable Payment 96 Instruction Acknowledgement of Notice of Assignment 98 Laboratory Pledgeholder's Agreement 101 5 The Interparty Agreement 106 6 The Completion Guarantee 121 Liability of the Completion Guarantor 123 Payments under the Guarantee 124 Completion Guarantors 129 How to Find Sample Completion Guarantor's Documents 129 Completion Bond Letter of Commitment 130 Film Finances' Sample Completion Guarantee 131...

Bank Facility Letter

From Name of Bank To Producer Date 200 The bank has agreed to provide you with production finance of up to amount of Facility the 'Production Finance Facility' in respect of the Film as defined below inclusive of all applicable interest, costs and fees subject to the following terms and conditions and repayable in accordance with the Repayment Schedule This is the introductory paragraph to the Facility Letter which is addressed to the Borrowers. The paragraph should contain an indication of the...

Official Coproduction Treaties

These include treaties agreed between Great Britain and Canada, Australia, New Zealand, France, Germany, Italy and Norway. The treaties vary in their individual requirements and guidelines. Some require that the production qualifies under a points system i.e., Australia , where points are awarded to key participants who are nationals of one or other of the co-producing countries, while other treaties have less onerous qualification requirements. See the table for highlights of the individual...

Appendix A Glossary of Film Production and Finance Terms

Above the line term denoting portion of a film's budget, usually including the writer, director, producer and main cast. Access letter a letter under which a laboratory undertakes to honour orders placed by a distributor, even though the laboratory may be owed money by the producer or, in relation to the film, by other persons. See also Laboratory letter and Pledge holder agreement. Adjusted gross deal a distribution agreement where the distributor deducts from gross receipts the costs of...

Notice of assignment and acknowledgement

The Producer hereby notifies the Licensee that it has irrevocably assigned to the Bank and has granted the Bank a security interest in and to all right, title, and interest in and to the Film, the Producer's rights in and to and under the Licence Agreement, the licence fee payable to the producer in respect of the Film under Paragraph of the Licence Agreement in the amount of the 'Licence Fee' and any and all other sums if any payable thereunder or hereunder collectively, the 'Bank's...

Letter of Credit

Irrevocable Letter of Credit - insert name of film production partnership or company On the terms and subject to the conditions set out below, Issuer hereby issues this irrevocable Letter of Credit in favour of the Beneficiary at the request of the Distributor. The introductory paragraph relates to issuance of the letter of credit in favour of the Beneficiary. In this example, the letter of credit has been issued at the request of the Distributor. In film transactions, letters of credit and or...

Termination

9.1 FCAM and FCustody may at any time terminate this Agreement upon thirty 30 Business Days by written notice to all of the Parties provided that FCAM's and FCustody's notice shall specify the arrangements proposed to be made by FCAM and FCustody to pay Entitlements which, apart from such termination, would then have been payable to Beneficiaries under the provisions hereof and FCAM and FCustody shall give good faith consideration to any representations made to FCAM and FCustody concerning such...

Credit Provisions

The credit provisions will be checked to ensure that prior to delivery of the film, the writer or author will receive their agreed credit. This provision should state that any inadvertent failure to give a credit will not enable the individual entitled to that credit to seek an injunction against the producers or subsequent theatrical distributor. If this was the case, then a writer who was entitled to a credit that was not given for whatever reason could actually stop the film from being...

Certificate of Authorship

Reference is made to the film currently entitled the 'Film' I, Name of Writer hereby certify that I wrote the original screenplay entitled 'the Work' and that pursuant to various assignment agreements, 'the Producer' owns all right, title and interest throughout the world in and to said Film based on the Work and the results and proceeds of my writing services in accordance with the said agreement and the Producer shall be deemed the author and sole owner of the Work and all other literary...

Criteria for Gap Financing

The banks that are now involved in the gap financing business usually have certain requirements before approving a loan. Banks, typically, will gap finance between 10 and 40 per cent of a film's budget. However, most gap financiers tend to gap only 20 per cent of a film's budget. In general, banks will not gap finance a film unless there are already several major pre-sales in place. Having a pre-sale in place shows that there is a market for this type of film and that the sale estimates given...

Short Form Option Agreement

KNOW ALL MEN BY THESE PRESENTS That in consideration of the payment of 1 and other good and valuable consideration, receipt of which is hereby acknowledged, the undersigned, Author , does hereby grant to 'Producer' and its assigns, successors, licensees and transferees forever, the exclusive and irrevocable right and option to purchase from the undersigned all audiovisual rights of every kind, now known or hereafter devised, including, without limitation, the sole and exclusive film, television...

Sample Recoupment Schedule

Sales Agent shall be entitled to deduct and retain a Deferred Sales Agent Fee in respect of the first Gross Receipts received up to in accordance with paragraph 2. Sales Agent shall be entitled to deduct and retain the Sales Agent Fee from Gross Receipts received beyond the first as set forth in the paragraph 2 c , such fee being inclusive of all sub-Sales Agent fees and any Sales Agent or similar fees whether or not paid to affiliates, subsidiaries or other companies...

Film Finances Sample Completion Agreement

AGREEMENT made as of the day of , between , a corporation 'Producer' of FILM FINANCES, INC., a California corporation herein 'Guarantor' , of 9000 Sunset Boulevard, Suite 1400, Los Angeles, California 90069. 1. Representations of Producer the Producer represents that it intends to produce a motion picture the 'Film' having the following elements i. Underlying literary property None ii. Screenplay entitled ' ', written by dated f. Principal members of the cast. in the role of ' ', in the role of...

Sale and Leaseback

The current UK tax legislation allows for a 100 per cent write off of film production costs for a qualifying British Film in the year of completion or acquisition of the film. The Government's stated objective when introducing such tax deductions was to offer producers a means to reduce the cost of their film production and thus promote production activity in UK. In order to take advantage of this tax deduction it has become common practice for film producers to enter into a transaction in the...

Sample Chain of Title Opinion Letter

Name of Bank the 'Bank' Name of Producer the 'Producer' Name of Film the 'Production' We act in the capacity of UK production counsel to the Producer in connection with the production and financing by the Producer of the Production. As such counsel, we have examined or reviewed the following agreements relating to the acquisition by the Producer of all rights and copyright in and to the screenplay in respect of the film currently entitled ' ' 2. Option Extension Agreement dated 3. Option and...

Limited Liability Partnerships

Since April 2001 it has been possible to structure film production and sale and lease back partnerships as a Limited Liability Partnership 'LLP' . Although LLPs were originally conceived to be used for professional partnerships, such as architects and accountants, they have become the vehicle of choice for anyone seeking to set up a film fund. An LLP is a hybrid between a limited company and a partnership combining the limited liability of a company with the flexibility and tax transparency of...

Sample Sales Estimates

Used in a Gap Deal UK France Germany Co-production ASK PRICES US The foregoing projections are estimates only. No representation is being made that the projections will be realized. Actual results may vary materially from the projections for numerous reasons including, but not limited to, the final cast and creative elements of the picture.

Quit claim

The Producer remises, releases and quit claims all right, title and interest in and to the Screenplay and the Film granted pursuant to the Agreements, and for greater certainty, confirms that it is not currently and hereafter shall not subsequently be entitled to any revenues from the exploitation of the Film. b. The Producer further quit claims any and all copyright interest in connection with the Film. c. The Producer hereby agrees to execute any and all further documents and assurances...

Acknowledgement of Notice of Assignment

We hereby acknowledge receipt of the Notice of Assignment and Irrevocable Payment Instructions the 'Notice' dated relating to the Film and hereby undertake for the benefit of the Bank to comply with the Notice. Capitalized terms used in this Acknowledgement shall bear the meanings ascribed to them in the Notice. In consideration of 1 and of other valuable consideration the receipt and adequacy of which we hereby acknowledge , we hereby undertake and agree that i. we will not invoke or assert...

The Chain of Title Opinion

A chain of title opinion letter is usually required by a bank or financier as a condition precedent for closing the financing on a film production. Not only do banks require the chain of title opinion, but any other financier or participant who is at risk in a film transaction may ask to be named as a beneficiary to the opinion. The opinion acts as an additional form of comfort that all of the underlying rights are in order and that there is no likelihood of potential litigation or a claim...

A Definitions and interpretations

'Producers' Materials' shall mean all materials, information, documentation and any other thing whatsoever deposited with us by the Producer in relation to the Film in order for us duly to perform our obligations under the Agreement. 'Delivery Materials' shall mean all materials, information, documentation and any other thing whatsoever which we shall create or produce in relation to the Film in preparation for the delivery of the Film to the Sales Agent or the Producer. 'Materials' shall mean...

Quit Claim and Notice of Ownership of Copyright and Other Rights

This agreement the 'Agreement' is entered into and is effective as of by and between ABC Films Limited, the 'Producer' and A. By Agreement dated as of , Y entered into an Option Agreement the 'Short Form Option' with Producer, whereby Producer acquired an option to purchase the screenplay the 'Screenplay' currently entitled written by Y B. By Agreement dated as of , the Short Form Option was extended until the 'Option Extension' C. By Agreement dated as of , Y entered into a Literary Option and...

Points system

In addition, the Convention establishes a points system to measure the European nature of the co-production. The Convention requires a minimum of 15 points out of a total possible 19 points awarded on the basis of European nationality in creative and technical categories. The points available to a production are

Short Form Assignment Agreement

KNOW ALL MEN BY THESE PRESENTS That in consideration of the payment of 1 and other good valuable consideration, receipt of which is hereby acknowledged, the undersigned, Author , does hereby sell, assign, grant and set over unto 'Producer' and its assigns, successors, licensees and transferees, all audiovisual rights of every kind, now known or hereafter devised, including, without limitation, the sole and exclusive film, television, musical, merchandising and commercial tie-up rights, and all...

Getting to the Term Sheet

Putting together the finance of a film can be likened to completing a jigsaw puzzle. However, most often there is no picture on the front of the box to illustrate how the final puzzle should look. For all the parties, it is therefore important to obtain the terms of the deal on offer. This, at least, will give an outline of the picture and will help identify areas of conflict that will need to be resolved. As far as the bank is concerned, at the term sheet stage you are not seeking a commitment...

Laboratory Pledgeholders Agreement

When a bank is involved in a film financing transaction, they will require an agreement from the laboratory that processes the film materials stating that the negatives and all of the materials in possession at the laboratory will be held to the order of the bank and will not be released to the producer without the bank's prior written approval. The bank will give the laboratory permission for any distributors or the sales agents to duplicate negatives to meet their specific print requirements...

Collection Agreements

In the world of multiparty film financing, investors, or those entitled to a share of revenues arising from the exploitation of a film, always have an interest in getting their money back or seeing a net profit. Collection Account Management Agreements have become an important aspect of a film financing transaction. Before the widespread use of collection accounts and the engagement of collection management companies, revenues from the sale of a film to international distributors were usually...

Collection Account Management Agreement

AGREEMENT dated as of the day of , 2004 1. FREEWAY CAM B.V. a company registered under the laws of The Netherlands c o Andrassy ut 12, 1061 Budapest, Hungary 'FCAM' 2. STICHTING FREEWAY CUSTODY a foundation registered under the laws of The Netherlands c o Andrassy ut 12, 1061 Budapest, Hungary 'FCustody' and 3. THOSE PERSONS, FIRMS OR OTHER ENTITIES SPECIFIED IN SCHEDULE 1 HERETO together 'Parties' and individually 'Party' which expressions shall include each of the Parties successors in title...