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...

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...

Conditions precedent

The loan agreement will incorporate a list of all the conditions that will need to be fulfilled before the loan can be drawn down. The length of the list will vary from transaction to transaction but typically will contain between 15 and 40 conditions. Below are some general headings into which these conditions fall and a brief explanation of some individual matters that will need attention. 1. Account opening documents. The bank's account opening requirements must be fulfilled. These will...

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...

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...

Security

The obligations of the Borrower to the Bank under this Facility Letter shall be secured by security in the Bank's preferred form as follows d The Laboratory Pledgeholder's Agreement e Such Distributor Notices as may be relevant and Any future security which the Bank may from time to time hold for the Borrower's liabilities relating to the Film. ii. For the avoidance of doubt, the Borrower acknowledges that all security held and to be held by the Bank for the Borrower's liabilities shall,...

Completion Guarantees

A completion guarantee is a particular type of contract of insurance required by financiers and distributors of films to protect the investment they have made until such time as the film is delivered to them for exploitation. Completion guarantors are specialist companies who offer a form of insurance coverage against certain events that could prevent a film production from being completed. Contributors to the financing of a production would lose their investment, without a hope of return, if a...

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...

Legal Advice

7.1 FCAM may at any time and in its absolute discretion but after having consulted with each of the Parties seek independent legal advice with regard to any non-payment of Gross Receipts by any Sub-Distributor or to any other matter relating to or affecting the performance of FCAM's duties or powers set out in this Agreement and each Party hereby undertakes to assist FCAM to obtain as fully informed and accurate legal advice as possible by 7.1.1 providing FCAM with copies of any relevant...

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...