Preamble

The preamble introduces the parties and their relationship to each other and briefly describes the purpose for the Interparty Agreement.

THIS INTERPARTY AGREEMENT made the [ ] day of [ ] 200[ ] BETWEEN:

[ ] (hereinafter called the 'PRODUCER') and [ ] (hereinafter called the 'LICENSEE') and [ ] (hereinafter called the 'BANK')

[ ] (hereinafter called the 'COMPLETION GUARANTOR')

WHEREAS pursuant to the terms of a loan agreement between the Bank and the Producer dated [ ] (the 'Loan Agreement'), the Bank has agreed to advance funds (the 'Loan') to the Producer for use in connection with the production of a film presently entitled [' '] (the 'Film') in accordance with terms and conditions contained therein;

AND WHEREAS the Producer and the Licensee have entered into an agreement dated as of [ ] (the 'Licence Agreement'), pursuant to which the Licensee will be granted the exclusive right to [DISTRIBUTE] the Film throughout [ ] (the 'Territory');

AND WHEREAS pursuant to the terms of the Loan Agreement, the Producer has provided the Bank with various security agreements including a copyright mortgage (collectively, the 'Security') over all of its right, title and interest and to all tangible and intangible elements comprising the Film (the 'Collateral');

AND WHEREAS pursuant to a completion guarantee agreement ('Completion Guarantee') between the Completion Guarantor and the Bank dated as of [ ] the Completion Guarantor has guaranteed to the Bank that the Film will be duly and timely completed and delivered to the Licensee in accordance with terms and conditions of the Licence Agreements;

AND WHEREAS pursuant to that certain agreement (the 'Producer's Agreement') between the Producer and the Completion Guarantor dated [ ] the Completion Guarantor has agreed to issue the Completion Guarantee;

AND WHEREAS the Producer has agreed to assign to the Bank all amounts payable to it by the Licensee pursuant to the Licence Agreement as security for and as a source of repayment of the Loan;

In consideration of these premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

The first few provisions below are important for the Bank as they confirm that the Licence Agreement is in full force and effect and that the Licensee has approved all elements of the Film over which it has rights of approval.

The Bank is also assured that any conditions precedent to the Licensee's obligations under the Licence Agreement, other than delivery, have been met. Banks do not usually provide financing until all the conditions precedent have been satisfied. (See chapter four, term sheet/loan letter, for a full list of condition precedents.)

To the extent that any condition precedents have not been satisfied, the Bank may be asked to waive or take a commercial view on some of them.

Depending on the size of the transaction and the importance of the licence or distribution agreement to the financing, it is usually necessary to list the condition precedents in detail for certainty.

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Film Making

Film Making

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