VIEWS: 335 PAGES: 13 CATEGORY: Legal Forms POSTED ON: 5/19/2010
Secure production financing for your motion picture by providing the lender with this Film Completion Guaranty. - The agreement is between the lender financing the film and the guarantor who is guaranteeing completion and delivery of the film. - If the producer fails to complete and deliver the film (as defined in the terms), the guarantor will take over production. - The guarantor is under no obligation under the Guaranty until the strike price (production price) has been advanced. - The guarantor is not responsible for obtaining any rating for the film, or to deliver any materials other than the delivery materials (as those are defined in the terms), or for the quality of the film itself. - If the guarantor fails to complete and deliver the film, it will repay the financier for all sums advanced. - The guarantor subordinates any claims it may have against the producer to the repayment of the financier and all of the financier's rights and security interests. - The document includes a Notice Cure and Arbitration Agreement. This Film Completion Guaranty template is in MS Word format, and is fully editable to meet your specific needs.
COMPLETION GUARANTY THIS AGREEMENT made effective as of the _____ day of ______________, _______. BETWEEN: [NAME OF FINANCING COMPANY] a corporation duly incorporated under the laws of ________ with a head office at _____________ [address] (the “Financier”) - and - [NAME OF GUARANTOR] a corporation duly incorporated under the laws of ________ with a head office at _____________ [address] (the “Guarantor”) WHEREAS: A. The Financier has agreed to advance the sum of $______________ (the “Funds”) to __________ [insert name of production company] (the “Producer”) to pay for the production costs of a film project currently entitled “__________________” (the “Film”), upon the terms and conditions of an agreement between the Financier and the Producer dated the _____ day of ______________, _______ (the “Financing Agreement”). B. As a condition to advancing the Funds, the Financier requires the Producer to procure a guarantee (“Guarantee”) of completion of the production and delivery of the Film. C. The Guarantor has agreed to provide such Guarantee, subject to the payment by the Producer of the Guarantor’s Fee, as hereinafter described. NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the foregoing premises and of the Financier lending the Funds to the Producer, the parties hereby agree as follows: 1. Guarantee Subject to the provisions of this Agreement, the Guarantor agrees to: (a) Guarantee the Completion and Delivery of the Film (as that term is defined in Schedule A attached hereto); (b) Procure or provide the Completion Funds, if any are needed, to Complete and Deliver the Film, if the Producer shall fail to do so; (c) Complete and Deliver the Film, if the Producer shall fail to do so; and (d) If Guarantor fails to Complete and Deliver the Film as aforesaid, make the payments specified in paragraph 7(a) hereof. -2- 2. Definitions The words and phrases defined herein shall have the meanings set forth in Schedule B attached hereto. 3. Guarantor’s Fee The Guarantor’s obligations hereunder are conditional upon the payment by the Producer of the Guarantor’s Fee, in full, as follows: [set out the amount of the fee and how it is to be paid] 4. Production Controls Pursuant to a Completion Agreement between the Guarantor and the Producer, the Guarantor shall have the right to Complete and Deliver the Film in accordance with this Completion Guaranty, or to procure the Completion and Delivery of the Film by any other person or company in accordance with the terms of the Completion Agreement. 5. Conditions of Guarantee The Guarantor shall be under no obligation hereunder: (a) until the entire amount of the Strike Price has been made available to the Producer or to the Guarantor, as and when required by the Producer or the Guarantor, as provided in the Financing Agreement, whether or not an event of default has occurred thereunder. Notwithstanding anything to the contrary contained herein, the Financier shall not be obligated to supervise or administer to the application of the Strike Price to the Producer or the Guarantor, it being agreed that the Financier’s obligation shall only be to advance such sums in accordance with the terms of the Financing Agreement and this Completion guaranty; (b) to obtain any seal, certificate or rating of the [revise as appropriate for your circumstances: Motion Picture Association of America, Inc. ("MPAA"), except as required to Complete and Deliver the Film; (c) to deliver any materials other than the Delivery Materials prior to the Delivery Date or to deliver the Delivery Materials to any locations other than the locations designated in Schedule A attached hereto; (d) for the quality of the Film or the Delivery Materials, other than the technical quality thereof necessary to Complete and Deliver the Film; (e) with respect to any defect in the copyright of the Screenplay, the Underlying Literary Property, if any, or the Film, or in the rights acquired for the Film in the Screenplay or in the Underlying Literary Property, if any, or in the title of the Film, or in the music of the Film (except for the rights in such music that are acquired by the Guarantor in the event the Guarantor takes over the production of the Film and then acquires rights in and to music which is used in the Film); (f) with respect to any claim or liability arising out of any tort or any breach of contract committed by the Producer, except to the extent necessary to Complete and Deliver the Film; (g) with respect to any of the Excluded Risks (as defined in Schedule B); and (h) any Over-Budget Costs arising as a result of currency fluctuations. -3- 6. Excluded Costs Notwithstanding any provisions of this Completion guaranty to the contrary, the Guarantor shall not be obligated to provide funds for the payment of the following costs (except to the extent such costs are (i) specified in the Budget, (ii) required to Complete and Deliver the Film, (iii) required to correct technical defects in the Film, or (iv) conform the Film to contractual specifications for which the Guarantor is responsible under this Completion guaranty): (a) the cost of delivery items which are not Delivery Materials; (b) the cost of legal, interest and finance fees and expenses, except as provided for in paragraph 7(a) hereof; (c) distribution expenses, including costs incurred in meeting censorship or exhibitor requirements, or to make foreign language versions of the Film (dubbed, subtitled or otherwise) or any other versions except the original version in the language specified in the Screenplay; (d) advertising and publicity costs, including costs incurred for previews; (e) costs incurred to photograph, record or include in the Film "cover shots" for television or other purposes or other substitute or additional material; provided, however, that if "cover shots" are required to Complete and Deliver the Film, the Guarantor will be obligated to deliver such "cover shots"; and (f) costs incurred after the Completion and Delivery of the Film or incurred in connection with re-cutting, re-editing, retakes (other than retakes done by the director during the ordinary course of production in accordance with the Production Schedule) and changes. 7. Failure to Complete and Deliver the Film; Insurance (a) In the event that the Guarantor fails to Complete and Deliver the Film, the Guarantor’s liability hereunder shall be limited (except as otherwise provided herein) to: (i) the payment to Financier, on demand, of an amount equal to the Obligations (as defined in Schedule B) less so much thereof as may have been refunded to and retained by Financier by insurance or otherwise indefeasibly paid to Financier in connection with the Film, and (ii) the payment of any additional costs or expenses of the Film that the Guarantor is required to pay pursuant to this Completion guaranty. The payment referred to in paragraph 7(a)(i) hereof shall be made to Financier without reduction or set-off and notwithstanding any Completion Funds advanced by the Guarantor to the Producer or expended by the Guarantor directly to Complete and Deliver the Film in accordance with the terms of this Completion guaranty. Upon payment to the Financier as provided in paragraph 7(a)(i) hereof, the Guarantor shall be automatically subrogated to all of the Financier’s rights, claims, causes of action and security interests in relation to the Film. The Financier agrees to execute such assignments and other instruments as the Guarantor may reasonably require to evidence and effectuate such subrogation, at the Guarantor’s sole cost and expense. (b) If any claim covered by production / indemnity insurance should arise in relation to the Film, the insurance recovery (unless paid to a third party, such as in relation to a personal injury or -4- property damage claim) shall be paid and disbursed as provided as an Insurance Recovery specified in Schedule B attached hereto. 8. Rights of Financier Provided that Financier does not interfere with the Guarantor’s ability to Complete and Deliver the Film pursuant to this Completion guaranty, Financier may at all times, without prejudice to this Completion guaranty and without discharging or in any way increasing Guarantor’s liability hereunder: (a) make further advances to the Producer; (b) grant to the Producer any time or indulgence; or (c) deal with, exchange, release, modify or abstain from perfecting or enforcing any security interest or other Guarantee or rights which Financier may have from or against the Producer or with any other person or guarantor; provided that such action shall not materially prejudice the rights or obligations of the Guarantor under this Completion guaranty. Financier agrees that it will not, without the prior written consent of Guarantor (which consent shall not be unreasonably withheld), agree to any amendment to the Financing Agreement or any agreements ancillary thereto or take any other action (including interference with Guarantor’s access to the physical elements of the Film) which may in any way materially prejudice the rights or obligations of Guarantor under this Completion guaranty. If the Financing Agreement provides that Financier has the right to take over control of the production of the Film, Financier acknowledges that such right is subject to the rights of Guarantor under this Completion guaranty. Financier shall not be obligated to see to the application of the Funds advanced pursuant to the Financing Agreement. 9. Subordination Guarantor hereby subordinates any rights and claims which it may have against the Producer, its principals and affiliates (whether by way of subrogation or otherwise) and any security interest which Guarantor may have in any collateral of the Film in which Financier has or may have a security interest pursuant to the Financing Agreement or any other agreement, to the repayment to Financier of the Obligations in full and to all of Financier’s rights and security interests and claims under the Financing Agreement or otherwise in connection with the Film. 10. Assignment Financier shall have the right to assign the benefit of this Completion guaranty, in whole or in part, to any third party who succeeds to Financier's rights in the Film or the Financing Agreement. Any other assignment to any other person or company shall be null and void. 11. Notices All notices required or permitted to be given pursuant to this Agreement shall be delivered by hand to the party for which it is intended, or sent by facsimile transmission, electronic email or other form of transmitted or electronic message or personally delivered, sent by prepaid courier or registered mail directly to such party at the following addresses or at such other address as either party may stipulate by written notice to the other: If to Financier: [name of contact person] [address] -5- [fax number] [email] If to Guarantor: [name of contact person] [address] [fax number] [email] Notices shall be deemed to be received on the date of actual delivery or transmission. 12. Corporate Approvals Guarantor hereby warrants that it is not required to obtain any authorizations, approvals or consents from any governmental bodies or regulatory authorities for the execution and delivery of this Completion guaranty and the performance thereof; provided, however, if any such authorizations, approvals or consents are hereafter required, Guarantor shall comply with such requirements. Guarantor further warrants that the execution, delivery and performance of all of the terms and provisions hereof have been duly authorized by proper corporate or other action under the laws of _______________ and that no consent of any third party to the execution, delivery and performance hereof is otherwise required. 13. Remedies In the event of a dispute hereunder, the provisions for arbitration specified in Schedule C attached hereto shall apply. Each and all of the several rights and remedies provided for in this Completion guaranty or at law or in equity shall be cumulative, and no one of them shall be exclusive of any other right or remedy. The exercise of any one or more of such rights or remedies shall not be deemed to be a waiver of or an election not to exercise any other such right or remedy. The obligations of the Producer and the Guarantor are several, not joint. Financier may bring proceedings against Guarantor without having first instituted proceedings or made demand upon or against Producer. If an action, suit or other proceeding is brought for the enforcement of this Completion guaranty, to declare rights or obligations hereunder, or as a result of an alleged breach, default or misrepresentation by either party, the prevailing party shall be entitled to recover its reasonable legal fees and other costs, in addition to any other relief to which that party may be entitled. 14. Miscellaneous Provisions (a) Governing Law. This Completion guaranty shall be governed by and construed in accordance with the laws of _______________. Any legal actions, claims or demands shall be handled in a court of competent jurisdiction within _________________. (b) Interpretation. The language of this Completion guaranty shall be construed as a whole according to its fair meaning and not strictly for or against either of the parties. Paragraph and section headings as used herein are for convenience of reference only and have no other significance. Any term used in this Completion Agreement in the singular shall be deemed to be used in the plural wherever appropriate. (c) Severability of Provisions. If any one or more of the provisions of this Completion guaranty shall be held to be illegal or unenforceable in any respect, the legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. (d) Modifications and Waivers in Writing. NO MODIFICATION, AMENDMENT OR WAIVER OF ANY PROVISION OF THIS COMPLETION GUARANTY OR WAIVER OF ANY DEFAULT -6- HEREUNDER SHALL BE EFFECTIVE UNLESS IN WRITING AND SIGNED BY AN OFFICER OF EACH OF THE PARTIES (IN THE CASE OF A MODIFICATION) OR BY THE WAIVING PARTY (IN THE CASE OF A WAIVER) AND SUCH WRITING EXPRESSLY STATES THAT SUCH WRITING IS A MODIFICATION OR WAIVER (AS APPLICABLE) OF THIS COMPLETION GUARANTY. (e) Counterpart Signatures. This Completion guaranty may be signed in counterparts and each such counterpart shall constitute an original document and each such counterpart, taken together, shall constitute one and the same instrument. IN WITNESS WHEREOF the parties hereto have executed this Agreement on the date first above written. [NAME OF FINANCING COMPANY] [NAME OF GUARANTOR] By: By: [name & office of signing officer] [name & office of signing officer -7- Schedule A to Completion guaranty between [NAME OF FINANCING COMPANY] and [NAME OF GUARANTOR] COMPLETION AND DELIVERY OF FILM 1. The term "Completion and Delivery of the Film" or "Complete and Deliver the Film" as used in this Completion guaranty shall have the following meaning: (a) The production of the Film in accordance with the Budget and the Production Schedule, and the Film as produced shall: (i) be based upon the Screenplay; (ii) qualify for a ________ [insert appropriate rating organization] rating of not more than __; (iii) be ___ to ___ minutes in length, including main and end titles; (iv) be shot in [revise as appropriate: color in 35mm; (v) be of technical first class quality; and (vi) have the following elements, all of which are subject to the approval by the Guarantor: Producer: [Name of Production Company] Director: Executive Producer: Principal Cast Members: [name] in the role of ________________ [name] in the role of ________________ (b) the delivery to ____________________ by the Delivery Date of the film and soundtrack materials specified in Exhibit "A" attached hereto (the "Delivery Materials"). 2. The term "Delivery Date" shall mean ________________, subject to postponements due to the occurrence of events of force majeure which extend the delivery date and any periods of notice, cure and arbitration as provided in Schedule C attached hereto. 3. The term "Distribution Agreements" shall mean the following agreements: (i) [list all distribution agreements] 4. The term "Distributors" shall mean the following: (i) [list all distributors] 5. The term "Production Bank Account" shall mean the bank account designated in th
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