The Interparty Agreement
The discounting of production receivables is the essence of all production financing. Whether for television or film, production receivables can include, among other things, licences to broadcasters, pre-sales or licences to distributors, negative pick-ups, equity investments, tax funds and grants or rebates made available by various institutions. The production receivables for a particular project are typically assigned to the bank by notice of assignment and the proceeds received are used to retire the loan. For significant licences or distribution agreements, where payments are contingent upon delivery, it is common for banks to require the implementation of multiparty agreements involving the producer, the completion guarantor, the bank and the licensee or distributor. This type of agreement is commonly referred to as the Interparty Agreement.