, LexisNexis(R) Forms FORM 556-10-2
Summary
This form is used when the Director’s services are being provided by a loan-out company.
Agreement dated (insert date of agreement) between (insert name, address and email address of loan-out company) (“Lender”) and (insert name, address and email address of production company) (“Production Company”).
1. ENGAGEMENT: Production Company agrees to borrow from Lender and Lender agrees to lend to Production Company, upon the terms and conditions herein specified, the directing services of (insert name of the Director) (“Director”) in connection with the Theatrical Motion Picture currently entitled “(insert title of the motion picture)” (the “Picture”). Lender hereby represents and warrants that it is a [(corporation) or (limited liability company (“LLC”))] organized and existing under and by virtue of the laws of the State of (identify state of incorporation of loan-out corporation or formation of LLC), that Lender has entered into a written contract with the Director which is now in full force and effect and pursuant to which Lender has the full right and authority to lend to Production Company the services of the Director upon the terms and conditions herein specified.
1. The “Engagement” clause is used for a loan-out arrangement. This clause sets forth the name of the director and picture and adds a sentence that describes the loan-out company and establishes that the loan-out company and director have a written contract which requires the director to render the services described in the loan-out agreement.
Since the name of the motion picture may change during production, and even as late as the release date, the “current” name is indicated. Sometimes, it may be referred to as a “working title.”
The production company will want to assure itself that the lender is validly incorporated for a corporation and organized for a LLC, and in good standing in the state of its incorporation or formation, since these elements are usually prerequisites for a binding employment agreement between the director and loan-out company.
2. TERM: Subject to the following terms and conditions, the Term shall commence upon Lender’s execution and shall continue until the completion of all of Director’s required services for the Picture.
2. The length of the director’s services is expressed in terms of a specific start date and a termination date that depends upon the completion of all the director’s services required for the motion picture, including pre- and postproduction. If the start date cannot be fixed at the time of preparation of the agreement, the production company may seek a period during which the production company can designate a start date, while the director may try to protect against conflicting engagements and waiting too long for work to start on the motion picture.
The date of commencement of services is usually no more than three months (but can be as much as six months or more) in advance of the anticipated date of commencement of principal photography since the director will have to be involved in finalizing the shooting script and other pre-production activities such as location and cast selection.
In representing a director, it is wise to keep in mind the flexible nature of the length of the term so that potential conflicts can be avoided regarding the director’s next motion picture. Also, the loan-out company may seek some protection regarding the length of the term in case production of the motion picture extends beyond a specified outside date or maximum time limit; e.g., additional compensation.
FORM 10-2 Clauses 3-42, Inclusive: Please refer to Form 10-1, Clauses 3-42, supra, inclusive. For the preparation of the Director Borrowing Agreement form, please refer to Form 10-1 and adapt the form to a loan-out situation by making appropriate modifications to the agreement, that is, (i) the Director’s loan-out company (“Lender”) will provide the director’s services, so in appropriate clauses replace “Director” with “Lender”, (ii) all payments should be made to the Lender, (iii) obligations set forth in the agreement are the Lender’s responsibility to ensure that obligations are performed by the Director, (iv) as appropriate from the context, the Lender and the Director may jointly agree to perform the contractual requirements, (v) if a presentation credit may be utilized (i.e., “name of Lender entity” presents may use the name of the Director’s loan-out company for the credit), (vi) typically, the Director will receive a “Directed by” credit and a “Film by” credit, (vii) Clause 43 (Attachment), infra, replaces corresponding Clause 24 (Garnishment), Form 10-1, supra, (viii) Clauses 44 and 45 are additional clauses to be used in Form 10-2, (ix) since the Director’s services are provided by a corporation or limited liability company that employs the Director’s services, a special workers’ compensation clause may be included (see Clause 45, infra), and (x) the Director will sign an inducement clause or separate inducement letter/agreement. For Form 10-2, after replacing Form 1, Clause 24, supra, with Clause 43, infra, please resume Form 10-2 with Clause 44, infra.
If a director agreement has been structured in the first instance as a direct employment agreement, and it is later determined that a loan-out arrangement is needed, a loan-out conversion agreement can be used. (See Form 6-3.)
43. ATTACHMENT: If Production Company shall be required, because of the service of any attachment or by the terms of any contract or assignment executed by Lender, to pay all or any portion of the compensation hereunder to any other person, firm or corporation, the withholding of payment of such compensation or any portion thereof, in accordance with the requirements of any such attachment, contract or assignment shall not be construed as a breach by Production Company of this Agreement.
43. The production company’s payment to the loan-out company may be subject to attachment (garnishment applies in the case of an employment agreement). If the production company withholds payments because of an attachment, or if there is an assignment of payments by the loan-out company to a third person, the production company should not be deemed in breach of the agreement if it honors the attachment or assignment.
44. PENSION, HEALTH AND WELFARE AND EMPLOYER TAXES: Production Company agrees upon the receipt of appropriate invoices to reimburse Lender in an amount equal to any contributions to pension plans, health and welfare funds required to be paid by Lender to any appropriate guild or union having jurisdiction over the type of services to be performed by the Director hereunder, it being expressly agreed that any amounts to be paid hereunder shall be based upon payments made by Lender in accordance with the applicable provisions of said respective guild or union basic agreements, and which in any event shall not exceed the amount of the contribution Production Company would have been required to make had Director been employed by Production Company. Production Company shall have no obligation to reimburse Lender for employer taxes of any kind or nature.
44. When a loan-out company is used, and if the agreement is subject to a guild or union agreement, in this instance, that would be the DGA Agreement, the production company should agree to reimburse the loan-out company for certain expenses incurred by the loan-out company as an employer. (In a straight employment agreement, the production company is obligated to make such payment directly to the DGA, if applicable.)
45. WORKERS’ COMPENSATION COVERAGE: Lender warrants and represents that Lender maintains workers’ compensation coverage for Director at Lender’s expense.
45. If the loan-out company maintains workers’ compensation coverage for the director, then the production company may want a representation to that effect from the loan-out company.
45. WORKERS’ COMPENSATION COVERAGE: For the purposes of any and all applicable Workers’ Compensation statutes, an employment relationship exists between the Director and Production Company such that Production Company is the Director’s special employer (as the term “Special Employer” is understood for purposes of Workers’ Compensation statutes). The rights and remedies, if any, of the Director and the Director’s heirs, executors, administrators, successors and assigns, against Production Company and/or its officers, directors, agents, employees, successors, assigns or licensees, by reason of injury, illness, disability or death arising out of or occurring in the course of the Director’s rendition of services shall be governed by and limited to those provided under such Workers’ Compensation statutes, and neither Production Company, nor its officers, directors, agents, employees, successors, assigns or licensees shall have any other obligation or liability by reason of any such injury, illness, disability or death. If the applicability of any Workers’ Compensation statutes to the engagement of the Director’s services is dependent upon, or affected by, an election on the part of the Director, such election is hereby made by the Director in favor of such application.
45. If the director’s services are provided by a loan-out company which does not maintain workers’ compensation coverage for the director, the use of this provision is intended to permit the director to be covered under the production company’s workers’ compensation coverage. Consequently, this provision is also intended to protect the production company from claims since the worker’s compensation coverage maintained by the production company will cover injury claims from the director.
46. EXECUTION, COUNTERPARTS, FACSIMILE or ELECTRONIC: This Agreement may be executed by original, facsimile or electronic signatures and in counterparts, each of which will be deemed an original but all of which together will constitute a single instrument. Any signed copy of this Agreement delivered electronically or by facsimile transmission will for all purposes be treated as if it had been delivered containing an original signature of the party whose signature appears in the electronic or facsimile version and will be binding upon that party in the same manner as though an original signed copy had been delivered.
46. Execution of contracts by electronic means and using counterparts is convenient and efficient, and, accordingly, has become a widely accepted method for execution of contracts.
By signing in the spaces provided below, Lender and Production Company accept and agree to all the terms and conditions of this Agreement.
| Lender: | Production Company: |
| (Insert Name of Loan-Out Company) | (Insert Name of Production Company) |
| By: | By: |
| Its: | Its: |
Federal I.D. No.-
The following form is used when the director’s services are provided by a loan-out company which signs the principal agreement with the production company. The Inducement is intended to bind the director to the contract even if something happens to the loan-out company (such as being suspended by its state of incorporation or formation), and it is no longer able to perform under the contract.
I, (insert name of the Director), agree to perform all obligations to be performed by Lender and me hereunder and make all representations and warranties herein made by Lender, to effectuate the terms and conditions of the foregoing Agreement, and I agree to look solely to Lender for payment of any compensation due me. In the event of any breach or threatened breach by Lender, I agree to render all services required of me hereunder directly to Production Company. I hereby accept and acknowledge each and all provisions of the foregoing Agreement to the same extent as if I had signed the Agreement directly.
(insert name of the Director) (“Director”)