Laboratory Pledgeholder Agreement
(Financing Motion Picture)

Summary

This form is a laboratory pledgeholder agreement between a film laboratory, a completion bond company (the guarantor), a production company, and a lender for laboratory services in connection with a motion picture. This template includes practical guidance and drafting notes. The laboratory pledgeholder agreement is a necessary part of a transaction for financing motion picture production. This is because some of the key components of the lender's collateral—that is, the results of the daily filming and elements of the completed motion picture—need to be stored in a film laboratory, which means that this essential piece of collateral is in the possession and under the control of a third party who will also be expending labor and materials on the motion picture and creating its own statutory lien on the motion picture. Because of the competing interests in a motion picture (the production company, lender, completion guarantor, and distributor, to which is then added the film laboratory), a laboratory pledgeholder agreement is needed to sort out these parties' rights to assert their claims to the collateral. The essential purpose of a laboratory pledgeholder agreement is satisfied when the lender has been repaid and has released its security interest. The laboratory may then be released from its duties as pledgeholder to the lender. However, if the guarantor has advanced funds for completion of the motion picture, it will continue to have an interest in the film materials in the possession of the laboratory, and arrangements may still have to be made to satisfy any obligations to it. On the other hand, if the guarantor has not advanced funds for the production and no longer has an interest in the motion picture, then the remaining interested parties may be limited to the production company and distributor (or distributors). At that point, these parties can use a laboratory access letter to guide their respective rights and obligations regarding the film materials held by the laboratory. For a collection of content related to motion picture production, see Motion Picture Production Resource Kit. For additional guidance on motion picture production and financing agreements, see Motion Picture Production Agreements and Documents and Entertainment Industry Contracts P 13.01; see also Loan Agreement (Financing Motion Picture).