POSSESSION OF NEGATIVE
: Distributor should receive a lab access letter rather than possession of the original negative and other original elements. Distributor shouldnot be permitted to remove masters from the laboratory.
ERRORS AND OMISSIONS (E&O) POLICY
: While it is generally the filmmaker'sresponsibility to purchase an E & O insurance policy, distributors are often willing toadvance the cost of this insurance and recoup the cost from gross revenues. In such anevent, the filmmaker should be added as an additional named insured on the policy.
: If the distributor defaults on its contractual obligations,filmmaker should have the right to terminate the contract, and regain rights to license thefilm in unsold territories as well as obtain money damages for the default. Filmmaker should give distributor fourteen days prior written notice of default before exercising theright to termination.
RIGHT TO INSPECT BOOKS AND RECORDS
: Distributor should maintaincomplete books and records with regard to all sales and rental of the film. Filmmaker should receive quarterly (or monthly) producer statements with any payment duefilmmaker. Filmmaker should have the right to examine the books and records of distributor during reasonable business hours on ten days notice.
: All monies due and payable to filmmaker should be held intrust by distributor for filmmaker. Filmmaker should be deemed to have a lien onfilmmaker's share of revenue. Distributor should pay filmmaker interest on any amounts past due.
LIMITATION ON ACTION
: Filmmaker should have at least three years from receiptof any financial statement, or discovery of any accounting irregularity, whichever is later,to contest accounting errors and file a Demand for Arbitration.
: It is best to prohibit assignment unless Filmmaker consents. If assignment is permitted, Distributor should not be relieved of its obligations under theoriginal contract.
: Distributor should give Filmmaker fourteen days writtennotice of any alleged default by filmmaker, and an additional ten days to cure suchdefault, before taking any action to enforce its rights.
: Filmmaker's warranties in regard to infringement of third party rightsshould be to the best of the filmmaker's knowledge and belief, not absolute.
SCHEDULE OF MINIMUMS
: For distributors who license foreign rights (known asforeign distributors or foreign sales agents) there should be a schedule of minimum