Types of Financial Assurances

Collection Account Management Agreement ("CAMA")

CAMAs are agreements between parties with a financial stake in a project who are entitled to receive a portion of a film’s gross receipts. These parties agree that all gross receipts will be deposited with a third-party account administrator who will distribute the receipts in an agreed-upon order and amount (frequently referred to as the "waterfall.").

The Union’s CAMA Requirements

For a CAMA to be acceptable to the union, the CAMA must:

1. Be effective upon the first dollar of worldwide gross receipts;
2. Place the union’s residuals set-aside in second position in the distribution schedule after only CAMA administrator’s fees and expenses; and
3. Contain the customary terms and conditions in connection with the calculation and payment of residuals, including the 6.2% SAG-AFTRA residuals set-aside for the payment of residuals.

Guaranty Agreements

Guarantors are additional parties who agree to be responsible for the signatory producer’s obligations if the producer defaults on its obligations under the Basic Agreement.

From Whom a Guaranty May Be Required

SAG-AFTRA may request guaranties from:

• Entities that are rights-holders on the SAG-AFTRA Security Agreement (other than the signatory producer);
• Parent companies of the signatory and/or copyright owners;
• Financially responsible parties enabling or controlling production.

Items Needed: All corporate or company structure documents (articles of incorporation/organization and bylaws/operating agreements) for the signatory, rights-holders and parent companies; financing documents; and complete chain-of-title.

Security Interests

SAG-AFTRA requires a secured interest (also known as a "lien" or "mortgage") in all rights related to a film. This includes distribution rights.

What Will Be Required: All rights-holders will need to sign the SAG-AFTRA Security Agreement.

Items Needed: Complete chain-of-title (including all assignments, option/purchase agreements, proof of payments, sales agency and distribution agreements) to determine who owns the film and exploitation rights.

Additional: If other parties hold security interests in the film and exploitation rights, the union may request these documents to establish its lien priority position:

Distributor’s Assumption Agreement

When a distributor acquires rights to exploit a film, the Basic Agreement requires the producer to obtain and deliver a Distributor’s Assumption Agreement (DAA) so that the distributor assumes primary responsibility for the signatory producer’s residuals reporting and payment obligations.

Items Needed: Copies of distribution agreements and sales agency agreements.

What If a DAA Will Not Be Provided: The union will require a residuals reserve and/or become party to a collection agreement that contains SAG-AFTRA\'s customary terms, conditions, residuals set-aside provisions and an acceptable position in the waterfall.

• Intercreditor Agreement - Offered to known banks, bond companies and bona fide third-party production lenders to whom the union agrees to subordinate its secured interest; and
• Interparty Subordination Agreement - Required lien subordination for all other secured parties, including equity investors, non-bank lenders, sales agents and distributors.