Film Accounting Glossary
Interparty agreement
What is an interparty agreement?
Also called interparty, or intercreditor agreement.
An interparty agreement is the contract among a production's financiers, lender, sales agent, completion guarantor, and collection agent that establishes whose rights rank where and how money flows.
It is what turns a stack of individual deals into one coherent recoupment order. Because the accounting has to follow it exactly, the interparty agreement effectively defines the waterfall the collection account will pay against.
Example
The senior lender, gap lender, equity, sales agent, guarantor, and collection agent all sign one document fixing who ranks where. Without it, six separate deals each claim first position and the collection agent has no defensible order to pay in.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Signed at closing. It is effectively the source code for the waterfall the collection account executes.
Common mistake
Closing individual deals without one. Each party then believes it ranks first, and the collection agent has no defensible order in which to pay.
Related questions
- What does an interparty agreement do?
- It sets out whose rights rank where among financiers, lenders, the sales agent, the guarantor, and the collection agent, turning separate deals into one waterfall.
- Who signs the interparty agreement?
- Every party with a financial position in the picture, which is why it is negotiated at closing alongside the loan and collection account documents.