Updated 2018

Advertising Production Agreement

Contract Terms
Part 2

A collaboration between:
These Contract Terms form Part 2 of the Agreement between the Agency
and Production Company named below for the production of the Film.

Contracts Terms
Agency (Insert full registered name of Agency)

Agency Producer

Production Company (Insert full registered name of Production Company)

Production Company Director Production Company Producer

Client Campaign/Brand/Product

Name of Film(s)

Start Date Shoot Date Completion Date

Format

The total amount of the Charges payable by the Agency to the Production Company under this Agreement is:
£

Figure in Numerals Figure in Words

(This should be the final sterling figure once the Budget is agreed, taking into account any currency to be bought on a forward exchange
contract in accordance with section F of the PIBS.)

Final PIBS Dated Final Budget Dated Final Script Dated Final Treatment Dated

1. Interpretation
1.1. Capitalised words in these Contract Terms shall have the meanings given to them in the PIBS.

1.2. Where any provision contained in these Contract Terms conflicts with any provision of the PIBS, these Contract Terms shall take
precedence unless otherwise expressly agreed in the PIBS.

1.3. A reference to writing or written includes e-mail.

1.4. Any words following the terms including, include, in particular, for example or any similar expression, shall be construed as
illustrative and shall not limit the sense of the words, description, definition, phrase or term preceding those terms.

1.5. Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular.

1.6. A reference to any party shall include that party’s personal representatives, successors and permitted assigns.

2 Advertising Production Agreement Production Insurance Contract Terms – Part 2

2. Duration and Scope of Work
2.1. This Agreement shall be deemed to have taken effect from the date of the Agency’s confirmation to the Production Company of
its appointment under the PIBS and shall continue, unless terminated earlier in accordance with clauses 18 or 19, until the
Production has been completed and the Film(s) supplied to the Agency in accordance with its terms.

2.2. The Production Company shall provide the Production from the dates and for the durations specified in the PIBS or these
Contract Terms in accordance with the terms of this Agreement.

3. Production Company Responsibilities

3.1. The Production Company shall produce the Film(s) for use by the Agency and Client in any medium anywhere in the world, in
accordance with this Agreement, and shall meet any performance dates specified in the PIBS or these Contract Terms. Time
shall be of the essence in respect of all such dates.

3.2. The Production Company shall:

(i) produce the Film(s) and provide such materials, production facilities and other Production Company
Deliverables necessary to produce the Film(s), in accordance with this Agreement, including the script
and treatment specified in the PIBS, and including as may be specified as the Production Company’s
responsibility in the PIBS;

(ii) appoint sufficient resources to perform its obligations under this Agreement including, subject to the prior written approval of
the Agency, appointing or, at the request of the Agency, replacing, Key Individuals, who the Production Company shall ensure
shall be suitably skilled, experienced and qualified to produce the Films;
(iii) promptly inform the Agency of the absence (or anticipated absence) of any Key Individual and where
necessary provide a suitably qualified and experienced replacement, subject to the prior approval of
the Agency which, in the event of any such absence (or anticipated absence) due to any circumstances
beyond the reasonable control of the Production Company, including but not limited to illness, shall not
be unreasonably withheld;
(iv) subject to (iii), not make any changes to any Key Individuals without the prior written approval of the
Agency; and
(v) provide such information to the Agency as the Agency may reasonably require from time to time,
including by way of example only, any potential, additional costs or charges likely to be incurred due to
Weather Days.

3.3. The Production Company shall obtain, and at all times maintain, all necessary licences and consents and shall comply with all
relevant legislation, regulations and codes of practice in relation to its obligations under this Agreement.

3.4. The Production Company shall meet regularly and co-operate with the Agency and such third parties (including any post-
production companies and the Client) as the Agency may reasonably require in order to ensure that the Film(s) shall be produced
in accordance with the obligations of the Production Company under this Agreement and that any changes to the Production that
might be required by the Agency and agreed by the Production Company are made. Any such changes shall be documented by
the parties either in section J of the PIBS or otherwise, including by email.

4. Agency Responsibilities
4.1. The Agency shall:
(i) co-operate with the Production Company in all matters relating to this Agreement and appoint the
Agency’s Representative who shall have the authority to bind the Agency on matters relating to the
Production and Deliverables;
(ii) provide such information as the Production Company may reasonably request in order to assist the
Production Company in the provision of the Production; and
(iii) provide the Agency Deliverables, including as may be specified as the Agency’s responsibility in the
PIBS.

5. Agency Approvals
5.1. The Production Company shall, as soon as is reasonably practicable and, in any event, by any relevant dates set out in the PIBS,
submit to the Agency for its approval the production items specified in section E of the PIBS. As soon as is reasonably practicable

3 Advertising Production Agreement Production Insurance Contract Terms – Part 2

 after delivery by the Production Company to the Agency of such items, the Agency shall examine them and (having regard for the
need of the Production Company either to prepare the production of the Film in accordance with the approval or to change the
disapproved items to the Agency’s satisfaction in advance of the Shoot), inform the Production Company as to whether the
Agency accepts such items (“Accepts”) or rejects them for failing to conform to the Specification and/or otherwise with this
Agreement.

5.2. The Agency shall use reasonable endeavours to ensure that the Agency Representative is available to approve (or reject) build
and sets/locations at the reasonable request of the Production Company.

(Note. During the period that the Agency Representative does not attend the shoot, right of creative
approval passes to the Production Company unless other agreement is made).

5.3. If the Agency rejects any production items pursuant to clause 5.1 it shall provide the Production Company with the reasons for
such rejection and the Production Company shall correct and resubmit the items (“Re-delivered Items”) as soon as reasonably
practicable after the date of notification of the rejection, taking into consideration any timeframe imposed on the Agency by its
Client (or within any timeframe agreed in writing by the parties) for re-examination, at no cost to the Agency if the reason for their
rejection is that they do not conform to the Specification, and the Agency shall inspect such Re-delivered Items as soon as
reasonably practicable after delivery.

5.4. The Agency shall have the right to have the Agency Representative (or other representative) in attendance during Shoots and/or
recording and/or post-production of the Film for consultation and approvals and such other requirements of the Agency as it may
deem necessary. The Production Company shall provide the representative with a monitor or other agreed means to view live
pictures. If the Agency Representative (or other representative) is not at the Shoot at any stage and the Production Company
requires a material decision to be taken by the Agency, the Production Company shall use best endeavours to contact the
Agency Representative or, if unable to do so, an alternative representative of the Agency, and if it is unable to do so within the
necessary time period, shall be entitled to take the decision in due consideration of the interests of the Agency and Client.

6. Warranties
6.1. The Production Company warrants and represents to the Agency that:
(i) it shall perform its obligations under this Agreement with reasonable care and skill and in accordance
with good industry practice and the standards expected of a professional and competent production
company
(ii) the Production and the Film Deliverables (excluding Film rushes that are not part of the final Film) shall
conform with all Specifications;
(iii) the Production and the Film Deliverables (excluding Film rushes that are not part of the final Film) do
not and shall not infringe the Intellectual Property Rights of any third party;
(iv) the personnel (including the Key Individuals) who perform the Production are and shall be competent
and suitable in every respect to do so; and
(v) the Production and the Film Deliverables (excluding Film rushes that are not part of the final Film) shall
be provided in accordance with all applicable legislation, regulations and codes of practice from time to
time in force.

6.2. The Production Company shall indemnify the Agency in respect of any damages, losses, claims, demands, actions, proceedings,
costs (including reasonable legal and other professional costs) and expenses suffered by the Agency resulting from or arising out
of any breach of any of the warranties and representations under clause 6.1.

7. Payment
7.1. In consideration of the performance of its obligations under this Agreement by the Production Company, the Agency shall pay the
Charges in accordance with this Agreement.

7.2. The Production Company shall invoice the Agency for the Charges on the date(s) set out in the PIBS.

7.3. If the Agency requires the Production Company to carry out any services over and above those specified in this Agreement, the
Agency will pay any reasonable additional charges agreed in advance in writing in an Extra Charge Authorisation Form which
shall be prepared by the Production Company and signed by the Agency in order to apply.

7.4. The Agency shall pay each undisputed invoice which is properly due and submitted to it by the Production Company in
accordance with this Agreement to the bank account nominated in writing by the Production Company.

4 Advertising Production Agreement Production Insurance Contract Terms – Part 2

7.5. The Agency reserves the right to withhold payment of any invoice (or part of any invoice) where the Agency reasonably disputes
its validity or accuracy. On receipt of any such invoice, the Agency shall notify the Production Company in writing of the reason for
the dispute, pay the undisputed part of such invoice in accordance with clause 7.4 and co-operate with Production Company to
resolve the dispute.

7.6. In the event that the Agency fails to make any undisputed payment properly due to the Production Company under this
Agreement, the Production Company shall be entitled to charge the Agency interest on such overdue sum at the rate of 2%
above the base rate of the Bank of England in force from time to time calculated from the due date up to the date of payment.

7.7. In the event that the Production Company will be purchasing foreign currency under this Agreement, it shall include the final
agreed cost in Sterling reimbursable by the Agency in the PIBS and the Budget and shall be responsible for ordering and paying
for the foreign exchange at the rate and at the cost set out in the PIBS and the Budget.

8. Production of New Films and Cinema Transfers

8.1. Where the Agency or its Client requires either to produce a new film using Film Deliverables produced under this Agreement or
further production or post-production work on the Film not contemplated by this Agreement (including transfers for use for cinema
exhibition) and such production or post-production work is to take place in the UK, and where reasonable and practicable in the
Agency’s opinion, the Production Company shall be given a first opportunity to undertake such work if a reasonable and
competitive price can be agreed between the parties in writing within 5 days of the Agency notifying the Production Company of
its intentions.

9. Safekeeping and Title to Deliverables

9.1. Safekeeping and Risk:
(i) The Production Company shall store copies of the Film Deliverables securely on a Storage Mechanism
as agreed with the Agency and be responsible for, and shall ensure the safekeeping of, all Production
Company Deliverables, Film Deliverables (including the Storage Mechanism) and any derivative
materials (whether in rough or final form) during the production and processing of the Film and at all
other times, including when they are in the possession or control of a third party at the instruction of the
Production Company, up to the Completion Date, and shall advise the Agency in writing where all such
deliverables are stored.
(ii) Subject to clause (iii) below, immediately after the sooner of the Completion Date or payment of the
Charges by the Agency pursuant to clause 7, the Production Company shall deliver all Film
Deliverables (including the Storage Mechanism) required by the Agency either to the Agency or third
party nominated by the Agency (such as a post-production company) in the format required by the
Agency, and risk in all Film Deliverables shall remain with the Production Company until received by,
and in the possession of, the Agency or such third party.
(iii) In the event that the Agency requires the Production Company to continue to store and safeguard the
Film Deliverables beyond the date referred to in clause (ii) above, the Agency shall be responsible for
and shall insure the safekeeping of the relevant Film Deliverables from that date.
(iv) The Agency shall be responsible for and shall ensure the safekeeping of all Agency Deliverables, Film
Deliverables (including the Storage Mechanism) and any derivative materials (whether in rough or final
form), during such time as they are in the possession or control of the Agency or a third party at the
instruction of the Agency.

9.2. Title:
(i) Title to the Film Deliverables shall remain with the Production Company until the Agency has paid the
Charges in accordance with clause 7, at which point Title shall automatically vest in the Agency.
(ii) The Production Company shall, promptly after the Shoot, return all wardrobe, props and other items
purchased (not hired) by it for use in the Film to the Agency, title in which shall vest in the Agency from
the date of purchase by the Production Company. Where a Shoot takes place overseas, the Production
Company shall notify the Agency in advance if it intends to purchase any wardrobe, props or other
items in order that the parties can agree how to deal with them after the Shoot.

5 Advertising Production Agreement Production Insurance Contract Terms – Part 2

10. Legal and Technical Requirements
10.1. As between the Agency and the Production Company, the Agency shall be responsible for ensuring that the content of the Film(s)
complies with any relevant legal or regulatory requirements. The Production Company shall ensure that the Film(s) complies with
the technical requirements and standards set by Ofcom or its successors in title, programme contractors and/or cinema exhibitors
(and, where the Film(s) are for overseas transmission, with all relevant local technical requirements and standards) which are in
force at the Commencement Date.

(Note. (i) Agency should refer to Clearcast Guidelines, the BCAP Code and the broadcasters’
requirements for the production and delivery of commercials.(ii) Production Company should refer to the
broadcasters’ requirements for commercials. (iii) See www.clearcast.co.uk and www.asa.org.uk).

11. Permits and Visas

11.1. The Production Company shall be responsible (unless otherwise agreed in writing) for obtaining all relevant UK and foreign
permits, licences and other official authorisations relating to any aspect of the Shoot, including any necessary visas or work
permits in respect of any Key Individuals or other personnel hired or employed by the Production Company. The Production
Company shall give the Agency written notice as far in advance as possible of any such requirements relating to the Client and/or
Agency personnel and to artists for whom the Agency is responsible. The Production Company will not be responsible for delays,
difficulties or inability to obtain visas or work permits for artists employed by the Agency.

12. Intellectual Property Rights

12.1. The Production Company hereby acknowledges that all IPRs in all Agency Materials shall belong to and vest in the Agency or the
Client as the case may be (or their licensors). The Agency hereby grants the Production Company for the Term a non-exclusive,
revocable licence to use the Agency Materials solely for the purpose of the Production in accordance with this Agreement.

12.2. Subject to clauses 12.3, 12.4 and 12.5 below, the Production Company hereby assigns to the Agency effective from the date of
payment (and, in the case of copyright, by way of a present assignment of future copyright) with full title guarantee and free of all
encumbrances all Intellectual Property Rights throughout the world for all purposes and for their full duration in all Film
Deliverables and in all other footage shot by the Production Company in the production of the Film(s) whether or not included in
the completed Film(s).

(Note. ensure all parties, including the Client, are aware of what copyright and licence/assignment details
have been obtained and that all parties are aware of any restrictions).

12.3. Subject to clause 12.4, the copyright in any animation exclusively designed, created and developed by the Production Company
for inclusion in the Film shall remain vested in the Production Company and the provisions of sub-clauses i) to iii) below shall
apply:
(i) the Production Company hereby grants to the Agency effective from the date of payment, an exclusive,
worldwide, perpetual, irrevocable licence (with full right to sublicense) to use such animation both in its
entirety and in part in any audio-visual media (and including any lifts and stills for promotional purposes
in unpaid media);
(ii) if the Agency requires use of such animation in any non-audio-visual media, it may select a category of
additional media from section D of the PIBS (at the agreed, additional licence fee, if relevant) and the
Production Company hereby grants a licence to the Agency to use such animation on the terms of the
licence set out in sub-clause i) in respect of such additional media;
(iii) if the Agency requires use of such animation in any media and/or for any purpose other than as
described in sub-clause i) or ii) or in addition thereto, the parties shall negotiate the particular media
and/or purpose (together with the relevant additional licence fee, if relevant) and any such additional
licence shall apply on the terms of the licence set out in clause i) in respect of such additional media
and/or purpose.

12.4. If the Agency requires an assignment from the Production Company of all Intellectual Property Rights in any animation, it may
select the option of an assignment from section D of the PIBS (at the agreed, additional assignment fee if relevant) in which event
the Production Company hereby assigns to the Agency all Intellectual Property Rights in such animation on the same terms as
the assignment of all other Intellectual Property Rights as set out in clause 12.2.

12.5. Where the Production Company commissions any material or Film Deliverable, including any animation, characters or models,
from a third party for use in connection with the production of the Film(s) or uses any other material or other Film Deliverable

6 Advertising Production Agreement Production Insurance Contract Terms – Part 2

 which has been created or provided by a third party, the Production Company undertakes to obtain from the third party either an
assignment to the Agency of such Intellectual Property Rights as may exist in those materials or other Film Deliverables or, if an
assignment cannot be obtained, a licence on terms to be approved by the Agency to use those materials or other Film
Deliverables in the Film(s) and the Production Company shall not incorporate any third party materials in the Film(s) without the
prior written approval of the Agency.

12.6. The Production Company undertakes to procure and pass on to the Agency irrevocable and unconditional waivers of all moral
rights (as described in Chapter 4 of Part 1 of the Copyright Designs and Patents Act 1988 or any similar or equivalent legislation
anywhere in the world), vesting in all Key Individuals and all other persons, including any third parties, engaged in the creation or
production of the Film(s) or any part thereof, including any Film Deliverables.

12.7. Where the Production Company is responsible for the engagement of actors, models or other performers, the Production
Company undertakes to obtain all necessary consents, releases, and approvals from such third parties on terms to be approved
by the Agency to use their contributions in and in respect of the Film(s) and shall provide copies of all such consents, releases
and approvals to the Agency.

(Note. Consent forms and terms to be provided to the Production Company by the Agency with this
Agreement).

12.8. If requested by the Agency, the Production Company shall promptly take all such actions and execute all such documents as
may, in the Agency’s reasonable opinion, be necessary to enable the Agency or its Client to obtain, defend or enforce the rights
intended to be assigned and/or licensed by this clause 12.

12.9. The Production Company shall not, and shall ensure that Key Individuals and other persons employed or otherwise engaged by
the Production Company shall not, create or use any derivative or alternative versions of the Film or any part of it (including, by
way of example only, substituting any music featuring in the Film with alternative music) without the prior written consent of the
Agency.

13. Postponement at Agency’s Request

13.1. If the Agency asks for the Film’s production schedule to be altered or postponed, the parties will use their best endeavours to
agree new dates and the Production Company shall be entitled to recover and the Agency shall, after receipt of the Production
Company’s invoice supported by substantiating documentation, pay to the Production Company such unavoidable, additional
costs incurred by the Production Company which are directly attributable to such alteration or postponement, provided that the
Production Company is unable to avoid or otherwise mitigate such costs.

14. Cancellation by Agency

14.1. The Agency shall be entitled to cancel the whole or any part of the Production by written notice to the Production Company. In the
event of such cancellation, the Production Company shall provide all Film Deliverables as exist to the Agency and shall then
(other than where cancellation is as a result of a Force Majeure Event or termination of this Agreement under clause 19.1) be
entitled to recover, and the Agency shall, after receipt of all such Film Deliverables and the Production Company’s invoice,
supported by substantiating documentation, pay to the Production Company the following amounts:
(i) third party costs (other than the Director’s fee and Producer’s fee) to which the Production Company is
committed in respect of the Production and unable to avoid or otherwise mitigate; and
(ii) an amount in respect of services performed by the Production Company from the Start Date up to the
date of notice of cancellation, calculated by reference to the period between the date of notice of
cancellation and the intended first Shoot Date as follows:
(a) if the date of cancellation is 20 days or more before the first Shoot Date = 25% of the Production Company’s mark-up as
set out in the Budget;
(b) if the date of cancellation is between 19 days and 11 days before the first Shoot Date = 50% of the Production Company’s
mark-up as set out in the Budget; or
(c) if the date of cancellation is 10 days or less before the first Shoot Date = 100% of the Production Company’s mark-up as
set out in the Budget; and
(iii) an amount in respect of the Director’s fee and the Producer’s fee to which the Production Company is
committed and unable to avoid or otherwise mitigate, calculated by reference to the period between the
notice of cancellation and the intended first Shoot Date as follows:

7 Advertising Production Agreement Production Insurance Contract Terms – Part 2

 (a) if the date of cancellation is 20 days or more before the first Shoot Date = 25% of the Director’s and Producer’s fees as
set out in the Budget;
(b) if the date of cancellation is between 19 days and 11 days before the first Shoot Date = 50% of the Director’s and
Producer’s fees as set out in the Budget; or
(c) if the date of cancellation is 10 days or less before the first Shoot Date = 100% of the Director’s and Producer’s fees as
set out in the Budget.

(Note. Agency should ensure it informs its Client of these cancellation provisions in advance of confirming
the production to the Production Company. See also the joint industry guidance and IPA/ISBA
Client/Agency Creative Services Agreement cancellation provisions).

(For a Production which includes or is entirely comprised of animation, the date from which the Production
Company was contracted to commence animation work on the Production shall be substituted for “first
Shoot Date” for the purposes of this clause 14.1).

14.2. If any of the above amounts cannot be agreed the provisions of clause 23 shall apply. Any amounts which are not in dispute shall
be paid in full by the Agency in accordance with the provisions of clause 7.

15. Limitation of Liability

15.1. Subject to clause 15.2, each party’s maximum aggregate liability under or in connection with this Agreement, whether in contract,
tort (including negligence) or otherwise, shall be limited to the Charges, provided that if either party becomes liable hereunder for
any loss that is covered by a policy of insurance which the relevant party is responsible for maintaining in accordance with clause
16, and the amount of cover provided by such insurance in respect of the loss (the “Insurance Limit”) exceeds the Charges, that
party’s maximum liability for the relevant loss shall be equal to the Insurance Limit .

15.2. Nothing in this Agreement shall exclude or in any way limit either party’s liability for fraud, death or personal injury caused by its
negligence, any indemnity or any other liability to the extent such liability may not be excluded or limited as a matter of law.

15.3. Subject to clause 15.2, in no event will either party be liable under or in connection with this Agreement for any:
(i) loss of actual or anticipated income or profits;
(ii) loss of anticipated savings; or
(iii) any indirect or consequential loss or damage including airtime costs, whether caused by tort (including
negligence), breach of contract or otherwise, and whether or not such loss or damage is foreseeable,
foreseen or known.

15.4. Where one party (“Indemnifying Party”) agrees to indemnify and keep the other party (“Indemnified Party”) indemnified under this
Agreement, such indemnity is subject to the Indemnified Party complying with the following process in the event that a third party
claim arises:
(i) the Indemnified Party must promptly notify the Indemnifying Party in writing of such claim;
(ii) the Indemnified Party must not make any admission of liability, settlement or compromise without the
prior written consent of the Indemnifying Party;
(iii) the Indemnified Party must give the Indemnifying Party express authority to conduct all negotiations
and litigation and to defend and/or settle all litigation arising from such claim, provided that the
Indemnifying Party regularly consults the Indemnified Party on the conduct and defence of the claim;
(iv) the Indemnified Party must provide the Indemnifying Party with all available information and assistance
in relation to such claim as the Indemnifying Party may reasonably require at the Indemnifying Party’s
cost and expense; and
(v) If within thirty (30) days after the Indemnifying Party’s receipt of notice of any such claim, the
Indemnifying Party fails to take action to defend or settle such claim, the Indemnified Party may at the
Indemnifying Party’s expense undertake the defence, compromise or settlement of the claim as it sees
fit.

8 Advertising Production Agreement Production Insurance Contract Terms – Part 2

16. Insurance
16.1. Each party shall arrange and maintain with reputable insurers such policies of insurance as are necessary and sufficient to meet
its liabilities under this Agreement, including as set out in the PIBS (in particular, in section B and the checklist at section I) and
shall use best endeavours to avoid any such policies being compromised or any exclusions contained within such policies from
taking effect. In particular:
(i) the Agency will be responsible for arranging insurance cover in respect of the following:
(a) non-appearance of, or any failure to complete their obligations by, any artist for which the Agency is responsible under this
Agreement or any key Agency personnel;

(Note. See section B.2.b of PIBS and clause 4.1 of these Contract Terms).
(b) non-appearance or non-usability of any Agency Deliverables provided by the Agency to the Production Company (other
than any Agency Deliverables included in the PIBS as the responsibility of the Production Company);
(c) loss or damage to the items specified in b) above;
(d) death or bodily injury to artists and other persons caused by or arising out of the negligence of the Agency (subject to
section B.3. of the PIBS);
(e) risks to the Film Deliverables and any derivative material during such time as they are in the possession or control of the
Agency or a third party at the instruction of the Agency;
(Note. See clause 9 of these Contract Terms).
(f) safekeeping of the Film Deliverables and any derivative material after the Completion Date;
(Note. See clause 9 of these Contract Terms).
(g) any statutory responsibility the Agency may have for providing employer’s liability insurance or worker’s compensation
insurance; and
(h) the total loss sustained due to the interruption, postponement, cancellation or abandonment of the production of the Film
which arises out of any matter for which the Agency is responsible as defined under paragraph 16.1.i), a), b) and c)
including, where relevant, reasonable Production Company costs and Director’s and Producer’s fees.
(ii) the Production Company will be responsible for arranging insurance cover in respect of the following:
(a) any breach of any of the warranties in clause 6 of these Contract Terms;
(b) non-appearance of, or any failure to complete any part of the Production by, any person for whom the Production
Company is responsible under this Agreement, including any Key Individual;
(Note. See section B.2.a. of PIBS and clause 3 of these Contract Terms).
(c) non-appearance or non-usability of any Production Company Deliverables (other than any Production Company
Deliverables included in the PIBS as the responsibility of the Agency);
(d) loss or damage to the items specified in c) above;
(e) death or bodily injury to artists and other persons caused by or arising out of the negligence of the Production Company
(subject to section B.3. of the PIBS);
(f) the engagement by the Production Company of any person, firm company or other entity,whether as employee,
freelancer, sub-contractor or otherwise, in the production of the Film(s);
(g) risks to the Film Deliverables and any derivative material during such time as they are in the possession or control of the
Production Company or a third party at the instruction of the Production Company;
(Note. See clause 9 of these Contract Terms).
(h) safekeeping of the Film Deliverables and any derivative material up to the Completion Date;
(Note. See clause 9 of these Contract Terms).
(i) any statutory responsibility the Production Company may have for providing employer’s liability insurance or worker’s
compensation insurance; and
(j) the total loss sustained due to the interruption, postponement, cancellation, abandonment of the production of the Film
which arises out of any matter for which the Production Company is responsible as defined under clause 16.1.ii), b), c)
and d) including, where relevant, reasonable Agency costs including but not limited to artists’ fees to the extent they have
been disclosed on the PIBS and associated costs and Agency’s travel and accommodation costs.
(Note. Parties should note that there are two main types of policy available: Commercial Producers
Indemnity Insurance for Production Companies, and Advertising Agencies’ Indemnity Insurance for

9 Advertising Production Agreement Production Insurance Contract Terms – Part 2

 Agencies. Separate, additional policies are also available for particular risks/perils, such as weather
day insurance).

16.2. Without prejudice to clause 16.1, the Production Company shall arrange and maintain with reputable insurers (unless otherwise
agreed in writing):
(i) employer’s liability insurance in an amount not less than £10,000,000;
(ii) public liability insurance in an amount not less than £5,000,000;
(iii) professional indemnity insurance at an amount not less than £1,000,000 for any one claim; and
(Note. Agencies should check the applicable territorial jurisdictions and courts).
(iv) commercial producer’s indemnity insurance in an amount sufficient to cover the Production Company’s
own costs plus all additional costs required by the Agency under section B4 of the PIBS;
unless such amounts are otherwise varied in the PIBS.

16.3. Each party shall, at the other’s request, provide the other with evidence that the insurances referred to in clause 16.1 and 16.2
are in effect.

16.4. Failure to comply with clauses 16.1 or 16.2 shall amount to a material breach of this Agreement.

17. Weather Days

17.1. The Agency shall meet such reasonable additional costs as the Production Company incurs directly due to a Weather Day, within
45 days of the Production Company providing accurate and substantiated invoices and receipts in respect of such costs (together
with its mark-up on those costs as set out in the Budget). Notwithstanding the foregoing, Agency will not be liable for additional
costs as a result of negligent errors and omissions in the Production Company’s compilation of the Weather Day costs and/or in
the Production Company’s invoice(s) therefor.

17.2. It is for the Agency to decide whether or not to insure against the cost of a Weather Day and if it takes out such insurance the fact
that it has not been paid by its insurer shall not permit the Agency to refuse or delay payment to the Production Company of any
sum due to it under 17.1) above.

18. Force Majeure

18.1. Provided it has complied with clause 18.2, if a party is prevented, hindered or delayed from performing any of its obligations under
this Agreement by a Force Majeure Event (the “Affected Party”), it shall not be in breach of this Agreement or otherwise liable for
any such failure or delay in the performance of such obligations. The time for performance of such obligations by the Affected
Party shall be extended accordingly up to a maximum of 30 days and the corresponding obligations of the other party will be
suspended and its time for performance of such obligations extended to the same extent as those of the Affected Party.

18.2. The Affected Party shall, as soon as reasonably practicable after the start of the Force Majeure Event, notify the other party in
writing of the Force Majeure Event, the date on which it started, its likely or potential duration, and the effect of the Force Majeure
Event on its ability to perform any of its obligations under the Agreement and shall use all reasonable endeavours to mitigate the
effect of the Force Majeure Event.

18.3. If the Force Majeure Event prevents, hinders or delays the Affected Party’s performance of its obligations for a continuous period
of more than 30 days, the party not affected by the Force Majeure Event may terminate this agreement and thereby cancel the
Production immediately by giving written notice to the Affected Party.

18.4. In the event that this Agreement is terminated and the Production cancelled under clause 18.3, the Production Company shall
provide all Film Deliverables as exist to the Agency and the Agency shall, after receipt of all such Film Deliverables (if any) and
the Production Company’s invoice supported by substantiating documentation, pay the Production Company (in accordance with
the Budget) in respect of work performed by the Production Company up to the date of the notice of termination, together with any
unavoidable costs actually and already incurred by the Production Company, including an amount in respect of the Director’s fee
and the Producer’s Fee to which the Production Company is committed and unable to avoid or otherwise mitigate.

(Note. If Agency schedule does not allow a 30 day delay, alter this accordingly on the PIBS).

10 Advertising Production Agreement Production Insurance Contract Terms – Part 2

19. Termination
19.1. The Agency may terminate this Agreement forthwith by written notice to the Production Company if the Production Company
commits any serious or material breach or any series of breaches of this Agreement, including any failure to comply with any of
the performance dates referred to in clause 3.1.

19.2. Either party may terminate this Agreement forthwith by written notice to the other if that other party (being a company) passes a
resolution for winding up (otherwise than for the purposes of a solvent amalgamation or reconstruction) or a court makes an order
to that effect or (being a partnership or other unincorporated association) is dissolved or (being a natural person) dies, or if either
party becomes or is declared insolvent or convenes a meeting of or makes or proposes to make any arrangement or composition
with its creditors or has a liquidator, receiver, administrator, administrative receiver, manager, trustee or similar officer appointed
over any of its assets or ceases or threatens to cease to carry on business.

19.3. In the event of termination by the Agency under clause 19.1) or 19.2) the Agency shall be entitled, without prejudice to any other
rights it may have, to recover and the Production Company shall on demand pay to the Agency all reasonable additional costs
which the Agency incurs in completing the Production. The Agency shall in addition be entitled on demand to immediate delivery
of all Film Deliverables, whether or not then complete, including unfinished versions of the Film required by the Agency to
complete the Production and/or to transmit the Film(s) and all Intellectual Property Rights and title in all such materials shall
automatically pass to the Agency (to the extent that they have not already done so by virtue of clause 12 or otherwise).

19.4. Any provisions of this Agreement which are expressed to survive its termination or which from their nature or context ought
reasonably to survive such termination, shall remain in full force and effect notwithstanding such termination, and termination of
this Agreement, however it arises, shall not affect or prejudice the accrued rights of the parties as at termination.

20. Confidential Information

20.1. Each of the parties acknowledges that it is likely to receive or otherwise become aware of Confidential Information of the other
party due to its participation in this Agreement.

20.2. Confidential Information shall exclude information which:

(i) at the time of receipt by the recipient is in the public domain;
(ii) subsequently comes into the public domain through no fault of the recipient, its officers, employees or
agents;
(iii) is lawfully received by the recipient from a third party on an unrestricted basis; and/or
(iv) is already known to the recipient before receipt under this Agreement.

20.3. Each of the parties undertakes to maintain the confidentiality of the other party’s Confidential Information at all times and to use
no less adequate measures than it uses in respect of its own confidential information to keep the other party’s Confidential
Information secure. Neither party shall at any time, whether during the Term or at any time thereafter, without the prior written
approval of the other party, use, disclose (other than to its employees, officers, agents, sub-contractors or authorised
representatives, herein referred to as its “Associates”, to whom, and to the extent to which, such disclosure is necessary for the
purposes contemplated under this Agreement), exploit, copy or modify any of the other party’s Confidential Information, or
authorise or permit any third party to do the same, other than for the sole purpose of the exercise of its rights and/or the
performance of its obligations in connection with this Agreement.

20.4. Each party agrees that, save where otherwise expressed in this Agreement, neither party to this Agreement shall obtain any
rights in or in respect of the Confidential Information of the other party and each party shall retain full proprietary interests in their
own Confidential Information.

20.5. In particular, during and after the Term, the Production Company shall treat in complete confidence all marketing and sales
information and statistics relating to the Client’s business.

20.6. The Production Company undertakes not to post or otherwise publish any information regarding the Film, the Agency, the Client,
the Product/Campaign Name/Brand (as set out in the PIBS) or the Shoot on its own website or any social media platform without
the prior written consent of the Agency.

20.7. Neither party shall be in breach of this clause 20 if it discloses the other party’s Confidential Information in circumstances where
such disclosure is required by law, regulation or order of a competent authority, provided that the other party is given reasonable
advance notice of the intended disclosure and a reasonable opportunity to challenge the same.

11 Advertising Production Agreement Production Insurance Contract Terms – Part 2

20.8. Each party shall indemnify the other in respect of any damages, losses, claims, demands, actions, proceedings, costs (including
reasonable legal and other professional costs) and expenses resulting from or arising out of any breach of this clause 20 by the
other.

21. Anti-Bribery Requirements

21.1. The Production Company shall:
(i) comply with all applicable laws, statutes, regulations and codes relating to anti-bribery and anti-
corruption including but not limited to the Bribery Act 2010 and their equivalent in any relevant
jurisdiction (“Relevant Requirements”);
(ii) if providing or procuring services from outside of the UK, not engage in any activity, practice or conduct
which would constitute an offence under sections 1, 2 or 6 of the Bribery Act 2010 if such activity,
practice or conduct had been carried out in the UK;
(iii) not do, or omit to do, any act that will cause or lead the Agency to be in breach of any of the Relevant
Requirements;
(iv) promptly report to the Agency any request or demand for any undue financial or other advantage of any
kind received by the Production Company in connection with the performance of this Agreement; and
have and shall maintain in place throughout the term of this Agreement its own policies and
procedures, to ensure compliance with the Relevant Requirements, and will enforce them where
appropriate.

21.2. The Production Company shall be responsible for the observance and performance of the Relevant Requirements by any person
associated with it who performs services or provides goods in connection with this Agreement, and shall be liable to the Agency
for any breach by such persons of any of the Relevant Requirements as defined in 21.1.i).

21.3. Breach of this clause 21 shall be deemed a serious breach under clause 19.1.

21.4. The Production Company shall indemnify the Agency against any losses, liabilities, damages, costs (including but not limited to
legal fees) and expenses incurred by, or awarded against, the Agency as a result of any breach of this clause 21 by the
Production Company or any breach of provisions equivalent to this clause 21 in any subcontract by any subcontractor of the
Production Company.

21.5. For the purpose of this clause 21, the meaning of “adequate procedures” and “foreign public official” and whether a person is
“associated” with another person shall be determined in accordance with section 7(2) of the Bribery Act 2010 (and any guidance
issued under section 9 of that Act), sections 6(5) and 6(6) of that Act and section 8 of that Act respectively. For the purposes of
this clause 21 a person associated with the Production Company includes but is not limited to any subcontractor of the Production
Company.

22. General
22.1. No variation of this Agreement will be valid unless it is in writing and signed by or on behalf of each of the parties, for example, by
amending the PIBS in the space provided at section J.

22.2. This Agreement is the entire agreement between the parties relating to its subject matter and supersedes all previous
communication, agreement and other arrangement whether oral or in writing. Each of the parties acknowledges and agrees that
in entering into this Agreement it has not relied on, and shall have no remedy in respect of, any statement, representation,
warranty or understanding other than the statements, representations, warranties and understandings expressly set out in this
Agreement and its only remedies in connection with any statements, representations, warranties and understandings expressly
set out in this Agreement shall be for breach of contract as provided in this Agreement. Nothing in this clause shall, however,
operate to limit or exclude any liability for fraud.

22.3. The failure of either party to enforce or to exercise any term of or any right pursuant to this Agreement does not constitute, and
shall not be construed as, a waiver of any such term or right and shall in no way affect that party’s right to enforce or exercise it.

22.4. If any provision of this Agreement (or part of any provision) is found by any court or other authority of competent jurisdiction to be
invalid, unenforceable or illegal, it shall be severed from the terms of this Agreement but the other provisions will remain
unaffected and in force.

12 Advertising Production Agreement Production Insurance Contract Terms – Part 2

22.5. Nothing in this Agreement is intended to create or evidence a partnership or joint venture of any kind between the parties or to
authorise either party to act as agent for the other. Save where expressly stated in this Agreement, neither party will have
authority to act in the name or on behalf of or otherwise to bind the other.

22.6. Other than in respect of the Client, no term of this Agreement is intended to confer a benefit on, or be enforceable by, any person
who is not a party to the agreement, other than the Client, (whether under the Contracts (Rights of Third Parties) Act 1999 or
otherwise.

22.7. The Production Company shall not, without the prior written consent of the Agency, assign, transfer, charge, sub-contract or deal
in any other manner with all or any of its rights or obligations under this Agreement without the prior written consent of the
Agency.

22.8. The Agency may at any time assign, transfer, charge, sub-contract or deal in any other manner with all or any of its rights under
this Agreement.

23. Dispute Resolution

23.1. If a dispute arises out of or in connection with this Agreement or the performance, validity or enforceability of it (Dispute) then the
parties shall follow the procedure set out in this clause:
(i) either party shall give to the other written notice of the Dispute, setting out its nature and full particulars
(Dispute Notice), together with relevant supporting documents (if any). On service of the Dispute
Notice, the parties shall attempt in good faith to resolve the Dispute with the assistance should they so
wish of their respective trade associations (the APA in respect of the Production Company and the IPA
in respect of the Agency);
(ii) if the parties are for any reason unable to resolve the Dispute within 30 days of the Dispute Notice, the
parties shall attempt to settle it by mediation in accordance with clause 23.2.

23.2. To initiate a mediation, the parties shall agree on the appointment of a mediator within 21 days of a written request (mediation
notice) by one party to the other for a mediation. If the parties are unable to agree on the appointment of a mediator within 21
days or to agree the process under which the mediation should be performed, or if the mediation fails for any reason within 21
days of its commencement, either party shall be entitled to elect to take their claim either to arbitration, in which event both parties
shall submit to legally binding arbitration by a panel to which each of the IPA, APA and ISBA shall nominate one arbitrator, or to
the courts.

24. Governing Law

24.1. This Agreement shall be governed by English law, and the courts of England and Wales shall, subject to the provisions of clause
23, have exclusive jurisdiction over any Disputes or claims arising out of or relating to this Agreement.

We confirm our acceptance of and agreement to the terms of this Agreement.

Name: Signed by: Name: Signed by:

Authorised for and on behalf of the Agency Authorised for and on behalf of the Production Company

DD/MM/YYYY DD/MM/YYYY

13 Advertising Production Agreement Production Insurance Contract Terms – Part 2

A collaboration between: