Personally, my view is that, in most cases, one option is the best approach. It offers better protection for the producer, some advance money and greater security on the purchase price for the rights holder and is the most established agreement structure. By pouring in a little money to acquire the option, the producer puts « his money where there is his mouth » and is more likely (I think) to take steps to develop the good. It has something « skin at stake ». Unlike an option agreement, a purchase agreement does not confer rights on the producer in the property itself. In this respect, a purchase contract is in principle a contract for services and not a contract for the purchase of property. In the absence of property rights, a purchase contract is probably easier for the owner to violate and therefore offers less protection to the producer. An owner could go behind the producer`s back and sell the rights to another party. The producer would have no choice but to assert a right to the infringement. Conversely, under an option agreement, the builder has acquired a stake in the property that will not fall on the owner until after the option expires. If the owner wishes to sell or option the same stake in the property, another buyer would expect the owner to provide insurance and guarantees that the interests to be acquired will not be legally linked and that no other person holds any possible ownership rights in the property. It is typical for producers to commission experienced securities advisors to write a Private Placement Memorandum, which they then register either with the relevant federal and regional authorities or apply for an exemption from registration with the same national and federal authorities. These offer plans must contain a description of all the essential elements of the film project, including biographies of all employees involved, risk factors, budgets and projections.
They must indicate where all initial agreements underlying the offer are filed and that they can be reviewed upon request. An important risk that needs to be disclosed is the risk of not receiving distribution and paying negative costs. For example, independent films that never receive distribution do not recoup their expenses, resulting in a loss for investors. Therefore, the producer should be honest from the outset, as he can be held criminally responsible for misrepresentations of facts. Investors may be entitled to a full refund of their investment if the producer or one of his representatives or collaborators conceals or presents facts concerning the production. However, these agreements can and often are limited only to certain rights and may exclude others. The rights of the writer usually depend on the bargaining power of the writer and the wishes of those who buy the property. Rights purchase agreements are the broadest form of purchase of real estate by a writer or other owner….