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Bob K

Deal Memo — Indemnification, Termination Without Cause, No Further Negotiation

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This may be the most obstreperous deal memo ever.  I agree to indemnify the production company for it’s own wrongdoing!  (I’ve looked for any clause saying “caused by contractor” or anything similar, but I don’t see it.)
 

“INDEMNIFICATION: Contractor does hereby agree to indemnify, defend, and hold Producer, its shareholders, officers, contractors, corporate affiliates, agents and employees harmless against all claims, judgments, decrees, costs and expenses arising out of the Program or arising out of the television broadcast and/or digital transmission of the Program, or associated sale and/or distribution of any reproduction of such broadcast or transmission, including but not limited to any death, disability, personal injury, property damage, negligence, recklessness and/or any alleged copyright infringement, trademark infringement, other property right infringement, libel or slander. The provisions of this paragraph will survive termination of this Agreement.”
 

Then, there’s a provision about termination if the “Contractor fails to perform his service satisfactorily.”  OK, I’ve never seen that before, and it seems a little harsh, but then I read the last sentence:  "...terminated at any time by Producer without cause."  Huh?
 

“If in the judgment of Producer, for any reason, Contractor fails to perform his service satisfactorily, Producer has the right to terminate engagement of Contractor at any time during the production and completion of the production, at which time wages will also terminate. This Agreement may be terminated at any time by Producer without cause.”
 

So, maybe I should strike some things out before signing?  Nope.
 

“Contractor understands that this is the sole agreement and no other agreement whether verbal or written has been understood or undertaken in this matter.  This is the final agreement; no further negotiation will be taken into consideration by either Producer or Contractor.”
 

And, on top of all of it, my agreed upon 10-hour day rate was changed to a "flat rate."  That's particularly annoying, since it usually means the "simple" and "short" shoot will be complicated and long, and I won't be paid for overtime.
 

So, I want to work, I'd rather be working than not working, but I can't see signing this.  Any thoughts?

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We’ll, as a practical matter, film technicians serve at the pleasure of the director and producer and can be dismissed at any time for any reason or no reason at all. (Sometimes unions offer some protection.) I’ve been on projects where I would check the call sheet for the next day’s work to confirm that I was still listed. 

 

But sometimes contracts are a window into the thinking and attitudes of the people behind the show. No good can follow the example you’ve shared. 

 

There are worse things than not working. And, it’s useful, especially at the beginning of a career, to develop a side gig that makes it easier to decline poor offers. 

 

David

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Well with our Health and Safety rules revised here in New Zealand

as a company supplying services to a production, if a serious acccident

happens then I am co-liable for that accident and can face huge fines

that would close my small business and lose my house.

 

Many smaller productions do not carry out a safety report or a safety briefing

and do risky things and presume they can get away with it.

 

You only find this out about these omissions when you turn up to do the job - no contract!!!

 

mike

 

 

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David, I should have mentioned it's a one day shoot.

 

Mike, yes, and in addition this contract says I indemnify them for anything "arising out of the Program" and it lists examples that happen downstream, long after the day of the shoot. 

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You can put anything you want into a contract.  Just because you (they) put something in doesn't mean it's right, legal, a good idea or even makes sense.  It just means they put the language in.  If you don't like something in a contract, protocol is to cross it out, possibly substituting something else you like better.  You send it back, and they decide what they are going to do about it.  As a crew person I have often found that they do nothing, either because the rank and file production people know the objectionable items are BS boilerplate and want to get on with their job already, or because all that was just a fishing expedition to see if you'd really sign off on something that potentially ruinous.  Re the actual language under discussion: I'm not indemnifying anyone, and if they insist that all that crap has to stand and you have to sign off on it to work then the negotiations are over.  Do NOT sign docs you can't fulfill the terms of.   The company may be expecting that you already have various sorts of insurance that cover all this.  If there was a lot of work on offer then you might consider paying for this.  For a 1 day job.....please.

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Philip, I've blacked out the parts of the (pdf) deal memo I don't accept, including the "flat rate."  I suppose I'll have to hand-write in the 10-hour rate and OT rate.  Would you sign and date the redacted document, or send it back unsigned?

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1 hour ago, Philip Perkins said:

The company may be expecting that you already have various sorts of insurance that cover all this.

 

I don't know of any insurance I could buy that would indemnify a client’s wrongdoing in which I have no part.

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You can buy insurance for anything.  E+O, etc.  But not cheaply.  You can sign your modded doc if you are sure there isn't anything else in it you don't like.  If you are not sure about what something means (as I usually am) then you need a lawyer to interp for you.  Be very sure that THEIR legal dept has an idea of what all of it means....

 

My fave situation is when I'm sent a doc like this on a weekend for a shoot starting Monday, and the client expresses astonishment that I won't just shut up and sign, with no legal advice, even though I'm not clear on what some of the verbiage means legally and probably don't have the sort of insurance I'm being asked for.  What I do understand is that signing such a doc attesting to me having some sort of insurance that I don't actually have could be considered fraud in court, so I don't do it.  Am thought of as being cranky for this, sometimes.

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These contracts can be deemed invalid by any good lawyer as they can be seen as signed under duress as a condition of employment, without ample notice or representation. 

 

You also can’t sign away your legal rights. Flat rates are illegal. 

 

For a one day job, I’d sign and move on. For a long job, it’d be worth a conversation. 

 

The language in the beginning talks about the program not the production. So they’re saying if you are sued for recording someone, you won’t hold them responsible. Seems like a pretty unlikely scenario. But if that’s a possibility in the job you’re doing, then something to consider.  

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1 hour ago, Bob K said:

Philip, I've blacked out the parts of the (pdf) deal memo I don't accept, including the "flat rate."  I suppose I'll have to hand-write in the 10-hour rate and OT rate.  Would you sign and date the redacted document, or send it back unsigned?


I'd probably send it back unsigned with a note saying something like "there are a couple/few parts of the contract that don't work for me. Specifically, the indemnification section and the rate/OT section. As a policy, I don't indemnify companies that hire me. And I usually work on a 10-hour day plus overtime. In the attached PDF you'll see that I crossed out the indemnification section and added the rate/OT info in the margin. Should I sign this changed form, do you want to send me an updated contract, or do you want to talk about this? :-) I hope we can work this out."

 

The problem, of course, could be that the person you're dealing with doesn't have the authority and/or experience to handle requested/needed contract changes. I deal with indemnification clauses all the time, though mainly in my jobs as a writer and producer. I can't count the number of times I've been asked to indemnify multibillion-dollar corporations from their own potential boneheaded actions. I've actually had some luck getting indemnification clauses changed or deleted, but it sometimes takes a week or two for things to go through their lawyers...For a one-day job where there are actual chances of tripping and injury, this might be a deal killer.

 

Are indemnification policies enforceable? It depends, say lawyers I've worked with. Will the production company come after you? Probably not...but would their insurance company come after you to avoid paying a claim from their own pockets? Maybe.... and would you want to pay the legal fees (and huge hassle) to have a court declare an indemnification clause deemed invalid?

 

Some  good background reading:

 

Indemnification Provisions in Contracts

An indemnification provision allocates the risk and expense in the event of a breach, default, or misconduct by one of the parties.

https://www.nolo.com/legal-encyclopedia/indemnification-provisions-contracts.html

[This is general background from my go-to resource for legal & business info... doesn't replace the occasional need for a lawyer, but since Nolo's stuff is written and/or edited by lawyers, at least I understand the general issues I face]

 

How to Deal with Warranty and Indemnification Clauses

http://www.writersandeditors.com/blog.htm?post=869703

[This was targeted at the needs of writers and authors, but I've used this very language to get changes that publishers and a few production clients could live with]

 

And insurance you can get. But not right away and it might take a while to get a policy that'll cover stuff like this (I have media perils insurance...which is sort of like a blanket Errors & Omissions policy...and general liability, but as you probably know, it's not something you can get delivered from Amazon in two days).

 

Good luck Bob!

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Philip and Jim, the first contact came last Tuesday, the PC booked me on Thursday, and I received the deal memo Friday night.  A "production book" is coming yet this weekend.  The shoot is on Tuesday.  So, yes, it's last minute, perhaps intentionally.  I'm asked to sign and return the deal memo by Monday.

 

Philip, I like the advice in your first paragraph.  It's always good to be polite.  Much better than the "bite me!" response that was my first instinct.

 

18 minutes ago, RPSharman said:

The language in the beginning talks about the program not the production. So they’re saying if you are sued for recording someone, you won’t hold them responsible.

 

RP, that's an interesting interpretation.  Perhaps their language is just a clumsy way of saying that.  But, "indemnify" also means "compensate," and it appears their language could be interpreted more broadly.

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14 hours ago, Bob K said:

“Contractor understands that this is the sole agreement and no other agreement whether verbal or written has been understood or undertaken in this matter.  This is the final agreement; no further negotiation will be taken into consideration by either Producer or Contractor.”

This is strange to put in a contract...I would take that to mean there can be no renegotiation after both parties sign, because it seems a weird thing to make retroactive. I mean, obviously a rate had to be agreed before the contract was sent? Plus language is strange. Who knows.

 

The rest of it just sounds like they have no insurance and are trying to cover their own backsides - something to be cautious of.

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Bob, that is rather a lot of contractual obligation to review for a one-day assignment. 

 

Regarding insurance, a policy that would meet the needs of the situation can be easily arranged even at the last moment if one has a relationship with an insurance broker. One of the more popular (at least locally in Los Angeles area) sources for equipment insurance is "Insure My Equipment."

 

https://www.insuremyequipment.com

 

This is a company specializing in equipment insurance for freelance camera people, photographers, sound professionals, etc. It is affiliated with Heffernan Insurance. If one has an equipment policy with them, one can just click on a few links from their site to activate their "Camera Operator General Liability Program." While pitched to camera, the policy also serves others. They say:

 

"The policy is specifically designed to cover vendors or subcontractors involved in the production, film or entertainment industry including but not limited to: Cameramen, Photographers, Set Designers, Sound Engineers & Coordinators, Sound Mixers, Video Editors, Lighting Specialists, Gaffers/ Grips, Character/ photo exhibits, Seasonal displays, Celebrity appearances, Tradeshow," etc., etc.

 

About the policy:

"InsureMyEquipment.com offers you Camera Operator General Liability protection from third party claims for property damage and/or bodily injury. The policy serves to protect the insured from lawsuits where the insured has been deemed liable for damages to a 3rd party."

 

But check their website for details and particular exclusions (stunts, water work, etc.) and limitations.

 

With a U.S. address and a credit card to pay for the policy, coverage can be arranged in a few minutes. Even without an existing equipment policy, I think one could arrange for a liability policy expeditiously.

 

I think wisdom lies in not working for people with unrealistic expectations and a practice of evading their legitimate liabilities by pushing them off onto employees who typically have little or no control over the work environment. But there may be times when having liability insurance may be suitable and I pass on the information in that context.

 

David

 

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I don't know about unrealistic expectations, it often seems like a contract suitable for use with a big vendor who might supply the client with crew,  large pieces of gear, transpo etc is the same as sent to a single short-hire free-lancer.  To some that might seem good policy, I think it is just laziness.  Many small prod co.s get very questionable legal advice on matters like this, and don't have enough experience to understand how the business really works on an individual free-lance hire level.  Some of them I've been able to educate, some stick to their demands and thus we don't work together.

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17 hours ago, Bob K said:

including but not limited to any death, disability, personal injury, property damage, negligence, recklessness and/or any alleged copyright infringement, trademark infringement, other property right infringement, libel or slander.

This part is the portion that I would never agree to... Although like Robert says, This would never hold up in court... This may deter the "common man" as they say from pursuing a lawsuit in the first place, but, again.... once someone is injured, or killed, all bets are off, I don't care wether you signed this or not...BUT, better never to agree to sign away YOUR rights against at least injury, or death.  It's just another hurdle and anything can be argued in court.

   They can fire me, I don't give a shi$ about that...

 

As has been suggested, black out and initial the items you DO NOT agree to abide by.  Anytime I have done this, they never said a word... or, simply forget to return it... sandbag it...  They are usually too busy to even notice and the smaller and more confused production teams may forget all about it and simply wait on you to complete it and return it on your own... NEVER sign this crap AFTER the job!!

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Insuremyequipment.com is a service from Heffernan, one of the three main brokers I hear about in my slice of the biz. The other two are Charles Whelan and Athos (Athos started by Kat Wong who, iirc, used to be at Heffernan). All have pretty good reputations, and they know are biz, are brokers rather than direct employees of a singular insurance company (I think), and are good about COIs, explaining what the hell is going on, etc.

 

[Sidebar: I'd be grateful to hear people's recommendations for other brokers and agents that they've worked with]

 

But will any insurance company offer liability insurance that covers a super-broad/blanket indemnity clause like the one Bob's facing? I'd guess (1) they don't offer such coverage or (2) they'd charge a super high premium... I think (1) is more likely...like "you're going to cover every dumbass thing they might do? And you're agreeing to be their E&O insurer? Yah right, friend."

 

My liability and E&O insurance polices cover dumbass things I (or those I employ) might do...not dumbass things others might do.

 

If the company is reasonable, I think they'll agree to drop the indemnification and hourly-rate stuff. But again, who there has the authority to make those changes to the contract? If they don't agree to the changes, walk away. I mean, probably nothing will happen, but why take the risk?

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Here’s some information Jim linked from NOLO about indemnification:

 

"In a mutual indemnification, both parties agree to compensate the other party for losses arising out of the agreement to the extent those losses are caused by the indemnifying party’s breach of the contract.  In a one-way indemnification, only one party provides this indemnity in favor of the other party."

 

And, "make sure your obligations are limited to your own mistakes or misconduct... the term 'to the extent arising out of' effectively provides this limitation."

 

This is exactly what concerns me about this company's indemnification.  It doesn’t limit my liability to my mistakes, misconduct or breach of contract.

 

There is some reassurance from NOLO, noting that “indemnification provisions are generally enforceable...  except “indemnifications that require a party to indemnify another party for any claim irrespective of fault (‘broad form’ or ‘no fault’ indemnities).  “Those have been found to violate public policy.”  So, this company’s indemnification provision is probably not enforceable.

 

This is NOLO’s example of what a “basic mutual indemnification provision” should look like—  
 
“Each party agrees to indemnify, defend, and hold harmless the other party from and against all reasonable claims of loss, cost, or damage (including reasonable outside attorneys’ fees) to the extent arising out of its breach of this Agreement, and/or its negligence or willful misconduct.”

 

That sounds like something I could sign.  But, there's another clause in the deal memo to consider:

"Contractor agrees to provide first class work. Contractor has the skills, physical fitness, resources, expertise, and experience necessary and appropriate to provide the services and perform all of his obligations under this Agreement in a prompt, competent, efficient, and effective manner."

 

So, where is the line, exactly, between "prompt, competent, efficient and effective" service, and breach of contract?  If one of my wireless mics has some RF hits, is that a breach of contract? 


And, there’s one more troubling clause in the memo that no one has yet commented about.  It’s a one-day shoot, and the deal memo says “this Agreement may be terminated at any time by Producer without cause.”  Does that give the producer carte blanche to say, at the end of the day, “thanks Bob, you did great work, and by the way I’m terminating our agreement and we’re not paying you?”  
    

 

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2 hours ago, Bob K said:

So, this company’s indemnification provision is probably not enforceable.

 

But you'll mostly likely need to pay a lawyer to get them to agree on that (or to get a court to force them to agree to that). But it's a good talking point.

 

2 hours ago, Bob K said:

“thanks Bob, you did great work, and by the way I’m terminating our agreement and we’re not paying you?”  

 

Then would you have a good case that you and not they hold the copyright to any audio recordings made during the gig? Who wants to go there, but perhaps an example of how the current wording of the deal memo probably doesn't work for either them or you.

 

Even if the prodco is mostly honest, they may say "no one else has ever complained about this agreement." But you have a good list of questions in your above post. Send them an email or give them a call mid-morning Monday (since this is, after all, the weekend). Since you got the memo Friday night, that's a reasonable response time. 

 

Try to work things out, be ready to say "sorry, this doesn't work for me at this time." Then they can get someone else. When/if they complain about you bailing, a reasonable response is that the terms were nonstandard and left you too exposed, and you weren't informed of them when you agreed to the gig...you only saw them in their Friday-night memo. They last-minute negotiations are all on them (though you don't need to say it that way :-) )

 

And for the record, yep I've walked away from gigs because of contract terms like this...mainly my gut was telling me that the people didn't quite get how production usually works. Usually, my replacement had no issues. A couple of times, they had huge hassles getting paid and/or reimbursed for L&D.

 

Good luck Bob!

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Thanks, Jim.  Good information and very helpful.  I'm planning to wait till Monday, and by then I should have their "production book" too, to provide some more information.  I've done probably over 1,000 contract jobs so far—sound, camera and editing—and I don't have any problem walking away from jobs with red flags.  They are few and far between, but I find that when I notice red flags and do the job anyway, bad things happen.

 

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58 minutes ago, Bob K said:

"Contractor agrees to provide first class work. Contractor has the skills, physical fitness, resources, expertise, and experience necessary and appropriate to provide the services and perform all of his obligations under this Agreement in a prompt, competent, efficient, and effective manner."

 

Sample of what this SHOULD look like from a recent contract:

 

"1. Services. Crew Member shall personally provide all services to Company as may be requested by Company in connection with the Film, as well as all services that are consistent with the duties of first class individuals of Crew Member’s position in the motion picture industry, as that term is commonly understood, during the pre-production, production, and wrap of the Film, as applicable. At all times during the term of Crew Member’s services hereunder, Crew Member will promptly and faithfully comply with all of Company’s reasonable instructions, directions, requests, rules, and regulations. Crew Member will perform Crew Member’s services conscientiously and to the full limit of Crew Member’s talents and capabilities when and wherever reasonably required or desired by Company and in accordance with Company’s reasonable instructions and directions in all matters, including those involving artistic taste and judgment."

 

So I know what they're getting at but, going back to what Philip said, it sounds like they might just not be knowledgeable enough/have the resources to call on to write a competent contract. Maybe send back some suggestions to help guide them along.

 

As to the producer just firing you at the end of the day, unlikely, but it's a Right to Termination clause, something in a lot of contracts I've seen, but it's always been followed up by couple sentences saying in effect that if that happens I have to compensated for services rendered up to that point. So if terminated at they end of the day, they would still have to pay me for that day.

 

Take them step by step on Monday explaining what isn't working for you, provide some examples of good wording.  Offer to work with them on getting a good contract together, send them samples of some good ones you've seen, gently reminding them that contracts are there to protect companies as much as contractors, so it's mutually beneficial for them to have a better contract moving forward. At the end of the day, stick to your guns, if that are that rigid on contract, in my experience they'll be just as rigid on set, and that's not going to be a good work environment.

 

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27 minutes ago, JWBaudio said:

if that are that rigid on contract, in my experience they'll be just as rigid on set, and that's not going to be a good work environment.

Thanks, JW.  I agree completely.  I find sound is the most mysterious aspect of production for some people—usually those not wearing headphones—yet they can be adamant micro-managers.  I've learned to just say no, politely, in spite of a natural inclination to accommodation.

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I'm just now busy striking out the Indemnification provision (in my first post) and the references to "flat rate" (we had agreed to a 10-hr rate including gear, not a 24-hr rate).  I'm going to write in the 10-hr rate and OT rate.  I've decided I can live with the "termination without cause" provision, after receiving some perspective here.

 

I'll suggest an alternate Indemnification provision (recommended by NOLO): “Each party agrees to indemnify, defend, and hold harmless the other party from and against all reasonable claims of loss, cost, or damage (including reasonable outside attorneys’ fees) to the extent arising out of its breach of this Agreement, and/or its negligence or willful misconduct.”

 

I'll follow Jim's prescription for a polite "how do you want to proceed?" approach.

 

On 3/24/2018 at 12:01 PM, RPSharman said:

So they’re saying if you are sued for recording someone, you won’t hold them responsible. Seems like a pretty unlikely scenario. But if that’s a possibility in the job you’re doing, then something to consider. 

 

After receiving the "production book" over the weekend, I realize that the shoot involves an interaction between a wealthy person and a wealthy corporation in what looks perhaps like some kind of endorsement, maybe.  I've done many shoots of that nature, but this one is mysterious and deliberately secret.  So, even RP's interpretation of the Indemnification clause is a concern.

 

On 3/24/2018 at 2:32 PM, Philip Perkins said:

Many small prod co.s get very questionable legal advice on matters like this, and don't have enough experience to understand how the business really works on an individual free-lance hire level.

 

It begins to appear that Philip's interpretation of the overly broad Indemnification clause may be correct in this case.

 

I've just noticed a second paragraph in the Indemnification provision, and ask for any thoughts about either striking it out or leaving it in.  The shoot is in a safe location and there is little chance of personal injury.  My only concern would be theft of my equipment, either in the parking garage or while at lunch, and that's not very likely either.   

 

"Contractor voluntarily and knowingly assumes all risks of loss, damage or injury to himself or personal property by participating in the production of the Program or being otherwise present on the surrounding premises or location."

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Bingo.  The "flat rate" changed to a 10-hr rate, and the new indemnification provision is exactly what I suggested:

 

"Each party agrees to indemnify, defend, and hold harmless the other party from
and against all reasonable claims of loss, cost, or damage (including reasonable outside attorneys’ fees) to the extent arising out of its breach of this Agreement, and/or its negligence or willful misconduct."

 

Thanks Jim, Phillip, RP and everyone who shared your experiences and knowledge.

 

 

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Such documents are generated by an attorney, or law firm, whose preeminent talent is convincing their client that such paperwork is necessary to prevent their world from crashing in around them.  That's 25% true and 75% overkill which -- not surprisingly -- accrues to the attorney's favor in billable hours. 

 

What I've done several times when such a "one-way" document shows up -- quite often last minute -- is to not have the time to read and sign it yet. 

 

If questioned, I offer to bring it with me to the shoot.  Then, usually, on shoot day everyone is more interested in getting the shots off than they are paperwork.  This means that it's not uncommon for me to have not bothered to sign their magnum opus prior to doing the work.  Kind of another application of the old "it's often easier to ask forgiveness afterward than to get permission beforehand" axiom.

 

If it's mere hours before the shoot and they're not happy with me bringing it with me, what are their options?  Cancel the shoot?  Not gonna happen.

 

Sometimes I end up forgetting their contract altogether, other times I'll send my approved version following the shoot.  If it's one I do need to sign prior to the gig, I've found most producers are quite understanding if I feel uncomfortable about signing my life away, and reasonable changes typically don't cause an issue.

 

Often the production company's interest is in having necessary documents on file for the IRS, etc., and if they still work for that purpose, they're not too concerned.  

 

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