NON-DISTURBANCE LETTER AGREEMENT

Updated: Nov. 1, 2025

1. What is it?

A Non-Disturbance Letter Agreement is a legal assurance provided—typically by a secured party such as a lender, rights holder, or distributor—to a third party (often a producer, financier, or licensee) that their rights to exploit, distribute, or use a film or intellectual property will not be interfered with or “disturbed” if the secured party takes control of the project due to a default or rights reversion. In effect, it says: "Even if we step into the shoes of the current rights holder, we will honor your existing agreement." This protects downstream parties from losing their rights or investments in the event of a legal dispute or enforcement of a security interest. It’s frequently used in distribution, co-production, and financing arrangements, particularly in connection with copyright mortgages, assignments, or sales.

2. Who is it for?

This agreement is used by third parties who need stability and protection when dealing with assets that might change hands or be encumbered by liens or reversion rights. It’s most common in complex financing or distribution structures involving multiple stakeholders.

Key users include:

• Distributors acquiring rights to a film with third-party financing

• Production financiers who want assurance their deal won't be wiped out by foreclosure

• Sales agents entering pre-sale agreements with downstream licensees

• Licensees of film, television, or streaming rights

• Completion bond companies monitoring risk to delivery

• IP lenders providing security over a copyrighted work

3. What does it include?

The Non-Disturbance Agreement typically identifies the existing agreement (e.g., a distribution or license agreement), acknowledges its validity, and guarantees that even in the event of foreclosure, termination, or assignment of the project’s rights, the protected party’s agreement will remain in force. It may include standstill obligations, waivers of termination rights, and binding commitments not to interfere with exploitation. These agreements are usually short but carry significant legal weight in providing security for third-party deals.

Key Sections Typically Include:

• Parties

  • Party providing the non-disturbance (e.g., a secured creditor, senior rights holder)

  • Party receiving the protection (e.g., distributor, licensee, financier)

• Recitals / Background

  • Description of the underlying deal being protected (e.g., distribution license)

  • Reference to any agreements creating a risk of interference (e.g., copyright mortgage or reversion clause)

• Non-Disturbance Commitment

  • Binding promise that the rights of the protected party under the agreement will not be terminated, modified, or disturbed

• Recognition of Agreement

  • Acknowledgment that the underlying license/distribution/finance agreement is valid and binding

  • Agreement to be bound by its terms if the provider assumes control of the IP

• Standstill / No-Interference Clauses

  • The provider agrees not to interfere with the protected party’s exploitation of the work

• Limitation of Remedies

  • Restricts the secured party from revoking the license or distribution rights due to default by the current rights holder

• Execution Block

  • Signature by both parties, often including titles and roles (e.g., “Authorized Representative of Secured Party”)

  • May include date of execution and optional notarization

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