Terms Short Fiction & Documentary

1. PURPOSE

1.1 The Danish Film Institute (DFI) can subsidise the development and production of Danish short and documentary films and the participation of Danish production companies in international co-productions of short and documentary films. Subsidies are awarded by the DFI's management.

1.2 The purpose of the DFI's subsidies is to secure the continual production and dissemination of different types of films, so that the overall range of Danish short and documentary films, in terms of artistic quality, diversity, volume and audience appeal, sustains and develops Danish cinema and cinema culture, both domestically and internationally.

2. DEVELOPMENT SUBSIDIES

2.1 Upon recommendation of a Film Commissioner, the DFI can subsidise the development of a film project, if such development is judged to be significantly important for strengthening the project artistically, financially or production-wise, or in terms of the film's target groups or audience potential.

2.2 The purpose of development subsidies is to ensure the best possible development of the project and to form a basis for the DFI's evaluation of a possible subsequent application for production subsidies to the film project. Subsidies can be awarded for all forms of development costs, including breakdown, pitch, treatment, research, scriptwriting, pilot, urgent shoots and financing costs, including costs of third-party services. If the project has signed on a scriptwriter, the writer's contract must be presented to the DFI.

2.3 Development subsidies normally can only be awarded to Danish production companies, cf. Item 4.2.1. It is, however, possible to apply for development subsidies for script preparation or research without a production company.

2.4 Before a decision to award development subsidies is made, the DFI performs a production and financial assessment of the project, unless the development subsidy is intended solely for script preparation and/or research.

2.5 The application must contain a description of the film project and the director's intentions, as well as a precise description of the matters for which the development subsidy application is being made, a statement about the expected outcome of the project development, a schedule for the development process, a budget and a financing plan. Administrative expenses of no more than 10% can be included in the budget, unless the development subsidy is solely intended for script and/or research efforts.

2.6 Development subsidies can be awarded for the purpose of acquiring the rights to a literary property or for an option on such rights. The subsidy amount normally cannot constitute more than 50% of the cost of acquiring such rights.

2.7 The DFI usually does not approve a development project's budget if it contains a margin of uncertainty.

2.8 Development subsidies are usually paid in two instalments: the first instalment upon the production company's written acceptance of the subsidy commitment and the second instalment upon the DFI's approval of the final accounts and the development outcome. However, the DFI may in the subsidy commitment specify that the development subsidy be paid in a greater number of instalments.

2.9 The production company is responsible for managing project development and must present audited accounts for expenses relating to project development, cf. Items 4.4.1 and 4.4.2. The accounts must be represented within one month of the completion of project development, unless the DFI grants an extension in writing. Any savings relative to the approved budget must immediately be repaid to the DFI in a proportion equal to the share of the DFI subsidy.

2.10 The production company must continually keep the DFI informed about the progress of project development, including any changes to the development project's schedule.

2.11 A commitment to development subsidies does not imply a commitment to subsequent production subsidies.

2.12 Production subsidies cannot be awarded until the audited accounts of the development project have been presented, cf. Items 4.4.1 and 4.4.2. Development subsidies that exclusively consist of script- or research-related fees are exempted from the requirement for audited accounts.

2.13 If the film project is later awarded a production subsidy by the DFI, the development subsidy is considered part of the total repayable subsidy.

3. PRODUCTION SUBSIDIES

3.1 Upon recommendation of a Film Commissioner, the DFI can subsidise the production of Danish short and documentary films.

3.2 Before a decision to award production subsidies is made, the DFI performs a production and financial assessment of the project, as well as an assessment of the film's target group and distribution potential.

3.3 Applying for production subsidies for films with a Danish majority production company

3.3.1 An application for production subsidies must contain the following information and documents:

• Script or project description.
• Description of the director's intentions.
• Schedules for preproduction, shooting, postproduction and expected completion.
• Production plan, if the film is a short.
• List of the crew and possible cast.
• Budget prepared on a DFI-approved budget form.
• Financing plan (distributor advances, pre-sales, equipment, own services, etc.) and information about any other possible support the project has received or applied for. The Financing Overview, cf. Appendix 1 of the present subsidy terms and conditions, must be used as a cover for the financing plan.
• Cash-flow plan.
• Statement about any possible agreements made with other companies (co-production agreements).
• Promotion schedule, submitted on the DFI form available at www.dfi.dk.
• Documentation proving that the applicant holds all rights to exploit the finished film. This includes copies of contracts with the scriptwriter, director, producer et al., plus agreements with the cast.
• Curricula vitae for the scriptwriter, director and producer, plus the production company's other possible key personnel prospects.
• Corporate information upon request.
• All other agreements made concerning the film.

3.3.2 The DFI may request additional information and statements, as required for application processing.

3.4 Letter of Commitment (LOC) and Letter of Interest (LOI)

3.4.1 If the documents required under Item 3.3.1 are not complete at the time of application, the DFI may reserve production subsidies for a period, in a so-called Letter of Commitment (LOC). A subsidy commitment can only be drawn up once all the requirements in the LOC have been fully met.

3.4.2 If the requirements stated in the LOC have not been met within the period set out in the LOC, the reserved production subsidy is void without further notice.

3.4.3 In special cases, the LOC can be extended following a written application.

3.4.4 The DFI can write a Letter of Interest (LOI) to show its interest in a project. However, the LOI is no guarantee that the project will receive subsidies.

3.5 Budget and financing plan

3.5.1 Production subsidies are awarded based on a DFI-approved budget. The budget must list all costs at market prices, in DKK or EUR.

3.5.2 The budget must contain the following items:

• Administration costs of no more than 10% of the budget, excluding the costs of project development and the margin of uncertainty.
• The producer's fee, the amount of which must be approved by the DFI, accounting for the nature and size of the individual production.
• Production company's overhead, which may constitute no more than 5% of the budgeted production costs, excluding the costs of the administrative surcharge and the margin of uncertainty.
• Margin of uncertainty of at least 5% and no more than 10% of the budgeted production costs, excluding the costs of project development and excluding the administrative surcharge and the production company's fee.
• The DFI-approved development accounts, as a separate item.

3.5.3 All financing and co-production agreements for the film, including the production company's own investment in the film, must be presented to the DFI for approval. The co-production agreements must specify the division of the film's financing and rights among the co-production partners and the Danish production company.

3.5.4 Production subsidies for the film can only be awarded once the production company has documented that the budget, including the margin of uncertainty, is fully financed.

3.6 Minority productions (co-productions with a foreign majority production company)

3.6.1 Upon recommendation of a Film Commissioner, the DFI can subsidise the production of short and documentary films in which the Danish production company is not the majority co-production partner. Before a decision to award production subsidies is made, the DFI performs a production and financial assessment of the project, as well as an assessment of the film's target group and distribution potential.

3.6.2 For a film with a foreign majority production company to receive subsidies, the subsidy application must be made by a Danish production company, there must be Danish creative or technical involvement in the production, and a distribution agreement must have been made for Danish theatrical distribution or for broadcast on Danish television.

3.6.3 Assessment of such applications is based on the presence of the following:

• A creative and financial partnership between a Danish and an international production partner. Past partnerships and future plans will be emphasised.
• A Danish share in the creative and technical partnership, including participation of Danish film workers and the film's expenditure in Denmark.
• Artistic quality.
• Distribution potential, including the nature of the distribution agreement made by the production company.

3.6.4 Applications for production subsidies must contain the application materials described in Item 3.3.1.

3.7 Payment instalments

3.7.1 Production subsidies are paid to the production company in instalments. The DFI determines the amount of individual instalments, according to the approved cash-flow plan. Subsidies are normally paid in four instalments:

1. The first instalment is paid upon the production company's written acceptance of the subsidy commitment.

2. The second instalment is paid once the Film Commissioner has viewed rough cuts or pre-edits and the DFI has approved the cost report, cf. Item 3.9.3.

3. The third instalment is paid once the DFI has received and approved the materials listed in Item 3.8.1.

4. The fourth instalment is paid once the DFI has approved the audited production accounts, cf. Items 3.9.4 and 3.9.5.

3.8 Depositing materials

3.8.1 The production company must deposit archive materials relating to the film at the DFI Film Archive, cf. the applicable Legal Deposit Act at the time of deposit.

3.8.2 The production company must deposit materials relating to the film for the DFI's promotion, publishing and festival activities, in compliance with the applicable deposit list for short and documentary films at the time of deposit.

3.8.3 The DFI must approve the technical quality of the deposited materials.

3.8.4 Deposits made in compliance with Items 3.8.1 and 3.8.2 must be made free of charge and may be included in the production budget.

3.9 Financial reporting and accounts

3.9.1 During the production and postproduction phases, the production company must continually keep the DFI informed about the production's progress. The DFI is entitled to monitor the production of the film, including viewing rough cuts, fine cuts and the final version of the film.

3.9.2 During production, the production company must keep separate accounts of the film's earnings and expenses. If individual items on the budget deviate by more than 10% from the approved budget (this does not apply to amounts under DKK 5,000), the production company must prepare an updated budget and present it to the DFI for approval. The DFI normally does not approve budget overruns for administration and salaries.

3.9.3 The production company must provide a cost report to the DFI, when a rough cut is available, and at other times, upon request. The DFI can require the cost report to be attested by a registered or state-certified accountant. The cost report must contain four columns: approved budget, spend, difference and expected final outcome.

3.9.4 No later than three months after the second to last instalment has been paid, the production company must submit the film's production accounts to the DFI. The accounts must be audited by a registered or state-certified accountant.

3.9.5 The production accounts must contain a specification of the film's production costs. The production accounts must contain the same items as the approved budget and the budget figures must be stated for comparison. The accounts must contain an account of variances on individual budget items of more than 10%, though this does not apply to amounts under DKK 5,000. The production accounts must moreover contain a separate specification of the film's financing, including support from funds, public support, pre-sales, etc. In preparing the final financing overview, use Appendix 1 of the present subsidy terms and conditions. Cf. also the accounting requirements in Item 4.4.

3.9.6 All salaries and fees relating to the production, as well as all due taxes to public coffers, must be paid before the accounts are presented. Upon request, the production company must be able to document that such payment has been made.

3.9.7 Any savings relative to the originally approved budget, excluding the margin of uncertainty, must be repaid to the DFI in a proportion equal to the share of the DFI subsidy. The production accounts cannot be approved until repayment of the DFI's share of the savings has been made.

3.10 Revenue statements

3.10.1 The DFI may ask the production company for a statement of the film's revenues. The production company must submit the statement within two weeks of such request. Revenues that are included in the film's production accounts should not be included in calculating the revenue statements. The production company's revenues are stated separately for, respectively, Danish theatrical distribution, videogram sales and rentals, sales to TV stations and other revenue.

3.11 Distribution rights

3.11.1 Taking into consideration the commercial exploitation of the subsidised film, the DFI has the non-exclusive right to distribute the film in any way and in any medium, both currently known and unknown, to schools, institutions, associations, film clubs, libraries and other non-commercial organisations in Denmark, Greenland and the Faroe Islands, or to the Danish minority in South Schleswig. Schools are entitled to electronically make the film available to teachers and students, at times and locations chosen by teachers and students, via secure connections. Libraries are entitled to lend out the film, including in electronic form. The DFI can set more specific rules for securing commercial usage rights, for instance establishing a reasonable holdback between the film's release date and the DFI's distribution or establishing a "black hole" in the DFI's distribution. Agreements on restrictions to the DFI's distribution rights can be set down in the subsidy commitment.

3.11.2 The DFI and the production company can agree that the DFI handles distribution, also to parties other than the institutions et al. mentioned in Item 3.11.1. The DFI and the production company can agree that the production company handles distribution to the institutions mentioned in Item 3.11.1.

3.11.3 With a view to ensuring the best possible distribution for the film, special conditions regarding time limits on distribution can be set down in the subsidy commitment. The film's first public showing in Denmark, including broadcast on Danish television, normally can take place three weeks after the DFI has approved the submission materials, cf. Item 3.8.

4. GENERAL TERMS AND CONDITIONS

4.1 The following general terms and conditions apply to all forms of DFI subsidies awarded according to these terms and conditions. Subsidies in these terms and conditions are understood to mean any form of capital infusion to a project that does not express an investment or a fee.

4.2 Subsidy application, subsidy commitment and reporting

4.2.1 Subsidies can be awarded to Danish production companies, on the condition that the producer, or leading employees of the production company, can document experience in film production and have film production as their main occupation. The director and producer/production company may not be the same person, unless the DFI specifically judges this not be of significance due to the special nature of the project.

4.2.2 All applications must be in writing, using the DFI application form.

4.2.3 As a requirement for receiving subsidies, full disclosure of all conditions regarding the rights to the individual project must be made. All applications must contain documentation proving that the applicant holds, or can acquire, all the necessary rights to adapt a work into film and distribute the finished film.

4.2.4 At any time, the DFI can require the applicant to submit the documentation necessary for application processing.

4.2.5 In the subsidy commitment, the DFI can change or supplement the present terms and conditions in accordance with the subsidy's purpose. The production company is obligated to these terms and conditions, and any deviation must be approved in writing by the DFI. The DFI is obligated to respond to requests from the subsidy recipient in that regard within a reasonable period.

4.2.6 If changes to the schedule or production plan are made, the production company must immediately submit the changed schedule or plan to the DFI.

4.2.7 The DFI can withhold payment of a subsidy, if the DFI has an unsecured outstanding account against the applicant, or against a subsidy recipient controlled by the applicant, or against a subsidy recipient controlling the applicant.

4.3 Security

4.3.1 To ensure the film's completion, in case of the production company's bankruptcy, as well as the DFI's conditional requirements for repayment of subsidies, the DFI can require the production company to provide satisfactory security. The production company must bear all costs of such a security.

4.3.2 The production company is obligated to complete the film. The DFI may require a completion bond to be taken out with a DFI-approved guarantor.

4.4 Accounts

4.4.1 The production company must present accounts for projects that have received development or production subsidies. The accounts must contain the same items as the approved budget, and the budget figures must be stated for comparison. The accounts must be audited by a registered or state-certified accountant.

4.4.2 An audit of production accounts must at a minimum include a general audit of the accounts, as well as an audit of assets and liabilities, cf. the applicable DFI audit instructions. The Office of the Auditor General of Denmark has access to review accounts and vouchers submitted by the subsidy recipient.

4.5 Repayment and negligence

4.5.1 DFI subsidies awarded according to the present terms and conditions need not be repaid, except as stated in Items 2.9 and 3.9.7.

4.5.2 If the subsidy recipient abandons, or for other reasons prematurely terminates, a subsidised project, unused subsidy must be repaid immediately. In such cases, the DFI may require auditor-certified accounts.

4.5.3 If the present terms and conditions are breached, or if it is determined that the film cannot legally be screened in Denmark, the DFI's subsidy commitment is void and any paid subsidy must be repaid.

4.5.4 The DFI can waive its repayment requirement, if, in the DFI's judgment, special circumstances apply, or if the repayment requirement will counteract the objectives of the DFI's activities, cf. the Film Act.

4.6 Credits

4.6.1 The film's opening credits must state that the film is produced with support from the "The Danish Film Institute", unless other agreement has been made between the production company and the DFI. The film's credit texts and all advertising materials must state that the film is produced with support from "The Danish Film Institute", name the Film Commissioner who recommended the film for subsidies and display the DFI logo. Master copies submitted to the DFI must in the closing titles state that the film is distributed by the DFI. The DFI must approve the design of credit texts, advertising materials, etc., mentioning the DFI.

4.7 The DFI's rights

4.7.1 When rights to projects that have received subsidies are transferred, the DFI must approve such transfer in writing. Transfers must take place at market prices. The DFI can oppose a transfer, if the transfer entails a risk that the DFI will be unable to exercise its rights according to the present terms and conditions or other agreements made with the production company.

4.7.2 Should the subsidy recipient's circumstances prevent the implied use within 24 months of the project's most recent subsidy commitment from the DFI, the DFI, in order to ensure the realisation of the subsidy's purpose, can require the subsidy recipient to transfer the necessary rights to the subsidised project to the DFI with a view to using the rights through a retransfer. The subsidy recipient is entitled to be reimbursed by the DFI for documented costs relating to the project, plus the possible added value of rights related to the project, to the extent that such amounts exceed the amount of subsidies received from the DFI or other contributors. Disputes regarding the appraisal of the rights relating to the project are settled by arbitration, in accordance with the regulations of Voldgiftsinstituttet (Danish Arbitration).

4.7.3 The subsidy recipient can prevent the DFI from taking over the rights to the subsidised project, if the subsidies are repaid within 30 days of notification of the DFI demand for transfer of the rights.

4.7.4 The DFI has the right to screen the film at festivals, domestically and internationally. The DFI moreover has the right to screen the film domestically and internationally to paying audiences as part of its cinema-culture activities. The DFI may screen the film only at individual, special events, if the film is still playing in cinemas in the same geographical area. The DFI will notify the production company about its screenings.

4.7.5 In case of screenings to paying audiences, the DFI is obliged to follow the suggested sales prices, if the film is in commercial distribution. It is the production company's obligation to provide written information about suggested prices. If not, the DFI will price admission to the film.

4.7.6 The DFI is entitled to use film excerpts, stills, dialogue sequences and passages of title scores in promoting subsidised film productions domestically and internationally. The DFI moreover is entitled to use the materials, with appropriate credits, in the DFI's publications, including CD-ROMs and the Internet, as well as in festival and press contexts. All images must be deposited with credits for still photographers and mention of production companies. The DFI is entitled to copy and use film posters and deposited image materials with a view to exercising its rights according to the present terms and conditions.

4.7.7 The DFI is entitled to publish any information about the film in connection with the DFI's promotion and press activities, unless other agreement has been made in writing with the subsidy recipient.

4.7.8 The DFI may have prints of the film made for its own use, according to the present terms and conditions. The DFI is entitled, at its own expense, to have foreign-language prints of the film made for the purpose of screenings at festivals and other cultural dissemination, domestically and internationally.

4.7.9 The DFI's exercise of its rights according to the present terms and conditions does not imply an obligation to pay fees to the production company or others, unless such has specifically been determined.

4.7.10 The subsidy recipient is obligated to make agreements with relevant rights holders and cast members to ensure the DFI's ability to exercise its rights to the finished production, as described in the present terms and conditions. The subsidy recipient must document to the DFI that the necessary rights have been obtained. The subsidy recipient must relieve the DFI of any liability, if a third party can make claims as a result of the DFI exercising its rights in accordance with the present terms and conditions or any other possible agreement with the subsidy recipient.

4.7.11 The subsidy recipient is obligated to append the present terms and conditions to all contracts relating to the film concerning circumstances regulated by the present terms and conditions or which might otherwise be of importance to the DFI's rights according to the present terms and conditions.

These present subsidy terms and conditions are specified by the DFI Board in accordance with the regulations of the DFI.