The funding recipient will be obligated to ensure appropriate exploitation of the subsidized production and inform the FILM FUND in writing, regularly, without being asked and annually by April 30th at least, beginning at the production’s initial release, with regard to all proceeds accruing from exploitation of the subsidized production. All relevant documents must be provided upon request.

Separate stipulations apply to subsidy area B, Project Development.

7.1.1. Funds provided by the FILM FUND must be repaid according to the returns from the exploitation proceeds obtained by May 31st of the year after such proceeds were earned, and for a period of 36 months from the initial release.

The obligation to make repayments will arise as soon as the funding recipient’s earnings from exploitation of the production in question exceed the private investment recognized by the FILM FUND in the subsidy agreement.

Proceeds from presales of rights and/or ancillary rights before completion of the subsidized production used for the purpose of financing said production will increase the funding recipient’s private investment with regard to repayment.

The FILM FUND will recognize all license shares for distributors of up to 40 percent of the net distribution proceeds and any distribution commissions for European and non-European countries of up to 30 percent of the actual and final license proceeds for the subsidized film. Distribution and sales costs will be recognized as preliminary costs that can be deducted to the extent that they are customary to the market and sector.

The producer’s share of the distribution earnings (net proceeds) remaining after payment of the preliminary costs and repayment of the private investment will be used for pro rata repayment of the subsidy to the FILM FUND according to the percentage of its interest in the recognized actual production costs.

7.1.2. In the event that the funding recipient neglects to fulfill his or her obligation to make repayments, such obligation will continue to exist and any claim to a non-repayable subsidy awarded after success according to Section E of the Subsidy Guidelines will terminate.

In the event that the obligation to make repayments and the obligation to make reports are violated, current or newly submitted subsidy applications will not be passed to the jury or the management board until further notice and no other subsidy agreements will be concluded on the basis of approvals already extended until such obligations have been fulfilled (see Item 6.6.). See Item 7.2.1. concerning the obligation to make early repayment.

7.1.3. The obligation to make reports without being asked will expire at

• repayment of the subsidy in full, or
• acknowledgment of the reports provided over the entire period of 36 months.

The obligation to provide information in response to a request by the FILM FUND will remain unaffected.

7.2.1. A subsidy which must be repaid in the event of success is due earlier than scheduled and an otherwise non-repayable subsidy must be repaid in the event that the funding recipient:

• has violated, intentionally or through gross negligence, the diligence of a prudent businessperson with regard to financing or the production;
• provided the FILM FUND with incorrect or incomplete information concerning important matters, i.e. matters that were essential to conclusion of the subsidy agreement;
• failed to complete the production as planned in spite of a reasonable extension; in the event that the funding recipient is a minority partner, the FILM FUND’s claims must be taken into consideration regarding his or her compensation of any damages caused by the majority partner; the funding recipient must also be able to provide evidence that he or she has made an effort to repay the subsidy;
• misused funding in part or in whole;
• failed to make reports as planned or requested despite a reasonable extension, failed to provide documentation of some kind or obstructed the examination of documentation;
• failed to provide the FILM FUND with proceeds from exploitation for the purpose of repaying funding within the prescribed periods of time;
• failed to observe contractually agreed holdback periods or copyright terms;
• violated other important obligations stemming from the subsidy agreement, especially those relating to monitoring,thereby endangering the satisfaction of his or her obligations regarding repayment to the FILM FUND;
• violated any of these guidelines after conclusion of the subsidy agreement.

7.2.2. If it is shown that the subsidy funds provided exceed the actual costs of the subsidized production after being offset by the private investment proportionate to the FILM FUND’s co-financing share, the difference must be refunded to the FILM FUND.

To the extent that funding exceeding this reduced amount has already been provided, the funding recipient must repay the difference to the FILM FUND immediately and without being asked, regardless of the amount of proceeds received from exploitation of the film plus interest as specified in these Guidelines.

7.2.3. Funding which must be repaid for one or more of the reasons specified above will accumulate interest of 3 percent above the European Central Bank’s key refinancing rate, at the least according to the reference interest rate published by the European Commission’s State Aid Control at the time the subsidy agreement was concluded per annum from the day of disbursement to the funding recipient.

7.2.4. The stipulations of Item 6.6. apply until the repayments declared due by the FILM FUND are paid in full.