7 Startup adVANce | Cooperation Agreement the former Party’s contractual obligations; each Party is liable for the conduct of its Subcontractor(s) as it is for its own conduct. 3.6 Grants 3.6.1 The requirements for the eligibility of the Startup for a Grant are set forth in item 1. of Section 2.7 of the Startup adVANce T&Cs. For the avoidance of doubt, meeting these Grant eligibility requirements does not give the Startup any right (for whatever legal reason) to claim the award of a Grant from Daimler. 3.6.2 The Grants shall be used solely for the purpose of the Startup adVANce Challenge, i.e. for expenses incurred by the Startup’s participation in the Startup adVANce Challenge. Only such expenses that were directly caused by the Startup’s participation in the relevant Phase are eligible, as further specified in Annex 1 of the Startup adVANce T&Cs. Value added tax, sales tax or similar taxes or duties are non-eligible expenses. Expenses must be determined in accordance with the usual accounting and management principles and practices of the Startup. The accounting procedures used in the recording of costs shall respect the accounting rules of the state in which the Startup is established. The Startup’s internal accounting and auditing procedures must permit direct reconciliation of the costs declared in respect of the Startup adVANce Challenge and, in case of Phase 3 (Concept Phase), a given Work Package / Milestone, with the corresponding financial statements and supporting documents. 3.6.3 The use of the Grants must be recorded in the accounts of the Startup. 3.6.4 Upon request by Daimler, the Startup must provide Daimler with satisfactory evidence of its compliance with the requirements of clauses 3.6.2 and 3.6.3. In particular (without limitation), Daimler may request the submission of proven financial statements, along with all the respective invoices and payment documentation. 3.6.5 Further details regarding the Grant for Phase 2 (Concept Phase) are set forth in clause 4.2 of this Agreement. Further details regarding the Grant for Phase 3 (Prototype Phase), if applicable, are set forth in clause 5.2 of this Agreement. 3.7 Existing Intellectual Property Rights 3.7.1 With respect to the field of Last Mile Transportation of Goods and People and in any other aspects relevant to the Startup adVANce Challenge and its Phases, each Party already owns or has licensed from third parties Intellectual Property Rights (as defined in clause 3.7.8), that the Parties will use within their cooperation under this Agreement (generally "Background- IP", and depending on the relevant Party, either "Daimler-Background-IP" or "Startup- Background-IP"). 3.7.2 Unless expressly specified otherwise in this Agreement each Party remains the owner of its own Background-IP. 3.7.3 The Startup-Background-IP that the Startup intends to use within Phase 2 (Concept Phase) and Phase 3 (Prototype Phase) is described in Annex 3.7.3. Annex 3.7.3 also includes information if and to which extent this Startup-Background-IP is subject to legal restrictions or limits. The Startup must inform Daimler reasonably in advance if it intends to use other Startup-Background-IP; in this case, the Startup must also provide information if and to which extent this Startup-Background-IP is subject to legal restrictions or limits. 3.7.4 Subject to clause 3.7.5, each Party grants the other Party a royalty-free, worldwide, non- exclusive, non-transferrable and non-sublicensable right to use its Background-IP only to the extent that this is necessary for the other Party (i) to perform such other Party’s obligations under this Agreement, (ii) to use such other Party’s Work Results, (iii) to use the Jointly-owned Work Results or (iv) to use the Work Results of the Party first mentioned herein, in each case