Startup adVANce Challenge | Startup Partnership by Mercedes-Benz Vans 13 2.6. Grants 1. Grants will be awarded in Phase 2 and Phase 3 only. 2. The Grant awarded in Phase 2 is € 10,000 for each selected startup. The Grant shall be paid within 30 days after the signature of the Cooperation Agreement by both the startup and Daimler AG. Daimler AG reserves the right to claim reimbursement of the Grant in case the startup fails to submit by July 23, 2017, 23:59 (CET) at the latest a revised Concept that has the maturity level expected for Phase 2 according to Sec. 1.5. 3. The Grants awarded in Phase 3 amount to € 900,000 for all selected startups (maximum five (5)) in total. Each selected startup will receive a Grant of at least € 80,000. The remainder of the € 900,000 will be awarded to certain or all of the startups selected for Phase 3 (“Optional Grant”). The Optional Grant may have different amounts for the selected startups, and certain selected startups may not receive an Optional Grant at all. In awarding the Optional Grant, Daimler AG will take into account the added value that the Work Packages contribute to Daimler AG’s strategic needs, provided that the decision on how to allocate the Optional Grant to the startups selected for Phase 3 will be in Daimler AG’s sole discretion. Twenty (20) percent of the Grant for Phase 3 (including the Optional Grant, if any) will be paid within 30 days after the startup has returned the signed copy of the Phase 3 Prototype Plan. The remaining eighty (80) percent shall be paid as linked to the Milestones in the Phase 3 Prototype Plan and following completion and joint validation of the Milestones. 4. In the event that a startup has received a Phase 2 Selection Notice or Phase 3 Selection Notice, but has subsequently failed to meet the eligibility requirements, as applicable for the relevant Phase (cf. Sec. 2.7 below), then such startup shall not be entitled to the Grant. In case this would cause the number of startups in Phase 2 to fall below 10, then the unused Grants shall increase the Grant available for Phase 3. 5. In order to receive those parts of the Grant for Phase 3 linked to Milestones, the startup must, upon completion of the Milestone submit a report covering the following: a. Executive summary on the current status of progress against the Phase 3 Prototype Plan. b. Overview about the realized activities. c. Achieved goals and target vs. actual comparison as well as explanations in case of deviations from the Phase 3 Prototype Plan. d. Likelihood of achievement of further Milestones. e. Potential modifications of the Phase 3 Prototype Plan due to any kind of circumstances and corresponding justification (only if necessary). f. Spent budget subdivided into in the different cost factors. g. Update of the business model according to the form provided by Daimler AG. 6. The Grants shall be used solely for the purpose of the Startup adVANce Challenge, i.e. for expenses incurred by the 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. Value added tax, sales tax or similar taxes or duties are not eligible. 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, a given Work Package / Milestone, with the corresponding financial statements and supporting documents. 7. The use of the Grants must be recorded in the accounts of the startup. 8. Upon request by Daimler AG, the startup must provide Daimler AG with satisfactory evidence of its compliance with the requirements of this Sec. 2.6. In particular (without limitation), Daimler AG may request the submission of proven financial statements, along with all the respective invoices and payment documentation. 2.7. Grant eligibility requirements 1. To be eligible for a Grant, the startup must: a. meet all criteria of the Startup Definition (see Sec. 1.4); b. have received a Phase 2 Selection Notice and returned a signed copy of the Cooperation Agreement (in case of the Grant for Phase 2) or a Phase 3 Selection Notice and returned a signed copy of the Phase 3 Prototype Plan (in case of the Grant for Phase 3), respectively (see Sec. 1.5); c. have successfully passed the compliance due diligence as part of the Selection for Phase 2; and d. not be subject to any reasons for exclusion from the Startup adVANce Challenge as stated in Sec. 1.4 and Sec. 2.2, No. 6, above. 2. If: a. the startup no longer meets the eligibility requirements set out above in item 1., or