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Textová podoba smlouvy Smlouva č. 2089490: grantová dohoda k projektu I-MECH (H2020-ECSEL-2016-1-RIA)

Příloha SML5200004617.pdf

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                        Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
                                                                                      Associated with document Ref. Ares(2017)2465795 - 15/05/2017

                                             GRANT AGREEMENT

                                      NUMBER — 737453 — I-MECH

This Agreement (‘the Agreement’) is between the following parties:
on the one part,
the Electronic Component Systems for European Leadership Joint Undertaking ('the JU'),
represented for the purposes of signature of this Agreement by the Executive Director or his/her
representative, Bert DE COLVENAER,
and
on the other part,
1. ‘the coordinator’:
SIOUX CCM BV (Sioux CCM) BV, 17047527, established in DE PINCKART 24, NUENEN
5674 CC, Netherlands, NL005993015B01 represented for the purposes of signing the Agreement by
Managing Director, Hans MICHELS
and the following other beneficiaries, if they sign their ‘Accession Form’ (see Annex 3 and Article 56):
2. ZAPADOCESKA UNIVERZITA V PLZNI (ZAPUNI), 3141991, established in UNIVERZITNI
8, PILSEN 306 14, Czech Republic, CZ49777513
3. ELEKTRONIKAS UN DATORZINATNU INSTITUTS (EDI), 000308583/181031, established
in DZERBENES IELA 14, RIGA 1006, Latvia, LV90002135242
4. REDEN B.V. (REDEN) BV, 08093312 , established in F HAZEMEIJERSTRAAT 800,
HENGELO OV 7555 RJ, Netherlands
5. FUNDACION TEKNIKER (TEK) ES3, F13, established in CALLE INAKI GOENAGA 5,
EIBAR GUIPUZCOA 20600, Spain, ESG20545729
6. VYSOKE UCENI TECHNICKE V BRNE (BUT), 00216305, established in ANTONINSKA
548/1, BRNO STRED 601 90, Czech Republic, CZ00216305
7. ROVIMATICA SL (ROV) SL, CO28487, established in CALLE PLATA, NUM. 4 PG IND EL
GRANADAL, CORDOBA 14014, Spain, ESB91652966

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
                                                                                      Associated with document Ref. Ares(2017)2465795 - 15/05/2017

8. TECHNISCHE UNIVERSITEIT EINDHOVEN (TU/e), 51278871, established in GROENE
LOPER 5, EINDHOVEN 5612 AE, Netherlands, NL001956218B01

9. INGENIA-CAT S.L. (INGENIA) SL, B306729, established in Marie Curie 8-14, Barcelona
08042, Spain, ESB63831580

10. TECHNOLUTION BV (TECHNOLUTION) BV, 29031050, established in
BURGERMEESTER JAMESSINGEL 1, GOUDA 2803 WV, Netherlands, NL007781465B01

11. FAGOR AOTEK S. COOP (FAGOR) S.COOP., 20020041, established in B SAN ANDRES 19,
ARRASATE MONDRAGON 20500, Spain, ESF20780276

12. GMV AEROSPACE AND DEFENCE SA (GMV A&D) SA, M24659, established in CALLE
ISAAC NEWTON PARQUE TECNOLOGICO DE MADRID, TRES CANTOS 28760, Spain,
ESA79197356

13. INFORMATION TECHNOLOGY FOR MARKET LEADERSHIP (ITML) OE,
125746003000, established in AGGELOU SIKELIANOU 71, ATHINA 15451, Greece,
EL800497651

14. LABORATORIO IBERICO INTERNACIONAL DE NANOTECNOLOGIA (INL),
508633346, established in AVENIDA MESTRE JOSE VEIGA, BRAGA 4715-330, Portugal,
PT508633346

15. TECO A.S. (TECO) AS, 46357301, established in HAVLICKOVA 260, KOLIN 28002, Czech
Republic, CZ46357301

16. OPEN ENGINEERING SA (OPENENG) SA, 476335227, established in AVENUE DE
L'EXPANSION 7, ALLEUR 4432, Belgium, BE0476335227

17. GEFRAN SPA (GEFRAN) SPA, 313074, established in VIA STATALE SEBINA 74,
PROVAGLIO D ISEO BS 25050, Italy, IT03032420170

18. UNIVERSITA DEGLI STUDI DI BRESCIA (UNIBS), CF98007650173, established in
PIAZZA MERCATO 15, BRESCIA 25121, Italy, IT01773710171

19. ELECTROMAGNETIC COMPATIBILITY MCC B.V. (EMCMCC) BV, 52798771,
established in TALMASTRAAT 42, BREDA 4812 KB, Netherlands, NL850602270B01

20.  NEDERLANDSE  ORGANISATIE  VOOR                               TOEGEPAST

NATUURWETENSCHAPPELIJK ONDERZOEK TNO (TNO), 27376655, established in ANNA

VAN BUERENPLEIN 1, DEN HAAG 2595 DA, Netherlands, NL002875718B01

21. EDILASIO CARREIRA DA SILVA LDA (EDILASIO) LDA, 500753199, established in RUA
AUGUSTO COSTA PICASSINOS, MARINHA GRANDE 2430 463, Portugal

22. SIEMENS INDUSTRY SOFTWARE SAS (SIEMENS PLM) SAS, 414988204, established in
AVENUE MORANE SAULNIER 13 ESPACE VELIZY IMMEUBLE LE CHAVEZ, CHATILLON
92320, France, FR82414988204

23. PHILIPS MEDICAL SYSTEMS NEDERLAND BV (PHI) BV, 17060498, established in
VEENPLUIS 4-6, BEST 5684 PC, Netherlands

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
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24. I.M.A. INDUSTRIA MACCHINE AUTOMATICHE SPA (IMA) SPA, 149288, established in
VIA EMILIA 428-442, OZZANO DELL'EMILIA 40064, Italy, IT00500931209

25. UNIVERSITA DEGLI STUDI DI MODENA E REGGIO EMILIA (UNIMORE),
CF00427620364, established in VIA UNIVERSITA 4, MODENA 41121, Italy, IT00427620364

26. EVIDENCE SRL (EVI) SRL, 142992/CF01638690501, established in Via Carducci 56, San
Giuliano Terme 56017, Italy, IT01638690501

27. IKERLAN SCL (IKERLAN-IK4) S.COOP., 1282, established in P JOSE MARIA
ARIZMENDIARRIETA 2, MONDRAGON 20500, Spain, ESF20079828

28. NICOLAS CORREA SA (CORREA) SA, BU536, established in CALLE ALCALDE MARTIN
COBOS, BURGOS 09007, Spain, ESA28041317

29. UNIVERSITY COLLEGE CORK - NATIONAL UNIVERSITY OF IRELAND, CORK
(UCC), CHY1691, established in WESTERN ROAD, CORK, Ireland, IE0006286E

30. JOHNSON & JOHNSON VISION CARE (IRELAND) (J&J Vistakon) IE5, 210174,
established in THE NATIONAL TECHNOLOGICAL PARK PLASSEY, LIMERICK, Ireland,
IE8210174B

31. NEXPERIA BV (Nexperia) BV, 66264111, established in JONKERBOSPLEIN 52, NIJMEGEN
6534 AB, Netherlands, NL856469397B01

Unless otherwise specified, references to ‘beneficiary’ or ‘beneficiaries’ include the coordinator.

The parties referred to above have agreed to enter into the Agreement under the terms and conditions
below.

By signing the Agreement or the Accession Form , the beneficiaries accept the grant and agree
to implement it under their own responsibility and in accordance with the Agreement, with all the
obligations and conditions it sets out.

The Agreement is composed of:

Terms and Conditions

Annex 1 Description of the action

Annex 2 Estimated budget for the action

Annex 3 Accession Forms

Annex 4 Model for the financial statements

Annex 5 Model for the certificate on the financial statements (CFS)

Annex 6 Model for the certificate on the methodology

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
                                                                                      Associated with document Ref. Ares(2017)2465795 - 15/05/2017

                                TERMS AND CONDITIONS

TABLE OF CONTENTS

CHAPTER 1 GENERAL...............................................................................................................................................12
            ARTICLE 1 — SUBJECT OF THE AGREEMENT.......................................................................................12

CHAPTER 2 ACTION.................................................................................................................................................. 12
            ARTICLE 2 — ACTION TO BE IMPLEMENTED....................................................................................... 12
            ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION....................................................12
            ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS.......................................................12
                 4.1 Estimated budget................................................................................................................................... 12
                 4.2 Budget transfers.....................................................................................................................................12

CHAPTER 3 GRANT....................................................................................................................................................12
            ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND FORMS OF
                 COSTS......................................................................................................................................................... 12
                 5.1 Maximum grant amount........................................................................................................................ 12
                 5.2 Form of grant, reimbursement rates and forms of costs.......................................................................13
                 5.3 Final grant amount — Calculation........................................................................................................13
                 5.4 Revised final grant amount — Calculation.......................................................................................... 15
            ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS................................................................................ 15
                 6.1 General conditions for costs to be eligible........................................................................................... 15
                 6.2 Specific conditions for costs to be eligible...........................................................................................16
                 6.3 Conditions for costs of linked third parties to be eligible.................................................................... 22
                 6.4 Conditions for in-kind contributions provided by third parties free of charge to be eligible................22
                 6.5 Ineligible costs.......................................................................................................................................22
                 6.6 Consequences of declaration of ineligible costs................................................................................... 23

CHAPTER 4 RIGHTS AND OBLIGATIONS OF THE PARTIES......................................................................... 23
    SECTION 1 RIGHTS AND OBLIGATIONS RELATED TO IMPLEMENTING THE ACTION................. 23
            ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION.........................23
                 7.1 General obligation to properly implement the action........................................................................... 23
                 7.2 Consequences of non-compliance......................................................................................................... 23

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
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            ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES INVOLVED IN THE
                 ACTION...................................................................................................................................................... 23

            ARTICLE 9 — IMPLEMENTATION OF ACTION TASKS BY BENEFICIARIES NOT RECEIVING JU
                 FUNDING....................................................................................................................................................24

            ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES.......................................................... 24
                 10.1 Rules for purchasing goods, works or services.................................................................................. 24
                 10.2 Consequences of non-compliance....................................................................................................... 24

            ARTICLE 11 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES AGAINST
                 PAYMENT...................................................................................................................................................24
                 11.1 Rules for the use of in-kind contributions against payment............................................................... 24
                 11.2 Consequences of non-compliance....................................................................................................... 25

            ARTICLE 12 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES FREE OF
                 CHARGE..................................................................................................................................................... 25
                 12.1 Rules for the use of in-kind contributions free of charge...................................................................25
                 12.2 Consequences of non-compliance....................................................................................................... 25

            ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS............................26
                 13.1 Rules for subcontracting action tasks................................................................................................. 26
                 13.2 Consequences of non-compliance....................................................................................................... 26

            ARTICLE 14 — IMPLEMENTATION OF ACTION TASKS BY LINKED THIRD PARTIES.................... 26
            ARTICLE 15 — FINANCIAL SUPPORT TO THIRD PARTIES.................................................................. 26

                 15.1 Rules for providing financial support to third parties........................................................................ 27
                 15.2 Financial support in the form of prizes.............................................................................................. 27
                 15.3 Consequences of non-compliance....................................................................................................... 27
            ARTICLE 16 — PROVISION OF TRANS-NATIONAL OR VIRTUAL ACCESS TO RESEARCH
                 INFRASTRUCTURE.................................................................................................................................. 27
                 16.1 Rules for providing trans-national access to research infrastructure.................................................. 27
                 16.2 Rules for providing virtual access to research infrastructure............................................................. 27
                 16.3 Consequences of non-compliance....................................................................................................... 27
    SECTION 2 RIGHTS AND OBLIGATIONS RELATED TO THE GRANT ADMINISTRATION............... 27
            ARTICLE 17 – GENERAL OBLIGATION TO INFORM..............................................................................27
                 17.1 General obligation to provide information upon request....................................................................27
                 17.2 Obligation to keep information up to date and to inform about events and circumstances likely to

                     affect the Agreement..............................................................................................................................27
                 17.3 Consequences of non-compliance....................................................................................................... 28
            ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION........................................ 28
                 18.1 Obligation to keep records and other supporting documentation....................................................... 28
                 18.2 Consequences of non-compliance....................................................................................................... 29

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
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            ARTICLE 19 — SUBMISSION OF DELIVERABLES................................................................................. 29
                 19.1 Obligation to submit deliverables....................................................................................................... 29
                 19.2 Consequences of non-compliance....................................................................................................... 29

            ARTICLE 20 — REPORTING — PAYMENT REQUESTS.......................................................................... 30
                 20.1 Obligation to submit reports............................................................................................................... 30
                 20.2 Reporting periods................................................................................................................................ 30
                 20.3 Periodic reports — Requests for interim payments............................................................................30
                 20.4 Final report — Request for payment of the balance.......................................................................... 31
                 20.5 Information on cumulative expenditure incurred................................................................................32
                 20.6 Currency for financial statements and conversion into euro.............................................................. 32
                 20.7 Language of reports.............................................................................................................................32
                 20.8 Consequences of non-compliance — Suspension of the payment deadline — Termination.............. 32

            ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS.......................................................... 32
                 21.1 Payments to be made.......................................................................................................................... 32
                 21.2 Pre-financing payment — Amount — Amount retained for the Guarantee Fund.............................. 33
                 21.3 Interim payments — Amount — Calculation.....................................................................................33
                 21.4 Payment of the balance — Amount — Calculation — Release of the amount retained for the
                     Guarantee Fund......................................................................................................................................34
                 21.5 Notification of amounts due................................................................................................................34
                 21.6 Currency for payments........................................................................................................................ 35
                 21.7 Payments to the coordinator — Distribution to the beneficiaries.......................................................35
                 21.8 Bank account for payments.................................................................................................................35
                 21.9 Costs of payment transfers..................................................................................................................35
                 21.10 Date of payment................................................................................................................................ 35
                 21.11 Consequences of non-compliance..................................................................................................... 35

            ARTICLE 22 — CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION OF
                 FINDINGS................................................................................................................................................... 36
                 22.1 Checks, reviews and audits by the Commission and the JU.............................................................. 36
                 22.2 Investigations by the European Anti-Fraud Office (OLAF)...............................................................38
                 22.3 Checks and audits by the European Court of Auditors (ECA)...........................................................38
                 22.4 Checks, reviews, audits and investigations for international organisations........................................ 38
                 22.5 Consequences of findings in checks, reviews, audits and investigations — Extension of
                     findings................................................................................................................................................... 39
                 22.6 Consequences of non-compliance....................................................................................................... 40

            ARTICLE 23 — EVALUATION OF THE IMPACT OF THE ACTION........................................................40
                 23.1 Right to evaluate the impact of the action..........................................................................................41

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
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                 23.2 Consequences of non-compliance....................................................................................................... 41
    SECTION 3 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND AND RESULTS.................. 41

        SUBSECTION 1 GENERAL.............................................................................................................................. 41
            ARTICLE 23a — MANAGEMENT OF INTELLECTUAL PROPERTY...................................................... 41
                 23a.1 Obligation to take measures to implement the Commission Recommendation on the management of
                     intellectual property in knowledge transfer activities........................................................................... 41
                 23a.2 Consequences of non-compliance..................................................................................................... 41

        SUBSECTION 2 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND.................................. 41
            ARTICLE 24 — AGREEMENT ON BACKGROUND..................................................................................41
                 24.1 Agreement on background.................................................................................................................. 42
                 24.2 Consequences of non-compliance....................................................................................................... 42
            ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND............................................................................ 42
                 25.1 Exercise of access rights — Waiving of access rights — No sub-licensing.......................................42
                 25.2 Access rights for other beneficiaries, for implementing their own tasks under the action..................42
                 25.3 Access rights for other beneficiaries, for exploiting their own results............................................... 42
                 25.4 Access rights for affiliated entities..................................................................................................... 43
                 25.5 Access rights for third parties............................................................................................................. 43
                 25.6 Consequences of non-compliance....................................................................................................... 43

        SUBSECTION 3 RIGHTS AND OBLIGATIONS RELATED TO RESULTS..............................................43
            ARTICLE 26 — OWNERSHIP OF RESULTS...............................................................................................43
                 26.1 Ownership by the beneficiary that generates the results.................................................................... 44
                 26.2 Joint ownership by several beneficiaries............................................................................................ 44
                 26.3 Rights of third parties (including personnel)...................................................................................... 44
                 26.4 The JU ownership, to protect results.................................................................................................. 45
                 26.5 Consequences of non-compliance....................................................................................................... 45
            ARTICLE 27 — PROTECTION OF RESULTS — VISIBILITY OF SUPPORT.......................................... 45
                 27.1 Obligation to protect the results..........................................................................................................46
                 27.2 The JU ownership, to protect the results............................................................................................ 46
                 27.3 Information on funding from the JU and support from the EU and JU members.............................. 46
                 27.4 Consequences of non-compliance....................................................................................................... 46
            ARTICLE 28 — EXPLOITATION OF RESULTS......................................................................................... 46
                 28.1 Obligation to exploit the results..........................................................................................................46
                 28.2 Results that could contribute to European or international standards — Information on funding from
                     the JU and support from the EU and JU members...............................................................................47
                 28.3 Consequences of non-compliance....................................................................................................... 47

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
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            ARTICLE 29 — DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF
                 SUPPORT.................................................................................................................................................... 47
                 29.1 Obligation to disseminate results........................................................................................................ 47
                 29.2 Open access to scientific publications................................................................................................ 47
                 29.3 Open access to research data.............................................................................................................. 48
                 29.4 Information on funding from the JU and support from the EU and JU members — Obligation and
                     right to use the JU logo and the EU emblem....................................................................................... 48
                 29.5 Disclaimer excluding JU responsibility.............................................................................................. 49
                 29.6 Consequences of non-compliance....................................................................................................... 49

            ARTICLE 30 — TRANSFER AND LICENSING OF RESULTS.................................................................. 49
                 30.1 Transfer of ownership......................................................................................................................... 49
                 30.2 Granting licenses................................................................................................................................. 49
                 30.3 The JU right to object to transfers or licensing.................................................................................. 50
                 30.4 Consequences of non-compliance....................................................................................................... 50

            ARTICLE 31 — ACCESS RIGHTS TO RESULTS....................................................................................... 50
                 31.1 Exercise of access rights — Waiving of access rights — No sub-licensing.......................................50
                 31.2 Access rights for other beneficiaries, for implementing their own tasks under the action..................50
                 31.3 Access rights for other beneficiaries, for exploiting their own results............................................... 50
                 31.4 Access rights of affiliated entities.......................................................................................................50
                 31.5 Access rights for the JU, EU institutions, bodies, offices or agencies and EU Member States...........51
                 31.6 Access rights for third parties............................................................................................................. 51
                 31.7 Consequences of non-compliance....................................................................................................... 51

    SECTION 4 OTHER RIGHTS AND OBLIGATIONS........................................................................................51
            ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR RESEARCHERS..................... 51
                 32.1 Obligation to take measures to implement the European Charter for Researchers and Code of
                     Conduct for the Recruitment of Researchers........................................................................................ 51
                 32.2 Consequences of non-compliance....................................................................................................... 51
            ARTICLE 33 — GENDER EQUALITY......................................................................................................... 51
                 33.1 Obligation to aim for gender equality.................................................................................................52
                 33.2 Consequences of non-compliance....................................................................................................... 52
            ARTICLE 34 — ETHICS.................................................................................................................................52
                 34.1 Obligation to comply with ethical principles......................................................................................52
                 34.2 Activities raising ethical issues........................................................................................................... 52
                 34.3 Activities involving human embryos or human embryonic stem cells...............................................53
                 34.4 Consequences of non-compliance....................................................................................................... 53

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
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            ARTICLE 35 — CONFLICT OF INTERESTS...............................................................................................53
                 35.1 Obligation to avoid a conflict of interests.......................................................................................... 53
                 35.2 Consequences of non-compliance....................................................................................................... 53

            ARTICLE 36 — CONFIDENTIALITY...........................................................................................................53
                 36.1 General obligation to maintain confidentiality................................................................................... 54
                 36.2 Consequences of non-compliance....................................................................................................... 54

            ARTICLE 37 — SECURITY-RELATED OBLIGATIONS............................................................................. 55
                 37.1 Results with a security recommendation............................................................................................ 55
                 37.2 Classified results..................................................................................................................................55
                 37.3 Activities involving dual-use goods or dangerous materials and substances......................................55
                 37.4 Consequences of non-compliance....................................................................................................... 55

            ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF SUPPORT...........................................55
                 38.1 Communication activities by beneficiaries......................................................................................... 55
                 38.2 Communication activities by the JU................................................................................................... 56
                 38.3 Consequences of non-compliance....................................................................................................... 57

            ARTICLE 39 — PROCESSING OF PERSONAL DATA.............................................................................. 57
                 39.1 Processing of personal data by the JU and the Commission.............................................................. 57
                 39.2 Processing of personal data by the beneficiaries................................................................................ 58
                 39.3 Consequences of non-compliance....................................................................................................... 58

            ARTICLE 40 — ASSIGNMENTS OF CLAIMS FOR PAYMENT AGAINST THE JU............................... 58
CHAPTER 5 DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES — RELATIONSHIP

    WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH PARTNERS OF A JOINT
    ACTION.......................................................................................................................................................................58

            ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES —
                 RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP WITH
                 PARTNERS OF A JOINT ACTION.......................................................................................................... 58
                 41.1 Roles and responsibilities towards the JU.......................................................................................... 58
                 41.2 Internal division of roles and responsibilities..................................................................................... 59
                 41.3 Internal arrangements between beneficiaries — Consortium agreement............................................60
                 41.4 Relationship with complementary beneficiaries — Collaboration agreement....................................60
                 41.5 Relationship with partners of a joint action — Coordination agreement........................................... 60

CHAPTER 6 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY — PENALTIES
    — DAMAGES — SUSPENSION — TERMINATION — FORCE MAJEURE................................................. 60
    SECTION 1 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY —
        PENALTIES...........................................................................................................................................................60
            ARTICLE 42 — REJECTION OF INELIGIBLE COSTS.............................................................................. 60
                 42.1 Conditions............................................................................................................................................ 60

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
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                 42.2 Ineligible costs to be rejected — Calculation — Procedure...............................................................60
                 42.3 Effects.................................................................................................................................................. 61
            ARTICLE 43 — REDUCTION OF THE GRANT......................................................................................... 61
                 43.1 Conditions............................................................................................................................................ 61
                 43.2 Amount to be reduced — Calculation — Procedure..........................................................................61
                 43.3 Effects.................................................................................................................................................. 62
            ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS............................................................................... 62
                 44.1 Amount to be recovered — Calculation — Procedure.......................................................................62
            ARTICLE 45 — ADMINISTRATIVE AND FINANCIAL PENALTIES.......................................................65
                 45.1 Conditions............................................................................................................................................ 66
                 45.2 Duration — Amount of penalty — Calculation................................................................................. 66
                 45.3 Procedure............................................................................................................................................. 66
    SECTION 2 LIABILITY FOR DAMAGES..........................................................................................................67
            ARTICLE 46 — LIABILITY FOR DAMAGES............................................................................................. 67
                 46.1 Liability of the JU............................................................................................................................... 67
                 46.2 Liability of the beneficiaries............................................................................................................... 67
    SECTION 3 SUSPENSION AND TERMINATION.............................................................................................68
            ARTICLE 47 — SUSPENSION OF PAYMENT DEADLINE....................................................................... 68
                 47.1 Conditions............................................................................................................................................ 68
                 47.2 Procedure............................................................................................................................................. 68
            ARTICLE 48 — SUSPENSION OF PAYMENTS..........................................................................................69
                 48.1 Conditions............................................................................................................................................ 69
                 48.2 Procedure............................................................................................................................................. 69
            ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION................................................... 69
                 49.1 Suspension of the action implementation, by the beneficiaries..........................................................69
                 49.2 Suspension of the action implementation, by the JU......................................................................... 70
            ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION OF ONE OR
                 MORE BENEFICIARIES........................................................................................................................... 71
                 50.1 Termination of the Agreement by the beneficiaries............................................................................71
                 50.2 Termination of the participation of one or more beneficiaries, by the beneficiaries...........................72
                 50.3 Termination of the Agreement or the participation of one or more beneficiaries, by the JU.............. 74
    SECTION 4 FORCE MAJEURE........................................................................................................................... 78
            ARTICLE 51 — FORCE MAJEURE.............................................................................................................. 78
CHAPTER 7 FINAL PROVISIONS............................................................................................................................78

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Grant Agreement number: 737453 — I-MECH — H2020-ECSEL-2016-1-RIA-two-stage
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            ARTICLE 52 — COMMUNICATIONS BETWEEN THE PARTIES............................................................ 78
                 52.1 Form and means of communication....................................................................................................78
                 52.2 Date of communication....................................................................................................................... 79
                 52.3 Addresses for communication............................................................................................................. 79

            ARTICLE 53 — INTERPRETATION OF THE AGREEMENT.................................................................... 80
                 53.1 Precedence of the Terms and Conditions over the Annexes...............................................................80
                 53.2 Privileges and immunities................................................................................................................... 80

            ARTICLE 54 — CALCULATION OF PERIODS, DATES AND DEADLINES........................................... 80
            ARTICLE 55 — AMENDMENTS TO THE AGREEMENT......................................................................... 80

                 55.1 Conditions............................................................................................................................................ 80
                 55.2 Procedure............................................................................................................................................. 80
            ARTICLE 56 — ACCESSION TO THE AGREEMENT............................................................................... 81
                 56.1 Accession of the beneficiaries mentioned in the Preamble................................................................ 81
                 56.2 Addition of new beneficiaries............................................................................................................. 81
            ARTICLE 57 — APPLICABLE LAW AND SETTLEMENT OF DISPUTES.............................................. 81
                 57.1 Applicable law.....................................................................................................................................81
                 57.2 Dispute settlement............................................................................................................................... 82
            ARTICLE 58 — ENTRY INTO FORCE OF THE AGREEMENT................................................................ 83

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CHAPTER 1 GENERAL

ARTICLE 1 — SUBJECT OF THE AGREEMENT
This Agreement sets out the rights and obligations and the terms and conditions applicable to the grant
awarded to the beneficiaries for implementing the action set out in Chapter 2.

CHAPTER 2 ACTION

ARTICLE 2 — ACTION TO BE IMPLEMENTED
The grant is awarded for the action entitled ‘Intelligent Motion Control Platform for Smart
Mechatronic Systems — I-MECH’ (‘action’), as described in Annex 1.

ARTICLE 3 — DURATION AND STARTING DATE OF THE ACTION
The duration of the action will be 36 months as of 1 June 2017 (‘starting date of the action’).

ARTICLE 4 — ESTIMATED BUDGET AND BUDGET TRANSFERS
4.1 Estimated budget
The ‘estimated budget’ for the action is set out in Annex 2.
It contains the estimated eligible costs and the forms of costs, broken down by beneficiary and budget
category (see Articles 5, 6).
4.2 Budget transfers
The estimated budget breakdown indicated in Annex 2 may be adjusted by transfers of amounts
between budget categories. This does not require an amendment according to Article 55, if the action
is implemented as described in Annex 1.
However, the beneficiaries may not add costs relating to subcontracts not provided for in Annex 1,
unless such additional subcontracts are approved by an amendment or in accordance with Article 13.
In addition, the estimated budget breakdown indicated in Annex 2 may not be adjusted by transfers
of amounts between beneficiaries. This requires in all cases an amendment according to Article 55.

CHAPTER 3 GRANT

ARTICLE 5 — GRANT AMOUNT, FORM OF GRANT, REIMBURSEMENT RATES AND
   FORMS OF COST

5.1 Maximum grant amount
The ‘maximum grant amount’ is EUR 5,018,644.93 (five million eighteen thousand six hundred
and forty four EURO and ninety three eurocents).

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5.2 Form of grant, reimbursement rates and forms of costs
The grant reimburses the action’s eligible costs (see Article 6) (‘reimbursement of eligible costs
grant’) according to the following reimbursement rates (see Annex 2):
- for beneficiaries established in other countries:

    30% 1 of the eligible costs of the beneficiaries that are SMEs or natural persons,
    25% 2 of the eligible costs of the beneficiaries that are for-profit private entities other than SMEs,
    35% of the eligible costs of the other beneficiaries.
The estimated eligible costs of the action are EUR 17,003,102.16 (seventeen million three thousand
one hundred and two EURO and sixteen eurocents).
Eligible costs (see Article 6) must be declared under the following forms ('forms of costs'):
   (a) for direct personnel costs:

           - as actually incurred costs (‘actual costs’) or
           - on the basis of an amount per unit calculated by the beneficiary in accordance with its

                usual cost accounting practices (‘unit costs’).
        Personnel costs for SME owners or beneficiaries that are natural persons not receiving a
        salary (see Article 6.2, Points A.4 and A.5) must be declared on the basis of the amount per
        unit set out in Annex 2 (unit costs);
   (b) for direct costs for subcontracting: as actually incurred costs (actual costs);
   (c) for direct costs of providing financial support to third parties: not applicable;
   (d) for other direct costs: as actually incurred costs (actual costs);
   (e) for indirect costs: on the basis of a flat-rate applied as set out in Article 6.2, Point E (‘flat-rate
        costs’);
   (f) specific cost category(ies): not applicable.
5.3 Final grant amount — Calculation
The ‘final grant amount’ depends on the actual extent to which the action is implemented in
accordance with the Agreement’s terms and conditions.
This amount is calculated by the JU — when the payment of the balance is made (see Article 21.4)
— in the following steps:
   Step 1 – Application of the reimbursement rates to the eligible costs

1 The percentage shall only correspond to the reimbursement rate applied by the JU under EU funding rules.
2 The percentage shall only correspond to the reimbursement rate applied by the JU under EU funding rules.

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   Step 2 – Limit to the maximum grant amount

   Step 3 – Reduction due to the no-profit rule

   Step 4 – Reduction due to improper implementation or breach of other obligations

5.3.1 Step 1 — Application of the reimbursement rates to the eligible costs

The reimbursement rate(s) (see Article 5.2) are applied to the eligible costs (actual costs, unit costs
and flat-rate costs; see Article 6) declared by the beneficiaries (see Article 20) and approved by the
JU (see Article 21).

5.3.2 Step 2 — Limit to the maximum grant amount

If the amount obtained following Step 1 is higher than the maximum grant amount set out in Article
5.1, it will be limited to the latter.

5.3.3 Step 3 — Reduction due to the no-profit rule

The grant must not produce a profit.

‘Profit’ means the surplus of the amount obtained following Steps 1 and 2 plus the action’s total
receipts, over the action’s total eligible costs.

The ‘action’s total eligible costs’ are the consolidated total eligible costs approved by the JU.

The ‘action’s total receipts’ are the consolidated total receipts generated during its duration (see
Article 3).

The following are considered receipts:

   (a) income generated by the action; if the income is generated from selling equipment or other
        assets purchased under the Agreement, the receipt is up to the amount declared as eligible under
        the Agreement;

   (b) financial contributions given by third parties to the beneficiary specifically to be used for the
        action, and

   (c) in-kind contributions provided by third parties free of charge and specifically to be used for the
        action, if they have been declared as eligible costs.

The following are however not considered receipts:

   (a) income generated by exploiting the action’s results (see Article 28);

   (b) financial contributions by third parties, if they may be used to cover costs other than the eligible
        costs (see Article 6);

   (c) financial contributions by third parties with no obligation to repay any amount unused at the
        end of the period set out in Article 3.

If there is a profit, it will be deducted from the amount obtained following Steps 1 and 2.

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5.3.4 Step 4 — Reduction due to improper implementation or breach of other obligations —
Reduced grant amount — Calculation

If the grant is reduced (see Article 43), the JU will calculate the reduced grant amount by deducting
the amount of the reduction (calculated in proportion to the improper implementation of the action or
to the seriousness of the breach of obligations in accordance with Article 43.2) from the maximum
grant amount set out in Article 5.1.

The final grant amount will be the lower of the following two:

   - the amount obtained following Steps 1 to 3 or

   - the reduced grant amount following Step 4.

5.4 Revised final grant amount — Calculation

If — after the payment of the balance (in particular, after checks, reviews, audits or investigations;
see Article 22) — the JU rejects costs (see Article 42) or reduces the grant (see Article 43), it will
calculate the ‘revised final grant amount’ for the beneficiary concerned by the findings.

This amount is calculated by the JU on the basis of the findings, as follows:

   - in case of rejection of costs: by applying the reimbursement rate to the revised eligible costs
        approved by the JU for the beneficiary concerned;

   - in case of reduction of the grant: by calculating the concerned beneficiary’s share in the grant
        amount reduced in proportion to its improper implementation of the action or to the seriousness
        of its breach of obligations (see Article 43.2).

In case of rejection of costs and reduction of the grant, the revised final grant amount for the
beneficiary concerned will be the lower of the two amounts above.

ARTICLE 6 — ELIGIBLE AND INELIGIBLE COSTS

6.1 General conditions for costs to be eligible

‘Eligible costs’ are costs that meet the following criteria:

(a) for actual costs:

    (i) they must be actually incurred by the beneficiary;

    (ii) they must be incurred in the period set out in Article 3, with the exception of costs relating
          to the submission of the periodic report for the last reporting period and the final report (see
          Article 20);

    (iii) they must be indicated in the estimated budget set out in Annex 2;

    (iv) they must be incurred in connection with the action as described in Annex 1 and necessary
          for its implementation;

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    (v) they must be identifiable and verifiable, in particular recorded in the beneficiary’s accounts
          in accordance with the accounting standards applicable in the country where the beneficiary
          is established and with the beneficiary’s usual cost accounting practices;

    (vi) they must comply with the applicable national law on taxes, labour and social security, and

    (vii) they must be reasonable, justified and must comply with the principle of sound financial
          management, in particular regarding economy and efficiency;

(b) for unit costs:

    (i) they must be calculated as follows:

             {amounts per unit set out in Annex 2 or calculated by the beneficiary in accordance with its usual cost
             accounting practices (see Article 6.2, PointA)
             multiplied by
             the number of actual units};

    (ii) the number of actual units must comply with the following conditions:

          - the units must be actually used or produced in the period set out in Article 3;

          - the units must be necessary for implementing the action or produced by it, and

          - the number of units must be identifiable and verifiable, in particular supported by records
               and documentation (see Article 18);

(c) for flat-rate costs:

    (i) they must be calculated by applying the flat-rate set out in Annex 2, and

    (ii) the costs (actual costs or unit costs) to which the flat-rate is applied must comply with the
          conditions for eligibility set out in this Article.

6.2 Specific conditions for costs to be eligible

Costs are eligible if they comply with the general conditions (see above) and the specific conditions
set out below for each of the following budget categories:

   A. direct personnel costs;
   B. direct costs of subcontracting;
   C. not applicable;
   D. other direct costs;
   E. indirect costs;
   F. not applicable.

‘Direct costs’ are costs that are directly linked to the action implementation and can therefore be
attributed to it directly. They must not include any indirect costs (see Point E below).

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‘Indirect costs’ are costs that are not directly linked to the action implementation and therefore cannot
be attributed directly to it.

A. Direct personnel costs

Types of eligible personnel costs

A.1 Personnel costs are eligible if they are related to personnel working for the beneficiary under
     an employment contract (or equivalent appointing act) and assigned to the action (‘costs for
     employees (or equivalent)’). They must be limited to salaries (including during parental leave),
     social security contributions, taxes and other costs included in the remuneration, if they arise
     from national law or the employment contract (or equivalent appointing act).

     Beneficiaries that are non-profit legal entities3 may also declare as personnel costs additional
     remuneration for personnel assigned to the action (including payments on the basis of
     supplementary contracts regardless of their nature), if:

         (a) it is part of the beneficiary’s usual remuneration practices and is paid in a consistent manner
             whenever the same kind of work or expertise is required;

         (b) the criteria used to calculate the supplementary payments are objective and generally
             applied by the beneficiary, regardless of the source of funding used.

     Additional remuneration for personnel assigned to the action is eligible up to the following
     amount:

         (a) if the person works full time and exclusively on the action during the full year: up to
             EUR 8 000;

         (b) if the person works exclusively on the action but not full-time or not for the full year: up
             to the corresponding pro-rata amount of EUR 8 000, or

         (c) if the person does not work exclusively on the action: up to a pro-rata amount calculated
             as follows:

                {{EUR 8 000
                divided by
                the number of annual productive hours (see below)},
                multiplied by
                the number of hours that the person has worked on the action during the year}.

A.2 The costs for natural persons working under a direct contract with the beneficiary other than
     an employment contract are eligible personnel costs, if:

3 For the definition, see Article 2.1(14) of the Rules for Participation Regulation No 1290/2013: ‘non-profit legal entity’
   means a legal entity which by its legal form is non-profit-making or which has a legal or statutory obligation not to
   distribute profits to its shareholders or individual members.

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         (a) the person works under the beneficiary’s instructions and, unless otherwise agreed with
             the beneficiary, on the beneficiary’s premises;

         (b) the result of the work carried out belongs to the beneficiary, and

         (c) the costs are not significantly different from those for personnel performing similar tasks
             under an employment contract with the beneficiary.

A.3 The costs of personnel seconded by a third party against payment are eligible personnel costs,
     if the conditions in Article 11 are met.

A.4 Costs of owners of beneficiaries that are small and medium-sized enterprises (‘SME owners’)
     who are working on the action and who do not receive a salary are eligible personnel costs, if
     they correspond to the amount per unit set out in Annex 2 multiplied by the number of actual
     hours worked on the action.

A.5 Costs of ‘beneficiaries that are natural persons’ not receiving a salary are eligible personnel
     costs, if they correspond to the amount per unit set out in Annex 2 multiplied by the number of
     actual hours worked on the action.

Calculation

Personnel costs must be calculated by the beneficiaries as follows:

    {{hourly rate
    multiplied by
    the number of actual hours worked on the action},
    plus
    for non-profit legal entities: additional remuneration to personnel assigned to the action under the conditions set
    out above (Point A.1)}.

The number of actual hours declared for a person must be identifiable and verifiable (see Article 18).

The total number of hours declared in JU, EU or Euratom grants, for a person for a year, cannot be
higher than the annual productive hours used for the calculations of the hourly rate. Therefore, the
maximum number of hours that can be declared for the grant are:

    {the number of annual productive hours for the year (see below)
    minus
    total number of hours declared by the beneficiary for that person in that year for other JU, EU or Euratom grants}.

The ‘hourly rate’ is one of the following:

   (a) for personnel costs declared as actual costs: the hourly rate is the amount calculated as follows:

              {actual annual personnel costs (excluding additional remuneration) for the person
              divided by

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              number of annual productive hours}.

        The beneficiaries must use the annual personnel costs and the number of annual productive
        hours for each financial year covered by the reporting period. If a financial year is not closed
        at the end of the reporting period, the beneficiaries must use the hourly rate of the last closed
        financial year available.

        For the ‘number of annual productive hours’, the beneficiaries may choose one of the following:

        (i) ‘fixed number of hours’: 1 720 hours for persons working full time (or corresponding pro-
              rata for persons not working full time);

        (ii) ‘individual annual productive hours’: the total number of hours worked by the person in
              the year for the beneficiary, calculated as follows:

                 {annual workable hours of the person (according to the employment contract, applicable collective
                 labour agreement or national law)
                 plus
                 overtime worked
                 minus
                 absences (such as sick leave and special leave)}.

              ‘Annual workable hours’ means the period during which the personnel must be working,
              at the employer’s disposal and carrying out his/her activity or duties under the employment
              contract, applicable collective labour agreement or national working time legislation.

              If the contract (or applicable collective labour agreement or national working time
              legislation) does not allow to determine the annual workable hours, this option cannot
              be used;

        (iii) ‘standard annual productive hours’: the ‘standard number of annual hours’ generally
              applied by the beneficiary for its personnel in accordance with its usual cost accounting
              practices. This number must be at least 90% of the ‘standard annual workable hours’.

              If there is no applicable reference for the standard annual workable hours, this option
              cannot be used.

        For all options, the actual time spent on parental leave by a person assigned to the action may
        be deducted from the number of annual productive hours;

   (b) for personnel costs declared on the basis of unit costs: the hourly rate is one of the following:

        (i) for SME owners or beneficiaries that are natural persons: the hourly rate set out in Annex 2
              (see Points A.4 and A.5 above), or

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        (ii) for personnel costs declared on the basis of the beneficiary’s usual cost accounting
              practices: the hourly rate calculated by the beneficiary in accordance with its usual cost
              accounting practices, if:

                  - the cost accounting practices used are applied in a consistent manner, based on
                      objective criteria, regardless of the source of funding;

                  - the hourly rate is calculated using the actual personnel costs recorded in the
                      beneficiary’s accounts, excluding any ineligible cost or costs included in other
                      budget categories.

                      The actual personnel costs may be adjusted by the beneficiary on the basis of
                      budgeted or estimated elements. Those elements must be relevant for calculating
                      the personnel costs, reasonable and correspond to objective and verifiable
                      information;

                  and

                  - the hourly rate is calculated using the number of annual productive hours (see
                      above).

B. Direct costs of subcontracting (including related duties, taxes and charges such as non-deductible
value added tax (VAT) paid by the beneficiary) are eligible if the conditions in Article 13 are met.

C. Direct costs of providing financial support to third parties not applicable.

D. Other direct costs

D.1 Travel costs and related subsistence allowances (including related duties, taxes and charges
     such as non-deductible value added tax (VAT) paid by the beneficiary) are eligible if they are in
     line with the beneficiary’s usual practices on travel.

D.2 The depreciation costs of equipment, infrastructure or other assets (new or second-hand) as
     recorded in the beneficiary’s accounts are eligible, if they were purchased in accordance with
     Article 10.1.1 and written off in accordance with international accounting standards and the
     beneficiary’s usual accounting practices.

     The costs of renting or leasing equipment, infrastructure or other assets (including related duties,
     taxes and charges such as non-deductible value added tax (VAT) paid by the beneficiary) are
     also eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or
     assets and do not include any financing fees.

     The costs of equipment, infrastructure or other assets contributed in-kind against payment are
     eligible, if they do not exceed the depreciation costs of similar equipment, infrastructure or assets,
     do not include any financing fees and if the conditions in Article 11.1 are met.

     The only portion of the costs that will be taken into account is that which corresponds to the
     duration of the action and rate of actual use for the purposes of the action.

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D.3 Costs of other goods and services (including related duties, taxes and charges such as non-
     deductible value added tax (VAT) paid by the beneficiary) are eligible, if they are:

         (a) purchased specifically for the action and in accordance with Article 10.1.1 or

         (b) contributed in kind against payment and in accordance with Article 11.1.

     Such goods and services include, for instance, consumables and supplies, dissemination
     (including open access), protection of results, certificates on the financial statements (if they are
     required by the Agreement), certificates on the methodology, translations and publications.

D.4 Capitalised and operating costs of ‘large research infrastructure’4 directly used for the action
     are eligible, if:

         (a) the value of the large research infrastructure represents at least 75% of the total fixed
             assets (at historical value in its last closed balance sheet before the date of the signature of
             the Agreement or as determined on the basis of the rental and leasing costs of the research
             infrastructure5);

         (b) the beneficiary’s methodology for declaring the costs for large research infrastructure has
             been positively assessed by the Commission (‘ex-ante assessment’);

         (c) the beneficiary declares as direct eligible costs only the portion which corresponds to the
             duration of the action and the rate of actual use for the purposes of the action, and

         (d) they comply with the conditions as further detailed in the annotations to the Horizon 2020
             grant agreements.

E. Indirect costs

Indirect costs are eligible if they are declared on the basis of the flat-rate of 25% of the eligible direct
costs (see Article 5.2 and Points A to D above), from which are excluded:

   (a) costs of subcontracting and

   (b) costs of in-kind contributions provided by third parties which are not used on the beneficiary’s
        premises;

4 ‘Large research infrastructure’ means research infrastructure of a total value of at least EUR 20 million, for a
   beneficiary, calculated as the sum of historical asset values of each individual research infrastructure of that beneficiary,
   as they appear in its last closed balance sheet before the date of the signature of the Agreement or as determined on the
   basis of the rental and leasing costs of the research infrastructure.

5 For the definition, see Article 2(6) of Regulation (EU) No 1291/2013 of the European Parliament and of the Council of
   11 December 2013 establishing Horizon 2020 - the Framework Programme for Research and Innovation (2014-2020)
   (OJ L 347, 20.12.2013 p.104)-(‘Horizon 2020 Framework Programme Regulation No 1291/2013’): ‘Research
   infrastructure’ are facilities, resources and services that are used by the research communities to conduct research and
   foster innovation in their fields. Where relevant, they may be used beyond research, e.g. for education or public services.
   They include: major scientific equipment (or sets of instruments); knowledge-based resources such as collections,
   archives or scientific data; e-infrastructures such as data and computing systems and communication networks; and any
   other infrastructure of a unique nature essential to achieve excellence in research and innovation. Such infrastructures
   may be ‘single-sited’, ‘virtual’ or ‘distributed’.

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   (c) not applicable;

   (d) not applicable.

Beneficiaries receiving an operating grant6 financed by the EU or Euratom budget cannot declare
indirect costs for the period covered by the operating grant.

F. Specific cost category(ies)

Not applicable

6.3 Conditions for costs of linked third parties to be eligible

not applicable

6.4 Conditions for in-kind contributions provided by third parties free of charge to be eligible

In-kind contributions provided free of charge are eligible direct costs (for the beneficiary), if the
costs incurred by the third party fulfil — mutatis mutandis — the general and specific conditions for
eligibility set out in this Article (Article 6.1 and 6.2) and Article 12.1.

6.5 Ineligible costs

‘Ineligible costs’ are:

   (a) costs that do not comply with the conditions set out above (Article 6.1 to 6.4), in particular:

           (i) costs related to return on capital;

           (ii) debt and debt service charges;

           (iii) provisions for future losses or debts;

           (iv) interest owed;

           (v) doubtful debts;

           (vi) currency exchange losses;

           (vii) bank costs charged by the beneficiary’s bank for transfers from the JU;

           (viii)excessive or reckless expenditure;

           (ix) deductible VAT;

6 For the definition, see Article 121(1)(b) of Regulation (EU, Euratom) No 966/2012 of the European Parliament and
   of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing
   Council Regulation (EC, Euratom) No 1605/2002 (OJ L 218, 26.10.2012, p.1) (‘Financial Regulation No 966/2012’):
   ‘operating grant’ means direct financial contribution, by way of donation, from the budget in order to finance the
   functioning of a body which pursues an aim of general EU interest or has an objective forming part of and supporting
   an EU policy.

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           (x) costs incurred during suspension of the implementation of the action (see Article 49);
   (b) costs declared under another JU, EU or Euratom grant (including other grants awarded by

        the JU, grants awarded by a Member State and financed by the EU or Euratom budget and
        grants awarded by bodies other than the JU for the purpose of implementing the EU or Euratom
        budget); in particular, indirect costs if the beneficiary is already receiving an operating grant
        financed by the EU or Euratom budget in the same period.
6.6 Consequences of declaration of ineligible costs
Declared costs that are ineligible will be rejected (see Article 42).
This may also lead to any of the other measures described in Chapter 6.

CHAPTER 4 RIGHTS AND OBLIGATIONS OF THE PARTIES

SECTION 1 RIGHTS AND OBLIGATIONS RELATED TO IMPLEMENTING THE
   ACTION

ARTICLE 7 — GENERAL OBLIGATION TO PROPERLY IMPLEMENT THE ACTION
7.1 General obligation to properly implement the action
The beneficiaries must implement the action as described in Annex 1 and in compliance with the
provisions of the Agreement and all legal obligations under applicable EU, international and national
law.
7.2 Consequences of non-compliance
If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).
Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 8 — RESOURCES TO IMPLEMENT THE ACTION — THIRD PARTIES
   INVOLVED IN THE ACTION

The beneficiaries must have the appropriate resources to implement the action.
If it is necessary to implement the action, the beneficiaries may:

   - purchase goods, works and services (see Article 10);
   - use in-kind contributions provided by third parties against payment (see Article 11);
   - use in-kind contributions provided by third parties free of charge (see Article 12);
   - call upon subcontractors to implement action tasks described in Annex 1 (see Article 13);

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   - call upon linked third parties to implement action tasks described in Annex 1 (see Article 14).

In these cases, the beneficiaries retain sole responsibility towards the JU and the other beneficiaries
for implementing the action.

ARTICLE 9 — IMPLEMENTATION OF ACTION TASKS BY BENEFICIARIES NOT
   RECEIVING JU FUNDING

Not applicable

ARTICLE 10 — PURCHASE OF GOODS, WORKS OR SERVICES

10.1 Rules for purchasing goods, works or services

10.1.1 If necessary to implement the action, the beneficiaries may purchase goods, works or services.

The beneficiaries must make such purchases ensuring the best value for money or, if appropriate, the
lowest price. In doing so, they must avoid any conflict of interests (see Article 35).

The beneficiaries must ensure that the JU, the Commission, the European Court of Auditors (ECA)
and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also
towards their contractors.

10.1.2 Beneficiaries that are ‘contracting authorities’ within the meaning of Directive 2004/18/EC7 or
‘contracting entities’ within the meaning of Directive 2004/17/EC8 must comply with the applicable
national law on public procurement.

10.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under Article 10.1.1, the costs related to the contract
concerned will be ineligible (see Article 6) and will be rejected (see Article 42).

If a beneficiary breaches any of its obligations under Article 10.1.2, the grant may be reduced (see
Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 11 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES
   AGAINST PAYMENT

11.1 Rules for the use of in-kind contributions against payment

If necessary to implement the action, the beneficiaries may use in-kind contributions provided by third
parties against payment.

7 Directive 2004/18/EC of the European Parliament and of the Council of 31 March 2004 on the coordination of
   procedures for the award of public work contracts, public supply contracts and public service contracts (OJ L 134,
   30.04.2004, p. 114).

8 Directive 2004/17/EC of the European Parliament and of the Council of 31 March 2004 coordinating the procurement
   procedures of entities operating in the water, energy, transport and postal services sectors (OJ L 134, 30.04.2004, p. 1).

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The beneficiaries may declare costs related to the payment of in-kind contributions as eligible (see
Article 6.1 and 6.2), up to the third parties’ costs for the seconded persons, contributed equipment,
infrastructure or other assets or other contributed goods and services.

The third parties and their contributions must be set out in Annex 1. The JU may however approve
in-kind contributions not set out in Annex 1 without amendment (see Article 55), if:

   - they are specifically justified in the periodic technical report and

   - their use does not entail changes to the Agreement which would call into question the decision
        awarding the grant or breach the principle of equal treatment of applicants.

The beneficiaries must ensure that the JU, the Commission, the European Court of Auditors (ECA)
and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also
towards the third parties.

11.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the costs related to the payment of
the in-kind contribution will be ineligible (see Article 6) and will be rejected (see Article 42).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 12 — USE OF IN-KIND CONTRIBUTIONS PROVIDED BY THIRD PARTIES
   FREE OF CHARGE

12.1 Rules for the use of in-kind contributions free of charge

If necessary to implement the action, the beneficiaries may use in-kind contributions provided by third
parties free of charge.

The beneficiaries may declare costs incurred by the third parties for the seconded persons, contributed
equipment, infrastructure or other assets or other contributed goods and services as eligible in
accordance with Article 6.4.

The third parties and their contributions must be set out in Annex 1. The JU may however approve
in-kind contributions not set out in Annex 1 without amendment (see Article 55), if:

   - they are specifically justified in the periodic technical report and

   - their use does not entail changes to the Agreement which would call into question the decision
        awarding the grant or breach the principle of equal treatment of applicants.

The beneficiaries must ensure that the JU, the Commission, the European Court of Auditors (ECA)
and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also
towards the third parties.

12.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the costs incurred by the third parties
related to the in-kind contribution will be ineligible (see Article 6) and will be rejected (see Article 42).

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Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 13 — IMPLEMENTATION OF ACTION TASKS BY SUBCONTRACTORS

13.1 Rules for subcontracting action tasks
13.1.1 If necessary to implement the action, the beneficiaries may award subcontracts covering the
implementation of certain action tasks described in Annex 1.

Subcontracting may cover only a limited part of the action.

The beneficiaries must award the subcontracts ensuring the best value for money or, if appropriate,
the lowest price. In doing so, they must avoid any conflict of interests (see Article 35).

The tasks to be implemented and the estimated cost for each subcontract must be set out in Annex 1
and the total estimated costs of subcontracting per beneficiary must be set out in Annex 2. The JU may
however approve subcontracts not set out in Annex 1 and 2 without amendment (see Article 55), if:

   - they are specifically justified in the periodic technical report and

   - they do not entail changes to the Agreement which would call into question the decision
        awarding the grant or breach the principle of equal treatment of applicants.

The beneficiaries must ensure that the JU, the Commission, the European Court of Auditors (ECA)
and the European Anti-Fraud Office (OLAF) can exercise their rights under Articles 22 and 23 also
towards their subcontractors.
13.1.2 The beneficiaries must ensure that their obligations under Articles 35, 36, 38 and 46 also apply
to the subcontractors.

Beneficiaries that are ‘contracting authorities’ within the meaning of Directive 2004/18/EC or
‘contracting entities’ within the meaning of Directive 2004/17/EC must comply with the applicable
national law on public procurement.

13.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under Article 13.1.1, the costs related to the subcontract
concerned will be ineligible (see Article 6) and will be rejected (see Article 42).

If a beneficiary breaches any of its obligations under Article 13.1.2, the grant may be reduced (see
Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 14 — IMPLEMENTATION OF ACTION TASKS BY LINKED THIRD PARTIES

Not applicable

ARTICLE 15 — FINANCIAL SUPPORT TO THIRD PARTIES

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15.1 Rules for providing financial support to third parties

Not applicable

15.2 Financial support in the form of prizes

Not applicable

15.3 Consequences of non-compliance

Not applicable

ARTICLE 16 — PROVISION OF TRANS-NATIONAL OR VIRTUAL ACCESS TO
   RESEARCH INFRASTRUCTURE

16.1 Rules for providing trans-national access to research infrastructure

Not applicable

16.2 Rules for providing virtual access to research infrastructure

Not applicable

16.3 Consequences of non-compliance

Not applicable

SECTION 2 RIGHTS AND OBLIGATIONS RELATED TO THE GRANT
   ADMINISTRATION

ARTICLE 17 — GENERAL OBLIGATION TO INFORM

17.1 General obligation to provide information upon request

The beneficiaries must provide — during implementation of the action or afterwards and in accordance
with Article 41.2 — any information requested in order to verify eligibility of the costs, proper
implementation of the action and compliance with any other obligation under the Agreement.

17.2 Obligation to keep information up to date and to inform about events and circumstances
      likely to affect the Agreement

Each beneficiary must keep information stored in the 'Beneficiary Register' (via the electronic
exchange system; see Article 52) up to date, in particular, its name, address, legal representatives,
legal form and organisation type.

Each beneficiary must immediately inform the coordinator — which must immediately inform the JU
and the other beneficiaries — of any of the following:

   (a) events which are likely to affect significantly or delay the implementation of the action or the
        EU's or JU's financial interests, in particular:

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          (i) changes in its legal, financial, technical, organisational or ownership situation

   (b) circumstances affecting:

          (i) the decision to award the grant or

         (ii) compliance with requirements under the Agreement.

17.3 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 18 — KEEPING RECORDS — SUPPORTING DOCUMENTATION

18.1 Obligation to keep records and other supporting documentation

The beneficiaries must — for a period of five years after the payment of the balance — keep records
and other supporting documentation in order to prove the proper implementation of the action and
the costs they declare as eligible.

They must make them available upon request (see Article 17) or in the context of checks, reviews,
audits or investigations (see Article 22).

If there are on-going checks, reviews, audits, investigations, litigation or other pursuits of claims under
the Agreement (including the extension of findings; see Articles 22), the beneficiaries must keep the
records and other supporting documentation until the end of these procedures.

The beneficiaries must keep the original documents. Digital and digitalised documents are considered
originals if they are authorised by the applicable national law. The JU or the Commission may accept
non-original documents if it considers that they offer a comparable level of assurance.

18.1.1 Records and other supporting documentation on the scientific and technical
implementation

The beneficiaries must keep records and other supporting documentation on scientific and technical
implementation of the action in line with the accepted standards in the respective field.

18.1.2 Records and other documentation to support the costs declared

The beneficiaries must keep the records and documentation supporting the costs declared, in particular
the following:

   (a) for actual costs: adequate records and other supporting documentation to prove the costs
        declared, such as contracts, subcontracts, invoices and accounting records. In addition, the
        beneficiaries' usual cost accounting practices and internal control procedures must enable direct
        reconciliation between the amounts declared, the amounts recorded in their accounts and the
        amounts stated in the supporting documentation;

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   (b) for unit costs: adequate records and other supporting documentation to prove the number of
        units declared. Beneficiaries do not need to identify the actual eligible costs covered or to keep
        or provide supporting documentation (such as accounting statements) to prove the amount per
        unit.

        In addition, for direct personnel costs declared as unit costs calculated in accordance
        with the beneficiary's usual cost accounting practices, the beneficiaries must keep adequate
        records and documentation to prove that the cost accounting practices used comply with the
        conditions set out in Article 6.2, Point A.

        The beneficiaries may submit to the JU, for approval by the Commission, a certificate (drawn up
        in accordance with Annex 6) stating that their usual cost accounting practices comply with these
        conditions (‘certificate on the methodology’). If the certificate is approved, costs declared in
        line with this methodology will not be challenged subsequently, unless the beneficiaries have
        concealed information for the purpose of the approval.

   (c) for flat-rate costs: adequate records and other supporting documentation to prove the eligibility
        of the costs to which the flat-rate is applied. The beneficiaries do not need to identify the costs
        covered or provide supporting documentation (such as accounting statements) to prove the
        amount declared at a flat-rate.

In addition, for personnel costs (declared as actual costs or on the basis of unit costs), the beneficiaries
must keep time records for the number of hours declared. The time records must be in writing and
approved by the persons working on the action and their supervisors, at least monthly. In the absence
of reliable time records of the hours worked on the action, the JU or the Commission may accept
alternative evidence supporting the number of hours declared, if it considers that it offers an adequate
level of assurance.

As an exception, for persons working exclusively on the action, there is no need to keep time records,
if the beneficiary signs a declaration confirming that the persons concerned have worked exclusively
on the action.

18.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, costs insufficiently substantiated
will be ineligible (see Article 6) and will be rejected (see Article 42), and the grant may be reduced
(see Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 19 — SUBMISSION OF DELIVERABLES

19.1 Obligation to submit deliverables

The coordinator must submit the ‘deliverables’ identified in Annex 1, in accordance with the timing
and conditions set out in it.

19.2 Consequences of non-compliance

If the coordinator breaches any of its obligations under this Article, the JU may apply any of the
measures described in Chapter 6.

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ARTICLE 20 — REPORTING — PAYMENT REQUESTS

20.1 Obligation to submit reports

The coordinator must submit to the JU (see Article 52) the technical and financial reports set out in
this Article. These reports include requests for payment and must be drawn up using the forms and
templates provided in the electronic exchange system (see Article 52).

20.2 Reporting periods

The action is divided into the following ‘reporting periods’:
   - RP1: from month 1 to month 12
   - RP2: from month 13 to month 27
   - RP3: from month 28 to month 36

20.3 Periodic reports — Requests for interim payments

The coordinator must submit a periodic report within 60 days following the end of each reporting
period.

The periodic report must include the following:

(a) a ‘periodic technical report’ containing:

       (i) an explanation of the work carried out by the beneficiaries;

      (ii) an overview of the progress towards the objectives of the action, including milestones and
           deliverables identified in Annex 1.

           This report must include explanations justifying the differences between work expected to
           be carried out in accordance with Annex 1 and that actually carried out.

           The report must also detail the exploitation and dissemination of the results and — if required
           in Annex 1 — an updated ‘plan for the exploitation and dissemination of the results’;

     (iii) a summary for publication by the JU;

     (iv) the answers to the ‘questionnaire’, covering issues related to the action implementation and
           the economic and societal impact, notably in the context of the key performance indicators
           and monitoring requirements of Horizon 2020 and the JU;

(b) a ‘periodic financial report’ containing:

       (i) an ‘individual financial statement’ (see Annex 4) from each beneficiary, for the reporting
           period concerned.

           The individual financial statement must detail the eligible costs (actual costs, unit costs and
           flat-rate costs; see Article 6) for each budget category (see Annex 2).

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           The beneficiaries must declare all eligible costs, even if — for actual costs, unit costs and
           flat-rate costs — they exceed the amounts indicated in the estimated budget (see Annex 2).
           Amounts which are not declared in the individual financial statement will not be taken into
           account by the JU.

           If an individual financial statement is not submitted for a reporting period, it may be included
           in the periodic financial report for the next reporting period.

           The individual financial statements of the last reporting period must also detail the receipts
           of the action (see Article 5.3.3).

           Each beneficiary must certify that:

              - the information provided is full, reliable and true;

              - the costs declared are eligible (see Article 6);

              - the costs can be substantiated by adequate records and supporting documentation (see
                   Article 18) that will be produced upon request (see Article 17) or in the context of
                   checks, reviews, audits and investigations (see Article 22), and

              - for the last reporting period: that all the receipts have been declared (see
                   Article 5.3.3);

      (ii) an explanation of the use of resources and the information on subcontracting (see
           Article 13) and in-kind contributions provided by third parties (see Articles 11 and 12) from
           each beneficiary, for the reporting period concerned;

     (iii) not applicable;

     (iv) a ‘periodic summary financial statement’ (see Annex 4), created automatically by
           the electronic exchange system, consolidating the individual financial statements for the
           reporting period concerned and including — except for the last reporting period — the
           request for interim payment.

20.4 Final report — Request for payment of the balance

In addition to the periodic report for the last reporting period, the coordinator must submit the final
report within 60 days following the end of the last reporting period.

The final report must include the following:

(a) a ‘final technical report’ with a summary for publication containing:

      (i) an overview of the results and their exploitation and dissemination;

     (ii) the conclusions on the action, and

     (iii) the socio-economic impact of the action;

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(b) a ‘final financial report’ containing:

      (i) a ‘final summary financial statement’ (see Annex 4), created automatically by the
          electronic exchange system, consolidating the individual financial statements for all
          reporting periods and including the request for payment of the balance and

     (ii) a ‘certificate on the financial statements’ (drawn up in accordance with Annex 5) for each
          beneficiary , if it requests a total contribution of EUR 325 000 or more, as reimbursement of
          actual costs and unit costs calculated on the basis of its usual cost accounting practices (see
          Article 5.2 and Article 6.2, Point A).

20.5 Information on cumulative expenditure incurred

Not applicable

20.6 Currency for financial statements and conversion into euro

Financial statements must be drafted in euro.

Beneficiaries with accounting established in a currency other than the euro must convert the costs
recorded in their accounts into euro, at the average of the daily exchange rates published in the C series
of the Official Journal of the European Union, calculated over the corresponding reporting period.

If no daily euro exchange rate is published in the Official Journal of the European Union for the
currency in question, they must be converted at the average of the monthly accounting rates published
on the Commission’s website, calculated over the corresponding reporting period.

Beneficiaries with accounting established in euro must convert costs incurred in another currency into
euro according to their usual accounting practices.

20.7 Language of reports

All reports (technical and financial reports, including financial statements) must be submitted in the
language of the Agreement.

20.8 Consequences of non-compliance — Suspension of the payment deadline — Termination

If the reports submitted do not comply with this Article, the JU may suspend the payment deadline
(see Article 47) and apply any of the other measures described in Chapter 6.

If the coordinator breaches its obligation to submit the reports and if it fails to comply with this
obligation within 30 days following a written reminder sent by the JU, the Agreement may be
terminated (see Article 50).

ARTICLE 21 — PAYMENTS AND PAYMENT ARRANGEMENTS

21.1 Payments to be made

The following payments will be made to the coordinator:

   - one pre-financing payment;

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   - one or more interim payments, on the basis of the request(s) for interim payment (see
        Article 20), and

   - one payment of the balance, on the basis of the request for payment of the balance (see
        Article 20).

21.2 Pre-financing payment — Amount — Amount retained for the Guarantee Fund

The aim of the pre-financing is to provide the beneficiaries with a float.

It remains the property of the JU until the payment of the balance.

The amount of the pre-financing payment will be EUR 2,676,610.63 (two million six hundred and
seventy six thousand six hundred and ten EURO and sixty three eurocents).

The JU will — except if Article 48 applies — make the pre-financing payment to the coordinator
within 30 days either from the entry into force of the Agreement (see Article 58) or from 10 days
before the starting date of the action (see Article 3), whichever is the latest.

An amount of EUR 250,932.25 (two hundred and fifty thousand nine hundred and thirty two EURO
and twenty five eurocents), corresponding to 5% of the maximum grant amount (see Article 5.1), is
retained by the JU from the pre-financing payment and transferred into the ‘Guarantee Fund’.

21.3 Interim payments — Amount — Calculation

Interim payments reimburse the eligible costs incurred for the implementation of the action during
the corresponding reporting periods.

The JU will pay to the coordinator the amount due as interim payment within 90 days from receiving
the periodic report (see Article 20.3), except if Articles 47 or 48 apply.

Payment is subject to the approval of the periodic report. Its approval does not imply recognition of
the compliance, authenticity, completeness or correctness of its content.

The amount due as interim payment is calculated by the JU in the following steps:

   Step 1 – Application of the reimbursement rates

   Step 2 – Limit to 90% of the maximum grant amount

21.3.1 Step 1 — Application of the reimbursement rates

The reimbursement rate(s) (see Article 5.2) are applied to the eligible costs (actual costs, unit costs
and flat-rate costs ; see Article 6) declared by the beneficiaries (see Article 20) and approved by the
JU (see above) for the concerned reporting period.

21.3.2 Step 2 — Limit to 90% of the maximum grant amount

The total amount of pre-financing and interim payments must not exceed 90% of the maximum grant
amount set out in Article 5.1. The maximum amount for the interim payment will be calculated as
follows:

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       {90% of the maximum grant amount (see Article 5.1)

        minus

       {pre-financing and previous interim payments}}.

21.4 Payment of the balance — Amount — Calculation — Release of the amount retained for
   the Guarantee Fund

The payment of the balance reimburses the remaining part of the eligible costs incurred by the
beneficiaries for the implementation of the action.

If the total amount of earlier payments is greater than the final grant amount (see Article 5.3), the
payment of the balance takes the form of a recovery (see Article 44).

If the total amount of earlier payments is lower than the final grant amount, the JU will pay the balance
within 90 days from receiving the final report (see Article 20.4), except if Articles 47 or 48 apply.

Payment is subject to the approval of the final report. Its approval does not imply recognition of the
compliance, authenticity, completeness or correctness of its content.

The amount due as the balance is calculated by the JU by deducting the total amount of pre-financing
and interim payments (if any) already made, from the final grant amount determined in accordance
with Article 5.3:

       {final grant amount (see Article 5.3)

        minus

       {pre-financing and interim payments (if any) made}}.

At the payment of the balance, the amount retained for the Guarantee Fund (see above) will be released
and:

   - if the balance is positive: the amount released will be paid in full to the coordinator together
        with the amount due as the balance;

   - if the balance is negative (payment of the balance taking the form of recovery): it will be
        deducted from the amount released (see Article 44.1.2). If the resulting amount:

           - is positive, it will be paid to the coordinator

           - is negative, it will be recovered.

The amount to be paid may however be offset — without the beneficiary’s consent — against any
other amount owed by the beneficiary to the JU up to the maximum JU contribution indicated, for
that beneficiary, in the estimated budget (see Annex 2).

21.5 Notification of amounts due

When making payments, the JU will formally notify to the coordinator the amount due, specifying
whether it concerns an interim payment or the payment of the balance.

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For the payment of the balance, the notification will also specify the final grant amount.
In the case of reduction of the grant or recovery of undue amounts, the notification will be preceded
by the contradictory procedure set out in Articles 43 and 44.
21.6 Currency for payments

The JU will make all payments in euro.
21.7 Payments to the coordinator — Distribution to the beneficiaries

Payments will be made to the coordinator.
Payments to the coordinator will discharge the JU from its payment obligation.
The coordinator must distribute the payments between the beneficiaries without unjustified delay.
Pre-financing may however be distributed only:

   (a) if the minimum number of beneficiaries set out in the call for proposals has acceded to the
        Agreement (see Article 56) and

   (b) to beneficiaries that have acceded to the Agreement (see Article 56).
21.8 Bank account for payments

All payments will be made to the following bank account:
       Name of bank: RABOBANK
       Address of branch: CROESELAAN 18 UTRECHT, Netherlands
       Full name of the account holder: SIOUX CCM BV SUBSIDIE
       Full account number (including bank codes):
       IBAN code: NL18RABO0315552565

21.9 Costs of payment transfers

The cost of the payment transfers is borne as follows:
   - the JU bears the cost of transfers charged by its bank;
   - the beneficiary bears the cost of transfers charged by its bank;
   - the party causing a repetition of a transfer bears all costs of the repeated transfer.

21.10 Date of payment

Payments by the JU are considered to have been carried out on the date when they are debited to its
account.
21.11 Consequences of non-compliance
21.11.1 If the JU does not pay within the payment deadlines (see above), the beneficiaries are entitled
to late-payment interest at the rate applied by the European Central Bank (ECB) for its main

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refinancing operations in euros (‘reference rate’), plus three and a half points. The reference rate is
the rate in force on the first day of the month in which the payment deadline expires, as published in
the C series of the Official Journal of the European Union.

If the late-payment interest is lower than or equal to EUR 200, it will be paid to the coordinator only
upon request submitted within two months of receiving the late payment.

Late-payment interest is not due if all beneficiaries are EU Member States (including regional and
local government authorities or other public bodies acting on behalf of a Member State for the purpose
of this Agreement).

Suspension of the payment deadline or payments (see Articles 47 and 48) will not be considered as
late payment.

Late-payment interest covers the period running from the day following the due date for payment (see
above), up to and including the date of payment.

Late-payment interest is not considered for the purposes of calculating the final grant amount.

21.11.2 If the coordinator breaches any of its obligations under this Article, the grant may be reduced
(see Article 43) and the Agreement or the participation of the coordinator may be terminated (see
Article 50).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 22 — CHECKS, REVIEWS, AUDITS AND INVESTIGATIONS — EXTENSION
   OF FINDINGS

22.1 Checks, reviews and audits by the Commission and the JU

22.1.1 Right to carry out checks

The JU will — during the implementation of the action or afterwards — check the proper
implementation of the action and compliance with the obligations under the Agreement, including
assessing deliverables and reports.

For this purpose the JU may be assisted by external persons or bodies.

The JU may also request additional information in accordance with Article 17. The JU may request
beneficiaries to provide such information to it directly.

Information provided must be accurate, precise and complete and in the format requested, including
electronic format.

22.1.2 Right to carry out reviews

The JU may — during the implementation of the action or afterwards — carry out reviews on the
proper implementation of the action (including assessment of deliverables and reports), compliance
with the obligations under the Agreement and continued scientific or technological relevance of the
action.

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Reviews may be started up to two years after the payment of the balance. They will be formally
notified to the coordinator or beneficiary concerned and will be considered to have started on the date
of the formal notification.

If the review is carried out on a third party (see Articles 10 to 16), the beneficiary concerned must
inform the third party.

The JU may carry out reviews directly (using its own staff) or indirectly (using external persons or
bodies appointed to do so). It will inform the coordinator or beneficiary concerned of the identity
of the external persons or bodies. They have the right to object to the appointment on grounds of
commercial confidentiality.

The coordinator or beneficiary concerned must provide — within the deadline requested — any
information and data in addition to deliverables and reports already submitted (including information
on the use of resources). The JU may request beneficiaries to provide such information to it directly.

The coordinator or beneficiary concerned may be requested to participate in meetings, including with
external experts.

For on-the-spot reviews, the beneficiaries must allow access to their sites and premises, including to
external persons or bodies, and must ensure that information requested is readily available.

Information provided must be accurate, precise and complete and in the format requested, including
electronic format.

On the basis of the review findings, a ‘review report’ will be drawn up.

The JU will formally notify the review report to the coordinator or beneficiary concerned, which has
30 days to formally notify observations (‘contradictory review procedure’).

Reviews (including review reports) are in the language of the Agreement.

22.1.3 Right to carry out audits

The JU or the Commission may — during the implementation of the action or afterwards — carry
out audits on the proper implementation of the action and compliance with the obligations under the
Agreement.

Audits may be started up to two years after the payment of the balance. They will be formally
notified to the coordinator or beneficiary concerned and will be considered to have started on the date
of the formal notification.

If the audit is carried out on a third party (see Articles 10 to 16), the beneficiary concerned must
inform the third party.

The JU or the Commission may carry out audits directly (using its own staff) or indirectly (using
external persons or bodies appointed to do so). It will inform the coordinator or beneficiary concerned
of the identity of the external persons or bodies. They have the right to object to the appointment on
grounds of commercial confidentiality.

The coordinator or beneficiary concerned must provide — within the deadline requested — any
information (including complete accounts, individual salary statements or other personal data) to

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verify compliance with the Agreement. The JU or the Commission may request beneficiaries to
provide such information to it directly

For on-the-spot audits, the beneficiaries must allow access to their sites and premises, including to
external persons or bodies, and must ensure that information requested is readily available.

Information provided must be accurate, precise and complete and in the format requested, including
electronic format.

On the basis of the audit findings, a ‘draft audit report’ will be drawn up.

The JU or the Commission will formally notify the draft audit report to the coordinator or beneficiary
concerned, which has 30 days to formally notify observations (‘contradictory audit procedure’). This
period may be extended by the JU or the Commission in justified cases.

The ‘final audit report’ will take into account observations by the coordinator or beneficiary
concerned. The report will be formally notified to it.

Audits (including audit reports) are in the language of the Agreement.

The JU or the Commission may also access the beneficiaries’ statutory records for the periodical
assessment of unit costs or flat-rate amounts.

22.2 Investigations by the European Anti-Fraud Office (OLAF)

Under Regulations No 883/201316 and No 2185/9617 (and in accordance with their provisions and
procedures), and Article 49 of the JU Financial Rules, the European Anti-Fraud Office (OLAF) may
— at any moment during implementation of the action or afterwards — carry out investigations,
including on-the-spot checks and inspections, to establish whether there has been fraud, corruption or
any other illegal activity affecting the financial interests of the EU.

22.3 Checks and audits by the European Court of Auditors (ECA)

Under Article 287 of the Treaty on the Functioning of the European Union (TFEU) and Article 49 of
the Financial Rules of the JU, the European Court of Auditors (ECA) may — at any moment during
implementation of the action or afterwards — carry out audits.

The ECA has the right of access for the purpose of checks and audits.

22.4 Checks, reviews, audits and investigations for international organisations

In conformity with its financial regulations, the European Union, including the European Anti-Fraud
Office (OLAF) and the European Court of Auditors (ECA), may undertake, including on the spot,
checks, reviews audits and investigations.

16 Regulation (EU, Euratom) No 883/2013 of the European Parliament and of the Council of 11 September 2013
   concerning investigations conducted by the European Anti-Fraud Office (OLAF) and repealing Regulation (EC)
   No 1073/1999 of the European Parliament and of the Council and Council Regulation (Euratom) No 1074/1999 (OJ
   L 248, 18.09.2013, p. 1).

17 Council Regulation (Euratom, EC) No 2185/1996 of 11 November 1996 concerning on-the-spot checks and inspections
   carried out by the Commission in order to protect the European Communities' financial interests against fraud and other
   irregularities (OJ L 292, 15.11.1996, p. 2).

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This Article will be applied in accordance with any specific agreement concluded in this respect by
the international organisation and the European Union.

22.5 Consequences of findings in checks, reviews, audits and investigations —Extension of
   findings

22.5.1 Findings in this grant

Findings in checks, reviews, audits or investigations carried out in the context of this grant may lead
to the rejection of ineligible costs (see Article 42), reduction of the grant (see Article 43), recovery of
undue amounts (see Article 44) or to any of the other measures described in Chapter 6.

Rejection of costs or reduction of the grant after the payment of the balance will lead to a revised final
grant amount (see Article 5.4).

Findings in checks, reviews, audits or investigations may lead to a request for amendment for the
modification of Annex 1 (see Article 55).

Checks, reviews, audits or investigations that find systemic or recurrent errors, irregularities, fraud
or breach of obligations may also lead to consequences in other JU, EU or Euratom grants awarded
under similar conditions (‘extension of findings from this grant to other grants’).

Moreover, findings arising from an OLAF investigation may lead to criminal prosecution under
national law.

22.5.2 Findings in other grants

The JU or the Commission may extend findings from other grants to this grant (‘extension of findings
from other grants to this grant’), if:

   (a) the beneficiary concerned is found, in other JU, EU or Euratom grants awarded under similar
        conditions, to have committed systemic or recurrent errors, irregularities, fraud or breach of
        obligations that have a material impact on this grant and

   (b) those findings are formally notified to the beneficiary concerned — together with the list of
        grants affected by the findings — no later than two years after the payment of the balance of
        this grant.

The extension of findings may lead to the rejection of costs (see Article 42), reduction of the grant
(see Article 43), recovery of undue amounts (see Article 44), suspension of payments (see Article 48),
suspension of the action implementation (see Article 49) or termination (see Article 50).

22.5.3 Procedure

The JU or the Commission will formally notify the beneficiary concerned the systemic or recurrent
errors and its intention to extend these audit findings, together with the list of grants affected.

22.5.3.1 If the findings concern eligibility of costs: the formal notification will include:

   (a) an invitation to submit observations on the list of grants affected by the findings;

   (b) the request to submit revised financial statements for all grants affected;

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   (c) the correction rate for extrapolation established by the JU or the Commission on the basis
        of the systemic or recurrent errors, to calculate the amounts to be rejected if the beneficiary
        concerned:

           (i) considers that the submission of revised financial statements is not possible or
                  practicable or

           (ii) does not submit revised financial statements.

The beneficiary concerned has 90 days from receiving notification to submit observations, revised
financial statements or to propose a duly substantiated alternative correction method. This period
may be extended by the JU or the Commission in justified cases.

The amounts to be rejected will be determined on the basis of the revised financial statements, subject
to their approval.

If the JU or the Commission does not receive any observations or revised financial statements, does
not accept the observations or the proposed alternative correction method or does not approve the
revised financial statements, it will formally notify the beneficiary concerned the application of the
initially notified correction rate for extrapolation.

If the JU or the Commission accepts the alternative correction method proposed by the beneficiary
concerned, it will formally notify the application of the accepted alternative correction method.

22.5.3.2 If the findings concern improper implementation or a breach of another obligation: the
formal notification will include:

   (a) an invitation to submit observations on the list of grants affected by the findings and

   (b) the flat-rate the JU or the Commission intends to apply according to the principle of
        proportionality.

The beneficiary concerned has 90 days from receiving notification to submit observations or to
propose a duly substantiated alternative flat-rate.

If the JU or the Commission does not receive any observations or does not accept the observations
or the proposed alternative flat-rate, it will formally notify the beneficiary concerned the application
of the initially notified flat-rate.

If the JU or the Commission accepts the alternative flat-rate proposed by the beneficiary concerned,
it will formally notify the application of the accepted alternative flat-rate.

22.6 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, any insufficiently substantiated costs
will be ineligible (see Article 6) and will be rejected (see Article 42).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 23 — EVALUATION OF THE IMPACT OF THE ACTION

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23.1 Right to evaluate the impact of the action

The JU or the Commission may carry out interim and final evaluations of the impact of the action
measured against the objective of the EU programme.

Evaluations may be started during implementation of the action and up to five years after the payment
of the balance. The evaluation is considered to start on the date of the formal notification to the
coordinator or beneficiaries.

The JU or the Commission may make these evaluations directly (using its own staff) or indirectly
(using external bodies or persons it has authorised to do so).

The coordinator or beneficiaries must provide any information relevant to evaluate the impact of the
action, including information in electronic format.

23.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the JU may apply the measures
described in Chapter 6.

SECTION 3 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND AND
   RESULTS

SUBSECTION 1 GENERAL

ARTICLE 23a — MANAGEMENT OF INTELLECTUAL PROPERTY

23a.1 Obligation to take measures to implement the Commission Recommendation on the
   management of intellectual property in knowledge transfer activities

Beneficiaries that are universities or other public research organisations must take measures to
implement the principles set out in Points 1 and 2 of the Code of Practice annexed to the Commission
Recommendation on the management of intellectual property in knowledge transfer activities19.

This does not change the obligations set out in Subsections 2 and 3 of this Section.

The beneficiaries must ensure that researchers and third parties involved in the action are aware of
them.

23a.2 Consequences of non-compliance

If a beneficiary breaches its obligations under this Article, the JU may apply any of the measures
described in Chapter 6.

SUBSECTION 2 RIGHTS AND OBLIGATIONS RELATED TO BACKGROUND

ARTICLE 24 — AGREEMENT ON BACKGROUND

19 Commission Recommendation C (2008) 1329 of 10.4.2008 on the management of intellectual property in knowledge
   transfer activities and the Code of Practice for universities and other public research institutions attached to this
   recommendation.

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24.1 Agreement on background

The beneficiaries must identify and agree (in writing) on the background for the action (‘agreement
on background’).

‘Background’ means any data, know-how or information — whatever its form or nature (tangible or
intangible), including any rights such as intellectual property rights — that:

   (a) is held by the beneficiaries before they acceded to the Agreement, and

   (b) is needed to implement the action or exploit the results.

24.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 25 — ACCESS RIGHTS TO BACKGROUND

25.1 Exercise of access rights — Waiving of access rights — No sub-licensing

To exercise access rights, this must first be requested in writing (‘request for access’).

‘Access rights’ means rights to use results or background under the terms and conditions laid down
in this Agreement.

Waivers of access rights are not valid unless in writing.

Unless agreed otherwise, access rights do not include the right to sub-license.

25.2 Access rights for other beneficiaries, for implementing their own tasks under the action

The beneficiaries must give each other access — on a royalty-free basis — to background needed to
implement their own tasks under the action, unless the beneficiary that holds the background has —
before acceding to the Agreement —:

   (a) informed the other beneficiaries that access to its background is subject to legal restrictions or
        limits, including those imposed by the rights of third parties (including personnel), or

   (b) agreed with the other beneficiaries that access would not be on a royalty-free basis.

25.3 Access rights for other beneficiaries, for exploiting their own results

The beneficiaries must give each other access — under fair and reasonable conditions — to
background needed for exploiting their own results, unless the beneficiary that holds the background
has — before acceding to the Agreement — informed the other beneficiaries that access to its
background is subject to legal restrictions or limits, including those imposed by the rights of third
parties (including personnel).

‘Fair and reasonable conditions’ means appropriate conditions, including possible financial terms
or royalty-free conditions, taking into account the specific circumstances of the request for access, for

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example the actual or potential value of the results or background to which access is requested and/or
the scope, duration or other characteristics of the exploitation envisaged.

Requests for access may be made — unless agreed otherwise — up to one year after the period set
out in Article 3.

25.4 Access rights for affiliated entities

Unless otherwise agreed in the consortium agreement, access to background must also be given
— under fair and reasonable conditions (see above; Article 25.3) and unless it is subject to legal
restrictions or limits, including those imposed by the rights of third parties (including personnel) —
to affiliated entities20 established in an EU Member State or ‘associated country’21, if this is needed
to exploit the results generated by the beneficiaries to which they are affiliated.

Unless agreed otherwise (see above; Article 25.1), the affiliated entity concerned must make the
request directly to the beneficiary that holds the background.

Requests for access may be made — unless agreed otherwise — up to one year after the period set
out in Article 3.

25.5 Access rights for third parties

Not applicable

25.6 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

SUBSECTION 3 RIGHTS AND OBLIGATIONS RELATED TO RESULTS

ARTICLE 26 — OWNERSHIP OF RESULTS

20 For the definition, see Article 2.1(2) of the Rules for Participation Regulation No 1290/2013: 'affiliated entity' means
      any legal entity that is under the direct or indirect control of a participant, or under the same direct or indirect control
      as the participant, or that is directly or indirectly controlling a participant.
      ‘Control’ may take any of the following forms:
         (a) the direct or indirect holding of more than 50% of the nominal value of the issued share capital in the legal
             entity concerned, or of a majority of the voting rights of the shareholders or associates of that entity;
         (b) the direct or indirect holding, in fact or in law, of decision-making powers in the legal entity concerned.
      However the following relationships between legal entities shall not in themselves be deemed to constitute controlling
      relationships:
         (a) the same public investment corporation, institutional investor or venture-capital company has a direct or
             indirect holding of more than 50% of the nominal value of the issued share capital or a majority of voting
             rights of the shareholders or associates;
         (b) the legal entities concerned are owned or supervised by the same public body.

21 For the definition, see Article 2.1(3) of the Rules for Participation Regulation No 1290/2013: ‘associated country’
   means a third country which is party to an international agreement with the Union, as identified in Article 7 of Horizon
   2020 Framework Programme Regulation No 1291/2013. Article 7 sets out the conditions for association of non-EU
   countries to Horizon 2020.

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26.1 Ownership by the beneficiary that generates the results

Results are owned by the beneficiary that generates them.

‘Results’ means any (tangible or intangible) output of the action such as data, knowledge or
information — whatever its form or nature, whether it can be protected or not — that is generated in
the action, as well as any rights attached to it, including intellectual property rights.

26.2 Joint ownership by several beneficiaries

Two or more beneficiaries own results jointly if:

   (a) they have jointly generated them and

   (b) it is not possible to:

          (i) establish the respective contribution of each beneficiary, or

         (ii) separate them for the purpose of applying for, obtaining or maintaining their protection
              (see Article 27).

The joint owners must agree (in writing) on the allocation and terms of exercise of their joint ownership
(‘joint ownership agreement’), to ensure compliance with their obligations under this Agreement.

Unless otherwise agreed in the joint ownership agreement, each joint owner may grant non-exclusive
licences to third parties to exploit jointly-owned results (without any right to sub-license), if the other
joint owners are given:

   (a) at least 45 days advance notice and

   (b) fair and reasonable compensation.

Once the results have been generated, joint owners may agree (in writing) to apply another regime
than joint ownership (such as, for instance, transfer to a single owner (see Article 30) with access
rights for the others).

26.3 Rights of third parties (including personnel)

If third parties (including personnel) may claim rights to the results, the beneficiary concerned must
ensure that it complies with its obligations under the Agreement.

If a third party generates results, the beneficiary concerned must obtain all necessary rights (transfer,
licences or other) from the third party, in order to be able to respect its obligations as if those results
were generated by the beneficiary itself.

If obtaining the rights is impossible, the beneficiary must refrain from using the third party to generate
the results.

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26.4 JU ownership, to protect results

26.4.1 The JU may — with the consent of the beneficiary concerned — assume ownership of results
to protect them, if a beneficiary intends — up to four years after the period set out in Article 3 — to
disseminate its results without protecting them, except in any of the following cases:

   (a) the lack of protection is because protecting the results is not possible, reasonable or justified
        (given the circumstances);

   (b) the lack of protection is because there is a lack of potential for commercial or industrial
        exploitation, or

   (c) the beneficiary intends to transfer the results to another beneficiary or third party established
        in an EU Member State or associated country, which will protect them.

Before the results are disseminated and unless any of the cases above under Points (a), (b) or (c)
applies, the beneficiary must formally notify the JU and at the same time inform it of any reasons for
refusing consent. The beneficiary may refuse consent only if it can show that its legitimate interests
would suffer significant harm.

If the JU decides to assume ownership, it will formally notify the beneficiary concerned within 45
days of receiving notification.

No dissemination relating to these results may before the end of this period or, if the JU takes a positive
decision, until it has taken the necessary steps to protect the results.

26.4.2 The JU may — with the consent of the beneficiary concerned — assume ownership of results
to protect them, if a beneficiary intends — up to four years after the period set out in Article 3 — to
stop protecting them or not to seek an extension of protection, except in any of the following cases:

   (a) the protection is stopped because of a lack of potential for commercial or industrial exploitation;

   (b) an extension would not be justified given the circumstances.

A beneficiary that intends to stop protecting results or not seek an extension must — unless any of
the cases above under Points (a) or (b) applies — formally notify the JU at least 60 days before the
protection lapses or its extension is no longer possible and at the same time inform it of any reasons for
refusing consent. The beneficiary may refuse consent only if it can show that its legitimate interests
would suffer significant harm.

If the JU decides to assume ownership, it will formally notify the beneficiary concerned within 45
days of receiving notification.

26.5 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such breaches may also lead to the any of the other measures described in Chapter 6.

ARTICLE 27 — PROTECTION OF RESULTS — VISIBILITY OF SUPPORT

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27.1 Obligation to protect the results

Each beneficiary must examine the possibility of protecting its results and must adequately protect
them — for an appropriate period and with appropriate territorial coverage — if:

   (a) the results can reasonably be expected to be commercially or industrially exploited and

   (b) protecting them is possible, reasonable and justified (given the circumstances).

When deciding on protection, the beneficiary must consider its own legitimate interests and the
legitimate interests (especially commercial) of the other beneficiaries.

27.2 JU ownership, to protect the results

If a beneficiary intends not to protect its results, to stop protecting them or not seek an extension of
protection, the JU may — under certain conditions (see Article 26.4) — assume ownership to ensure
their (continued) protection.

27.3 Information on funding from the JU and support from the EU and JU members

Applications for protection of results (including patent applications) filed by or on behalf of a
beneficiary must — unless the JU requests or agrees otherwise or unless it is impossible — include
the following:

        “The project leading to this application has received funding from the Electronic Component Systems for
        European Leadership Joint Undertaking under grant agreement No 737453. This Joint Undertaking receives
        support from the European Union’s Horizon 2020 research and innovation programme and Netherlands, Czech
        Republic, Latvia, Spain, Greece, Portugal, Belgium, Italy, France, Ireland”.

27.4 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such a breach may also lead to any of the other measures described in Chapter 6.

ARTICLE 28 — EXPLOITATION OF RESULTS

28.1 Obligation to exploit the results

Each beneficiary must — up to four years after the period set out in Article 3 — take measures aiming
to ensure ‘exploitation’ of its results (either directly or indirectly, in particular through transfer or
licensing; see Article 30) by:

   (a) using them in further research activities (outside the action);

   (b) developing, creating or marketing a product or process;

   (c) creating and providing a service, or

   (d) using them in standardisation activities.

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This does not change the security obligations in Article 37, which still apply.

28.2 Results that could contribute to European or international standards — Information on
   funding from the JU and support from the EU and JU members

If results are incorporated in a standard, the beneficiary concerned must — unless the JU requests or
agrees otherwise or unless it is impossible — ask the standardisation body to include the following
statement in (information related to) the standard:

        “Results incorporated in this standard received funding from the Electronic Component Systems for European
        Leadership Joint Undertaking under grant agreement No 737453. This Joint Undertaking receives support from
        the European Union’s Horizon 2020 research and innovation programme and Netherlands, Czech Republic,
        Latvia, Spain, Greece, Portugal, Belgium, Italy, France, Ireland”.

28.3 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced in
accordance with Article 43.

Such a breach may also lead to any of the other measures described in Chapter 6.

ARTICLE 29 — DISSEMINATION OF RESULTS — OPEN ACCESS — VISIBILITY OF
   SUPPORT

29.1 Obligation to disseminate results

Unless it goes against their legitimate interests, each beneficiary must — as soon as possible —
‘disseminate’ its results by disclosing them to the public by appropriate means (other than those
resulting from protecting or exploiting the results), including in scientific publications (in any
medium).

This does not change the obligation to protect results in Article 27, the confidentiality obligations in
Article 36, the security obligations in Article 37 or the obligations to protect personal data in Article 39,
all of which still apply.

A beneficiary that intends to disseminate its results must give advance notice to the other beneficiaries
of — unless agreed otherwise — at least 45 days, together with sufficient information on the results
it will disseminate.

Any other beneficiary may object within — unless agreed otherwise — 30 days of receiving
notification, if it can show that its legitimate interests in relation to the results or background would
be significantly harmed. In such cases, the dissemination may not take place unless appropriate steps
are taken to safeguard these legitimate interests.

If a beneficiary intends not to protect its results, it may — under certain conditions (see Article 26.4.1)
— need to formally notify the JU before dissemination takes place.

29.2 Open access to scientific publications

Each beneficiary must ensure open access (free of charge online access for any user) to all
peer-reviewed scientific publications relating to its results.

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In particular, it must:

   (a) as soon as possible and at the latest on publication, deposit a machine-readable electronic
        copy of the published version or final peer-reviewed manuscript accepted for publication in a
        repository for scientific publications;

        Moreover, the beneficiary must aim to deposit at the same time the research data needed to
        validate the results presented in the deposited scientific publications.

   (b) ensure open access to the deposited publication — via the repository — at the latest:

          (i) on publication, if an electronic version is available for free via the publisher, or

         (ii) within six months of publication (twelve months for publications in the social sciences
              and humanities) in any other case.

   (c) ensure open access — via the repository — to the bibliographic metadata that identify the
        deposited publication.

        The bibliographic metadata must be in a standard format and must include all of the following:

           - the terms “ECSEL”, “European Union (EU)” and “Horizon 2020”;

           - the name of the action, acronym and grant number;

           - the publication date, and length of embargo period if applicable, and

           - a persistent identifier.

29.3 Open access to research data

Not applicable

29.4 Information on funding from the JU and support from the EU and JU members —
   Obligation and right to use the JU logo and the EU emblem

Unless the JU requests or agrees otherwise or unless it is impossible, any dissemination of results (in
any form, including electronic) must:

   (a) display the JU logo;

   (b) display the EU emblem and

   (c) include the following text:

        “This project has received funding from the Electronic Component Systems for European Leadership Joint
        Undertaking under grant agreement No 737453. This Joint Undertaking receives support from the European
        Union’s Horizon 2020 research and innovation programme and Netherlands, Czech Republic, Latvia, Spain,
        Greece, Portugal, Belgium, Italy, France, Ireland” .

When displayed together with another logo, the JU logo and the EU emblem must have appropriate
prominence.

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For the purposes of their obligations under this Article, the beneficiaries may use the JU logo and the
EU emblem without first obtaining approval from the JU or the Commission.

This does not however give them the right to exclusive use.

Moreover, they may not appropriate the JU logo or the EU emblem or any similar trademark or logo,
either by registration or by any other means.

29.5 Disclaimer excluding JU responsibility

Any dissemination of results must indicate that it reflects only the author's view and that the JU is not
responsible for any use that may be made of the information it contains.

29.6 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such a breach may also lead to any of the other measures described in Chapter 6.

ARTICLE 30 — TRANSFER AND LICENSING OF RESULTS

30.1 Transfer of ownership

Each beneficiary may transfer ownership of its results.

It must however ensure that its obligations under Articles 26.2, 26.4, 27, 28, 29, 30 and 31 also apply
to the new owner and that this owner has the obligation to pass them on in any subsequent transfer.

This does not change the security obligations in Article 37, which still apply.

Unless agreed otherwise (in writing) for specifically-identified third parties or unless impossible under
applicable EU and national laws on mergers and acquisitions, a beneficiary that intends to transfer
ownership of results must give at least 45 days advance notice (or less if agreed in writing) to the
other beneficiaries that still have (or still may request) access rights to the results. This notification
must include sufficient information on the new owner to enable any beneficiary concerned to assess
the effects on its access rights.

Unless agreed otherwise (in writing) for specifically-identified third parties, any other beneficiary
may object within 30 days of receiving notification (or less if agreed in writing), if it can show that
the transfer would adversely affect its access rights. In this case, the transfer may not take place until
agreement has been reached between the beneficiaries concerned.

30.2 Granting licenses

Each beneficiary may grant licences to its results (or otherwise give the right to exploit them), if:

   (a) this does not impede the rights under Article 31 and

   (b) not applicable.

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In addition to Points (a) and (b), exclusive licences for results may be granted only if all the other
beneficiaries concerned have waived their access rights (see Article 31.1).

This does not change the dissemination obligations in Article 29 or security obligations in Article 37,
which still apply.

30.3 JU right to object to transfers or licensing

Not applicable

30.4 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such a breach may also lead to any of the other measures described in Chapter 6.

ARTICLE 31 — ACCESS RIGHTS TO RESULTS

31.1 Exercise of access rights — Waiving of access rights — No sub-licensing

The conditions set out in Article 25.1 apply.

The obligations set out in this Article do not change the security obligations in Article 37, which still
apply.

31.2 Access rights for other beneficiaries, for implementing their own tasks under the action

The beneficiaries must give each other access — on a royalty-free basis — to results needed for
implementing their own tasks under the action.

31.3 Access rights for other beneficiaries, for exploiting their own results

The beneficiaries must give each other — under fair and reasonable conditions (see Article 25.3) —
access to results needed for exploiting their own results.

Requests for access may be made — unless agreed otherwise — up to one year after the period set
out in Article 3.

31.4 Access rights of affiliated entities

Unless agreed otherwise in the consortium agreement, access to results must also be given — under
fair and reasonable conditions (Article 25.3) — to affiliated entities established in an EU Member
State or associated country, if this is needed for those entities to exploit the results generated by the
beneficiaries to which they are affiliated.

Unless agreed otherwise (see above; Article 31.1), the affiliated entity concerned must make any such
request directly to the beneficiary that owns the results.

Requests for access may be made — unless agreed otherwise — up to one year after the period set
out in Article 3.

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31.5 Access rights for the JU, EU institutions, bodies, offices or agencies and EU Member
   States

The beneficiaries must give access to their results — on a royalty-free basis — to EU institutions,
bodies, offices or agencies, for developing, implementing or monitoring EU policies or programmes.

Such access rights are limited to non-commercial and non-competitive use.

This does not change the right to use any material, document or information received from the
beneficiaries for communication and publicising activities (see Article 38.2).

31.6 Access rights for third parties

Not applicable

31.7 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

SECTION 4 OTHER RIGHTS AND OBLIGATIONS

ARTICLE 32 — RECRUITMENT AND WORKING CONDITIONS FOR RESEARCHERS

32.1 Obligation to take measures to implement the European Charter for Researchers and
   Code of Conduct for the Recruitment of Researchers

The beneficiaries must take all measures to implement the principles set out in the Commission
Recommendation on the European Charter for Researchers and the Code of Conduct for the
Recruitment of Researchers23, in particular regarding:

   - working conditions;

   - transparent recruitment processes based on merit, and

   - career development.

The beneficiaries must ensure that researchers and third parties involved in the action are aware of
them.

32.2 Consequences of non-compliance

If a beneficiary breaches its obligations under this Article, the JU may apply any of the measures
described in Chapter 6.

ARTICLE 33 — GENDER EQUALITY

23 Commission Recommendation 2005/251/EC of 11 March 2005 on the European Charter for Researchers and on a Code
   of Conduct for the Recruitment of Researchers (OJ L 75, 22.3.2005, p. 67).

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33.1 Obligation to aim for gender equality

The beneficiaries must take all measures to promote equal opportunities between men and women in
the implementation of the action. They must aim, to the extent possible, for a gender balance at all
levels of personnel assigned to the action, including at supervisory and managerial level.

33.2 Consequences of non-compliance

If a beneficiary breaches its obligations under this Article, the JU may apply any of the measures
described in Chapter 6.

ARTICLE 34 — ETHICS

34.1 Obligation to comply with ethical principles

The beneficiaries must carry out the action in compliance with:

   (a) ethical principles (including the highest standards of research integrity — as set out, for
        instance, in the European Code of Conduct for Research Integrity24 — and including, in
        particular, avoiding fabrication, falsification, plagiarism or other research misconduct) and

   (b) applicable international, EU and national law.

Funding will not be granted for activities carried out outside the EU if they are prohibited in all
Member States.

The beneficiaries must ensure that the activities under the action have an exclusive focus on civil
applications.

The beneficiaries must ensure that the activities under the action do not:

   (a) aim at human cloning for reproductive purposes;

   (b) intend to modify the genetic heritage of human beings which could make such changes heritable
        (with the exception of research relating to cancer treatment of the gonads, which may be
        financed), or

   (c) intend to create human embryos solely for the purpose of research or for the purpose of stem
        cell procurement, including by means of somatic cell nuclear transfer.

34.2 Activities raising ethical issues

Activities raising ethical issues must comply with the ‘ethics requirements’ set out in Annex 1.

Before the beginning of an activity raising an ethical issue, the coordinator must submit (see Article 52)
to the JU copy of:

24 The European Code of Conduct for Research Integrity of ALLEA (All European Academies) and ESF (European
   Science Foundation) of March 2011.
   http://ec.europa.eu/research/participants/data/ref/h2020/other/hi/h2020-ethics_code-of-conduct_en.pdf

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   (a) any ethics committee opinion required under national law and

   (b) any notification or authorisation for activities raising ethical issues required under national law.

If these documents are not in English, the coordinator must also submit an English summary of the
submitted opinions, notifications and authorisations (containing, if available, the conclusions of the
committee or authority concerned).

If these documents are specifically requested for the action, the request must contain an explicit
reference to the action title. The coordinator must submit a declaration by each beneficiary concerned
that all the submitted documents cover the action tasks.

34.3 Activities involving human embryos or human embryonic stem cells

Activities involving research on human embryos or human embryonic stem cells may be carried out
only if:

   - they are set out in Annex 1 or

   - the coordinator has obtained explicit approval (in writing) from the JU (see Article 52).

34.4 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43) and the Agreement or participation of the beneficiary may be terminated (see Article 50).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 35 — CONFLICT OF INTERESTS

35.1 Obligation to avoid a conflict of interests

The beneficiaries must take all measures to prevent any situation where the impartial and objective
implementation of the action is compromised for reasons involving economic interest, political or
national affinity, family or emotional ties or any other shared interest (‘conflict of interests’).

They must formally notify to the JU without delay any situation constituting or likely to lead to a
conflict of interests and immediately take all the necessary steps to rectify this situation.

The JU may verify that the measures taken are appropriate and may require additional measures to
be taken by a specified deadline.

35.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43) and the Agreement or participation of the beneficiary may be terminated (see Article 50).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 36 — CONFIDENTIALITY

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36.1 General obligation to maintain confidentiality

During implementation of the action and for four years after the period set out in Article 3, the
parties must keep confidential any data, documents or other material (in any form) that is identified
as confidential at the time it is disclosed (‘confidential information’).

If a beneficiary requests, the JU may agree to keep such information confidential for an additional
period beyond the initial four years.

If information has been identified as confidential only orally, it will be considered to be confidential
only if this is confirmed in writing within 15 days of the oral disclosure.

Unless otherwise agreed between the parties, they may use confidential information only to implement
the Agreement.

The beneficiaries may disclose confidential information to their personnel or third parties involved
in the action only if they:

   (a) need to know to implement the Agreement and

   (b) are bound by an obligation of confidentiality.

This does not change the security obligations in Article 37, which still apply.

The JU may disclose confidential information to its staff, other EU institutions and bodies or third
parties, if:

   (a) this is necessary to implement the Agreement or safeguard the EU's or JU's financial interests
        and

   (b) the recipients of the information are bound by an obligation of confidentiality.

The confidentiality obligations no longer apply if:

   (a) the disclosing party agrees to release the other party;

   (b) the information was already known by the recipient or is given to him without obligation of
        confidentiality by a third party that was not bound by any obligation of confidentiality;

   (c) the recipient proves that the information was developed without the use of confidential
        information;

   (d) the information becomes generally and publicly available, without breaching any
        confidentiality obligation, or

   (e) the disclosure of the information is required by EU or national law.

36.2 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

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ARTICLE 37 — SECURITY-RELATED OBLIGATIONS

37.1 Results with a security recommendation

Not applicable

37.2 Classified results

Not applicable

37.3 Activities involving dual-use goods or dangerous materials and substances

Not applicable

37.4 Consequences of non-compliance

Not applicable

ARTICLE 38 — PROMOTING THE ACTION — VISIBILITY OF SUPPORT

38.1 Communication activities by beneficiaries
38.1.1 Obligation to promote the action and its results

The beneficiaries must promote the action and its results, by providing targeted information to multiple
audiences (including the media and the public) in a strategic and effective manner.

This does not change the dissemination obligations in Article 29, the confidentiality obligations in
Article 36 or the security obligations in Article 37, all of which still apply.

Before engaging in a communication activity expected to have a major media impact, the beneficiaries
must inform the JU (see Article 52).
38.1.2 Information on funding from the JU and support from the EU and JU members —
Obligation and right to use the JU logo and the EU emblem

Unless the JU requests or agrees otherwise or unless it is impossible, any communication activity
related to the action (including in electronic form, via social media, etc.) and any infrastructure,
equipment and major results funded by the grant must:

   (a) display the JU logo;

   (b) display the EU emblem and

   (c) include the following text:

         For communication activities: “This project has received funding from the ECSEL Joint Undertaking under
         grant agreement No 737453. This Joint Undertaking receives support from the European Union’s Horizon
         2020 research and innovation programme and Netherlands, Czech Republic, Latvia, Spain, Greece, Portugal,
         Belgium, Italy, France, Ireland” .

         For infrastructure, equipment and major results: “This [infrastructure][equipment][insert type of result] is
         part of a project that has received funding from the ECSEL Joint Undertaking under grant agreement No

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         737453. This Joint Undertaking receives support from the European Union’s Horizon 2020 research and
         innovation programme and Netherlands, Czech Republic, Latvia, Spain, Greece, Portugal, Belgium, Italy,
         France, Ireland” .

When displayed together with another logo, the JU logo and the EU emblem must have appropriate
prominence.

For the purposes of their obligations under this Article, the beneficiaries may use the JU logo and the
EU emblem without first obtaining approval from the JU or the Commission.

This does not, however, give them the right to exclusive use.

Moreover, they may not appropriate the JU logo or the EU emblem or any similar trademark or logo,
either by registration or by any other means.

38.1.3 Disclaimer excluding JU responsibility

Any communication activity related to the action must indicate that it reflects only the author's view
and that the JU is not responsible for any use that may be made of the information it contains.

38.2 Communication activities by the JU

38.2.1 Right to use beneficiaries’ materials, documents or information

The JU may use, for its communication and publicising activities, information relating to the action,
documents notably summaries for publication and public deliverables as well as any other material,
such as pictures or audio-visual material that it receives from any beneficiary (including in electronic
form).

This does not change the confidentiality obligations in Article 36 and the security obligations in
Article 37, all of which still apply.

However, if the JU’s use of these materials, documents or information would risk compromising
legitimate interests, the beneficiary concerned may request the JU not to use it (see Article 52).

The right to use a beneficiary’s materials, documents and information includes:

   (a) use for its own purposes (in particular, making them available to persons working for the JU
        or any other EU institution, body, office or agency or body or institutions in EU Member States;
        and copying or reproducing them in whole or in part, in unlimited numbers);

   (b) distribution to the public (in particular, publication as hard copies and in electronic or digital
        format, publication on the internet, as a downloadable or non-downloadable file, broadcasting
        by any channel, public display or presentation, communicating through press information
        services, or inclusion in widely accessible databases or indexes);

   (c) editing or redrafting for communication and publicising activities (including shortening,
        summarising, inserting other elements (such as meta-data, legends, other graphic, visual, audio
        or text elements), extracting parts (e.g. audio or video files), dividing into parts, use in a
        compilation);

   (d) translation;

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   (e) giving access in response to individual requests under Regulation No 1049/200125, without
        the right to reproduce or exploit;

   (f) storage in paper, electronic or other form;

   (g) archiving, in line with applicable document-management rules, and

   (h) the right to authorise third parties to act on its behalf or sub-license the modes of use set out
        in Points (b),(c),(d) and (f) to third parties if needed for the communication and publicising
        activities of the JU.

If the right of use is subject to rights of a third party (including personnel of the beneficiary), the
beneficiary must ensure that it complies with its obligations under this Agreement (in particular, by
obtaining the necessary approval from the third parties concerned).

Where applicable (and if provided by the beneficiaries), the JU will insert the following information:

        “© – [year] – [name of the copyright owner]. All rights reserved. Licensed to the ECSEL Joint Undertaking
        under conditions.”

38.3 Consequences of non-compliance

If a beneficiary breaches any of its obligations under this Article, the grant may be reduced (see
Article 43).

Such breaches may also lead to any of the other measures described in Chapter 6.

ARTICLE 39 — PROCESSING OF PERSONAL DATA

39.1 Processing of personal data by the JU and the Commission

Any personal data under the Agreement will be processed by the JU or the Commission under
Regulation No 45/200126 and according to the ‘notifications of the processing operations’ to the Data
Protection Officer (DPO) of the JU or the Commission (publicly accessible in the DPO register).

Such data will be processed by the ‘data controller’ of the JU or the Commission for the purposes
of implementing, managing and monitoring the Agreement or protecting the financial interests of the
JU, EU or Euratom (including checks, reviews, audits and investigations; see Article 22).

The persons whose personal data are processed have the right to access and correct their own personal
data. For this purpose, they must send any queries about the processing of their personal data to the
data controller, via the contact point indicated in the ‘privacy statement’ that are published on the JU
and the Commission websites.

They also have the right to have recourse at any time to the European Data Protection Supervisor
(EDPS).

25 Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access
   to European Parliament, Council and Commission documents, OJ L 145, 31.5.2001, p. 43.

26 Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection
   of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free
   movement of such data (OJ L 8, 12.01.2001, p. 1).

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39.2 Processing of personal data by the beneficiaries

The beneficiaries must process personal data under the Agreement in compliance with applicable EU
and national law on data protection (including authorisations or notification requirements).

The beneficiaries may grant their personnel access only to data that is strictly necessary for
implementing, managing and monitoring the Agreement.

The beneficiaries must inform the personnel whose personal data are collected and processed by the
JU or the Commission. For this purpose, they must provide them with the privacy statement (see
above), before transmitting their data to the JU or the Commission.

39.3 Consequences of non-compliance

If a beneficiary breaches any of its obligations under Article 39.2, the JU may apply any of the
measures described in Chapter 6.

ARTICLE 40 — ASSIGNMENTS OF CLAIMS FOR PAYMENT AGAINST THE JU

The beneficiaries may not assign any of their claims for payment against the JU to any third party,
except if approved by the JU on the basis of a reasoned, written request by the coordinator (on behalf
of the beneficiary concerned).

If the JU has not accepted the assignment or the terms of it are not observed, the assignment will
have no effect on it.

In no circumstances will an assignment release the beneficiaries from their obligations towards the JU.

CHAPTER 5 DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES —
   RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP
   WITH PARTNERS OF A JOINT ACTION

ARTICLE 41 — DIVISION OF BENEFICIARIES’ ROLES AND RESPONSIBILITIES —
   RELATIONSHIP WITH COMPLEMENTARY BENEFICIARIES — RELATIONSHIP
   WITH PARTNERS OF A JOINT ACTION

41.1 Roles and responsibilities towards the JU

The beneficiaries have full responsibility for implementing the action and complying with the
Agreement.

The beneficiaries are jointly and severally liable for the technical implementation of the action as
described in Annex 1. If a beneficiary fails to implement its part of the action, the other beneficiaries
become responsible for implementing this part (without being entitled to any additional JU funding
for doing so), unless the JU expressly relieves them of this obligation.

The financial responsibility of each beneficiary is governed by Articles 44, 45 and 46.

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41.2 Internal division of roles and responsibilities

The internal roles and responsibilities of the beneficiaries are divided as follows:

(a) Each beneficiary must:

      (i) keep information stored in the 'Beneficiary Register' (via the electronic exchange system) up
          to date (see Article 17);

     (ii) inform the coordinator immediately of any events or circumstances likely to affect
          significantly or delay the implementation of the action (see Article 17);

     (iii) submit to the coordinator in good time:

          - individual financial statements for itself and, if required, certificates on the financial
               statements (see Article 20);

          - the data needed to draw up the technical reports (see Article 20);

          - ethics committee opinions and notifications or authorisations for activities raising ethical
               issues (see Article 34);

          - any other documents or information required by the JU under the Agreement, unless the
               Agreement requires the beneficiary to submit this information directly to the JU.

(b) The coordinator must:

      (i) monitor that the action is implemented properly (see Article 7);

     (ii) act as the intermediary for all communications between the beneficiaries and the JU (in
          particular, providing the JU with the information described in Article 17), unless the
          Agreement specifies otherwise;

     (iii) request and review any documents or information required by the JU and verify their
          completeness and correctness before passing them on to the JU;

     (iv) submit the deliverables and reports to the JU (see Articles 19 and 20);

      (v) ensure that all payments are made to the other beneficiaries without unjustified delay (see
          Article 21);

     (vi) inform the JU of the amounts paid to each beneficiary, when required under the Agreement
          (see Articles 44 and 50) or requested by the JU.

    The coordinator may not delegate the above-mentioned tasks to any other beneficiary or
    subcontract them to any third party.

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41.3 Internal arrangements between beneficiaries — Consortium agreement
The beneficiaries must have internal arrangements regarding their operation and co-ordination to
ensure that the action is implemented properly. These internal arrangements must be set out in a
written ‘consortium agreement’ between the beneficiaries, which may cover:

   - internal organisation of the consortium;
   - management of access to the electronic exchange system;
   - distribution of JU funding;
   - additional rules on rights and obligations related to background and results (including whether

        access rights remain or not, if a beneficiary is in breach of its obligations) (see Section 3 of
        Chapter 4);
   - settlement of internal disputes;
   - liability, indemnification and confidentiality arrangements between the beneficiaries.
The consortium agreement must not contain any provision contrary to the Agreement.
41.4 Relationship with complementary beneficiaries — Collaboration agreement
Not applicable
41.5 Relationship with partners of a joint action — Coordination agreement
Not applicable

CHAPTER 6 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY
   — PENALTIES — DAMAGES — SUSPENSION — TERMINATION — FORCE
   MAJEURE

SECTION 1 REJECTION OF COSTS — REDUCTION OF THE GRANT — RECOVERY
   — PENALTIES

ARTICLE 42 — REJECTION OF INELIGIBLE COSTS
42.1 Conditions
42.1.1 The JU will — at the time of an interim payment, at the payment of the balance or
afterwards — reject any costs which are ineligible (see Article 6), in particular following checks,
reviews, audits or investigations (see Article 22).
42.1.2 The rejection may also be based on the extension of findings from other grants to this grant,
under the conditions set out in Article 22.5.2.
42.2 Ineligible costs to be rejected — Calculation — Procedure
Ineligible costs will be rejected in full.

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If the JU rejects costs without reduction of the grant (see Article 43) or recovery of undue amounts
(see Article 44), it will formally notify the coordinator or beneficiary concerned the rejection of
costs, the amounts and the reasons why (if applicable, together with the notification of amounts
due; see Article 21.5). The coordinator or beneficiary concerned may — within 30 days of receiving
notification — formally notify the JU of its disagreement and the reasons why.

If the JU rejects costs with reduction of the grant or recovery of undue amounts, it will formally
notify the rejection in the ‘pre-information letter’ on reduction or recovery set out in Articles 43
and 44.

42.3 Effects

If the JU rejects costs at the time of an interim payment or the payment of the balance, it will deduct
them from the total eligible costs declared, for the action, in the periodic or final summary financial
statement (see Articles 20.3 and 20.4). It will then calculate the interim payment or payment of the
balance as set out in Articles 21.3 or 21.4.

If the JU — after an interim payment but before the payment of the balance — rejects costs
declared in a periodic summary financial statement, it will deduct them from the total eligible costs
declared, for the action, in the next periodic summary financial statement or in the final summary
financial statement. It will then calculate the interim payment or payment of the balance as set out
in Articles 21.3 or 21.4.

If the JU rejects costs after the payment of the balance, it will deduct the amount rejected from the
total eligible costs declared, by the beneficiary, in the final summary financial statement. It will then
calculate the revised final grant amount as set out in Article 5.4.

ARTICLE 43 — REDUCTION OF THE GRANT

43.1 Conditions

43.1.1 The JU may — at the payment of the balance or afterwards — reduce the maximum grant
amount (see Article 5.1), if the action has not been implemented properly as described in Annex 1 or
another obligation under the Agreement has been breached.

43.1.2 The JU may also reduce the maximum grant amount on the basis of the extension of findings
from other grants to this grant, under the conditions set out in Article 22.5.2.

43.2 Amount to be reduced — Calculation — Procedure

The amount of the reduction will be proportionate to the improper implementation of the action or
to the seriousness of the breach.

Before reduction of the grant, the JU will formally notify a ‘pre-information letter’ to the coordinator
or beneficiary concerned:

   - informing it of its intention to reduce the grant, the amount it intends to reduce and the reasons
        why and

   - inviting it to submit observations within 30 days of receiving notification

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If the JU does not receive any observations or decides to pursue reduction despite the observations
it has received, it will formally notify confirmation of the reduction (if applicable, together with the
notification of amounts due; see Article 21).

43.3 Effects

If the JU reduces the grant at the time of the payment of the balance, it will calculate the reduced grant
amount for the action and then determine the amount due as payment of the balance (see Articles 5.3.4
and 21.4).

If the JU reduces the grant after the payment of the balance, it will calculate the revised final
grant amount for the beneficiary concerned (see Article 5.4). If the revised final grant amount for
the beneficiary concerned is lower than its share of the final grant amount, the JU will recover the
difference (see Article 44).

ARTICLE 44 — RECOVERY OF UNDUE AMOUNTS

44.1 Amount to be recovered — Calculation — Procedure

The JU will — after termination of the participation of a beneficiary, at the payment of the
balance or afterwards — claim back any amount that was paid but is not due under the Agreement.

Each beneficiary’s financial responsibility in case of recovery is limited to its own debt, except for
the amount retained for the Guarantee Fund (see Article 21.4).

44.1.1 Recovery after termination of a beneficiary’s participation

If recovery takes place after termination of a beneficiary’s participation (including the coordinator),
the JU will claim back the undue amount from the beneficiary concerned, by formally notifying it a
debit note (see Article 50.2 and 50.3). This note will specify the amount to be recovered, the terms
and the date for payment.

If payment is not made by the date specified in the debit note, the JU will recover the amount:

   (a) by ‘offsetting’ it — without the beneficiary’s consent — against any amounts owed to the
        beneficiary concerned by the JU.

        In exceptional circumstances, to safeguard the EU’s or JU’s financial interests, the JU may
        offset before the payment date specified in the debit note;

   (b) Not applicable;

   (c) by taking legal action (see Article 57)

If payment is not made by the date specified in the debit note, the amount to be recovered (see above)
will be increased by late-payment interest at the rate set out in Article 21.11, from the day following
the payment date in the debit note, up to and including the date the JU receives full payment of the
amount.

Partial payments will be first credited against expenses, charges and late-payment interest and then
against the principal.

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Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive
2007/64/EC27 applies.

44.1.2 Recovery at payment of the balance

If the payment of the balance takes the form of a recovery (see Article 21.4), the JU will formally
notify a ‘pre-information letter’ to the coordinator:

   - informing it of its intention to recover, the amount due as the balance and the reasons why;

   - specifying that it intends to deduct the amount to be recovered from the amount retained for
        the Guarantee Fund;

   - requesting the coordinator to submit a report on the distribution of payments to the beneficiaries
        within 30 days of receiving notification, and

   - inviting the coordinator to submit observations within 30 days of receiving notification.

If no observations are submitted or the JU decides to pursue recovery despite the observations it has
received, it will confirm recovery (together with the notification of amounts due; see Article 21.5)
and:

   - pay the difference between the amount to be recovered and the amount retained for the
        Guarantee Fund, if the difference is positive or

   - formally notify to the coordinator a debit note for the difference between the amount to be
        recovered and the amount retained for the Guarantee Fund, if the difference is negative. This
        note will also specify the terms and the date for payment.

If the coordinator does not repay the JU by the date in the debit note and has not submitted the report
on the distribution of payments: the JU will recover the amount set out in the debit note from the
coordinator (see below).

If the coordinator does not repay the JU by the date in the debit note, but has submitted the report on
the distribution of payments: the JU will:

   (a) identify the beneficiaries for which the amount calculated as follows is negative:

     {{{{beneficiary’s costs declared in the final summary financial statement and approved by the JU multiplied

         by the reimbursement rate set out in Article 5.2 for the beneficiary concerned}

         divided by

      the JU contribution for the action calculated according to Article 5.3.1}

         multiplied by

      } the final grant amount (see Article 5.3) ,

27 Directive 2007/64/EC of the European Parliament and of the Council of 13 November 2007 on payment services in
   the internal market amending Directives 97/7/EC, 2002/65/EC, 2005/60/EC and 2006/48/EC and repealing Directive
   97/5/EC (OJ L 319, 05.12.2007, p. 1).

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         minus

     } {pre-financing and interim payments received by the beneficiary} .

   (b) formally notify to each beneficiary identified according to point (a) a debit note specifying the
        terms and date for payment. The amount of the debit note is calculated as follows:

      {{amount calculated according to point (a) for the beneficiary concerned

         divided by

         the sum of the amounts calculated according to point (a) for all the beneficiaries identified according to point
         (a)}

         multiplied by

         the amount set out in the debit note formally notified to the coordinator}.

If payment is not made by the date specified in the debit note, the JU will recover the amount:

   (a) by ‘offsetting’ it — without the beneficiary’s consent — against any amounts owed to the
        beneficiary concerned by the JU.

        In exceptional circumstances, to safeguard the EU’s or JU’s financial interests, the JU may
        offset before the payment date specified in the debit note;

   (b) by drawing on the Guarantee Fund. The JU will formally notify the beneficiary concerned
        the debit note on behalf of the Guarantee Fund and recover the amount:

           (i) not applicable;

           (ii) by taking legal action (see Article 57).

If payment is not made by the date in the debit note, the amount to be recovered (see above) will be
increased by late-payment interest at the rate set out in Article 21.11, from the day following the
payment date in the debit note, up to and including the date the JU receives full payment of the amount.

Partial payments will be first credited against expenses, charges and late-payment interest and then
against the principal.

Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive
2007/64/EC applies.
44.1.3 Recovery of amounts after payment of the balance

If, for a beneficiary, the revised final grant amount (see Article 5.4) is lower than its share of the final
grant amount, it must repay the difference to the JU.

The beneficiary’s share of the final grant amount is calculated as follows:

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  {{{beneficiary’s costs declared in the final summary financial statement and approved by the JU multiplied by

    the reimbursement rate set out in Article 5.2 for the beneficiary concerned}

    divided by

   the JU contribution for the action calculated according to Article 5.3.1}

    multiplied by

  } the final grant amount (see Article 5.3) .

If the coordinator has not distributed amounts received (see Article 21.7), the JU will also recover
these amounts.

The JU will formally notify a pre-information letter to the beneficiary concerned:

   - informing it of its intention to recover, the due amount and the reasons why and

   - inviting it to submit observations within 30 days of receiving notification.

If no observations are submitted or the JU decides to pursue recovery despite the observations it has
received, it will confirm the amount to be recovered and formally notify to the beneficiary concerned
a debit note. This note will also specify the terms and the date for payment.

If payment is not made by the date specified in the debit note, the JU will recover the amount:

   (a) by ‘offsetting’ it — without the beneficiary’s consent — against any amounts owed to the
        beneficiary concerned by the JU.

        In exceptional circumstances, to safeguard the EU’s or JU’s financial interests, the JU may
        offset before the payment date specified in the debit note;

   (b) by drawing on the Guarantee Fund. The JU will formally notify the beneficiary concerned
        the debit note on behalf of the Guarantee Fund and recover the amount:

           (i) not applicable;

           (ii) by taking legal action (see Article 57).

If payment is not made by the date in the debit note, the amount to be recovered (see above) will be
increased by late-payment interest at the rate set out in Article 21.11, from the day following the date
for payment in the debit note, up to and including the date the JU receives full payment of the amount.

Partial payments will be first credited against expenses, charges and late-payment interest and then
against the principal.

Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive
2007/64/EC applies.

ARTICLE 45 — ADMINISTRATIVE AND FINANCIAL PENALTIES

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45.1 Conditions

Under Articles 33 and 35 of the Financial Rules of the JU (read in conjunction with Articles 109 and
131(4) of the Financial Regulation No 966/2012), the JU may impose administrative and financial
penalties if a beneficiary:

   (a) has committed substantial errors, irregularities or fraud or is in serious breach of its obligations
        under the Agreement or

   (b) has made false declarations about information required under the Agreement or for the
        submission of the proposal (or has not supplied such information).

Each beneficiary is responsible for paying the financial penalties imposed on it.

Under Articles 33 and 35 of the Financial Rules of the JU (read in conjunction with Article 109(3) of
the Financial Regulation No 966/2012), the JU may — under certain conditions and limits — publish
decisions imposing administrative or financial penalties.

45.2 Duration — Amount of penalty — Calculation

Administrative penalties exclude the beneficiary from all JU contracts and grants for a maximum of
five years from the date the infringement is established by the JU.

If the beneficiary commits another infringement within five years of the date the first infringement is
established, the JU may extend the exclusion period up to 10 years.

Financial penalties will be between 2% and 10% of the maximum JU contribution indicated, for the
beneficiary concerned, in the estimated budget (see Annex 2).

If the beneficiary commits another infringement within five years of the date the first infringement is
established, the JU may increase the rate of financial penalties to between 4% and 20%.

45.3 Procedure

Before applying a penalty, the JU will formally notify the beneficiary concerned:

   - informing it of its intention to impose a penalty, its duration or amount and the reasons why and

   - inviting it to submit observations within 30 days.

If the JU does not receive any observations or decides to impose the penalty despite of observations
it has received, it will formally notify confirmation of the penalty to the beneficiary concerned and
— in case of financial penalties — deduct the penalty from the payment of the balance or formally
notify a debit note, specifying the amount to be recovered, the terms and the date for payment.

If payment is not made by the date specified in the debit note, the JU may recover the amount:

   (a) by ‘offsetting’ it — without the beneficiary’s consent — against any amounts owed to the
        beneficiary concerned by the JU.

        In exceptional circumstances, to safeguard the EU’s or JU’s financial interests, the JU may
        offset before the payment date in the debit note;

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   (b) by taking legal action (see Article 57).

If payment is not made by the date in the debit note, the amount to be recovered (see above) will be
increased by late-payment interest at the rate set out in Article 21.11, from the day following the
payment date in the debit note, up to and including the date the JU receives full payment of the amount.

Partial payments will be first credited against expenses, charges and late-payment interest and then
against the principal.

Bank charges incurred in the recovery process will be borne by the beneficiary, unless Directive
2007/64/EC applies.

SECTION 2 LIABILITY FOR DAMAGES

ARTICLE 46 — LIABILITY FOR DAMAGES

46.1 Liability of the JU

The JU cannot be held liable for any damage caused to the beneficiaries or to third parties as a
consequence of implementing the Agreement, including for gross negligence.

The JU cannot be held liable for any damage caused by any of the beneficiaries or third parties involved
in the action, as a consequence of implementing the Agreement.

46.2 Liability of the beneficiaries

46.2.1 Conditions

Except in case of force majeure (see Article 51), the beneficiaries must compensate the JU for any
damage it sustains as a result of the implementation of the action or because the action was not
implemented in full compliance with the Agreement.

Each beneficiary is responsible for paying the damages claimed from it.

46.2.2 Amount of damages - Calculation

The amount the JU can claim from a beneficiary will correspond to the damage caused by that
beneficiary.

46.2.3 Procedure

Before claiming damages, the JU will formally notify the beneficiary concerned:

   - informing it of its intention to claim damages, the amount and the reasons why and

   - inviting it to submit observations within 30 days.

If the JU does not receive any observations or decides to claim damages despite the observations it has
received, it will formally notify confirmation of the claim for damages and a debit note, specifying
the amount to be recovered, the terms and the date for payment.

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If payment is not made by the date specified in the debit note, the JU may recover the amount:

   (a) by ‘offsetting’ it — without the beneficiary’s consent — against any amounts owed to the
        beneficiary concerned by the JU.

        In exceptional circumstances, to safeguard the EU’s or JU’s financial interests, the JU may
        offset before the payment date specified in the debit note;

   (b) by taking legal action (see Article 57).

If payment is not made by the date in the debit note, the amount to be recovered (see above) will be
increased by late-payment interest at the rate set out in Article 21.11, from the day following the
payment date in the debit note, up to and including the date the JU receives full payment of the amount.

Partial payments will be first credited against expenses, charges and late-payment interest and then
against the principal.

Bank charges incurred in the recovery process will be borne by the beneficiary, unless
Directive 2007/64/EC applies.

SECTION 3 SUSPENSION AND TERMINATION

ARTICLE 47 — SUSPENSION OF PAYMENT DEADLINE

47.1 Conditions

The JU may — at any moment — suspend the payment deadline (see Article 21.2 to 21.4) if a request
for payment (see Article 20) cannot be approved because:

   (a) it does not comply with the provisions of the Agreement (see Article 20);

   (b) the technical reports or financial reports have not been submitted or are not complete or
        additional information is needed, or

   (c) there is doubt about the eligibility of the costs declared in the financial statements and additional
        checks, reviews, audits or investigations are necessary.

47.2 Procedure

The JU will formally notify the coordinator of the suspension and the reasons why.

The suspension will take effect the day notification is sent by the JU (see Article 52).

If the conditions for suspending the payment deadline are no longer met, the suspension will be lifted
— and the remaining period will resume.

If the suspension exceeds two months, the coordinator may request the JU if the suspension will
continue.

If the payment deadline has been suspended due to the non-compliance of the technical or financial
reports (see Article 20) and the revised report or statement is not submitted or was submitted but is

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also rejected, the JU may also terminate the Agreement or the participation of the beneficiary (see
Article 50.3.1(l)).

ARTICLE 48 — SUSPENSION OF PAYMENTS

48.1 Conditions

The JU may — at any moment — suspend, in whole or in part, the pre-financing payment and
interim payments for one or more beneficiaries or the payment of the balance for all beneficiaries,
if a beneficiary:

   (a) has committed or is suspected of having committed substantial errors, irregularities, fraud or
        serious breach of obligations in the award procedure or under this Agreement or

   (b) has committed — in other JU, EU or Euratom grants awarded to it under similar conditions
        — systemic or recurrent errors, irregularities, fraud or serious breach of obligations that have
        a material impact on this grant (extension of findings from other grants to this grant; see
        Article 22.5.2).

48.2 Procedure

Before suspending payments, the JU will formally notify the coordinator:

   - informing it of its intention to suspend payments and the reasons why and

   - inviting it to submit observations within 30 days of receiving notification.

If the JU does not receive observations or decides to pursue the procedure despite the observations
it has received, it will formally notify confirmation of the suspension. Otherwise, it will formally
notify that the suspension procedure is not continued.

The suspension will take effect the day the confirmation notification is sent by the JU.

If the conditions for resuming payments are met, the suspension will be lifted. The JU will formally
notify the coordinator.

During the suspension, the periodic report(s) (see Article 20.3) must not contain any individual
financial statements from the beneficiary concerned. When the JU resumes payments, the coordinator
may include them in the next periodic report.

The beneficiaries may suspend implementation of the action (see Article 49.1) or terminate the
Agreement or the participation of the beneficiary concerned (see Article 50.1 and 50.2).

ARTICLE 49 — SUSPENSION OF THE ACTION IMPLEMENTATION

49.1 Suspension of the action implementation, by the beneficiaries

49.1.1 Conditions

The beneficiaries may suspend implementation of the action or any part of it, if exceptional
circumstances — in particular force majeure (see Article 51) — make implementation impossible or
excessively difficult.

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49.1.2 Procedure

The coordinator must immediately formally notify to the JU the suspension (see Article 52), stating:

   - the reasons why and

   - the expected date of resumption.

The suspension will take effect the day this notification is received by the JU.

Once circumstances allow for implementation to resume, the coordinator must immediately formally
notify the JU and request an amendment of the Agreement to set the date on which the action will
be resumed, extend the duration of the action and make other changes necessary to adapt the action
to the new situation (see Article 55) — unless the Agreement or the participation of a beneficiary has
been terminated (see Article 50).

The suspension will be lifted with effect from the resumption date set out in the amendment. This
date may be before the date on which the amendment enters into force.

Costs incurred during suspension of the action implementation are not eligible (see Article 6).

49.2 Suspension of the action implementation, by the JU

49.2.1 Conditions

The JU may suspend implementation of the action or any part of it:

   (a) if a beneficiary has committed or is suspected of having committed substantial errors,
        irregularities, fraud or serious breach of obligations in the award procedure or under this
        Agreement;

   (b) if a beneficiary has committed — in other JU, EU or Euratom grants awarded to it under similar
        conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations
        that have a material impact on this grant (extension of findings from other grants to this
        grant; see Article 22.5.2), or

   (c) if the action is suspected of having lost its scientific or technological relevance.

49.2.2 Procedure

Before suspending implementation of the action, the JU will formally notify the coordinator:

   - informing it of its intention to suspend the implementation and the reasons why and

   - inviting it to submit observations within 30 days of receiving notification.

If the JU does not receive observations or decides to pursue the procedure despite the observations
it has received, it will formally notify confirmation of the suspension. Otherwise, it will formally
notify that the procedure is not continued.

The suspension will take effect five days after confirmation notification is received by the coordinator
(or on a later date specified in the notification).

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It will be lifted if the conditions for resuming implementation of the action are met.

The coordinator will be formally notified of the lifting and the Agreement will be amended to set the
date on which the action will be resumed, extend the duration of the action and make other changes
necessary to adapt the action to the new situation (see Article 55) — unless the Agreement has already
been terminated (see Article 50).

The suspension will be lifted with effect from the resumption date set out in the amendment. This date
may be before the date on which the amendment enters into force.

Costs incurred during suspension are not eligible (see Article 6).

The beneficiaries may not claim damages due to suspension by the JU (see Article 46).

Suspension of the action implementation does not affect the JU’s right to terminate the Agreement
or participation of a beneficiary (see Article 50), reduce the grant or recover amounts unduly paid
(see Articles 43 and 44).

ARTICLE 50 — TERMINATION OF THE AGREEMENT OR OF THE PARTICIPATION
   OF ONE OR MORE BENEFICIARIES

50.1 Termination of the Agreement by the beneficiaries

50.1.1 Conditions and procedure

The beneficiaries may terminate the Agreement.

The coordinator must formally notify termination to the JU (see Article 52), stating:

   - the reasons why and

   - the date the termination will take effect. This date must be after the notification.

If no reasons are given or if the JU considers the reasons do not justify termination, the Agreement
will be considered to have been ‘terminated improperly’.

The termination will take effect on the day specified in the notification.

50.1.2 Effects

The coordinator must — within 60 days from when termination takes effect — submit:

  (i) a periodic report (for the open reporting period until termination; see Article 20.3) and

 (ii) the final report (see Article 20.4).

If the JU does not receive the reports within the deadline (see above), only costs which are included
in an approved periodic report will be taken into account.

The JU will calculate the final grant amount (see Article 5.3) and the balance (see Article 21.4) on
the basis of the reports submitted. Only costs incurred until termination are eligible (see Article 6).
Costs relating to contracts due for execution only after termination are not eligible.

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Improper termination may lead to a reduction of the grant (see Article 43).

After termination, the beneficiaries’ obligations (in particular Articles 20, 22, 23, Section 3 of
Chapter 4, 36, 37, 38 and 40) continue to apply.

50.2 Termination of the participation of one or more beneficiaries, by the beneficiaries

50.2.1 Conditions and procedure

The participation of one or more beneficiaries may be terminated by the coordinator, on request of
the beneficiary concerned or on behalf of the other beneficiaries.

The coordinator must formally notify termination to the JU (see Article 52) and inform the beneficiary
concerned.

If the coordinator’s participation is terminated without its agreement, the formal notification must be
done by another beneficiary (acting on behalf of the other beneficiaries).

The notification must include:

   - the reasons why;

   - the opinion of the beneficiary concerned (or proof that this opinion has been requested in
        writing);

   - the date the termination takes effect. This date must be after the notification, and

   - a request for amendment (see Article 55), with a proposal for reallocation of the tasks and the
        estimated budget of the beneficiary concerned (see Annexes 1 and 2) and, if necessary, the
        addition of one or more new beneficiaries (see Article 56). If termination takes effect after the
        period set out in Article 3, no request for amendment must be included unless the beneficiary
        concerned is the coordinator. In this case, the request for amendment must propose a new
        coordinator.

If this information is not given or if the JU considers that the reasons do not justify termination, the
participation will be considered to have been terminated improperly.

The termination will take effect on the day specified in the notification.

50.2.2 Effects

The coordinator must — within 30 days from when termination takes effect — submit:

  (i) a report on the distribution of payments to the beneficiary concerned and

 (ii) if termination takes effect during the period set out in Article 3, a ‘termination report’ from the
      beneficiary concerned, for the open reporting period until termination, containing an overview of
      the progress of the work, an overview of the use of resources, the individual financial statement
      and, if applicable, the certificate on the financial statement (see Articles 20.3 and 20.4).

The information in the termination report must also be included in the periodic report for the next
reporting period (see Article 20.3).

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If the request for amendment is rejected by the JU, (because it calls into question the decision awarding
the grant or breaches the principle of equal treatment of applicants), the Agreement may be terminated
according to Article 50.3.1(c).

If the request for amendment is accepted by the JU, the Agreement is amended to introduce the
necessary changes (see Article 55).

The JU will calculate — on the basis of the periodic reports, the termination report and the report on
the distribution of payments — if the (pre-financing and interim) payments received by the beneficiary
concerned exceed the beneficiary’s JU contribution (calculated by applying the reimbursement rate(s)
to the eligible costs declared by the beneficiary and approved by the JU). Only costs incurred by
the beneficiary concerned until termination takes effect are eligible (see Article 6). Costs relating to
contracts due for execution only after termination are not eligible.

   • If the payments received exceed the amounts due:

       - if termination takes effect during the period set out in Article 3 and the request for
           amendment is accepted, the beneficiary concerned must repay to the coordinator the amount
           unduly received. The JU will formally notify the amount unduly received and request the
           beneficiary concerned to repay it to the coordinator within 30 days of receiving notification.
           If it does not repay the coordinator, the JU will draw upon the Guarantee Fund to pay the
           coordinator and then notify a debit note on behalf of the Guarantee Fund to the beneficiary
           concerned (see Article 44);

       - in all other cases (in particular if termination takes effect after the period set out in Article 3),
           the JU will formally notify a debit note to the beneficiary concerned. If payment is not made
           by the date in the debit note, the Guarantee Fund will pay to the JU the amount due and the
           JU will notify a debit note on behalf of the Guarantee Fund to the beneficiary concerned
           (see Article 44);

       - if the beneficiary concerned is the former coordinator, it must repay the new coordinator
           according to the procedure above, unless:

               - termination is after an interim payment and

               - the former coordinator has not distributed amounts received as pre-financing or
                    interim payments (see Article 21.7).

           In this case, the JU will formally notify a debit note to the former coordinator. If payment is
           not made by the date in the debit note, the Guarantee Fund will pay to the JU the amount due.
           The JU will then pay the new coordinator and notify a debit note on behalf of the Guarantee
           Fund to the former coordinator (see Article 44).

   • If the payments received do not exceed the amounts due: amounts owed to the beneficiary
       concerned will be included in the next interim or final payment.

If the JU does not receive the termination report within the deadline (see above), only costs included
in an approved periodic report will be taken into account.

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If the JU does not receive the report on the distribution of payments within the deadline (see above),
it will consider that:

   - the coordinator did not distribute any payment to the beneficiary concerned and that

   - the beneficiary concerned must not repay any amount to the coordinator.

Improper termination may lead to a reduction of the grant (see Article 43) or termination of the
Agreement (see Article 50).

After termination, the concerned beneficiary’s obligations (in particular Articles 20, 22, 23, Section 3
of Chapter 4, 36, 37, 38 and 40) continue to apply.

50.3 Termination of the Agreement or the participation of one or more beneficiaries, by the
   JU

50.3.1 Conditions

The JU may terminate the Agreement or the participation of one or more beneficiaries, if:

   (a) one or more beneficiaries do not accede to the Agreement (see Article 56);

   (b) a change to their legal, financial, technical, organisational or ownership situation is likely to
         substantially affect or delay the implementation of the action or calls into question the decision
         to award the grant;

   (c) following termination of participation for one or more beneficiaries (see above), the necessary
         changes to the Agreement would call into question the decision awarding the grant or breach
         the principle of equal treatment of applicants (see Article 55);

   (d) implementation of the action is prevented by force majeure (see Article 51) or suspended by
         the coordinator (see Article 49.1) and either:

            (i) resumption is impossible, or

           (ii) the necessary changes to the Agreement would call into question the decision awarding
                the grant or breach the principle of equal treatment of applicants;

   (e) a beneficiary is declared bankrupt, being wound up, having its affairs administered by the
         courts, has entered into an arrangement with creditors, has suspended business activities, or
         is subject to any other similar proceedings or procedures under national law;

   (f) a beneficiary (or a natural person who has the power to represent or take decisions on its
         behalf) has been found guilty of professional misconduct, proven by any means;

   (g) a beneficiary does not comply with the applicable national law on taxes and social security;

   (h) the action has lost scientific or technological relevance;

   (i) not applicable;

   (j) not applicable;

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   (k) a beneficiary (or a natural person who has the power to represent or take decisions on its
         behalf) has committed fraud, corruption, or is involved in a criminal organisation, money
         laundering or any other illegal activity affecting the EU’s or JU’s financial interests;

   (l) a beneficiary (or a natural person who has the power to represent or take decisions on its
         behalf) has — in the award procedure or under the Agreement — committed:

            (i) substantial errors, irregularities, fraud or

           (ii) serious breach of obligations, including improper implementation of the action,
                submission of false information, failure to provide required information, breach of
                ethical principles;

   (m) a beneficiary has committed — in other JU, EU or Euratom grants awarded to it under similar
         conditions — systemic or recurrent errors, irregularities, fraud or serious breach of obligations
         that have a material impact on this grant (‘extension of findings from other grants to this
         grant’).

50.3.2 Procedure

Before terminating the Agreement or participation of one or more beneficiaries, the JU will formally
notify the coordinator:

   - informing it of its intention to terminate and the reasons why and

   - inviting it, within 30 days of receiving notification, to submit observations and — in case of
        Point (l.ii) above — to inform the JU of the measures to ensure compliance with the obligations
        under the Agreement.

If the JU does not receive observations or decides to pursue the procedure despite the observations it
has received, it will formally notify to the coordinator confirmation of the termination and the date
it will take effect. Otherwise, it will formally notify that the procedure is not continued.

The termination will take effect:

   - for terminations under Points (b), (c), (e), (g), (h), (j), and (l.ii) above: on the day specified in
        the notification of the confirmation (see above);

   - for terminations under Points (a), (d), (f), (i), (k), (l.i) and (m) above: on the day after the
        notification of the confirmation is received by the coordinator.

50.3.3 Effects

   (a) for termination of the Agreement:

        The coordinator must — within 60 days from when termination takes effect — submit:

          (i) a periodic report (for the last open reporting period until termination; see Article 20.3) and

         (ii) a final report (see Article 20.4).

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        If the Agreement is terminated for breach of the obligation to submit the reports (see
        Articles 20.8 and 50.3.1(l)), the coordinator may not submit any reports after termination.

        If the JU does not receive the reports within the deadline (see above), only costs which are
        included in an approved periodic report will be taken into account.

        The JU will calculate the final grant amount (see Article 5.3) and the balance (see Article 21.4)
        on the basis of the reports submitted. Only costs incurred until termination takes effect are
        eligible (see Article 6). Costs relating to contracts due for execution only after termination are
        not eligible.

        This does not affect the JU’s right to reduce the grant (see Article 43) or to impose
        administrative and financial penalties (Article 45).

        The beneficiaries may not claim damages due to termination by the JU (see Article 46).

        After termination, the beneficiaries’ obligations (in particular Articles 20, 22, 23, Section 3 of
        Chapter 4, 36, 37, 38 and 40) continue to apply.

   (b) for termination of the participation of one or more beneficiaries:

        The coordinator must — within 60 days from when termination takes effect — submit:

          (i) a report on the distribution of payments to the beneficiary concerned;

         (ii) a request for amendment (see Article 55), with a proposal for reallocation of the tasks and
              estimated budget of the beneficiary concerned (see Annexes 1 and 2) and, if necessary,
              the addition of one or more new beneficiaries (see Article 56). If termination is notified
              after the period set out in Article 3, no request for amendment must be submitted unless
              the beneficiary concerned is the coordinator. In this case the request for amendment must
              propose a new coordinator, and

        (iii) if termination takes effect during the period set out in Article 3, a termination report
              from the beneficiary concerned, for the open reporting period until termination, containing
              an overview of the progress of the work, an overview of the use of resources, the
              individual financial statement and, if applicable, the certificate on the financial statement
              (see Article 20).

        The information in the termination report must also be included in the periodic report for the
        next reporting period (see Article 20.3).

        If the request for amendment is rejected by the JU (because it calls into question the decision
        awarding the grant or breaches the principle of equal treatment of applicants), the Agreement
        may be terminated according to Article 50.3.1(c).

        If the request for amendment is accepted by the JU, the Agreement is amended to introduce
        the necessary changes (see Article 55).

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        The JU will calculate — on the basis of the periodic reports, the termination report and the
        report on the distribution of payments — if the (pre-financing and interim) payments received
        by the beneficiary concerned exceed the beneficiary’s JU contribution (calculated by applying
        the reimbursement rate(s) to the eligible costs declared by the beneficiary and approved by
        the JU). Only costs incurred by the beneficiary concerned until termination takes effect are
        eligible (see Article 6). Costs relating to contracts due for execution only after termination are
        not eligible.

           • If the payments received exceed the amounts due:

               - if termination takes effect during the period set out in Article 3 and the request for
                    amendment is accepted, the beneficiary concerned must repay to the coordinator the
                    amount unduly received. The JU will formally notify the amount unduly received
                    and request the beneficiary concerned to repay it to the coordinator within 30 days
                    of receiving notification. If it does not repay the coordinator, the JU will draw upon
                    the Guarantee Fund to pay the coordinator and then notify a debit note on behalf of
                    the Guarantee Fund to the beneficiary concerned (see Article 44);

               - in all other cases, in particular if termination takes effect after the period set out in
                    Article 3, the JU will formally notify a debit note to the beneficiary concerned. If
                    payment is not made by the date in the debit note, the Guarantee Fund will pay to
                    the JU the amount due and the JU will notify a debit note on behalf of the Guarantee
                    Fund to the beneficiary concerned (see Article 44);

               - if the beneficiary concerned is the former coordinator, it must repay the new
                    coordinator the amount unduly received, unless:

                       - termination takes effect after an interim payment and

                       - the former coordinator has not distributed amounts received as pre-financing
                            or interim payments (see Article 21.7)

                    In this case, the JU will formally notify a debit note to the former coordinator. If
                    payment is not made by the date in the debit note, the Guarantee Fund will pay to the
                    JU the amount due. The JU will then pay the new coordinator and notify a debit note
                    on behalf of the Guarantee Fund to the former coordinator (see Article 44).

           • If the payments received do not exceed the amounts due: amounts owed to the
               beneficiary concerned will be included in the next interim or final payment.

        If the JU does not receive the termination report within the deadline (see above), only costs
        included in an approved periodic report will be taken into account.

        If the JU does not receive the report on the distribution of payments within the deadline (see
        above), it will consider that:

           - the coordinator did not distribute any payment to the beneficiary concerned, and that

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           - the beneficiary concerned must not repay any amount to the coordinator.
        After termination, the concerned beneficiary’s obligations (in particular Articles 20, 22, 23,
        Section 3 of Chapter 4, 36, 37, 38 and 40) continue to apply.

SECTION 4 FORCE MAJEURE

ARTICLE 51 — FORCE MAJEURE
‘Force majeure’ means any situation or event that:

   - prevents either party from fulfilling their obligations under the Agreement,
   - was unforeseeable, exceptional situation and beyond the parties’ control,
   - was not due to error or negligence on their part (or on the part of third parties involved in the

        action), and
   - proves to be inevitable in spite of exercising all due diligence.
The following cannot be invoked as force majeure:
   - any default of a service, defect in equipment or material or delays in making them available,

        unless they stem directly from a relevant case of force majeure,
   - labour disputes or strikes, or
   - financial difficulties.
Any situation constituting force majeure must be formally notified to the other party without delay,
stating the nature, likely duration and foreseeable effects.
The parties must immediately take all the necessary steps to limit any damage due to force majeure
and do their best to resume implementation of the action as soon as possible.
The party prevented by force majeure from fulfilling its obligations under the Agreement cannot be
considered in breach of them.

CHAPTER 7 FINAL PROVISIONS

ARTICLE 52 — COMMUNICATION BETWEEN THE PARTIES
52.1 Form and means of communication
Communication under the Agreement (information, requests, submissions, ‘formal notifications’, etc.)
must:

   - be made in writing and
   - bear the number of the Agreement.

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Until the payment of the balance: all communication must be made through the electronic exchange
system and using the forms and templates provided there.

After the payment of the balance: formal notifications must be made by registered post with proof
of delivery (‘formal notification on paper’).

Communications in the electronic exchange system must be made by persons authorised according
to the ‘Terms and Conditions of Use of the electronic exchange system’. For naming the authorised
persons, each beneficiary must have designated — before the signature of this Agreement — a ‘Legal
Entity Appointed Representative (LEAR)’. The role and tasks of the LEAR are stipulated in his/her
appointment letter (see Terms and Conditions of Use of the electronic exchange system).

If the electronic exchange system is temporarily unavailable, instructions will be given on the JU
website.

52.2 Date of communication

Communications are considered to have been made when they are sent by the sending party (i.e. on
the date and time they are sent through the electronic exchange system).

Formal notifications through the electronic exchange system are considered to have been made when
they are received by the receiving party (i.e. on the date and time of acceptance by the receiving party,
as indicated by the time stamp). A formal notification that has not been accepted within 10 days after
sending is considered to have been accepted.

Formal notifications on paper sent by registered post with proof of delivery (only after the payment
of the balance) are considered to have been made on either:

   - the delivery date registered by the postal service or

   - the deadline for collection at the post office.

If the electronic exchange system is temporarily unavailable, the sending party cannot be considered
in breach of its obligation to send a communication within a specified deadline.

52.3 Addresses for communication

The electronic exchange system must be accessed via the following URL:

   https://ec.europa.eu/research/participants/portal/desktop/en/projects/

The JU will formally notify the coordinator and beneficiaries in advance any changes to this URL.

Formal notifications on paper (only after the payment of the balance) addressed to the JU must be
sent to the following address:

   ECSEL Joint Undertaking
   B-1049 Brussels Belgium

Formal notifications on paper (only after the payment of the balance) addressed to the beneficiaries
must be sent to their legal address as specified in the 'Beneficiary Register'.

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ARTICLE 53 — INTERPRETATION OF THE AGREEMENT

53.1 Precedence of the Terms and Conditions over the Annexes

The provisions in the Terms and Conditions of the Agreement take precedence over its Annexes.

Annex 2 takes precedence over Annex 1.

53.2 Privileges and immunities

Nothing in the Agreement may be interpreted as a waiver of any privileges or immunities accorded
to the LABORATORIO IBERICO INTERNACIONAL DE NANOTECNOLOGIA by its constituent
documents or international law.

ARTICLE 54 — CALCULATION OF PERIODS, DATES AND DEADLINES

In accordance with Regulation No 1182/7128, periods expressed in days, months or years are calculated
from the moment the triggering event occurs.

The day during which that event occurs is not considered as falling within the period.

ARTICLE 55 — AMENDMENTS TO THE AGREEMENT

55.1 Conditions

The Agreement may be amended, unless the amendment entails changes to the Agreement which
would call into question the decision awarding the grant or breach the principle of equal treatment
of applicants.

Amendments may be requested by any of the parties.

55.2 Procedure

The party requesting an amendment must submit a request for amendment signed in the electronic
exchange system (see Article 52).

The coordinator submits and receives requests for amendment on behalf of the beneficiaries (see
Annex 3).

If a change of coordinator is requested without its agreement, the submission must be done by another
beneficiary (acting on behalf of the other beneficiaries).

The request for amendment must include:

   - the reasons why;

   - the appropriate supporting documents;

28 Regulation (EEC, Euratom) No 1182/71 of the Council of 3 June 1971 determining the rules applicable to periods,
   dates and time-limits (OJ L 124, 8.6.1971, p. 1).

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   - for a change of coordinator without its agreement: the opinion of the coordinator (or proof that
        this opinion has been requested in writing).

The JU may request additional information.

If the party receiving the request agrees, it must sign the amendment in the electronic exchange system
within 45 days of receiving notification (or any additional information the JU has requested). If it
does not agree, it must formally notify its disagreement within the same deadline. The deadline may
be extended, if necessary for the assessment of the request. If no notification is received within the
deadline, the request is considered to have been rejected

An amendment enters into force on the day of the signature of the receiving party.

An amendment takes effect on the date agreed by the parties or, in the absence of such an agreement,
on the date on which the amendment enters into force.

ARTICLE 56 — ACCESSION TO THE AGREEMENT

56.1 Accession of the beneficiaries mentioned in the Preamble

The other beneficiaries must accede to the Agreement by signing the Accession Form (see Annex 3) in
the electronic exchange system (see Article 52) within 30 days after its entry into force (see Article 58).

They will assume the rights and obligations under the Agreement with effect from the date of its entry
into force (see Article 58).

If a beneficiary does not accede to the Agreement within the above deadline, the coordinator must
— within 30 days — request an amendment to make any changes necessary to ensure proper
implementation of the action. This does not affect the JU’s right to terminate the Agreement (see
Article 50).

56.2 Addition of new beneficiaries

In justified cases, the beneficiaries may request the addition of a new beneficiary.

For this purpose, the coordinator must submit a request for amendment in accordance with Article 55.
It must include an Accession Form (see Annex 3) signed by the new beneficiary in the electronic
exchange system (see Article 52).

New beneficiaries must assume the rights and obligations under the Agreement with effect from the
date of their accession specified in the Accession Form (see Annex 3).

ARTICLE 57 — APPLICABLE LAW AND SETTLEMENT OF DISPUTES

57.1 Applicable law

The Agreement is governed by the applicable EU law, supplemented if necessary by the law of
Belgium.

For LABORATORIO IBERICO INTERNACIONAL DE NANOTECNOLOGIA, the Agreement is
governed by the applicable EU law, supplemented if necessary by the law of Portugal and, where

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appropriate, by the rules of the general principles governing the law of international organisations
and the rules of general international law.
57.2 Dispute settlement
If a dispute concerning the interpretation, application or validity of the Agreement cannot be settled
amicably, the General Court — or, on appeal, the Court of Justice of the European Union — has sole
jurisdiction. Such actions must be brought under Article 272 of the Treaty on the Functioning of the
EU (TFEU).
As an exception, for the following beneficiaries:

   - LABORATORIO IBERICO INTERNACIONAL DE NANOTECNOLOGIA
such disputes must — if they cannot be settled amicably — be referred to arbitration.
The Permanent Court of Arbitration Optional Rules for Arbitration Involving International
Organisations and States in force at the date of entry into force of the Agreement will apply.
The appointing authority will be the Secretary-General of the Permanent Court of Arbitration
following a written request submitted by either party.
The arbitration proceedings must take place in Brussels and the language used in the arbitral
proceedings will be English.
The arbitral award will be binding on all parties and will not be subject to appeal.
If a dispute concerns administrative or financial penalties or offsetting the beneficiaries must bring
action before the General Court — or, on appeal, the Court of Justice of the European Union — under
Article 263 TFEU.

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ARTICLE 58 — ENTRY INTO FORCE OF THE AGREEMENT

The Agreement will enter into force on the day of signature by the JU or the coordinator, depending
on which is later.

SIGNATURES                                For the JU
For the coordinator
                                          [--TGSMark#signature-service_75_210--]
[--TGSMark#signature-956554443_75_210--]

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