Exhibit 10.8
 
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CMS #: Fund: 27L0 Unit: AIPU Subunit: AIGR Approp: ECAAB7110 Function: ESCR
Object: 5781   Encumbrance #:  Grant $: 250,000  Dates: to 5/1/18  STATE OF
COLORADO  OFFICE OF ECONOMIC DEVELOPMENT AND INTERNATIONAL TRADE   Grant
Agreement  with  Evolutionary Genomics, Inc.  I TABLE OF CONTENTS 1 1. PARTIES 1
2. EFFECTIVE DATE AND NOTICE OF NONLIABILITY 1 3. RECITALS 1 4. DEFINITIONS 2 5.
TERM and EARLY TERMINATION. 3 6. STATEMENT OF WORK 3 7. PAYMENTS TO GRANTEE 3 8.
REPORTING —NOTIFICATION 4 9. GRANTEE RECORDS 5 10. CONFIDENTIAL
INFORMATION-STATE RECORDS 6 11. CONFLICTS OF INTEREST 6 12. REPRESENTATIONS AND
WARRANTIES 6 13. INSURANCE 7 14. BREACH 8 15. REMEDIES 9 16. NOTICES and
REPRESENTATIVES 10 17. GOVERNMENTAL IMMUNITY 11 18. STATEWIDE CONTRACT
MANAGEMENT SYSTEM 11 19. GENERAL PROVISIONS 12 20. COLORADO SPECIAL PROVISIONS
14 21. SIGNATURE PAGE 16 22. EXHIBIT A — STATEMENT OF WORK i 1  1. PARTIES  This
Grant Agreement (hereinafter called "Grant") is entered into by and between
Evolutionary Genomics, Inc. (hereinafter called "Grantee"), and the STATE OF
COLORADO acting by and through the Colorado Office of Economic Development and
International Trade (hereinafter called the "State" or "OEDIT").  2. EFFECTIVE
DATE AND NOTICE OF NONLIABILITY.  This Grant shall not be effective or
enforceable until it is approved and signed by the Colorado State Controller or
designee (hereinafter called the "Effective Date"). The State shall not be
liable to pay or reimburse Grantee for any performance hereunder, including, but
not limited to costs or expenses incurred, or be bound by any provision hereof
prior to the Effective Date.  3. RECITALS  A. Authority, Appropriation, And
Approval  Authority to enter into this Early Stage Capital and Retention Grant
exists in CRS §24-48.5-117, et seq., and funds have been budgeted, appropriated
and otherwise made available pursuant to the Advanced  Industries Acceleration
Grant Program and Advanced Industries Acceleration Cash Fund, and a sufficient
 
 
 

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unencumbered balance thereof remains available for payment. Required approvals,
clearance and coordination have been accomplished from and with appropriate
agencies.  B. Consideration  The Parties acknowledge that the mutual promises
and covenants contained herein and other good and valuable consideration are
sufficient and adequate to support this Grant.  C. Purpose  The purpose of the
Advanced Industries Grant Program is to accelerate economic growth through
grants that improve and expand the development of advanced industries,
facilitate the collaboration of advanced  industry staekholders, and further the
development of new advanced industry products and services in  Colorado.  D.
References  All references in this Grant to sections (whether spelled out or
using the § symbol), subsections, exhibits or other attachments, are references
to sections, subsections, exhibits or other attachments contained herein or
incorporated as a part hereof, unless otherwise noted.  4. DEFINITIONS  The
following terms as used herein shall be construed and interpreted as
follows:  A. Budget  "Budget" means the budget for the Work described in Exhibit
A.  B. Evaluation  "Evaluation" means the process of examining Grantee's Work
and rating it based on criteria established in this Grant and Exhibit A.  C.
Exhibits and other Attachments  The following are attached hereto and
incorporated by reference herein: Exhibit A (Statement of Work.  D.
Goods  "Goods" means tangible material.  E. Grant  "Grant" means this Grant, its
terms and conditions, attached exhibits, documents incorporated by reference
under the terms of this Grant, and any future modifying agreements, exhibits,
attachments or references incorporated herein pursuant to Colorado State law,
Fiscal Rules, and State Controller Policies.  F. Grant Funds  "Grant Funds"
means available funds payable by the State to Grantee pursuant to this
Grant.  G. Intellectual Property  "Intellectual Property" includes the
Inventions, Know-How, software, technical information, data, trade  secrets,
processes, technology, and designs that the Grantee conceived, made, or first
reduced to practice as a result of the performance of Work under this Grant.  H.
Intellectual Property Rights  "Intellectual Property Rights" means all past,
present, and future rights of the following types, which may exist or be created
under the laws of any jurisdiction in the world for the Intellectual Property:
(a) rights associated with works of authorship, including exclusive exploitation
rights, copyrights, moral rights, and  mask work rights; (b) trade secret
rights; (c) patent and industrial property rights; (d) trademark and trade name
rights and similar rights; (e) other proprietary rights in intellectual property
of every kind and nature; and (f) rights in or relating to registrations,
renewals, extensions, combinations, divisions, and reissues of,  and
applications for, any of the rights referred to in clauses (a) through (e) of
this sentence.  I.  Inventions  "Invention(s)" means individually and
collectively any invention, improvements or discoveries, whether or not
patentable, that the Grantee conceived, made, or first reduced to practice in
the performance of Work under this Grant.  J. Know-How  "Know-How" means
original works of authorship in an intangible medium, or fixed in a tangible
medium of expression by the Grantee which is related to the Work and the Work
Product or to the use of, or desirable   Page 2 of 16
 
 
 

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for the practice of, the Inventions, and which the Grantee conceived, made, or
first reduced to practice in the performance of Work under this Grant.  K. OEDIT
Designee  "OEDIT Designee" means the entity designated by OEDIT to manage the
Intellectual Property on behalf of the State and which (i) has a license
agreement with Grantee pursuant to CRS §24-48.5-101, et seq., and (ii) has
entered a separate agreement with OEDIT for the management of the Intellectual
Property.  L. Party or Parties  "Party" means the State or Grantee and "Parties"
means both the State and Grantee.  M. Program  "Program" means the Advanced
Industries Acceleration Grant Program that provides the funding for this
Grant.  N. Research Institution  "Research Institution" means an institution
located and operating in Colorado that is a public or private,  non-profit
institution of higher education or teaching hospital; federal laboratory;
private technology and  research center; or prive,non-profitmedical and research
center with a technology transfer office (TTO) that has been qualified by
OEDIT.  0. Review  "Review" means examining Grantee's Work to ensure that it is
adequate, accurate, correct and in accordance with the criteria established in
this Grant and Exhibit A.  P. Subcontractor  "Subcontractor" means
third-parties, if any, engaged by Grantee to aid in performance of
Grantee's  obligations pursuant to this Grant who are not employees of Grantee.
The term "Subcontractor" shall not include vendors of Goods that are incidental
to Grantee's performance of its obligations pursuant to this Grant.  Q.
Work  "Work" means the tasks and activities Grantee is required to perform to
fulfill its obligations under this Grant and Exhibit A.  R. Work Product  "Work
Product" means the tangible or intangible results of Grantee's Work, including,
but not limited to, (i) Intellectual Property or, (ii) software, research,
studies, data, photographs, negatives or other finished or unfinished documents,
drawings, models, surveys, maps, materials, or work product of any type
developed during the term of the Grant. Work Product shall not include any
Mid-term or Final Reports.  5. TERM and EARLY TERMINATION.  A. Initial Term-Work
Commencement  The Parties respective performances under this Grant shall
commence on the Effective Date. This Grant  shall terminate on June 1, 2018
unless sooner terminated or further extended as specified elsewhere herein.  6.
STATEMENT OF WORK  A. Completion  Grantee shall complete the Work and its other
obligations as described herein and in Exhibit A on or before May 1, 2018. The
State shall not be liable to compensate Grantee for any Work performed prior to
the  Effective Date or after the termination of this Grant.  B. Employees  All
persons employed by Grantee or any of its Subcontractors shall be considered
Grantee's or its  Subcontractors' employee(s), as applicable, for all purposes
hereunder and shall not be employees of the State for any purpose as a result of
this Grant.  7. PAYMENTS TO GRANTEE  The State shall, in accordance with the
provisions of this §7, pay Grantee in the following amounts and using the
methods set forth below:  A. Maximum Amount    Page 3 of 16
 
 
 

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The maximum amount of Grant Funds payable under this Grant to Grantee by the
State is $250,000, (also  known as the "Grant Award") as determined by the State
from available funds. Grantee agrees to provide any additional funds required
for the successful completion of the Work. Payments to Grantee are limited to
the unpaid obligated balance of the Grant as set forth in Exhibit A.  B.
Payment  i. Advance, Interim and Final Payments  Any advance payment allowed
under this Grant or in Exhibit A shall comply with State Fiscal Rules and be
made in accordance with the provisions of this Grant or such Exhibit. Grantee
shall initiate any payment requests by submitting invoices to the State in the
form and manner set forth and approved by the State.  ii. Interest  The State
shall fully pay each invoice within 45 days of receipt thereof if the amount
invoiced  represents performance by Grantee previously accepted by the State.
Uncontested amounts not paid by the State within 45 days may, if Grantee so
requests, bear interest on the unpaid balance beginning on the 46th day at a
rate not to exceed one percent per month until paid in full; provided, however,
that  interest shall not accrue on unpaid amounts that are subject to a good
faith dispute. Grantee shall  invoice the State separately for accrued interest
on delinquent amounts. The billing shall reference the   delinquent payment, the
number of day's interest to be paid and the interest rate.  iii. Available
Funds-Contingency-Termination  The State is prohibited by law from making fiscal
commitments beyond the term of the State's current fiscal year. Therefore,
Grantee's compensation is contingent upon the continuing availability of State
appropriations as provided in the Colorado Special Provisions, set forth below.
If federal funds are used with this Grant in whole or in part, the State's
performance hereunder is contingent upon the  continuing availability of such
funds. Payments pursuant to this Grant shall be made only from  available funds
encumbered for this Grant and the State's liability for such payments shall be
limited to the amount remaining of such encumbered funds. If State or federal
funds are not appropriated, or otherwise become unavailable to fund this Grant,
the State may immediately terminate this Grant in whole or in part without
further liability in accordance with the provisions herein.  iv. Erroneous
Payments  At the State's sole discretion, payments made to Grantee in error for
any reason, including, but not  limited to overpayments or improper payments,
and unexpended or excess funds received by Grantee, may be recovered from
Grantee by deduction from subsequent payments under this Grant or other Grants,
grants or agreements between the State and Grantee or by other appropriate
methods and  collected as a debt due to the State. Such funds shall not be paid
to any person or entity other than the State.  C. Use of Funds  Grant Funds and
Matching Funds shall be used only for eligible costs identified herein and/or in
the Work Budget listed in Exhibit A. Grantee may adjust budgeted expenditure
amounts up to 10% within each line item of said Work Budget without approval of
the State. Adjustments in excess of 10% shall be authorized by the State in an
amendment to this Grant. The State's total consideration shall not exceed the
maximum amount shown herein.  D. Matching Funds  Grantee shall provide Matching
Funds as provided in Exhibit A. Grantee shall have raised the full amount of
Matching Funds prior to the Effective Date and shall report to the State
regarding the status of such funds upon request.  Grantee must have the full
amount of Matching Funds available on or between the date the Grant Award is
publically announced by OEDIT and/or the Effective Date. Grantee can start
deploying the Matching Funds to advance the project after the Grant Award is
publically announced by OEDIT.  8. REPORTING — NOTIFICATION  Reports,
Evaluations, and Reviews required under this §8 shall be in accordance with the
procedures of and in such form as prescribed by the State and in accordance with
§19, if applicable.  A. Performance, Progress, Personnel, and Funds    Page 4 of
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Grantee shall submit a report to the State upon expiration or sooner termination
of this Grant, containing an Evaluation and Review of Grantee's performance and
the final status of Grantee's obligations hereunder. In addition, Grantee shall
comply with all reporting requirements, if any, set forth in Exhibit A.  B.
Litigation Reporting  Within 10 days after being served with any pleading in a
legal action filed with a court or administrative  agency, related to this Grant
or which may affect Grantee's ability to perform its obligations
hereunder,  Grantee shall notify the State of such action and deliver copies of
such pleadings to the State's principal  representative as identified herein. If
the State's principal representative is not then serving, such notice and copies
shall be delivered to the Executive Director of OEDIT.  C. Performance Outside
the State of Colorado and/or the United States  [Not applicable if Grant Funds
include any federal funds] Following the Effective Date, Grantee shall  provide
written notice to the State, in accordance with §16 (Notices and
Representatives), within 20 days of the earlier to occur of Grantee's decision
to perform, or its execution of an agreement with a Subgrantee to perform,
Services outside the State of Colorado and/or the United States. Such notice
shall specify the type of Services to be performed outside the State of Colorado
and/or the United States and the reason why it is necessary or advantageous to
perform such Services at such location or locations. All notices received by the
State pursuant to this §8.0 shall be posted on the Colorado Department of
Personnel & Administration's  website. Knowing failure by Grantee to provide
notice to the State under this §8.0 shall constitute a material breach of this
Grant.  D. Noncompliance  Grantee's failure to provide reports and notify the
State in a timely manner in accordance with this §8 may result in the delay of
payment of funds and/or termination as provided under this Grant.  E.
Subcontracts  Copies of any and all agreements with any Subcontractors entered
into by Grantee to perform its obligations hereunder shall be submitted to the
State or its principal representative upon request by the State. Any and all
agreements with Subcontractors entered into by Grantee related to its
performance hereunder shall  comply with all applicable federal and state laws
and shall provide that such agreements be governed by the laws of the State of
Colorado.    9. GRANTEE RECORDS  Grantee shall make, keep, maintain and allow
inspection and monitoring of the following:  A. Maintenance  A complete file of
all records, documents, communications, notes and other written materials,
electronic media files, and communications, pertaining in any manner to the Work
(including, but not limited to the operation of programs) hereunder. Grantee
shall maintain such records until the last to occur of the  following: (i) a
period of three years after the date this Grant is completed or terminated, or
(ii) final  payment is made hereunder, whichever is later, or (iii) for such
further period as may be necessary to  resolve any pending matters, or (iv) if
an audit is occurring, or Grantee has received notice that an audit is pending,
then until such audit has been completed and its findings have been resolved
(the "Record  Retention Period").  B. Inspection  Grantee shall permit the State
and any other duly authorized agent of a governmental agency to audit,  inspect,
examine, excerpt, copy and/or transcribe Grantee's records related to this Grant
during the Record Retention Period for a period of three years following
termination of this Grant or final payment hereunder, whichever is later, to
assure compliance with the terms hereof or to evaluate Grantee's
performance  hereunder. The State reserves the right to inspect the Work at all
reasonable times and places during the term of this Grant, including any
extension. If the Work fails to conform to the requirements of this Grant, the
State may require Grantee promptly to bring the Work into conformity with Grant
requirements, at  Grantee's sole expense. If the Work cannot be brought into
conformance by re-performance or other  corrective measures, the State may
require Grantee to take necessary action to ensure that future    Page 5 of 16
 
 
 

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performance conforms to Grant requirements and exercise the remedies available
under this Grant, at law or in equity in lieu of or in conjunction with such
corrective measures.  C. Monitoring  Grantee also shall permit the State, the
federal government (if applicable), and other governmental agencies having
jurisdiction, in their sole discretion, to monitor all activities conducted by
Grantee pursuant to the terms of this Grant using any reasonable procedure,
including, but not limited to: internal evaluation  procedures, examination of
program data, special analyses, on-site checking, formal audit examinations, or
any other procedures. All monitoring controlled by the State shall be performed
in a manner that shall not unduly interfere with Grantee's performance
hereunder.  D. Final Audit Report  If an audit is performed on Grantee's records
for any fiscal year covering a portion of the term of this Grant, Grantee shall
submit a copy of the final audit report to the State or its principal
representative at the address specified herein.  10. CONFIDENTIAL
INFORMATION-STATE RECORDS  Grantee shall comply with the provisions of this §10
if it becomes privy to confidential information in  connection with its
performance hereunder. Confidential information includes, but is not necessarily
limited to, state records, personnel records, and information concerning
individuals.  A. Confidentiality  Grantee shall keep all State records and
information confidential at all times and shall comply with all laws and
regulations concerning confidentiality of information. Any request or demand by
a third party for State records and information in the possession of Grantee
shall be immediately forwarded to the State's principal representative.  B.
Notification  Grantee shall notify its agent, employees, Subcontractors, and
assigns who may come into contact with State records and confidential
information that each is subject to the confidentiality requirements set forth
herein, and shall provide each with a written explanation of such requirements
before they are permitted to access such records and information.  C. Use,
Security, and Retention  Confidential information of any kind shall not be
distributed or sold to any third party or used by Grantee or its agents in any
way, except as authorized by this Grant or approved in writing by the State.
Grantee shall provide and maintain a secure environment that ensures
confidentiality of all State records and other  confidential information
wherever located. Confidential information shall not be retained in any files or
otherwise by Grantee or its agents, except as permitted in this Grant or
approved in writing by the State.  D. Disclosure-Liability  Disclosure of State
records or other confidential information by Grantee for any reason may be cause
for legal action by third parties against Grantee, the State or their respective
agents. Grantee shall indemnify, save, and hold harmless the State, its
employees and agents, against any and all claims, damages, liability and court
awards including costs, expenses, and attorney fees and related costs, incurred
as a result of any act or omission by Grantee, or its employees, agents,
Subcontractors, or assignees pursuant to this §10.  11. CONFLICTS OF
INTEREST  Grantee shall not engage in any business or personal activities or
practices or maintain any relationships which conflict in any way with the full
performance of Grantee's obligations hereunder. Grantee acknowledges that with
respect to this Grant, even the appearance of a conflict of interest is harmful
to the State's interests. Absent the State's prior written approval, Grantee
shall refrain from any practices, activities or relationships that  reasonably
appear to be in conflict with the full performance of Grantee's obligations to
the State hereunder. If a conflict or appearance exists, or if Grantee is
uncertain whether a conflict or the appearance of a conflict of  interest
exists, Grantee shall submit to the State a disclosure statement setting forth
the relevant details for the State's consideration. Failure to promptly submit a
disclosure statement or to follow the State's direction in  regard to the
apparent conflict constitutes a breach of this Grant.  12. REPRESENTATIONS AND
WARRANTIES    Page 6 of 16
 
 
 

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Grantee makes the following specific representations and warranties, each of
which was relied on by the State in entering into this Grant.  A. Standard and
Manner of Performance  Grantee shall perform its obligations hereunder in
accordance with the highest standards of care, skill and diligence in the
industry, trades or profession and in the sequence and manner set forth in this
Grant.  B. Legal Authority — Grantee and Grantees Signatory  Grantee warrants
that it possesses the legal authority to enter into this Grant and that it has
taken all actions required by its procedures, by-laws, and/or applicable laws to
exercise that authority, and to lawfully  authorize its undersigned signatory to
execute this Grant, or any part thereof, and to bind Grantee to its terms. If
requested by the State, Grantee shall provide the State with proof of Grantee's
authority to enter into this Grant within 15 days of receiving such request.  C.
Licenses, Permits, Etc.  Grantee represents and warrants that as of the
Effective Date it has, and that at all times during the term  hereof it shall
have, at its sole expense, all licenses, certifications, approvals, insurance,
permits, and other  authorization required by law to perform its obligations
hereunder. Grantee warrants that it shall maintain all necessary licenses,
certifications, approvals, insurance, permits, and other authorizations required
to  properly perform this Grant, without reimbursement by the State or other
adjustment in Grant Funds.  Additionally, all employees and agents of Grantee
performing Work under this Grant shall hold all required licenses or
certifications, if any, to perform their responsibilities. Grantee, if a foreign
corporation or other foreign entity transacting business in the State of
Colorado, further warrants that it currently has obtained and shall maintain any
applicable certificate of authority to transact business in the State of
Colorado and has designated a registered agent in Colorado to accept service of
process. Any revocation, withdrawal or non-renewal of licenses, certifications,
approvals, insurance, permits or any such similar requirements  necessary for
Grantee to properly perform the terms of this Grant shall be deemed to be a
material breach by Grantee and constitute grounds for termination of this
Grant.  13. INSURANCE  Grantee and its Subcontractors shall obtain and maintain
insurance as specified in this section at all times during the term of this
Grant. All policies evidencing the insurance coverage required hereunder shall
be issued by  insurance companies satisfactory to the State.  A. Public
Entities  If Grantee or Subcontractor is a "public entity" within the meaning of
the Colorado Governmental Immunity Act, CRS §24-10-101, et seq., as amended (the
"GIA"), then Grantee shall maintain, and shall require any Subcontractor to
maintain, at all times during the term of this Grant such liability insurance,
by commercial policy or self-insurance, as is necessary to meet its liabilities
under the GIA. Grantee shall show proof of such insurance satisfactory to the
State, if requested by the State. Grantee shall require any agreement with
Subcontractors that are public entities providing Work hereunder, to include the
insurance requirements  necessary to meet Subcontractor's liabilities under the
GIA.  B. Non-Public Entities  If Grantee or Subcontractor is not a "public
entity" within the meaning of the GIA, Grantee shall obtain and maintain, and
shall require any Subcontractor to obtain and maintain, during the term of this
Grant insurance coverage and policies meeting the same requirements set forth in
§13(C).  C. Grantee and any Subcontractors  Grantee shall obtain, and shall
require any Subcontractors, other than those that are public entities, to obtain
insurance with provisions substantially similar to the following:  i. Worker's
Compensation  Worker's Compensation Insurance as required by State statute, and
Employer's Liability Insurance covering all of Grantee and Subcontractors
employees acting within the course and scope of their employment.  ii.
Automobile Liability  Automobile Liability Insurance covering any auto
(including owned, hired and non-owned autos) with a minimum limit of $1,000,000
each accident combined single limit.   Page 7 of 16
 
 
 

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iii. Additional Insured  Grantee and the State shall be named as additional
insured on the Commercial General Liability  Insurance policy (leases and
construction Grants require additional insured coverage for completed operations
on endorsements CG 2010 11/85, CG 2037, or equivalent).  iv. Primacy of
Coverage  Coverage required of Grantee and Subcontractors shall be primary over
any insurance or selfinsurance program carried by Grantee or the State.  v.
Cancellation  The above insurance policies shall include provisions preventing
cancellation or non-renewal without at least 30 days prior notice to Grantee,
and Grantee shall forward such notice to the State in  accordance with §16
(Notices and Representatives) within seven days of Grantee's receipt of such
notice.  vi. Subrogation Waiver  All insurance policies in any way related to
this Grant and secured and maintained by Grantee or its  Subcontractors as
required herein shall include clauses stating that each carrier shall waive all
rights of recovery, under subrogation or otherwise, against Grantee or the
State, its agencies, institutions,  organizations, officers, agents, employees,
and volunteers.  D. Certificates  Grantee if not subject to §13.A. above, shall,
and shall require any Subcontractor to, provide certificates showing insurance
coverage required hereunder to the State prior to the Effective Date of this
Grant. No later than 15 days prior to the expiration date of any such coverage,
Grantee shall, and shall require any Subcontractor to, deliver to the State or
Grantee certificates of insurance evidencing renewals thereof. In addition, upon
request by the State at any other time during the term of this Grant, Grantee
shall, and shall require any Subcontractor to, within 10 days of such request,
supply to the State evidence satisfactory to the State of compliance with the
provisions of this §13.  14. BREACH  A. Defined  In addition to any breaches
specified in this section or other sections of this Grant, the failure of either
Party to perform any of its material obligations hereunder in whole or in part
or in a timely or satisfactory manner, constitutes a breach. The institution of
proceedings under any bankruptcy, insolvency, reorganization or similar law, by
or against Grantee, or the appointment of a receiver or similar officer for
Grantee or any of its property, which is not vacated or fully stayed within 20
days after the institution or occurrence thereof, shall also constitute a
breach.  B. Notice and Cure Period  In the event of a breach, notice of such
shall be given in writing by the aggrieved Party to the other Party in the
manner provided in §16. The Party notified of such breach shall have 30 days of
receipt of written notice to cure such breach (the "Cure Period"). If such
breach is not cured within 30 days of receipt of written  notice, or if a cure
cannot be completed within 30 days, or if cure of the breach has not begun
within 30  days and pursued with due diligence the State may exercise any of the
remedies set forth in §15.  Notwithstanding anything to the contrary herein, the
State, in its sole discretion, need not provide advance notice or a Cure Period
and may immediately terminate this Grant in whole or in part if
reasonably  necessary to preserve public safety or to prevent immediate public
crisis.  C. Specific Breaches by Grantee  In addition to the breaches specified
elsewhere in this contract, Grantee shall be in material breach of the contract
under the following circumstances:   i.  Relocation of Headquarters or Majority
of Employees Out-of-State  If Grantee relocates its headquarters outside of
Colorado or has less than 50% of its employees working in Colorado at any time
before the completion date or within 24 months after the completion date (§6),
then Grantee shall be in material breach of this Agreement. Grantee shall
provide written notice to OEDIT within 30 days of taking such action.    Page 8
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15. REMEDIES  If Grantee is in breach under any provision of this Grant,
provided that a breach is not necessary under §15(B), the State shall have all
of the remedies listed in this §15 in addition to all other remedies set forth
in other  sections of this Grant following the notice and Cure Period set forth
in §14(B). The State may exercise any or all of the remedies available to it, in
its sole discretion, concurrently or consecutively.  A. Termination for Cause
and/or Breach  If Grantee fails to perform any of its obligations hereunder with
such diligence as is required to ensure its completion in accordance with the
provisions of this Grant and in a timely manner, the State may notify Grantee of
such non-performance in accordance with the provisions herein. If Grantee
thereafter fails to promptly cure such non-performance within the Cure Period,
the State, at its option, may terminate this entire Grant or such part of this
Grant as to which there has been delay or a failure to properly perform.
Exercise by the State of this right shall not be deemed a breach of its
obligations hereunder. Grantee shall continue performance of this Grant to the
extent not terminated, if any.  i.  Obligations and Rights  To the extent
specified in any termination notice, Grantee shall not incur further obligations
to the State or render further performance hereunder past the effective date of
such notice. Grantee shall  complete Work not cancelled by the termination
notice and may incur obligations as are necessary to do so within this Grant's
terms, and shall complete and deliver any outstanding Mid-Term and Final
Reports. Upon termination, Grantee shall take timely, reasonable and necessary
action to protect and preserve property in the possession of Grantee in which
the State has an interest. All materials owned by the State in the possession of
Grantee shall be immediately returned to the State. Notwithstanding the
foregoing, Grantee may continue to perform tasks and activities as described
herein, including through the use of Subcontractors; provided that (a) State
shall have no obligation to reimburse  Grantee (or its Subcontractors) for such
if performed after the termination date, except as otherwise agreed to by the
parties and (b) Grantee shall notify all Subcontractors that the Grant is
terminated and the State will no longer be providing funding for the Work.  ii.
Payments  If this Grant is terminated as provided herein, the State shall
reimburse Grantee for the State's share of out-of pocket expenditures made
before the date of termination, which are directly attributable to the
uncompleted portion of Grantee's obligations hereunder less the amount of
Matching Funds provided that the sum of any and all reimbursement shall not
exceed the maximum amount of Grant Funds  payable to Grantee hereunder; that
such expenses are approved as indicated herein and in Exhibit A. The State shall
retain all other Grant Funds.  If, after termination by the State, it is
determined that Grantee was not in breach or that Grantee's action or inaction
was excusable, such termination shall be treated as a termination in the public
interest and the rights and obligations of the Parties shall be the same as if
this Grant had been terminated in the public interest, as described
herein.  iii. Damages and Withholding  Notwithstanding any other remedial action
by the State, Grantee also shall remain liable to the State for any damages
sustained by the State by virtue of any breach under this Grant by Grantee and
the State may withhold any payment to Grantee for the purpose of mitigating the
State's damages, until  such time as the exact amount of damages due to the
State from Grantee is determined. The State may withhold any amount that may be
due to Grantee as the State deems necessary to protect the State, including loss
as a result of outstanding liens or claims of former lien holders.  B. Grantee
and the State's Right to Terminate for Non-Viability  Grantee and the State may
mutually agree to terminate Grantee's performance hereunder at any time the
Parties mutually determine in writing that the Work Product will not be feasible
nor commercially viable based on results obtained. Upon such termination,
Grantee shall cease its performance hereunder and  provide prompt written notice
to OEDIT. In the event the Parties mutually terminate this Grant pursuant to
this Section, Grantee shall provide to the State any outstanding reports,
including Annual and Final Reports,    Page 9 of 16
 
 
 

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and financial documentation as required herein, and the State may withhold Grant
Funds, or Grantee shall refund Grant Funds to the State, as provided in
§15.A.ii.  C. Early Termination in the Public Interest  The State is entering
into this Grant for the purpose of carrying out the public policy of the State
of  Colorado, as determined by its Governor, General Assembly, and/or Courts. If
this Grant ceases to further the public policy of the State, the State, in its
sole discretion, may terminate this Grant in whole or in part. Exercise by the
State of this right shall not constitute a breach of the State's obligations
hereunder. This subsection shall not apply to a termination of this Grant by the
State for cause or breach by Grantee, which shall be governed by §14(A) or as
otherwise specifically provided for herein.  i. Method and Content  The State
shall notify Grantee of such termination in accordance with §16. The notice
shall specify the effective date of the termination and whether it affects all
or a portion of this Grant.  ii. Obligations and Rights  Upon receipt of a
termination notice, Grantee shall be subject to and comply with the same
obligations and rights set forth in §15(A)(i).  iii. Payments  If this Grant is
terminated by the State pursuant to this §15(B), the State shall reimburse
Grantee for the State's share of a portion of actual out-of-pocket expenses (not
otherwise reimbursed under this Grant) incurred by Grantee which are directly
attributable to the uncompleted portion of Grantee's obligations hereunder;
provided that the sum of any and all reimbursement shall not exceed the  maximum
amount payable to Grantee hereunder, and provided that such expenses are
approved as indicated herein and in Exhibit A.  D. Remedies Not Involving
Termination  The State, in its sole discretion, may, after the Cure Period,
exercise one or more of the following remedies in addition to other remedies
available to it, and shall provide Grantee notice of such exercise:  i. Suspend
Performance  Suspend Grantee's performance with respect to all or any portion of
this Grant pending necessary  corrective action as specified by the State
without entitling Grantee to an adjustment in price/cost or performance
schedule. Grantee shall promptly cease performance and incurring costs in
accordance with the State's directive and the State shall not be liable for
costs incurred by Grantee after the  suspension of performance under this
provision.  ii. Withhold Payment  Withhold payment to Grantee until corrections
in Grantee's performance are satisfactorily made and completed.  iii. Deny
Payment  Deny payment for those obligations not performed, that due to Grantee's
actions or inactions, cannot be performed or, if performed, would be of no value
to the State; provided, that any denial of payment shall be reasonably related
to the value to the State of the obligations not performed.  iv. Removal  Demand
removal from the Work of any of Grantee's employees, agents, or Subcontractors
whom the State deems incompetent, careless, insubordinate, unsuitable, or
otherwise unacceptable, or whose continued relation to this Grant is deemed to
be contrary to the public interest or not in the State's best interest.  E.
Liquidated Damages  In the event that Grantee breaches this Agreement as
specified in section 14(c), then Grantee shall pay OEDIT liquidated damages in
an amount equal to the maximum amount paid to Grantee (§7).  16. NOTICES and
REPRESENTATIVES  Each individual identified below is the principal
representative of the designating Party. All notices required to be given
hereunder shall be hand delivered with receipt required or sent by certified or
registered mail to such Party's principal representative at the address set
forth below. In addition to, but not in lieu of a hard-copy  notice, notice also
may be sent by e-mail to the e-mail addresses, if any, set forth below. Either
Party may from    Page 10 of 16
 
 
 

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time to time designate by written notice substitute addresses or persons to whom
such notices shall be sent. Unless otherwise provided herein, all notices shall
be effective upon receipt.    A. State:  Katie Woslager  Colorado Office of
Economic  Development and International Trade 1625 Broadway, Suite 2700  Denver,
CO 80202  katie.woslager state.co.us 303-892-8760  B. Grantee:  Steve
Warnecke  Evolutionary Genomics, Inc. 1801 Sunset Place, Suite C Longmont, CO
80501  303-513-3510  17. GOVERNMENTAL IMMUNITY  Notwithstanding any other
provision to the contrary, nothing herein shall constitute a waiver, express or
implied, of any of the immunities, rights, benefits, protection, or other
provisions of the Colorado Governmental  Immunity Act, CRS §24-10-101, et seq.,
as amended. Liability for claims for injuries to persons or property  arising
from the negligence of the State of Colorado, its departments, institutions,
agencies, boards, officials, and employees is controlled and limited by the
provisions of the Governmental Immunity Act and the risk  management statutes,
CRS §24-30-1501, et seq., as amended. In no event shall the State be liable to
Grantee for any lost profits or business opportunities, loss of use, business
interruption, loss of data, or any other indirect, special, incidental, or
consequential damages under any theory of liability, whether based in contract,
tort,  negligence, product liability, or otherwise.  18. STATEWIDE CONTRACT
MANAGEMENT SYSTEM  If the maximum amount payable to Grantee under this Grant is
$100,000 or greater, either on the Effective Date or at anytime thereafter, this
§19 applies.  Grantee agrees to be governed, and to abide, by the provisions of
CRS §24-102-205, §24-102-206, §24-103-601, §24-103.5-101 and §24-105-102
concerning the monitoring of vendor performance on state Grants and inclusion of
Grant performance information in a statewide Contract Management
System.  Grantee's performance shall be subject to Evaluation and Review in
accordance with the terms and conditions of this Grant, State law, including CRS
§24-103.5-101, and State Fiscal Rules, Policies and Guidance. Evaluation and
Review of Grantee's performance shall be part of the normal Grant administration
process and Grantee's performance will be systematically recorded in the
statewide Contract Management System. Areas of Evaluation and Review shall
include, but shall not be limited to quality, cost and timeliness. Collection of
information  relevant to the performance of Grantee's obligations under this
Grant shall be determined by the specific  requirements of such obligations and
shall include factors tailored to match the requirements of
Grantee's  obligations. Such performance information shall be entered into the
statewide Contract Management System at intervals established herein and a final
Evaluation, Review and Rating shall be rendered within 30 days of the end of the
Grant term. Grantee shall be notified following each performance Evaluation and
Review, and shall address or correct any identified problem in a timely manner
and maintain work progress.  Should the final performance Evaluation and Review
determine that Grantee demonstrated a gross failure to meet the performance
measures established hereunder, the Executive Director of the Colorado
Department of Personnel and Administration (Executive Director), upon request by
the OEDIT, and showing of good cause, may remove the name of the Grantee from
the Contract Management System and prohibit Grantee from bidding on future State
Grants or Contracts. Grantee may contest the final Evaluation, Review and Rating
by: (a) filing   Page 11 of 16
 
 
 

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rebuttal statements, which may result in either removal or correction of the
evaluation (CRS §24-105-102(6)), or  (b) under CRS §24-105-102(6), exercising
the debarment protest and appeal rights provided in CRS §§24-109- 106, 107, 201
or 202, which may result in the reversal of the debarment and reinstatement of
Grantee, by the Executive Director, upon a showing of good cause.   19. GENERAL
PROVISIONS  A. Assignment and Subcontracts  Grantee's rights and obligations
hereunder are personal and may not be transferred, assigned or  subcontracted
without the prior, written consent of the State, except for the Approved
Subcontractors named in Exhibit A. Any attempt at assignment, transfer, or
subcontracting without such consent shall be void. Any and all assignments and
subcontracts shall be subject to all of the terms and conditions of this
Contract. Grantee shall be solely responsible for all aspects of Subcontractor
arrangements and performance.  B. Binding Effect  Except as otherwise provided
in §19(A), all provisions herein contained, including the benefits and burdens,
shall extend to and be binding upon the Parties' respective heirs, legal
representatives, successors, and  assigns.  C. Captions  The captions and
headings in this Grant are for convenience of reference only, and shall not be
used to interpret, define, or limit its provisions.  D. Counterparts  This Grant
may be executed in multiple identical original counterparts, all of which shall
constitute one agreement.  E. Entire Understanding  This Grant represents the
complete integration of all understandings between the Parties and all
prior  representations and understandings, oral or written, are merged herein.
Prior or contemporaneous additions, deletions, or other changes hereto shall not
have any force or effect whatsoever, unless embodied herein.  F.
Indemnification-General  Grantee shall indemnify, save, and hold harmless the
State, its employees and agents, against any and all  claims, damages, liability
and court awards including costs, expenses, and attorney fees and related
costs,  incurred as a result of any act or omission by Grantee, or its
employees, agents, Subcontractors, or assignees pursuant to the terms of this
Grant; however, the provisions hereof shall not be construed or interpreted as a
waiver, express or implied, of any of the immunities, rights, benefits,
protection, or other provisions, of the Colorado Governmental Immunity Act, CRS
§24-10-101 et seq., or the Federal Tort Claims Act, 28 U.S.C. 2671 et seq., as
applicable, as now or hereafter amended.  G. Jurisdiction and Venue  All suits,
actions, or proceedings related to this Grant shall be held in the State of
Colorado and exclusive venue shall be in the City and County of Denver.  H.
Modification  i. By the Parties  Except as specifically provided in this Grant,
modifications hereof shall not be effective unless agreed to in writing by the
Parties in an amendment hereto, properly executed and approved in accordance
with applicable Colorado State law, State Fiscal Rules, and Office of the State
Controller Policies, including, but not limited to, the policy entitled
MODIFICATION OF CONTRACTS - TOOLS AND FORMS.  ii. By Operation of Law  This
Grant is subject to such modifications as may be required by changes in Federal
or Colorado State law, or their implementing regulations. Any such required
modification automatically shall be incorporated into and be part of this Grant
on the effective date of such change, as if fully set forth herein.  I. Order of
Precedence    Page 12 of 16
 
 
 

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The provisions of this Grant shall govern the relationship of the State and
Grantee. In the event of conflicts or inconsistencies between this Grant and its
exhibits and attachments including, but not limited to, those provided by
Grantee, such conflicts or inconsistencies shall be resolved by reference to the
documents in the following order of priority:  i. Colorado Special
Provisions,  ii. The provisions of the main body of this Grant, iii. Exhibit
A,  iv. Exhibit B.  J. Severability  Provided this Grant can be executed and
performance of the obligations of the Parties accomplished within its intent,
the provisions hereof are severable and any provision that is declared invalid
or becomes  inoperable for any reason shall not affect the validity of any other
provision hereof.  K. Survival of Certain Grant Terms  Notwithstanding anything
herein to the contrary, provisions of this Grant requiring continued
performance, compliance, or effect after termination hereof, shall survive such
termination and shall be enforceable by the State if Grantee fails to perform or
comply as required.  L. Taxes  The State is exempt from all federal excise taxes
under IRC Chapter 32 (No. 84-730123K) and from all  State and local government
sales and use taxes under CRS §§39-26-101 and 201 et seq. Such exemptions apply
when materials are purchased or services rendered to benefit the State; provided
however, that certain political subdivisions (e.g., City of Denver) may require
payment of sales or use taxes even though the  product or service is provided to
the State. Grantee shall be solely liable for paying such taxes as the State is
prohibited from paying for or reimbursing Grantee for them.  M. Third Party
Beneficiaries  Enforcement of this Grant and all rights and obligations
hereunder are reserved solely to the Parties, and not to any third party. Any
services or benefits which third parties receive as a result of this Grant are
incidental to the Grant, and do not create any rights for such third
parties.  N. Waiver  Waiver of any breach of a term, provision, or requirement
of this Grant, or any right or remedy hereunder, whether explicitly or by lack
of enforcement, shall not be construed or deemed as a waiver of any  subsequent
breach of such term, provision or requirement, or of any other term, provision,
or requirement.  0. Confidentiality of Grantee Records  Except as otherwise
provided herein, or except as otherwise required by law or court order, as
determined by the State in the State's reasonable discretion, the State shall
hold in strict confidence and shall not  disclose to third parties and shall
deny third parties the right to inspect or discover Grantee's records in the
possession of the State which are related to this Grant and clearly identified
by Grantee as confidential.  To the extent not prohibited by federal law, this
Grant and the performance measures and standards under CRS §24-103.5-101, if
any, are subject to public release through the Colorado Open Records Act, CRS
§24- 72-101, et seq.     THE REST OF THIS PAGE INTENTIONALLY LEFT
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20. COLORADO SPECIAL PROVISIONS  The Special Provisions apply to all Grants
except where noted in italics.  A. CONTROLLER'S APPROVAL. CRS §24-30-202
(1).  This Grant shall not be deemed valid until it has been approved by the
Colorado State Controller or designee.  B. FUND AVAILABILITY. CRS
§24-30-202(5.5).  Financial obligations of the State payable after the current
fiscal year are contingent upon funds for that purpose being appropriated,
budgeted, and otherwise made available.  C. GOVERNMENTAL IMMUNITY.  No term or
condition of this Grant shall be construed or interpreted as a waiver, express
or implied, of any of the immunities, rights, benefits, protections, or other
provisions, of the Colorado Governmental Immunity Act, CRS §24-10-101 et seq.,
or the Federal Tort Claims Act, 28 U.S.C. §§1346(b) and 2671 et seq.,
as  applicable now or hereafter amended.  D. INDEPENDENT CONTRACTOR  Grantee
shall perform its duties hereunder as an independent contractor and not as an
employee. Neither  Grantee nor any agent or employee of Grantee shall be deemed
to be an agent or employee of the State.  Grantee and its employees and agents
are not entitled to unemployment insurance or workers compensation benefits
through the State and the State shall not pay for or otherwise provide such
coverage for Grantee or any of its agents or employees. Unemployment insurance
benefits shall be available to Grantee and its  employees and agents only if
such coverage is made available by Grantee or a third party. Grantee shall pay
when due all applicable employment taxes and income taxes and local head taxes
incurred pursuant to this Grant. Grantee shall not have authorization, express
or implied, to bind the State to any Agreement, liability or understanding,
except as expressly set forth herein. Grantee shall (a) provide and keep in
force workers' compensation and unemployment compensation insurance in the
amounts required by law, (b) provide proof thereof when requested by the State,
and (c) be solely responsible for its acts and those of its employees and
agents.  E. COMPLIANCE WITH LAW.  Grantee shall strictly comply with all
applicable federal and State laws, rules, and regulations in effect or hereafter
established, including, without limitation, laws applicable to discrimination
and unfair  employment practices.  F. CHOICE OF LAW.  Colorado law, and rules
and regulations issued pursuant thereto, shall be applied in the
interpretation,  execution, and enforcement of this grant. Any provision
included or incorporated herein by reference which conflicts with said laws,
rules, and regulations shall be null and void. Any provision incorporated herein
by reference which purports to negate this or any other Special Provision in
whole or in part shall not be valid or enforceable or available in any action at
law, whether by way of complaint, defense, or otherwise. Any provision rendered
null and void by the operation of this provision shall not invalidate the
remainder of this Grant, to the extent capable of execution.  G. BINDING
ARBITRATION PROHIBITED.  The State of Colorado does not agree to binding
arbitration by any extra-judicial body or person. Any provision to the contrary
in this Agreement or incorporated herein by reference shall be null and
void.  H. SOFTWARE PIRACY PROHIBITION. Governor's Executive Order D 002
00.  State or other public funds payable under this Grant shall not be used for
the acquisition, operation, or  maintenance of computer software in violation of
federal copyright laws or applicable licensing restrictions. Grantee hereby
certifies and warrants that, during the term of this Grant and any extensions,
Grantee has and shall maintain in place appropriate systems and controls to
prevent such improper use of public funds. If the  State determines that Grantee
is in violation of this provision, the State may exercise any remedy available
at law or in equity or under this Grant, including, without limitation,
immediate termination of this Grant and any remedy consistent with federal
copyright laws or applicable licensing restrictions.  I. EMPLOYEE FINANCIAL
INTEREST. CRS §§24-18-201 and 24-50-507.    Page 14 of 16
 
 
 

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The signatories aver that to their knowledge, no employee of the State has any
personal or beneficial interest whatsoever in the service or property described
in this Grant. Grantee has no interest and shall not acquire any interest,
direct or indirect, that would conflict in any manner or degree with the
performance of  Grantee's services and Grantee shall not employ any person
having such known interests.  J. VENDOR OFFSET. CRS §§24-30-202 (1) and
24-30-202.4.  [Not Applicable to intergovernmental agreements] Subject to CRS
§24-30-202.4 (3.5), the State Controller may withhold payment under the State's
vendor offset intercept system for debts owed to State agencies for:  (a) unpaid
child support debts or child support arrearages; (b) unpaid balances of tax,
accrued interest, or  other charges specified in CRS §39-21-101, et seq.; (c)
unpaid loans due to the Student Loan Division of the Department of Higher
Education; (d) amounts required to be paid to the Unemployment
Compensation  Fund; and (e) other unpaid debts owing to the State as a result of
final agency determination or judicial  action.   K. PUBLIC CONTRACTS FOR
SERVICES. CRS §8-17.5-101.  [Not Applicable to Agreements relating to the offer,
issuance, or sale of securities, investment advisory services or fund management
services, sponsored projects, intergovernmental Agreements, or  information
technology services or products and services] Grantee certifies, warrants, and
agrees that it does not knowingly employ or contract with an illegal alien who
shall perform work under this Grant and shall confirm the employment eligibility
of all employees who are newly hired for employment in the  United States to
perform work under this Grant, through participation in the E-Verify Program or
the State program established pursuant to CRS §8-17.5-102(5)(c), Grantee shall
not knowingly employ or contract with an illegal alien to perform work under
this Grant or enter into a contract with a Subcontractor that fails to certify
to Grantee that the Subcontractor shall not knowingly employ or contract with an
illegal alien to perform work under this Grant. Grantee (a) shall not use
E-Verify Program or State program procedures to undertake pre-employment
screening of job applicants while this Grant is being performed, (b) shall
notify the Subcontractor and the contracting State agency within three days if
Grantee has actual knowledge that a Subcontractor is employing or contracting
with an illegal alien for work under this Grant, (c) shall terminate the
subcontract if a Subcontractor does not stop employing or contracting with the
illegal alien within three days of receiving the notice, and (d) shall comply
with reasonable requests made in the course of an  investigation, undertaken
pursuant to CRS §8-17.5-102(5), by the Colorado Department of Labor
and  Employment. If Grantee participates in the State program, Grantee shall
deliver to the contracting State  agency, Institution of Higher Education or
political subdivision, a written, notarized affirmation, affirming that Grantee
has examined the legal work status of such employee, and shall comply with all
of the other requirements of the State program. If Grantee fails to comply with
any requirement of this provision or CRS §8-17.5-101 et seq., the contracting
State agency, institution of higher education or political subdivision may
terminate this Grant for breach and, if so terminated, Grantee shall be liable
for damages.  L. PUBLIC CONTRACTS WITH NATURAL PERSONS. CRS
§24-76.5-101.  Grantee, if a natural person eighteen (18) years of age or older,
hereby swears and affirms under penalty of perjury that he or she (a) is a
citizen or otherwise lawfully present in the United States pursuant to federal
law, (b) shall comply with the provisions of CRS §24-76.5-101 et seq., and (c)
has produced one form of identification required by CRS §24-76.5-103 prior to
the effective date of this Grant.   SPs Effective 1/1/09     THE REST OF THIS
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21. SIGNATURE PAGE  Grant Routing Number   THE PARTIES HERETO HAVE EXECUTED THIS
GRANT   * Persons signing for Grantee hereby swear and affirm that they are
authorized to act on Grantee's behalf and acknowledge that   the State is
relying on their representations to that effect.    GRANTEE Evolutionary
Genomics, Inc. Steve Warnecke   CEO        *Signature   STATE OF COLORADO John
W. Hickenlooper, GOVERNOR Colorado Office of Economic Development
and   International Trade Fiona E. Arnold  Executive
Director         Date:  8/6/15 Date: June 14, 2015              ALL GRANTS
REQUIRE APPROVAL BY THE STATE CONTROLLER   CRS §24-30-202 requires the State
Controller to approve all State Grants. This Grant is not valid until signed and
dated below   by the State Controller or delegate. Grantee is not authorized to
begin performance until such time. If Grantee begins  performing prior thereto,
the State of Colorado is not obligated to pay Grantee for such performance or
for any goods and/or  services provided hereunder.   STATE CONTROLLER Robert
Jaros, CPA, MBA, JD     By:  Frank Tamayo, delegate     Date: 8/6/15     Page 16
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Fund: 27L0 Unit: AIPU Subunit: AIGR Approp: ECAAB7110 Function: ESCR Object:
5781   Encumbrance #:  Grant $: 250,000  Dates: to 5/1/18  22. EXHIBIT A —
STATEMENT OF WORK   STATE OF COLORADO  OFFICE OF ECONOMIC DEVELOPMENT AND
INTERNATIONAL TRADE   with  Evolutionary Genomics, Inc.   1. GENERAL DESCRIPTION
Evolutionary Genomics identifies, develops, patents and markets genes that
improve agricultural crops and allow farmers to be more productive and
profitable.   DEFINITIONS  1.1. "IF NEEDED" means include definitions if needed
for language used in the General Description of   the Grantee's Obligations.  2.
GRANTEE'S OBLIGATIONS 2.1 Develop the pest resistance in soybeans.  2.2 Develop
the sweetness genes in tomatoes.  2.3 Continue ortholog development work in
beans and cowpeas.  As a condition of this Grant, Grantee has reported
obligations as described in §5 of this Exhibit A. These obligations include but
are not limited to ongoing reporting obligations which extend beyond the end
date of the grant per in §5.4 of this Exhibit A  3. PERSONNEL 3.1. Responsible
Administrator  Grantee's performance hereunder shall be under the supervision of
Steve Warnecke, an employee or agent of Grantee, who is hereby designated as the
responsible administrator of this Grant.  3.2. Other Key Personnel  3.2.1. Key
Personnel The following people are Key Personnel for purposes of this Grant, and
shall be replaced only in accordance with §4.3 of this Exhibit A:  Dr. Erich
Veitenheimer, Key Advisor, Cooley, LLP  3.2.2.  Approved Subcontractors  The
following people or entities are the only Approved Subcontractors for purposes
of this Grant:  3.2.3.  Grantee may add or delete Approved Subcontractors only
with the State's prior, written approval, pursuant to §20.A. of the Grant and
§4.3. of this Exhibit A.  3.3. Replacement  Grantee shall immediately notify the
State if any Key Personnel cease to serve. Provided there is a good-faith reason
for the change, if Grantee wishes to replace its Key Personnel, it shall notify
the State and seek its approval. Such approval is at the State 's sole
discretion, as the State issued this Grant in reliance on Grantee's
representations regarding Key Personnel. Such notice shall specify why the
change is necessary, who the proposed replacement is, what the proposed
replacement's qualifications are, and when the change would take effect. If at
any time Key Personnel cease to serve, the State, in its sole discretion, may
direct Grantee to suspend performance of the Work until such time as
replacements are approved. All notices sent under this subsection shall be sent
in  accordance with the Notices and Representatives provisions of this
Grant.   Page i of iv
 
 
 

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4. ACCEPTANCE CRITERIA 4.1. Mid-term and Final Report(s)  Grantee shall be
responsible for completing the Work, and shall provide to the State's
Representative Mid-term and Final reports using a format required and provided
by the State and as described herein.  4.1.1.  Progress on Grantee's Obligations
outlined in §3 of this Exhibit A, including analysis of  the results and
findings from the Work.  4.1.2. An analysis of technical difficulties, errors,
and planned or recommended next steps. 4.1.3. Use of Grant and Matching Funds
according to the Grant and Work Budget in §7 of this Exhibit A, including
documentation verifying those expenditures. 4.1.4. Commercialization Advancement
Metrics including: 4.1.4.1. New business entity created 4.1.4.2. New jobs
created 4.1.4.3. Follow-on capital raised 4.1.4.4. New exports in terms of
revenue 4.1.4.5. Intellectual property development (patent filings, awards,
other) 4.1.4.6. Licenses issued on technology 4.1.4.7. New product or service
offered to end-customer 4.1.4.8. New revenue generated 4.1.4.9. Other metrics as
identified by OEDIT 4.2. Mid-Term Report Submission and Due Date(s)  Mid-term
reports cover activity from grant execution through June 30th, and are due no
later than September Is' each year until the Work completion date as noted in
§6.A. or until submission o f the Final Report. The Reports shall be delivered
to the State's representative identified in §16.A. of the Grant and in
accordance with §8.A. of the Grant. The State may withhold payment(s)
if  Reports are not submitted in accordance with this Grant Agreement.  4.3.
Final Report Submission and Due Date  The Final Report is due by the Agreement
Termination Date identified in §5 of the Grant. The Report shall be delivered to
the State's representative identified in §16.A of the Grant and in accordance
with §8.A. of the Grant.  4.4. Additional Reporting  Grantee shall cooperate
with the State in promptly supplying any additional information or data to the
State that is necessary to fulfill OEDIT's obligations under CRS §24-48.5-117,
et seq, to report to committees of the House and the Senate as needed during the
term of this Agreement.  Additional Reporting Requires follow up Reports on the
Commercialization Advancement Metrics identified in §5.1.4. of the Statement of
Work as solicited by the State, due September 1s' at years 1, 2, 3, 4 and 5
following the Statement of Work completion date identified in §6.A of the Grant
and covering results from the beginning of the grant term.  4.5. The State may
withhold payment(s) if Reports are not submitted in accordance with this
Grant   Agreement.  5. PAYMENTS Payments shall be made in accordance with the
provisions set forth in this Grant. OEDIT may transfer the Grant Award in
advance of performance only if a Fiscal Rule waiver has been granted by the
State Controller for this Grant. Grantee must request interim and final payments
by completing reports and invoice forms provided by the State.             Page
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Payment Schedule:  ESCR Phase III  Disbursement  Schedule  $25,000 Initial
Advance payment to be paid following execution of this Grant. 10% of Maximum
Amount $212,500 Interim payments must be requested by the Grantee. $12,500 Final
Payment will be made following receipt and acceptance by OEDIT of the Final
Report. 5% of the Maximum Amount. $250,000 TOTAL    6. ADMINISTRATIVE
REQUIREMENTS 6.1. Accounting 6.1.1.  At all times from the Effective Date of
this Grant until completion of the Work, Grantee shall maintain properly
segregated books of State Grant Funds, Matching Funds, and other funds
associated with the Work.  6.1.2.  All receipts and expenditures associated with
said Work shall be documented in a detailed and specific manner, and shall
accord with the Work Budget set forth herein.  6.2. Monitoring  The State may
monitor the Work on an as-needed basis. The State may choose to audit Grantee's
activities performed under this Agreement. Such audit may be requested by OEDIT
via electronic media, and all documentation shall be made available for audit by
OEDIT within 30 days of such request. Grantee shall maintain a complete file of
all records, documents, communications, notes and other written materials or
electronic media, files or communications, which pertain in any manner to the
operation of activities undertaken pursuant to this Grant. Such books and
records shall contain documentation of the participant's pertinent activity
under this Grant in a form  consistent with good accounting practice.  7. WORK
BUDGET 7.1. Matching Funds Grantee has secured a dollar amount that is two times
that of the AIA Grant Funds in §7.2. of this section and the maximum amount in
§7.A. of the Grant.  Matching funds support the commercial advancement of this
project, and the State has determined the availability and adequacy of the
Matching Funds in accordance with §7.D. of the Grant.  Matching Funds must
support the technology and application described in § 1. of this Exhibit A. The
source of Matching Funds is:  7.2. AIA Grant Funds The total Grant Award under
this Grant is provided in §7.A. of the Grant Agreement. The use of the Grant
Funds and Matching Funds must support the Obligations listed in §2, the
Project  General Description, described in§1 of this Statement of Work and the
Work Budget described in §7.3 of this Statement of Work.                  Page
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7.3. Work Budget   Line-item AIA Matching Total Grant Funds Funds Personnel
Expenses 221,600 102,750 324,350  Materials & Supplies 28,400 1,600 30,000
Contracting Services 350,000 350,000 Expenses  Legal & Intellectual Property
50,000 50,000 Services  Other Consulting &  Marketing Expenses  Other Project
Expenses Administrative Expenses Facilities Expenses  TOTAL 250,000 504,350
754,350    7.4.  Format for Reporting Costs  7.4.1.  Expenditure Table — Reports
shall document the expenditure of both Grant Funds and Matching Funds by cost
category similar to the table provided herein. The expenditure of Grant Funds
may not exceed the Maximum provided in §7.A. of the Grant
Agreement.  7.4.2.  Supporting Documentation - required with the Final Report,
shall include reports from the Grantee institution's accounting system and shall
uniquely identify the expenses under Grant  Funds and Matching Funds. These
expenditures shall be identified by the cost categories named in §7.3.
above.    THE REST OF THIS PAGE INTENTIONALLY LEFT
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