Exhibit 10.7


 


Execution Version


 


Avista
Public Acquisition Corp. II 

65 East 55th Street, 18th Floor

New York, NY 10022


 


February 12, 2021


 


Avista Acquisition LP II

65 East 55th Street, 18th Floor


 


New York, NY 10022


 


		RE:	Securities Subscription
Agreement



 


Gentlemen:


 


This agreement (this
 “Agreement”) is entered into on February 12, 2021 by and between Avista Acquisition LP II, a Cayman Islands
exempted limited partnership (the “Subscriber” or “you”), and Avista Public Acquisition Corp.
II, a Cayman Islands exempted company (the “Company”). Pursuant to the terms hereof, the Company hereby accepts
the offer the Subscriber has made to purchase 5,750,000 Class B ordinary shares, $0.0001 par value per share (the “Shares”),
up to 750,000 of which are subject to surrender and cancellation by you if the underwriters of the initial public offering (“IPO”)
of units (“Units”) of the Company do not fully exercise their over-allotment option (the “Over-allotment
Option”). The Company and the Subscriber’s agreements regarding such Shares are as follows:


 


		1.	Purchase of Securities.



 


		1.1.	Purchase of Shares. For the sum of $25,000, which the Company acknowledges has been remitted at the Company’s
direction for offering costs, the Company hereby issues the Shares to the Subscriber, and the Subscriber hereby subscribes for
and purchases the Shares from the Company, 750,000 of which are subject to surrender and cancellation, on the terms and subject
to the conditions set forth in this Agreement. All references in this Agreement to shares of the Company being surrendered and
canceled shall take effect as surrenders and cancellations for no consideration of such shares as a matter of Cayman Islands law.



 


		1.2.	Surrender of Subscriber Shares. On the issuance of the Shares, the Subscriber hereby surrenders for no consideration
the one Class B ordinary share, $0.0001 par value that the Subscriber holds in the Company.



 






     


     


    

 


		2.	Representations, Warranties and Agreements.



 


		2.1.	Subscriber’s Representations, Warranties and Agreements. To induce the Company to issue the Shares to the Subscriber,
the Subscriber hereby represents and warrants to the Company and agrees with the Company as follows:



 


		2.1.1.	No Government Recommendation or Approval. The Subscriber understands that no federal or state agency has passed upon
or made any recommendation or endorsement of the offering of the Shares.



 


		2.1.2.	No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Subscriber of the
transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the formation and governing
documents of the Subscriber, (ii) any agreement, indenture or instrument to which the Subscriber is a party or (iii) any
law, statute, rule or regulation to which the Subscriber is subject, or any agreement, order, judgment or decree to which
the Subscriber is subject.



 


		2.1.3.	Registration and Authority. The Subscriber is a Cayman Islands exempted limited partnership, validly existing and possessing
all requisite power and authority necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery
by you, this Agreement will be a legal, valid and binding agreement of Subscriber, enforceable against Subscriber in accordance
with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).



 


		2.1.4.	Experience, Financial Capability and Suitability. Subscriber is: (i) sophisticated in financial matters and is
able to evaluate the risks and benefits of the investment in the Shares and (ii) able to bear the economic risk of its investment
in the Shares for an indefinite period of time because the Shares have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), and therefore cannot be sold unless subsequently registered under the Securities
Act or an exemption from such registration is available. Subscriber is capable of evaluating the merits and risks of its investment
in the Company and has the capacity to protect its own interests. Subscriber must bear the economic risk of this investment until
the Shares are sold pursuant to: (i) an effective registration statement under the Securities Act or (ii) an exemption
from registration available with respect to such sale. Subscriber is able to bear the economic risks of an investment in the Shares
and to afford a complete loss of Subscriber’s investment in the Shares.



 






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		2.1.5.	Access to Information; Independent Investigation. Prior to the execution of this Agreement, the Subscriber has had the
opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company,
as well as the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information
to verify the accuracy of all information so obtained. In determining whether to make this investment, Subscriber has relied solely
on Subscriber’s own knowledge and understanding of the Company and its business based upon Subscriber’s own due diligence
investigation and the information furnished pursuant to this paragraph. Subscriber understands that no person has been authorized
to give any information or to make any representations which were not furnished pursuant to this Section 2 and Subscriber
has not relied on any other representations or information in making its investment decision, whether written or oral, relating
to the Company, its operations and/or its prospects.



 


		2.1.6.	Regulation D Offering. Subscriber represents that it is an “accredited investor” as such term is defined
in Rule 501(a) of Regulation D under the Securities Act and acknowledges the sale contemplated hereby is being made in
reliance on a private placement exemption to “accredited investors” within the meaning of Section 501(a) of
Regulation D under the Securities Act or similar exemptions under federal and state law.



 


		2.1.7.	Investment Purposes. The Subscriber is purchasing the Shares solely for investment purposes, for the Subscriber’s
own account and not for the account or benefit of any other person, and not with a view towards the distribution or dissemination
thereof. The Subscriber did not decide to enter into this Agreement as a result of any general solicitation or general advertising
within the meaning of Rule 502 of Regulation D under the Securities Act.



 


		2.1.8.	Restrictions on Transfer; Shell Company. Subscriber understands the Shares are being offered in a transaction not involving
a public offering within the meaning of the Securities Act.



 


Subscriber understands the Shares will be “restricted
securities” within the meaning of Rule 144(a)(3) under the Securities Act, and Subscriber understands that the
certificates representing the Shares will contain a legend in respect of such restrictions. If in the future the Subscriber decides
to offer, resell, pledge or otherwise transfer the Shares, such Shares may be offered, resold, pledged or otherwise transferred
only pursuant to: (i) registration under the Securities Act, or (ii) an available exemption from registration. Subscriber
agrees that if any transfer of its Shares or any interest therein is proposed to be made, as a condition precedent to any such
transfer, Subscriber may be required to deliver to the Company an opinion of counsel satisfactory to the Company. Absent registration
or an exemption, the Subscriber agrees not to resell the Shares. Subscriber further acknowledges that because the Company is a
shell company, Rule 144 may not be available to the Subscriber for the resale of the Shares until one year following consummation
of the initial business combination of the Company, despite technical compliance with the requirements of Rule 144 and the
release or waiver of any contractual transfer restrictions.


 






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		2.1.9.	No Governmental Consents. No governmental, administrative or other third party consents or approvals are required or
necessary on the part of Subscriber in connection with the transactions contemplated by this Agreement.



 


		2.2.	Company’s Representations, Warranties and Agreements. To induce the Subscriber to purchase the Shares, the Company
hereby represents and warrants to the Subscriber and agrees with the Subscriber as follows:



 


		2.2.1.	Incorporation and Corporate Power. The Company is a Cayman Islands exempted company and is qualified to do business
in every jurisdiction in which the failure to so qualify would reasonably be expected to have a material adverse effect on the
financial condition, operating results or assets of the Company. The Company possesses all requisite corporate power and authority
necessary to carry out the transactions contemplated by this Agreement. Upon execution and delivery by the Company, this Agreement
will be a legal, valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the
enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement
is sought in a proceeding at law or in equity).



 


		2.2.2.	No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions
contemplated hereby do not violate, conflict with or constitute a default under (i) the memorandum and articles of association
of the Company, (ii) any agreement, indenture or instrument to which the Company is a party or (iii) any law, statute,
rule or regulation to which the Company is subject, or any agreement, order, judgment or decree to which the Company is subject.



 


		2.2.3.	Title to Securities. Upon issuance in accordance with, and payment pursuant to, the terms hereof, and registration in
the Company’s register of members, the Shares will be duly and validly issued, fully paid and nonassessable. Upon issuance
in accordance with, and payment pursuant to, the terms hereof, and registration in the Company’s register of members, the
Subscriber will have or receive good title to the Shares, free and clear of all liens, claims and encumbrances of any kind, other
than (a) transfer restrictions hereunder and other agreements to which the Shares may be subject, (b) transfer restrictions
under federal and state securities laws and (c) liens, claims or encumbrances imposed due to the actions of the Subscriber.



 






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		2.2.4.	No General Solicitation. Neither the Company, nor any of its officers, directors, employees, agents or stockholders
has either directly or indirectly, including through a broker or finder, (i) engaged in any general solicitation or (ii) published
any general advertisement in connection with the offer and sale of the Shares.



 


		2.2.5.	No Adverse Actions. There are no actions, suits, investigations or proceedings pending, threatened against or affecting
the Company which: (i) seek to restrain, enjoin, prevent the consummation of or otherwise affect the transactions contemplated
by this Agreement or (ii) question the validity or legality of any transactions or seeks to recover damages or to obtain other
relief in connection with any transactions.



 


		3.	Surrender and Cancellation of Shares.



 


		3.1.	Partial or No Exercise of the Over-allotment Option. In the event the Over-allotment Option granted to the representative(s) of
the underwriters of the Company’s IPO is not exercised in full, the Subscriber acknowledges and agrees that it shall surrender
for cancellation any and all rights to such number of Shares (up to an aggregate of 750,000 Shares and pro rata based upon the
percentage of the Over-allotment Option exercised) such that immediately following such surrender, the Subscriber (and all other
initial shareholders prior to the IPO, if any) will own an aggregate number of Shares (not including ordinary shares issuable upon
exercise of any warrants or any ordinary shares purchased by Subscriber in the Company’s IPO or in the aftermarket) equal
to 20% of the issued and outstanding ordinary shares of the Company immediately following the IPO.



 


		3.2.	Termination of Rights as Shareholder. If any of the Shares are surrendered and cancelled in accordance with this Section 3,
then after such time the Subscriber (or successor in interest), shall no longer have any rights as a holder of such Shares, and
the Company shall take such action as is appropriate to cancel such Shares.



 


		4.	Waiver of Liquidation Distributions; Redemption Rights. In connection with the Shares purchased pursuant to this Agreement,
the Subscriber hereby waives any and all right, title, interest or claim of any kind in or to any distributions by the Company
from the trust account which will be established for the benefit of the Company’s public shareholders and into which substantially
all of the proceeds of the IPO will be deposited (the “Trust Account”), in the event of a liquidation of the
Company upon the Company’s failure to timely complete an initial business combination. For purposes of clarity, in the event
the Subscriber purchases ordinary shares in the IPO or in the aftermarket, any additional Shares so purchased shall be eligible
to receive any liquidating distributions by the Company. However, in no event will the Subscriber have the right to redeem any
ordinary shares into funds held in the Trust Account upon the successful completion of an initial business combination.



 






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		5.	Restrictions on Transfer.



 


		5.1.	Securities Law Restrictions. In addition to any restrictions to be contained in that certain letter agreement (commonly
known as an “Insider Letter”) to be dated as of the closing of the IPO by and between Subscriber and the Company,
Subscriber agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Shares unless, prior
thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws
with respect to the Shares proposed to be transferred shall then be effective or (b) the Company has received an opinion from
counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from
registration under the Securities Act and the rules promulgated by the Securities and Exchange Commission thereunder and with
all applicable state securities laws.



 


		5.2.	Restrictive Legends. Any certificates representing the Shares shall have endorsed thereon legends substantially as follows:



 


“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST
THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL, IS
AVAILABLE.”


 


“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO LOCKUP PROVISIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP.”


 


		5.3.	Additional Shares or Substituted Securities. In the event of the declaration of a share capitalization, the declaration
of an extraordinary dividend payable in a form other than Shares, a spin-off, a share sub-division, an adjustment in conversion
ratio, a recapitalization or a similar transaction affecting the Company’s outstanding Shares without receipt of consideration,
any new, substituted or additional securities or other property which are by reason of such transaction distributed with respect
to any Shares subject to this Section 5 or into which such Shares thereby become convertible shall immediately be subject
to this Section 5 and Section 3. Appropriate adjustments to reflect the distribution of such securities or property shall
be made to the number and/or class of Shares subject to this Section 5 and Section 3.



 






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		5.4.	Registration Rights. Subscriber acknowledges that the Shares are being purchased pursuant to an exemption from the registration
requirements of the Securities Act and will become freely tradable only after certain conditions are met or they are registered
pursuant to a Registration and Shareholder Rights Agreement to be entered into with the Company prior to the closing of the IPO.



 


		6.	Other Agreements.



 


		6.1.	Further Assurances. Subscriber agrees to execute such further instruments and to take such further action as may reasonably
be necessary to carry out the intent of this Agreement.



 


		6.2.	Notices. All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in
writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile or
electronic transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such
party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the
electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing
by such party. Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered
personally, on the business day following receipt of written confirmation, if sent by facsimile or electronic transmission, one
(1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.



 


		6.3.	Entire Agreement. This Agreement, together with that certain Insider Letter to be entered into between Subscriber and
the Company, substantially in the form to be filed as an exhibit to the Registration Statement on Form S-1 associated with
the Company’s IPO, embodies the entire agreement and understanding between the Subscriber and the Company with respect to
the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter
hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall
affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.



 


		6.4.	Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written
agreement executed by all parties hereto.



 


		6.5.	Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom
granted, only by a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver
or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this
Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose
for which it was given, and shall not constitute a continuing waiver or consent.



 






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		6.6.	Assignment. The rights and obligations under this Agreement may not be assigned by either party hereto without the prior
written consent of the other party.



 


		6.7.	Benefit. All statements, representations, warranties, covenants and agreements in this Agreement shall be binding on
the parties hereto and shall inure to the benefit of the respective successors and permitted assigns of each party hereto. Nothing
in this Agreement shall be construed to create any rights or obligations except among the parties hereto, and no person or entity
shall be regarded as a third-party beneficiary of this Agreement.



 


		6.8.	Governing Law. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance
with and governed by the laws of the State of Delaware applicable to contracts wholly performed within the borders of such state,
without giving effect to the conflict of law principles thereof.



 


		6.9.	Severability. In the event that any court of competent jurisdiction shall determine that any provision, or any portion
thereof, contained in this Agreement shall be unreasonable or unenforceable in any respect, then such provision shall be deemed
limited to the extent that such court deems it reasonable and enforceable, and as so limited shall remain in full force and effect.
In the event that such court shall deem any such provision, or portion thereof, wholly unenforceable, the remaining provisions
of this Agreement shall nevertheless remain in full force and effect.



 


		6.10.	No Waiver of Rights, Powers and Remedies. No failure or delay by a party hereto in exercising any right, power or remedy
under this Agreement, and no course of dealing between the parties hereto, shall operate as a waiver of any such right, power or
remedy of such party. No single or partial exercise of any right, power or remedy under this Agreement by a party hereto, nor any
abandonment or discontinuance of steps to enforce any such right, power or remedy, shall preclude such party from any other or
further exercise thereof or the exercise of any other right, power or remedy hereunder. The election of any remedy by a party hereto
shall not constitute a waiver of the right of such party to pursue other available remedies. No notice to or demand on a party
not expressly required under this Agreement shall entitle the party receiving such notice or demand to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights of the party giving such notice or demand to any
other or further action in any circumstances without such notice or demand.



 


		6.11.	Survival of Representations and Warranties. All representations and warranties made by the parties hereto in this Agreement
or in any other agreement, certificate or instrument provided for or contemplated hereby, shall survive the execution and delivery
hereof and any investigations made by or on behalf of the parties.



 






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		6.12.	No Broker or Finder. Each of the parties hereto represents and warrants to the other that no broker, finder or other
financial consultant has acted on its behalf in connection with this Agreement or the transactions contemplated hereby in such
a way as to create any liability on the other. Each of the parties hereto agrees to indemnify and save the other harmless from
any claim or demand for commission or other compensation by any broker, finder, financial consultant or similar agent claiming
to have been employed by or on behalf of such party and to bear the cost of legal expenses incurred in defending against any such
claim.



 


		6.13.	Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of
reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.



 


		6.14.	Counterparts. This Agreement may be executed in one or more counterparts, all of which when taken together shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered
to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation
of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were
an original thereof.



 


		6.15.	Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an
ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties
hereto and no presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any
provision of this Agreement. The words “include,” “includes,” and “including”
will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will
be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa,
unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,”
 “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and
not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and
covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract
from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.



 


		6.16.	Mutual Drafting. This Agreement is the joint product of the Subscriber and the Company and each provision hereof has
been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any
party hereto.



 


		7.	Voting and Redemption of Shares. Subscriber agrees to vote the Shares in favor of an initial business combination that
the Company negotiates and submits for approval to the Company’s shareholders and shall not seek redemption or repurchase
with respect to such Shares. Additionally, the Subscriber agrees not to tender any Shares in connection with a tender offer presented
to the Company’s shareholders in connection with an initial business combination negotiated by the Company.



 


[Signature Page Follows]


 






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If the foregoing accurately sets forth our understanding and
agreement, please sign the enclosed copy of this Agreement and return it to us.


 


	 	Very truly yours,
	 	 
	 	Avista Public Acquisition Corp. II
	 	 
	 	By:	
        /s/ Benjamin Silbert

	 	 	Name: Benjamin Silbert
	 	 	Title:   General Counsel


 


	Accepted and agreed as of the date first written above.	 
	 	 
	
        Avista Acquisition LP II
	 
	By:	Avista Acquisition GP LLC II, its general partner	 
	 	 
	By:	
        /s/ David Burgstahler
	 
	 	Name: David Burgstahler	 
	 	Title:   Manager