Document:

EX-10.12

 Exhibit 10.12 

CERTAIN IDENTIFIED INFORMATION HAS BEEN OMITTED
FROM THIS DOCUMENT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY
CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED, AND HAS
BEEN MARKED “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE. 

EXCLUSIVE LICENSE AGREEMENT 

AGREEMENT, dated August 12, 2016 (the “Effective Date”), between THE TRUSTEES OF COLUMBIA UNIVERSITY IN THE CITY OF NEW YORK, a
New York corporation (“Columbia”), and Singular Genomics Systems, Inc. , a Delaware corporation (“Company”). 
 1.
Definitions. 
 a. “Affiliate” shall mean any corporation or other entity that directly or indirectly controls, is
controlled by, or is under common control with, another corporation or entity. Control means direct or indirect ownership of, or other beneficial interest in, fifty percent (50%) or more of the voting stock, other voting interest, or income of a
corporation or other entity. 
 b. “Cover” or “Covered By” shall mean (i) infringes, in the case of a claim in an
issued patent, or (ii) would infringe the claim if it existed in an issued patent, in the case of a claim in a pending application. 

c. “Designee” shall mean a corporation or other entity that is under contract to, or in partnership with (i) Company, (ii) a
Sublicensee, (iii) an Affiliate of Company or (iv) an Affiliate of a Sublicensee, wherein such corporation or other entity is granted the right to make, use, sell, distribute, import, or export Products. For avoidance of doubt, a Third
Party reseller of Product that purchases Product at a fair market rate for a reseller from Company, a Sublicensee, or an Affiliate of Company or Sublicensee, for resale and takes title to such Products shall not be deemed a Designee. 

d. “Field” shall mean all fields of use. 

e. “License Year” shall mean the one year period from the Effective Date of this Agreement or an anniversary thereof to the next
anniversary of the Effective Date. 
 f. “Materials” shall mean the tangible physical material, if any, delivered to Company
hereunder. Any Materials delivered to Company hereunder shall be listed in an Exhibit B hereto which may be amended from time to time upon mutual agreement of the parties. 

g. “Net Sales” shall mean [***] to Company, Sublicensees, Designees, or any Affiliates of the foregoing for the sale, rental, lease
or other transfer of the Product less the following deductions, in each case to the extent actually allowed and taken by such Third Party customer and not otherwise recovered by or reimbursed to Company, Sublicensees, Designees, or any Affiliates of
the foregoing in connection with such Product (“Permitted Deductions”): [***]. 

 For ease of administration, Net Sales by Sublicensees may be calculated using the deductions
set forth in the applicable sublicense agreement instead of the deductions set forth above, so long as such deductions are commercially reasonable and do not result in any deductions or decreases significantly greater than those permitted herein.

 In the case of transfers of Products between any of Company, Sublicensees, Designees, and Affiliates of any of the foregoing, for
subsequent sale, rental, lease or other transfer of such Products to Third Parties, Net Sales shall be the greater of (i) [***] for the transfer of the Product between any of Company, Sublicensees, Designees, and Affiliates of any of the foregoing
and (ii) [***] to the Third Party customer for that Product in an arms-length transaction. 
 At Columbia’s option, in the case of
transfers of Products between any of Company, Sublicensees, Designees, and Affiliates of any of the foregoing, for use by Company, Sublicensees, Designees, and Affiliates of any of the foregoing such that the Product is consumed or used, and is not
incorporated into a product or service subsequently sold to a Third Party customer, Net Sales shall mean the greater of: (1) [***] for the transfer of the Product between any of Company, Sublicensees, Designees, and Affiliates of any of the
foregoing, and (2) [***]. 
 In the event that a Product is sold in combination with one or more other products or components that are not
Products (a “Combination Product”), Net Sales, for the purposes of determining royalty payments on the Combination Product, shall mean the gross amount collected for the Combination Product less the deductions set forth in clauses (i)
– (iv) above, multiplied by a proration factor that is determined as follows: 
 (i) If all components of the Combination Product were
sold separately during the same or immediately preceding calendar quarter, the proration factor shall be determined by the formula [A / (A+B)], where A is the average gross sales price of all Product components during such period when sold
separately from the other component(s), and B is the average gross sales price of the other component(s) during such period when sold separately from Product components; or 

(ii) If all components of the Combination Product were not sold separately during the same or immediately preceding calendar quarter, the
proration factor shall be determined by the parties in good faith negotiations based on the relative value contributed by each component. 

h. “Other Product” shall mean any (i) product (or component thereof), other than a Patent Product, the development,
manufacture, use, sale, offering for sale, importation, exportation, distribution, rental or lease of which involves the direct use of or incorporation, in whole or in part, of Materials or Technical Information, or (ii) service (or component
thereof), other than a Patent Product, the performance of which involves the direct use of or incorporation, in whole or in part, of Materials or Technical Information. 

i. “Patent” or “Patents” shall mean: (i) the United States and foreign patents and/or patent applications listed in
Exhibit A hereto; (ii) any non-provisional patent applications that claim priority to any provisional patent applications listed in Exhibit A hereto; (iii) any and

  
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all claims of continuation-in-part applications that claim priority to the United States patent applications listed
in Exhibit A, but only where such claims are directed to inventions disclosed in the manner provided in the first paragraph of 35 U.S.C. Section 112 in the United States patent applications listed in Exhibit A, and such claims in any patents
issuing from such continuation-in-part applications; (iv) any and all foreign patent applications, foreign patents or related foreign patent documents that claim
priority to the patents and/or patent applications listed in Exhibit A; (v) any and all divisionals, continuations, reissues, re-examinations, renewals, substitutions, and extensions of the foregoing; and
(vi) any and all patents issuing from the foregoing. Notwithstanding the preceding definition, Patent and Patents shall not include any patents or patent applications based on research conducted after the Effective Date, except as otherwise
agreed in a separate writing. 
 j. “Patent Product” shall mean any (i) product (or component thereof) the manufacture, use,
sale, offering for sale, or importation of which is Covered By a Valid Claim of a Patent, or (ii) service (or component thereof), the performance of which is Covered By a Valid Claim of a Patent. 

k. “Product” or “Products” shall mean a Patent Product and/or an Other Product. 

l. “Sublicensee” shall mean any third party to whom Company has granted a sublicense pursuant to this Agreement. An Affiliate of
Company exercising rights hereunder shall not be considered a Sublicensee. 
 m. “Technical Information” shall mean any know-how, technical information and data developed by Columbia by or under the direction of [***] prior to the Effective Date and provided to or received by Company, which
know-how, technical information and data, including, without limitation, any know-how, technical information and data disclosed in any Patent, (i) are necessary or
useful for the discovery, development, manufacture, use, sale, offering for sale, importation, exportation, distribution, rental or lease of a Product, (ii) are specifically identified on Exhibit C hereto which may be amended from time to time
upon mutual agreement of the parties, and (iii) has not become a matter of public information or publicly available prior to the Effective Date. For the avoidance of doubt, Technical Information shall not, however, include any know-how, technical information or data that (i) is in the possession of Company prior to the time such know-how, technical information or data was developed by Columbia;
or (ii) is independently developed by Company or a Third Party from which Company rightfully obtains such know-how, technical information or data, without use of any such
know-how, technical information or data from Columbia as evidenced by Company’s corroborating written documentation. 

n. “Territory” shall mean worldwide. 

o. “Third Party” shall mean any entity or person other than Company, Sublicensees, Designees, or their Affiliates. 

p. “Valid Claim” shall mean a claim of (i) an issued Patent or (ii) in the case of a claim in a pending application of a
Patent, a claim that has not been pending for the longer of (A) [***] from the date of the first binding examination on the merits of the claims in such pending application by a national patent office or (B) [***] from the date of first filing of
the 

  
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applicable provisional patent application, or if no provisional patent application is filed, the date of first filing of the applicable non-provisional or
international patent application, unless and until such claim becomes an issued claim of an issued Patent, which in either case of (i) or (ii) has not lapsed or been revoked, abandoned or held unenforceable or invalid by a final decision of a
court or governmental or supra-governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal. 

2. License Grant. 
 a.
Columbia grants to the Company and any Affiliate thereof, upon and subject to all the terms and conditions of this Agreement (including Section 3 hereof): 

(i) an exclusive license under the Patents to discover, develop, manufacture, have made, use, sell, offer to sell, have sold, import, export,
distribute, rent or lease Products in the Field and throughout the Territory; 
 (ii) an exclusive license to use Technical Information to
discover, develop, manufacture, have made, use, sell, offer to sell, have sold, import, export, distribute, rent or lease Products in the Field and throughout the Territory, until such time as Technical Information is published or otherwise publicly
distributed and thereafter, the license granted hereunder shall automatically convert to a non-exclusive license, provided however, that Columbia and its faculty and employees shall have the right to publish,
disseminate or otherwise disclose the Technical Information in accordance with Section 3.b.; and 
 (iii) an exclusive license to use
Materials to discover, develop, manufacture, have made, use, sell, offer to sell, have sold, import, export, distribute, rent or lease Products in the Field and throughout the Territory. 

b. Columbia grants to Company the right to grant sublicenses, provided that: (i) the sublicense agreement must be consistent with the
terms and provisions of this Agreement applicable to the Company; (ii) the Sublicensee shall have no further right to grant sublicenses under this Agreement without the prior written consent of Columbia, not to be unreasonably withheld;
(iii) in the event any Sublicensee (or any entity or person acting on its behalf) initiates any proceeding or otherwise asserts any claim challenging the validity or enforceability of any Patent in any court, administrative agency or other
forum, Company shall, upon written request by Columbia and to the extent permitted by applicable laws, terminate forthwith the sublicense agreement with such Sublicensee, and the sublicense agreement shall provide for such right of termination by
Company; (iv) the Sublicensee will submit quarterly reports to Company consistent with the reporting provision of Section 5a herein; (v) Company remains fully liable for the performance of its and its Sublicensee’s obligations
hereunder; (vi) Company notifies Columbia of any proposed grant of a sublicense and provides to Columbia a copy of any sublicense agreement within thirty (30) days following execution thereof; provided such sublicense agreement may be
redacted for information not necessary to determine compliance with this Agreement, and (vii) no such sublicense or attempt to obtain a sublicensee shall relieve Company of its obligations under Section 6 hereof to exercise its own
commercially reasonable efforts, directly or through a sublicense, to discover, develop and market Products, nor relieve Company of its obligations to pay Columbia any and all license fees, royalties and other payments due under the Agreement,
including but not limited to under Sections 4, 5 and 11 of the Agreement. Company may not enter into a sublicense agreement prior to the first anniversary of the Effective Date, without Columbia’s prior written consent, not to be unreasonably
withheld. 

  
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 c. Columbia will use reasonable efforts to promptly notify the Company of any Improvements
to the Patents in the Field reported to Columbia Technology Ventures [***], or those working under his direction, within one (1) year of the effective date of the license agreement and agrees to enter into good faith discussions with Company
about the possibility of exclusively licensing such Improvements subject to the following: (i) any commitments or obligations to any third party undertaken by Columbia, whether undertaken before or after the Effective Date; (ii) any
limitations imposed by law, rule or regulation or by the terms of any government grant, contract or cooperative agreement; (iii) 35 U.S.C Section 200 et seq. and implementing regulations and policies; and (iv) any requirements imposed on
Columbia to maintain any particular tax status, standing or exemption. For purposes of the license agreement, “Improvements” means any discovery, development, invention, enhancement or modification (i) on which [***] is an inventor or
developer, individually or with others in his laboratory employed by Columbia, (ii) that is not included in the Patents, and (iii) that claims inventions for which manufacture, use or sale would necessarily infringe a Valid Claim of a
Patent. Any disclosures by Columbia to Company under this Section 2(c) shall be subject to Section 7 and sufficiently detailed for Company to assess the commercial viability of the Improvements. 

d. All rights and licenses granted by Columbia to Company under this Agreement are subject to applicable requirements of 35 U.S.C. Sections
200 et seq., as amended, and implementing regulations and policies. Without limitation of the foregoing, Company agrees that, to the extent required under 35 U.S.C. Section 204, any Product used, sold, distributed, rented or
leased by Company, Sublicensees, Designees, and their Affiliates in the United States will be manufactured substantially in the United States unless Company obtains written permission from the United States government to manufacture such Product
outside of the United States, and Columbia will cooperate in good faith with Company’s attempts to obtain such permission. In addition, Company agrees that, to the extent required under 35 U.S.C. Section 202(c)(4), the United States
government is granted a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States any Patent throughout the world. 

e. All rights not specifically granted herein are reserved to Columbia. Except as expressly provided under this Section 2, no right or
license is granted (expressly or by implication or estoppel) by Columbia to Company or its Affiliates or Sublicensees under any tangible or intellectual property, materials, patent, patent application, trademark, copyright, trade secret, know-how, technical information, data or other proprietary right. 
 3. Reservation of Rights for
Research Purposes; Freedom of Publication.  
 a. Columbia reserves the right to practice the Patents and use Materials, to the
extent Patents and Materials are exclusively licensed hereunder, for academic research (which for avoidance of doubt does not include sponsored research for for-profit entities under

  
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agreements that would grant rights that are inconsistent with the rights granted to Company hereunder) and educational purposes in the Field and to permit other
non-profit entities or individuals to practice and use such Patents and Materials for academic research and educational purposes in the Field. Columbia shall obtain from all entities or individuals who are
given permission to practice and use such Patents and Materials an agreement in writing to limit such use to academic research and educational purposes. Nothing in this Agreement shall be interpreted to limit in any way the right of Columbia and its
faculty or employees to practice and use such Patents and Materials for any purpose outside the Field or to license or permit such use outside the Field by third parties. 

b. Company acknowledges that Columbia is dedicated to free scholarly exchange and to public dissemination of the results of its scholarly
activities. Columbia and its faculty and employees shall have the right to publish, disseminate or otherwise disclose any information relating to its research activities, including Technical Information. 

4. Fees, Royalties and Payment. 

a. Importance of Technical Information and Materials. Company has requested, and Columbia has agreed, to grant certain rights to
Technical Information and Materials. Because of the importance of Technical Information and Materials, Company has agreed to pay certain royalties to Columbia on Other Products, as specified below, even if it is not Covered By a Patent, in order to
obtain rights to Technical Information and Materials. Company has agreed to these payments because of the commercial value of Technical Information and Materials, separate and distinct from the commercial value of the Patents. Company further
acknowledges that licenses to Technical Information, Materials, and each patent and application within the definition of Patents were separately available from a license to the Patents, and that for convenience and because of the preference of
Company, the parties executed a combined license to the Patents, Technical Information, and Materials. 
 b. In consideration of the
licenses granted under Section 2a of this Agreement, the Company shall pay to Columbia as follows: 
 (i) License Fee: A
nonrefundable, non-recoverable and non-creditable license fee in the sum of [***], payable within 50 days following the execution of this Agreement. The Company
acknowledges that Columbia, in its sole discretion, may use such funds to offset any all fees and expenses associated with filing, prosecution and maintenance of the Patents. 

(ii) Annual Fee: A nonrefundable and non-recoverable annual license fee payable on
January 1 of each calendar year, or the first business day thereafter as follows: 
  

	 	•	 	 [***] for the 1st and 2nd License Years; 

  

	 	•	 	 [***] payable on the 3rd License Year (i.e., January 1,
2019); 

  

	 	•	 	 [***] payable on the 4th License Year;

  

	 	•	 	 [***] payable on the 5th License Year and each License Year
thereafter. 

 Annual license fees shall be creditable against earned royalties accrued in the calendar year with respect
to which such fee applies (e.g., the fee payable January 1, 2019, shall be creditable against earned royalties accrued in calendar year 2019) ; and 

  
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 (iii) Royalties: 

With respect to sales of Products by Company, Sublicensees, Designees or their Affiliates, in the Territory, a nonrefundable and non-recoverable royalty of: 
  

	 	(1)	 [***] on Net Sales of Patent Products that are chemicals, reagents or consumables (“Consumable”);

  

	 	(2)	 [***] on Net Sales of Patent Products that are services including but not limited to diagnostic, genotyping,
and sequencing services (“Services); 

  

	 	(3)	 [***] on Net Sales of Patent Products that are instruments, systems or devices (“System”); and

  

	 	(4)	 [***] on Net Sales of Other Products that are Consumables; 

 

	 	(5)	 [***] on Net Sales of Other Products that are Services; and 

 

	 	(6)	 [***] on Net Sales of Other Products that are Systems. 

In the event Company or its Affiliate, Sublicensee or Designee enters into a license agreement with a Third Party for intellectual property rights which
Company (or its Affiliate, Sublicensee or Designee) reasonably deem are necessary to manufacture, use, sell or import Products or that add material value to the development, manufacture or commercialization of Products, then Company may deduct from
the royalties due to Columbia on such Products pursuant to Section 4(b)(iii) [***] of any payments actually paid to any such Third Party as consideration solely for any such license to such intellectual property rights; provided that in no
event shall the royalties due to Columbia for a given calendar quarter be reduced under Section 4(b)(iii) by more than (i) with respect to Patent Products, [***] or (ii) with respect to Other Products, [***]. Notwithstanding the
foregoing, the royalty rate on Net Sales of Other Products that are [***], as set forth in Section 4(b)(iii)(6) above, [***]. 
 c. In
consideration of Company’s right to sublicense third parties granted under Section 2b of this Agreement, Company shall pay to Columbia the following nonrefundable, non-recoverable and non-creditable amounts (the intention of the parties being that Columbia shall receive consideration equivalent to a full pass-through royalty on all sales of Products by Sublicensees): 

(i) Royalties: 
 (A)
With respect to sales of Products by Sublicensees, their Designees or their Affiliates, in the Territory, a nonrefundable and non-recoverable royalty [***]. 

(ii) Other Payments: a percentage of any and all other gross revenues (excluding royalties), fees, payments and consideration
(including any premium above fair market value for debt and/or equity securities or instruments, or the market value in an arm’s length transaction of any cross-licensing rights granted by Sublicensee to Company), including

  
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without limitation, any upfront, milestone or lump sum payments, received by Company from Sublicensees, their Designees or their Affiliates as full or partial consideration for the grant of any
sublicense by Company pursuant to Section 2b of this Agreement (collectively, “Sublicense Revenue”) as follows: 
  

	 	(1)	 [***] prior to the first anniversary of the Effective Date unless Columbia has given prior written consent;

  

	 	(2)	 [***] of Sublicense Revenue received by Company after the first anniversary of the Effective Date and prior to
the second anniversary of the Effective Date; 

  

	 	(3)	 [***] of Sublicense Revenue received by Company after the second anniversary of the Effective Date until the
later of (i) the third anniversary of the Effective Date or (ii) the first commercial sale of a Product; 

  

	 	(4)	 [***] of Sublicense Revenue received by Company thereafter. 

For avoidance of doubt, Sublicense Revenue shall not include the following: (i) royalties on Net Sales, (ii) funds that are paid
for bona-fide research and development of Products that occurs after the actual date of execution of the sublicense agreement, but not to exceed fair market rates, (iii) fair market value payments for equity or securities of Company, or
payments for an acquisition of all or substantially all of its assets that includes the assignment of this Agreement, and (iv) reimbursement for patent prosecution, defense, enforcement or maintenance or other related expenses. 

For avoidance of doubt, Sublicense Revenue shall not include fees, payments or consideration received by Company attributable to the grant of
licenses or sublicenses by Company to intellectual property other than the Patents, Technical Information and Materials. Company may apportion without discrimination a commercially reasonable percentage of sublicensing payments made to Columbia,
which shall not be less than [***] of the total Sublicense Revenue otherwise payable under 4(c)(ii). Upon request of either Party, Columbia and Company will meet to discuss such proposed apportionment if in such Party’s opinion the
apportionment does not reasonably reflect the value of the sublicensed Patents, Technical Information or Materials. If there is a dispute between the Parties as to reasonable apportionment, such dispute shall be subject to Section 26(a). 

d. Development Milestone Payments: In the event that the Company, Sublicensees, or their Affiliates (collectively
“Developer”) develops a Product for potential commercial sale in the Territory, the following nonrefundable, non-recoverable and non-creditable milestone
payments shall be made by Company to Columbia with respect to milestones 1-3, the first Product to reach such milestones, as follows: 
  

	 	(1)	 [***] on the [***] on a Company proprietary system using a Product; 

 

	 	(2)	 [***] on first commercial sale of a Product that is a Consumable; 

 

	 	(3)	 [***] on first commercial sale of a Patent Product that is a System; 

 

	 	(4)	 [***] on achievement of [***] in cumulative gross sales of Products, payable [***] (for clarity, this payment
shall be made only once based on sales of all Products); 

  
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 For avoidance of doubt, each of the above milestones shall be payable only once. 

In the event one or more of the above milestones are achieved in conjunction with, or solely by, a Sublicensee, Company will pay Columbia the greater of:
(a) the applicable Development Milestone Payment or (b) the Sublicense Revenue payment pursuant to Section 4(c)(ii), but not both. 

e. Duration of Other Product Royalties. Royalties on Other Products shall be payable on Net Sales on a
country-by-country basis, and shall apply in the case of an Other Product that is a System, Consumable or Service, until the twelfth (12th) anniversary of the first bona fide commercial sale of each of the first Product (whether Patent Product or Other Product at the time of such first commercial sale) that is a (i) System, (ii)
Consumable, and (iii) Service in such country, respectively, but in any event shall not extend beyond the [***] anniversary of this Agreement (the “Other Product Royalty Term”). 

f. Highest Royalty Due. If a Product is covered by both the definition of Patent Product and Other Product, Columbia shall be entitled
to the Patent Product royalty rate on the Product. Columbia shall not be entitled to more than one royalty payment on the same Product sale under Section 4. To the extent a Product ceases being a Patent Product, but is still an Other Product,
Columbia shall be entitled to the Other Product royalty rate on the Product, but only for such time as specified in Section 4e. By way of example, but not by way of limitation, if the manufacture of a Product is Covered by a Valid Claim of a
Patent, and the manufacture of that Product also incorporates in part Technical Information, Company must pay the royalty specified in Section 4b(iii)(1)-(3). If, after some period of time (for example, five years) of paying the royalties
specified in Section 4b(iii)(1)-(3) on the Product, the Product ceases to be a Patent Product, Company must continue to pay royalties on the Product pursuant to Section 4b(iii)(4)-(6) for the duration specified in Section 4e. 

g. No Non-Monetary Consideration. Without Columbia’s prior written consent, Company,
Sublicensees, Designees, and Affiliates of the foregoing, shall not solicit or accept any material consideration for the sale of any Product other than as will be accurately reflected in Net Sales. Furthermore, Company shall not enter into any
transaction with any Affiliate that would circumvent its monetary or other obligations under this Agreement. 
 h. Rate Adjustment on
Challenge; Payment of Costs and Expenses. 
 (i) In the event Company (or any entity or person acting on its behalf) initiates any
proceeding or otherwise asserts any claim challenging the validity or enforceability of any Patent in any court, administrative agency or other forum (“Challenge”), all royalty rates, and other payment rates set forth in Sections 4b(iii)
and 4c for Patent Products shall [***] on and after the date of such challenge for the remaining term of this Agreement. 
 (ii) Company
shall pay all reasonable out-of-pocket costs and expenses incurred by Columbia (including reasonable attorneys’ fees) in connection with defending a Challenge.
Columbia may bill Company on a quarterly basis with respect to such costs and expenses, and Company shall make payment within thirty (30) days after receiving an invoice from Columbia. 

  
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 (iii) In the event at least one claim of a Patent that is subject to a Challenge survives
the Challenge by not being found invalid or unenforceable regardless of whether the claim is amended as part of the Challenge, all royalty rates, and other payment rates set forth in Sections 4b(iii) and 4c for Patent Products shall [***] (but, for
clarity, not in addition to the doubling under clause (i) above) on and after the date of such finding for the remaining term of this Agreement. 

Company acknowledges and agrees that the provisions set forth in this Section 4h reasonably reflect the value derived from the Agreement by Company in
the event of a Challenge. In addition, Company acknowledges and agrees that any payments made under this Section 4h shall be nonrefundable and non-recoverable for any reason whatsoever. 

i. Sale Below Fair Market Value. In the event that Company, Sublicensees, Designees or their Affiliates sell Product to a Third Party
to whom it also sells other products, the price for Licensed Product shall not be established such that Net Sales is below fair market value with the intent of increasing market share for other products sold by Company, Sublicensees, Designees or
their Affiliates to such Third Party or for the purpose of reducing the amount of royalties payable on the Net Sales of Product. If the sale of Product under such circumstances results in Net Sales below the fair market value of Product, then the
Net Sales of Product in such transaction shall be deemed to be the fair market value for purposes of calculating payments owed to Columbia under this Agreement. 

j. Equity: Company shall provide equity in the Company to Columbia as specified in the stock purchase agreement to be executed in
association with the License Agreement. A breach of the stock purchase agreement shall be deemed a breach of this Agreement. The stock purchase agreement shall include the equivalent of the following provisions: 

i) Company shall grant to Columbia shares of the common stock of Company representing [***] of the common stock outstanding as of the date of
this Agreement. Promptly following closing on cumulative institutional or non-institutional equity investments (i.e., exclusive of grants and loans) of at least [***], Company shall grant to Columbia
additional shares of the common stock of Company such that the total shares granted pursuant to this Agreement represents [***] of shares outstanding after giving effect to closing on [***] of such investment. 

ii) [***] 
 5. Reports and
Payments. 
 a. Within forty-five (45) days or (if all or some royalties for such calendar quarter are based on sales by
Sublicensees or Designees) sixty (60) days after the first business day of each calendar quarter of each License Year of this Agreement, Company shall submit to Columbia a written report with respect to the preceding calendar quarter (the
“Payment Report”) stating: 

  
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 (i) Gross and Net Sales of Products by Company, Sublicensees, Designees and their
Affiliates during such quarter, together with detailed information sufficient to permit Columbia to verify the accuracy of reported Net Sales, including Product names, country where manufactured, country where sold, actual selling price, units sold,
and identification whether the Product is a Patent Product or Other Product; 
 (ii) Sublicense Revenue received by Company from its
Sublicensees during such quarter together with the respective payment reports (which may be redacted for information not relevant to the calculation of the Sublicense Revenue payment) received by Company from any Sublicensees; and 

(iii) A calculation under Section 4 of the amounts due to Columbia. 

b. Simultaneously with the submission of each Payment Report, Company shall make payments to Columbia of the amounts due for the calendar
quarter covered by the Payment Report. Payment shall be by check payable to The Trustees of Columbia University in the City of New York and sent to the following address: 

The Trustees of Columbia University in the City of New York 

Columbia Technology Ventures 

[***] 
 [***] 

or to such other address as Columbia may specify by notice hereunder, or if requested by Columbia, by wire transfer of immediately available funds by Company
to: 
 [***] 
 or to such other bank and
account identified by notice to Company by Columbia. Company is required to send the quarterly royalty statement whether or not royalty payments are due. 

c. Within thirty (30) days after the date of termination or expiration of this Agreement, Company shall pay Columbia any and all amounts
that are due pursuant to this Agreement as of the date of such termination or expiration, together with a Payment Report for such payment in accordance with Section 5a hereof, except that such Payment Report shall cover the period from the end
of the last calendar quarter prior to termination or expiration to the date of termination or expiration. Nothing in the foregoing shall be deemed to satisfy any of Company’s other obligations under this Agreement upon termination or
expiration. 
 d. With respect to revenues obtained by Company in foreign countries, Company shall make royalty payments to Columbia in the
United States in United States Dollars. In the event that Company sublicenses Patents to a Sublicensee that does not qualify as a United States taxpayer, and payments to Company for such sublicense will be reduced by withholding taxes, the parties
intend that Columbia will share proportionally and equitably with respect to such reductions in payment to Company. In such event, the parties will discuss in good faith a reasonable and fair apportionment of such responsibility and mechanism for
such 

  
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apportionment. Royalty payments for transactions outside the United States shall first be determined in the currency of the country in which they are earned, and then converted to United States
dollars using the buying rates of exchange quoted by The Wall Street Journal (or its successor) in New York, New York for the last business day of the calendar quarter in which the royalties were earned. Any and all loss of exchange value, taxes, or
other expenses incurred in the transfer or conversion of foreign currency into U.S. dollars and any income, remittance, or other taxes on such royalties required to be withheld at the source shall be the exclusive responsibility of Company, and
shall not be used to decrease the amount of royalties due to Columbia. Company and Columbia will cooperate reasonably in completing and filing documents required under provisions of any applicable tax Laws or under any other applicable Laws in
connection with the making of or exemption from any required tax payment or withholding payment, or in connection with any claim to a refund of or credit for any such payment. Royalty statements shall show sales both in the local currency and US
dollars, with the exchange rate used clearly stated. 
 e. Company shall maintain at its principal office usual books of account and records
showing its actions under this Agreement, and sufficient to determine Company’s compliance with its obligations hereunder. Upon reasonable notice, but not more than once per calendar year, Columbia may have a certified public accountant or
auditor, and an attorney (each as to whom Company has no reasonable objection) inspect and copy such books and records for purposes of verifying the accuracy of the amounts paid under this Agreement. The review may cover a period of not more than
five (5) years before the first day of the calendar quarter in which the review is requested. In the event that such review shows that Company has underpaid royalties by an amount exceeding the lesser of (i) [***] or more with respect to any
calendar quarter or (ii) [***] for any calendar quarter or an aggregate of [***] or more for any calendar year, Company shall pay, within ten days after demand by Columbia, the reasonable out-of-pocket costs and expenses of such review (including the fees charged by Columbia’s accountant and attorney involved in the review), in addition to amount of any underpayment and any interest
thereon. Columbia may not inspect any period more than once, unless such period is subject to a dispute. Company agrees to cooperate fully with Columbia’s accountant or auditor and attorney in connection with any such review. During the review,
Company shall provide Columbia’s accountant or auditor and attorney with all information reasonably requested to audit and test for completeness, including without limitation, to the extent relevant, information relating to sales, inventory,
manufacturing, purchasing, transfer records, customer lists, invoices, purchase orders, sales orders, shipping documentation, third-party royalty reports, pricing policies, and agreements with third parties (including Sublicensees, Designees,
Affiliates of Company, Sublicensees and Designees, and customers). 
 f. Notwithstanding anything to the contrary in this Agreement
(including Section 15b), and without limiting any of Columbia’s rights and remedies hereunder, any payment required hereunder that is made late (including unpaid portions of amounts due) shall bear interest, compounded monthly, either at
the rate of [***]. Any interest charged or paid in excess of the maximum rate permitted by applicable New York State Law shall be deemed the result of a mistake and interest paid in excess of the maximum rate shall be credited or refunded (at the
Company’s option) to Company. 
 g. Company shall reimburse Columbia for any reasonable costs and expenses incurred in connection with
collecting on any arrears of Company with respect to its undisputed payment and reimbursement obligations under this Agreement (such as Section 11b of this Agreement), including the reasonable costs of engaging any collection agency for such
purpose. 

  
 12 

 6. Diligence. 

a. Company shall use its commercially reasonable efforts to research, discover, develop and market Products for commercial sale and
distribution in the Territory, and to such end, such efforts will include the following (each, a “Milestone Event”): 
 (1)
Securing [***] in total gross cash financing proceeds within [***] of the Effective Date; 
 (2) Achieve [***] on a Company proprietary
system that is or uses a Patent Product within [***] of the Effective Date; and 
 (3) First commercial sale of a Patent Product within [***]
of the Effective Date. 
 b. If Company believes that it will not achieve a Milestone Event, and provided Company is in compliance with all
other material terms and obligations of this Agreement, Company may notify Columbia in writing in advance of the relevant deadline. Company shall include with such notice (a) a reasonable explanation of the reasons for such failure (and lack of
finances will not constitute reasonable basis for such failure) (“Explanation”) and (b) a reasonable, detailed, written plan for promptly achieving a reasonable extended and/or amended milestone (“Plan”). If Company so
notifies Columbia and provides Columbia with an Explanation and Plan, both of which are reasonably acceptable to Columbia, then Section 6a will be amended to incorporate the extended and/or amended milestone set forth in the Plan. If Company so
notifies Columbia and provides Columbia with an Explanation and Plan, but the Explanation is not reasonably acceptable to Columbia, then Company will have the option to extend the deadline for such Milestone Event for a [***] or other agreed upon
period by paying to Columbia an extension fee of [***]. If Company does not make such payment or, if after the extension, on a milestone-by-milestone basis, Company
fails to achieve the milestone, Columbia shall have the option, in its sole discretion, to terminate this Agreement or convert any or all of such exclusive licenses to nonexclusive licenses with no right to sublicense and no right to initiate legal
proceedings pursuant to Section 11. 
 c. No less often than every twelve (12) months after the Effective Date of this Agreement,
Company shall report in writing to Columbia on progress made toward the diligence objectives set forth above. 

  
 13 

 7. Confidentiality.  

a. Except to the extent required to discover, develop, manufacture, use, sell, have sold, distribute, rent or lease Products in the Field, or
to grant a sublicense under this Agreement, Company will treat as confidential the Patents and Technical Information disclosed hereunder, and will not disclose or distribute the same to any third party (other than Sublicensees and Designees) without
Columbia’s written permission; provided that Company may use the Technical Information in a good faith manner to conduct development and commercialization activities. 

b. The obligations of confidentiality under this Section 7 do not apply to any Patents, Materials or Technical Information that Company
can demonstrate: 
 (i) was known to Company prior to receipt thereof from Columbia; 

(ii) was or becomes a matter of public information or publicly available through no act or failure to act on the part of Company; 

(iii) is acquired by Company from a third party entitled to disclose it to Company; or 

(iv) Company discovers, develops independently without reference to or use of such Patents, Materials or Technical Information, as evidenced
by contemporaneous written records. 
 8. Disclaimer of Warranty; Limitations of Liability.  

a. Columbia hereby represents to Company that, as of the Effective Date: 

 

	 	1.	 all Columbia inventors listed on the Patents have assigned or have an obligation to assign all right, title and
interest that they have in the Patents to Columbia; and 

  

	 	2.	 Columbia is not in receipt of written notification of any claim, action, case, suit, litigation, arbitration,
inquiry or proceeding pending or threatened by any Third Party that seeks to challenge Columbia’s ownership of Patents or the ability of Columbia to grant the licenses hereunder. 

b. COLUMBIA IS LICENSING THE PATENTS, MATERIALS, TECHNICAL INFORMATION, AND THE SUBJECT OF ANY OTHER LICENSE HEREUNDER, ON AN “AS
IS” BASIS. EXCEPT AS SET FORTH IN SECTION 8a, COLUMBIA MAKES NO WARRANTIES EITHER EXPRESS OR IMPLIED OF ANY KIND, AND HEREBY EXPRESSLY DISCLAIMS ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND AS TO THE PATENTS, MATERIALS,
TECHNICAL INFORMATION, PRODUCTS AND/OR ANYTHING DISCOVERED, DEVELOPED, MANUFACTURED, USED, SOLD, OFFERED FOR SALE, IMPORTED, EXPORTED, DISTRIBUTED, RENTED, LEASED OR OTHERWISE DISPOSED OF UNDER ANY 

  
 14 

 
LICENSE GRANTED HEREUNDER, INCLUDING BUT NOT LIMITED TO: ANY WARRANTIES OF MERCHANTABILITY, TITLE, FITNESS, ADEQUACY OR SUITABILITY FOR A PARTICULAR PURPOSE, USE OR RESULT; ANY WARRANTIES AS TO
THE VALIDITY OF ANY PATENT; AND ANY WARRANTIES OF FREEDOM FROM INFRINGEMENT OF ANY DOMESTIC OR FOREIGN PATENTS, COPYRIGHTS, TRADE SECRETS OR OTHER PROPRIETARY RIGHTS OF ANY PARTY. 

b. In no event shall Columbia, or its trustees, officers, faculty members, students, employees and agents, have any liability to Company,
Sublicensees, Designees, or Affiliates of the foregoing, or any Third Party arising out of the use, operation or application of the Patents, Technical Information, Materials, Products, or anything discovered, developed, manufactured, used, sold,
offered for sale, imported, exported, distributed, rented, leased or otherwise disposed of under any license granted hereunder by Company, Sublicensees, Designees or Affiliates of the foregoing, or any Third Party for any reason, including but not
limited to, the unmerchantability, inadequacy or unsuitability of the Patents, Materials, Technical Information, Products and/or anything discovered, developed, manufactured, used, sold, offered for sale, imported, exported, distributed, rented,
leased or otherwise disposed of under any license granted hereunder for any particular purpose or to produce any particular result, or for any latent defects therein. 

c. In no event will Columbia, or its trustees, officers, faculty members, students, employees and agents, be liable to the Company,
Sublicensees, Designees or Affiliates of the foregoing, or any Third Party, for any consequential, incidental, special or indirect damages (including, but not limited to, from any destruction to property or from any loss of use, revenue, profit,
time or good will) based on activity arising out of or related to this Agreement, whether pursuant to a claim of breach of contract or any other claim of any type. 

d. Except in the case of willful misconduct as determined by a court of competent jurisdiction, in no event shall Columbia’s liability to
Company exceed the payments made to Columbia by Company under this Agreement. 
 e. The parties hereto acknowledge that the limitations and
exclusions of liability and disclaimers of warranty set forth in this Agreement form an essential basis of the bargain between the parties. 

9. Prohibition Against Use of Columbia’s Name.  

Company will not use the name, insignia, or symbols of Columbia, its faculties or departments, or any variation or combination thereof, or the
name of any trustee, faculty member, other employee, or student of Columbia for any purpose whatsoever without Columbia’s prior written consent. Notwithstanding the foregoing, Company may use the name of Columbia faculty members and employees
who are also officers, employees or consultants of Company so long as their names are used only in corporate (including marketing) materials which factually describe their relationship with Company with no implication of endorsement or sponsorship,
and are used only with the permission of such individuals. 

  
 15 

 10. Compliance with Governmental Obligations. 

a. Notwithstanding any provision in this Agreement, Columbia disclaims any obligation or liability arising under the license provisions of
this Agreement if Company or its Affiliates is charged in a governmental action for not complying with or fails to comply with governmental regulations in the course of taking steps to bring any Product to a point of practical application. 

b. Company and its Affiliates shall comply upon reasonable notice from Columbia with all governmental requests directed to Columbia and
provide all information and assistance necessary to comply with the governmental requests. 
 c. Company and its Affiliates shall use
commercially reasonable efforts to ensure that research, development, manufacturing and marketing under this Agreement complies with all government regulations in force and effect including, but not limited to, Federal, state, and municipal
legislation. 
 11. Patent Prosecution and Maintenance; Litigation. 

a. Columbia, by counsel it selects to whom Company has no reasonable objection, in consultation with Company and any counsel appointed by the
Company, will file, prosecute and maintain all Patents in Columbia’s name and in countries designated by the Company. As an accommodation to Company, Columbia and its counsel shall not prepare any work product for filing in the first instance.
Instead, Company and its counsel shall prepare all work product for filing in the first instance and provide same to Columbia and its counsel in a timely manner prior to any filing deadline for review and filing. In the event that Company and its
counsel does not provide work product for filing in a timely manner, Columbia and its counsel shall prepare same. Columbia shall instruct its patent counsel (1) to copy Company on all correspondence related to Patents (including copies of each
patent application, office action, response to office action, request for terminal disclaimer, and request for reissue or reexamination of any patent or patent application) and provide copies of all such items to Company counsel as soon as
reasonably practicable, and (2) as requested by Company, to provide an update as to the current status of all Patents. The parties agree that consultation between the parties relating to the Patents under this Section 11 shall be pursuant
to a common interest in the validity, enforceability and scope of the Patents. Each party shall treat such consultation, along with any information disclosed by each party in connection therewith (including any information concerning patent
expenses), on a strictly confidential basis, and shall not disclose such consultation or information to any party without the other party’s prior written consent. If Company seeks to challenge the validity, enforceability or scope of any
Patent, Columbia’s consultation obligation under this Section 11a shall automatically terminate; for the avoidance of doubt, any such termination shall not affect Company’s confidentiality and nondisclosure obligations with respect to
consultation or disclosure of information prior to such termination, and shall not affect any other provisions of this Agreement (including Company’s reimbursement obligation under Section 11b). 

  
 16 

 b. Except as expressly set forth below, Company will reimburse Columbia for the actual fees,
costs, and expenses that Columbia has incurred [***] and that Institution incurs following [***] in preparing, filing, prosecuting and maintaining the Patents, including without limitation, attorneys’ fees, the costs of any interference
proceedings, oppositions, reexaminations, or any other ex parte or inter partes administrative proceeding before patent offices, taxes, annuities, issue fees, working fees, maintenance fees and renewal charges (collectively, “Patent
Expenses”); provided that Columbia shall consult with Company, and the parties shall agree in good faith on a strategy, before incurring any significant expenses related to interference proceedings, oppositions, reexaminations, or any other ex
parte or inter partes administrative proceeding that could generate significant costs. Patent Expenses incurred [***] in connection with the Patents set forth in Exhibit A are “Past Patent Expenses,” and Columbia, using reasonable efforts,
estimates Past Patent Expenses to be [***]. To the extent that the license fee paid by Company under Section 4b(i) is less than the Past Patent Expenses, such difference shall be reimbursed in full by Company to Columbia within sixty
(60) days after the Effective Date. 
 Patent Expenses incurred by Columbia [***] (“Future Patent Expenses”) shall be reimbursed to Columbia
by Company within thirty (30) days of receiving an invoice from Columbia. Upon failure of Company to pay any Past Patent Expenses or Future Patent Expenses as required by this Section 11b within 30 days from Columbia’s notice to
Company of such failure, Columbia may, in its sole discretion, take either of the following actions: 
 i) Abandon the Patents, and in such
event, Columbia will provide notice of such abandonment to Company, or 
 ii) In the event Columbia notifies Company that Columbia will
continue to prosecute such Patents at its expense, Company will have no further rights to such Patents under this Agreement. 
 With respect to non-US and non-PCT Patent Expenses, Columbia will send to Company a brief description of anticipated actions by country or region (e.g., conversion to applications in specific
countries or regionals such as the EPO), when the action is due, and the associated expense for such actions on a county or regional basis in advance of such action due dates (hereinafter a “Patent Expense Estimate”). For avoidance of
doubt, Company’s Patent Expense reimbursement obligation for non-US countries shall cover only those it designates in which to file, prosecute and maintain Patents. The parties shall discuss same in
good faith. Within the later of one month prior to the action due dates or 30 days of Company receipt of the Patent Expense Estimate, Company shall determine whether it desires for Columbia to proceed with such actions on a country-by-country basis. Failure by Company to make the associated advance payment as described for a particular action for a non-US
country selected/approved by Company will be considered an election not to secure the rights associated with the specific action, and Columbia may, in its sole discretion, abandon the Patents in such country, or in the event Columbia notifies
Company that Columbia will continue to prosecute such Patents at its expense in such country (“Returned Patents”), Company will have no further rights to such Returned Patents under this Agreement, effective immediately upon Company
receipt of Columbia’s notification to Company. Any over-payment will be applied to future Patent Expenses. Upon Company request, any over-payment not used for future Patent Expenses within 12 months will be returned to the company
promptly. Any expenses in excess of the Patent Expense estimate will be invoiced to the company. 

  
 17 

 c. Each party shall promptly notify the other in writing of any actual, alleged or
threatened challenge to the validity or enforceability of the Patents of which it becomes aware. Columbia shall have the first right to defend, control and settle any such validity or enforceability challenges. Columbia shall consult with Company
before taking any such actions, and the parties shall agree in good faith on a strategy before incurring any significant costs. In the event Columbia does not defend any such validity or enforceability challenge within ninety days of becoming aware
of the same, or if its ceases to defend such challenge, then Company shall have the right to defend, control and settle such validity or enforceability challenge, provided that the terms of any settlement shall be subject to Columbia’s prior
written consent. 
 d. In the event that Columbia or Company becomes aware of any Third Party who is selling a product that does or will
compete with a Product sold or being developed by Company or any of its Affiliates (but not a Sublicensee, or Sublicensee Affiliate) and has a good faith belief that such Third Party is infringing an issued patent falling within the definition of
Patents (“Third Party Infringer”), that Party will notify the other Party. Company shall have the right to initiate legal proceedings against any such Third-Party Infringer in its own name and at Company’s sole expense. Columbia may
initiate legal proceedings against such Third Party Infringer if Company fails within [***] of receipt of such notice to either (i) cause such infringement to cease or (ii) initiate legal proceedings against the Third-Party Infringer or
engage in substantive discussions with such Third-Party Infringer with respect to abating such infringement or a sublicense to such Third-Party Infringer; provided, however, that if Company reasonably determines that there are good faith, strategic
reasons not to initiate legal proceedings at that time, then the Parties shall discuss same in good faith and Company’s first right to enforce shall be tolled for the period determined by the Parties for postponement of initiation of legal
proceedings. Any proposed disposition or settlement of a legal proceeding filed by Company pursuant to this Section 11c to enforce any issued patent falling within the definition of Patents against any Third-Party Infringer shall be subject to
Columbia’s prior written approval, which approval shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, Company’s rights under this Section 11c shall apply only to claims of Patents that are exclusively
licensed to Company under this Agreement and only in the Field and Territory that are exclusively licensed to Company under this Agreement. The party that initiates legal proceedings against such Third Party Infringer (the “Initiating
Party”) shall provide the other party (the “Non-Initiating Party”) with advance written notice, as early as practicable, of its intent to file any such suit or take any such action, and shall
provide the Non-Initiating Party with an opportunity to make suggestions and comments regarding such suit or action, which the Initiating Party shall consider in good faith. Thereafter, at the Non-Initiating Party’s request and from time to time during the course of such suit or action, the Initiating Party shall keep the Non-Initiating Party informed, shall
consult with the Non-Initiating Party regarding the status and direction of any such suit or action, and shall provide the Non-Initiating Party with copies of all
material documents filed in, or otherwise relating to, such suit or action as early as practicable in advance of any filing thereof to allow the Non-Initiating Party to comment thereon, which comments Columbia
shall consider in good faith. 

  
 18 

 e. The Non-Initiating Party will provide all
assistance reasonably requested by the “Initiating Party”, at the Initiating Party’s expense, and will not make any admission or assert any position in any legal or administrative proceeding that is inconsistent with or adverse to any
position asserted by the Initiating Party in any proceedings against the Third Party Infringer, without the Initiating Party’s prior written consent. Any recovery, whether by way of settlement or judgment, from a third party pursuant to a legal
proceeding initiated in accordance with Section 11d shall first be used to reimburse the Initiating Party and the Non-Initiating Party for its actual fees, costs and expenses incurred in connection with
such proceeding. Any remaining amounts from any such settlement or judgment shall be divided as follows: (A) Columbia shall retain or receive, as applicable, the royalty that it would have otherwise received under Section 4b(iii) had such
activities been performed by Company, (B) subject to clause (A), Company shall retain or receive, as applicable, all damages awarded based on lost sales of Product, and (C) all other such amounts (including any punitive or exemplary
damages) shall be divided [***] to the party who initiated or carried on the proceedings and [***] to the other party. 
 f. In the event a
party initiates or defends a legal proceeding concerning any Patent pursuant to Section 11, the other party shall cooperate fully with and supply all assistance reasonably requested by the party initiating such proceeding, including without
limitation, joining the proceeding as a party if requested. The party that institutes any legal proceeding concerning any Patent pursuant to Section 11 shall have sole control of that proceeding. 

12. Indemnity and Insurance. 

a. Company will indemnify, defend, and hold harmless Columbia, its trustees, officers, faculty, employees, students and agents, from and
against any and all third party actions, suits, claims, demands, prosecutions, liabilities, costs, expenses, damages, deficiencies, losses or obligations (including attorneys’ fees) based on, arising out of, or relating to: (i) the
discovery, development, manufacture, packaging, use, sale, offering for sale, importation, exportation, distribution, rental or lease of Products, even if altered for use for a purpose not intended, (ii) the use of Patents, Materials or
Technical Information by Company, Sublicensees, Designees, or their Affiliates or customers, (iii) any representation made or warranty given by Company, Sublicensees, Designees, or their Affiliates with respect to Products, Patents, Materials
or Technical Information, (iv) any infringement claims relating to Products, Patents, Materials or Technical Information, and (v) any asserted violation of the Export Laws (as defined in Section 14 hereof) by Company, Sublicensees,
Designees, or their Affiliates, except in each case to the extent attributable to the gross negligence or willful misconduct of Columbia as determined by a court of competent jurisdiction. Except as separately provided for under Sections 11(c)-(f),
Columbia will promptly notify Company in writing any action, suit, claims, demands or prosecutions (“Claim”) for which it will be seeking indemnification and grant Company control of the defense and settlement of the Claim, provided that
the failure of Columbia to give notice as provided above shall not relieve Company of its defense or indemnification obligations, except to the extent that the failure results in actual prejudice or damage to Company. Company will direct the defense
and settlement of any such Claim with counsel of its choosing who are reasonably acceptable to Columbia. Company shall not settle any such action without the written consent of Columbia, which consent shall not be unreasonably withheld. Company will
not consent to the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to the indemnified entities a release from all liability with respect to the Claim.

  
 19 

 b. Commencing at least five (5) business days prior to the first Product being offered
for sale or entering human clinical trials, Company shall obtain and maintain during the term of this Agreement, Commercial General Liability insurance including product liability and contractual liability coverage applicable to Company’s
indemnity obligations under Section 12a) with reputable and financially secure insurance carriers reasonably acceptable to Columbia to cover the activities of Company, Sublicensees, Designees, and their Affiliates, for minimum limits of
$5,000,000 combined single limit for personal injury and property damage per occurrence and in the aggregate. Such insurance shall include Columbia as additional insureds. Company shall furnish a certificate of insurance evidencing such
coverage, with thirty days’ written notice to Columbia of cancellation or material change in coverage. The minimum amounts of insurance coverage required herein shall not be construed as creating any limitation on the Company’s
indemnity obligation under Section 12a of this Agreement. 
 c. Company’s insurance shall be primary coverage; any insurance
Columbia may purchase shall be excess and noncontributory. The Company’s insurance shall be written to cover claims incurred, discovered, manifested, or made during or after the expiration of this Agreement. 

d. Company shall at all times comply with all statutory workers’ compensation and employers’ liability requirements covering its
employees with respect to activities performed under this Agreement. 
 13. Marking.  

Prior to the issuance of patents falling within the definition of Patents, Company shall mark all Patent Products made, sold, offered for
sale, imported, or otherwise disposed of by Company under the license granted in this Agreement with the words “Patent Pending,” and following the issuance of one or more patents, with the numbers of such patents. The Company shall cause
its Affiliates, and use reasonable efforts to cause its Sublicensees and Designees and their Affiliates, to comply with the marking requirements of this Section 13. 

14. Export Control Laws. 

Company agrees to comply with U.S. export laws and regulations pertaining to the export of technical data, services and commodities, including
the International Traffic in Arms Regulations (22 C.F.R. § 120 et seq.), the Export Administration Regulations (15 C.F.R. § 730 et seq.), the regulations administered by the Treasury Department’s Office of Foreign Assets Control (31
C.F.R. § 500, et seq.), and the Anti-Boycott Regulations (15 C.F.R. § 760). The parties shall cooperate with each other to facilitate compliance with these laws and regulations. 

Company understands that sharing controlled technical data with non-U.S. persons is an export to that
person’s country of citizenship that is subject to U.S. export laws and regulations, even if the transfer occurs in the United States. Company shall obtain any necessary U.S. government license or other authorization required pursuant to the
U.S. export control laws and regulations for the export or re-export of any commodity, service or technical data covered by this Agreement, including technical data acquired from Columbia pursuant to this
Agreement and products created as a result of that data. 

  
 20 

 15. Breach and Cure. 

a. In addition to applicable legal standards, Company shall be deemed to be in material breach of this Agreement for: (i) failure to pay
fully and promptly amounts due pursuant to Section 4 (including without limitation any payments required under subsection h thereof) and payable pursuant to Section 5; (ii) failure of Company to meet any of its obligations under
Section 6 of this Agreement; (iii) failure to comply with governmental requests directed to Columbia pursuant to Section 10b; (iv) failure to reimburse Columbia for or pay fully and promptly the costs of prosecuting and
maintaining Patents pursuant to Section 11; (v) failure to obtain and maintain insurance in the amount and of the type provided for in Section 12; and (vi) failure to comply with the Export Laws under Section 14. 

b. Either party shall have the right to cure its material breach. The cure shall be effected within a reasonable period of time but in no
event later than [***] after notice of any breach given by the non-breaching party. 
 16. Term
of Agreement. 
 a. This Agreement shall be effective as of the Effective Date and shall continue in full force and effect until its
expiration or termination in accordance with this Section 16. 
 b. Unless terminated earlier under any provision of this Agreement,
the term of the licenses granted hereunder shall extend, on a country-by-country and
product-by-product basis, until the later of (i) the date of expiration of the last to expire of the issued patents falling within the definition of Patents, or
(ii) the expiration of the Other Product Royalty Term for such product in such country. 
 c. Columbia may terminate this Agreement:
(i) upon [***] days written notice to Company if Columbia elects to terminate in accordance with [***]; (ii) upon written notice to Company for Company’s material breach of the Agreement and Company’s failure to cure such material
breach in accordance with Section 15b; (iii) in the event Company becomes insolvent or is generally not paying its debts as such debts become due, unless Company can provide adequate assurance of future performance, including diligent
development and sales of Product; (iv) in the event Company ceases to conduct business as a going concern; and (v) in the event Company (or any entity or person acting on its behalf) initiates any proceeding or otherwise asserts any claim
challenging the validity or enforceability of any Patent in any court, administrative agency or other forum. Termination under (ii) – (v) shall be effective upon date of notice sent pursuant to Section 17. If the Company disputes in good
faith such material breach or its failure to cure such breach by written notice to Columbia within such [***] period, then such dispute shall be submitted to the dispute resolution procedures set forth in Article 26(a). In that event, the notifying
Party does not have the right to terminate until it has been determined, pursuant to the procedures set forth in Article 26(a), that Company is in material breach of this Agreement, and such breaching Party further fails to cure such breach within
[***] after the conclusion of any proceedings under Article 26(a). 
 d. Company shall have the right to terminate this Agreement for any
reason upon thirty (30) days prior written notice. 

  
 21 

 e. Upon any termination of this Agreement other than under Section 16d, if the license
granted to Company under this Agreement is sublicensed, then each Sublicensee that is not at such time in material breach of its sublicense shall have the right to obtain a license from Columbia on the same terms and conditions as set forth herein,
which shall not impose any representations, warranties, obligations or liabilities on Columbia that are not included in this Agreement and (i) the scope of the license granted directly by Columbia to such sublicensee shall be co-extensive with the scope of the sublicense granted by Company to such sublicensee, and (ii) if the sublicense granted to such sublicensee was non-exclusive, such
sublicensee shall not have the right to participate in the prosecution or enforcement of the Patents under the license granted to it directly by Columbia. Any sublicense granted by Company will contain provisions corresponding to those of this
paragraph respecting termination and the conditions of continuance of sublicenses. 
 f. Upon expiration of the term of this Agreement as
set forth in Section 16(b), Company shall have a non-exclusive, perpetual, license to use the Technical Information and Materials. 

g. Sections 5c, 5e, 5f, 5g, 7, 8, 9, 10, 12, 14, 16e, 16f, 16g, 16h, 16i, 17, 19, 22, 23, and 25, 26 will survive any termination or expiration
of this Agreement. 
 h. Any termination of this Agreement shall not adversely affect any rights or obligations that may have accrued to
either party prior to the date of termination, including without limitation, Company’s obligation to pay all amounts due and payable under Sections 4 (including any payments required under subsection h thereof), 5 and 11 hereof. 

i. Upon any termination of this Agreement for any reason other than the expiration of this Agreement under Section 16b or Company’s
failure to cure a material breach of this Agreement under Section 16c(ii), Company, Sublicensees, Designees, and their Affiliates shall have the right, for [***] or such longer period as the parties may reasonably agree, to dispose of Products
or substantially completed Products then on hand, and to complete orders for Products then on hand, and royalties shall be paid to Columbia with respect to such Products as though this Agreement had not terminated. If this Agreement expires under
Section 16b, then the Company shall thereafter be free to use the Technical Information and Materials without any further obligation to Columbia. 

h. Notwithstanding anything to the contrary in the Agreement, to the extent the manufacture of a Product is Covered By an issued patent within
the definition of Patents and occurs prior to the expiration of such issued patent, the sale of that Product after the expiration date of the issued patent shall still constitute a royalty-bearing sale under Section 4. 

  
 22 

 17. Notices. Any notice required or permitted to be given under this Agreement shall
be sufficient if in writing and shall be considered given (i) when mailed by certified mail (return receipt requested), postage prepaid, or (ii) on the date of actual delivery by hand or overnight delivery, with receipt acknowledged, 

 

			
	if to Columbia, to:	 	 Executive Director
 Columbia Technology
Ventures
 Columbia University
 [***]

		
	copy to:	 	 General Counsel
 Columbia University

[***]

		
	if to the Company, to:	 	
		 	 Singular Genomics, Inc. (c/o Seed General Council)

1201 Camino Del Mar, Suite 202
 Del Mar, California 92014

Attn: Drew Spaventa

		
	copy to:	 	
		 	 Singular Genomics, Inc. (c/o Seed General Council)

1201 Camino Del Mar, Suite 202
 Del Mar, California 92014

Attn: Seed General Council

 or to such other address as a party may specify by notice hereunder. 

18. Assignment. This Agreement and all rights and obligations hereunder may not be assigned by either party without the written consent
of the other party, except that Company may assign this Agreement, without the written consent of Columbia, to an entity that acquires all or substantially all of its business or assets, whether through merger, reorganization or otherwise, provided
that the party to which this Agreement is assigned expressly agrees in writing to assume and be bound by all obligations of the assigning party under this Agreement. Company shall provide Columbia with written notice of any such assignment. Any
attempt to assign without compliance with this provision shall be void. 
 19. Waiver and Election of Remedies. The failure of any
party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver or deprive that party thereafter of the right to insist upon strict adherence to that term or any other term of this Agreement. All
waivers must be in writing and signed by an authorized representative of the party against which such waiver is being sought. The pursuit by either party of any remedy to which it is entitled at any time or continuation of the Agreement despite a
breach by the other shall not be deemed an election of remedies or waiver of the right to pursue any other remedies to which it may be entitled. 

  
 23 

 20. Binding on Successors. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns to the extent assignment is permitted under this Agreement. 
 21.
Independent Contractors. It is the express intention of the parties that the relationship of Columbia and the Company shall be that of independent contractors and shall not be that of agents, partners or joint venturers. Nothing in this
Agreement is intended or shall be construed to permit or authorize either party to incur, or represent that it has the power to incur, any obligation or liability on behalf of the other party. 

22. Entire Agreement; Amendment. This Agreement, together with the Exhibits, sets forth the entire agreement between the parties
concerning the subject matter hereof and supersedes all previous agreements, written or oral, concerning such subject matter. This Agreement may be amended only by written agreement duly executed by the parties. 

23. Severability. In the event that any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable
because it is invalid, illegal or unenforceable, the validity of the remaining provisions shall not be affected, and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular
provisions held to be unenforceable, unless such construction would materially alter the meaning of this Agreement. By way of example, but not by way of limitation, Sections 4h(i), 4h(ii) and 4h(iii) are intended by Company and Columbia to be
severable from each other, such that if one clause is found to be unenforceable, the other clauses remain operative and in effect. 
 24.
No Third-Party Beneficiaries. Except as expressly set forth herein, the parties hereto agree that there are no third-party beneficiaries of any kind to this Agreement. 

25. Governing Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of
New York as applicable to agreements made and wholly performed within the State of New York, and without reference to the conflict or choice of laws principles of any jurisdiction. 

26. Dispute Resolution: 

(a) Internal Resolution. The Parties shall discuss in good faith for a period of no less than thirty (30) days any disputes arising
between the Parties in connection with this Agreement. In the event such a dispute between the Parties is not settled within thirty (30) days, the issue shall be referred to the Executive Director of Columbia Technology Ventures, or his/her
designee, and an officer of Company, or his/her designee, for discussions in good faith for a period of no less than thirty (30) days. If no agreement is reached by the executives within such additional thirty (30) day period, then either
Party may initiate dispute resolution procedures pursuant to Section 26(b). 
 (b) Unless otherwise separately agreed in writing, the
parties agree that any and all claims arising under or related to this Agreement shall be heard and determined only in either the United States District Court for the Southern District of New York or in the courts of the State of New York located in
the City and County of New York, and the parties irrevocably agree to submit themselves to the exclusive and personal jurisdiction of those courts and irrevocably waive any and all rights any such party may now or hereafter have to object to such
jurisdiction or the convenience of the forum. 

  
 24 

 27. Execution in Counterparts; Facsimile or Electronic Transmission. This Agreement
may be executed in counterparts, and by facsimile or electronic transmission. This Agreement is not binding on the parties until it has been signed below on behalf of each party. 

 
  

  
 25 

 IN WITNESS WHEREOF, Columbia and the Company have caused this Agreement to be executed by
their duly authorized representatives as of the day and year first written above. 
  

			
	 THE TRUSTEES OF COLUMBIA

UNIVERSITY IN THE CITY OF NEW YORK

		
	By:	 	/s/ Orin Herskowitz
	Name:	 	Orin Herskowitz
	Title:	 	Exec Dir, CTV
	
	 SINGULAR GENOMICS SYSTEMS, INC. 

		
	By:	 	/s/ Andrew Spaventa
	Name:	 	 Andrew Spaventa

	Title:	 	 Chief Executive Officer

  

  
 26 

 EXHIBIT A 

Patents 
 [***] 

 
  

  
 27 

 EXHIBIT B 

Materials 
 [***] 

 
  

  
 28 

 EXHIBIT C 

Technical Information 

[***] 
  

 

  
 29 

 CERTAIN IDENTIFIED INFORMATION
HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS BOTH NOT MATERIAL
AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY
DISCLOSED, AND HAS BEEN MARKED “[***]” TO INDICATE WHERE OMISSIONS HAVE
BEEN MADE. 
 FIRST AMENDMENT 

TO 
 LICENSE AGREEMENT

 This FIRST AMENDMENT TO LICENSE AGREEMENT (this “Amendment”) is made and entered into as of September 7, 2016 (“Amendment
Effective Date”) by and between Singular Genomics Systems Inc. (“Company”) and The Trustees of Columbia University in the City of New York (“Columbia”). 

W I T N E S S E T H: 
 WHEREAS, Company
and Columbia are parties to that certain License Agreement dated August 12, 2016 (the “Agreement”). Each capitalized term used herein, and not otherwise defined herein, shall have the meaning set forth in the Agreement; 

WHEREAS, Company and the Columbia wish to amend the Agreement in certain respects to add intellectual property licensed to Company under the Agreement and
additional diligence milestones and payments in consideration for such intellectual property; 
 NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein set forth, the parties hereto hereby agree as follows: 
  

	1.	 Replacement of Exhibit A with Exhibit A-1 (Patents). Exhibit A
is hereby deleted in its entirety and replaced with Exhibit A-1 attached as Appendix 1 hereto. Each mention in the Agreement of “Exhibit A” will now be deemed to be a reference to
“Exhibit A-1”. 

  

	2.	 Replacement of Exhibit C with Exhibit C-1 (Technical
Information). Exhibit C is hereby deleted in its entirety and replaced with Exhibit C-1 attached as Appendix 2 hereto. Each mention in the Agreement of “Exhibit C” will now be deemed to be a
reference to “Exhibit C-1”. 

  

	3.	 Section 4d shall be amended by adding the following language after subsection (4): 

“(5) [***] on first commercial sale of a Patent Product Covered by a Valid Claim of a Patent resulting from [***].” 

 

	4.	 Section 6a shall be amended by adding the following language to the end of the provision:

 “(4) First commercial sale of a Patent Product Covered by a Valid Claim of a Patent resulting from [***]; 

(5) Within [***] of the Effective Date, the Company shall have commenced and be engaged in active, bona fide development for a Patent Product
Covered by a Valid Claim of a Patent resulting from [***].” 

  
 30 

	5.	 Section 6b shall be amended by deleting the last sentence of Section 6(b) and replacing it with the
following: 

 “If Company does not make such payment or, if after the extension, on a
milestone-by-milestone basis, Company fails to achieve the milestone, then: (1) [***], Columbia shall have the option, in its sole discretion, to terminate this
Agreement or convert any or all of such exclusive licenses to nonexclusive licenses with no right to sublicense and no right to initiate legal proceedings pursuant to Section 11; and (2) for [***], Columbia shall have the option, in its
sole discretion of terminating this Agreement solely with respect to Patents resulting from [***] and its associated Technical Information or converting the exclusive licenses to [***] and its associated Technical Information to nonexclusive
licenses with no right to sublicense and no right to initiate legal proceedings pursuant to Section 11.” 
  

	6.	 Except as expressly set forth in this Amendment, the Agreement shall remain in full force and effect. If there
is any inconsistency or conflict between this Amendment and the Agreement, the provisions of this Amendment shall govern and control. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Amendment shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. 

  
 31 

 IN WITNESS WHEREOF, the parties hereto have causes this Amendment to Agreement to be executed as of the date
first above written. 
  

			
	 THE TRUSTEES OF COLUMBIA

UNIVERSITY IN THE CITY OF NEW YORK

		
	By:	 	/s/ Orin Herskowitz
	Name:	 	Orin Herskowitz
	Title:	 	Exec Dir, CTV
		
	[***]	 	
	
	 SINGULAR GENOMICS SYSTEMS, INC.

		
	By:	 	/s/ Andrew Spaventa
	Name:	 	 Andrew Spaventa

	Title:	 	 Chief Executive Officer

  

  
 32 

 Appendix 1 

EXHIBIT A-1: Patents 

[***] 
  

 

  
 33 

 Appendix 2 

EXHIBIT C-1: Technical Information 

[***] 
  

 

  
 34 

 CERTAIN IDENTIFIED INFORMATION
HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS BOTH NOT MATERIAL
AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY
DISCLOSED, AND HAS BEEN MARKED “[***]” TO INDICATE WHERE OMISSIONS HAVE
BEEN MADE. 
 SECOND AMENDMENT 

TO 
 LICENSE AGREEMENT

 This SECOND AMENDMENT TO LICENSE AGREEMENT (this “Amendment”) is made and entered into as of November 4, 2016 (“Amendment Two
Effective Date”) by and between Singular Genomics Systems Inc. (“Company”) and The Trustees of Columbia University in the City of New York (“Columbia”). 

W I T N E S S E T H: 
 WHEREAS, Company
and Columbia are parties to that certain License Agreement dated August 12, 2016, as amended by the First Amendment dated September 7, 2017 (the “Agreement”). Each capitalized term used herein, and not otherwise defined herein,
shall have the meaning set forth in the Agreement; 
 WHEREAS, Company and the Columbia wish to amend the Agreement in certain respects to add intellectual
property licensed to Company under the Agreement and amend the diligence milestones and payments in consideration for such intellectual property; 
 NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein set forth, the parties hereto hereby agree as follows: 
  

	1.	 Replacement of Exhibit A-1 with Exhibit A-2 (Patents). Exhibit A-1 is hereby deleted in its entirety and replaced with Exhibit A-2 attached as Appendix 1 hereto. Each
mention in the Agreement of “Exhibit A” or “Exhibit A-1” will now be deemed to be a reference to “Exhibit A-2”. 

 

	2.	 Replacement of Exhibit B with Exhibit B-2 (Materials). Exhibit B
is hereby deleted in its entirety and replaced with Exhibit B-2 attached as Appendix 2 hereto. Each mention in the Agreement of “Exhibit B” will now be deemed to be a reference to “Exhibit B-2”. 

  

	3.	 Replacement of Exhibit C-1 with Exhibit C-2 (Technical Information). Exhibit C-1 is hereby deleted in its entirety and replaced with Exhibit C-2 attached as Appendix 3
hereto. Each mention in the Agreement of “Exhibit C” or “Exhibit C-1” will now be deemed to be a reference to “Exhibit C-2”.

  

	4.	 Section 4b(ii) shall be amended by deleting, in its entirety, the second bullet point which reads as
follows: 

  

	 	•	 	 [***] 

  
 35 

	5.	 Sections 4d(1)-(3) shall be amended by deleting it entirely and adding the following as the new Sections
4d(1)-(3): 

 (1) [***] payable on the 6 month anniversary of the achievement date of [***]; 

(2) [***] payable on the 6 month anniversary of the achievement date of the first commercial sale of a Product that is a Consumable; 

(3) [***] payable on the 6 month anniversary of the achievement date of the first commercial sale of a Patent Product that is a System; 

 

	6.	 Section 4d shall be amended by adding the following language after subsection (5): 

“(6) The parties will within six (6) months of the Amendment Two Effective Date enter into good faith discussions for the addition of
one (1) development milestone payment to be added as Section 4d(6) per a separate written amendment. 
  

	7.	 Section 11b shall be amended by adding the following language to the end of the first (1st) paragraph:

 Solely with respect to Past Patent Expenses for Patents from [***], payment of such [***] shall be deferred until a time
to be negotiated in good faith between the parties and recorded per a separate written amendment within [***]. Company’s obligation to pay to Columbia the [***] shall survive (1) termination of this Agreement, or (2) termination of
the licenses granted under Section 2 with respect to Patents from [***], provided either of these termination events occurs more than [***]. For the avoidance of doubt, payment of Future Patent Expenses for [***] shall be in accordance with the
next paragraph of this Section 11b. 
  

	8.	 Within [***], Company may terminate [***] upon written notice to Columbia. Upon Columbia’s receipt of
Company’s notice of termination of the [***] shall be deleted from this Amendment, the Patents related to [***] shall be deleted from Exhibit A-2, the Technical Information related to [***] shall be
deleted from Exhibit C-2 and, subject to Section 16h, the Company shall have no further rights, liability or obligation relating thereto. 

 

	9.	 Except as expressly set forth in this Amendment, the Agreement shall remain in full force and effect. If there
is any inconsistency or conflict between this Amendment and the Agreement, the provisions of this Amendment shall govern and control. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Amendment shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns. 

  
 36 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Agreement to be executed as of the date
first above written. 
  

			
	 THE TRUSTEES OF COLUMBIA

UNIVERSITY IN THE CITY OF NEW YORK

		
	By:	 	/s/ Orin Herskowitz
	Name:	 	Orin Herskowitz
	Title:	 	 Executive Director
 Columbia Technology
Ventures

		
	[***]	 	
	
	 SINGULAR GENOMICS SYSTEMS, INC.

		
	By:	 	/s/ Andrew Spaventa
	Name:	 	 Andrew Spaventa

	Title:	 	 Chief Executive Officer

  

  
 37 

 Appendix 1 

EXHIBIT A-2: Patents 

[***] 
  

 

  
 38 

 Appendix 2 

EXHIBIT B-2: Materials 

[***] 
  

 

  
 39 

 Appendix 3 

EXHIBIT C-2: Technical Information 

[***] 
  

 

  
 40 

 CERTAIN IDENTIFIED INFORMATION
HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS BOTH NOT MATERIAL
AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY
DISCLOSED, AND HAS BEEN MARKED “[***]” TO INDICATE WHERE OMISSIONS HAVE
BEEN MADE. 
 THIRD AMENDMENT 

TO 
 LICENSE AGREEMENT

 This THIRD AMENDMENT TO LICENSE AGREEMENT (this “Amendment”) is made and entered into as of June 20, 2017 (“Amendment Three
Effective Date”) by and between Singular Genomics Systems Inc. (“Company”) and The Trustees of Columbia University in the City of New York (“Columbia”). 

W I T N E S S E T H: 
 WHEREAS, Company
and Columbia are parties to that certain License Agreement dated August 12, 2016, as amended on September 7, 2016 and November 4, 2016 (collectively, the “Agreement”). Each capitalized term used herein, and not otherwise
defined herein, shall have the meaning set forth in the Agreement; 
 WHEREAS, Company and the Columbia wish to amend the Agreement in certain respects to
add intellectual property licensed to Company under the Agreement and amend the diligence milestones and payments in consideration for such intellectual property; 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein set forth, the parties hereto hereby agree as follows: 

 

	1.	 Replacement of Exhibit A -2 (Patents) with Exhibit A-3. Exhibit A-2 is hereby deleted in its entirety and replaced with Exhibit A-3 attached as Appendix 1 hereto. Each mention in the
Agreement of “Exhibit A-2” will now be deemed to be a reference to “Exhibit A-3”. 

 

	2.	 Replacement of Exhibit C-2 (Technical Information) with Exhibit C-3. Exhibit C-2 is hereby deleted in its entirety and replaced with Exhibit C-3 attached as Appendix 2 hereto. Each mention in the
Agreement of “Exhibit C-2” will now be deemed to be a reference to “Exhibit C¬3”. 

  

	3.	 Section 4b(iii)(1) shall be deleted in its entirety and replaced with the following language:

 “(1) [***] on Net Sales of Patent Products that are chemicals, reagents or consumables (“Consumable”)
[***] in Net Sales of Products upon which the royalty on Net Sales of Consumables will [***] of Net Sales of Consumables;” 
  

	4.	 The Company and Columbia acknowledge that the Company gave Columbia notice that terminated Section 5
(including the Amendment Two version of Section 4d(6) of the Agreement) and 6 of Amendment Two. Section 4d shall be amended by adding the following language after subsection (5): 

“(6) [***] on first commercial sale of a Product that [***].” 

  
 41 

	5.	 Section 6(a) shall be amended by adding the following language to the end of the provision: “(6)
Conduct good faith due diligence on opportunities to develop and commercialize Products that (i) use or incorporate any information, data, or subject matter disclosed in [***] or (ii) are Covered by a Valid Claim of a Patent resulting from
[***], including assessing the market opportunity and technical feasibility, and shall share such results with Columbia [***] of Amendment Three Effective Date.” 

 

	6.	 Except as expressly set forth in this Third Amendment, the Agreement shall remain in full force and effect. If
there is any inconsistency or conflict between this Third Amendment and the Agreement, the provisions of this Third Amendment shall govern and control. This Third Amendment may be executed in any number of counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same instrument. This Third Amendment shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

  
 42 

 IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to Agreement to be executed as of
the date first above written. 
  

			
	 THE TRUSTEES OF COLUMBIA

UNIVERSITY IN THE CITY OF NEW YORK

		
	By:	 	/s/ Orin Herskowitz
	Name:	 	Orin Herskowitz
	Title:	 	 Executive Director
 Columbia Technology
Ventures

		
	[***]	 	
	
	 SINGULAR GENOMICS SYSTEMS INC.

		
	By:	 	/s/ Andrew Spaventa
	Name:	 	 Andrew Spaventa

	Title:	 	 Chief Executive Officer

  

  
 43 

 Appendix I 

EXHIBIT A-3: Patents 

[***] 
  

 

  
 44 

 Appendix 2 

EXHIBIT C-3: Technical Information 

[***] 
  

 

  
 45avlr-ex101_103.htm

Exhibit 10.1

 

AVALARA, INC.

2018 EQUITY INCENTIVE PLAN
GLOBAL PERFORMANCE SHARE UNIT NOTICE

 

Avalara, Inc. (the “Company”) hereby grants to you an Award of Performance Share Units (the “PSUs”).  The PSUs are subject to all the terms and conditions set forth in this Global Performance Share Unit Notice (this “PSU Notice”), the Global Performance Share Unit Agreement (the “PSU Agreement”), including all appendices thereto, including any additional terms and conditions for your country as set forth in the applicable appendix (the “Appendices,” and together with the PSU Notice and the PSU Agreement, the “Agreement”), and the Avalara, Inc. 2018 Equity Incentive Plan (the “Plan”), all of which are incorporated into this PSU Notice in their entirety.  

 

		
	
Participant:
	
 

	
Participant ID:
	
 

	
Grant Date:
	
 

	
Grant Number:
	
 

	
Target Number of PSUs Subject to Award (“Target PSUs”):
	
 

 

Performance Periods:  Three separate performance periods (each, a “Performance Period”) apply to the Target PSUs:

 

	
 
	
•
	
January 1, 2021 through December 31, 2021 (the “First Performance Period”)

	
 
	
•
	
January 1, 2021 through December 31, 2022 (the “Second Performance Period”)

	
 
	
•
	
January 1, 2021 through December 31, 2023 (the “Third Performance Period”)

Vesting Schedule:   Subject to the terms of the PSU Agreement, PSUs are eligible for vesting as follows:

 

	
 
	
•
	
For each of the First and Second Performance Periods, one-third of the Target PSUs are eligible for vesting based on the level of achievement of Revenue Compound Annual Growth Rate (the “Performance Goal”) (calculated in accordance with Annex A) for the applicable Performance Period (rounded down to the nearest whole PSU); provided, however, that such PSUs may not become vested in excess of 100% of target for such PSUs in each of the First and Second Performance Periods.

 

	
 
	
•
	
For the Third Performance Period, the Target PSUs are eligible for vesting based on the level of achievement of the Performance Goal (calculated in accordance with Annex A), minus the total number of PSUs that vested in each of the First Performance Period and the Second Performance Period (rounded down to the nearest whole share). 

 

	
 
	
•
	
The total number of PSUs that may be earned for all Performance Periods may not exceed 250% of Target PSUs.

 

 

Determination of Vested PSUs:  PSUs will be treated as vested only as of the date the Committee (as defined in the Plan) certifies the achievement of the Performance Goal for a Performance Period (the “Vesting Date”), subject to your continued employment or service with the Company or a Related Company (“Service”) through such date, except as otherwise set forth in the PSU Agreement.  The Committee will certify the level of achievement for each Performance Period, and will issue to you one share of Common Stock for each PSU that vested in such Performance Period (each vested PSU, a “Vested PSU”), in each case, no later than March 15th of the calendar year following the end of the applicable Performance Period.  

Additional Terms/Acknowledgement:  You acknowledge receipt of, and understand and agree to, the Agreement and the Plan.  You further acknowledge that as of the Grant Date, the Agreement and the Plan set forth the entire understanding between you and the Company regarding the PSUs and supersede all prior oral and written agreements on the subject.

 

 

 

 

 

 

-2-

 

 

AVALARA, INC.

 

2018 EQUITY INCENTIVE PLAN

GLOBAL PERFORMANCE SHARE UNIT AGREEMENT

 

Pursuant to your Global Performance Share Unit Notice (the “PSU Notice”) and this Global Performance Share Unit Agreement (the “PSU Agreement”), including all appendices thereto, including any additional terms and conditions for your country as set forth in the appendix hereto (the “Appendices,” and together with the PSU Notice and the PSU Agreement, this “Agreement”), Avalara, Inc. (the “Company”) has granted to you an Award of Performance Share Units (“PSUs”) under its 2018 Equity Incentive Plan (the “Plan”) for that number of Target PSUs indicated in your PSU Notice.  This Agreement is made pursuant to the provisions of the Plan, the terms of which are hereby incorporated by reference in their entirety, and will in all respects be construed in conformity with the express terms and provisions of the Plan.  Capitalized terms not defined in this Agreement but defined in the Plan have the same definitions as in the Plan.

 

The details of the PSUs, in addition to those set forth in the PSU Notice, the Appendices, and the Plan, are as follows: 

 

1.Vesting of PSUs.  Subject to the terms of this Agreement, the PSUs are eligible for vesting as set forth in the PSU Notice (the “Vesting Schedule”). 

 

2.Settlement of PSUs.  Subject to the other terms of this Agreement with respect to settlement of Vested PSUs, as soon as practicable following completion of a Performance Period, but in no event later than March 15th of the calendar year following completion of the applicable Performance Period, (a) the Committee will certify the achievement of the Performance Goal for that Performance Period (which date is the Vesting Date for such Vested PSUs), and (b) the Company will deliver to you one share of Common Stock (each, a “Share”) for each Vested PSU in settlement thereof.  

 

All PSUs that do not become Vested PSUs after completion of the Third Performance Period will terminate and be cancelled, without the payment of any consideration to you.  You will have no further rights, and the Company will have no further obligations to you, with respect to such unvested, forfeited PSUs.  

 

3.Termination of Service.  

 

(a)General.  Except as otherwise set forth in this Section 3 and Section 4 or any other agreement or Company policy that applies to you, upon your Termination of Service for any reason prior to a Vesting Date for a Performance Period, any portion of the outstanding PSUs that have not vested as of the date of your Termination of Service will immediately be forfeited to the Company without the payment of any consideration to you.  You will have no further rights, and the Company will have no further obligations to you, with respect to such unvested, forfeited PSUs.  For the avoidance of doubt, except as otherwise set forth in this Section 3 and Section 4, providing services during only a portion of a Performance Period prior to a Vesting Date, but where your Termination of Service occurs prior to the Vesting Date, will not entitle you to vest in a pro-rata portion of the PSUs that would have vested as of such Vesting Date, nor will it entitle you to any compensation for the lost vesting.

 

For purposes of the PSUs, Termination of Service will be considered to occur as of the date you are no longer actively providing services to the Company, or, if different, the Related Company that employs you or for which you otherwise provide services (the “Service Recipient”), or any other Related Company (regardless of the reason for such termination and whether or not later found to be invalid or in 

-1-

 

breach of employment laws in the jurisdiction where you are employed or otherwise rendering services or the terms of your employment or service agreement, if any).  Unless otherwise determined by the Company, your right to vest in the PSUs, if any, will cease as of this date and will not be extended by any notice period (e.g., your period of service would not include any contractual notice period or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where you are employed or otherwise providing services, or the terms of your employment or service agreement, if any).  The Company will have the exclusive discretion to determine when you are no longer actively providing services for purposes of the PSUs (including whether you may still be considered to be actively providing services while on leave of absence).

 

(b)Death or Disability.  In the event of your death or Disability on or after the last day of a Performance Period but prior to the Vesting Date for such Performance Period, you (or your legal representative or beneficiary) will be entitled to any Vested PSUs for such Performance Period, calculated in accordance with the Vesting Schedule applicable to the Performance Period and settled in accordance with Section 2 of the PSU Agreement.    

 

4.Change in Control.  

 

(a)Change in Control during First Performance Period.   If a Change in Control occurs (i) prior to completion of the First Performance Period and (ii) you remain in Service through the effective date of the Change in Control, then the Target PSUs will be converted in their entirety to time vesting units, with the number thereof adjusted in connection with the Change in Control pursuant to Section 15 of the Plan (the “Time Vesting Units”), and will be settled as set forth in this Section 4.

 

(b)Change in Control after First Performance Period but Prior to Completion of the Third Performance Period.  If a Change in Control occurs on or after completion of a Performance Period, but prior to the Vesting Date for such Performance Period, the PSUs for such Performance Period will be payable based on achievement of the Performance Goal for the Performance Period as set forth in Section 1 of the PSU Agreement.  Subject to the preceding sentence, if a Change in Control occurs (i) after completion of the First Performance Period but prior to completion of the Third Performance Period and (ii) you remain in Service through the effective date of the Change in Control, the Target PSUs will be converted to Time Vesting Units, settled as set forth in this Section 4, in an amount equal to the greater of:

 

(i)the Target PSUs, minus any Vested PSUs earned for a previously completed Performance Period; and

 

(ii)that amount calculated by determining the level of achievement of the Performance Goal, but calculated for a single abbreviated Performance Period that ends with the close of the Company’s fiscal quarter coincident with or immediately preceding the Change in Control (calculated in accordance with Annex A but not capped at 100% of target if such a cap would otherwise apply), minus any Vested PSUs earned for a prior Performance Period. The total amount payable under the Award may not exceed 250% of Target PSUs.  

 

Any outstanding PSUs that do not become Time Vesting Units will automatically be cancelled and forfeited for no consideration as of immediately prior to the Change in Control.

 

(c)Conversion to Time Vesting Following Change in Control.  Upon a Change in Control, any Time Vesting Units will vest solely based on your continued Service, except as otherwise set forth in this Section 4 or any other agreement or Company policy that applies to you.  The Time Vesting Units will vest in substantially equal quarterly installments, with the first vesting date being the first 

-2-

 

quarterly date that follows the Change in Control (e.g., January 5, April 5, July 5 and October 5) and the last quarterly vesting date being the January 5 that immediately follows the Third Performance Period.  The Company will deliver to you payment (which may be in cash, shares or a combination thereof, as applicable in the Change in Control) with respect to each vested Time Vesting Unit within 45 days following the applicable quarterly vesting date for such Time Vesting Unit.  If settled solely in shares, one share of common stock of the Company or the Successor Company, as applicable, will be issued for each Time Vesting Unit that becomes vested.

 

(d)  Treatment if Award is Not Assumed or Substituted.  Notwithstanding the foregoing, the Time Vesting Units will become fully vested immediately prior to the Change in Control if the Award will not be converted, assumed, substituted for or replaced by the Successor Company and will be settled as soon as practicable following the Change in Control, but in any event within 45 days following the date of such Change in Control.  

 

(e)Qualifying Termination in Connection with or within 12 Months of a Change in Control.  In the event of (i) your Termination of Service by the Company or a Related Company (or a Successor Company) without Cause or (ii) your resignation from the Company or a Related Company (or a Successor Company) for Good Reason in connection with or within 12 months of a Change in Control, (each, a “Qualifying Termination”), any then outstanding Time Vesting Units will become fully vested and will be settled by delivery of the applicable payment to you (or your legal representative or beneficiary) within 45 days of the date of such Qualifying Termination. 

 

5.Compliance with Law.

 

(a)You represent and warrant that you have been furnished with a copy of the Plan and the plan summary/prospectus for the Plan.

 

(b)Notwithstanding any other provision of this Agreement, Shares will not be issued upon settlement of Vested PSUs unless the Shares issuable are registered under the Securities Act or, if such Shares are not then so registered, the Company has determined that such issuance would be exempt from the registration requirements of the Securities Act.  The PSUs also must comply with all other applicable laws and regulations governing the PSUs, including any U.S. and non-U.S. state, federal and local laws, and you will not receive Shares upon settlement of Vested PSUs if the Company determines that such receipt would not be in material compliance with such laws and regulations.

 

You understand that the Company is under no obligation to register or qualify the Shares with the U.S. Securities Exchange Commission or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Shares.  Further, you agree that the Company will have unilateral authority to amend the Plan and the Agreement without your consent to the extent necessary to comply with securities or other laws applicable to issuance of Shares.

 

(c)You hereby agree that you will in no event sell or distribute all or any part of the Shares that you may receive pursuant to the settlement of Vested PSUs unless (i) there is an effective registration statement under the Securities Act or (ii) the Company receives an opinion of your legal counsel (concurred in by legal counsel for the Company) stating that such transaction is exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration.  You understand that the Company has no obligation to you to maintain any registration of the Shares with the U.S. Securities and Exchange Commission and has not represented to you that it will so maintain registration of the Shares.  Sales of the Shares are also subject to compliance with other laws and 

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regulations, including but not limited to, U.S. and non-U.S. securities, exchange control, insider trading and market abuse laws, and with the Company’s insider trading policy. 

 

6.Transfer Restrictions.  PSUs may not be sold, transferred, assigned, encumbered, pledged or otherwise disposed of, whether voluntarily or by operation of law, during your lifetime. 

 

7.Dividends.  You will receive no benefit or adjustment to your PSUs with respect to any cash dividend, stock dividend or other distribution, except as provided in the Plan with respect to adjustments made pursuant to Section 15.1 of the Plan. 

 

8.Tax Withholding; No Obligation to Minimize Taxes.

 

(a)Regardless of any action taken by the Company, the Service Recipient or any other Related Company, the ultimate responsibility for all income tax, social insurance, FICA, payroll tax, fringe benefits tax, payment on account and all other tax-related items related to your participation in the Plan and legally applicable to you or deemed by the Company or the Service Recipient in its discretion to be an appropriate charge to you even if legally applicable to the Company or the Service Recipient (the “Tax‐Related Items”) is and remains your responsibility and may exceed the amount, if any, actually withheld by the Company or the Service Recipient.  

 

You agree to make adequate arrangements satisfactory to the Company and/or the Service Recipient, as applicable, prior to any relevant taxable or tax withholding event, as applicable, to satisfy any applicable tax withholding obligation related to all Tax-Related Items.  The Company has no obligation to deliver Shares pursuant to Vested PSUs until you have satisfied any applicable tax withholding obligation related to the Tax-Related Items in a manner acceptable to the Company. 

 

(b)In order to satisfy your obligations set forth in Section 8(a), you may irrevocably appoint any brokerage firm acceptable to the Company for such purpose (the “Agent”) as your Agent, and authorize the Agent, pursuant to a plan that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act, to: 

 

(i)Sell on the open market at the then prevailing market price(s), on your behalf, as soon as practicable on or after the settlement date for any Vested PSUs, the minimum number of Shares (rounded up to the next whole number) sufficient to generate proceeds to cover the amount of any applicable tax withholding obligation related to the Tax‐Related Items and all applicable fees and commissions due to, or required to be collected by, the Agent; and 

 

(ii)Remit directly to the Company the cash amount necessary to cover the any applicable withholding obligation related to such Tax‐Related Items, as of such date.

 

(c)Notwithstanding the foregoing, you authorize the Company and/or the Service Recipient, or their respective agents, at their discretion, to satisfy their tax withholding obligations with regard to all Tax-Related Items, if any, by one or a combination of the following:

 

(i)withholding from your wages, salary or other cash compensation payable to you by the Company, the Service Recipient and/or any other Related Company;

 

(ii)withholding from proceeds of the sale of Shares acquired upon settlement of the PSUs either through a voluntary sale or through a mandatory sale arranged by the Company (on your behalf pursuant to this authorization without further consent);

 

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(iii)withholding Shares to be issued upon settlement of the PSUs; or

 

(iv)any other method of withholding determined by the Company and permitted by applicable law and under the terms of the Plan.

 

(d)The Company may withhold or account for Tax-Related Items by considering statutory withholding rates or other applicable withholding rates, including maximum applicable rates in your jurisdiction(s).  In the event of over-withholding, you may receive a refund of any over-withheld amount in cash and will have no entitlement to the equivalent in Common Stock, or if not refunded, you may seek a refund from the applicable tax authorities. In the event of under-withholding, you may be required to pay additional Tax-Related Items directly to the applicable tax authorities or to the Company and/or the Service Recipient.  If the obligation for Tax-Related Items is satisfied by withholding Shares, for tax purposes, you are deemed to have been issued the full number of Shares for which the PSUs were settled, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items.

(e)Finally, you acknowledge that the Company and/or the Service Recipient (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the PSUs, including but not limited to, the grant, the vesting, the issuance of Shares upon vesting, the subsequent sale of Shares acquired pursuant to the PSUs and the receipt of any dividends, and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the PSUs to reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result.  Further, you acknowledge that if you are subject to tax in more than one jurisdiction, the Company and/or the Service Recipient (or former Service Recipient, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.  By accepting the Award, you agree that you will be deemed to have waived any claims against the Company with respect to any tax consequences related to the PSUs.

 

9.PSUs Not an Employment or Service Contract.  Nothing in the Plan or this Agreement will be deemed to constitute or amend any employment or service contract or confer or be deemed to confer any right for you to continue in the employ of, or to continue any other relationship with, the Company or any Related Company or limit in any way the right of the Company or any Related Company to terminate your employment or other relationship at any time, with or without cause. 

 

10.Nature of Grant.  By accepting the Award, you acknowledge, understand and agree that:

 

(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;

 

(b)the grant of PSUs is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of PSUs, or benefits in lieu of PSUs, even if PSUs have been granted in the past; 

 

(c)all decisions with respect to future PSU grants or other grants, if any, will be at the sole discretion of the Company; 

 

(d)you are voluntarily participating in the Plan; 

 

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(e)the PSUs and the Shares underlying the PSUs, and the income from and value of same, are not intended to replace any pension rights or compensation; 

 

(f)the PSUs and the Shares underlying the PSUs, and the income from and value of same, are not part of normal or expected compensation for purposes of, including but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, holiday pay, holiday top-up, pension or retirement or welfare benefits or similar mandatory payments; 

 

(g)unless otherwise agreed with the Company, the PSUs and the Shares underlying the PSUs, and the income from and value of same, are not granted as consideration for, or in connection with, the service you may provide as a director of a non‐U.S. Related Company;

 

(h)the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;

 

(i)no claim or entitlement to compensation or damages will arise from forfeiture of the PSUs resulting from (a) your Termination of Service (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where you are employed or providing services or the terms of your employment or service agreement, if any) or (b) the application of Section 16 of the PSU Agreement or any compensation recovery or clawback policies adopted by the Company; and

 

(j)unless otherwise provided in the Plan or by the Company in its discretion, the PSUs and the benefits evidenced by this Agreement do not create any entitlement to have the PSUs or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Common Stock; 

 

(k)the following provisions apply only if you are providing services outside of the United States:

 

i.the PSUs and the Shares underlying the PSUs, and the income from and value of same, are not part of normal or expected compensation for any purpose; and

 

ii.neither the Company, the Service Recipient nor any other Related Company will be liable for any foreign exchange rate fluctuation between your local currency and the United States Dollar that may affect the value of the PSUs or of any amounts due to you pursuant to the settlement of the PSUs or the subsequent sale of any Shares acquired upon settlement.

11.Data Privacy Information and Consent.

 

(a)Data Collection and Usage.  The Company and the Service Recipient collect, process and use certain personal information about you, including, but not limited to, your name, home address and telephone number, email address, date of birth, social insurance, passport or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all PSUs or any other entitlement to Shares awarded, canceled, exercised, vested, unvested or outstanding in your favor (“Data”), for the purposes of implementing, administering and managing the Plan.  The legal basis, where required, for the processing of Data is your consent.

 

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(b)Stock Plan Administration Service Providers.  The Company transfers Data to E*TRADE Securities LLC and its affiliated companies (“E*TRADE”), an independent service provider based in the United States, which is assisting the Company with the implementation, administration and management of the Plan.  The Company may select a different service provider or additional service providers and share Data with such other provider(s) serving in a similar manner.  You may be asked to agree on separate terms and data processing practices with the service provider, with such agreement being a condition to the ability to participate in the Plan. 

 

(c)International Data Transfers.  The Company and E*TRADE are based in the United States.  Your country or jurisdiction may have different data privacy laws and protections than the United States.  The Company's legal basis, where required, for the transfer of Data is your consent.

 

(d)Data Retention.  The Company will hold and use Data only as long as is necessary to implement, administer and manage your participation in the Plan, or as required to comply with legal or regulatory obligations, including under tax, exchange control, securities, labor and other laws.  This means Data may be retained until after your Termination of Service. 

 

(e)Voluntariness and Consequences of Consent Denial or Withdrawal.  Participation in the Plan is voluntary, and you are providing the consents herein on a purely voluntary basis.  If you do not consent, or if you later seek to revoke your consent, your salary from or employment and career with the Service Recipient will not be affected; the only consequence of refusing or withdrawing your consent is that the Company would not be able to grant the PSUs or other equity awards to you or administer or maintain such awards.

 

(f)Data Subject Rights.  You may have a number of rights under data privacy laws in your jurisdiction.  Depending on where you are based, such rights may include the right to (i) request access or copies of Data the Company processes, (ii) rectification of incorrect Data, (iii) deletion of Data, (iv) restrictions on processing of Data, (v) portability of Data, (vi) lodge complaints with competent authorities in your jurisdiction, and/or (vii) receive a list with the names and addresses of any potential recipients of Data.  To receive clarification regarding these rights or to exercise these rights, you can contact your local human resources representative.

 

(g)Declaration of Consent. By accepting the PSUs and indicating consent via the Company’s acceptance procedure, you are declaring that you expressly agree with the data processing practices described herein and consent to the collection, processing and use of Data by the Company and the transfer of Data to the recipients mentioned above, including recipients located in countries which do not adduce an adequate level of protection from a European (or other non-U.S.) data protection law perspective, for the purposes described above.

 

Finally, upon request of the Company or the Service Recipient, you agree to provide an executed data privacy consent form (or any other agreements or consents) that the Company and/or the Service Recipient may deem necessary to obtain from you for the purpose of administering your participation in the Plan in compliance with the data privacy laws in your country, either now or in the future.  You understand and agree that you will not be able to participate in the Plan if you fail to provide any such consent or agreement requested by the Company and/or the Service Recipient.

 

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12.No Shareholder Rights.  Neither you nor any other person in the event of your death prior to settlement of Vested PSUs will have any rights of a shareholder with respect to the PSUs unless and until the date of issuance of any Shares issuable upon settlement of Vested PSUs. 

 

13.Notices.  Any notice which either party hereto may be required or permitted to give to the other will be in writing and may be delivered personally, by interoffice mail, by fax, by electronic mail or other electronic means, or via a postal service, postage prepaid, which, with respect to notices to you, will be provided to you at your electronic mail or postal address as shown on the records of the Company from time to time, or at such other electronic mail or postal address as you, by notice to the Company, may designate in writing from time to time. 

 

14.No Advice Regarding Grant.  The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding your participation in the Plan or your acquisition or sale of Shares underlying the PSUs.  You should consult with your own personal tax, legal and financial advisors regarding your participation in the Plan before taking any action related to the Plan. 

 

15.Definitions. 

 

(a)“Cause” means the occurrence of one or more of the following events:

 

(i)your gross negligence with respect to the business and affairs of the Company;

 

(ii)your willful disregard or neglect of your duties, including your violation of any material Company or Related Company policy applicable to you that continues for a period of 10 days following written notice thereof to you by the Company or a Related Company; 

 

(iii) your act, or omission to act, intended to cause harm or damage to the business, property, operations, financial condition or reputation of the Company; 

 

(iv) your material breach of any of the provisions of any written agreement between you and the Company or a Related Company that is not cured, to the extent susceptible to cure, within 30 days after the Company or a Related Company has given written notice to you describing such breach; 

 

(v)your commission of any act of embezzlement, fraud, theft and/or financial dishonesty with respect to the Company or a Related Company, including without limitation misappropriation of funds, properties and/or assets; 

 

(vi)your breach of your fiduciary obligations, or disloyalty, to the Company or a Related Company; 

 

(vii)your material breach of the Proprietary Information and Inventions Agreement between you and the Company; or 

 

(viii)your conviction of, or plea of guilty or nolo contendere to, a felony or a crime involving theft, fraud, dishonesty, misrepresentation or sexual harassment. 

 

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The determination of whether your termination is either for Cause or without Cause will be made by the Board, in its sole discretion. Any determination by the Board that you were terminated with or without Cause for the purposes of this Award will have no effect on any determination of your or the Company’s rights or obligations for any other purpose.  

 

(b)“Change in Control” has the meaning set forth in the Plan, provided, however, that to the extent required for compliance with Section 409A of the Code, “Change in Control” means consummation of transaction that also constitutes a “change in control event” described in Section 1.409A-3(i)(5)(v) (change in the ownership of a corporation) or (vii) (change in the ownership of a substantial portion of a corporation’s assets) of the treasury regulations promulgated under Section 409A of the Code (a “409A Change of Control”).

 

(c)“Good Reason” means, without your express, written consent: 

 

(i)any material breach by the Company or a Related Company (or a Successor Company) of any written agreement to which you are a party; 

 

(ii)a material reduction in your level of responsibility, duties or authority; 

 

(iii)a material reduction in your then-in-effect base salary (other than a reduction that is equal in percentage to, or smaller than, that imposed upon other executives in the Company or the Service Recipient); or 

 

(iv)relocation of your principal office to a location more than 50 miles from your then-current principal office.

 

Notwithstanding the foregoing, your Termination of Service will not be for Good Reason unless (1) you notify the Company in writing of the existence of the condition that you believe constitutes Good Reason within 30 days of the initial existence of such condition (which notice specifically identifies such condition), (2) the Company fails to remedy such condition within 30 days after the date on which it receives such notice (the “Remedial Period”) and (3) you actually terminate employment within 30 days after the expiration of the Remedial Period and before the Company remedies such condition.

 

16.Clawback and Recovery of Compensation.  

 

(a)In accordance with Section 18.13 of the Plan, the PSUs are subject to the requirements of (i) Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (regarding recovery of erroneously awarded compensation) and any implementing rules and regulations thereunder, (ii) similar rules under the laws of any other jurisdiction, (iii) any compensation recovery or clawback policies adopted by the Company to implement any such requirements or (iv) any other compensation recovery or clawback policies as may be adopted from time to time by the Company, all to the extent determined by the Committee in its discretion to be applicable to you and/or required by applicable law. 

 

(b)In addition to the foregoing Section 16(a), and notwithstanding anything to the contrary in this Agreement, if the Board or the Committee determines that fraud, willful misconduct, gross negligence or violation of Company policy caused or otherwise contributed to the need for a material restatement of the Company’s financial results, the Board or the Committee may require you, to the extent permitted by applicable law and after a review of relevant facts and circumstances, to promptly repay to the Company any gain realized in respect of the PSUs if an amount received under such PSUs within the three years preceding the date on which the Board or the Committee determines that such an 

-9-

 

event has occurred would have been materially lower if it had been based on the restated results. The foregoing forfeiture and repayment obligations will be without prejudice to any other rights that the Company may have.

 

In determining whether to seek recovery under this Section 16, the Board or the Committee will take into account such considerations as it deems appropriate, including whether the assertion of a claim may violate applicable law or prejudice the interests of the Company in any related proceeding or investigation and the cost of the recovery process versus the amount to be recovered. 

 

17.Successors and Assigns.  The Company may assign its rights under this Agreement at any time, whether or not such rights are then exercisable, to any person or entity selected by the Board.  This Agreement will inure to the benefit of the successors and assigns of the Company and be binding upon you and your heirs, executors, administrators, successors and assigns, whether or not any such person will have become a party to this Agreement and agreed in writing to join herein and be bound by the terms and conditions hereof. 

 

18.Imposition of Other Requirements.  The Company reserves the right to impose other requirements on your participation in the Plan, on the PSUs and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require you to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. 

 

19.No Waiver.  No waiver of any provision of this Agreement will be valid unless in writing and signed by the person against whom such waiver is sought to be enforced, nor will failure to enforce any right hereunder constitute a continuing waiver of the same or a waiver of any other right hereunder. 

 

20.Section 409A Compliance.  The Company intends that the PSUs will be exempt from, or comply with, the requirements of Section 409A of the Code; provided, however, that the Company makes no representations that the PSUs will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the PSUs.  If necessary for exemption from, or compliance with, Section 409A of the Code, each installment that vests or is delivered under an Award in a series of payments or installments will be treated as a separate payment for purposes of Section 409A of the Code.    

 

21.Electronic Delivery and Acceptance.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  You hereby consent to receive such documents by electronic delivery and agree to participate in the Plan through an online or electronic system established and maintained by the Company or a third party designated by the Company.

 

22.Appendix for Non-U.S. Participants.  Notwithstanding any provision in this Agreement, any PSUs granted under the Plan will be subject to any additional terms and conditions for your country set forth in the Appendix attached hereto.  Moreover, if you relocate to one of the countries included in the Appendix, the additional terms and conditions for such country will apply to you, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.  The Appendix constitutes part of the PSU Agreement.   

 

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23.Language.  You acknowledge and represent that you are proficient in the English language or have consulted with an advisor who is sufficiently proficient in English, as to allow you to understand the terms of this Agreement and any other documents related to the Plan.  If you have received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different from the English version, the English version will control.

24.Insider Trading/Market Abuse Laws.  You may be subject to insider trading restrictions and/or market abuse laws in applicable jurisdictions, including the United States and, if different, your country, your broker’s country and/or the country where Shares are listed, which may affect your ability to accept or otherwise acquire, or sell, attempt to sell or otherwise dispose of, Shares or rights to Shares (e.g., the PSUs) under the Plan or rights linked to the value of Shares (e.g., phantom awards, futures) during such times as you are considered to have “inside information” regarding the Company (as defined by the laws or regulations in the applicable jurisdiction) or the trade in Shares or the trade in rights to Shares under the Plan.  Local insider trading laws and regulations may prohibit the cancellation or amendment of orders you place before you possessed inside information.  Furthermore, you could be prohibited from (1) disclosing the inside information to any third party and (2) “tipping” third parties or otherwise causing them to buy or sell Company securities; “third parties” includes fellow employees.  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy.  It is your responsibility to comply with any applicable restrictions and you are advised to speak to your personal advisor on this matter.

 

25.Foreign Asset/Account Reporting Requirements and Exchange Controls.  You acknowledge that your country may have certain foreign asset and/or foreign account reporting requirements and exchange controls which may affect your ability to acquire or hold Shares purchased under the Plan or cash received from participating in the Plan (including from any dividends paid on or sales proceeds arising from the sale of Shares acquired under the Plan) in a brokerage or bank account outside your country.  You may be required to report such accounts, assets or transactions to the tax or other authorities in your country.  You also may be required to repatriate sale proceeds or other funds received as a result of your participation in the Plan to your country through a designated bank or broker within a certain time after receipt.  You acknowledge that it is your responsibility to comply with such regulations, and you are advised to consult your personal legal advisor for any details. 

 

 

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avalara, inc.

 

Appendix

to

2018 equity incentive plan

GLOBAL PERFORMANCE SHARE UNIT AGREEMENT

 

Capitalized terms used but not defined herein have the meanings ascribed to them in the Plan and/or the PSU Agreement to which this Appendix is attached.

 

Terms and Conditions  

 

This Appendix includes additional terms and conditions that govern the PSUs granted to you under the Plan if you reside and/or work in one of the countries listed below.  

 

If you are a citizen or resident of a country other than the one in which you are currently working and/or residing, transfer to another country after the Grant Date, or are considered a resident of another country for local law purposes, the Company will, in its discretion, determine the extent to which the special terms and conditions contained herein apply to you.

 

Notifications  

 

This Appendix also includes information regarding exchange controls and certain other issues of which you should be aware with respect to your participation in the Plan.  The information is based on the securities, exchange control and other laws in effect in the respective countries as of January 2021.  Such laws are often complex and change frequently.  As a result, you should not rely on the information noted herein as the only source of information relating to the consequences of your participation in the Plan because the information may be out of date by the time the PSUs vest or you sell the Shares acquired under the Plan.  

 

In addition, the information contained in this Appendix is general in nature and may not apply to your particular situation, and the Company is not in a position to assure you of any particular result.  Accordingly, you should seek appropriate professional advice as to how the applicable laws in your country may apply to your situation.

 

Finally, you understand that if you are a citizen or resident of a country other than the one in which you currently reside and/or work, transfer to another country after the Grant Date, or are considered a resident of another country for local law purposes, the notifications contained herein may not apply to you in the same manner.

 

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BRAZIL

 

Terms and Conditions 

 

Compliance with Law.  In accepting the PSUs, you acknowledge your agreement to comply with Brazilian laws and to pay any and all applicable Tax-Related Items associated with the vesting and/or settlement of the PSUs, the sale of Shares acquired under the Plan and the receipt of any dividends paid on such Shares.  

 

Nature of Grant.  This provision supplements Section 10 of the PSU Agreement:

 

By accepting the PSUs, you acknowledge that (i) you are making an investment decision, and (ii) the value of the underlying Shares is not fixed and may increase or decrease over the vesting period without compensation to you. 

 

Notifications

 

Exchange Control Notification.  Brazilian residents are required to submit annually a declaration of assets and rights held outside of Brazil to the Central Bank of Brazil if the aggregate value of such assets and rights is equal to or greater than US$1,000,000.  Assets and rights that must be reported include Shares acquired under the Plan and may include the PSUs. 

 

Tax of Financial Transaction (IOF).  Repatriation of funds (e.g., sale proceeds and/or cash dividends) into Brazil and the conversion of USD into BRL associated with such fund transfers may be subject to Tax on Financial Transactions (“IOF”). It is your responsibility to comply with any applicable IOF arising from your participation in the Plan.  You should consult with your personal tax advisor for additional details. 

 

CANADA

 

Terms and Conditions

 

Settlement of PSUs.  Notwithstanding any discretion in the Plan, the PSUs will be settled only in Shares.  You will not be entitled to receive a cash payment upon vesting of the PSUs.

 

Termination of Employment.  The following provision replaces the corresponding paragraph in Section 3(a) of the PSU Agreement:

 

For purposes of the PSUs, your Termination of Service (regardless of the reason for such termination and whether or not later found to be invalid, unlawful or in breach of employment laws in the jurisdiction where you are employed or providing services, or the terms of your employment or service agreement, if any) will be deemed to have occurred as of the earliest of:  (a) the date your Service is terminated; (b) the date that you receive notice of termination of your Service; and (c) the date that you are no longer actively providing services to the Service Recipient, the Company or any other Related Company, regardless of any notice period or period of pay in lieu of such notice required under applicable employment law (including, without limitation, statutory law, regulatory law and common law) in the jurisdiction where you are employed or providing services or the terms of your employment agreement, if any.  If, notwithstanding the foregoing, applicable employment legislation explicitly requires continued vesting during a statutory notice period, your right to vest in the PSUs, if any, will terminate effective as of the last date of the minimum statutory notice period, but you will not earn or be entitled to pro-rated vesting if 

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the Vesting Date falls after the end of your statutory notice period, nor will you be entitled to any compensation for lost vesting. 

 

The following provisions apply to residents of Quebec:

 

Data Privacy.  The following provision supplements Section 11 of the PSU Agreement:

 

You hereby authorize the Company and the Company’s representatives, including the broker(s) designated by the Company, to discuss with and obtain all relevant information from all personnel, professional or non-professional, involved in the administration and operation of the Plan.  You further authorize the Company, the Service Recipient and any other Related Company, as well as E*TRADE or any other third‐party stock plan service provider(s) as designated by the Company to disclose and discuss the Plan with their advisors and to record all relevant information and keep such information in your employee file.

 

Language Consent.  The parties acknowledge that it is their express wish that this Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English.

 

Consentement Relatif à la Langue. Les parties reconnaissent avoir expressement souhaité que la convention «Agreement » ainsi que tous les documents, avis et procédures judiciaries, éxecutés, donnés ou intentés en vertu de, ou lié, directement ou indirectement à la présente convention, soient rédigés en langue anglaise.

 

Notifications

 

Securities Law Notification.  Shares acquired under the Plan may not be sold or otherwise disposed of within Canada.  You may sell the Shares acquired under the Plan only through E*TRADE or such other stock plan service provider selected by the Company in the future, provided the sale of Shares takes place outside of Canada through the facilities of a stock exchange on which the Shares are traded.

 

Foreign Asset/Account Reporting Notification.  Specified foreign property, including shares and rights to receive shares (e.g., PSUs, stock options, restricted stock units) of a non-Canadian company held by a Canadian resident must generally be reported annually on a Form T1135 (Foreign Income Verification Statement) if the total cost of the foreign specified property exceeds C$100,000 at any time during the year.  Thus, the PSUs must be reported (generally at a nil cost) if the C$100,000 cost threshold is exceeded because of other specified foreign property you hold.  When Shares are acquired, their cost generally is the adjusted cost base (“ACB”) of the Shares.  The ACB would ordinarily equal the fair market value of the Shares at the time of acquisition, but if you own other Shares (acquired separately), this ACB may have to be averaged with the ACB of the other Shares.  You should consult a personal tax advisor to ensure compliance with applicable reporting obligations.

 

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FRANCE

 

Terms and Conditions

 

Nature of Grant.  The PSUs are not intended to qualify for special tax and social security treatment applicable to PSUs granted under Sections L. 225-197-1 to L. 225-197-5 and Sections L. 22-10-59 to L. 22-10-60 of the French Commercial Code, as amended.

 

Language Consent.  By accepting the grant of the PSUs, you confirm having read and understood the documents related to the grant (the Agreement and the Plan), which were provided in the English language.  You accept the terms of those documents accordingly.

 

Consentement Relatif à la Langue.  En acceptant l’attribution d'Actions liées à la Performance (« PSUs »), vous confirmez avoir lu et compris les documents relatifs à l’attribution (le Contrat et le Plan), qui ont été remis en langue anglaise.  Vous acceptez les termes de ces documents en connaissance de cause.

 

Notifications

 

Foreign Asset/Account Reporting Notification.  If you are a French resident, you must declare all of your foreign bank and brokerage accounts in which you hold cash or securities, including the accounts that were opened and/or closed during the tax year, on an annual basis on a special form N° 3916, together with your income tax return.

 

Exchange Control Notification.  You must report the value of any cash or securities that you bring into France or send out of France without the use of a financial institution to the French Customs and Excise Authorities when the value of such cash or securities reaches or exceeds the threshold amount.

 

GERMANY

 

Notifications 

 

Exchange Control Notification.  Cross-border payments in excess of €12,500 must be reported electronically to the German Federal Bank (Bundesbank) on a monthly basis.  In case of payments in connection with securities (including proceeds realized upon the sale of Shares), the report must be made by the 5th day of the month following the month in which the payment was received.  The form of report (“Allgemeine Meldeportal Statistik”) can be accessed via the Bundesbank’s website (www.bundesbank.de) and is available in both German and English.  You are responsible for obtaining the appropriate form from the bank and complying with the applicable reporting obligations.

 

Foreign Asset/Account Reporting Notification.  If the acquisition of Shares leads to a “qualified participation” at any point during the calendar year, you will need to report the acquisition when you file your tax return for the relevant year.  A “qualified participation” is attained only in the unlikely event (i) the value of the shares acquired exceeds €150,000, and you own 1% or more of the Company’s total common stock or (ii) you hold shares exceeding 10% of the Company’s total common stock.

 

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INDIA

 

Notifications

 

Exchange Control Notification.  Exchange control laws and regulations in India require that all proceeds resulting from the sale of Shares and any dividends received in relation to the PSUs or the Shares be repatriated to India within such time as prescribed under applicable Indian exchange control laws, as may be amended from time to time.  Indian residents must obtain a foreign inward remittance certificate (“FIRC”) from the bank into which foreign currency is deposited and retain the FIRC as evidence of the repatriation of funds in the event that the Reserve Bank of India or the Service Recipient requests proof of repatriation.

 

Foreign Asset/Account Reporting Notification.  Foreign bank accounts and any foreign financial assets (including Shares held outside India) must be reported in the annual Indian personal tax return.  It is your responsibility to comply with this reporting obligation and you should consult with your personal advisor in this regard.

 

IRELAND

 

Notifications

 

Director Reporting Notification.  Directors, shadow directors and secretaries of an Irish Related Company must notify the Irish Related Company in writing upon (i) receiving or disposing of an interest in the Company (e.g., PSUs, Shares, etc.), (ii) becoming aware of the event giving rise to the notification requirement, or (iii) becoming a director or secretary if such an interest exists at the time, in each case if the interest represents more than 1% of the Company.  This notification requirement also applies with respect to the interests of any spouse or children under the age of 18 of the director, shadow director or secretary (whose interests will be attributed to the director, shadow director or secretary).  You should consult your personal legal advisor as to whether or not this notification requirement applies to you.

 

ITALY

 

Terms and Conditions

 

Plan Document Acknowledgment.  In accepting the PSUs, you acknowledge that a copy of the Plan was made available to you, and that you have reviewed the Plan and the Agreement in their entirety and fully understand and accept all provisions of the Plan and the Agreement.

 

You further acknowledge that you have read and specifically and expressly approve the following provisions in the Agreement:  Section 1 (“Vesting of PSUs”); Section 3 (“Termination of Service”); Section 8 (“Tax Withholding; No Obligation to Minimize Taxes”); Section 10 (“Nature of Grant”); Section 11 (“Data Privacy Information and Consent”); and Section 18 (“Imposition of Other Requirements”).

 

Notifications

 

Foreign Asset/Account Reporting Notification.  To the extent that you hold investments abroad or foreign financial assets that may generate taxable income in Italy (such as Shares you acquire under the Plan) during the calendar year, you are required to report them on your annual tax return (UNICO Form, RW Schedule), or on a special form if no tax return is due.

 

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Foreign Financial Asset Tax Notification.  The value of your foreign assets (including Shares acquired under the Plan) may be subject to a foreign financial assets tax and you are responsible for reporting the foreign assets and their value on your annual tax return and paying the foreign financial assets tax.  This tax is assessed at the end of the calendar year or on the last day the Shares are held (in such case, or when Shares are acquired during the course of the year, the tax is levied in proportion to the number of days the Shares are held over the calendar year).  No tax payment duties arise if the amount of the foreign financial assets tax calculated on all financial assets held abroad does not exceed a certain threshold.  You should consult with your personal tax advisor for additional information about the foreign financial assets tax.

 

LUXEMBOURG

 

There are no country-specific provisions.

 

POLAND

 

Notifications

 

Exchange Control Notification.  If you transfer funds exceeding €15,000 in a single transaction, you are required to do so through a bank account in Poland.  You are required to retain all documents connected with foreign exchange transactions for a period of five years, calculated from the end of the year when the foreign exchange transactions were made.

 

In addition, if you hold Shares acquired under the Plan and/or maintain a bank account abroad and the aggregate value of Shares and/or cash held in such foreign accounts exceeds PLN 7 million, you must file reports on the transactions and balances of the accounts on a quarterly basis to the National Bank of Poland.

 

You should consult with your personal legal advisor to determine your remittance and/or reporting responsibilities.

 

SPAIN

 

Terms and Conditions

 

Nature of Grant.  This provision supplements Section 10 of the PSU Agreement:

 

By accepting the PSUs, you consent to participation in the Plan and acknowledge that you have received a copy of the Plan.

 

You understand that the Company has unilaterally, gratuitously and discretionally decided to grant the PSUs under the Plan to individuals who may be employees or other service providers of the Company or a Related Company throughout the world.  This decision is a limited decision that is entered into upon the express assumption and condition that any grant will not bind the Company, the Service Recipient or any other Related Company, other than as expressly set forth in the Agreement.  Consequently, you understand that the PSUs are granted on the assumption and condition that the PSUs and any Shares issued under the Plan are not a part of any employment or other service contract (either with the Company, the Service Recipient or any other Related Company) and will not be considered a mandatory benefit, salary for any purpose (including severance compensation) or any other right whatsoever.

 

Further, you understand and agree that, unless otherwise expressly provided for by the Company or set forth in the Plan or the Agreement, any unvested PSUs will be cancelled without entitlement to any 

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Shares underlying the PSUs if a Termination of Service occurs for any reason, including, but not limited to: resignation, retirement, disciplinary dismissal adjudged to be with cause, disciplinary dismissal adjudged or recognized to be without good cause (i.e., subject to a “despido improcedente”), material modification of the terms of employment under Article 41 of the Workers’ Statute, relocation under Article 40 of the Workers’ Statute, Article 50 of the Workers’ Statute, or under Article 10.3 of Royal Decree 1382/1985.  The Company, in its sole discretion, will determine the date when a Termination of Service occurs for purposes of the PSUs. 

 

In addition, you understand that the PSUs would not be granted to you but for the assumptions and conditions referred to above; thus, you acknowledge and freely accept that, should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason, then any grant of, or right to, the PSUs will be null and void. 

 

Notifications

 

Securities Law Notification.  No “offer of securities to the public,” as defined under Spanish law, has taken place or will take place in the Spanish territory in connection with the grant of the PSUs under the Plan.  Neither the Plan nor the Agreement have been nor will be registered with the Comisión Nacional del Mercado de Valores (Spanish Securities Exchange Commission), and they do not constitute a public offering prospectus.

 

Foreign Asset/Account Reporting Notification.  To the extent you hold shares (including Shares acquired under the Plan) or have bank accounts outside of Spain with a value in excess of €50,000 (for each type of asset category) as of December 31, you will be required to report information on such assets on your tax return Form 720 for such year with severe penalties in the event of non-compliance.  After such shares or accounts are initially reported, the reporting obligation will apply for subsequent years only if the value of any previously reported shares or accounts increases by more than €20,000 (for each type of asset category) as of each subsequent December 31, or if you sell shares or cancel bank accounts that were previously reported.  You should consult with your personal tax advisor for further information regarding your foreign asset reporting obligations.

 

Exchange Control Notification.  You are required to electronically declare to the Bank of Spain any security accounts (including brokerage accounts held abroad), as well as the securities (including Shares acquired under the Plan) held in such accounts if the value of the transactions for all such accounts during the prior year or the balances of such accounts as of December 31 of the prior year exceeds €1 million. 

 

Different thresholds and deadlines to file the declaration apply.  However, if neither such transactions during the immediately preceding year nor the balances/positions as of December 31 exceed €1 million, no such declaration must be filed unless expressly required by the Bank of Spain.  If any of such thresholds were exceeded during the current year, you may be required to file the relevant declaration corresponding to the prior year, however, a summarized form of declaration may be available.  You should consult your personal tax or legal advisor for further information regarding your exchange control reporting obligations.

 

Additionally, the acquisition of Shares under the Plan must be declared for statistical purposes to the Direccion General de Comercio e Inversiones (the “DGCI”), the Bureau for Commerce and Investments, which is a department of the Ministry of Economy, Industry and Competitiveness.  Generally, the declaration must be filed in January for Shares (and any other securities) owned as of December 31 of each year; however, if the value of the Shares acquired or the amount of the sale proceeds you realize from the sale of Shares exceeds a certain threshold, the declaration must be filed within one month of the acquisition or sale, as applicable.

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UNITED KINGDOM

 

Terms and Conditions

 

Settlement of PSUs.  Notwithstanding any discretion in the Plan, the PSUs will be settled only in Shares.  You will not be entitled to receive a cash payment upon vesting of the PSUs.

 

Responsibility for Taxes.  The following supplements Section 8 of the PSU Agreement:

 

Without limitation to Section 8 of the PSU Agreement, you agree that you are liable for all Tax-Related Items and hereby covenant to pay all such Tax-Related Items, as and when requested by the Company or the Service Recipient or by Her Majesty’s Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority).  You also agree to indemnify and keep indemnified the Company and the Service Recipient against any Tax-Related Items that they are required to pay or withhold or have paid or will pay to HMRC (or any other tax authority or any other relevant authority) on your behalf.

 

Notwithstanding the foregoing, if you are a director or executive officer of the Company (within the meaning Section 13(k) of the Exchange Act), the terms of the immediately foregoing provision may not apply to you if the indemnification is viewed as a loan.  In such case, if the amount of any income tax due is not collected from or paid by you within 90 days of the end of the U.K. tax year in which an event giving rise to the indemnification described above occurs, the amount of any uncollected income tax may constitute an additional benefit to you on which additional income tax and National Insurance Contributions (“NICs”) may be payable.  You will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company or the Service Recipient (as appropriate) for the value of any employee NICs due on this additional benefit, which the Company or the Service Recipient may recover from you by any of the means referred to in the Plan or Section 8 of the PSU Agreement.

 

Joint Election.  As a condition of your participation in the Plan, you agree to accept any liability for secondary Class 1 NICs which may be payable by the Company and/or the Service Recipient in connection with the PSUs and any event giving rise to Tax-Related Items (the “Service Recipient’s NICs”).  Without limitation to the foregoing, you agree to enter into a joint election with the Company (the “Joint Election”), the form of such Joint Election being formally approved by HMRC, and to execute any other consents or elections required to accomplish the transfer of the Service Recipient’s NICs to you.  You further agree to execute such other joint elections as may be required between you and any successor to the Company and/or the Service Recipient.  You further agree that the Company and/or the Service Recipient may collect the Service Recipient’s NICs from you by any of the means set forth in Section 8 of the PSU Agreement.

 

If you do not enter into a Joint Election, or if approval of the Joint Election has been withdrawn by HMRC, the Company, in its sole discretion and without any liability to the Company or the Service Recipient, may choose not to issue or deliver any Shares to you upon vesting of the PSUs.

 

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AVALARA, INC.

 

ANNEX A

 

TO

 

GLOBAL PERFORMANCE SHARE UNIT NOTICE AND GLOBAL PERFORMANCE SHARE UNIT AGREEMENT

 

 

1.Performance Goals.

 

Vesting of PSUs is based on the Company’s revenue compound annual growth rate (“Revenue CAGR”) measured over each applicable Performance Period, as determined by the Committee.  

 

	
 
	
•
	
Revenue CAGR will generally include acquired revenue, except for the amount of aggregate acquired next twelve months (NTM) revenue that exceeds $100 million, which will not factor into the growth calculation. Any growth from the acquired revenue base will otherwise be factored into the overall growth calculation.

	
 
	
•
	
In calculating Revenue CAGR, the Company will seek to limit the impact of currency fluctuations during a Performance Period on growth rates.  Accordingly, the Company and the Committee will apply, in their sole discretion, a reasonable methodology intended to maintain a constant currency exchange rate against the US Dollar during a Performance Period.

 

2.Determination of Vested PSUs.  Following each Performance Period, the Committee will determine the level of achievement of Revenue CAGR for that Performance Period.  Linear interpolation will apply for results that fall between any of the two Revenue CAGR percentages below.  No amount will be payable for a Performance Period if Revenue CAGR is not at least 20.0% for that Performance Period.  In no event may more than one-third of Target PSUs be earned in each of the First Performance Period and the Second Performance Period.  No more than 250% of the Target PSUs may be earned in the aggregate for all Performance Periods.  Subject to the foregoing, Target PSUs may be earned as follows:

 

			
	
 
	
Revenue CAGR
	
Percentage of Target PSUs Earned

	
Threshold
	
20.0%
	
25%

	
Target
	
23.0%
	
100%

	
 
	
25.0%
	
150%

	
 
	
28.0%
	
200%

	
Maximum
	
32.0%
	
250%

 

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