AVALARA DATA TRANSFER ADDENDUM

This AVALARA DATA TRANSFER ADDENDUM, including its schedules, (“Data Transfer Addendum”) is made by and between Avalara, Inc., and Affiliates (“Avalara”), and the Customer purchasing Avalara Services (“Customer”) and is effective on the date the Fiscal Representation Service was purchased (the “Addendum Effective Date”).  This Data Transfer Addendum amends the agreement (the “Terms”) agreed to by both parties in connection with Customer’s purchase of Avalara Services, including the Data Processing Addendum that is part of the Terms. “Affiliate means an entity that controls, is controlled by, or is under common control with a Party. For this definition, “control” means direct or indirect ownership of more than 50% of the voting interests of the subject entity. Capitalized terms used and not otherwise defined in this Data Transfer Addendum have the meanings provided in the Terms.

On the date that Avalara notifies Customer in writing that it has adopted an alternative recognized compliance standard for the lawful transfer of personal data (as defined in Regulation (EU) 2016/679 of the European Parliament and of the Council) outside of the EEA, such alternative standard shall replace the terms of Schedule 1 in its entirety.

The Parties understand and intend the references to the “law of the Member State where the data exporter is established” to mean law of the Member State where Customer’s corporate headquarters are located in the EEA, and the references to the “Member State where the data exporter is established” to mean the Member State where Customer’s corporate headquarters are located in the EEA.

Except as amended by this Data Transfer Addendum, the Terms will remain in full force and effect, including, for the avoidance of doubt, the financial limits on liability found therein.

To the extent that the terms of this Data Transfer Addendum and the Terms conflict, the terms of this Data Transfer Addendum shall prevail.  To the extent that the terms of Schedule 1 hereto and other terms contained herein conflict, the terms of Schedule 1 shall prevail.

This Data Transfer Addendum shall automatically expire on the termination or expiry of the Terms.

Schedule 1

Standard Contractual Clauses (processors)

For the purposes of Article 26(2) of Directive 95/46/EC for the transfer of personal data to processors established in third countries which do not ensure an adequate level of data protection 

Customer (the “data exporter”)
and
Avalara, Inc., and its Affiliates (the “data importer”)


each a “party”; together “the parties”, HAVE AGREED on the following Contractual Clauses (the “Clauses” or “Standard Contractual Clauses”) in order to adduce adequate safeguards with respect to the protection of privacy and fundamental rights and freedoms of individuals for the transfer by the data exporter to the data importer of the personal data specified in Appendix 1.

Clause 1
Definitions
  1. 'personal data', 'special categories of data', 'process/processing', 'controller', 'processor', 'data subject' and 'supervisory authority' shall have the same meaning as in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data;
  2. 'the data exporter' means the controller who transfers the personal data;
  3. 'the data importer' means the processor who agrees to receive from the data exporter personal data intended for processing on his behalf after the transfer in accordance with his instructions and the terms of the Clauses and who is not subject to a third country's system ensuring adequate protection within the meaning of Article 25(1) of Directive 95/46/EC;
  4. 'the subprocessor' means any processor engaged by the data importer or by any other subprocessor of the data importer who agrees to receive from the data importer or from any other subprocessor of the data importer personal data exclusively intended for processing activities to be carried out on behalf of the data exporter after the transfer in accordance with his instructions, the terms of the Clauses and the terms of the written subcontract;
  5. 'the applicable data protection law' means the legislation protecting the fundamental rights and freedoms of individuals and, in particular, their right to privacy with respect to the processing of personal data applicable to a data controller in the Member State where the data exporter is established;
  6. 'technical and organisational security measures' means those measures aimed at protecting personal data against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access, in particular where the processing involves the transmission of data over a network, and against all other unlawful forms of processing.
Clause 2
Details of the transfer

The details of the transfer and in particular the special categories of personal data where applicable are specified in Appendix 1 which forms an integral part of the Clauses.

Clause 3
Third-party beneficiary clause
  1. The data subject can enforce against the data exporter this Clause, Clause 4(b) to (i), Clause 5(a) to (e), and (g) to (j), Clause 6(1) and (2), Clause 7, Clause 8(2), and Clauses 9 to 12 as third-party beneficiary.
  2. The data subject can enforce against the data importer this Clause, Clause 5(a) to (e) and (g), Clause 6, Clause 7, Clause 8(2), and Clauses 9 to 12, in cases where the data exporter has factually disappeared or has ceased to exist in law unless any successor entity has assumed the entire legal obligations of the data exporter by contract or by operation of law, as a result of which it takes on the rights and obligations of the data exporter, in which case the data subject can enforce them against such entity.
  3. The data subject can enforce against the subprocessor this Clause, Clause 5(a) to (e) and (g), Clause 6, Clause 7, Clause 8(2), and Clauses 9 to 12, in cases where both the data exporter and the data importer have factually disappeared or ceased to exist in law or have become insolvent, unless any successor entity has assumed the entire legal obligations of the data exporter by contract or by operation of law as a result of which it takes on the rights and obligations of the data exporter, in which case the data subject can enforce them against such entity. Such third-party liability of the subprocessor shall be limited to its own processing operations under the Clauses.
  4. The parties do not object to a data subject being represented by an association or other body if the data subject so expressly wishes and if permitted by national law.
Clause 4
Obligations of the data exporter

The data exporter agrees and warrants:

  1. that the processing, including the transfer itself, of the personal data has been and will continue to be carried out in accordance with the relevant provisions of the applicable data protection law (and, where applicable, has been notified to the relevant authorities of the Member State where the data exporter is established) and does not violate the relevant provisions of that State;
  2. that it has instructed and throughout the duration of the personal data processing services will instruct the data importer to process the personal data transferred only on the data exporter's behalf and in accordance with the applicable data protection law and the Clauses;
  3. that the data importer will provide sufficient guarantees in respect of the technical and organisational security measures specified in Appendix 2 below;
  4. that after assessment of the requirements of the applicable data protection law, the security measures are appropriate to protect personal data against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access, in particular where the processing involves the transmission of data over a network, and against all other unlawful forms of processing, and that these measures ensure a level of security appropriate to the risks presented by the processing and the nature of the data to be protected having regard to the state of the art and the cost of their implementation;  
  5. that it will ensure compliance with the security measures;
  6. that, if the transfer involves special categories of data, the data subject has been informed or will be informed before, or as soon as possible after, the transfer that its data could be transmitted to a third country not providing adequate protection within the meaning of Directive 95/46/EC;
  7. to forward any notification received from the data importer or any subprocessor pursuant to Clause 5(b) and Clause 8(3) to the data protection supervisory authority if the data exporter decides to continue the transfer or to lift the suspension;
  8. to make available to the data subjects upon request a copy of the Clauses, with the exception of Appendix 2, and a summary description of the security measures, as well as a copy of any contract for subprocessing services which has to be made in accordance with the Clauses, unless the Clauses or the contract contain commercial information, in which case it may remove such commercial information;
  9. that, in the event of subprocessing, the processing activity is carried out in accordance with Clause 11 by a subprocessor providing at least the same level of protection for the personal data and the rights of data subject as the data importer under the Clauses; and
  10. that it will ensure compliance with Clause 4(a) to (i).
Clause 5
Obligations of the data importer

The data importer agrees and warrants:

  1. to process the personal data only on behalf of the data exporter and in compliance with its instructions and the Clauses; if it cannot provide such compliance for whatever reasons, it agrees to inform promptly the data exporter of its inability to comply, in which case the data exporter is entitled to suspend the transfer of data and/or terminate the contract;
  2. that it has no reason to believe that the legislation applicable to it prevents it from fulfilling the instructions received from the data exporter and its obligations under the contract and that in the event of a change in this legislation which is likely to have a substantial adverse effect on the warranties and obligations provided by the Clauses, it will promptly notify the change to the data exporter as soon as it is aware, in which case the data exporter is entitled to suspend the transfer of data and/or terminate the contract;
  3. that it has implemented the technical and organisational security measures specified in Appendix 2 before processing the personal data transferred;
  4. that it will promptly notify the data exporter about:
    1. any legally binding request for disclosure of the personal data by a law enforcement authority unless otherwise prohibited, such as a prohibition under criminal law to preserve the confidentiality of a law enforcement investigation,
    2. any accidental or unauthorised access, and
    3. any request received directly from the data subjects without responding to that request, unless it has been otherwise authorised to do so;
  5. to deal promptly and properly with all inquiries from the data exporter relating to its processing of the personal data subject to the transfer and to abide by the advice of the supervisory authority with regard to the processing of the data transferred;
  6. at the request of the data exporter to submit its data processing facilities for audit of the processing activities covered by the Clauses which shall be carried out by the data exporter or an inspection body composed of independent members and in possession of the required professional qualifications bound by a duty of confidentiality, selected by the data exporter, where applicable, in agreement with the supervisory authority;
  7. to make available to the data subject upon request a copy of the Clauses, or any existing contract for subprocessing, unless the Clauses or contract contain commercial information, in which case it may remove such commercial information, with the exception of Appendix 2 which shall be replaced by a summary description of the security measures in those cases where the data subject is unable to obtain a copy from the data exporter;
  8. that, in the event of subprocessing, it has previously informed the data exporter and obtained its prior written consent;
  9. that the processing services by the subprocessor will be carried out in accordance with Clause 11;
  10. to send promptly a copy of any subprocessor agreement it concludes under the Clauses to the data exporter.
Clause 6
Liability
  1. The parties agree that any data subject, who has suffered damage as a result of any breach of the obligations referred to in Clause 3 or in Clause 11 by any party or subprocessor is entitled to receive compensation from the data exporter for the damage suffered.
  2. If a data subject is not able to bring a claim for compensation in accordance with paragraph 1 against the data exporter, arising out of a breach by the data importer or his subprocessor of any of their obligations referred to in Clause 3 or in Clause 11, because the data exporter has factually disappeared or ceased to exist in law or has become insolvent, the data importer agrees that the data subject may issue a claim against the data importer as if it were the data exporter, unless any successor entity has assumed the entire legal obligations of the data exporter by contract of by operation of law, in which case the data subject can enforce its rights against such entity. The data importer may not rely on a breach by a subprocessor of its obligations in order to avoid its own liabilities.
  3. If a data subject is not able to bring a claim against the data exporter or the data importer referred to in paragraphs 1 and 2, arising out of a breach by the subprocessor of any of their obligations referred to in Clause 3 or in Clause 11 because both the data exporter and the data importer have factually disappeared or ceased to exist in law or have become insolvent, the subprocessor agrees that the data subject may issue a claim against the data subprocessor with regard to its own processing operations under the Clauses as if it were the data exporter or the data importer, unless any successor entity has assumed the entire legal obligations of the data exporter or data importer by contract or by operation of law, in which case the data subject can enforce its rights against such entity. The liability of the subprocessor shall be limited to its own processing operations under the Clauses.
Clause 7
Mediation and jurisdiction
  1. The data importer agrees that if the data subject invokes against it third-party beneficiary rights and/or claims compensation for damages under the Clauses, the data importer will accept the decision of the data subject:
    1. to refer the dispute to mediation, by an independent person or, where applicable, by the supervisory authority;
    2. to refer the dispute to the courts in the Member State where the data exporter is established.
  2. The parties agree that the choice made by the data subject will not prejudice its substantive or procedural rights to seek remedies in accordance with other provisions of national or international law.
Clause 8
Cooperation with supervisory authorities
  1. The data exporter agrees to deposit a copy of this contract with the supervisory authority if it so requests or if such deposit is required under the applicable data protection law.
  2. The parties agree that the supervisory authority has the right to conduct an audit of the data importer, and of any subprocessor, which has the same scope and is subject to the same conditions as would apply to an audit of the data exporter under the applicable data protection law.
  3. The data importer shall promptly inform the data exporter about the existence of legislation applicable to it or any subprocessor preventing the conduct of an audit of the data importer, or any subprocessor, pursuant to paragraph 2. In such a case the data exporter shall be entitled to take the measures foreseen in Clause 5 (b).
Clause 9
Governing Law

The Clauses shall be governed by the law of the Member State where the data exporter is established.

Clause 10
Variation of the contract

The parties undertake not to vary or modify the Clauses. This does not preclude the parties from adding clauses on business related issues where required as long as they do not contradict the Clause.

Clause 11
Subprocessing
  1. The data importer shall not subcontract any of its processing operations performed on behalf of the data exporter under the Clauses without the prior written consent of the data exporter. Where the data importer subcontracts its obligations under the Clauses, with the consent of the data exporter, it shall do so only by way of a written agreement with the subprocessor which imposes the same obligations on the subprocessor as are imposed on the data importer under the Clauses. Where the subprocessor fails to fulfil its data protection obligations under such written agreement the data importer shall remain fully liable to the data exporter for the performance of the subprocessor's obligations under such agreement.
  2. The prior written contract between the data importer and the subprocessor shall also provide for a third-party beneficiary clause as laid down in Clause 3 for cases where the data subject is not able to bring the claim for compensation referred to in paragraph 1 of Clause 6 against the data exporter or the data importer because they have factually disappeared or have ceased to exist in law or have become insolvent and no successor entity has assumed the entire legal obligations of the data exporter or data importer by contract or by operation of law. Such third-party liability of the subprocessor shall be limited to its own processing operations under the Clauses.
  3. The provisions relating to data protection aspects for subprocessing of the contract referred to in paragraph 1 shall be governed by the law of the Member State where the data exporter is established. 
  4. The data exporter shall keep a list of subprocessing agreements concluded under the Clauses and notified by the data importer pursuant to Clause 5 (j), which shall be updated at least once a year. The list shall be available to the data exporter's data protection supervisory authority.
Clause 12
Obligation after the termination of personal data processing services
  1. The parties agree that on the termination of the provision of data processing services, the data importer and the subprocessor shall, at the choice of the data exporter, return all the personal data transferred and the copies thereof to the data exporter or shall destroy all the personal data and certify to the data exporter that it has done so, unless legislation imposed upon the data importer prevents it from returning or destroying all or part of the personal data transferred. In that case, the data importer warrants that it will guarantee the confidentiality of the personal data transferred and will not actively process the personal data transferred anymore.
  2. The data importer and the subprocessor warrant that upon request of the data exporter and/or of the supervisory authority, it will submit its data processing facilities for an audit of the measures referred to in paragraph 1.

APPENDIX 1 TO THE STANDARD CONTRACTUAL CLAUSES

Data exporter

Customer is the data exporter.

Data importer

The data importer is Avalara, Inc., and its Affiliates (as defined in the Terms), a provider of automated transaction tax compliance solutions.

Data subjects

Data subjects include the Data Exporter’s authorized users, employees, contractors, agents, representatives, or customers.

Categories of data

Data Exporter may submit data to the Data Importer, the extent of which is determined and controlled by the Data Exporter, and which may include certain business information and the following categories of Customer personal data:

  1. As to Customer’s Authorized Users, employees, contractors, agents, or representatives: contact details of the individual, which may include name, birthdate, email, user ID, address, and connection data.
  2. As to Customer’s customers: invoice data, shipment details, and identifier (number and/or free text field as supplied by Customer).

Avalara does not require any special categories of data to be submitted as a precondition to the provision of service.

Processing operations

Personal data may be processed for the following purposes: (a) to provide the Services, (b) to respond to Customer support requests; and (c) otherwise to fulfill the obligations set out in the Terms. 

APPENDIX 2 TO THE STANDARD CONTRACTUAL CLAUSES

Description of the technical and organisational security measures implemented by the data importer in accordance with Clauses 4(d) and 5(c) (or document/legislation attached):

Information Security Policy Summary

Avalara maintains an information security policy providing direction and support to all levels of the organization, from individual contributor to executive management.  The information security policy has been approved by management, published and communicated to all workforce members and relevant external-parties, and is reviewed annually or when significant changes to the internal or external environment occur to ensure its continued suitability, adequacy and effectiveness.

The information security policy ensures appropriate data protection mechanisms, including technical, process and physical mechanisms, are implemented in accordance with information security best practices, security professional ethics, business requirements, all relevant laws and regulations, data privacy requirements, and private certification and compliance requirements.

Asset Management
  • All information and IT assets are inventoried and clearly identified.
  • All information and IT assets are owned by a designated part of the organization or individual.
  • All equipment and IT assets owned or managed by Avalara must be used exclusively for work-related purposes, except as formally authorized by policy.
  • All information assets are classified in terms of its value, legal and regulatory requirements, sensitivity and criticality to the organization and labeled in order to effectively convey the appropriate information handling and security controls required.
Human Resources
  • Roles and responsibilities for information security are clearly defined.
  • Employees, contractors and third-party users have background checks performed and be appropriately screened prior to employment.
  • Management is responsible for ensuring that workforce members are adequately trained in information security as it related to their job duties.
  • A disciplinary process is defined and documented for incidents of non-compliance.
  • A documented process is followed in the event of termination or change of employment.
Physical & Environmental Security
  • All data processing facilities are housed in secure areas and protected by defined security barriers and are protected by damage from fire, flood, earthquake, explosion, civil unrest or other forms of natural or man-made disaster.
  • Sensitive areas of information processing are protected by physical entry controls and entry is logged.
  • Utilities and telecommunications are delivered to data processing facilities via multiple redundant suppliers and paths.
Operations
  • Standard operating procedures are documented as part of new projects and maintained throughout the life of an information system.
  • Changes to computing environments are controlled, tested and validated.  Multiple environments are maintained in order to provide testing and validation outside of the production environment.
  • Business and technical processes enforce segregation of duties.
  • Use of third-party services is documented, controlled and monitored to ensure compliance with Avalara policies.
  • Anti-virus and anti-malware controls are implemented to prevent malicious code execution.
  • Systems and data are backed up to ensure the availability of information in the event of a disaster.  All media is securely wiped prior to disposal.
  • Infrastructure is scanned for vulnerabilities through periodic scans using automated toolsets.  Patches and updates are prioritized using a risk-based approach and applied using a combination of automated and manual processes.  Systems are maintained and updated according to a regular schedule.
  • Information is protected from disclosure through business process and technical controls during transit, storage and processing.  Mobile computing devices are encrypted to prevent information disclosure in the event of loss or theft.
  • Systems are monitored to detect unauthorized use.
Access Control
  • Access controls are defined for every information system and define the user provisioning lifecycle.
  • User passwords must meet specific requirements for age, complexity and re-use.
  • User sessions timeout after a specific period of inactivity and require re-authentication.
  • Role-based access controls are implemented and use the principle of least-privilege.
  • Sensitive systems are segregated at the lowest level feasible.
System Acquisition & Development
  • Security requirements are included in the overall business requirements documentation.
  • Controls are implemented within systems to ensure the validity and completeness of processing, system integrity and auditability.
  • Encryption is used where appropriate to ensure the confidentiality of Avalara and customer data.
  • System development activities comply with technical security requirements regarding the development, testing and production approval of system changes.  Source code is scanned with a combination of automated and manual processes to identify vulnerabilities and remediation is prioritized using a risk-based approach.
Incident Management
  • All workforce members are required to promptly report any actual or suspected information security incidents, breaches or weaknesses.
  • Incident management processes establish clear incident ownership, roles, responsibilities, communications schedules, plans and other aspects to ensure incidents are handled in a consistent and effective manner.
  • Incidents are investigated for root cause and learnings are applied to policies, procedures, configurations and other areas relevant to the incident.
  • Evidence is collected in a forensically sound manner in order to support possible law enforcement involvement.
Business Continuity
  • Threats to continued business operations are identified, regularly reviewed, assessed and planned for where necessary.
  • Business continuity plans establish clear ownership, roles, responsibilities, communications schedules, plans and other aspects to ensure business interruptions are handled in a consistent and effective manner. 
  • Business continuity plans are tested regularly to ensure workforce members are familiar with the plans and that plans adequately address the threat against which they were created.
Legal & Regulatory Compliance
  • Applicable legal, statutory, regulatory and contractual obligations are identified and regularly reviewed.
  • Necessary controls are identified and implemented in order to ensure compliance with identified obligations.
  • Records sufficient to ensure critical information system auditability are generated, protected and preserved as necessary.