Buyers Terms and Conditions

This policy outlines general terms and conditions for the purchase of goods and services.

1. Applicability

a. These General Terms and Conditions for the Purchase of Goods and Services (these "Terms") are the exclusive terms which govern the purchase of goods ("Goods") and services ("Services") by Progenity, Inc. ("Buyer") from the seller identified in the corresponding Purchase Order ("Seller"). These Terms prevail over any of Seller's general terms and conditions of sale, or any terms submitted by Seller as part of a sales quotation, sales acceptance or otherwise, regardless of when or in what manner submitted by Seller. Buyer expressly rejects any terms and conditions other than these Terms.

b. The purchase order issued for the Goods and/or Services in issue (the "Purchase Order"), the written supply contact executed by and between Buyer and Seller, if any (as applicable, the "Supply Contract"), and these Terms (collectively, this "Agreement") comprise the entire agreement between the parties, and supersede all prior or contemporaneous understandings, agreements, negotiations, representations and warranties, and communications, both written and oral. This Agreement expressly limits Seller's acceptance to these Terms. To the extent of a conflict between any of the documents comprising this Agreement, such documents shall control in the following order of priority: (a) the Purchase Order(s), (b) the Supply Contract, and (c) these Terms. The Agreement will be deemed accepted by Seller by Seller's shipment of Goods, performance of Services, commencement of work on Goods, written acknowledgement, or any other conduct of Seller that recognizes the existence of a contract pertaining to the subject matter of the Agreement.

2. Delivery of Goods and Performance of Services

a. Seller shall deliver the Goods in the quantities and on the date(s) specified (i) in the Purchase Order, or (ii) as otherwise agreed in writing by the parties, or (iii) if no delivery date is specified, in writing, Seller shall deliver the Goods within ten (10) days of Seller's receipt of the Purchase Order (alternatively, the "Delivery Date"). If Seller fails to deliver the Goods in full by the Delivery Date, Buyer may terminate the Agreement immediately by providing written notice to Seller and Seller shall indemnify Buyer against any losses, claims, damages, and reasonable costs and expenses directly attributable to Seller's failure to deliver the Goods, in full, on the Delivery Date. Buyer has the right to return any Goods delivered prior to the Delivery Date at Seller's expense and Seller shall redeliver such Goods on the Delivery Date.

b. Seller shall deliver all Goods to the Buyer's address specified in the Purchase Order (the "Delivery Point") during Buyer's normal business hours or as otherwise instructed by Buyer. Seller shall pack all goods for shipment according to Buyer's instructions or, if there are no instructions, in a manner sufficient to ensure that the Goods are delivered in undamaged condition. Seller must provide Buyer prior written notice if it requires Buyer to return any packaging material. Any return of such packaging material shall be made at Seller's risk of loss and expense.

c. Seller shall provide the Services to Buyer as described and in accordance with the schedule set forth on the reverse side of these Terms and in accordance with the terms and conditions set forth in these Terms.

d. Seller acknowledges that time is of the essence with respect to Seller's obligations under the Agreement and the timely delivery of the Goods and/or Services, including all Delivery Dates, other performance dates, timetables, project milestones and other requirements.

3. Quantity

If Seller delivers more or less than 100% of the quantity of Goods specified in the Purchase Order, Buyer may reject all or any excess Goods. Any such rejected Goods shall be returned to Seller at Seller's sole risk and expense. If Buyer does not reject, and instead accepts, the delivery of Goods at the increased or reduced quantity, the Price for the Goods shall be adjusted on a pro-rata basis.

4. Shipping Terms

Delivery shall be made FOB the Delivery Point in accordance with the terms on the Purchase Order. The Purchase Order number must appear on all shipping documents, shipping labels, bills of lading, invoices, correspondence and any other documents pertaining to the Purchase Order.

5. Title and Risk of Loss

Title and risk of loss passes to Buyer upon delivery of the Goods at the Delivery Point.

6. Inspection and Rejection of Nonconforming Goods

Buyer has the right to inspect the Goods on or after the Delivery Date. Buyer, at its sole option, may inspect all or a sample of the Goods, and may reject all or any portion of the Goods if it determines the Goods are nonconforming or defective. If Buyer rejects any portion of the Goods, Buyer has the right, effective upon written notice to Seller, to: (a) rescind the Agreement in its entirety; (b) accept the remaining Goods at an equitably reduced price agreed to between the Parties; or (c) require replacement of the rejected Goods with conforming Goods. If Buyer requires replacement of the Goods, Seller shall, at its expense, within five (5) days of the date of Buyer's notice of rejection, replace the nonconforming or defective Goods and pay for all related expenses, including, but not limited to, transportation charges for the return of the defective goods and the delivery of replacement Goods. If Seller fails to timely deliver replacement Goods, Buyer may replace them with goods from a third party and charge Seller the cost thereof and, at Buyer's sole option, terminate the Agreement for cause. Any inspection or other action by Buyer under this Section shall not reduce or otherwise affect Seller's obligations under the Agreement, and Buyer shall have the right to conduct further inspections after Seller has carried out any remedial actions.

7. Price

The price of the Goods and Services is the price stated in the Purchase Order (the "Price"). If no price is included in the Purchase Order, the Price shall be the price set forth in Seller's published price list in effect as of the date of the Purchase Order. Unless otherwise specified in the Purchase Order, the Price includes all handling, packaging, loading, transportation costs to the Delivery Point, insurance, customs duties, tariffs and fees, and applicable sales, use, excise, services, value added tax, good and services tax, or similar tax (provided, however, that these transactional taxes should be separately identified and itemized in any written price quotation provided by Seller to Buyer). No increase in the Price is effective, whether due to increased material, labor or transportation costs or otherwise, without the prior written consent of Buyer.

8. Payment Terms

Seller shall issue an invoice to Buyer on or any time after the completion of delivery of Goods or performance of Services and only in accordance with these Terms. Unless otherwise provided in the Purchase Order, Buyer shall pay all properly invoiced amounts due to Seller within forty-five (45) days after Buyer's receipt of such invoice, except for any amounts disputed by Buyer in good faith. All payments shall be made in U.S. dollars. Without prejudice to any other right or remedy it may have, Buyer reserves the right to set off at any time any amount owing to it by Seller against any amount payable by Buyer to Seller. In the event of a payment dispute, Buyer shall deliver a written statement to Seller no later than ten (10) days prior to the date payment is due on the disputed invoice listing all disputed items and providing a reasonably detailed description of each disputed item. Amounts not so disputed are deemed accepted and must be paid, notwithstanding disputes on other items, within the period set forth in this Section 8. The parties shall seek to resolve all such disputes expeditiously and in good faith. Seller shall continue performing its obligations under the Agreement notwithstanding any such dispute.

9. Seller's Obligations Regarding Goods and Services; Buyer's Audit Rights

Seller shall:

a. before the date on which manufacture and/or supply of the Goods and/or performance of the Services is to start, obtain, and at all times during the term of the Agreement, maintain, all necessary licenses, consents and approvals and comply with all relevant laws applicable to the provision of the Goods and/or Services;

b. comply with all rules, regulations and policies of Buyer, including security procedures concerning systems and data and remote access thereto, building safety and security procedures, including the restriction of access by Buyer to certain areas of its premises or systems for security reasons, and general health and safety practices and procedures;

c. maintain complete and accurate books and records relating to the provision of the Goods and/or Services under the Agreement, including, without limitation, records of the time spent as to any and all Services rendered, the precise nature of any Services rendered, and materials used by the particular employees of Seller or permitted Subcontractors (defined below) in providing the Goods and/or Services, all in such form as Buyer shall reasonably require. During the term of the Agreement and for a period of four (4) years thereafter, upon Buyer's written request, and during normal business hours, Seller grants Buyer and/or Buyer's designee(s) access to Seller's premises and the right to inspect and make copies of Seller's books and records and make available for interview personnel of Seller and Permitted Subcontractors, as applicable, in connection with Buyer auditing Seller's compliance with the Agreement and the provision of the Goods and/or Services in conformance therewith;

d. Seller will promptly furnish to Buyer in such form and detail as Buyer may direct: (a) a list of all ingredients and materials incorporated in the Goods; (b) the amount of such ingredients and materials; and (c) information concerning any changes in or additions to such ingredients and materials. Prior to and with the shipment of the Goods, Seller agrees to furnish to Buyer sufficient advance warning and notice, in writing (including, without limitation, appropriate labels on the Goods, containers and packing), of any dangerous Goods or hazardous material that is an ingredient or a part of any shipment of Goods, together with such special handling instructions as may be necessary to advise carriers, Buyer and their respective employees of how to exercise that measure of care and precaution that will comply with any applicable laws or regulations and best prevent bodily injury or property damage in the handling, transportation, processing, use or disposal of the Goods, containers and packing shipped to Buyer. Upon Buyer's request, Seller will certify to Buyer in writing the origin of any ingredients or materials in the Goods. Seller will promptly provide, in writing, any information regarding the Goods requested by Buyer so that Buyer may comply in a timely manner with reporting requirements under applicable law with respect to consumer protection, "conflict minerals" or similar materials or ingredients, if any.

e. obtain Buyer's written consent prior to entering into agreements with or otherwise engaging any person or entity, including all subcontractors and affiliates of Seller, other than Seller's employees, to provide any Services to Buyer (each such approved subcontractor or other third party, a "Permitted Subcontractor"). Buyer's approval shall not relieve Seller of its obligations under the Agreement, and Seller shall remain fully responsible for the performance of each such Permitted Subcontractor and its employees and for their compliance with all of the terms and conditions of the Agreement as if they were Seller's own employees. Nothing contained in the Agreement shall create any contractual relationship between Buyer and any Seller subcontractor or supplier and Buyer shall not be required to make any payment, directly or indirectly, to or on account of any Permitted Subcontractor;

f. require each Permitted Subcontractor to be bound in writing by the confidentiality provisions of these Terms, and, upon Buyer's written request, to enter into a separate non-disclosure or intellectual property assignment or license agreement in a form that is reasonably satisfactory to Buyer;

g. ensure that all persons, whether employees, agents, subcontractors, or anyone acting for or on behalf of the Seller, are properly licensed, certified or accredited as required by applicable law and are suitably skilled, experienced and qualified to produce the Goods and/or to perform the Services;

h. ensure that all of its equipment used in the manufacture and/or supply of the Goods and/or the provision of the Services is in good working order and suitable for the purposes for which it is used, and conforms to all relevant legal standards and standards specified by the Buyer; and

i. keep and maintain any Buyer equipment and/or other tangible personal property of Buyer in Seller's possession in a safe and secure manner and in good working order and shall not dispose of or use such equipment and/or other property of Buyer other than in accordance with the Buyer's written instructions or authorization.

10. Change Orders

Buyer may at any time, by written instructions, specifications and/or drawings issued to Seller (each a "Change Order"), order changes to the Goods and/or Services. Seller shall within ten (10) days of receipt of a Change Order submit to Buyer a firm cost proposal for the Change Order. If Buyer accepts such cost proposal, Seller shall proceed with the changed Goods and/or Services, subject to the revised pricing contained in the cost proposal, and otherwise according to the remaining terms of the Agreement. Seller acknowledges that a Change Order will not necessarily entitle Seller to any adjustment in the Price under the applicable Purchase Order or of the performance deadlines of the Agreement.

11. Warranties

a. Seller warrants and guarantees to Buyer that all Goods will:

i. be free from any defects in workmanship, material and design;

ii. conform to applicable specifications, drawings, designs, samples, descriptions, quality standards and other requirements specified by Buyer;

iii. be fit and sufficient for Buyer's intended particular purpose and function as intended;

iv. be new and merchantable;

v. be free and clear of all liens, claims, security interests or other encumbrances; and

vi. not infringe or misappropriate any third party's patent or other intellectual property rights;

vii. these warranties survive any delivery, inspection, acceptance or payment of or for the Goods by Buyer;

b. Seller warrants to Buyer that it shall perform the Services using personnel of required skill, experience and qualifications and in a professional and workmanlike manner in accordance with generally recognized industry standards for similar services and shall devote adequate resources to satisfy its obligations under the Agreement; and

c. the warranties set forth in this Section 11 are cumulative and in addition to any other warranty provided by Seller, or by applicable law or in equity. Unless otherwise set forth in the Agreement, the duration of the respective warranties provided by Seller to Buyer for the Goods and/or Services will begin on the date of receipt of the particular Goods by Buyer or the date that Seller concludes providing the particular Services and will end on the later of (i) the date of expiration of any warranty period provided under applicable law for the Goods or Services, as applicable, (ii) expiration of any warranty applicable to the associated products and/or services resulting from the particular Goods and/or Services, as provided by Buyer to Buyer's end customer, or (iii) the expiration of any specific warranty period or performance standard provided in any document incorporated by reference into the Agreement, including in Buyer's specifications or quality standards. Any applicable statute of limitations period shall be deemed to commence as of the date of Buyer's discovery of the noncompliance of the Goods or Services with any of the foregoing warranties. If Buyer gives Seller notice of noncompliance pursuant to this Section, Seller shall, at its own cost and expense, within ten (10) days of Seller's receipt of such notice; (i) replace or repair the defective or nonconforming Goods and pay for all related expenses, including, but not limited to, transportation charges for the return of the defective or nonconforming Goods to Seller and the delivery of repaired or replacement conforming Goods to Buyer, and, if applicable, (ii) perform remedial Services, and/or (iii) compensate Buyer for any and all losses suffered by Buyer resulting from any and all Goods and/or Services which are unable or impractical to be repaired, replaced or otherwise remedied so as to conform to the requirements of the Agreement.

12. General Indemnification

Seller shall defend, indemnify and hold harmless Buyer and Buyer's parent company, its subsidiaries, affiliates, successors or assigns and their respective directors, officers, shareholders, agents and employees (individually and collectively, "Indemnitees") against any and all loss, injury, death, damage, liability, claim, deficiency, action, judgment, interest, award, penalty, fine, cost or expense, including reasonable attorney and other professional fees and costs, and the cost of enforcing any right to indemnification hereunder and the cost of pursuing any insurance providers (collectively, "Losses") arising out of or occurring in connection with the Goods and/or Services purchased from Seller or Seller's negligence, willful misconduct or breach of the Agreement. Seller shall not enter into any settlement with any third parties as to any such Losses without Indemnitees' prior written consent.

13. Intellectual Property Indemnification

Seller shall, at its expense, defend, indemnify and hold harmless Buyer and any other Indemnitees against any and all Losses arising out of or in connection with any claim that Buyer's or Indemnitees' use or possession of the Goods and/or acceptance or use of the Services infringes or misappropriates the patent, copyright, trade secret or other intellectual property right of any third party. In no event shall Seller enter into any settlement of any such Losses without Indemnitees' prior written consent.

14. Limitation of Liability

Nothing in the Agreement shall exclude or limit (a) Seller's liability under any section of the Agreement, or (b) Seller's liability for fraud, personal injury or death caused by its negligence or willful misconduct.

15. Compliance with Laws

Seller shall comply with all applicable laws, regulations, rules and ordinances, including, without limitation, (a) any regulations and rules promulgated by the U.S. Food and Drug Administration, and (b) to the extent applicable to Seller, the provisions of the Health Insurance Portability and Accountability Act of 1996, as amended ("HIPAA"). Seller shall maintain in effect all the licenses, permissions, authorizations, consents and permits that it needs to carry out its obligations under the Agreement. Seller shall comply with all export and import laws of all countries involved in the sale and delivery of the Goods under the Agreement or any resale of the Goods by Seller. Seller assumes all responsibility for shipments of Goods requiring any government import clearance or similar approval. Buyer may terminate the Agreement if any governmental authority imposes antidumping or countervailing duties or any other penalties on Goods.

16. Termination

In addition to any remedies that may be provided under the Agreement, Buyer may terminate the Agreement with immediate effect upon written notice to the Seller, either before or after the acceptance of the Goods or the Seller's delivery of the Services, if Seller has not performed or complied with any provisions of the Agreement, in whole or in part and has not cured such failure of performance within then (10) days of receiving notice. If the Seller becomes insolvent, files a petition for bankruptcy or commences or has commenced against it proceedings relating to bankruptcy, receivership, reorganization or assignment for the benefit of creditors, then the Buyer may immediately terminate the Agreement upon written notice to Seller. In addition to any other rights of Buyer to terminate the Agreement, Buyer may at its option, terminate all or any part of the Agreement before the expiration date set forth in the Agreement, at any time and for any reason, by giving written notice to Seller. If Buyer terminates the Agreement for any reason, Seller's sole and exclusive remedy is payment for the Goods received and accepted and Services accepted by Buyer prior to the termination.

17. Waiver

No waiver by Buyer of any of the provisions of the Agreement is effective unless explicitly set forth in writing and signed by Buyer. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from the Agreement operates, or may be construed, as a waiver thereof. No single or partial exercise of any right, remedy, power or privilege hereunder precludes any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

18. Confidential Information; No Advertising

a. All non-public, confidential or proprietary information of Buyer, including but not limited to, specifications, samples, patterns, designs, plans, drawings, documents, data, business operations, clinical data, customer lists, patient information, pricing, discounts or rebates, disclosed by Buyer to Seller, whether disclosed orally or disclosed or accessed in written, electronic or other form or media, and whether or not marked, designated or otherwise identified as "confidential" in connection with the Agreement is confidential, solely for the purpose of performing the Agreement and may not be disclosed or copied unless authorized in advance by Buyer in writing. For the avoidance of doubt, with respect to any patient information or other personally identifiable information that Seller may obtain, directly or indirectly, from or through Buyer, in connection with the Agreement, Seller agrees to (i) treat such information as confidential information of Seller, and (ii) to otherwise comply with any and all applicable statutes, rules, regulations and/or ordinances governing the confidentiality and treatment of any such information, including, without limitation, HIPAA. Upon Buyer's request, Seller shall promptly return all documents and other materials received from Buyer. Buyer shall be entitled to injunctive relief for any violation of this Section. This Section does not apply to information that is: (a) in the public domain; (b) known to Seller at the time of disclosure; or (c) rightfully obtained by Buyer on a non-confidential basis from a third party.

b. Seller will not, without first obtaining the written consent of Buyer, in any manner (i) advertise or publish the fact that Seller has contracted to furnish Buyer the Goods and/or Services covered by the Agreement; (ii) use Buyer's trademarks, trade names or confidential information in Seller's advertising or promotional materials; or (iii) use Buyer's trademarks, trade names or confidential information in any form of electronic communication such as web sites (internal or external), blogs or other types of postings.

19. Remedies

The rights and remedies reserved to Buyer in the Agreement are cumulative with, and additional to, all other rights and remedies of Buyer under applicable law or in equity. Without limiting the foregoing, in the event that any Goods and/or Services fail to conform to the warranties set forth in the Agreement or the product specifications incorporated by reference in the Agreement, or if Seller otherwise breaches any of its obligations under the Agreement, Buyer will be entitled to recover from Seller any and all damages, including, without limitation, any direct, indirect, incidental and consequential damages and all legal and other professional fees and costs incurred by Buyer as a result of such breach or failure, including, without limitation, costs, expenses and losses incurred by Buyer (a) in inspecting, sorting, testing, repairing or replacing nonconforming Goods; (b) resulting from production or service interruptions of Buyer; (c) in conducting recall campaigns or other corrective service actions; or (d) resulting from personal injury, including death, or property damage. If requested by Buyer, Seller will enter into a separate agreement for the administration and processing of warranty chargebacks for nonconforming Goods.

20. Specific Performance.

Seller acknowledges and agrees that money damages will not be a sufficient remedy for any actual or threatened breach of the Agreement by Seller and that, in addition to all other rights and remedies that Buyer may have, Buyer will be entitled to specific performance and temporary, preliminary and permanent injunctive relief in connection with any action to enforce the Agreement, without any requirement of a bond or other security to be provided by Buyer.

21. Force Majeure

Neither party shall be liable to the other for any delay or failure in performing its obligations under the Agreement to the extent that such delay or failure is caused by an event or circumstance that is beyond the reasonable control of that party, without such party's fault or negligence, and which by its nature could not have been foreseen by such party or, if it could have been foreseen, was unavoidable ("Force Majeure Event"). Force Majeure Events include, but are not limited to, acts of God or the public enemy, government restrictions, floods, fire, earthquakes, explosion, epidemic, war, sabotage, invasion, hostilities, terrorist acts, riots, strike, embargoes or industrial disturbances. Seller's economic hardship or changes in market conditions are not considered Force Majeure Events. Seller shall use all diligent efforts to end the failure or delay of its performance, ensure that the effects of any Force Majeure Event are minimized and resume performance under the Agreement. If a Force Majeure Event prevents Seller from carrying out its obligations under the Agreement for a continuous period of more than fourteen (14) business days, Buyer may terminate the Agreement, without liability on the part of Buyer, immediately by giving written notice to Seller.

22. Assignment

Seller shall not assign, transfer, delegate or subcontract any of its rights or obligations under the Agreement without the prior written consent of Buyer. Any purported assignment or delegation in violation of this Section shall be null and void. No assignment or delegation shall relieve the Seller of any of its obligations hereunder. Buyer may at any time assign or transfer any or all of its rights or obligations under the Agreement without Seller's prior written consent to any affiliate or to any person acquiring all or substantially all of Buyer's assets.

23. Relationship of the Parties

The relationship between the parties is that of independent contractors. Nothing contained in the Agreement shall be construed as creating any agency, partnership, joint venture or other form of joint enterprise, employment or fiduciary relationship between the parties, and neither party shall have authority to contract for or bind the other party in any manner whatsoever.

24. No Third-Party Beneficiaries

The Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of the Agreement.

25. Governing Law

All matters arising out of or relating to the Agreement are governed by and construed in accordance with the internal laws of the State of Michigan without giving effect to any choice or conflict of law provision or rule (whether of the State of Michigan or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than those of the State of Michigan. The provisions of the United Nations Convention on Contracts for the International Sale of Goods (Vienna, 1980), as amended, are expressly excluded.

26. Submission to Jurisdiction

Any legal suit, action or proceeding arising out of or relating to the Agreement shall be instituted in the federal courts of the United States of America or the courts of the State of Michigan in each case located in the City of Ann Arbor and County of Washtenaw, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding.

27. Notices

All notices, requests, consents, claims, demands, waivers and other communications hereunder (each, a "Notice") shall be in writing and addressed to the parties at the addresses set forth on the face of the Purchase Order, in the Supply Contract, or to such other address that may be designated by the receiving party in writing. All Notices shall be delivered by personal delivery, nationally recognized overnight courier (with all fees pre-paid), facsimile (with confirmation of transmission) or certified or registered mail (in each case, return receipt requested, postage prepaid). Except as otherwise provided in the Agreement, a Notice is effective only (a) upon receipt of the receiving party, and (b) if the party giving the Notice has complied with the requirements of this Section.

28. Severability

If any term or provision of the Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of the Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction.

29. Survival

Provisions of the Agreement which by their nature should apply beyond their terms will remain in force after any termination or expiration of the Agreement including, but not limited to, the following provisions: Compliance with Laws, Confidential Information, Governing Law, Submission to Jurisdiction and Survival.

30. Amendment and Modification

The Agreement may only be amended or modified in a writing stating specifically that it amends the Agreement and is signed by an authorized representative of each party.