EXHIBIT 10.11

 

CONFIDENTIAL TREATMENT REQUESTED

 

APPLICATION SERVICE PROVIDER AGREEMENT

 

This Application Services Provider Agreement (“Agreement”) is entered into this
19th day of September, 2014 (“Effective Date”) by and between DNAnexus, Inc., a
Delaware corporation, with its principal place of business at 1975 W. El Camino
Real, Suite 101, Mountain View, CA 94040 (“Vendor”) and Natera, Inc., with its
principal place of business at 201 Industrial Road, Suite 410, San Carlos, CA
94070 (“Natera”) for the provision of services in accordance with the following
terms and conditions.  When used herein the term “Agreement” includes the body
of this Agreement and any and all Statements of Work entered into by the Parties
(as defined below) and all exhibits attached hereto.  In the event of a conflict
between the body of this Agreement and any Statement of Work or exhibit, the
body of this Agreement will govern.  Vendor and Natera may be referred to in
this Agreement individually as a “Party” and together as the “Parties.”  The
Parties had previously entered into a Pilot Agreement (the “Pilot Agreement”),
which is hereby terminated as of the Effective Date (provided that any
provisions identified in Section 7.2 (Effect of Termination of Expiration) of
the Pilot Agreement as surviving termination shall continue to govern as between
the parties with regard to the subject matter of the Pilot Agreement).

 

R E C I T A L S

 

WHEREAS, the Parties have determined to further their business relationship
based upon the success of the Pilot Agreement;

 

WHEREAS, Vendor is in the business of providing a platform as a service
(“PaaS”), and such PaaS is routinely maintained and modified by Vendor,
typically without version releases or bundled updates; and

 

WHEREAS, Natera desires to access and use Vendor’s PaaS product pursuant to the
terms and conditions set forth herein.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Parties hereby agree as follows:

 

A G R E E M E N T

 

1.  Definitions

 

1.1   “Content” means, without limitation, any and all information, data,
analysis, software (including APIs, source code and/or object code, as
applicable), algorithms, work flows, data flows, processes and procedures,
software results, ideas, plans, sketches, texts, files, links, images, photos,
video, sound, inventions (whether or not patentable), notes, works of
authorship, articles, feedback, or other materials.

 

1.2   “Developments” means all Content created by Vendor, its contractors or
agents specifically in connection with the performance of this Agreement and
having exclusive and unique applicability to the Natera Source Code.

 

1.3   “Documentation” means the designated user manuals, handbooks, or online
materials furnished by Vendor that describe the features, functionality or
operation of the Services.

 

1.4   “Natera Content” means (a) any Content provided by Natera or Natera Users,
or imported or uploaded to, or otherwise used by or on behalf of Natera or
Natera Users in connection with, the Vendor Services, including, without
limitation, Natera Source Code; (b) any analysis, summary, modification, report
or results regarding NGS Data or other data from Natera or Natera Users; and (c)
any Developments.  For the avoidance of doubt, Natera Content does not include
Vendor System and modifications and improvements made thereto.

 

1.5   “Natera Source Code” means all proprietary source code of Natera which
Natera provides or grants access to Vendor in connection with the performance of
this Agreement.

 

1.6   “Natera Users” means individuals, laboratories, institutions or other
entities to whom or to which Natera delivers NGS Data and/or analysis via the
Vendor System.  “Natera Users” includes internal users of the Vendor System at
Natera and third parties to whom or to which Natera delivers NGS Data and/or
analysis via the Vendor System.  All information relating to Natera Users shall
be deemed Natera Confidential Information.

 

1.7   “NGS Data” means results regarding next-generation sequencing and array
data.

 

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1.8   “Vendor System” means the technology, including the website at
https://dnanexus.com (“Site”) and the services and other items provided through
the Site under this Agreement, including (1) the DNAnexus genomic information
management and analysis services, software, reports and documentation provided
via login, (2) the DNAnexus application programming interface (“API”) and
software development kit (“SDK”) and (3) the DNAnexus App Library (“Library”)
and any software or services that may be provided by DNAnexus or third parties
through the Library (“Add-ons”); hardware, software, and networks used by Vendor
to deliver the Vendor Service to Natera in accordance with this Agreement.

 

2.  Term.  The term of this Agreement shall commence on the Effective Date and
continue in full force for three (3) years (the “Initial Term”).  Upon the
expiration of the Initial Term, this Agreement shall automatically renew for
successive one (1) year terms (each a “Renewal Term”), unless either Party
terminates the Agreement according to Section 24.3 (Termination for
Convenience).  The Initial Term and any Renewal Terms are referred to herein
collectively as the “Term.” Pursuant to Section 15.2 (Fees During Renewal
Terms), such notice shall identify any fee increase applicable to the Renewal
Term that is about to commence.

 

3.  Vendor; No Subcontracting.  Vendor shall perform the obligations described
in this Agreement and in the Statement(s) of Work itself and through its direct
wholly-owned subsidiaries, provided such subsidiaries are disclosed in writing
to Natera. Subject to Section 25.5 (Assignment), Vendor may not assign, delegate
or subcontract this Agreement nor any of its rights, duties or obligations under
this Agreement without Natera’s prior express written consent.  Notwithstanding
the foregoing, Vendor may use subcontractors for code development, quality
assurance, and other generic functions that do not require or allow access to
Natera Confidential Information or its facilities or relate to the direct
performance of the Services.  Any purported assignment or delegation not
permitted by this Agreement nor consented to by Natera shall be void at Natera’s
option, which voiding Natera may enforce by injunctive relief, and shall
constitute a material breach of this Agreement.  Vendor acknowledges that Natera
has entered this Agreement in reliance on Vendor’s ability and agreement to
personally perform Vendor’s obligations hereunder.  Notwithstanding any Natera
consent to any subcontracting: (1) Vendor shall remain responsible for any and
all performance required under this Agreement, including, but not limited to,
the obligation to properly supervise, coordinate, and perform all work required
hereunder, and no subcontract shall bind or purport to bind Natera; (2) Vendor
shall ensure its subcontractors comply with all relevant terms and conditions of
this Agreement; (3) any breach by a Vendor subcontractor of this Agreement shall
constitute a breach by Vendor of this Agreement for which Vendor shall remain
liable; and (4) any consent to subcontracting shall be subject to Natera’s right
under Section 11.4 (Vendor Personnel) to approve or disapprove any Vendor
Personnel assigned to provide work hereunder.

 

4.  Natera. Subject to the limitations, if any, set forth in Exhibit B relating
to the scope of the license granted by Vendor to the Services, the rights and
obligations of Natera may be, in whole or in part, exercised or fulfilled by
Natera and its respective affiliates, subsidiaries, and contractors. 

 

5.  Services.  Vendor will provide Natera with access to and use of the Vendor
System and certain hosted applications and furnish certain professional
services, including, but not limited to, Support Services (as defined below),
maintenance, customization, implementation, and training services (collectively,
the “Services” or “Vendor Services”), all as more particularly described
herein.  Vendor will provide the Services to Natera in accordance with industry
standards and in any event in a manner consistent with the highest level of
service that it provides to its other customers.  The Services to be provided by
Vendor are set forth in this Agreement, Exhibit B, such Statements of Work as
the Parties may mutually agree upon from time-to-time or as the Parties may
otherwise agree from time to time.  Subject to the terms and conditions of this
Agreement, Vendor grants to Natera a non-exclusive, non-transferable (except as
provided in Section 25.5), revocable (solely as provided elsewhere in this
agreement), limited license to access and use the Services and Documentation (as
defined below) in accordance with the Documentation for its business activities,
including without limitation the provision of the Services to its customers in
the ordinary course of its business, during the Term.  Natera will be
responsible for managing access to the Services by Natera Users and for changing
settings in accordance with the Documentation, and will designate a named
super-User (which Natera may change upon prior written notice to Vendor) to be
responsible to notify Vendor of any changes in authorized users and Natera
changes to settings that affect use of the Vendor System by Natera
Users.  Natera shall use all reasonable efforts consistent with industry
standards to ensure that use of the Services by its customers complies with the
terms of this Agreement.

 

6.  Restrictions.  Natera shall use the Services solely in accordance with this
Agreement, applicable laws and regulations, including without limitation HIPAA
and export control laws. Natera will not, and will not permit any third party
to:

 

6.1   translate, modify, adapt, enhance, decompile, disassemble or reverse
engineer the Vendor System or otherwise determine or attempt to determine source
code or protocols from the executable code of the Vendor System or create any
derivative works based upon the Vendor System;

 

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6.2   extract ideas, algorithms, procedures, workflows or hierarchies from the
Vendor System or otherwise use the Vendor System for the purpose of creating
another product or service

 

6.3   rent, lease or otherwise charge third parties for access to Natera’s user
accounts or for sharing through the Site, except to the extent Natera does so
with Vendor’s prior approval (for example, through the Library) provided, that
Natera’s charging end users for the delivery of NGS Data and/or analysis via the
Vendor System shall not be subject to this restriction;  

 

6.4   introduce any virus, malware or spyware into the Vendor System;

 

6.5   adversely impact the speed, security or integrity of the Vendor System;

 

6.6   access or use Natera Content without the prior agreement of Natera Users
to the scope and nature of that access or use;

 

6.7   circumvent or render ineffective technological and other measures
implemented to protect and control the Vendor System and Natera Content or

 

6.8   use any Free and Open Source Software (“FOSS”) in a way that would cause
the non-FOSS portions of the Vendor System to be subject to any FOSS licensing
terms or obligations. Free and Open Source Software means any software that is
subject to terms that, as a condition of use, copying modification or
redistribution, require such software or derivative works thereof to be
disclosed and/or distributed in source code form, to be licensed for purposes of
making derivative works, or to be redistributed free of charge, including
without limitation software distributed under the GNU General Public License or
GNU Lesser/Library GPL.

 

7.  Access and Security Guidelines.  Natera will assign each Natera User a
unique user identification name and password (“UserID”) for access to and use of
the Vendor System.  Natera’s super-User who will be assigned a unique UserID for
purposes of communicating with Vendor regarding the management and
administration of the Natera Users and the Services.  Natera agrees (a) not to
authorize a third party other than Natera User to use its account, usernames or
passwords at any time; (b) to instruct Natera Users not to share passwords or
UserIDs and otherwise maintain the confidentiality of the user ID(s) and
password(s) necessary for access to the Vendor System; (c) to notify Vendor
promptly of any actual or suspected unauthorized use of its account, usernames
or passwords and (d) to provide complete, accurate and up-to-date information,
including, for example, email addresses used to provide notices to Natera under
this Agreement.  Vendor reserves the right to terminate any username and
password, which Vendor reasonably determines, after consultation with Natera’s
super-User, may have been used by an unauthorized third party or by any user or
individual other than the Natera User to whom such username and password was
originally assigned.  Vendor may monitor use of the API and Natera Software on
the Site or in the Vendor System for the purpose of providing the Services,
including for quality assurance, improvement of the Services and verification of
compliance with this Agreement. Natera represents and warrants that it
understands the security and architectural implications of installing
applications with access to Natera Content. Vendor disclaims any responsibility
for any use or misuse of Natera Content accessed by applications installed by or
on behalf of Natera.

 

8.  Service Levels.  Vendor shall provide the Services, not including any
Support Services or other professional or consulting services, in accordance
with the service levels (“Service Levels”) set forth in Exhibit C (Service
Levels) and any applicable Statement of Work.

 

9.  Software.  To the extent Vendor delivers any software to Natera in
connection with this Agreement for installation on Natera servers, Natera will
have a non-exclusive, non-transferable (except as provided in Section 25.5),
non-sublicensable, revocable (solely as provided elsewhere in this Agreement),
limited license to use the software solely in connection with the Services as
contemplated hereunder.  Natera shall not disassemble, decompile, or reverse
engineer the software or remove any proprietary notices thereon.  The software
will be deemed part of and included in the definition of the Services.

 

10.  Third Party Intellectual Property. “Third Party Intellectual Property”
shall mean intellectual property, including software, licensed, made, conceived,
or developed by a third party and provided by Vendor through the App
Library.  All such Third Party Intellectual Property shall be deemed part of and
included in the definition of “Services” and subject to all terms and conditions
of this Agreement relating to the Services. 

 

10.1 Disclaimer.  Notwithstanding any term in this Agreement, Vendor makes no
representation, warranty, promise or endorsement regarding Third Party
Intellectual Property provided in connection with the Services.

 

10.2 End-User License Agreement.  Natera agrees that use of Third Party
Intellectual Property, such as a third party Add-on, may be subject to an
End-User License Agreement or “EULA”, which provides the terms and conditions of
use established by the owner of the Third Party Intellectual Property (“Third
Party Provider”). Natera shall be

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presumed to have reviewed applicable terms and policies, including privacy and
data gathering practices, and to have made necessary and appropriate
investigation before using any Third Party Intellectual Property.

 

10.3 Relationship of the Parties.  Natera agrees that any purchase of a Third
Party Product by Natera is from the Third-Party Provider, with Vendor acting as
an agent for the Third Party Provider, and that the Third Party Provider, and
not Vendor, is solely responsible for the Third Party Intellectual and any
obligations in the EULA. Natera also agrees that Vendor is a third-party
beneficiary of the EULA and that, upon Natera’s acceptance of its terms, Vendor
will have the right to enforce the EULA against Natera.

 

11.  Services and Deliverables. The provisions of this Section shall apply to
the extent the Parties enter into a Statement of Work, as defined below, for the
provision of professional services. Acceptance testing under Section 11.5 to
11.7 shall not be required or available with respect to modifications of the
Site, API or SDK notwithstanding the terms of Section 11, unless otherwise
provided in a Statement of Work.

 

11.1 Statement(s) of Work. Vendor will provide the Services, have the
obligations to Natera, produce and deliver the deliverables (“Deliverables”),
achieve the “Milestones,” and retain the responsibilities described in one or
more sequentially numbered, written statements of work that specifically
reference this Agreement and are attached hereto as part of Exhibit A (each, a
“Statement of Work”).  The terms “Services”, “Deliverables” and “Milestones”
have the meanings set forth in such Statement(s) of Work. For the avoidance of
doubt, the term “Services” shall include both the specific services described in
a Statement of Work, as well as the general meaning for such term contained in
this Agreement.  Each Statement of Work will be effective and become valid and
enforceable only when signed by Natera and Vendor.  If a conflict arises between
the body of this Agreement and a Statement of Work or other attachment, exhibit,
or schedule hereto, except with regard to an express amendment to this
Agreement, the body of this Agreement shall control.

 

11.2 Change Orders.  Natera may desire to make significant custom modifications
to the Services following execution of a Statement of Work.  If so, Natera will
submit a written change order to Vendor describing such changes in appropriate
detail (a “Change Order”).  If a Change Order does not require Vendor to incur
any additional material costs or expenses, then Vendor will make such
modification within a commercially reasonable period after Vendor’s receipt of
Natera’s Change Order.  If a Change Order does require that Vendor incur
additional material costs or expenses, then Vendor in good faith will provide
Natera with a written assessment of such costs and expenses and the time
required to perform the modifications required by the Change Order.  Natera will
notify Vendor in writing after receipt of the Change Order response from Vendor
as to whether Natera wishes Vendor to implement such Change Order based on such
response.  Natera will compensate Vendor for implementation of a Change Order in
accordance with the terms and conditions of the relevant Change Order and
Vendor’s statement, as provided prior to Vendor’s implementation of the Change
Order, if any.  Vendor’s implementation of a Change Order shall not delay the
performance of Services and/or the delivery of Deliverables not reasonably
affected by a Change Order.

 

11.3 Natera Cooperation.  Natera acknowledges that Vendor’s ability to perform
the Services will require Natera to perform certain tasks, which shall be
mutually agreed upon and set forth in the applicable Statement(s) of
Work.  Natera hereby agrees to perform its obligations in accordance with such
requirements in a commercially reasonable manner.  Furthermore, the Parties
acknowledge that Natera’s failure to perform its obligations may adversely
affect Vendor’s ability to meet its performance obligations hereunder and the
Parties hereby agree to negotiate in good faith to arrive at an equitable
adjustment to the terms of this Agreement to compensate Vendor for such
additional effort and costs directly caused by Natera’s delay or failure to
perform. 

 

11.4 Vendor Personnel.  Vendor agrees that all Vendor Personnel assigned to
perform under this Agreement must have experience performing the tasks to which
they will be assigned under this Agreement.  In the event that, as a result of
the actions, inaction, or replacement of Vendor Personnel, additional or
accelerated work is required to perform this Agreement, Vendor shall perform all
such work at no additional charge to Natera.  Vendor shall promptly fill any
Vendor Personnel vacancy with Vendor Personnel having qualifications at least
equivalent to those of the Vendor Personnel being replaced. As used herein,
“Vendor Personnel” shall mean all of Vendor’s employees, agents, and
subcontractors who perform services related to the performance of Vendor’s
obligations under this Agreement.

 

11.5 Acceptance Criteria.  The Services, Deliverables and Milestones under a
Statement of Work may be subject to acceptance testing by Natera, in its sole
discretion, to verify that they satisfy the acceptance criteria mutually agreed
to by the Parties (the “Acceptance Criteria”).  Such Acceptance Criteria shall
be based, at a minimum, on conformance of the Services and Deliverables to the
specifications set forth in Exhibit B, Exhibit C, the relevant Statement(s) of
Work, the requirements of this Agreement, and, solely to the extent not
inconsistent with the foregoing, the Documentation (the “Specifications”). 

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11.6 Acceptance Testing.  When Vendor notifies Natera that a Service,
Deliverable or Milestone (if the Statement of Work provides for Milestones) has
been completed as provided under a Statement of Work, Natera shall test or
evaluate the Services, Deliverables and/or Milestones to determine whether they
comply in all material respects with the Acceptance Criteria. Upon completion of
Natera’s review and testing, Natera shall notify Vendor whether it has accepted
the applicable Services, Milestones and/or Deliverables (“Accept” or
“Acceptance”), or whether it has identified discrepancies with the Acceptance
Criteria (“Reject” or “Rejection”).  If Natera does not perform acceptance
testing or provide a written Rejection following acceptance testing notice to
Vendor within [*] business days (or such other time as may be agreed upon by the
Parties in writing) of Natera’s receipt of such Service, Deliverable or
Milestone, Natera may not later Reject such item under this Section and any fees
associated with Acceptance shall become due.  Vendor shall implement the
Services under the Statement of Work if either Natera has not Rejected the
Services, Milestones and/or Deliverables or if Natera chooses not to perform
acceptance testing within [*] business days of original Vendor notification to
Natera. If Natera Rejects the Services, Milestones and/or Deliverables, Natera
shall provide a written list of items that must be corrected.  On receipt of
Natera’s notice, Vendor shall promptly commence, at no additional charge to
Natera, all reasonable efforts to complete, as quickly as possible, such
necessary corrections, repairs and modifications to the Services, Milestones
and/or Deliverables as will permit them to be ready for retesting, but in no
event shall such corrective measures exceed [*] days (or such other time as the
Parties may agree upon in writing) from receipt of Natera’s notice.  The testing
and evaluation process shall resume, as set forth above, with Natera having an
additional [*] business day testing period.  If Natera Accepts the Services,
Milestones and/or Deliverables, it shall issue a written “Acceptance
Notice”.  The date of such Acceptance Notice shall be deemed the “Acceptance
Date.”  If Natera determines that the Services, Milestones and/or Deliverables,
as revised, still do not comply in all material respects with the Acceptance
Criteria after one attempt by Vendor at correction, Natera may either (a) afford
Vendor the opportunity to repeat the correction and modification process as set
forth above at no additional cost or charge to Natera, or (b) depending on the
nature and extent of the failure in Natera’s sole judgment, terminate the
relevant Statement(s) of Work or this Agreement in accordance with Section 24
(Termination) as a non-curable default with respect to (i) the Statement(s) of
Work relating to the Service(s), Milestone(s) and/or Deliverables(s) that is
(are) not performing or conforming as required herein, or (ii) this entire
Agreement if the failure materially affects the function or desirability of the
Services, Milestones and/or Deliverables to Natera as a whole.  The foregoing
procedure shall be repeated until the Service and/or Deliverables pass the
applicable Specifications, or Natera elects to terminate the Agreement and/or
Statement(s) of Work as provided above. 

 

11.7 Failed Acceptance Testing.  In the event of a termination under Section
11.6 (Acceptance Testing), Vendor shall pay to Natera, within [*] business days
of written notice of termination, all sums paid to Vendor by Natera under this
Agreement for the Services, Milestones and/or Deliverables as to which the
termination applies.  If Vendor fully performs by making complete reimbursement
to Natera as provided herein, the reimbursement remedy shall be Natera’s sole
remedy and shall preclude any other remedy available under this Agreement or at
law or in equity for failure of acceptance testing.  In the event Natera fails
to Reject a Service, Milestone or Deliverable or otherwise respond to Vendor
within the testing period provided above, Natera may not later Reject the
Service, Milestone or Deliverable under Section 11.6 (Acceptance Testing) or
receive a refund of fees paid as provided in this Section 11.7 (Failed
Acceptance Testing) and any fees associated with Acceptance shall become due and
payable.

 

12. Subsequent Versions or New Products.  If, during the Term, Vendor makes
available any future update, version, or release of the Services, excluding
Third Party Intellectual Property, for which an additional charge is required
(i.e., Natera would not otherwise be entitled to receive the version without
charge under this Agreement), Vendor shall waive such charge and provide the
update, version, or release to Natera.  During the Term, if functions or modules
not included in the version of the Services marketed by Vendor as of the
Effective Date, and not otherwise provided to Natera under this Agreement, are
subsequently made generally available to any of Vendor’s other clients, the
Parties shall negotiate in good faith the price of the functions or modules. 

 

13. Documentation.  At no additional charge to Natera, Vendor shall provide
Natera with all Documentation relating to the Services.  If the Documentation
for the Services is revised or supplemented at any time, Vendor shall promptly
deliver a copy of such revised or supplemental Documentation to Natera, at no
additional cost to Natera.  Natera may, at any time, reproduce copies of all
Documentation and other materials provided by Vendor, distribute such copies to
Natera personnel, and incorporate such copies into its own technical manuals,
provided that such reproduction, distribution and incorporation relate to
Natera’s and its personnel’s use of the Services as permitted in this Agreement,
and all copyright and trademark notices, if any, are reproduced thereon.  To the
maximum extent available, Vendor shall deliver the Documentation in electronic
form to Natera.

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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14. Support Services.  Vendor shall provide the support and maintenance services
described in this Section 14 (Support Services) and the applicable Statement(s)
of Work (collectively, the “Support Services”). 

 

14.1 Support Responsibilities.  In addition to any warranty obligations of
Vendor under this Agreement, Vendor shall:

 

(a)   Correct any failure of the Services, and Deliverables to perform in
accordance with the Specifications, including without limitation, defect repair,
programming corrections, and remedial programming, and provide such services and
repairs required to maintain the Services, and Deliverables so that they operate
properly, continuously and in accordance with the Specifications.

 

(b)   Provide email support twenty-four (24) hours a day, seven (7) days a week,
three hundred and sixty-five (365) days a year.

 

(c)   Respond to and then continuously work to remedy issues of Service
Unavailability, as defined in Section 6.2 of Exhibit C (Service Level
Agreement):

 

(i)           within one hour of Natera’s support request made during a support
window consisting of the hours of 9:00 am to 5:00 pm Pacific Time on Monday
through Friday excluding New Year’s Day, President’s Day, Memorial Day,
Independence Day, Labor Day, Columbus Day, Thanksgiving Day and the following
day, Christmas Day and the following day, and New Year’s Eve.  Vendor shall
respond to Service Unavailability support requests made outside the support
window and to all other issues within one business day. Section 14.1(c)(i) shall
remain in effect until Vendor notifies Natera no later than sixty (60) days
after the Effective Date of this Agreement that a longer support window is
available, at which point Section 14.1(c)(ii) will take effect.

 

(ii)           Upon notice given to Natera no later than sixty (60) days after
the Effective Date of this Agreement and continuing for the Term of the
Agreement, respond to and then continuously work to remedy issues of Service
Unavailability, as defined in Section 6.2 of Exhibit C (Service Level Agreement)
within one hour of Natera’s support request made twenty-four (24) hours a day,
seven (7) days a week, three hundred and sixty-five (365) days a year. Any
support request regarding issues of Service Unavailability shall be made to the
customer support contact selected by Vendor.

 

(d)   Provide online access to technical support bulletins and other user
support information and forums.

 

(e)   Provide phone support during Vendor’s normal business hours.

 

14.2 Vendor’s Changes and Upgrades.  Vendor may from time to time make material
enhancements and changes to the Services.  In the event of such enhancements or
changes, (a) the new version of the Services will include at least the
functionality, level or quality of services that Natera previously received and
shall continue to comply with all of the requirements of this Agreement, (b)
Natera shall be provided, at least [*] days in advance of any such changes,
written notice and a demonstration of such changes, and (c) Vendor will not
enhance or change the Services in such manner as Natera, having objectively
considered data, reasonably determines will [*], or otherwise have a [*] on the
functionality or operation of, Natera’s products.   During the Term, Natera
shall receive access to all new versions, releases, updates, enhancements of the
Services that Vendor makes available to its other licensees without additional
charge within [*] days of their general availability.

 

14.3 Support Not to be Withheld.  Support under this Agreement will not be
withheld due to any unrelated dispute arising under this Agreement, another
agreement between the Parties, or any other unrelated dispute between the
Parties.

 

15. Fees and Expenses.

 

15.1 Fees for Services.  The fees for the Services and/or Deliverables shall be
as set forth in Exhibit B and the applicable Statements of Work.  The Parties
will agree as to fees with respect to any Renewal Term.

 

15.2 Fees During Renewal Terms.  Vendor’s fees hereunder as set forth in Exhibit
B and the applicable Statements of Work shall be fixed during the Initial
Term.  Thereafter, Vendor may increase such fees for a Renewal Term by providing
notice to Natera at least [*] days prior to the commencement of such Term. 

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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15.3 Responsibility for Costs.  Except for any reimbursable expenses specified
in a Statement of Work, or as otherwise approved in writing by Natera, Vendor
shall be responsible for all costs and expenses incidental to the provision of
the Services, including but not limited to, all costs for Third Party
Intellectual Property and equipment provided by Vendor, and all fees, fines,
licenses, bonds or taxes required of or imposed against Vendor including but not
limited to corporate income tax, sales and excise taxes or amounts levied
thereof, and all other of Vendor’s costs of doing business.  Vendor shall supply
copies of third parties’ invoices and other reasonable supporting documentation
in substantiation of any reimbursable expenses, as Natera may request from time
to time.  No payments will be made for services rendered or expenses incurred by
Vendor other than the Services or Deliverables unless such services are approved
in advance in writing by Natera, and Vendor supplies such documentation as
Natera may request with respect to such costs.

 

15.4 Travel and Living Expenses.  Unless provided for differently in a Statement
of Work, in the event that Natera requests Vendor to provide Services at a
location away from the metropolitan area of Vendor’s regular place of business,
Natera will reimburse Vendor for reasonable and necessary budgeted travel and
living expenses incurred by Vendor that would not have been incurred in any
event if such Services had been performed at Vendor’s regular place of
business.  Receipts or reasonable evidence thereof are required for commercial
travel, car rental, parking, and lodging.  Vendor shall submit monthly expense
reports to Natera.  When Vendor employees visit more than one client on the same
trip, the expenses incurred will be apportioned in relation to time spent with
each client.  Vendor shall obtain Natera’s prior written approval, which shall
not be unreasonably withheld, before incurring any travel or living expenses
exceeding, in the aggregate, [*].  All air travel shall be economy class on
generally scheduled commercial flights.  Vendor shall use commercially
reasonable efforts to make airline reservations for travel sufficiently in
advance of the travel date so as to obtain the lowest airfare.

 

15.5 Taxes.  Natera will pay or reimburse Vendor, for any and all sales, use, or
similar taxes based on Natera’s receipt of the Services and Deliverables
hereunder (but specifically excluding taxes in the nature of ordinary personal
property taxes assessed against or payable by Vendor, taxes based upon Vendor’s
net income or personnel, Vendor’s corporate franchise taxes and the
like).  Vendor will pay, and hold Natera harmless against, any penalty,
interest, or additional tax that may be assessed or levied as a result of the
failure or delay of Vendor or Vendor Personnel to file any return or information
required by law, rule, or regulation, other than state, city or local sales
taxes.  Vendor will provide reasonable assistance to Natera should Natera
contest any taxes imposed on it which result from this Agreement.  The Parties
shall reasonably cooperate to more accurately determine each Party’s tax
liability and to minimize such liability to the extent legally permissible.

 

15.6 Payment Terms. Unless provided otherwise in a Statement of Work, Vendor
will invoice Natera for the Services and/or Deliverables in monthly installments
no later than [*] days following the end of the month in which the Services
and/or Deliverables were completed or delivered.  The invoice will detail the
work performed during such period and the information required in Section 15.8
(Invoices).  Except as provided in this Agreement or as may otherwise be
provided in a Statement of Work, Natera agrees to pay the amounts due Vendor
hereunder within [*] days after Natera receives Vendor’s invoice, except to the
extent such invoices are the subject of a dispute between the Parties.  While
any invoice is in dispute, Vendor does not waive its right to payment.

 

15.7 All Fees Stated.  Except as provided in this Section 15 (Fees and Expenses)
or in the event of an amendment to this Agreement: there are no other fees to be
paid by Natera in connection with this Agreement for the Services and/or
Deliverables.  Any work performed by Vendor and not specifically authorized by
Natera in writing shall be considered gratuitous and Vendor shall have no right
or claim whatsoever to any form of compensation.

 

15.8 Invoices.  Each invoice shall fairly and accurately describe in reasonable
detail the actual Services performed, the person(s) or entity(ies) who performed
such Services, the dates on which such Services were performed, any Deliverables
delivered in the prior month, any Milestones met in the prior month, the fees
and expenses payable by Natera for such Services, Deliverables and Milestones,
and any reimbursable expenses.  In connection with travel and living expenses,
the invoices shall specify the purpose and location of the meeting for which the
travel was required, the project involved, and the name of the person who called
the meeting.  With regard to messenger services, the invoice shall specify the
person to whom the package was sent and the project involved.  Vendor shall
include with its invoices all supporting documentation for any out-of-pocket or
third party reimbursable expenses.  Natera shall not be required to make payment
for the out-of-pocket or third party reimbursable expenses in any invoices if
such documentation is not furnished by the Vendor as herein provided and if
Natera provides written notice of the deficiencies in documentation, or if any
invoices with respect to the same is rendered more than ninety (90) days after
the expenses were incurred, in

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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which case Vendor shall be solely and exclusively responsible for payment of
same at its own cost and expense.  Natera may refuse payment with respect to any
invoice that fails to comply with the requirements contained in this Section
15.8 (Invoices), though failure of Vendor to comply with this section shall not
finally relieve Natera of its obligation to pay fees for other Services rendered
in compliance with the remaining terms of this Agreement.  Nothing contained
herein shall be interpreted to mean that Natera is required to pay any amount
that Natera disputes.  While any amount is in dispute, Vendor does not waive its
right to payment.

 

15.9 Payment Does Not Imply Acceptance.  The making of any payment or payments
by Natera, or the receipt thereof by Vendor, shall in no way affect the
responsibility of Vendor to furnish the Services and Deliverables in accordance
with this Agreement, and shall not imply acceptance by Natera of such items or
the waiver of any warranties or requirements of this Agreement.

 

15.10 Audits and Records.  Vendor shall, at its sole cost and expense, maintain
complete and accurate books and records regarding its performance of the
Services and compliance with this Agreement covering all activities and
transactions arising out of or relating to this Agreement and shall keep such
records for not less than [*] years after termination.  Natera and its duly
authorized representatives shall have the right, upon [*] days prior notice,
during normal business hours for the Term, not more than [*] and for a period of
[*] years following the termination hereof for any reason, to examine and copy
(without charge to Natera) such books and records, and all other documents and
materials in the possession or under the control of Vendor, with respect to the
subject matter and terms of this Agreement that reasonably have a bearing on or
pertain to matters, rights, duties or obligations covered by this
Agreement.  Natera and its authorized representative, in a manner agreed to by
the Parties, shall have access to Vendor’s facilities, shall be permitted by
Vendor to interview current or former employees of Vendor with respect to
matters pertinent to Vendor’s performance of this Agreement, shall have access
to all necessary records, and shall be furnished, without charge, adequate and
appropriate workspace in order to perform the examinations provided for under
this subsection.  The cost for any such on-site audit shall be borne by
Natera.  The exercise by Natera of any right to audit under this or any other
Section of this Agreement at any time or times or the acceptance by Natera of
any statement or the payment thereof by Natera shall be without prejudice to any
of Natera’s rights or remedies and shall not bar Natera from thereafter
disputing the accuracy of any payment or statement.

 

15.11 Security Audits.  Vendor shall have an accredited third party vendor,
reasonably acceptable to Natera, perform audits of Vendor’s security system in
accordance with industry standards, including, without limitation, a yearly
penetration test.  During the Term and upon request, Natera shall be provided
the results of Vendor’s yearly penetration test. Natera shall not cause any
penetration test of the Vendor System to occur without Vendor’s prior written
consent.

 

15.12 Compliance Audits.  During the Term, to the extent Vendor engages a third
party auditor, reasonably acceptable to Natera, to perform an SSAE 16 of
Vendor’s operations, information security program, and/or disaster
recovery/business continuity plan, Vendor shall promptly furnish a copy of the
audit report to Natera upon request.  Any such audit reports shall be deemed
Vendor Confidential Information.

 

16. Representations and Warranties.

 

16.1 Vendor’s Warranties.  Vendor represents and warrants that: (i) it has the
full power, capacity and authority to enter into and perform this Agreement and
to make the grant of rights contained herein, it is the lawful owner or licensee
of the Vendor System, and its performance of this Agreement does not violate or
conflict with any agreement to which Vendor is a party; (ii) the Services will
be performed and the Deliverables developed in a professional manner consistent
with the level of care, skill, practice and judgment exercised by other
professionals in performing Services of a similar nature under similar
circumstances by personnel with requisite skills, qualifications and licenses
needed to carry out such work and in accordance at the highest level of service
that Vendor delivers to its other customers; (iii) all Services and Deliverables
shall materially conform to the Specifications and requirements set forth in
this Agreement at all times during the Term; (iv) to Vendor’s knowledge as of
the Effective Date, the Services and the Deliverables shall not contain
defamatory or indecent matter;  (v) there is no pending or threatened litigation
that would have a material adverse impact on its performance under the
Agreement; (vi) it shall not transmit or make available any Natera Confidential
Information, including Personal Data, to any entity or individual outside the
continental United States; (vii) the Documentation shall be complete and
accurate so as to enable a reasonably skilled Natera user to effectively use all
of its features and functions without assistance from Vendor and, on each date
on which Vendor delivers it to Natera, the Documentation is Vendor’s most
current version thereof; provided that, without the prior written approval of
Natera, in no event shall any Documentation reflect a material diminution in the
form,

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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features or functionality of the Services from that originally licensed under
this Agreement, and, accordingly, Vendor shall not change the form, features or
functionality in any material adverse manner from that originally licensed under
this Agreement; (viii) it shall comply with all applicable laws and regulations,
including those relating to privacy and information security, in its performance
of this Agreement and provision of the Services; (ix) there is no existing
pattern or repetition of material customer complaints regarding the Vendor
System, Services or Deliverables, including functionality or performance issues,
and that Vendor’s engineers have not currently identified any repeating adverse
impact on the Vendor System, Services or Deliverables, including functionality
or performance, for which the root cause is believed to be a flaw or defect in
the Vendor System, Services or Deliverables and Vendor shall promptly notify
Natera upon becoming aware of the same; (x) the Vendor System and Services does
not contain any open source code or other code which may subject Natera’s source
code to the terms of open source licenses that would require the distribution of
Natera source code under such open source licenses; and (xi) under no
circumstances may Natera Source Code be made available to any entity or person
[*] without Natera’s prior written consent.

 

16.2 Natera’s Warranty.  Natera represents and warrants that, at all times
during the term of this Agreement, Natera shall have the full power to enter
into and perform this Agreement and to make the grant of rights contained
herein, and Natera’s performance of this Agreement shall not violate or conflict
with any agreement to which Natera is a party. Natera warrants that it has the
right to provide Vendor with Natera Content and to permit Vendor to use Natera
Content in the manner described in this Agreement.

 

16.3 Third Party Services.  Vendor may use third party service providers such as
Amazon Web Services (“AWS”), and Vendor reserves the right, subject to Section 3
of Exhibit C, to substitute an equivalent alternate service provider [*]. Vendor
makes no representations or warranties regarding AWS, its durability, or
availability.

 

16.4 Disclaimer of Other Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS
AGREEMENT, NEITHER PARTY MAKES ANY OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE, MERCHANTABILITY, QUIET ENJOYMENT, QUALITY OF INFORMATION, OR
TITLE/NON-INFRINGEMENT, AND ANY WARRANTY THAT THE VENDOR SYSTEM OR SERVICES WILL
BE ERROR-FREE, RELIABLE, COMPLETE OR SECURE; AND ALL SUCH WARRANTIES ARE HEREBY
SPECIFICALLY DISCLAIMED.

 

17. Intellectual Property. 

 

17.1 Vendor Intellectual Property.  Natera acknowledges that Vendor holds and
shall retain all right, title and interest in and to the Vendor System, and all
modifications and improvements thereof (specifically excluding in all cases any
Natera Content), and that the Vendor System is protected by intellectual
property rights owned by or licensed to Vendor.  Vendor grants to Natera a
limited, non-transferable (except as provided in Section 25.5),non-exclusive,
and revocable (solely as provided elsewhere in this agreement) license during
the Term to use the Vendor System solely as necessary for Natera and Natera
Users to access and use the Services in accordance with this Agreement.  Other
than as expressly set forth in this Agreement, no license or other rights in the
Vendor System are granted to Natera, and all such rights are hereby expressly
reserved by Vendor.

 

17.2 Natera Content and Developments.  Notwithstanding any contrary provision,
Natera retains all right, title and interest in and to the Natera Content, and
the parties acknowledge and agree that the Natera Content constitutes Natera
Confidential Information.  Vendor may only use Natera Content to provide the
Services to Natera in accordance with this Agreement and shall not disclose
Natera Content to any third party (including any assignee or successor unless
provided for otherwise under the Agreement) without Natera’s prior written
consent in each case.  Natera will be solely responsible for providing Natera
Content required for the testing and evaluation of the Services pursuant to any
Statement of Work.  Natera grants to Vendor a limited, non-transferable,
non-exclusive, revocable, fully-paid and royalty-free license during the Term to
store and use such Natera Content solely as necessary for Vendor to provide the
Services to Natera in accordance with this Agreement.  Except for the foregoing
limited license, no license or other rights in the Natera Content are granted to
Vendor, and all such rights are hereby expressly reserved by Natera.  Vendor
hereby assigns, transfers and conveys to Natera, exclusively and perpetually,
all rights, titles, and interests throughout the world it may have or acquire in
the Developments, including without limitation all intellectual property or
other proprietary rights (including without limitation copyrights, patents
rights, trade secret right, rights of reproduction, trademark rights, rights of
publicity, and the right to secure registrations, renewals, reissues, and
extensions thereof) (collectively “Intellectual Property Rights”) therein.  No
rights of any kind in and to the Developments or Intellectual Property Rights
therein are reserved to or by Vendor or will revert to Vendor.  Vendor agrees to
execute such further

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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documents and to do such further acts, at Natera’s expense, as may be necessary
to perfect, register or enforce Natera’s ownership of such rights, in whole or
in part.

 

17.3 Natera Source Code Encryption.  All Natera Source Code will be encrypted,
at Natera’s discretion and control, using a method selected by Natera, at
Natera’s sole discretion, subject to AWS’ policies and available
technology.  Vendor will not access itself or provide access to any third party
(including any permitted subcontractor) to Natera Source Code, without Natera’s
prior written approval. Under no circumstances will Vendor store any unencrypted
versions of all or any part of the Natera Source Code without Natera’s prior
written approval.

 

17.4 Use of Natera Property.  Natera may, but is not required to (unless
otherwise set forth in a Statement of Work), provide certain hardware, software,
data, databases, office space, security access or other materials, intellectual
property, technologies or services, other than Natera Content, to Vendor in
connection with this Agreement (“Natera Property”).  Natera hereby grants Vendor
a non-exclusive, non-transferable, fully paid and royalty free license to use
the Natera Property solely for Natera’s benefit in connection with Vendor’s
performance of the Services.  Natera may terminate the foregoing license at any
time, without cause, on written notice to Vendor.  Unless specifically
authorized in the Statement of Work, Vendor shall use the Natera Property only
in the form provided by Natera, without modification.  In addition, Vendor will
maintain and use Natera Property in accordance with any written instructions
and/or specifications provided by Natera. Natera Property shall be considered
Confidential Information of Natera. Except for the limited license provided in
this Section 17.4 (Use of Natera Property), nothing contained in this Agreement
shall be construed as granting Vendor any right, title, or interest in or to any
of the Natera Property.

 

18. Confidentiality.

 

18.1 Confidential Information.  Except as provided in Section 18.2 (Exclusions),
each Party agrees that all information supplied by one Party and its affiliates
and agents (collectively, the “Disclosing Party”) to the other (“Receiving
Party”) including, without limitation, (a) source code, prices, trade secrets,
databases, designs and techniques, engine protocols, models, displays and
manuals, and the selection, coordination, and arrangement of the contents of
such materials; and (b) any unpublished information concerning research
activities and plans, customers, marketing or sales plans, sales forecasts or
results of marketing efforts, pricing or pricing strategies, costs, operational
techniques, strategic plans, information of or relating to customers, business
partners, and personnel, Personal Data (as defined below), and unpublished
financial information, including information concerning revenues, profits and
profit margins will be deemed confidential and proprietary to the Disclosing
Party, regardless of whether such information was disclosed intentionally or
unintentionally or marked as “confidential” or “proprietary” (“Confidential
Information”), provided, however, that Developments shall be Confidential
Information of Natera.

 

18.2 Exclusions.  Confidential Information will not include any information or
material, or any element thereof, whether or not such information or material is
Confidential Information for the purposes of this Agreement, to the extent any
such information or material, or any element thereof: (a) has previously become
or is generally known, unless it has become generally known through a breach of
this Agreement or a similar confidentiality or non-disclosure agreement,
obligation or duty; (b) was already rightfully known to the Receiving Party
prior to being disclosed by or obtained from the Disclosing Party only if
evidenced by written records kept in the ordinary course of business or by proof
of actual use by the Receiving Party; (c) has been or is hereafter rightfully
received by the Receiving Party from a third person (other than the Disclosing
Party) without restriction or disclosure and without breach of a duty of
confidentiality to the Disclosing Party; or (d) has been independently developed
by the Receiving Party without access to Confidential Information of the
Disclosing Party.  It will be presumed that any Confidential Information in a
Receiving Party’s possession is not within exceptions (b), (c) or (d) above, and
the burden will be upon the Receiving Party to prove otherwise by records and
documentation.

 

18.3 Treatment of Confidential Information.  Each Party recognizes the
importance of the other’s Confidential Information.  In particular, each Party
recognizes and agrees that the Confidential Information of the other is critical
to their respective businesses and that neither Party would enter into this
Agreement without assurance that such information and the value thereof will be
protected as provided in this Section 18 (Confidentiality) and elsewhere in this
Agreement.  Accordingly, each Party agrees as follows: (a) the Receiving Party
will hold any and all Confidential Information it obtains in strictest
confidence and will use and permit use of Confidential Information solely for
the purposes of this Agreement.  Without limiting the foregoing, the Receiving
Party shall use at least the same degree of care to avoid disclosure or use of
this Confidential Information as the Receiving Party employs with respect to its
own Confidential Information of a like importance, which shall not be less than
the standard of care imposed by applicable laws and regulations relating to the
protection of such information and, in the absence of any legally imposed
standard of care, the standard shall be that of a reasonable person under the
circumstances; (b) the Receiving Party may disclose or provide access to its
responsible employees who have a need to know and may make copies of
Confidential Information only to the extent reasonably necessary to carry out
its obligations hereunder; and (c) the Receiving Party

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currently has and, for so long as it possesses Confidential Information of the
Disclosing Party, will maintain in effect and enforce rules and policies to
protect against access to or use or disclosure of Confidential Information other
than in accordance with this Agreement, including without limitation written
instruction to and agreements with employees and agents who are bound by an
obligation of confidentiality no less restrictive than set forth in this
Agreement to ensure that such employees and agents protect the confidentiality
of Confidential Information.  The Receiving Party will require its employees and
agents not to disclose Confidential Information to third parties, including
without limitation customers, subcontractors or consultants, without the
Disclosing Party’s prior written consent; and will notify the Disclosing Party
immediately of any unauthorized disclosure or use, and will cooperate with the
Disclosing Party to protect all proprietary rights in and ownership of its
Confidential Information.

 

18.4 Personal Data.  In connection with this Agreement and performance of the
Services, Vendor may be provided or obtain, from Natera or otherwise, Personal
Data, as defined below, pertaining to Natera’s current and prospective
personnel, directors and officers, agents, subcontractors, investors, and
customers and may need to Process such Personal Data and/or transfer it, all
subject to the restrictions set forth in this Agreement and otherwise in
compliance with all applicable foreign and domestic laws and regulations for the
sole purpose of performing the Services.  For purposes of this Agreement,
“Personal Data” shall mean any information relating to an identified or
identifiable individual created, received, maintained, or transmitted by Vendor
in the course of the Services.  For the avoidance of doubt, Personal Data shall
include, but not be limited to, all “nonpublic personal information,” as defined
under the Gramm-Leach-Bliley Act (15 United States Code (“U.S.C.”) §6801 et
seq.), “protected health information” as defined under the Health and Insurance
Portability and Accountability Act of 1996 (42 U.S.C. §1320d), and “Personal
Data” as that term is defined in EU Data Protection Directive (Directive
95/46/EEC) on the protection of individuals with regard to processing of
personal data and the free movement of such data.  “Process” or “Processing”
shall mean any operation or set of operations performed upon the Personal Data,
whether or not by automatic means, including collection, recording,
organization, use, transfer, disclosure, storage, manipulation, combination and
deletion of Personal Data. 

 

18.5 Treatment of Personal Data.  Without limiting any other warranty or
obligation specified in this Agreement, and in particular the confidentiality
provisions of this Section 18 (Confidentiality), during the term of this
Agreement and thereafter in perpetuity, Vendor will not gather, store, log,
archive, use or otherwise retain any Personal Data in any manner and will not
disclose, distribute, sell, share, rent or otherwise transfer any Personal Data
to any third party, except as expressly required to perform its obligations in
this Agreement or as Vendor may be expressly directed in advance in writing by
Natera.  Vendor represents and warrants that Vendor will use Personal Data only
in compliance with (a) this Agreement (including the Business Associate
Agreement), (b) Natera’s then current privacy policy, if any, and only if
disclosed to Vendor and (c) all applicable local, state, and federal laws and
regulations (including, but not limited to, the Gramm-Leach-Bliley Act, Fair and
Accurate Credit Transaction Act, and all other current and future laws and
regulations relating to spamming, privacy, and consumer protection); (a), (b),
and (c), collectively, the “Personal Data Rules.”  In addition, but without
limitation, all Natera Content will be subject to the Vendor Privacy Policy, as
updated by Vendor from time to time and made available at
https://DNAnexus.com/privacy (the “Vendor Privacy Policy”); provided that, if
there is a conflict between the Vendor Privacy Policy and the Personal Data
Rules, the Personal Data Rules shall control.  Vendor agrees to provide Natera
with written notice of any substantive updates to the Vendor Privacy Policy
prior to posting such updates to the above URL.

 

18.6 Retention of Personal Data.  Vendor will not retain any Personal Data for
any period longer than necessary for Vendor to fulfill its obligations under
this Agreement.  As soon as Vendor no longer needs to retain such Personal Data
in order to perform its duties under this Agreement, Vendor will promptly return
or destroy or erase all originals and copies of such Personal Data.

 

18.7 Compelled Disclosures.  To the extent required by applicable law or by
lawful order or requirement of a court or governmental authority having
competent jurisdiction over the Receiving Party, the Receiving Party may
disclose Confidential Information in accordance with such law or order or
requirement, subject to the following conditions:  as soon as possible after
becoming aware of such law, order or requirement and prior to disclosing
Confidential Information pursuant thereto, the Receiving Party will so notify
the Disclosing Party in writing and, if possible, the Receiving Party will
provide the Disclosing Party notice not less than five (5) business days prior
to the required disclosure.  The Receiving Party will use reasonable efforts not
to release Confidential Information pending the outcome of any measures taken by
the Disclosing Party to contest, otherwise oppose or seek to limit such
disclosure by the Receiving Party and any subsequent disclosure or use of
Confidential Information that may result from such disclosure.  The Receiving
Party will cooperate with and provide assistance to the Disclosing Party
regarding such measures.  Notwithstanding any such compelled disclosure by the
Receiving Party, such compelled disclosure will not otherwise affect the
Receiving Party’s obligations hereunder with respect to Confidential Information
so disclosed.

 

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18.8  Return of Confidential Information.  On Natera’s written request or upon
expiration or termination of this Agreement for any reason, the Vendor will
promptly: (a) return or destroy, at Natera’s option, all originals and copies of
all documents and materials it has received containing Natera’s Confidential
Information; and (b) deliver or destroy, at Natera’s option, all originals and
copies of all summaries, records, descriptions, modifications, negatives,
drawings, adoptions and other documents or materials, whether in writing or in
machine-readable form, prepared by Vendor, prepared under its direction, or at
its request from the documents and materials referred to in subparagraph (a),
and provide a notarized written statement to Natera certifying that all
documents and materials referred to in subparagraphs (a) and (b) have been
delivered to Natera or destroyed, as requested by Natera.  On termination or
expiration of this Agreement, Natera shall return or destroy all Vendor
Confidential Information (excluding items subject to any continuing licenses to
Natera hereunder or that are required for use of the Deliverables), at Vendor’s
option.

 

18.9  Non-Exclusive Equitable Remedy.  Each Party acknowledges and agrees that
due to the unique nature of Confidential Information there can be no adequate
remedy at law for any breach of its obligations hereunder, that any such breach
or threatened breach may allow a Party or third parties to unfairly compete with
the other Party resulting in irreparable harm to such Party, and therefore, that
upon any such breach or any threat thereof, each Party will be entitled to
appropriate equitable remedies, and may seek injunctive relief from a court of
competent jurisdiction without the necessity of proving actual loss, in addition
to whatever remedies either of them might have at law or equity.  Any breach of
this Section 18 (Confidentiality) will constitute a material breach of this
Agreement and be grounds for immediate termination of this Agreement in the
exclusive discretion of the non-breaching Party.

 

18.10 Business Associate Agreement.  In addition to and cumulative of the
obligations set forth in this Section and elsewhere in this Agreement, the
provisions of the Business Associate Agreement, attached as Exhibit D, shall
govern Vendor’s responsibilities with regard to Protected Health
Information.  In the event of a conflict between the body of this Agreement and
Exhibit D, Exhibit D shall govern with regard to Protected Health Information.

 

19.  Security.

 

19.1 In General.  Vendor will maintain and enforce safety and physical security
procedures with respect to its access, use, and possession of Natera’s
Confidential Information, including Personal Data, (a) that are compliant with
the requirements of Exhibit E (Information Security Requirements) and, to the
extent not inconsistent, at least equal to industry standards for such types of
locations, and (b) which provide reasonably appropriate technical and
organizational safeguards against accidental or unlawful destruction, loss,
alteration or unauthorized disclosure or access of such information. Without
limiting the generality of the foregoing, Vendor will take all reasonable
measures, and in no case less than industry standard efforts, to secure and
defend its location and equipment against “hackers” and others who may seek,
without authorization, to modify or access Vendor systems or the information
found therein.  Vendor will periodically test its systems for potential areas
where security could be breached.  Vendor will as soon as possible report to
Natera any breaches of security or unauthorized access to Natera’s Confidential
Information, including Personal Data, that Vendor detects or becomes aware
of.  Vendor will use diligent efforts to remedy such breach of security or
unauthorized access in a timely manner and deliver to Natera a root cause
assessment and future incident mitigation plan with regard to any breach of
security or unauthorized access affecting the Confidential Information,
including Personal Data.  Vendor shall provide Natera all written details
regarding Vendor’s internal investigation regarding any security breach.  Upon
Natera’s request, Vendor will provide a second more in-depth investigation and
results of findings. Vendor agrees not to notify any regulatory authority nor
any customer or consumer, on behalf of Natera unless Natera specifically
requests in writing that Vendor do so or Vendor is required to do so by
law.  Vendor and Natera will work together to formulate a plan to rectify all
security breaches. 

 

19.2 Use of Personal Portable Devices.  Without Natera’s prior written
authorization, under no circumstances will any Vendor Personnel connect to any
Natera Content or access, handle, or use any Natera Confidential Information
and/or data, for purposes of downloading, extracting, storing or transmitting
the information and/or data through personally owned, rented, or borrowed
equipment, including but not limited to, laptops, personal digital assistants,
instant messaging devices, Universal Serial Bus (“USB”) devices and cell phones.

 

19.3 Security Breach.  Vendor shall notify Natera of any security, or suspected
security breach of any Natera Confidential Information or data covered under
applicable federal regulations set forth in 12 CFR Part 30, or under California
Civil Code 1798.82, or any other breach of Confidential Information as soon as
possible following discovery, if the information was, or is reasonably believed
to have been acquired by an unauthorized person.  Notification must be given in
the most expedient time possible and without unreasonable delay.  Written
confirmation must be sent within forty-eight (48) hours of discovery or
notification of the breach or suspected breach.

 

19.4 Additional Procedures in the Event of Security Breach of Personal Data.
 Upon Natera’s determination that a misuse or security breach of Personal Data
has occurred or is reasonably possible Vendor shall fully cooperate with Natera
in rectifying any misuse, including notifying all affected Natera
customers.  Natera shall determine, in its

 

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sole discretion, the content and means of delivery of the customer
notice.  Vendor will bear all costs and expenses incurred as a result of
security breach caused directly or indirectly by Vendor including but not
limited to, the administrative cost of opening and closing accounts, printing
new checks, embossing new cards, notice, print and mailing costs, and the costs
to obtain credit monitoring services and identity theft insurance for Natera
customers whose Personal Data has or may have been compromised.

 

20.  Disaster Recovery/Business Continuity.  Vendor shall maintain a Business
Continuity and Disaster Recovery Plan for the Services (the “Plan”), and
implement such plan in the event of any unplanned interruption of the
Services.  Within 60 days of the Effective Date, Vendor shall provide Natera
with a copy of Vendor’s current Plan, revision history, and any reports or
summaries relating to past testing of the Plan.  The Plan shall be considered
Vendor Confidential Information.  Vendor shall actively test, review, and update
the Plan on at least an annual basis using American Institute of Certified
Public Accountants standards and other reasonable industry practices as
guidance.  Vendor shall promptly provide Natera with copies of all such updates
to the Plan.  All updates shall be subject to the requirements of this Section
20 (Disaster Recovery/Business Continuity).  In any event, any future updates or
revisions to the Plan shall be no less protective than the plan in effect as of
the Effective Date.  Vendor shall notify Natera of the completion of any audit
(e.g., ISO 9000) of the Plan and promptly provide Natera with a copy of the
audit report and reasonable evidence that any identified deficiencies have been
corrected.  Vendor shall also promptly provide Natera with copies of all reports
and/or summaries resulting from any testing of the Plan.  If Vendor fails to
reinstate the Services within the periods of time set forth in the Plan, Natera
may in addition to any other remedies available hereunder, in its sole
discretion, immediately terminate this Agreement as a non-curable default under
Section 24.2 (Material Breach).  Vendor shall maintain disaster avoidance
procedures designed to safeguard Natera’s data and the data processing
capability, and availability of the Services, throughout the Term.  Additional
disaster recovery/business continuity requirements may be set forth in the
individual Statement(s) of Work.  Vendor shall as soon as possible notify Natera
of any disaster or other event in which the Plan is activated.  Without limiting
Vendor’s obligations under this Agreement, whenever a disaster causes Vendor to
allocate limited resources between or among Vendor’s customers, Vendor shall
endeavor to provide Natera at least the same treatment as comparable Vendor
customers with respect to such limited resources.  The provisions of Section
25.7 (Force Majeure) shall not limit Vendor’s obligations under this Section 20
(Disaster Recovery/Business Continuity).

 

21.  Indemnification. 

 

21.1 Vendor’s Indemnification. At Vendor’s expense as provided herein, Vendor
agrees to defend, indemnify, and hold harmless Natera and its directors,
officers, agents, employees, members, subsidiaries and successors in interest
from and against any claim, action, proceeding, liability, loss, damage, cost,
or expense, including, without limitation, attorneys’ fees, experts’ fees and
court costs, arising out of any claim by a third party (a) related to (i)
Vendor’s breach of this Agreement (including a breach of the BAA); (ii) any
injury to any person or persons or damage to tangible or intangible property
caused by use of the Vendor System, but only to the extent that [*]; and/or (b)
that Natera’s authorized use of the Services and/or Deliverables (collectively,
the “Indemnified Items”) infringe that third party’s patent, copyright, trade
secret or other intellectual property rights (collectively, “Vendor Indemnified
Claim(s)”), including the payment of all amounts that a court or arbitrator
awards or that Vendor agrees to in settlement of any such Vendor Indemnified
Claim(s) as well as any and all reasonable expenses or charges as they are
incurred by Natera or any other party indemnified under this Section 21
(Indemnification) in cooperating in the defense of any such Vendor Indemnified
Claim(s).  Natera shall:  (A) give Vendor prompt written notice of such Vendor
Indemnified Claim; and (B) once Vendor has unconditionally accepted the tender
of Natera’s defense, allow Vendor to control, and fully cooperate with Vendor
(at Vendor’s sole expense) in, the defense and all related negotiations.  Vendor
shall not enter into any stipulated judgment or settlement that purports to bind
Natera (other than with respect to monetary damages which are to be paid by
Vendor pursuant to this Section) without Natera’s express written authorization,
which shall not be unreasonably withheld or delayed.  Notwithstanding the
foregoing, Vendor shall have no indemnity obligation for Vendor Indemnified
Claims arising from use of the Indemnified Items in excess of the rights granted
hereunder. 

 

21.2 Infringement Claim Additional Remedy. If the Indemnified Items, or any
portion of them, become or are likely to become the subject of an Vendor
Indemnified Claim under Section 21.1(b) (“Infringement Claim”), then, in
addition to defending the Vendor Indemnified Claim and paying any damages and
attorneys’ fees as required above, Vendor shall, at its option and in its sole
discretion, either [*].  Any costs associated with implementing the above
alternatives will be borne by Vendor.  If Vendor fails to provide one of the
foregoing remedies within [*] days of notice of the Infringement Claim, Natera
shall have the right, at its sole option, to elect to terminate this Agreement
with

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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regard to the infringing Indemnified Items and have Vendor refund to Natera all
one-time fees prepaid by Natera for the infringing Indemnified Items (which sums
shall be refunded by Vendor within [*] business days of termination).

 

21.3 Natera’s Indemnification.  At Natera’s expense as provided herein, Natera
agrees to defend, indemnify, and hold harmless Vendor and its directors,
officers, agents, employees, members, subsidiaries and successors in interest
from and against any claim, action, proceeding, liability, loss, damage, cost,
or expense, including, without limitation, attorneys’ fees, experts’ fees and
court costs, arising out of any claim by a third party (a) related to (i)
Natera’s breach of this Agreement and/or (ii) Natera’s violation of the law,
including any law relating to Personal Data; (iii) any injury to any person or
persons or damage to tangible or intangible property caused by use of the Vendor
System, but only to the extent that such injury or damage is [*]; and/or (b)
based on Vendor’s authorized use of the Natera Content or the Natera Property
(collectively, “Natera Indemnified Claims”), including the payment of all
amounts that a court or arbitrator awards or that Natera agrees to in settlement
of any such Natera Indemnified Claims as well as any and all reasonable expenses
or charges as they are incurred by Vendor or any other party indemnified under
this Section 21 (Indemnification) in cooperating in the defense of any such
Natera Indemnified Claims.  Vendor shall:  (A) give Natera prompt written notice
of such Natera Indemnified Claim; and (B) once Natera has unconditionally
accepted the tender of Vendor’s defense, allow Natera to control, and fully
cooperate with Natera (at Natera’s sole expense) in, the defense and all related
negotiations.  Natera shall not enter into any stipulated judgment or settlement
that purports to bind Vendor (other than with respect to monetary damages which
are to be paid by Natera pursuant to this Section) without Vendor’s express
written authorization, which shall not be unreasonably withheld or
delayed.  Notwithstanding the foregoing, Natera shall have no indemnity
obligation for Natera Indemnified Claims arising from use of the Natera Content
or the Natera Property in excess of the rights granted hereunder.

 

22. Disclaimer of Consequential Damages; Limitation of Liability.  EXCEPT FOR
THE OBLIGATIONS UNDER SECTIONS 17 (INTELLECTUAL PROPERTY), 18 (CONFIDENTIALITY),
21 (INDEMNIFICATION) AND 25.3 (EMPLOYMENT TAXES AND BENEFITS), AND EITHER
PARTY’S INFRINGEMENT OF THE OTHER PARTY’S INTELLECTUAL PROPERTY RIGHTS, NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, CONSEQUENTIAL, OR
PUNITIVE DAMAGES ARISING OUT OF OR RELATED TO THIS AGREEMENT, EVEN IF THE PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. EXCEPT FOR THE OBLIGATIONS
UNDER SECTIONS 17 (INTELLECTUAL PROPERTY), 18 (CONFIDENTIALITY) AND 21
(INDEMNIFICATION), EACH PARTY’S TOTAL CUMULATIVE LIABILITY TO THE OTHER PARTY
FOR ANY CLAIM ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT (UNDER ANY LEGAL
THEORY INCLUDING CLAIMS IN CONTRACT OR TORT), THE SERVICES AND THE VENDOR
SYSTEM, WILL NOT EXCEED [*] THE AMOUNTS ACTUALLY PAID TO VENDOR BY NATERA (UNDER
THIS AGREEMENT OR THE PILOT AGREEMENT BETWEEN THE PARTIES)  DURING THE [*]
PERIOD PRECEDING THE DATE OF THE EVENT GIVING RISE TO THE LIABILITY.

 

22.1 No Liability for Decisions. OTHER THAN AS A RESULT OF A BREACH OF A
REPRESENTATION, WARRANTY OR COVENANT HEREUNDER, VENDOR ASSUMES NO RESPONSIBILITY
AND WILL HAVE NO LIABILITY OF ANY KIND FOR THE DECISIONS MADE BY ANY PARTY BASED
ON USE OF THE VENDOR SYSTEM AND SERVICES, OR ANY EFFECTS THAT MAY RESULT FROM
SUCH USE. VENDOR WILL NOT BE LIABLE FOR ANY DEFICIENCY IN PERFORMING UNDER THIS
AGREEMENT IF SUCH DEFICIENCY RESULTS FROM ANY FAILURE TO PROVIDE COMPLETE AND
ACCURATE INFORMATION TO VENDOR OR VENDOR SYSTEM (INCLUDING WITHOUT LIMITATION
THE PROVISION OF SEQUENCING DATA).

 

23. Insurance. Vendor shall obtain, pay for, and maintain in full force and
effect during the Term insurance as follows:  (a)  Workers’ compensation and
employers’ liability insurance with limits to conform with the greater of the
amount required by applicable law or [*] each accident, including occupational
disease coverage; (b) Commercial general liability insurance with limits not
less than [*] combined single limit for bodily injury, death, and property
damage, including personal injury, contractual liability, independent
contractors, broad-form property damage, and products and completed operations
coverage; (c) Automobile contractual liability coverage for non-owned and hired
automobile coverages with a combined single limit of liability for each accident
of not less than [*]; and (d) Professional liability insurance (Errors and
Omissions) with limits not less than [*] annual aggregate for all claims each
policy year.  To the extent any insurance coverage required under this Section
is purchased on a “claims-made” basis, such insurance shall cover all prior acts
of Vendor during the Term, and such insurance shall be continuously maintained
until at least [*] years beyond the expiration or termination of the Term, or
Vendor shall purchase “tail” coverage, effective upon

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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termination of any such policy or upon termination or expiration of the Term, to
provide coverage for at least [*] years from the occurrence of either such
event. Certificates of Insurance evidencing all coverages described in this
Section shall be furnished to Natera on written request.  Vendor shall give
thirty (30) days’ prior written notice to Natera of cancellation, non-renewal,
or material change in coverage, scope, or amount of any policy.

 

24. Termination. 

 

24.1 Bankruptcy.  Natera may, in its sole discretion, terminate this Agreement
in the event of the Vendor commencing voluntary or involuntary winding up, or
upon the filing of any petition seeking the winding up of the Vendor, or upon
the Vendor making a general assignment for the benefit of its creditors (each,
an “Insolvency Event”).  Upon the occurrence of any Insolvency Event, Vendor
agrees, within the scope and limitations of the United States Bankruptcy Code
and any applicable agreements between Vendor and AWS (the “AWS Agreements”), to
use commercially reasonable efforts to facilitate the timely transfer of any (i)
Natera Content or Natera Property, (ii) Developments, and (iii) Vendor System,
each as stored on any AWS servers pursuant to the AWS Agreements, from such AWS
servers to other AWS servers available for Natera data storage pursuant to any
separate agreement or agreements to be entered into between AWS and Natera.

 

24.2 Material Breach.  If either Party materially defaults in the performance of
any of its obligations under this Agreement, which default is capable of cure
and is not substantially cured within thirty (30) days after written notice
specifying the default is given to the defaulting Party, the Party not in
default may, by giving written notice thereof to the defaulting Party, terminate
the Agreement, as of a date specified in such notice of termination. 

 

24.3 Termination for Convenience.  Without reason, penalty or breach of this
Agreement and notwithstanding the other Party’s compliance with all requirements
of this Agreement, Natera at any time and Vendor beginning at the start of the
first Renewal Term may terminate this Agreement or any Statement of Work,
Service, or Deliverable, provided that written notice is given to the other
Party at least [*] prior to the date of termination if Natera is the terminating
Party and at least [*] prior to the date of termination if Vendor is the
terminating Party.  In the event of any such termination, Vendor shall be
compensated for any Services rendered prior to the effective date of the
termination, but any compensation allocated to Services that were yet to be
rendered with regard to any canceled aspect of the Services shall then be
eliminated.

 

24.4 Effect of Termination.  Upon termination of this Agreement, unless
otherwise specified by Natera in writing:

 

(a)   Vendor shall cease to perform the Services, and Natera will pay to Vendor
all sums due to Vendor for Services properly performed through the effective
date of such expiration or termination (prorated as appropriate).

 

(b)   Expiration or termination of this Agreement for any reason will not
release either Party from any liabilities or obligations set forth in this
Agreement which (i) the Parties have expressly agreed in writing will survive
any such expiration or termination or (ii) remain to be performed or by their
nature would be intended to be applicable following any such expiration or
termination. 

 

(c)   In the case of termination of the Agreement, all Statement(s) of Work that
have not been completed shall be deemed canceled as of the effective date of
such termination.

 

(d)   Vendor will cooperate with Natera and take all reasonably requested steps
to assist Natera in making an orderly transition of the Services back to Natera
or its designees and will cooperate in the return of all Confidential
Information, Personal Data and other related documents.

 

(e)   All applicable licenses and other rights granted to Natera with respect to
the Service will immediately terminate.

 

(f)   Natera will have the right to download and delete all Natera Content in
the Vendor System during a 15 day period following the effective date of
termination or expiration of this Agreement. Following the 15 day period, Natera
will lose access to all Natera Content remaining in Vendor’s System, and Vendor
will have no obligation to maintain or make accessible any Natera Content, which
Vendor may delete without restriction.

 

24.5 Survival. The following Sections shall survive any termination or
expiration of this Agreement:  1 (Definitions), 15.10 (Audits and Records), 16
(Representations and Warranties); 17 (Intellectual Property); 18

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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(Confidentiality); 21 (Indemnification); 22 (Disclaimer of Consequential
Damages; Limitation of Liability); 23 (Insurance); 24.4 (Effect of Termination);
24.5 (Survival); and 25 (General Provisions).

 

25. General Provisions.

 

25.1 Days.  Unless expressly provided otherwise, all references to “days” refer
to calendar days.

 

25.2 Independent Contractors.  Vendor is an independent contractor and is not an
agent or employee of, and has no authority to bind, Natera by contract or
otherwise.  Vendor will perform the Services under the general direction of
Natera, but Vendor will determine, in Vendor’s sole discretion, the manner and
means by which the Services are accomplished, subject to the requirement that
Vendor will at all times comply with applicable law and with Natera’s reasonable
instructions.  This Agreement will not be construed as creating an agency,
partnership, joint venture or any other form of association between the parties,
who will at all times be and remain independent contractors.  Further, it is not
the intention of this Agreement or of the Parties to confer a third party
beneficiary right of action upon any third party or entity whatsoever, and
nothing in this Agreement will be construed so as to confer upon any third party
or entity other than the Parties hereto a right of action under this Agreement
or in any manner whatsoever.

 

25.3 Employment Taxes and Benefits.  Vendor warrants that the Services will be
provided by Vendor Personnel.  Vendor agrees to pay all necessary employment
taxes required by law.  Vendor also agrees to report Vendor Personnel’s income
and withhold all required taxes from such income, as may be required by
law.  Vendor Personnel will not be entitled to receive any vacation or illness
payments, or to participate in any plans, arrangements, or distributions by
Natera pertaining to any bonus, stock option, profit sharing, insurance or
similar benefits for Natera employees.  In addition, Vendor agrees that it will
provide for workers’ compensation, unemployment, and all other coverage required
under applicable local, state or federal law.  Vendor further agrees that it
will defend (including payment of all attorneys’ fees) and indemnify Natera
against any claim asserted against Natera for Vendor’s failure to comply with
its obligations under this paragraph.

 

25.4 Publicity.  Vendor agrees not to make, without Natera’s prior express
written consent, any publication or presentation that contains any reference or
discussion relating to Natera, Natera Confidential Information or work performed
by Vendor for Natera.

 

25.5 Assignment.  Neither Party may assign any rights or obligations arising
under this Agreement, whether by operation or law or otherwise, without the
prior written consent of the other; except that either Party may assign this
Agreement without consent of the other Party to a corporate affiliate of such
Party or in connection with a merger, acquisition, corporate reorganization, or
sale of all or substantially all of its assets (a “Corporate Transaction”).
 Vendor hereby agrees to provide written notice to Natera promptly after the
closing of any Corporate Transaction in which Vendor is the target, with such
written notice to include the identity of the acquiring entity and its principal
corporate affiliates.  Such written notice shall be Vendor’s Confidential
Information.  Vendor further agrees that it will not share any Natera Content
with any such acquiring entity that is a competitor of Natera [*].  Natera shall
have the right to terminate this Agreement prior to the expiration of such [*]
period by providing written notice of termination to Vendor, which notice shall
have immediate effect.  In the event of such termination, Vendor shall not share
Natera Content with the acquiring entity. This Agreement shall inure to the
benefit of and shall be binding on the permitted successors and assignees of the
Parties.  Any attempted transfer of assignment of this Agreement in violation of
this Section 25.5 is null and void.

 

25.6 Insolvency Events.  The Parties agree that the rights granted to Natera
hereunder, including, without limitation, those rights granted in Section 5, are
rights in “intellectual property” within the scope of Section 101 (or its
successors) of the United States Bankruptcy Code (the “Code”).  Natera, as a
licensee of intellectual property rights hereunder, shall have and may fully
exercise all rights available to a licensee under the Code, including, without
limitation, under Section 365(n) or its successors.  In the event of a case
under the Code involving Vendor, Natera shall have the right to obtain (and
Vendor or any trustee for Vendor or its assets shall, at Natera’s written
request, deliver to Natera) a copy of all embodiments (including, without
limitation, any work in progress) of any intellectual property rights granted
hereunder.  Vendor shall take all steps reasonably requested by Natera to
perfect, exercise and enforce its rights under this Section 25.6, including,
without limitation, filings in the U.S. Copyright Office and U.S. Patent and
Trademark Office, and under the Uniform Commercial Code.

 

25.7 Force Majeure.  If either Party cannot perform any of its obligations
because of any act of God, court order, war, or any other cause not within the
Party’s reasonable control and could not be avoided through the exercise of
reasonable care and diligence (a “Force Majeure Event”), then the non-performing
Party will: (a) promptly notify the

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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other Party; (b) take reasonable steps to resume performance as soon as
possible; and (c) not be considered in breach during the duration of the Force
Majeure Event.  In the event a Force Majeure Event continues for a period of
[*], Natera may terminate this Agreement by providing written notice to
Vendor.  Notwithstanding the foregoing, a Force Majeure Event will not relieve
Vendor of its obligations under 18 (Confidentiality), 19 (Security), and 20
(Disaster Recovery).

 

25.8 Governing Law; Venue.  This Agreement will be governed by and construed in
accordance with the laws of the State of California without giving effect to
principles of conflict of laws that would require the application of the laws of
a different jurisdiction.  The United Nations Convention on Contracts for the
International Sale of Goods will not apply to this Agreement.  Any action or
proceeding arising from or relating to this Agreement must be brought in a
federal or state court sitting in San Francisco, California, and each Party
irrevocably submits to the jurisdiction and venue of any such court in any such
action or proceeding.  If a dispute arising under this Agreement results in
litigation, the non-prevailing Party shall pay the court costs and reasonable
attorneys’ fees of the prevailing Party.

 

25.9 Waivers.  All waivers hereunder must be made in writing by a duly
authorized representative of the Party against whom the waiver is to operate,
and failure at any time to require the other Party’s performance of any
obligation under this Agreement shall not affect the right subsequently to
require performance of that obligation.

 

25.10 Waiver/Severability.  Any waiver, in whole or in part, of any provision of
this Agreement will not be considered to be a waiver of any other provision.  If
any term of this Agreement is found to be unenforceable or invalid for any
reason, all other terms will remain in full force and effect.

 

25.11 Construction.  All headings used in this Agreement are for reference
purposes only and are not part of this Agreement.  Neither this Agreement nor
any Statement of Work will be construed in favor or against either Party by
reason of the authorship of any provisions hereof.

 

25.12 Terminology. All personal pronouns used herein, whether used in the
feminine, masculine, or neuter gender, shall include all other genders, and the
singular shall include the plural and vice versa.  Unless otherwise expressly
stated, the words “herein,” “hereof,” and “hereunder” and other words of similar
import refer to this Agreement as a whole and not to any particular Section,
Subsection or other subpart.  The words “include,” “includes,” “included,”
“including,” “without limitation,” or the phrase “e.g.” shall not be construed
as terms of limitation and shall, in all instances, be interpreted as meaning
“including, but not limited to.”

 

25.13 Exhibits, Statement(s) of Work and Addenda.  All Exhibits, Statement(s) of
Work, and Addenda that are referenced herein and appended hereto, or are signed
by the Parties on or after the date of this Agreement, are hereby incorporated
by reference.  The following Exhibits are attached hereto and incorporated
herein:

 

 

Exhibit A

Statement(s) of Work

 

Exhibit B

Services; Fees

 

Exhibit C

Service Levels

 

Exhibit D

Business Associate Agreement

 

Exhibit E

Information Security Requirements

 

25.14 Entire Agreement.  This Agreement, as to its subject matter, exclusively
and completely states the rights, duties and obligations of the Parties and
supersedes all prior and contemporaneous representations, letters, proposals,
discussions and understandings by or between the Parties.  This Agreement may
only be amended in a writing signed by both Parties.  The Parties, by their
representatives signing below, agree with the terms of this Agreement.  In
particular, no shrink-wrap, click-wrap, or other terms and conditions or
agreements (“Additional Terms”) provided with any products or software hereunder
shall be binding on Natera, even if use of such products and software requires
an affirmative “acceptance” of those Additional Terms before access is
permitted.  All such Additional Terms shall be of no force or effect and shall
be deemed rejected by Natera in their entirety.

 

25.15 Notices.  All notices under this Agreement will be in writing and will be
deemed to have been duly given if delivered personally or by an internationally
recognized courier service or, if between Parties located in the United States,
mailed by U.S. registered or certified mail, return receipt requested, postage
prepaid, to the Parties at the addresses set forth herein.  All notices under
this Agreement that are addressed as provided in this Section 25.15

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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(Notices), (a) if delivered personally or by a nationally recognized courier
service, will be deemed given upon delivery, or (b) if delivered by mail in the
manner described above, will be deemed given on the relevant Party’s receipt of
the notice. All notices shall be sent by certified mail or by personal delivery,
to the following addresses:

 

If to Vendor:

If to Natera:

DNAnexus, Inc.

Natera, Inc. 

1975 W El Camino Real

201 Industrial Road, Suite 401

Suite 101

San Carlos, CA 94070

Mountain View, CA 94040

Attention: Vice President, Product

Attention: CEO

Development

 

 

 

 

With a copy to:

With a copy to:

 

 

DNAnexus, Inc.

Natera, Inc. 

1975 W El Camino Real

201 Industrial Road, Suite 401

Suite 101

San Carlos, CA 94070

Mountain View, CA 94040

Attention: General Counsel

Attention: General Counsel

 

 

Either Party may change its address or designee for notification purposes by
giving notice to the other of the new address or designee and the date upon
which such change will become effective.

 

25.16 Agreement Drafted By All Parties.  This Agreement is the result of arm’s
length negotiations between the Parties and shall be construed to have been
drafted by all Parties such that any ambiguities in this Agreement shall not be
construed against either Party.

 

25.17 Counterparts.  This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, and will become effective and binding
upon the Parties as of the Effective Date at such time as all the signatories
hereto have signed a counterpart of this Agreement.

 

25.18 Electronic Signatures and Facsimiles - Binding.  This Agreement and
associated Statement(s) of Work and related documents may be accepted in
electronic form (e.g., by an electronic or digital signature or other means of
demonstrating assent) and Vendor’s acceptance will be deemed binding between the
Parties.  Each Party acknowledges and agrees it will not contest the validity or
enforceability of this Agreement and associated Statement(s) of Work and related
documents, including under any applicable statute of frauds, because they were
accepted and/or signed in electronic form.  Each Party further acknowledges and
agrees that it will not contest the validity or enforceability of a signed
facsimile copy of this Agreement and associated Statement(s) of Work and related
documents on the basis that it lacks an original handwritten
signature.  Facsimile signatures shall be considered valid signatures as of the
date hereof.  Computer maintained records of a Party when produced in hard copy
form shall constitute business records and shall have the same validity as any
other generally recognized business records.

 

25.19 Source Code Escrow. No later than sixty (60) days after the Effective Date
of this Agreement, Vendor will have deposited a copy of the Source Code (as
defined below) for the Vendor System with Iron Mountain, a software escrow agent
(the “Escrow Agent”), located at San Francisco, California (the “Escrow”)
pursuant to a written Escrow Agreement.  Natera shall pay Escrow Agent’s fees
for opening and maintaining the escrow account subject to the Escrow
Agreement.  Vendor shall continually update the Source Code by promptly
depositing in the escrow each material new release, update, version,
enhancement, correction, patch, and improvement of the Vendor System.  In
addition, Vendor shall include in the Escrow the names and contact information
for the primary developers of the Vendor System.  Vendor’s duty to update the
Source Code shall continue through the Term or until Natera ceases obtaining
support from Vendor, whichever is later.  The Source Code will be held in the
Escrow and the events upon which Natera shall have access to the Source Code
shall include (collectively the “Release Conditions”):  [*].  Upon the
occurrence of a Release Condition (or any other release conditions that may be
specified under the Escrow Agreement), Natera shall be entitled to use the
Source Code to perform its own support and maintenance and alter or modify the
Source Code for its internal use.  In addition, Natera may hire, without penalty
or fee, any one of the developers identified above and Vendor shall take no
action to restrict Natera’s employment of that developer.  Should use of the
Source Code as provided in this Section involve the use or practice of any
patent, copyright, trade secret, trademark or

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

18

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other proprietary information in which Vendor has an interest, Vendor, its
assignee, or successors, agree not to assert a claim for patent, copyright,
trade secret, trademark or other proprietary information infringement against
Natera provided use of Vendor System and Source Code is in accordance with this
Agreement. Should use of the Source Code as provided in this Section involve the
use or practice of any patent, copyright, trade secret, trademark or other
proprietary information of any Third Party, Vendor shall make all reasonable
efforts to obtain for Natera or assist Natera in obtaining any necessary
rights.  Regardless of whether one of the Release Conditions occurs, Natera
shall have the right, at Natera’s sole expense, to require the Escrow Agent to
verify the relevance, completeness, currency, accuracy, and functionality of the
Source Code by, among other things, compiling the Source Code and performing
test runs for comparison with the capabilities of the Vendor System.  In the
event such testing demonstrates the Source Code does not correspond to the
Vendor System, Vendor shall reimburse Natera for costs and fees incurred up to
[*] in the testing and immediately deposit the correct Source Code with the
Escrow Agent. “Source Code” shall mean, with respect to the Vendor System, the
source code of such software and all related compiler command files, build
scripts, scripts relating to the operation and maintenance of such application,
application programming interface (API), graphical user interface (GUI), object
libraries, and all currently written and documented instructions on building the
object code of such application, such that collectively the foregoing will be
sufficient to enable a person possessing reasonable skill, training, knowledge
and expertise in computer software, genomics, bioinformatics and information
technology to build, load and operate the machine-executable object code of such
application, to maintain and support such application and to effectively use all
functions and features of such software to enable Natera to continue to use the
Vendor System as contemplated by this Agreement. 

 

The Parties have caused this Agreement to be executed as of the Effective Date
by their duly authorized representatives.

 

DNANEXUS, INC.

    

NATERA, INC.

 

 

 

By:

/s/Timothy L. O’Brien

 

By:

/s/Jonathan Sheena

 

 

 

 

 

Name:

Timothy L. O’Brien

 

Name:

Jonathan Sheena

 

 

 

 

 

Title:

VP Sales

 

Title:

CTO

 

 

 

 

 

Date:

9/19/14

 

Date:

9/22/14

 

 

 

19

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT A

 

STATEMENT OF WORK NO. 1

 

This Statement of Work, effective as of the last signature date set forth below,
is a part of and incorporated into the Application Services Provider Agreement
(“Agreement”) between DNAnexus, Inc. (“Vendor”) and Natera, Inc. (“Natera”),
dated September 19, 2014.  Capitalized terms not defined in this Statement of
Work are as defined in the Agreement.  In the event of any conflict between the
body of the Agreement and this Statement of Work, the body of the Agreement
shall govern. 

 

1.            Description of Services and Deliverables:

 

DNAnexus provides a comprehensive service for operating in the cloud. We enable
Natera to:

 

Streamline its sequence data management and analysis operations

Deploy enterprise-grade security and be ready for any future regulatory
compliance requirements

Lower operating costs and avoid capital investment in computing hardware

Scale data infrastructure up and down quickly, without practical limit

Expand its market reach globally by virtualizing Natera’s data and analysis
logistics in the cloud

 

In addition to the technical functionality provided by DNAnexus’ cloud platform,
DNAnexus has invested and will continue to invest considerable resources in
helping Natera expand globally.

 

Our partnership to date has included the following areas of investment:

 

Consulting and implementation work

 

The DNAnexus Science team has assisted in a number of areas to deploy Natera’s
infrastructure in the cloud, both in a consultative fashion and through direct
implementation:

 

Overall system architecture: Design and implementation work, including setting
up projects, permissions, data and metadata flow, security, upstream and
downstream integration with Natera systems.

Versioning architecture: Design and implementation of versioning system for
data and analysis pipelines, supporting concurrent execution of production
versions with future development work.

Analysis pipelines: Implementation and optimization of Natera analysis
pipelines.

“Czar” API server: Assistance in the design and implementation of Natera’s API
server, including security design and authentication protocols.

Sequence data upload: Setup and installation of sequence data upload flow at
Natera and at partner sequencing sites including [*]. Helping diagnose and
resolve upload bandwidth issues to support required throughputs.

Sales support: Assistance with selling the technical and security aspects of
delivering Natera algorithms and pipelines through the cloud.

 

Prioritized development

 

In order to meet aggressive timelines to support Natera’s deployment goals,
DNAnexus has reprioritized engineering development efforts to match Natera’s
needs. These include:

 

[*]

[*]

[*]

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

 

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Going forward, DNAnexus will continue to partner with Natera through consulting,
implementation, and prioritized development. DNAnexus will also provide the
following services:

 

Sales and support for partner sequencing sites

 

DNAnexus will work with Natera to develop best practice procedures for selling,
onboarding, and supporting partner sequencing sites. This includes marketing and
technical collateral used in sales settings, assistance in the installation of
automated sequence data upload from the partner sequencing site, testing and
solving customer upload bandwidth issues, and second-line support for technical
issues.

 

Support

 

DNAnexus will provide the highest level of support to Natera. This includes:

 

High-level primary and secondary support contacts at DNAnexus with a response
time as provided for in this Agreement. Initial contacts will be [*] and [*],
respectively.

Escalation path to [*], [*], and [*] for more urgent or high-level needs.

 

Automated testing

 

To ensure continued technology platform delivery to Natera, DNAnexus will deploy
automated testing tailored to Natera in the following way:

 

Natera to designate [*] end-to-end pipelines, which can be changed with [*]
notice. For example, [*]

Natera to designate automated test input datasets and criteria for validation

DNAnexus will conduct internal testing on Natera’s pipelines prior to releasing
any major or minor changes to production

 

2.      Payment terms:

 

The Parties have caused this Agreement to be executed as of the Effective Date
by their duly authorized representatives.

 

DNANEXUS, INC.

    

NATERA, INC.

 

 

 

By:

/s/Timothy L. O’Brien

 

By:

/s/Jonathan Sheena

 

 

 

 

 

Name:

Timothy L. O’Brien

 

Name:

Jonathan Sheena

 

 

 

 

 

Title:

VP Sales

 

Title:

CTO

 

 

 

 

 

Date:

9/19/14

 

Date:

9/22/14

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

 

 

2

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EXHIBIT B

 

SERVICES; FEES

 

Vendor pricing is composed of two components:

 

Resource-based pricing: Variable compute, storage, and networking usage of the
DNAnexus platform.

Per-test pricing: Additional value add per delivered test for ongoing
consulting, implementation, prioritized development, and premium support.

 

The total bill to Natera each calendar month will be based on the number of
tests as well as the accrued compute, storage, and networking usage according to
the below price schedules.

 

Resource-based pricing

 

All DNAnexus usage, including R&D and production pipeline execution, is charged
according to the below pricing sheet:

 

Compute

Cost Class

Cost per virtual core hour

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Data Transfer & Storage

Service

Cost

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

Resource-based pricing shall be updated from time to time by a signed agreement
reflecting Vendor’s current list pricing.

 

Per-test pricing

 

A “production test” is composed of [*]. Accounting for number of “production
tests” will be done by counting all [*] generated by the production test
pipeline and applying a proportion [*] that reflects the [*], with the ratio to
be reasonably agreed upon by Natera and DNAnexus.  At the end of each three
month period, the numbers shall be adjusted to reflect the number of units
billed by Natera to its customers in that period. 

 

A value add charge is applied to each execution of a billable production test,
based upon the following tiers of monthly production test volumes:

 

Value-add price per test

Production test monthly volume

[*]

Up to [*] production tests

[*]

Each production test over [*] up to [*]

[*]

Each production test over [*]

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

 

 

 

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Prices in lower priced tiers apply only to the number of tests above the lower
threshold associated with the tier and not exceeding any upper threshold.
Example calculations are as follows:

 

 

 

Number of Tests in One Month

Total Per-Test Pricing Cost

9,000

[*]

10,500

[*]

30,000

[*]

 

Underlying resource costs for compute, storage, and network transfer are
accounted for separately according to the resource-based price sheet above.
Current estimates based on portions of the test pipeline currently implemented
are:

 

[*] per test for computation

[*] per test per month for ongoing storage

[*] per test for network transfer

 

Based on currently implemented analysis pipelines, the combined resource-based
and per-test pricing is estimated at [*] per test for compute at the highest
volume tier, and [*] per test per month for ongoing storage.

 

Modifying analysis steps or adjusting the volume of data will alter the final
pricing in accordance with the resource-based pricing scheme.

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

 

 

2

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EXHIBIT C

 

SERVICE LEVELS

 

This Exhibit describes the performance standards and service levels to be
achieved by Vendor in providing the Services, not including Support Services or
any other professional or consulting services:

 

1.  Definitions.  Except as provided in this Exhibit, capitalized terms shall
have the meanings set forth in the body of the Agreement. The following terms,
when used in this Exhibit, shall have the following meanings:

 

“Host” shall be a cloud services provider, currently AWS.

 

“Server” shall mean the server(s) on which the Services will be hosted.

 

2.  General Hosting Obligations.  In addition to the other obligations set forth
in the Agreement and this Exhibit, Vendor shall do the following:

 

Ø

Operate the Services on a Server owned and securely maintained by the Host. 

Ø

Allow access to the Services over the Internet and provide secure and
confidential storage of all information transmitted to and from the Services.

Ø

Maintain ability to redeploy at a geographically different site (e.g., different
flood plain and power grid) from where the Server is located, to ensure
continuous service in the event of disaster.

Ø

Review security notifications and alerts relevant to the hosting platform (e.g.,
Vendor notifications of bugs, attacks, patches), and apply as appropriate to
maintain a reasonable level of defense.

Ø

Vendor shall provide adequate firewall protection in order to secure Natera, End
User and Employee Information and other Confidential Information of Natera and
users of the Services from unauthorized access by third parties.

 

3.  Change of Host.  In the event that during the Term Vendor desires to
transition to a new Host, Vendor shall provide Natera with at least [*] prior
written notice of the transition.  Vendor shall reasonably cooperate with Natera
in evaluating the security and performance of the proposed new Host.  Natera
shall have [*] from receipt of notice of the transition to object to the new
Host.  In the event of such objection, the parties shall meet and confer
regarding alternate Hosts.  If the parties are unable for any reason to reach
agreement within [*] of receipt by Vendor of the objection, Natera may, in its
sole discretion, elect to terminate this Agreement as of the date that Vendor
has indicated that it will transition without further obligation except for
paying outstanding fees for past services rendered.

 

4.  Service Monitoring & Management.  Vendor will perform continuous monitoring
and management of the Services to optimize availability of Services.  Included
within the scope of this section is the proactive monitoring of the Server and
all service components of Vendor’s firewall for trouble on a 7 day by 24 hour
basis, and the expedient restoration of components when failures occur within
the time period set forth in Section 10 (Service Outages) of this Exhibit.

 

Vendor will monitor “heartbeat” signals of all servers, routers and leased
lines, and HTTP availability of the Server, by proactive probing not to exceed
300-second intervals 24 hours a day using an automated tool.  If a facility does
not respond to a ping-like stimulus, it shall be immediately checked
again.  When Vendor receives a “down” signal, or otherwise has knowledge of a
failure in the Server or the application software and/or hardware, Vendor
personnel will:

 

Ø

Promptly notify Natera by email, DNAnexus blog or Twitter according to mutually
agreed upon procedures that an outage has occurred, providing such details as
may be available, including the Vendor trouble ticket number, if appropriate,
and time of outage;

Ø

Work the problems continuously until resolution, escalating to management or to
engineering as required;

Ø

Promptly notify Natera of final resolution, along with any pertinent findings or
action taken, and requests concurrence to close the trouble ticket.

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

 

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5.  Backups.  Natera understands that backup services are provided according to
policies and procedures of the Host. Vendor represents that files uploaded and
generated successfully and any related metadata will be backed up and that
genomic data are currently stored in Amazon S3. If a production file system
fails, Vendor will attempt to restore from backup. Natera understands that
neither Vendor nor Host can recover any deleted file. 

 

6.  Service Levels.  

 

Vendor shall make the Services (excluding any consulting or other professional
services) available at a Monthly Uptime Percentage (defined below) of at least
[*] during any monthly billing cycle (the “Service Level Commitment”). In the
event that Vendor fails to meet the Service Level Commitment in any given month,
Natera will be eligible to receive a Service Credit for that month as described
below.

 

6.1  “Monthly Uptime Percentage” is calculated by subtracting from 100% the
percentage of minutes during the month in which the Services were in a state of
Service Unavailability.

 

6.2  Subject to the exclusions in Section 6.3 below, “Service Unavailability”
means that a Natera User attempts to but cannot perform any one of the
following:

 

(a)   Log in to the Services;

 

(b)   Access the API server;

 

(c)   Transfer data to and from the Services; and

 

(d)   Run jobs on the Services.

 

6.3  The Service Level Commitment does not apply to any delay of service due to:

 

(a)   maintenance activities during [*] scheduled on [*];

 

(b)   maintenance activities for which notification is provided at least [*] in
advance;

 

(c)   [*]

 

(d)   factors outside of Vendor’s reasonable control, including any force
majeure event; Internet access or related problems beyond the demarcation point
of Service; failure of Natera’s or a third party’s, (except a third party
subcontractor) equipment, software or other technology not in Vendor’s direct
control, including app errors, app internal errors, faulty app, applet or
workflow design; and failure of Internet-based computing and storage services,
such as those provided by AWS or other cloud service provider, not in Vendor’s
control.

 

7.  Service Level Reporting.   Vendor shall be responsible for monitoring
Service Level performance and shall provide Natera with reports showing Service
Level performance at Natera’s request in the event that a Service Credit is
claimed. 

 

8.  Failure to Achieve Service Levels.  Failure to achieve the Service Level
Commitment set forth in Section 6 of this Exhibit shall constitute a “Service
Level Failure.” Following a Service Level Failure, Natera will be eligible for a
Service Credit of [*] of the total monthly charges for each [*] of Service
Unavailability.

 

Service Credits will apply [*]. Service Credits will not entitle Natera to any
[*]. A Service Credit will be applicable and issued only if the credit amount
for the applicable monthly billing cycle is greater than $10. Unless otherwise
provided in this Agreement and subject to Vendor meeting its other obligations
under this Agreement, including without limitation its obligations under
Sections 14.1(a) and (c) of the Agreement and Section 4 of this Exhibit,
Natera’s sole and exclusive remedy for any unavailability, non-performance, or
other failure by Vendor to provide Service according to this Exhibit C is the
receipt of a Service Credit (if eligible).  Notwithstanding the foregoing, if a
Service Unavailability lasts for more than [*] (an “Extreme Service
Unavailability”), the Service Credit shall not be Natera’s sole and exclusive
remedy, and, in addition to all other remedies available to Natera under this
Agreement or at law, this shall constitute a Release Condition under the Escrow,
and Natera shall have access to and use of one of the primary developers of the
Vendor System to assist Natera in seeking to remedy the Service Unavailability.

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

4

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In the event Vendor fails to achieve the Service Level Commitment [*] in any [*]
period during the Term, Natera may, in its sole discretion, terminate this
Agreement without further obligation except for outstanding fees due for past
services rendered.

 

To receive a Service Credit, Natera must submit a claim by email to
support@dnanexus.com for each Service Unavailability outage no later than [*]
after outage. The claim must include: (a) the words “Service Unavailability” in
the subject line; (b) the dates and times of each Service Unavailability and (c)
Natera or End User’s logs, redacted to omit confidential or sensitive
information, that document and corroborate Natera’s or End User’s attempted
activity that failed. At the end of a calendar month in which a Service
Unavailability claim was made and Vendor confirms that the Service Level
Commitment was not met based on Natera’s or End User’s outage reports, Vendor
shall issue the Service Credit to Natera within one billing cycle following the
month in which the Vendor failed to meet the Service Level Commitment. Natera’s
failure to make a Service Credit claim or to provide other information as
required above will disqualify Natera from receiving the Service Credit.

 

9.  Corrective Action Plan.  Notwithstanding Vendor’s obligation to continue to
perform as required under the Agreement and this Exhibit and Natera’s remedies
set forth herein, if Natera does not terminate the Agreement after [*] during
the Term, Vendor shall promptly investigate the root causes of such Service
Level Failure and shall provide to Natera (within [*] after the end of the month
in which the second Service Level Failure occurred) an analysis of such root
causes and a proposed corrective action plan for Natera’s review, comment and
approval (the “Corrective Action Plan”).  The Corrective Action Plan shall
include, at a minimum: (i) a commitment by Vendor to Natera to devote the
appropriate time, skilled personnel, systems support and equipment, and/or
resources to remedy, and prevent any further occurrences of, the Service Level
Failure; (ii) a strategy for developing any programming/software updates, fixes,
patches, etc. necessary to remedy, and prevent any further occurrences of, the
Service Level Failure; and (iii) time frames for implementation of the
Corrective Action Plan.  There shall be no additional charge (other than those
fees set forth in the Agreement) for Vendor’s implementation of such Corrective
Action Plan in the time frames and manner set forth in the Corrective Action
Plan.

 

10.  Service Outages. 

 

10.1  Scheduled. Other than outages due to maintenance activities set forth in
Section 6.3(a) of this Exhibit, Vendor shall notify Natera of scheduled outages
at least [*] in advance.

 

10.2  Unscheduled. Promptly upon notice of an unscheduled outage, Vendor
personnel shall:

 

Ø

Notify the person designated by Natera by email, DNAnexus blog or Twitter
according to predefined procedures that an outage has occurred, providing such
details as may be available, including the trouble ticket number if appropriate
and time of outage;

Ø

Work the problems until resolution, escalating to management or to engineering
as required;

Ø

Promptly notify Natera of final resolution, along with any pertinent findings or
action taken.

 

11.  Security Breaches or Denial of Service attacks.  In the event of an attack
or an actual, threatened or suspected breach of security against the Services
and/or Server, Vendor will take whatever reasonable steps that are necessary to
halt such action, including taking the Services down.  Downtime due to external
attacks shall not count against Availability requirement set forth
above.  Vendor’s actions may include, as appropriate:

 

Ø

Confirm the threat;

Ø

Deny access from the source of the attack;

Ø

Investigate the extent of the damage, if any;

Ø

Back-up the affected systems and those suspected to be affected;

Ø

Strengthen defenses everywhere, not just the suspected path that the attacker
used;

Ø

Contact the ISP where the threat or attack originated and/or law enforcement to
work with Vendor’s security team;

Ø

Produce an Incident Report within 3 business days detailing Vendor’s findings;

Ø

Re-instate the denial of access after a set time period, but continue to monitor
traffic from that source until risk of further attacks is deemed to be minimized
and

Ø

Apply any applicable network changes necessary to resolve a denial of service
attack.

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

 

 

5

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EXHIBIT D

 

BUSINESS ASSOCIATE AGREEMENT

 

THIS BUSINESS ASSOCIATE AGREEMENT (this “BAA”) between DNAnexus, Inc.
(“DNAnexus”) and Natera, (“Natera”) is made as of May 1, 2014 (the “BAA
Effective Date”). The parties are also parties to an Application Service
Provider Agreement (the “Agreement”).

 

RECITALS

 

A.           Natera is a “Covered Entity” as that term is defined under the
Health Insurance Portability and Accountability Act of 1996 (Public Law 104-91),
as amended, (“HIPAA”), and the regulations promulgated thereunder by the
Secretary of the U.S. Department of Health and Human Services (“Secretary”),
including, without limitation, the regulations codified at 45 C.F.R. Parts 160
and 164 (“HIPAA Regulations”);

 

B.           DNAnexus performs services for or on behalf of Natera, and in
performing said services, DNAnexus creates, receives, maintains, or transmits
PHI (as defined below);

 

C.           The Parties intend to protect the privacy and provide for the
security of PHI Disclosed by Natera to DNAnexus, or received or created by
DNAnexus, when providing services in compliance with HIPAA, the Health
Information Technology for Economic and Clinical Health Act (Public Law 111-005)
(the “HITECH Act”) and its implementing regulations and guidance issued by the
Secretary, and other applicable state and federal laws, all as amended from time
to time (collectively, the “Covered Laws”); and

 

D.           The HIPAA Privacy and Security Rules require Natera and DNAnexus to
enter into a BAA that meets certain requirements with respect to the Use and
Disclosure of PHI, which are met by this BAA.

 

The parties hereby agree as follows:

 

1.     Applicability and Additional Definitions. Unless otherwise expressly
defined in this BAA, all capitalized terms in this BAA will have the meanings
set forth in HIPAA.

 

1.1.   “Breach” shall have the meaning given under 45 C.F.R. § 164.402.

 

1.2.    “Designated Record Set” shall have the meaning given such term under 45
C.F.R. § 164.501. 

 

1.3.   “Disclose” and “Disclosure” mean, with respect to PHI, the release,
transfer, provision of access to, or divulging in any other manner of PHI
outside of DNAnexus or to other than members of its Workforce, as set forth in
45 C.F.R. § 160.103.

 

1.4.   “Law” means any law, regulation or statute applicable to this Agreement
or the parties’ performance hereunder.

 

1.5.   “PHI” means “protected health information” as defined in 45 C.F.R. §
160.103.

 

1.6.   “Subcontractor” shall have the meaning given to such term under 45 C.F.R.
§ 160.103.

 

1.7.   “Unsecured PHI” shall have the meaning given to such term under 45 C.F.R.
§ 164.402. 

 

1.8.   “Unsecured PHI” shall have the meaning given to such term under 42 U.S.C.
§ 17932(h), 45 C.F.R. § 164.402, and guidance issued pursuant to the HITECH Act
including, but not limited to the guidance issued on April 17, 2009 and
published in 74 Federal Register 19006 (April 27, 2009) by the Secretary.

 

1.9.   “Use” or “Uses” mean, with respect to PHI, the sharing, employment,
application, utilization, examination or analysis of such PHI within DNAnexus’s
internal operations, as set forth in 45 C.F.R. § 160.103.

 

--------------------------------------------------------------------------------

 

1.10. “Workforce” shall have the meaning given to such term under 45 C.F.R. §
160.103.

 

2.   Permitted and Required Uses and Disclosures.

 

2.1.   DNAnexus Services. DNAnexus may Use or Disclose PHI for or on behalf of
Natera solely as specified in the Agreement, provided such use is also permitted
under this BAA, and applicable Law.

 

2.2.   Administration and Management of DNAnexus. DNAnexus may use and disclose
PHI as necessary for the proper management and administration of DNAnexus.  Any
Disclosures under this section will be made only if DNAnexus obtains reasonable
assurances from the recipient of the PHI that (I) the recipient will hold the
PHI confidentially and will Use or Disclose the PHI only as required by law or
for the purpose for which it was disclosed to the recipient, and (II) the
recipient will notify DNAnexus of any instances of which it is aware in which
the confidentiality of the information has been breached.

 

3.   Obligations of DNAnexus.

 

3.1.   Limit on Uses and Disclosures. DNAnexus will use or disclose PHI only as
permitted by this BAA or as required by law, provided that any such use or
disclosure would not violate HIPAA if done by Natera, unless permitted under
HIPAA for a Business Associate

 

3.2.   Safeguards. DNAnexus will use reasonable and appropriate safeguards to
prevent Use or Disclosure of the PHI other than as provided for by this BAA,
consistent with the requirements of Subpart C of 45 C.F.R. Part 164 (with
respect to Electronic PHI) and as further reflected in this BAA.

 

3.3.   Reporting.

 

3.3.1.   Reporting of Impermissible Uses and Disclosures. DNAnexus will report
to Natera any Use or Disclosure of PHI not permitted or required by this BAA of
which DNAnexus becomes aware no later than three (3) business days after
becoming aware of such Security Incident or non-permitted Use or Disclosure, in
accordance with the notice provisions set forth herein.  DNAnexus shall document
and retain records of its investigation of any suspected Breach, including its
reports to Natera under this BAA.

 

3.3.2.   Reporting of Security Incidents.  Without limiting the generality of
DNAnexus’ obligations under 3.3.1, DNAnexus will report to Natera on no less
than a quarterly basis any Security Incidents involving PHI of which DNAnexus
becomes aware in which there is a successful unauthorized access, use,
disclosure, modification, or destruction of information or interference with
system operations in an Information System in a manner that risks the
confidentiality, Integrity, or availability of such Information. No further
notice will be provided, for unsuccessful attempts at such unauthorized access,
use modification, or destruction, such as pings and other broadcast attacks on a
firewall, denial of service attacks, port scans, unsuccessful login attempts, or
interception of encrypted information where the key is not compromised, or any
combination of the above, as long as no such incident results in unauthorized
access, Use or Disclosure of PHI.

 

3.3.3.   Reporting of Breaches. DNAnexus will report to Natera any Breach of
Natera’s Unsecured PHI that DNAnexus may discover to the extent required by 45
C.F.R. §164.410. DNAnexus will make such report without unreasonable delay, and
in no case later than [*] after discovery of such Breach.

 

 

--------------------------------------------------------------------------------

* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS

7

--------------------------------------------------------------------------------

 

3.4.   Subcontractors. DNAnexus will ensure that any Subcontractors that create,
receive, maintain, or transmit PHI on behalf of DNAnexus agree to restrictions
and conditions consistent with those found in this BAA, and agree to implement
reasonable and appropriate safeguards to protect PHI consistent with the
requirements of this BAA.

 

3.5.   Access to PHI. DNAnexus will make PHI In a Designated Record Set
available to Natera so that Natera can comply with 45 C.F.R. § 164.524.

 

3.6.   Amendment to PHI. DNAnexus will make PHI in a Designated Record Set
available to Natera for amendment and incorporate any amendments to the PHI, as
may reasonably be requested by Natera in accordance with 42 U.S.C. § 17935(e)
and 45 C.F.R. § 164.526. DNAnexus shall notify Natera within five (5) days of
receipt of a request for access to PHI.

 

3.7.   Accounting of Disclosures. DNAnexus will make available to Natera the
information required to provide an accounting of Disclosures in accordance with
42 U.S.C. § 17935(c) and 45 C.F.R. § 164.528 of which DNAnexus is aware, within
thirty (30) days after such information is requested by Natera.

 

3.8.   Internal Records. DNAnexus will make its internal practices, books, and
records relating to the Use and Disclosure of PHI available to the Secretary of
the U.S. Department of Health and Human Services (“HHS”) for purposes of
determining Natera’s compliance with HIPAA.  Nothing in this section will waive
any applicable privilege or protection, including with respect to trade secrets
and confidential commercial Information.

 

3.9.   Restrictions and Accommodations.  In the event Natera agrees with an
Individual to any restrictions on Use or Disclosure of PHI pursuant to 45 CFR
Section 164.522(a) or if Natera determines that it is obligated to accommodate a
reasonable request of an Individual to receive communications of PHI pursuant to
45 CFR Section 164.522(b), Natera promptly shall notify DNAnexus of the same, as
well as any revocation or modification of the same, and DNAnexus thereupon shall
observe such restriction or accommodation (or revocation or modification, if
any, thereof) to the extent applicable to its Use or Disclosure of PHI
hereunder, notwithstanding any other provision hereof, except as otherwise
required by law.

 

3.10. Delegated Responsibilities.  To the extent that DNAnexus carries out one
or more of Natera’s obligations under Subpart E of 45 C.F.R. Part 164, DNAnexus
must comply with the requirements of Subpart E that apply to the Natera in the
performance of such obligations.

 

3.11. Minimum Necessary.  DNAnexus (and its Subcontractors) shall, to the extent
practicable, limit its request, Use, or Disclosure of PHI to the minimum amount
of PHI necessary to accomplish the purpose of the request, Use or Disclosure, in
accordance with 42 U.S.C. § 17935(b) and 45 C.F.R. § 164.502(b)(1) or any other
guidance issued thereunder.

 

3.12. Acknowledgement.  DNAnexus acknowledges that it is obligated by law to
comply, and represents and warrants that it shall comply, with all applicable
provisions of the Covered Laws.  DNAnexus shall comply with all applicable state
privacy and security laws, to the extent that such state laws are not preempted
by HIPAA or the HITECH Act.

 

4.   Natera’s Obligations

 

4.1.   Appropriate Use of HIPAA Accounts.  Natera is responsible for
implementing appropriate privacy and security safeguards in order to protect PHI
in compliance with HIPAA and this BAA.

8

--------------------------------------------------------------------------------

 

4.2.   Limitations in Notice of Privacy Practices.  Natera shall notify DNAnexus
of any limitations in its Notice of Privacy Practices to the extent that such
limitations affect DNAnexus’s Use or Disclosure of PHI.

 

4.3.   Necessary Consents. Natera will obtain any necessary authorizations,
consents, and other permissions that may be required under applicable law prior
to placing PHI in the DNAnexus System.

 

4.4.   Change in Permissions.  Natera shall notify DNAnexus of any changes in or
revocation of permission by an individual regarding the Use or Disclosure of
PHI, to the extent that such changes may affect DNAnexus’s Use or Disclosure of
PHI. 

 

4.5.   Restrictions on Disclosures. Natera will not agree to any restriction
requests or place any restrictions in any notice of privacy practices that
violate or cause DNAnexus to violate this BAA or any applicable law.

 

5.   Indemnification.  Notwithstanding anything to the contrary which may be
contained in any Agreement, including but not limited to any limitations on
liability contained therein, either party (“Indemnifying Party”) hereby agrees
to indemnify and hold harmless the other party (“Indemnified Party”) and its
respective officers, directors, managers, members, employees and agents from and
against any and all losses, damages, fines, penalties, claims or causes of
action and associated expenses (including, without limitation, court costs and
attorney’s fees) arising from Indemnified Party’s (including its employees,
directors, officers, agents, or other members of its Workforce, and its
Subcontractors) breach of this BAA or its violation of any Laws, or otherwise
arising from Indemnified Party’s negligence or wrongful acts or omissions,
including but not limited to failure to perform its obligations, that result in
a violation of Laws.

 

6.   Term and Termination.

 

6.1.   Term. The term of this BAA will commence on the BAA Effective Date and
will remain in effect BAA until the earliest of (a) the termination of the
Agreement, (b) notification by Natera that an account is no longer subject to
this BAA; or (c) termination of this BAA pursuant to this BAA, which must be in
a manner consistent with applicable Law.

 

6.2.   Termination. Either party has the right to terminate this BAA in the
event the other party breaches a material term of this BAA and fails to cure
such breach within ten (10) days of receiving such notification, provided the
non-breaching party may terminate this BAA immediately upon written notice in
the event the non-breaching party reasonably determines such breach cannot be
cured. A material breach of this BAA will be treated as a material breach of the
Agreement.

 

6.3.   Effect of Termination. At termination of this BAA, DNAnexus, to the
extent feasible, will return or destroy all PHI that DNAnexus still maintains in
any form and retain no copies of such information or, if such return or
destruction is not feasible, (a) retain only that PHI which is necessary for
DNAnexus to continue its proper management and administration or to carry out
its legal responsibilities; (b) return to Natera the remaining PHI that the
DNAnexus still maintains in any form; (c) extend the protections of this BAA to
the information and (d) limit further Uses and Disclosures to those purposes
that make the return or destruction of the information infeasible; and (e)
return to Natera the PHI retained by DNAnexus when it is no longer needed by
DNAnexus for its proper management and administration or to carry out its legal
responsibilities.

 

6.4.   No Agency Relationship. As set forth in the Agreement, nothing in this
BAA is intended to make either party an agent of the other. Nothing in this BAA
is intended to confer upon Natera the right or authority to control DNAnexus’s
conduct in the course of DNAnexus’s complying with the Agreement and BAA.

 

9

--------------------------------------------------------------------------------

 

6.5.   Nondisclosure. Each party agrees that the terms of this BAA are not
publicly known and Confidential Information of each party under the Agreement.

 

6.6.   Entire Agreement; Conflict. This BAA, together with the Agreement: (a) is
intended by the parties as a final, complete and exclusive expression of the
terms of their agreement; and (b) supersedes all prior agreements and
understandings (whether oral or written) between the parties with respect to the
subject matter hereof. If there is a conflict between the Agreement, this BAA or
any other amendment or addendum to the Agreement or this BAA, the document later
in time will prevail or if the documents have the same effective date, this BAA
will prevail.

 

6.7.   Counterparts and Electronic Delivery. This BAA may be executed in two or
more counterparts, each of which will be deemed an original and all of which
taken together will be deemed to constitute one and the same document. The
parties may sign and deliver this BAA by electronic transmission.

 

 

IN WITNESS WHEREOF, the parties have executed this BAA as of the BAA Effective
Date.

 

 

DNAnexus, Inc.

Natera, Inc.

 

 

 

 

 

 

By;  /s/Timothy L. O’Brien

By:  /s/Jonathan Sheena

Name:   Timothy L. O’Brien

Name:   Jonathan Sheena

Date:   9/19/14

Date:   9/22/14

 

 

10

--------------------------------------------------------------------------------

 

EXHIBIT E

 

Information Security Requirements

 

[Exhibit E was omitted in the original]

 

 

 

11

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

DNAnexus, Inc.

 

Amendment to the Application

 

Service Provider Agreement dated September 19, 2014

 

This Amendment (“Amendment”) is made as of June 8th 2015(“Amendment Effective
Date”) by and between DNAnexus, Inc., a Delaware corporation, having its
principal place of business at 1975 W. El Camino Real, Suite 101, Mountain View,
CA 94040 (“Vendor”), and Natera, Inc., having its principal place of business at
201 Industrial Road, Suite 410, San Carlos, CA 94070 (“Natera”).

 

Vendor and Natera agree to amend the Application Service Provider Agreement
having an effective date of September 19, 2014 (“Agreement”) as follows:

 

1. Exhibit B of the Agreement is hereby replaced with Exhibit B of this
Amendment.

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the Amendment
Effective Date.

 

 

 

Vendor

 

 

Natera, Inc.

 

 

 

 

 

 

 

By:  

/s/Timothy L. O’Brien

 

By:  

/s/Jonathan Sheena

 

 

 

 

 

 

 

Name:  

Timothy L. O’Brien

 

Name:  

Jonathan Sheena

 

 

 

 

 

 

 

Title:  

VP Sales

 

Title:  

CTO

 

 

Page 1 of 3

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

EXHIBIT B

 

SERVICES; FEES

 

Vendor pricing is composed of two components:

 

·

Resource-based pricing: Variable compute, storage, and networking usage of the
DNAnexus platform.

·

Per-test pricing: Additional value add per delivered test for ongoing
consulting, implementation, prioritized development, and premium support.

 

The total bill to Natera each calendar month will be based on the number of
tests as well as the accrued compute, storage, and networking usage according to
the below price schedules.

 

Resource-based pricing

 

All DNAnexus usage, including R&D and production pipeline execution, is charged
according to the below pricing sheet:

 

Compute

Cost Class

Cost per virtual core hour

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Data Transfer & Storage

Service

Cost

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

Resource-based pricing shall be updated from time to time by a signed agreement
reflecting Vendor’s current list pricing.

 

Per-test pricing

 

A “production test” is composed of [*]. Accounting for number of “production
tests” will be done by counting all [*] generated by the production test
pipeline and applying a proportion [*] that reflects the [*], with the ratio to
be reasonably agreed upon by Natera and DNAnexus. At the end of each three month
period, the numbers shall be adjusted to reflect the number of units billed by
Natera to its customers in that period.

 

 

--------------------------------------------------------------------------------

* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

Page 2 of 3

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

A value add charge is applied to each execution of a billable production test,
based upon the following tiers of monthly production test volumes:

 

Value-add price per test

Production test monthly volume

[*]

Up to [*] production tests

[*]

Each production test over [*] up to [*]

[*]

Each production test over [*]

 

Prices in lower priced tiers apply only to the number of tests above the lower
threshold associated with the tier and not exceeding any upper threshold.
Example calculations are as follows:

 

 

 

Number of Tests in One Month

Total Per-Test Pricing Cost

9,000

[*]

10,500

[*]

30,000

[*]

 

Underlying resource costs for compute, storage, and network transfer are
accounted for separately according to the resource-based price sheet above.
Current estimates based on portions of the test pipeline currently implemented
are:

 

·

[*] per test for computation

·

[*] per test per month for ongoing storage

·

[*] per test for network transfer

 

Based on currently implemented analysis pipelines, the combined resource-based
and per-test pricing is estimated at [*] per test for compute at the highest
volume tier, and [*] per test per month for ongoing storage.

 

Modifying analysis steps or adjusting the volume of data will alter the final
pricing in accordance with the resource-based pricing scheme.

 

 

--------------------------------------------------------------------------------

* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

 

 

Page 3 of 3

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

DNAnexus, Inc.

 

Second Amendment to the Application

 

Service Provider Agreement dated September 19, 2014

 

This Second Amendment (“Second Amendment”) is made as of December 29, 2016
(“Second Amendment Effective Date”) by and between DNAnexus, Inc., a Delaware
corporation, having its principal place of business at 1975 W. El Camino Real,
Suite 101, Mountain View, CA 94040 (“Vendor”), and Natera, Inc., having its
principal place of business at 201 Industrial Road, Suite 410, San Carlos, CA
94070 (“Natera”).

 

Vendor and Natera agree to amend the Application Service Provider Agreement
having an effective date of September 19, 2014 (“Agreement”), as amended by the
Amendment dated June 8, 2015, as follows:

 

1.   Section 2 of the Agreement is hereby amended such that the first sentence
thereof is deleted in its entirety and replaced with the following:

 

“The term of this Agreement shall commence on the Effective Date and continue in
full force until December 31, 2019 (the “Initial Term”).”

 

2.   Section 24.3 of the Agreement is hereby replaced in its entirety with the
following:

 

“24.3 Termination for Convenience.  Without reason, penalty or breach of this
Agreement and notwithstanding the other Party’s compliance with all requirements
of this Agreement, Natera at any time and Vendor beginning at the start of the
first Renewal Term may terminate this Agreement or any Statement of Work,
Service, or Deliverable, provided that written notice is given to the other
Party at least [*] prior to the date of termination if Natera is the terminating
Party and at least [*] prior to the date of termination if Vendor is the
terminating Party.”

 

3.   Section 24.4(a) of the Agreement is hereby replaced in its entirety with
the following:

 

“(a)  Vendor shall cease to perform the Services; Natera will pay to Vendor all
sums due to Vendor for Services properly performed through the effective date of
such expiration or termination (prorated as appropriate); and, any compensation
allocated to Services that were yet to be rendered with regard to any canceled
aspect of the Services shall be refunded to Natera (prorated as appropriate).”

 

4.   Exhibit B of the Agreement is hereby replaced in its entirety with Exhibit
B of this Amendment.

 

5.   Exhibit C of the Agreement is hereby replaced in its entirety with Exhibit
C of this Amendment.

 

 

--------------------------------------------------------------------------------

* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

Page 1 of 10

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

IN WITNESS WHEREOF, the parties have executed this Amendment as of the Second
Amendment Effective Date.

 

 

 

Vendor

    

 

Natera, Inc.

 

 

 

 

 

 

 

By:  

/s/Richard Daly

 

By:  

/s/Jonathan Sheena

 

 

 

 

 

 

 

Name:  

Richard Daly

 

Name:  

Jonathan Sheena

 

 

 

 

 

 

 

Title:  

CEO

 

Title:  

CTO

Page 2 of 10

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

EXHIBIT B

 

SERVICES; FEES

 

Vendor pricing is composed of two components:

 

·

Resource-based pricing: Variable compute, storage, and networking usage of the
DNAnexus platform.

·

Per-test pricing:  Additional value add per delivered test for ongoing
consulting, implementation, prioritized development, and premium support.

 

Subject to Natera’s payment of the annual license fee and the terms under
“Committed Fees” below, the total bill to Natera each calendar month will be
based on the number of tests as well as the accrued compute, storage, and
networking usage according to the below price schedules.

 

Committed Fees

 

DNAnexus will charge Natera a non-refundable annual license fee of [*] (the
“License Limit”) for a period of [*] commencing on January 1, 2017, and
continuing for the calendar years of [*] (each a “License Year”). DNAnexus shall
submit invoices to Natera in advance of each License Year (December 2016 for
License Year 2017, and subsequent invoices in [*] for use of [*] (“Yearly
License Limit”) at Discounted Pricing. Should customer utilize services in
excess of the Yearly License Limit at any point during the respective License
Year, DNAnexus will charge contingent fees to Natera for usage in excess of the
Yearly License Limit at [*] Resource-based and [*] Per-test Pricing, until
commencement of the next License Year. Notwithstanding the foregoing, in the
event DNAnexus terminates the Agreement for convenience (Section 24.3), or
Natera terminates the Agreement pursuant to the terms of Section 24.1 or 24.2,
the license fee will be refunded to Natera prorated in an amount commensurate
with services provided through the effective date of the termination.
Notwithstanding the foregoing, once Natera has [*], Natera shall no longer be
obligated to pay any further License Limits, and once Natera has [*], any
further License Limit shall be reduced by [*].

 

Resource-based pricing

 

All DNAnexus usage, including R&D and production pipeline execution, is charged
according to the below pricing sheet. For future AWS compute and storage public
price reductions DNAnexus will reduce compute and storage prices and pass
through [*] of the AWS price reduction. For example, if AWS reduces their price
for compute by 10% DNAnexus will reduce Natera’s equivalent compute price by
[*]. DNAnexus and Natera will review AWS price changes and update the price
schedules [*] as needed.

 

 

--------------------------------------------------------------------------------

* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

Page 3 of 10

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

The following table shall be used to calculate the weighted average price
reduction in each [*] period for each DNANexus Compute Cost Class:

 

 

 

DNANexus Compute Cost Class

AWS Instance

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

 

 

Compute

Cost Class

Cost per virtual core hour

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Data Transfer & Storage

Service

Cost

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

Resource-based pricing shall be updated from time to time by a signed agreement
reflecting Vendor’s current list pricing.

 

 

--------------------------------------------------------------------------------

* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

Page 4 of 10

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

Per-test pricing

 

A “production test” is composed of [*] Accounting for number of “production
tests” will be done by counting all [*] generated by the production test
pipeline and applying a proportion [*] that reflects the [*], with the ratio to
be reasonably agreed upon by Natera and DNAnexus.  At the end of each three
month period, the numbers shall be adjusted to reflect the number of units
billed by Natera to its customers in that period.

 

A value add charge is applied to each execution of a billable production test,
based upon the following tiers of monthly production test volumes:

 

Value-add price per test

Production test monthly volume

[*]

Up to [*] production tests

[*]

Each production test over [*] up to [*]

[*]

Each production test over [*]

 

Prices in lower priced tiers apply only to the number of tests above the lower
threshold associated with the tier and not exceeding any upper threshold.
Example calculations are as follows:

 

Number of Tests in One Month

Total Per-Test Pricing Cost

9,000

[*]

10,500

[*]

30,000

[*]

 

Underlying resource costs for compute, storage, and network transfer are
accounted for separately according to the resource-based price sheet above.
Current estimates based on portions of the test pipeline currently implemented
are:

 

·

[*] per test for computation

·

[*] per test per month for ongoing storage

·

[*] per test for network transfer

 

Based on currently implemented analysis pipelines, the combined resource-based
and per-test pricing is estimated at [*] for compute at the highest volume tier,
and [*] per test per month for ongoing storage.

 

Modifying analysis steps or adjusting the volume of data will alter the final
pricing in accordance with the resource-based pricing scheme.

 

 

--------------------------------------------------------------------------------

* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

Page 5 of 10

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

Discounted Pricing

 

[*]

 

Discounted Resource-based pricing

 

[*]:

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

Discounted Per-test pricing

 

A “production test” is composed of [*]. Accounting for number of “production
tests” will be done by counting all [*] generated by the production test
pipeline and applying a proportion [*] that reflects the [*], with the ratio to
be reasonably agreed upon by Natera and DNAnexus.  At the end of each three
month period, the numbers shall be adjusted to reflect the number of units
billed by Natera to its customers in that period.

 

A value add charge is applied to each execution of a billable production test,
based upon the following tiers of monthly production test volumes:

 

 

 

Value-add price per test

Production test monthly volume

[*]

Up to [*] production tests

[*]

Each production test over [*] up to [*]

[*]

Each production test over [*]

 

 

--------------------------------------------------------------------------------

*  CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

Page 6 of 10

--------------------------------------------------------------------------------

 

CONFIDENTIAL

 

EXHIBIT C

 

SERVICE LEVELS

 

This Exhibit describes the performance standards and service levels to be
achieved by Vendor in providing the Services, not including Support Services or
any other professional or consulting services:

 

1. Definitions.  Except as provided in this Exhibit, capitalized terms shall
have the meanings set forth in the body of the Agreement.  The following terms,
when used in this Exhibit, shall have the following meanings:

 

“Host” shall be a cloud services provider, currently AWS.

 

“Server” shall mean the server(s) on which the Services will be hosted.

 

2. General Hosting Obligations.  In addition to the other obligations set forth
in the Agreement and this Exhibit, Vendor shall do the following:

 

Ø

Operate the Services on a Server owned and securely maintained by the Host. 

 

Ø

Allow access to the Services over the Internet and provide secure and
confidential storage of all information transmitted to and from the Services.

 

Ø

Maintain ability to redeploy at a geographically different site (e.g., different
flood plain and power grid) from where the Server is located, to ensure
continuous service in the event of disaster.

 

Ø

Review security notifications and alerts relevant to the hosting platform (e.g.,
Vendor notifications of bugs, attacks, patches), and apply as appropriate to
maintain a reasonable level of defense.

 

Ø

Vendor shall provide adequate firewall protection in order to secure Natera, End
User and Employee Information and other Confidential Information of Natera and
users of the Services from unauthorized access by third parties.

 

3. Change of Host.  In the event that during the Term Vendor desires to
transition to a new Host, Vendor shall provide Natera with at least [*] prior
written notice of the transition.  Vendor shall reasonably cooperate with Natera
in evaluating the security and performance of the proposed new Host.  Natera
shall have [*] from receipt of notice of the transition to object to the new
Host.  In the event of such objection, the parties shall meet and confer
regarding alternate Hosts.  If the parties are unable for any reason to reach
agreement within [*] of receipt by Vendor of the objection, Natera may, in its
sole discretion, elect to terminate this Agreement as of the date that Vendor
has indicated that it will transition without further obligation except for
paying outstanding fees for past services rendered.

 

4. Service Monitoring & Management.  Vendor will perform continuous monitoring
and management of the Services to optimize availability of Services.  Included
within the scope of this section is the proactive monitoring of the Server and
all service components of Vendor’s firewall for trouble on a 7-day by 24-hour
basis, and the expedient restoration of components when failures occur within
the time period set forth in Section 10 (Service Outages) of this Exhibit.

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
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Vendor will monitor “heartbeat” signals of all servers, routers and leased
lines, and HTTP availability of the Server, by proactive probing not to exceed
300-second intervals 24 hours a day using an automated tool.  If a facility does
not respond to a ping-like stimulus, it shall be immediately checked
again.  When Vendor receives a “down” signal, or otherwise has knowledge of a
failure in the Server or the application software and/or hardware, Vendor
personnel will:

 

Ø

Promptly notify Natera by email, DNAnexus blog or Twitter according to mutually
agreed upon procedures that an outage has occurred, providing such details as
may be available, including the Vendor trouble ticket number, if appropriate,
and time of outage;

 

Ø

Work the problems continuously until resolution, escalating to management or to
engineering as required;

 

Ø

Promptly notify Natera of final resolution, along with any pertinent findings or
action taken, and requests concurrence to close the trouble ticket.

 

5. Backups.  Natera understands that backup services are provided according to
policies and procedures of the Host. Vendor represents that files uploaded and
generated successfully and any related metadata will be backed up and that
genomic data are currently stored in Amazon S3. If a production file system
fails, Vendor will attempt to restore from backup. Natera understands that
neither Vendor nor Host can recover any deleted file. 

 

6. Service Levels.  

 

Vendor shall make the Services (excluding any consulting or other professional
services) available at a Monthly Uptime Percentage (defined below) of at least
[*] during any monthly billing cycle (the “Service Level Commitment”). In the
event that Vendor fails to meet the Service Level Commitment in any given month,
Natera will be eligible to receive a Service Credit for that month as described
below. At least once annually, technical and business representatives of both
parties will meet to review the Service Level terms of this Section 6 to ensure
the performance metrics and delivery of the Services are in alignment with
Natera’s requirements.

 

6.1   “Monthly Uptime Percentage” is calculated by subtracting from 100% the
percentage of minutes during the month in which the Services were in a state of
Service Unavailability.

 

6.2   Subject to the exclusions in Section 6.3 below, “Service Unavailability”
means any disruption of a Natera User’s access to or use of any Services or
Deliverables, where disruption means an inability to access or use, or a delay
in accessing or using, the Service or Deliverable, and which includes but is not
limited to:

 

(a)   General unavailability of DNANexus API servers to a Natera User;

 

(b)   Slowness of DNANexus platform causing disruption for Natera “Production
Review” processes or any other modules, where “slowness” is defined as a service
interruption where, in any [*] interval in which at least [*] API requests from
Natera’s production review user are processed, at least [*] of these API
requests take more than [*];

 

(c)   Inability to allocate resources for jobs or subjobs within 30 minutes of
an attempt by a Natera User to do so;

 

(d)   Job/subjob failures; 

 

(e)   Inability of a Natera User to log in to the Services;

 

(f)   Inability of a Natera User to transfer data to and from the Services; and,

 

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
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(g)   Inability of a Natera User to run jobs on the Services.

 

6.3   The Service Level Commitment does not apply to any delay of service due
to:

 

(a)   maintenance activities during a 30 minute window scheduled on Tuesdays
from 1:00 pm to 8:00 pm Pacific Time;

 

(b)   maintenance activities for which notification is provided at least [*] in
advance;

 

(c)   disabled log in due to lack of user log in activity during a prescribed
period or due to excessive failed log in attempts or

 

(d)   factors outside of Vendor’s reasonable control, including any force
majeure event; Internet access or related problems beyond the demarcation point
of Service; failure of Natera’s or a third party’s, (except a third party
subcontractor) equipment, software or other technology not in Vendor’s direct
control, including app errors, app internal errors, faulty app, applet or
workflow design; and failure of Internet-based computing and storage services,
such as those provided by AWS or other cloud service provider, not in Vendor’s
control.

 

7. Service Level Reporting.  Vendor shall be responsible for monitoring Service
Level performance and shall provide Natera with reports showing Service Level
performance at Natera’s request in the event that a Service Credit is claimed. 

 

8. Failure to Achieve Service Levels.  Failure to achieve the Service Level
Commitment set forth in Section 6 of this Exhibit shall constitute a “Service
Level Failure.” Following a Service Level Failure, Natera will be eligible for a
Service Credit of [*] of the total monthly charges for each [*] and any
remaining partial hour of Service Unavailability.

 

Service Credits will apply only [*] Natera. Service Credits will not entitle
Natera to [*]. A Service Credit will be applicable and issued only if the credit
amount for the applicable monthly billing cycle is greater than $10. Unless
otherwise provided in this Agreement and subject to Vendor meeting its other
obligations under this Agreement, including without limitation its obligations
under Sections 14.1(a) and (c) of the Agreement and Section 4 of this Exhibit,
Natera’s sole and exclusive remedy for any unavailability, non-performance, or
other failure by Vendor to provide Service according to this Exhibit C is the
receipt of a Service Credit (if eligible).  Notwithstanding the foregoing, if a
Service Unavailability lasts for more than [*] (an “Extreme Service
Unavailability”), the Service Credit shall not be Natera’s sole and exclusive
remedy, and, in addition to all other remedies available to Natera under this
Agreement or at law, this shall constitute a Release Condition under the Escrow,
and Natera shall have access to and use of one of the primary developers of the
Vendor System to assist Natera in seeking to remedy the Service Unavailability.

 

In the event Vendor fails to achieve the Service Level Commitment [*] in any [*]
period during the Term, Natera may, in its sole discretion, terminate this
Agreement without further obligation except for outstanding fees due for past
services rendered.

 

To receive a Service Credit, Natera must submit a claim by email to
support@dnanexus.com for each Service Unavailability outage no later than [*]
after outage. The claim must include: (a) the words “Service Unavailability” in
the subject line; (b) the dates and times of each Service Unavailability and (c)
Natera or End User’s logs, redacted to omit confidential or sensitive
information, that document and corroborate Natera’s or End User’s attempted
activity that failed. At the end of a calendar month in which a Service
Unavailability claim was made and Vendor confirms that the Service Level
Commitment was not met based on Natera’s or End User’s outage reports, Vendor
shall issue the Service Credit to Natera within one billing cycle following the
month in which the Vendor failed to meet the Service Level Commitment. Natera’s
failure to make a Service Credit claim or to provide other information as
required above will disqualify Natera from receiving the Service Credit.

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
TO THE OMITTED PORTIONS.

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9. Corrective Action Plan.  Notwithstanding Vendor’s obligation to continue to
perform as required under the Agreement and this Exhibit and Natera’s remedies
set forth herein, if Natera does not terminate the Agreement after [*] Service
Level Failures in any [*] period during the Term, Vendor shall promptly
investigate the root causes of such Service Level Failure and shall provide to
Natera (within [*] after the end of the month in which the second Service Level
Failure occurred) an analysis of such root causes and a proposed corrective
action plan for Natera’s review, comment and approval (the “Corrective Action
Plan”).  The Corrective Action Plan shall include, at a minimum: (i) a
commitment by Vendor to Natera to devote the appropriate time, skilled
personnel, systems support and equipment, and/or resources to remedy, and
prevent any further occurrences of, the Service Level Failure; (ii) a strategy
for developing any programming/software updates, fixes, patches, etc. necessary
to remedy, and prevent any further occurrences of, the Service Level
Failure;  and (iii) time frames for implementation of the Corrective Action
Plan.  There shall be no additional charge (other than those fees set forth in
the Agreement) for Vendor’s implementation of such Corrective Action Plan in the
time frames and manner set forth in the Corrective Action Plan.

 

10. Service Outages. 

 

10.1 Scheduled. Other than outages due to maintenance activities set forth in
Section 6.3(a) of this Exhibit, Vendor shall notify Natera of scheduled outages
at least [*] in advance.

 

10.2 Unscheduled. Promptly upon notice of an unscheduled outage, Vendor
personnel shall:

 

Ø

Notify the person designated by Natera by email, DNAnexus blog or Twitter
according to predefined procedures that an outage has occurred, providing such
details as may be available, including the trouble ticket number if appropriate
and time of outage;

 

Ø

Work the problems until resolution, escalating to management or to engineering
as required;

 

Ø

Promptly notify Natera of final resolution, along with any pertinent findings or
action taken.

 

11. Security Breaches or Denial of Service attacks.  In the event of an attack
or an actual, threatened or suspected breach of security against the Services
and/or Server, Vendor will take whatever reasonable steps that are necessary to
halt such action, including taking the Services down.  Downtime due to external
attacks shall not count against Availability requirement set forth
above.  Vendor’s actions may include, as appropriate:

 

Ø

Confirm the threat;

 

Ø

Deny access from the source of the attack;

 

Ø

Investigate the extent of the damage, if any;

 

Ø

Back-up the affected systems and those suspected to be affected;

 

Ø

Strengthen defenses everywhere, not just the suspected path that the attacker
used;

 

Ø

Contact the ISP where the threat or attack originated and/or law enforcement to
work with Vendor’s security team;

 

Ø

Produce an Incident Report within 3 business days detailing Vendor’s findings;

 

Ø

Re-instate the denial of access after a set time period, but continue to monitor
traffic from that source until risk of further attacks is deemed to be minimized
and

 

 

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* CERTAIN INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT
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Ø

Apply any applicable network changes necessary to resolve a denial of service
attack

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