Document:

EX-10.5

 EXHIBIT 10.5 

CORPORATE INTEGRITY AGREEMENT 

BETWEEN THE 
 OFFICE OF
INSPECTOR GENERAL 
 OF THE 

DEPARTMENT OF HEALTH AND HUMAN SERVICES 

AND 
 PROGENITY, INC.

 I. PREAMBLE 
 Progenity,
Inc. (Progenity) hereby enters into this Corporate Integrity Agreement (CIA) with the Office of Inspector General (OIG) of the United States Department of Health and Human Services (HHS) to
promote compliance with the statutes, regulations, and written directives of Medicare, Medicaid, and all other Federal health care programs (as defined in 42 U.S.C. § 1320a-7b(f)) (Federal health care
program requirements). Contemporaneously with this CIA, Progenity is entering into a Settlement Agreement with the United States. 
 Prior
to the Effective Date of this CIA, Progenity voluntarily established a Compliance Program which includes, among other things, a Chief Compliance Officer (CCO) and Compliance Committee, internal monitoring by the CCO and Compliance Committee,
compliance updates provided to the Board of Directors, regular compliance training and education for employees, written compliance policies and procedures, and a disclosure program. Progenity shall continue these and other aspects of its Compliance
Program throughout the term of this CIA and shall do so in accordance with the terms set forth below. 
 II. TERM AND SCOPE OF THE CIA 

A. The period of the compliance obligations assumed by Progenity under this CIA shall be five years from the effective date of this CIA. The
“Effective Date” shall be the date on which the final signatory of this CIA executes this CIA. Each one-year period, beginning with the one-year period
following the Effective Date, shall be referred to as a “Reporting Period.” 

  
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 B. Sections VII, X, and XI shall expire no later than 120 days after OIG’s receipt of:
(1) Progenity’s final annual report; or (2) any additional materials submitted by Progenity pursuant to OIG’s request, whichever is later. 

C. The scope of this CIA shall be governed by the following definitions: 

1. “Arrangements” shall mean: 
  

	 	a.	 every arrangement or transaction that involves, directly or indirectly, the offer, payment, solicitation, or
receipt of anything of value; and is between Progenity and any actual or potential source of health care business or referrals to Progenity or any actual or potential recipient of health care business or referrals from Progenity; or

  

	 	b.	 every financial relationship (as defined in 42 C.F.R. § 411.354(a)) that is between Progenity and a
physician (or a physician’s immediate family member (as defined at 42 C.F.R. § 411.351)) who makes a referral (as defined at 42 U.S.C. § 1395nn(h)(5)) to Progenity for designated health services (as defined at 42 U.S.C. §
1395nn(h)(6)). 

  

	 	2.	 The term “source of health care business or referrals” shall mean any individual or entity that
refers, recommends, arranges for, orders, leases, or purchases any good, facility, item, or service for which payment may be made in whole or in part by a Federal health care program. 

 

	 	3.	 The term “recipient of health care business or referrals” shall mean any individual or entity
(1) to whom Progenity refers an individual for the furnishing or arranging for the furnishing of any item or service, or (2) from whom Progenity purchases, leases or orders or arranges for or recommends the purchasing, leasing, or ordering
of any good, facility, item, or service for which payment may be made in whole or in part by a Federal health care program. 

  

	 	4.	 “Focus Arrangements” means every Arrangement that: 

  
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	 	a.	 is between Progenity and any actual source or recipient of health care business or referrals and involves,
directly or indirectly, the offer, payment, or provision of anything of value; or 

  

	 	b.	 is between Progenity and any physician (or a physician’s immediate family member (as defined at 42 C.F.R.
§ 411.351)) who makes a referral (as defined at 42 U.S.C. § 1395nn(h)(5)) to Progenity for designated health services (as defined at 42 U.S.C. §1395nn(h)(6)). 

Notwithstanding the foregoing provisions of Section II.C.4, any Arrangement that satisfies the requirements of 42 C.F.R. § 411.356
(ownership or investment interests), 42 C.F.R. § 411.357(g) (remuneration unrelated to the provision of designated health services); 42 C.F.R. § 411.357(i) (payments by a physician for items and services); 42 C.F.R. § 411.357(k) (non-monetary compensation); 42 C.F.R. § 411.357(m) (medical staff incidental benefits), 42 C.F.R. § 411.357(o) (compliance training), 42 C.F.R. § 411.357(q) (referral services), 42 C.F.R. §
411.357(s) (professional courtesy), or 42 C.F.R. § 357(u) (community-wide health information systems), shall not be considered a Focus Arrangement for purposes of this CIA, provided that Progenity maintains sufficient documentation to
demonstrate compliance with the applicable exceptions to 42 U.S.C. § 1395nn (Stark Law). Such documentation shall be made available to OIG upon request. 
  

	 	5.	 “Covered Persons” includes: 

 

	 	a.	 all owners who are natural persons (other than shareholders who: (1) have an ownership interest of less
than 5% and (2) acquired the ownership interest through public trading), officers, directors, and employees of Progenity; and 

 

	 	b.	 all contractors, subcontractors, agents, and other persons who furnish patient care items or services or who
perform billing or coding functions on behalf of Progenity excluding vendors whose sole connection with Progenity is selling or otherwise providing medical supplies or equipment to Progenity. 

  
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 Notwithstanding the above, this term presumptively does not include part-time or per diem
employees, contractors, subcontractors, agents, and other persons who are not reasonably expected to work more than 160 hours per year, except that any such natural persons in such categories shall become “Covered Persons” at the point
when they work more than 160 hours during a Reporting Period. 
 6. “Arrangements Covered Persons” includes each Covered Person who
is involved with the development, approval, management, or review of Progenity’s Arrangements. 
 III. CORPORATE INTEGRITY OBLIGATIONS
 
 Progenity shall establish and maintain a Compliance Program that includes the following elements: 

A. Compliance Officer and Committee, Board of Directors, and Management Compliance Obligations 

1. Compliance Officer. Within 90 days after the Effective Date, Progenity shall appoint a Compliance Officer and shall maintain a
Compliance Officer for the term of the CIA. The Compliance Officer shall be an employee and a member of senior management of Progenity, shall report directly to the Chief Executive Officer or the President of Progenity, and shall not be, or be
subordinate to, the General Counsel or Chief Financial Officer or have any responsibilities that involve acting in any capacity as legal counsel or supervising legal counsel functions for Progenity. The Compliance Officer shall be responsible for,
without limitation: 
  

	 	a.	 developing and implementing policies, procedures, and practices designed to ensure compliance with the
requirements set forth in this CIA and with Federal health care program requirements; 

  

	 	b.	 making periodic (at least quarterly) reports regarding compliance matters in person to the Board
of Directors of Progenity (Board) and shall be authorized to report on such matters to the Board at any time. Written documentation of 

  
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the Compliance Officer’s reports to the Board shall be made available to OIG upon request; and 

  

	 	c.	 monitoring the day-to-day
compliance activities engaged in by Progenity as well as any reporting obligations created under this CIA. 

 Any
noncompliance job responsibilities of the Compliance Officer shall be limited and must not interfere with the Compliance Officer’s ability to perform the duties outlined in this CIA. 

Progenity shall report to OIG, in writing, any changes in the identity of the Compliance Officer, or any actions or changes that would affect
the Compliance Officer’s ability to perform the duties necessary to meet the obligations in this CIA, within five business days after such
a change. 
 2. Compliance Committee. Within 90 days after the Effective Date, Progenity shall appoint a Compliance Committee. The
Compliance Committee shall, at a minimum, include the Compliance Officer and other members of senior management necessary to meet the requirements of this CIA (e.g., senior executives of relevant departments, such as billing, clinical, human
resources, audit, and operations). The Compliance Officer shall chair the Compliance Committee and the Compliance Committee shall support the Compliance Officer in fulfilling his/her responsibilities (e.g., shall assist in the analysis of
Progenity’s risk areas and shall oversee monitoring of internal and external audits and investigations). The Compliance Committee shall meet at least quarterly. The minutes of the Compliance Committee meetings shall be made available to OIG
upon request. 
 Progenity shall report to OIG, in writing, any changes in the composition of the Compliance Committee, or any actions or
changes that would affect the Compliance Committee’s ability to perform the duties necessary to meet the obligations in this CIA, within 15 business days after such a change. 

3. Board Compliance Obligations. The Board of Progenity shall be responsible for
the review and oversight of matters related to compliance with Federal health care program requirements and the obligations of this CIA. The Board must include independent (i.e., non-employee and non-executive) members. 

  
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 The Board shall, at a minimum, be responsible for the following: 

 

	 	a.	 meeting at least quarterly to review and oversee Progenity’s compliance program, including but not limited
to the performance of the Compliance Officer and Compliance Committee; 

  

	 	b.	 submitting to the OIG a description of the documents and other materials it reviewed, as well as any additional
steps taken, such as the engagement of an independent advisor or other third party resources, in its oversight of the compliance program and in support of making the resolution below during each Reporting Period; and 

 

	 	c.	 for each Reporting Period of the CIA, adopting a resolution, signed by each member of the Board summarizing its
review and oversight of Progenity’s compliance with Federal health care program requirements and the obligations of this CIA. 

 At
minimum, the resolution shall include the following language: 
 “The Board has made a reasonable inquiry into the operations of
Progenity’s Compliance Program including the performance of the Compliance Officer and the Compliance Committee. Based on its inquiry and review, the Board has concluded that, to the best of its knowledge, Progenity has implemented an effective
Compliance Program to meet Federal health care program requirements and the obligations of the CIA.” 
 If the Board is unable to
provide such a conclusion in the resolution, the Board shall include in the resolution a written explanation of the reasons why it is unable to provide the conclusion and the steps it is taking to implement an effective Compliance
Program at Progenity. 
 Progenity shall report to OIG, in writing, any changes in the composition of the Board, or any actions or changes
that would affect the Board’s ability to perform the 

  
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duties necessary to meet the obligations in this CIA, within 15 business days after such a change. 

4. Management Certifications. In addition to the responsibilities set forth in this CIA for all Covered Persons, certain Progenity
employees (Certifying Employees) are specifically expected to monitor and oversee activities within their areas of authority and shall annually certify that the applicable Progenity department is in compliance with applicable Federal health care
program requirements and with the obligations of this CIA. These Certifying Employees shall include, at a minimum, the following: Chief Executive Officer; Chief Financial Officer; Chief Operating Officer; Chief Commercial Officer; Chief Scientific
Officer; Chief Medical Officer; and Chief Information Officer. For each Reporting Period, each Certifying Employee shall sign a certification that states: 

“I have been trained on and understand the compliance requirements and responsibilities as they relate to [insert name of department], an
area under my supervision. My job responsibilities include ensuring compliance with regard to the [insert name of department] with all applicable Federal health care program requirements, obligations of the Corporate Integrity Agreement, and
Progenity policies, and I have taken steps to promote such compliance. To the best of my knowledge, the [insert name of department] of Progenity is in compliance with all applicable Federal health care program requirements and the obligations of the
Corporate Integrity Agreement. I understand that this certification is being provided to and relied upon by the United States.” 
 If
any Certifying Employee is unable to provide such a certification, the Certifying Employee shall provide a written explanation of the reasons why he or she is unable to provide the certification outlined above. 

Within 90 days after the Effective Date, Progenity shall develop and implement a written process for Certifying Employees to follow for the
purpose of completing the certification required by this section (e.g., reports that must be reviewed, assessments that must be completed, sub-certifications that must be obtained, etc. prior to the Certifying
Employee making the required certification). 

  
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	 	B.	 Written Standards 

Within 90 days after the Effective Date, Progenity shall develop and implement written policies and procedures regarding the operation of its
compliance program, including the compliance program requirements outlined in this CIA and Progenity’s compliance with Federal health care program requirements (Policies and Procedures). The Policies and Procedures also shall address: 

 

	 	a.	 42 U.S.C. § 1320a-7b(b) (Anti-Kickback Statute) and the Stark Law,
and the regulations and other guidance documents related to these statutes, and business or financial arrangements or contracts that generate unlawful Federal health care program business in violation of the Anti-Kickback Statute or the Stark Law;
and 

  

	 	b.	 the requirements set forth in Section III.D (Compliance with the Anti-Kickback Statute and Stark Law).

 The Policies and Procedures shall be made available to all Covered Persons. Throughout the term of this
CIA, Progenity shall enforce its Policies and Procedures and shall make compliance with its Policies and Procedures an element of evaluating the performance of all employees. 

At least annually (and more frequently, if appropriate), Progenity shall assess and update, as necessary, the Policies and Procedures. Any
revised or new Policies and Procedures shall be made available to all Covered Persons. 
 All Policies and Procedures shall be
made available to OIG upon request. 
  

	 	C.	 Training and Education 

1. Covered Persons Training. Within 90 days after the Effective Date, Progenity shall develop a written plan (Training Plan) that
outlines the steps Progenity will take to ensure that all Covered Persons receive at least annual training regarding Progenity’s CIA requirements and Compliance Program and the applicable Federal health care program requirements, including the
requirements of the Anti-Kickback Statute and the Stark Law; and that all Arrangements Covered Persons receive at least annual training 

  
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regarding: (i) Arrangements that potentially implicate the Anti-Kickback Statute or the Stark Law, as well as the regulations and other guidance documents related to these statutes;
(ii) Progenity’s policies, procedures, and other requirements relating to Arrangements and Focus Arrangements, including but not limited to the Focus Arrangements Tracking System, the internal review and approval process, and the tracking
of remuneration to and from sources of health care business or referrals required by Section III.D of the CIA; (iii) the personal obligation of each individual involved in the development, approval, management, or review of Progenity’s
Arrangements to know the applicable legal requirements and the Progenity’s policies and procedures; (iv) the legal sanctions under the Anti-Kickback Statute and the Stark Law; and (v) examples of violations of the Anti-Kickback
Statute and the Stark Law.  
 The Training Plan shall include information regarding
the following: training topics, identification of Covered Persons and Arrangements Covered Persons required to attend each training session, length of the training sessions(s), schedule for training, and format of the training. Progenity shall
furnish training to its Covered Persons and Arrangements Covered Persons pursuant to the Training Plan during each Reporting Period. 
 2.
Board Training. In addition to the training described in Section III.C.1, within 90 days after the Effective Date, each member of the Board shall receive training regarding the corporate governance responsibilities of board members, and the
responsibilities of board members with respect to review and oversight of the Compliance Program. Specifically, the training shall address the unique responsibilities of health care Board members, including the risks, oversight areas, and strategic
approaches to conducting oversight of a health care entity. This training may be conducted by an outside compliance expert hired by the Board and should include a discussion of the OIG’s guidance on Board member responsibilities. 

New members of the Board shall receive the Board training described above within 30 days after becoming a member or within 90 days after the
Effective Date, whichever is later. 
 3. Training Records. Progenity shall make available to OIG, upon request, training materials
and records verifying the training described in Sections III.C.1 and IIIC.2 has been provided as required. 

  
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	 	D.	 Compliance with the Anti-Kickback Statute and Stark Law 

1. Focus Arrangements Procedures. Within 90 days after the Effective Date, Progenity shall create procedures reasonably designed to
ensure that each existing and new or renewed Focus Arrangement does not violate the Anti-Kickback Statute and/or the Stark Law or the regulations and guidance related to these statutes (Focus Arrangements Procedures). These procedures shall include
the following: 
  

	 	a.	 creating and maintaining a centralized tracking system for all existing and new or renewed Focus Arrangements
and the information specified in Sections III.D.1.b-f below for each existing and new or renewed Focus Arrangement (Focus Arrangements Tracking System); 

 

	 	b.	 documenting the names and positions of the Arrangements Covered Person(s) involved in the negotiation, review,
and approval of all Focus Arrangements; 

  

	 	c.	 tracking all remuneration to and from all parties to Focus Arrangements, to ensure that the parties are
complying with the financial terms of the Focus Arrangements and that the Focus Arrangements are commercially reasonable; 

  

	 	d.	 documenting all fair market value determination(s) for any Focus Arrangement, including the fair market value
amount or range and corresponding time period(s), the date(s) of completion of the fair market valuation(s), the individuals or entities that determined the fair market value amount or range, and the names and positions of the Covered Person(s) who
received and/or were otherwise involved with the fair market value determination(s); 

  

	 	e.	 tracking service and activity logs to ensure that parties to the Focus Arrangement are performing the services
required under the applicable Focus Arrangement(s) (if applicable); 

  
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	 	f.	 monitoring the use of leased space, medical supplies, medical devices, equipment, or other patient care items
to ensure that such use is consistent with the terms of the applicable Focus Arrangement(s) (if applicable); 

  

	 	g.	 establishing and implementing a written review and approval process for Focus Arrangements, the purpose of
which is to ensure that all existing and new or renewed Focus Arrangements do not violate the Anti-Kickback Statute and Stark Law, and that includes at least the following: (i) a legal review of all Focus Arrangements by counsel with expertise
in the Anti-Kickback Statute and Stark Law, (ii) a process for specifying and documenting the business need or business rationale for all Focus Arrangements, and (iii) a process for determining and documenting the fair market value of the
remuneration specified in the Focus Arrangement; 

  

	 	h.	 ensuring that all existing Focus Arrangements are subject to the review and approval process described in
Section III.D.1.g above; 

  

	 	i.	 requiring the Compliance Officer to review the Focus Arrangements Tracking System, internal review and approval
process, and other Focus Arrangements Procedures on at least an annual basis and to provide a report on the results of such review to the Compliance Committee; and 

 

	 	j.	 implementing effective responses when suspected violations of the Anti-Kickback Statute and Stark Law are
discovered, including disclosing Reportable Events and quantifying and repaying Overpayments pursuant to Sections III.J and III.K when appropriate. 

2. New or Renewed Focus Arrangements. No later than 90 days after the Effective Date, and prior to entering into new Focus Arrangements
or renewing existing Focus Arrangements, in addition to complying with the Focus Arrangements 

  
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Procedures set forth above, Progenity shall comply with the following requirements (Focus Arrangements Requirements): 
  

	 	a.	 Ensure that all new or renewed written Focus Arrangements are signed by Progenity and the other party(ies) to
the Focus Arrangement prior to the payment or receipt of any remuneration pursuant to the Focus Arrangement; 

  

	 	b.	 Ensure that all new or renewed Focus Arrangements have been subject to the written review and approval process
described in Section III.D.1.g prior to the payment or receipt of any remunerations pursuant to the Focus Arrangement, and that Progenity maintains appropriate documentation of the review and approval of such Focus Arrangement; and

  

	 	c.	 Include in any new or renewed written agreement a certification by the parties to the Focus Arrangement that
the parties shall not violate the Anti-Kickback Statute and the Stark Law with respect to the performance of the Arrangement. 

3. Records Retention and Access. Progenity shall retain and make available to OIG, upon request, the Focus Arrangements Tracking System
and all supporting documentation of the Focus Arrangements subject to this Section and, to the extent available, all non-privileged communications related to the Focus Arrangements and the actual performance
of the duties under the Focus Arrangements.  
  

	 	E.	 Review Procedures 

1. General Description. 
  

	 	a.	 Engagement of Independent Review Organization. Within 90 days after the Effective Date, Progenity shall
engage an entity (or entities), such as an accounting, auditing or consulting firm, to perform the claims review described in Section III.E.3 and, within 90 days after the Effective Date, Progenity shall engage a law or consulting firm or a lawyer
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the arrangements review described in Section III.E.2. The entity (or entities) engaged to perform the claims review and the arrangements review are referred to hereinafter as the
“Independent Review Organization” or “IRO.” The applicable requirements relating to the IRO are outlined in Appendix A to this CIA, which is incorporated by reference. 

 

	 	b.	 Retention of Records. The IRO and Progenity shall retain and make available to OIG, upon request, all
work papers, supporting documentation, correspondence, and draft reports (those exchanged between the IRO and Progenity) related to the reviews. 

  

	 	c.	 Responsibilities and Liabilities. Nothing in this Section III.E affects Progenity’s
responsibilities or liabilities under any criminal, civil, or administrative laws or regulations applicable to any Federal health care program including, but not limited to, the Anti-Kickback Statute and/or the Stark Law. 

 

	 	d.	 Access to Records and Personnel. Progenity shall ensure that the IRO has access to all records and
personnel necessary to complete the reviews listed in this Section III.E and that all records furnished to the IRO are accurate and complete. 

2. Arrangements Review. The IRO shall perform an Arrangements Review and prepare an Arrangements Review Report as outlined in Appendix B
to this CIA, which is incorporated by reference. 
 3. Claims Review. The IRO shall review claims submitted by Progenity and
reimbursed by the Medicare and Medicaid programs, to determine whether the medical necessity of the items and services furnished was appropriately documented and whether the claims were correctly coded, submitted and reimbursed (Claims Review) and
shall prepare a Claims Review Report, as outlined in Appendix C to this CIA, which is incorporated by reference. 

  
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 4. Certifications. The IRO for the Claims Reviews shall include in its report(s) to
Progenity a certification that the IRO has (a) evaluated its professional independence and objectivity with respect to the reviews required under this Section III.E and (b) concluded that it is, in fact, independent and objective, in
accordance with the requirements specified in Appendix A to this CIA. The IRO’s certification shall include a summary of all current and prior engagements between Progenity and the IRO. The IRO for the Arrangements Review shall include in its
report(s) to Progenity a certification that the IRO (a) does not currently represent or is not currently employed or engaged by Progenity and (b) does not have a current or prior relationship to Progenity or its owners, officers, or
directors that would cause a reasonable person to question the IRO’s objectivity in performing the reviews required by Section III.E. The IRO’s certification shall include a summary of any current and prior relationships between Progenity
or its owners, officers, or directors and the IRO. 
 F. Risk Assessment and Internal Review Process 

Within 90 days after the Effective Date, Progenity shall develop and implement a centralized annual risk assessment and internal review process
to identify and address risks associated with Arrangements (as defined in Section II.C.1 above) and Progenity’s participation in the Federal health care programs, including but not limited to the risks associated with the submission of claims
for items and services furnished to Medicare and Medicaid program beneficiaries. The Compliance Committee shall be responsible for implementation and oversight of the risk assessment and internal review process. The risk assessment and internal
review process shall be conducted at least annually and shall require Progenity to: (1) identify and prioritize risks, (2) develop internal audit work plans related to the identified risk areas, (3) implement the internal audit work
plans, (4) develop corrective action plans in response to the results of any internal audits performed, and (5) track the implementation of the corrective action plans in order to assess the effectiveness of such plans. Progenity shall
maintain the risk assessment and internal review process for the term of the CIA. 
 G. Disclosure Program 

Within 90 days after the Effective Date, Progenity shall establish a Disclosure Program that includes a mechanism
(e.g., a toll-free compliance telephone line) to enable individuals to disclose, to the Compliance Officer or some other person who is not in the disclosing individual’s chain of command, any identified issues or questions associated

  
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with Progenity’s policies, conduct, practices, or procedures with respect to a Federal health care program believed by the individual to be a potential violation of criminal, civil, or
administrative law. Progenity shall appropriately publicize the existence of the disclosure mechanism (e.g., via periodic e-mails to employees or by posting the information in prominent common areas).

 The Disclosure Program shall emphasize a nonretribution, nonretaliation policy, and shall include a reporting mechanism for anonymous
communications for which appropriate confidentiality shall be maintained. The Disclosure Program also shall include a requirement that all of Progenity’s Covered Persons shall be expected to report suspected violations of any Federal health
care program requirements to the Compliance Officer or other appropriate individual designated by Progenity. Upon receipt of a disclosure, the Compliance Officer (or designee) shall gather all relevant information from the disclosing individual. The
Compliance Officer (or designee) shall make a preliminary, good faith inquiry into the allegations set forth in every disclosure to ensure that he or she has obtained all of the information necessary to determine whether a further review should be
conducted. For any disclosure that is sufficiently specific so that it reasonably: (1) permits a determination of the appropriateness of the alleged improper practice; and (2) provides an opportunity for taking corrective action, Progenity
shall conduct an internal review of the allegations set forth in the disclosure and ensure that proper follow-up is conducted. 

The Compliance Officer (or designee) shall maintain a disclosure log and shall record all disclosures, whether or not related to a potential
violation of criminal, civil, or administrative law related to the Federal health care programs, in the disclosure log within two business days of receipt of the disclosure. The disclosure log shall include a summary of each disclosure received
(whether anonymous or not), the individual or department responsible for reviewing the disclosure, the status of the review, and any corrective action taken in response to the review. 

H. Ineligible Persons 
 1.
Definitions. For purposes of this CIA: 
  

	 	a.	 an “Ineligible Person” shall include an individual or entity who: 

  
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	 	i.	 is currently excluded from participation in any Federal health care program; or 

 

	 	ii.	 has been convicted of a criminal offense that falls within the scope of 42 U.S.C. § 1320a-7(a), but has not yet been excluded. 

  

	 	b.	 “Exclusion List” means the HHS/OIG List of Excluded Individuals/Entities (LEIE) (available through
the Internet at http://www.oig.hhs.gov). 

 2. Screening Requirements. Progenity shall ensure that all prospective
and current Covered Persons are not Ineligible Persons, by implementing the following screening requirements. 
  

	 	a.	 Progenity shall screen all prospective Covered Persons against the Exclusion List prior to engaging their
services and, as part of the hiring or contracting process or medical staff credentialing process, shall require such Covered Persons to disclose whether they are Ineligible Persons. 

 

	 	b.	 Progenity shall screen all current Covered Persons against the Exclusion List within 90 days after the
Effective Date and on a monthly basis thereafter. 

  

	 	c.	 Progenity shall implement a policy requiring all Covered Persons to disclose immediately if they become an
Ineligible Person. 

 Nothing in this Section III.H affects Progenity’s responsibility to refrain from (and liability
for) billing Federal health care programs for items or services furnished, ordered, or prescribed by an excluded person. Progenity understands that items or services furnished, ordered, or prescribed by excluded persons are not payable by Federal
health care programs and that Progenity may be liable for overpayments and/or criminal, civil, and administrative sanctions for employing or contracting with an excluded person regardless of whether Progenity meets the requirements of Section III.H.

  
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 3. Removal Requirement. If Progenity has actual notice that a Covered Person has
become an Ineligible Person, Progenity shall remove such Covered Person from responsibility for, or involvement with, Progenity’s business operations related to the Federal health care program(s) from which such Covered Person has been excluded
and shall remove such Covered Person from any position for which the Covered Person’s compensation or the items or services furnished, ordered, or prescribed by the Covered Person are paid in whole or part, directly or indirectly, by any
Federal health care program(s) from which the Covered Person has been excluded at least until such time as the Covered Person is reinstated into participation in such Federal health care program(s). 

4. Pending Charges and Proposed Exclusions. If Progenity has actual notice that a Covered Person is charged with a criminal offense that
falls within the scope of 42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(1)-(3), or is proposed for exclusion during the Covered Person’s employment or contract term
or during the term of a physician’s or other practitioner’s medical staff privileges, Progenity shall take all appropriate actions to ensure that the responsibilities of that Covered Person have not and shall not adversely affect the
quality of care rendered to any beneficiary or the accuracy of any claims submitted to any Federal health care program. 
 I. Notification
of Government Investigation or Legal Proceeding 
 Within 30 days after discovery, Progenity shall notify OIG, in writing, of any ongoing
investigation or legal proceeding known to Progenity conducted or brought by a governmental entity or its agents involving an allegation that Progenity has committed a crime or has engaged in fraudulent activities. This notification shall include a
description of the allegation, the identity of the investigating or prosecuting agency, and the status of such investigation or legal proceeding. Progenity shall also provide written notice to OIG within 30 days after the resolution of the matter,
and shall provide OIG with a description of the findings and/or results of the investigation or proceeding, if any. 
 J. Overpayments

 1. Definition of Overpayments. An “Overpayment” means any funds that Progenity receives or retains under any Federal
health care program to which Progenity, after applicable reconciliation, is not entitled to under such Federal health care program. 

  
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 2. Overpayment Policies and Procedures. Within 90 days after the Effective Date,
Progenity shall develop and implement written policies and procedures regarding the identification, quantification and repayment of Overpayments received from any Federal health care program. 

K. Reportable Events 
 1.
Definition of Reportable Event. For purposes of this CIA, a “Reportable Event” means anything that involves: 
  

	 	a.	 a substantial Overpayment; 

 

	 	b.	 a matter that a reasonable person would consider a probable violation of criminal, civil, or administrative
laws applicable to any Federal health care program for which penalties or exclusion may be authorized; 

  

	 	c.	 the employment of or contracting with a Covered Person who is an Ineligible Person as defined by Section
III.H.1.a; or 

  

	 	d.	 the filing of a bankruptcy petition by Progenity. 

A Reportable Event may be the result of an isolated event or a series of occurrences. 

2. Reporting of Reportable Events. If Progenity determines (after a reasonable opportunity to conduct an appropriate review or
investigation of the allegations) through any means that there is a Reportable Event, Progenity shall notify OIG, in writing, within 30 days after making the determination that the Reportable Event exists. 

3. Reportable Events under Section III.K.1.a. and III.K.1.b. For Reportable Events under Section III.K.1.a and b, the report to OIG
shall include: 
  

	 	a.	 a complete description of all details relevant to the Reportable Event, including, at a minimum, the types of
claims, transactions, or other conduct giving rise to the Reportable Event; the period during which the conduct occurred; and the 

  
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names of entities and individuals believed to be implicated, including an explanation of their roles in the Reportable Event; 

 

	 	b.	 a statement of the Federal criminal, civil or administrative laws that are probably violated by the Reportable
Event, if any; 

  

	 	c.	 the Federal health care programs affected by the Reportable Event; 

 

	 	d.	 a description of the steps taken by Progenity to identify and quantify any Overpayments; and

  

	 	e.	 a description of Progenity’s actions taken to correct the Reportable Event and prevent it from recurring.

 If the Reportable Event involves an Overpayment, within 60 days of identification of the Overpayment, Progenity shall
repay the Overpayment, in accordance with the requirements of 42 U.S.C. § 1320a-7k(d) and any applicable regulations and Centers for Medicare and Medicaid (CMS) guidance and provide OIG with a copy of the
notification and repayment. 
 4. Reportable Events under Section III.K.1.c. For Reportable Events under Section III.K.1.c, the report
to OIG shall include: 
  

	 	a.	 the identity of the Ineligible Person and the job duties performed by that individual; 

 

	 	b.	 the dates of the Ineligible Person’s employment or contractual relationship or medical staff
membership; 

  

	 	c.	 a description of the Exclusion List screening that Progenity completed before and/or during the Ineligible
Person’s employment or contract or medical staff membership and any flaw or breakdown in the Ineligible Persons screening process 

  
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that led to the hiring or contracting with or credentialing the Ineligible Person; 

  

	 	d.	 a description of how the Ineligible Person was identified; and 

 

	 	e.	 a description of any corrective action implemented to prevent future employment or contracting with or
credentialing an Ineligible Person. 

 5. Reportable Events under Section III.K.1.d. For Reportable Events under
Section III.K.1.d, the report to the OIG shall include documentation of the bankruptcy filing and a description of any Federal health care program authorities implicated. 

6. Reportable Events Involving the Stark Law. Notwithstanding the reporting requirements outlined above, any Reportable Event
that involves solely a probable violation of the Stark Law should be submitted by Progenity to the Centers for Medicare & Medicaid Services (CMS) through the self-referral disclosure protocol (SRDP), with a copy to the OIG. If
Progenity identifies a probable violation of the Stark Law and repays the applicable Overpayment directly to the CMS contractor, then Progenity is not required by this Section III.K to submit the Reportable Event to CMS through the SRDP. 

IV. SUCCESSOR LIABILITY 
 In the
event that, after the Effective Date, Progenity proposes to (a) sell any or all of its business, business units, or locations (whether through a sale of assets, sale of stock, or other type of transaction) relating to the furnishing of items or
services that may be reimbursed by a Federal health care program; or (b) purchase or establish a new business, business unit, or location relating to the furnishing of items or services that may be reimbursed by a Federal health care program,
the CIA shall be binding on the purchaser of any business, business unit, or location and any new business, business unit, or location (and all Covered Persons at each new business, business unit, or location) shall be subject to the applicable
requirements of this CIA, unless otherwise determined and agreed to in writing by OIG. Progenity shall give notice of such sale or purchase to OIG within 30 days following the closing of the transaction. 

  
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 If, in advance of a proposed sale or proposed purchase, Progenity wishes to obtain a
determination by OIG that the proposed purchaser or the proposed acquisition will not be subject to the requirements of the CIA, Progenity must notify OIG in writing of the proposed sale or purchase at least 30 days in advance. This notification
shall include a description of the business, business unit, or location to be sold or purchased, a brief description of the terms of the transaction and, in the case of a proposed sale, the name and contact information of the prospective purchaser.

 V. IMPLEMENTATION AND ANNUAL REPORTS 

A. Implementation Report 

Within 120 days after the Effective Date, Progenity shall submit a written report to OIG summarizing the status of its implementation of the
requirements of this CIA (Implementation Report). The Implementation Report shall, at a minimum, include: 
 1. the name, business address,
business phone number, and position description of the Compliance Officer required by Section III.A, and a summary of other noncompliance job responsibilities the Compliance Officer may have; 

2. the names and positions of the members of the Compliance Committee required by Section III.A; 

3. the names of the Board members who are responsible for satisfying the Board compliance obligations described in Section III.A.3; 

4. the names and positions of the Certifying Employees required by Section III.A.4 and a copy of the written process for Certifying Employees
to follow in order to complete the certification required by Section III.A.4; 
 5. a list of all Policies and Procedures required by Section
III.B; 
 6. the Training Plan required by Section III.C.1 and a description of the Board training required by Section III.C.2 (including a
summary of the topics covered, the length of the training, and when the training was provided); 

  
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 7. a description of (a) the Focus Arrangements Tracking System required by Section
III.D.1.a, (b) the internal review and approval process required by Section III.D.1.g; and (c) the tracking and monitoring procedures and other Focus Arrangements Procedures required by Section III.D.1; 

8. the following information regarding the IRO(s): (a) identity, address, and phone number; (b) a copy of the engagement letter;
(c) information to demonstrate that the IRO has the qualifications outlined in Appendix A to this CIA; and (d) a certification from the IRO regarding its professional independence and objectivity with respect to Progenity or that it does
not have a prohibited relationship with Progenity as set forth in Section III.E.4, that includes a summary of all current and prior engagements or relationships between Progenity and the IRO, as applicable; 

9. a description of the risk assessment and internal review process required by Section III.F; 

10. a description of the Disclosure Program required by Section III.G; 

11. a description of the Ineligible Persons screening and removal process required by Section III.H; 

12. a copy of Progenity’s policies and procedures regarding the identification, quantification and repayment of Overpayments required by
Section III.J; 
 13. a description of Progenity’s corporate structure, including identification of any individual owners in addition to
its parent and sister companies, subsidiaries, and their respective lines of business;  

14. a list of all of Progenity’s locations (including locations and mailing addresses), the corresponding name under which each location
is doing business, and each location’s Medicare and state Medicaid program provider number(s) and/or supplier number(s); and 
 15. the
certifications required by Section V.C. 

  
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 B. Annual Reports 

Progenity shall submit to OIG a report on its compliance with the CIA requirements for each of the five Reporting Periods (Annual
Report). Each Annual Report shall include, at a minimum, the following information: 
 1. any change in the identity, position description,
or other noncompliance job responsibilities of the Compliance Officer; a current list of the Compliance Committee members, a current list of the Board members who are responsible for satisfying the Board compliance obligations, and a current list of
the Certifying Employees, along with the identification of any changes made during the Reporting Period to the Compliance Committee, Board, and Certifying Employees; 

2. a description of any changes to the written process for Certifying Employees to follow in order to complete the certification required by
Section III.A.4; 
 3. the dates of each report made by the Compliance Officer to the Board (written documentation of such reports shall be
made available to OIG upon request); 
 4. the Board resolution required by Section III.A.3 and a description of the documents and other
materials reviewed by the Board, as well as any additional steps taken, in its oversight of the compliance program and in support of making the resolution; 

5. a list of any new or revised Policies and Procedures developed during the Reporting Period; 

6. a description of any changes to Progenity’s Training Plan developed pursuant to Section III.C, and a summary of any Board training
provided during the Reporting Period; 
 7. a description of (a) any changes to the Focus Arrangements Tracking System required by
Section III.D.1.a; (b) any changes to the internal review and approval process required by Section III.D.1.g; and (c) any changes to the tracking and monitoring procedures and other Arrangements Procedures required by Section III.D.1; 

  
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 8. a complete copy of all reports prepared pursuant to Section III.E and Progenity’s
response to the reports, along with corrective action plan(s) related to any issues raised by the reports, including Progenity’s determination of whether the CMS overpayment rule requires the repayment of an extrapolated Overpayment (as defined
in Appendix B); 
 9. a certification from the IRO regarding its professional independence and objectivity with respect to Progenity or that
the IRO does not have a prohibited relationship with Progenity, as described in Section III.E.4, including a summary of all current and prior engagements or relationships between Progenity and the IRO, as applicable; 

10. a description of any changes to the risk assessment and internal review process required by Section III.F, including the reasons for such
changes; 
 11. a summary of the following components of the risk assessment and internal review process during the Reporting Period:
(a) work plans developed, (b) internal audits performed, (c) corrective action plans developed in response to internal audits, and (d) steps taken to track the implementation of the corrective action plans. Copies of any work
plans, internal audit reports, and corrective actions plans shall be made available to OIG upon request; 
 12. a summary of the disclosures
in the disclosure log required by Section III.G that: (a) relate to Federal health care programs; or (b) involve allegations of conduct that may involve illegal remuneration or inappropriate referrals in violation of the Anti-Kickback
Statute or Stark law (the complete disclosure log shall be made available to OIG upon request); 
 13. a description of any changes to the
Ineligible Persons screening and removal process required by Section III.H, including the reasons for such changes; 
 14. a summary
describing any ongoing investigation or legal proceeding required to have been reported pursuant to Section III.I. The summary shall include a description of the allegation, the identity of the investigating or prosecuting agency, and the status of
such investigation or legal proceeding; 

  
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 15. a description of any changes to the Overpayment policies and procedures required by
Section III.J, including the reasons for such changes; 
 16. a summary of Reportable Events (as defined in Section III.K) identified during
the Reporting Period; 
 17. a description of all changes to the most recently provided list of Progenity’s locations (including
addresses) as required by Section V.A.14; 
 18. a description of any changes to Progenity’s corporate structure, including any
individual owners, parent and sister companies, subsidiaries, and their respective lines of business; and 

19. the certifications required by Section V.C. 

The first Annual Report shall be received by OIG no later than 60 days after the end of the first Reporting Period. Subsequent Annual Reports
shall be received by OIG no later than the anniversary date of the due date of the first Annual Report. 
 C. Certifications 

1. Certifying Employees. In each Annual Report, Progenity shall include the certifications of Certifying Employees as required by
Section III.A.4; 
 2. Compliance Officer and Chief Executive Officer. The Implementation Report and each Annual Report shall include
a certification by the Compliance Officer and Chief Executive Officer that: 
  

	 	a.	 to the best of his or her knowledge, except as otherwise described in the report, Progenity is in compliance
with all of the requirements of this CIA; 

  

	 	b.	 to the best of his or her knowledge, Progenity has implemented procedures reasonably designed to ensure that
all Focus Arrangements do not violate the Anti-Kickback Statute and Stark Law, including the Focus Arrangements Procedures required in Section III.D of the CIA; 

  
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	 	c.	 to the best of his or her knowledge, Progenity has fulfilled the requirements for New and Renewed Focus
Arrangements under Section III.D.2 of the CIA; 

  

	 	d.	 he or she has reviewed the report and has made reasonable inquiry regarding its content and believes that the
information in the report is accurate and truthful; and 

  

	 	e.	 he or she understands that the certification is being provided to and relied upon by the United States.

 3. Chief Financial Officer. The first Annual Report shall include a certification by the Chief Financial Officer
that, to the best of his or her knowledge, Progenity has complied with its obligations under the Settlement Agreement: (a) not to resubmit to any Federal health care program payors any previously denied claims related to the Covered Conduct
addressed in the Settlement Agreement, and not to appeal any such denials of claims; (b) not to charge to or otherwise seek payment from federal or state payors for unallowable costs (as defined in the Settlement Agreement); (c) to identify and
adjust any past charges or claims for unallowable costs; and (d) he or she understands that the certification is being provided to and relied upon by the United States. 

D. Designation of Information 

Progenity shall clearly identify any portions of its submissions that it believes are trade secrets, or information that is commercial or
financial and privileged or confidential, and therefore potentially exempt from disclosure under the Freedom of Information Act (FOIA), 5 U.S.C. § 552. Progenity shall refrain from identifying any information as exempt from disclosure if that
information does not meet the criteria for exemption from disclosure under FOIA. 
 VI. NOTIFICATIONS AND SUBMISSION OF REPORTS 

Unless otherwise stated in writing after the Effective Date, all notifications and reports required under this CIA shall be submitted to the
following entities: 

  
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 OIG: 

Administrative and Civil Remedies Branch 

Office of Counsel to the Inspector General 

Office of Inspector General 

U.S. Department of Health and Human Services 

Cohen Building, Room 5527 
 330
Independence Avenue, S.W. 
 Washington, DC 20201 

Telephone: 202.619.2078 

Facsimile: 202.205.0604 

Progenity: 
 Hutan
Hashemi 
 Chief Compliance Officer 

Progenity, Inc. 
 4330 La Jolla
Village Drive, Suite 200 
 San Diego, CA 92122 

Unless otherwise specified, all notifications and reports required by this CIA may be made by overnight mail, hand delivery, or other means,
provided that there is proof that such notification was received. For purposes of this requirement, internal facsimile confirmation sheets do not constitute proof of receipt. Upon request by OIG, Progenity may be required to provide OIG with an
additional copy of each notification or report required by this CIA, in OIG’s requested format (electronic or paper). 
 VII. OIG INSPECTION,
AUDIT, AND REVIEW RIGHTS 
 In addition to any other rights OIG may have by statute, regulation, or contract, OIG or its duly
authorized representative(s) may conduct interviews, examine and/or request copies of Progenity’s books, records, and other documents and supporting materials, and conduct on-site reviews of any of
Progenity’s locations for the purpose of verifying and evaluating: (a) Progenity’s compliance with the terms of this CIA; and (b) Progenity’s compliance with the requirements of the Federal health care programs. The

  
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documentation described above shall be made available by Progenity to OIG or its duly authorized representative(s) at all reasonable times for inspection, audit, and/or reproduction. Furthermore,
for purposes of this provision, OIG or its duly authorized representative(s) may interview any of Progenity’s owners, employees, contractors, and directors who consent to be interviewed at
the individual’s place of business during normal business hours or at such other place and time as may be mutually agreed upon between the individual and OIG. Progenity shall assist OIG or its duly authorized representative(s) in contacting and
arranging interviews with such individuals upon OIG’s request. Progenity’s owners, employees, contractors, and directors may elect to be interviewed with or without a representative of Progenity present. 

VIII. DOCUMENT AND RECORD RETENTION 

Progenity shall maintain for inspection all documents and records relating to reimbursement from the Federal health care programs and to
compliance with this CIA for six years (or longer if otherwise required by law) from the Effective Date. 
 IX. DISCLOSURES 

Consistent with HHS’s FOIA procedures, set forth in 45 C.F.R. Part 5, OIG shall make a reasonable effort to notify Progenity prior to any
release by OIG of information submitted by Progenity pursuant to its obligations under this CIA and identified upon submission by Progenity as trade secrets, or information that is commercial or financial and privileged or confidential, under the
FOIA rules. With respect to such releases, Progenity shall have the rights set forth at 45 C.F.R. § 5.42(a). 
 X. BREACH AND DEFAULT
PROVISIONS 
 Progenity is expected to fully and timely comply with all of its CIA obligations. 

A. Stipulated Penalties for Failure to Comply with Certain Obligations 

As a contractual remedy, Progenity and OIG hereby agree that failure to comply with certain obligations as set forth in this CIA may lead to
the imposition of the following monetary penalties (hereinafter referred to as “Stipulated Penalties”) in accordance with the following provisions. 

  
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 1. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the
obligation became due) per obligation for each day Progenity fails to establish, implement or comply with any of the following obligations as described in Sections III: 
  

	 	a.	 a Compliance Officer; 

 

	 	b.	 a Compliance Committee; 

 

	 	c.	 the Board compliance obligations as required by Section III.A.3.; 

 

	 	d.	 the management certification obligations and the development and implementation of a written process for
Certifying Employees, as required by Section III.A.4; 

  

	 	e.	 written Policies and Procedures; 

 

	 	f.	 the development of a written training plan and the training and education of Covered Persons, Arrangements
Covered Persons, and Board members; 

  

	 	g.	 the Focus Arrangements Procedures and/or Focus Arrangements Requirements; 

 

	 	h.	 a risk assessment and internal review process; 

 

	 	i.	 a Disclosure Program; 

 

	 	j.	 Ineligible Persons screening and removal requirements; 

 

	 	k.	 notification of Government investigations or legal proceedings; 

 

	 	l.	 policies and procedures regarding the repayment of Overpayments; and 

  
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	 	m.	 reporting of Reportable Events. 

2. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day Progenity
fails to engage and use an IRO, as required by Section III.E, Appendix A, Appendix B, or Appendix C. 
 3. A Stipulated Penalty of $2,500
(which shall begin to accrue on the day after the date the obligation became due) for each day Progenity fails to timely submit (a) a complete Implementation Report or Annual Report, (b) a certification to OIG in accordance with the
requirements of Section V, or (c) a complete response to any request for information from OIG. 
 4. A Stipulated Penalty of $2,500
(which shall begin to accrue on the day after the date the obligation became due) for each day Progenity fails to submit any Arrangements Review Report in accordance with the requirements of Section III.E and Appendix B. 

5. A Stipulated Penalty of $2,500 (which shall begin to accrue on the day after the date the obligation became due) for each day Progenity
fails to submit any Claims Review Report in accordance with the requirements of Section III.E and Appendix C or fails to repay any Overpayment identified by the IRO as required by Appendix C. 

6. A Stipulated Penalty of $1,500 for each day Progenity fails to grant access as required in Section VII. (This Stipulated Penalty shall begin
to accrue on the date Progenity fails to grant access.) 
 7. A Stipulated Penalty of $50,000 for each false certification submitted by or on
behalf of Progenity as part of its Implementation Report, any Annual Report, additional documentation to a report (as requested by the OIG), or otherwise required by this CIA. 

8. A Stipulated Penalty of $2,500 for each day Progenity fails to grant the IRO access to all records and personnel necessary to complete the
reviews listed in Section III.E., and for each day Progenity fails to furnish accurate and complete records to the IRO, as required by Section III.E and Appendix A. 

  
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 9. A Stipulated Penalty of $1,000 for each day Progenity fails to comply fully and
adequately with any obligation of this CIA. OIG shall provide notice to Progenity stating the specific grounds for its determination that Progenity has failed to comply fully and adequately with the CIA obligation(s) at issue and steps Progenity
shall take to comply with the CIA. (This Stipulated Penalty shall begin to accrue 10 business days after the date Progenity receives this notice from OIG of the failure to comply.) A Stipulated Penalty as described in this Subsection shall not be
demanded for any violation for which OIG has sought a Stipulated Penalty under Subsections 1-8 of this Section. 

B. Timely Written Requests for Extensions 

Progenity may, in advance of the due date, submit a timely written request for an extension of time to perform any act or file any notification
or report required by this CIA. Notwithstanding any other provision in this Section, if OIG grants the timely written request with respect to an act, notification, or report, Stipulated Penalties for failure to perform the act or file the
notification or report shall not begin to accrue until one day after Progenity fails to meet the revised deadline set by OIG. Notwithstanding any other provision in this Section, if OIG denies such a timely written request, Stipulated Penalties for
failure to perform the act or file the notification or report shall not begin to accrue until three business days after Progenity receives OIG’s written denial of such request or the original due date, whichever is later. A “timely written
request” is defined as a request in writing received by OIG at least five days prior to the date by which any act is due to be performed or any notification or report is due to be filed. 

C. Payment of Stipulated Penalties 

1. Demand Letter. Upon a finding that Progenity has failed to comply with any of the obligations described in Section X.A and
after determining that Stipulated Penalties are appropriate, OIG shall notify Progenity of: (a) Progenity’s failure to comply; and (b) OIG’s exercise of its contractual right to demand payment of the Stipulated Penalties. (This
notification shall be referred to as the “Demand Letter.”) 
 2. Response to Demand Letter. Within 10 business days after
the receipt of the Demand Letter, Progenity shall either: (a) cure the breach to OIG’s satisfaction and pay the applicable Stipulated Penalties or (b) request a hearing before an HHS administrative law judge (ALJ) to
dispute OIG’s determination of noncompliance, pursuant to the agreed upon provisions set forth below in Section X.E. In the event 

  
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Progenity elects to request an ALJ hearing, the Stipulated Penalties shall continue to accrue until Progenity cures, to OIG’s satisfaction, the alleged breach in dispute. Failure to respond
to the Demand Letter in one of these two manners within the allowed time period shall be considered a material breach of this CIA and shall be grounds for exclusion under Section X.D. 

3. Form of Payment. Payment of the Stipulated Penalties shall be made by electronic funds transfer to an account specified by OIG in the
Demand Letter. 
 4. Independence from Material Breach Determination. Except as set forth in Section X.D.1.c, these provisions for
payment of Stipulated Penalties shall not affect or otherwise set a standard for OIG’s decision that Progenity has materially breached this CIA, which decision shall be made at OIG’s discretion and shall be governed by the provisions in
Section X.D, below. 
 D. Exclusion for Material Breach of this CIA 

1. Definition of Material Breach. A material breach of this CIA means: 

 

	 	a.	 a failure by Progenity to report a Reportable Event, take corrective action, or make the appropriate refunds,
as required in Section III.K; 

  

	 	b.	 repeated violations or a flagrant violation of any of the obligations under this CIA, including, but not
limited to, the obligations addressed in Section X.A; 

  

	 	c.	 a failure to respond to a Demand Letter concerning the payment of Stipulated Penalties in accordance with
Section X.C; or 

  

	 	d.	 a failure to engage and use an IRO in accordance with Section III.E, Appendix A, Appendix B, or Appendix C.

 2. Notice of Material Breach and Intent to Exclude. The parties agree that a material breach of this CIA by
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 Progenity’s exclusion from participation in the Federal health care programs. The length of the
exclusion shall be in the OIG’s discretion, but not more than five years per material breach. Upon a determination by OIG that Progenity has materially breached this CIA and that exclusion is the appropriate remedy, OIG shall notify Progenity
of: (a) Progenity’s material breach; and (b) OIG’s intent to exercise its contractual right to impose exclusion. (This notification shall be referred to as the “Notice of Material Breach and Intent to Exclude.”) 

3. Opportunity to Cure. Progenity shall have 30 days from the date of receipt of the Notice of Material Breach and Intent to Exclude to
demonstrate that: 
  

	 	a.	 the alleged material breach has been cured; or 

 

	 	b.	 the alleged material breach cannot be cured within the 30 day period, but that: (i) Progenity has begun to
take action to cure the material breach; (ii) Progenity is pursuing such action with due diligence; and (iii) Progenity has provided to OIG a reasonable timetable for curing the material breach. 

4. Exclusion Letter. If, at the conclusion of the 30-day period, Progenity fails to satisfy the
requirements of Section X.D.3, OIG may exclude Progenity from participation in the Federal health care programs. OIG shall notify Progenity in writing of its determination to exclude Progenity. (This letter shall be referred to as the
“Exclusion Letter.”) Subject to the Dispute Resolution provisions in Section X.E, below, the exclusion shall go into effect 30 days after the date of Progenity’s receipt of the Exclusion Letter. The exclusion shall have
national effect. Reinstatement to program participation is not automatic. At the end of the period of exclusion, Progenity may apply for reinstatement by submitting a written request for reinstatement in accordance with the provisions at 42 C.F.R.
§§ 1001.3001-.3004. 
 E. Dispute Resolution 

1. Review Rights. Upon OIG’s delivery to Progenity of its Demand Letter or of its Exclusion Letter, and as an agreed-upon
contractual remedy for the resolution of disputes arising under this CIA, Progenity shall be afforded certain review rights comparable to the ones that are provided in 42 U.S.C. § 1320a-7(f) and 42 C.F.R.
Part 1005 as if they applied to the Stipulated Penalties or exclusion sought pursuant to 

  
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this CIA. Specifically, OIG’s determination to demand payment of Stipulated Penalties or to seek exclusion shall be subject to review by an HHS ALJ and, in the event of an appeal, the HHS
Departmental Appeals Board (DAB), in a manner consistent with the provisions in 42 C.F.R. § 1005.2-1005.21. Notwithstanding the language in 42 C.F.R. § 1005.2(c), the request for a hearing involving
Stipulated Penalties shall be made within 10 days after receipt of the Demand Letter and the request for a hearing involving exclusion shall be made within 25 days after receipt of the Exclusion Letter. The procedures relating to the filing of a
request for a hearing can be found at http://www.hhs.gov/dab/divisions/civil/procedures/divisionprocedures.html. 
 2. Stipulated
Penalties Review. Notwithstanding any provision of Title 42 of the United States Code or Title 42 of the Code of Federal Regulations, the only issues in a proceeding for Stipulated Penalties under this CIA shall be: (a) whether Progenity
was in full and timely compliance with the obligations of this CIA for which OIG demands payment; and (b) the period of noncompliance. Progenity shall have the burden of proving its full and timely compliance and the steps taken to cure the
noncompliance, if any. OIG shall not have the right to appeal to the DAB an adverse ALJ decision related to Stipulated Penalties. If the ALJ agrees with OIG with regard to a finding of a breach of this CIA and orders Progenity to pay Stipulated
Penalties, such Stipulated Penalties shall become due and payable 20 days after the ALJ issues such a decision unless Progenity requests review of the ALJ decision by the DAB. If the ALJ decision is properly appealed to the DAB and the DAB upholds
the determination of OIG, the Stipulated Penalties shall become due and payable 20 days after the DAB issues its decision. 
 3. Exclusion
Review. Notwithstanding any provision of Title 42 of the United States Code or Title 42 of the Code of Federal Regulations, the only issues in a proceeding for exclusion based on a material breach of this CIA shall be whether Progenity
was in material breach of this CIA and, if so, whether: 
  

	 	a.	 Progenity cured such breach within 30 days of its receipt of the Notice of Material Breach; or

  

	 	b.	 the alleged material breach could not have been cured within the 30 day period, but that, during the 30 day
period following Progenity’s receipt of the Notice of Material Breach: (i) Progenity had begun to take action to cure the 

  
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34 

	 	
material breach; (ii) Progenity pursued such action with due diligence; and (iii) Progenity provided to OIG a reasonable timetable for curing the material breach. 

For purposes of the exclusion herein, exclusion shall take effect only after an ALJ decision favorable to OIG, or, if the ALJ rules for
Progenity, only after a DAB decision in favor of OIG. Progenity’s election of its contractual right to appeal to the DAB shall not abrogate OIG’s authority to exclude Progenity upon the issuance of an ALJ’s decision in favor of OIG.
If the ALJ sustains the determination of OIG and determines that exclusion is authorized, such exclusion shall take effect 20 days after the ALJ issues such a decision, notwithstanding that Progenity may request review of the ALJ decision by the
DAB. If the DAB finds in favor of OIG after an ALJ decision adverse to OIG, the exclusion shall take effect 20 days after the DAB decision. Progenity shall waive its right to any notice of such an exclusion if a decision upholding the exclusion is
rendered by the ALJ or DAB. If the DAB finds in favor of Progenity, Progenity shall be reinstated effective on the date of the original exclusion. 

4. Finality of Decision. The review by an ALJ or DAB provided for above shall not be considered to be an appeal right arising
under any statutes or regulations. Consequently, the parties to this CIA agree that the DAB’s decision (or the ALJ’s decision if not appealed) shall be considered final for all purposes under this CIA.  

XI. EFFECTIVE AND BINDING AGREEMENT 

Progenity and OIG agree as follows: 

A. This CIA shall become final and binding on the date the final signature is obtained on the CIA. 

B. This CIA constitutes the complete agreement between the parties and may not be amended except by written consent of the parties to this CIA.

 C. OIG may agree to a suspension of Progenity’s obligations under this CIA based on a certification by Progenity that it is no longer
providing health care items or services that will be billed to any Federal health care program and it does not have any ownership or control interest, as defined in 42 U.S.C. §1320a-3, in any entity that
bills any Federal health care program. If Progenity is relieved of its CIA obligations, 

  
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35 

 
Progenity shall be required to notify OIG in writing at least 30 days in advance if Progenity plans to resume providing health care items or services that are billed to any Federal health care
program or to obtain an ownership or control interest in any entity that bills any Federal health care program. At such time, OIG shall evaluate whether the CIA will be reactivated or modified. 

D. All requirements and remedies set forth in this CIA are in addition to and do not affect (1) Progenity’s responsibility to follow
all applicable Federal health care program requirements or (2) the government’s right to impose appropriate remedies for failure to follow applicable Federal health care program requirements. 

E. The undersigned Progenity signatories represent and warrant that they are authorized to execute this CIA. The undersigned OIG signatories
represent that they are signing this CIA in their official capacities and that they are authorized to execute this CIA. 
 F. This CIA may be
executed in counterparts, each of which constitutes an original and all of which constitute one and the same CIA. Electronically-transmitted copies or facsimiles of signatures shall constitute acceptable, binding signatures for purposes of this CIA.

  
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36 

 ON BEHALF OF PROGENITY 

 

					
	 /s/ Clarke Neumann
	 		 	July 21, 2020                    
	Clarke Neumann	 		 	DATE
	General Counsel, Progenity	 		 	
			
	 /s/ Jonathan M. Phillips
	 		 	July 21, 2020                    
	Jonathan M. Phillips	 		 	DATE
	M. Kendall Day	 		 	
	Gibson, Dunn & Crutcher LLP	 		 	
	Counsel for Progenity	 		 	

  
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Corporate Integrity Agreement 
  

37 

 ON BEHALF OF THE OFFICE OF INSPECTOR GENERAL 

OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES 
  

					
	 /s/ Lisa M. Re
	 		 	July 20, 2020                    
	LISA M. RE	 		 	DATE
	Assistant Inspector General for Legal Affairs	 		 	
	Office of Inspector General	 		 	
	U.S. Department of Health and Human Services	 		 	
			
	 /s/ Tamar Terzian
	 		 	July 21, 2020                    
	TAMAR TERZIAN	 		 	DATE
	Senior Counsel	 		 	
	Office of Inspector General	 		 	
	U.S. Department of Health and Human Services	 		 	

  
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38 

 APPENDIX A 

INDEPENDENT REVIEW ORGANIZATION 
 This
Appendix contains the requirements relating to the Independent Review Organization (IRO) required by Section III.E of the CIA. 
 A. IRO Engagement

 1. Progenity shall engage an IRO to perform the Claims Review that possesses the qualifications set forth in Paragraph B, below, to
perform the responsibilities in Paragraph C, below. The IRO shall conduct the Claims Review in a professionally independent and objective fashion, as set forth in Paragraph E. 

2. Progenity shall engage an IRO to perform the Arrangements Review that possesses the qualifications set forth in Paragraph B, below, to
perform the responsibilities in Paragraph C, below. The IRO shall not have a prohibited relationship to Progenity as set forth in Paragraph F. 

3. Within 30 days after OIG receives the information identified in Section V.A.8 of the CIA or any additional information submitted by
Progenity in response to a request by OIG, whichever is later, OIG will notify Progenity if the IRO is unacceptable. Absent notification from OIG that the IRO is unacceptable, Progenity may continue to engage the IRO. 

4. If Progenity engages a new IRO during the term of the CIA, that IRO must also meet the requirements of this Appendix. If a new IRO is
engaged, Progenity shall submit the information identified in Section V.A.8 of the CIA to OIG within 30 days of engagement of the IRO. Within 30 days after OIG receives this information or any additional information submitted by Progenity at the
request of OIG, whichever is later, OIG will notify Progenity if the IRO is unacceptable. Absent notification from OIG that the IRO is unacceptable, Progenity may continue to engage the IRO. 

B. IRO Qualifications 
 The IRO shall:

 1. assign individuals to conduct the Arrangements Review who are knowledgeable in the requirements of the Anti-Kickback Statute and the
Stark Law and 

  
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Appendix A 
 1 

 
the regulations and other guidance documents related to these statutes; 
 2. possess
expertise in fair market valuation issues or have the ability to associate a valuation firm to assist in conducting the transactions review component of the Arrangements Review; 

3. assign individuals to conduct the Claims Review who have expertise in the Medicare and state Medicaid program requirements applicable to the
claims being reviewed; 
 4. assign individuals to design and select the Claims Review sample who are knowledgeable about the appropriate
statistical sampling techniques; 
 5. assign individuals to conduct the coding review portions of the Claims Review who have a nationally
recognized coding certification and who have maintained this certification (e.g., completed applicable continuing education requirements); 

6. assign licensed nurses or physicians with relevant education, training and specialized expertise (or other licensed health care
professionals acting within their scope of practice and specialized expertise) to make the medical necessity determinations required by the Claims Review; and 

7. have sufficient staff and resources to conduct the reviews required by the CIA on a timely basis. 

C. IRO Responsibilities 
 The IRO shall:

 1. perform each Arrangements Review and Claims Review in accordance with the specific requirements of the CIA; 

2. follow all applicable Medicare and state Medicaid program rules and reimbursement guidelines in making assessments in the Claims Review;

 3. request clarification from the appropriate authority (e.g., Medicare contractor), if in doubt of the application of a particular
Medicare or state Medicaid program policy or regulation; 

  
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Appendix A 
 2 

 4. respond to all OIG inquires in a prompt, objective, and factual manner; and 

5. prepare timely, clear, well-written reports that include all the information required by Appendix B and Appendix C (as applicable) to the CIA. 

D. Progenity Responsibilities 
 Progenity
shall ensure that the IRO has access to all records and personnel necessary to complete the reviews listed in Section III.E of this CIA and that all records furnished to the IRO are accurate and complete. 

E. IRO Independence and Objectivity 
 The
IRO engaged to perform the Claims Review must perform the Claims Review in a professionally independent and objective fashion, as defined in the most recent Government Auditing Standards issued by the U.S. Government Accountability Office. 

F. IRO Relationship to Progenity 
 The IRO
engaged to perform the Arrangements Review shall not (1) currently represent or currently be employed or engaged by Progenity or (2) have a current or prior relationship to Progenity or its owners, officers, or directors that would cause a
reasonable person to question the IRO’s objectivity in performing the Arrangements Review. 
 G. Assertions of Privilege 

Progenity shall not assert claims of attorney-client privilege in order to avoid disclosing to OIG information related to or resulting from the
IRO’s engagement to perform the Arrangements Review. Progenity’s engagement letter with the IRO shall include a provision stating that the IRO agrees not to assert claims of work product privilege in order to avoid disclosing to OIG
information related to or resulting from its engagement. 
 H. IRO Removal/Termination 

1. Progenity and IRO. If Progenity terminates its IRO or if the IRO withdraws from the engagement during the term of the CIA, Progenity
must submit a notice explaining (a) its reasons for termination of the IRO or (b) the IRO’s reasons for 

  
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Appendix A 
 3 

 
its withdrawal to OIG, no later than 30 days after termination or withdrawal. Progenity must engage a new IRO in accordance with Paragraph A of this Appendix and within 60 days of termination or
withdrawal of the IRO. 
 2. OIG Removal of IRO. In the event OIG has reason to believe that the IRO does not possess the
qualifications described in Paragraph B, is not independent and objective as set forth in Paragraph E or has a prohibited relationship as set forth in paragraph F (as applicable), or has failed to carry out its responsibilities as described in
Paragraph C, OIG shall notify Progenity in writing regarding OIG’s basis for determining that the IRO has not met the requirements of this Appendix. Progenity shall have 30 days from the date of OIG’s written notice to provide information
regarding the IRO’s qualifications, independence, relationship to Progenity or performance of its responsibilities in order to resolve the concerns identified by OIG. If, following OIG’s review of any information provided by Progenity
regarding the IRO, OIG determines that the IRO has not met the requirements of this Appendix, OIG shall notify Progenity in writing that Progenity shall be required to engage a new IRO in accordance with Paragraph A of this Appendix. Progenity must
engage a new IRO within 60 days of its receipt of OIG’s written notice. The final determination as to whether or not to require Progenity to engage a new IRO shall be made at the sole discretion of OIG. 

  
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Appendix A 
 4 

 APPENDIX B 

ARRANGEMENTS REVIEW 
 The Arrangements
Review shall consist of two components: a systems review and a transactions review. The IRO shall perform all components of each Arrangements Review. If there are no material changes to Progenity’s systems, processes, policies, and procedures
relating to Arrangements, the Arrangements Systems Review shall be performed for the first and fourth Reporting Periods. If Progenity materially changes the Arrangements systems, processes, policies and procedures, the IRO shall perform an
Arrangements Systems Review for the Reporting Period in which such changes were made in addition to conducting the systems review for the first and fourth Reporting Periods. The Arrangements Transactions Review shall be performed annually and shall
cover each of the five Reporting Periods. 
 A. Arrangements Systems Review. The Arrangements Systems Review shall be a review of Progenity’s
systems, processes, policies, and procedures relating to the initiation, review, approval, and tracking of Arrangements. Specifically, the IRO shall review the following: 

1. Progenity’s systems, policies, processes, and procedures with respect to creating and maintaining a centralized tracking system for all
existing and new and renewed Focus Arrangements (Focus Arrangements Tracking System), including a detailed description of the information captured in the Focus Arrangements Tracking System; 

2. Progenity’s systems, policies, processes, and procedures for documenting the names and positions of the Arrangements Covered Person(s)
involved in the negotiation, review, and approval of all Focus Arrangements; 
 3. Progenity’s systems, policies, processes, and
procedures for tracking all remuneration to and from all parties to Focus Arrangements to ensure that the parties are complying with the financial terms of the Focus Arrangements and that the Focus Arrangements are commercially reasonable; 

4. Progenity’s systems, policies, processes and procedures for documenting all fair market value determination(s) for any Focus
Arrangement, including the fair market value amount or range and corresponding time period(s), the date(s) of completion of the fair market valuation(s), the individuals or entities that determined the fair market value

  
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Appendix B 
 1 

 
amount or range, and the names and positions of the Arrangements Covered Person(s) involved with the fair market value determination(s); 

5. Progenity’s systems, policies, processes, and procedures for tracking service and activity logs to ensure that parties to the Focus
Arrangement are performing the services required under the applicable Focus Arrangement(s) (if applicable); 
 6. Progenity’s systems,
policies, processes, and procedures for monitoring the use of leased space, medical supplies, medical devices, equipment, or other patient care items to ensure that such use is consistent with the terms of the applicable Focus Arrangement(s) (if
applicable); 
 7. Progenity’s systems, policies, processes, and procedures for initiating Arrangements, including those policies that
identify the individuals with authority to initiate an Arrangement and that specify the business need or business rationale required to initiate an Arrangement; 

8. Progenity’s systems, policies, processes, and procedures for the internal review and approval of existing, new and renewed Focus
Arrangements, including those policies that identify the individuals required to approve each type or category of Focus Arrangement entered into by Progenity, the internal controls designed to ensure that all required approvals are obtained, the
processes for determining and documenting the business need or business rationale for all Focus Arrangements, the processes for determining and documenting the fair market value of the remuneration specified in the Focus Arrangement, and the
processes for ensuring that all Focus Arrangements are subject to a legal review by counsel with expertise in the Anti-Kickback Statute and Stark Law; 

9. the Compliance Officer’s annual review of and reporting to the Compliance Committee on the Focus Arrangements Tracking System,
Progenity’s internal review and approval process, and other Focus Arrangements systems, process, policies, and procedures; 
 10.
Progenity’s systems, policies, processes, and procedures for implementing effective responses when suspected violations of the Anti-Kickback Statute and Stark Law are discovered, including disclosing Reportable Events and quantifying and
repaying Overpayments when appropriate; and 

  
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Appendix B 
 2 

 11. Progenity’s systems, policies, processes, and procedures for ensuring that all new
and renewed Focus Arrangements comply with the Focus Arrangements Requirements set forth in Section III.D.2 of the CIA. 
 B. Arrangements Systems Review
Report. The IRO shall prepare a report based upon each Arrangements Systems Review performed. The Arrangements Systems Review Report shall include the following information: 

1. a description of the documentation (including policies) reviewed and personnel interviewed; 

2. a detailed description of Progenity’s systems, policies, processes, and procedures relating to the items identified in Section A.1-11 above; 
 3. findings and supporting rationale regarding weaknesses in Progenity’s systems,
processes, policies, and procedures relating to Arrangements described in Section A.1-11 above, if any; and 

4. recommendations to improve Progenity’s systems, policies, processes, or procedures relating to Arrangements described in Section A.1-11 above. 
 C. Arrangements Transactions Review. The Arrangements Transactions Review shall consist of a
review by the IRO of 25 randomly selected Focus Arrangements that were entered into or renewed by Progenity during the Reporting Period. The IRO shall assess whether Progenity has complied with the Focus Arrangements Procedures and the Focus
Arrangements Requirements described in Sections III.D.1 and III.D.2 of the CIA, with respect to the selected Focus Arrangements. 
 1. The
IRO’s assessment with respect to each Focus Arrangement that is subject to review shall include: 
 a. verifying that the Focus
Arrangement is maintained in Progenity’s centralized tracking system in a manner that permits the IRO to identify: (i) the parties to the Focus Arrangement, (ii) the name(s) and position(s) of the Arrangements Covered Person(s)
involved in the negotiation, review, and approval of the Focus Arrangement; (iii) the relevant terms of the Focus Arrangement (i.e., the items, services, equipment, or space to be provided, the amount of compensation, the effective date,
the expiration date, etc.); and (iv) the parties’ performance under the Focus Arrangement (i.e., items or 

  
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Appendix B 
 3 

 
services actually provided, equipment or space actually provided or leased, amount of payments, dates of payment, etc.); 

b. verifying that the Focus Arrangement was subject to the internal review and approval process (including both a legal and business review)
and obtained the necessary approvals and that such review and approval is appropriately documented; 
 c. verifying that the remuneration
related to the Focus Arrangement has been determined in accordance with Progenity’s policies and procedures for determining and documenting the fair market value of the remuneration, that the remuneration is properly tracked, and that the
parties to the Focus Arrangement are complying with the financial terms of the Focus Arrangement; 
 d. verifying that the business need or
business rationale for the Focus Arrangement is specified and is consistent with Progenity’s policies and procedures; 
 e. verifying
that the service and activity logs are properly completed and reviewed (if applicable); 
 f. verifying that leased space, medical supplies,
medical devices, and equipment, and other patient care items are properly monitored (if applicable); and 
 g. verifying that the Focus
Arrangement satisfies the Focus Arrangements Requirements of Section III.D.2 of the CIA. 
 2. For any Focus Arrangement for which the IRO
cannot verify compliance with each of the applicable requirements specified in Section C.1 above, the IRO shall identify and review the system(s) and process(es) that resulted in the identified non-compliance
and recommend improvements to such system(s) and process(es). The IRO may need to review additional documentation and/or interview personnel to identify the system(s) and process(es) that resulted in the identified
non-compliance. 
 3. If the IRO cannot verify compliance with each of the applicable requirements
specified in Section C.1 above with respect to at least 90% of the Focus Arrangements subject to the Arrangements Transactions Review, then, at its discretion, within 60 days of receipt of the Arrangements Transactions Review Report, the OIG may
require the IRO to select an additional sample of Focus Arrangements, not to exceed the number of Focus Arrangements initially reviewed by the IRO, that will be subject to the Arrangements Transactions Review (Additional Transactions Review) and
complete and 

  
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Appendix B 
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submit to Progenity and OIG an Additional Transactions Review Report that includes the information specified in Section D below, within 60 days of the date the OIG notifies Progenity and its IRO
that an Additional Transactions Review will be required. 
 D. Arrangements Transactions Review Report. The IRO shall prepare a report based on each
Arrangements Transactions Review performed. The Arrangements Transactions Review Report shall include the following information: 
 1.
Review Methodology. 
  

	 	a.	 Review Protocol. A description of the process used by the IRO to identify the Focus Arrangements subject
to review in the Arrangements Transactions Review. 

  

	 	b.	 Sources of Data. A full description of the documentation and other information relied upon by the IRO in
performing the Arrangements Transactions Review. 

  

	 	c.	 Supplemental Materials. The IRO shall request all documentation and materials required for its review of
the Focus Arrangements selected as part of the Arrangements Transactions Review and Progenity shall furnish such documentation and materials to the IRO prior to the IRO initiating its review of the Focus Arrangements. If the IRO accepts any
supplemental documentation or materials from Progenity after the IRO has completed its initial review of the Focus Arrangements (Supplemental Materials), the IRO shall identify in the Arrangements Transactions Review Report the Supplemental
Materials, the date the Supplemental Materials were accepted, and the relative weight the IRO gave to the Supplemental Materials in its review. In addition, the IRO shall include a narrative in the Arrangements Transactions Review Report
describing the process by which the Supplemental Materials were accepted and the IRO’s reasons for accepting the Supplemental Materials. 

2. Review Findings. The IRO’s findings with respect to whether Progenity has complied with the Focus Arrangements Procedures and
Focus Arrangements Requirements with respect to each of the randomly selected Focus Arrangements reviewed by the IRO, including findings for each item listed in Sections C.1.a-g above.

  
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Appendix B 
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In addition, as applicable, the Arrangements Transactions Review Report shall include the IRO’s recommendations as required by Section C.2 above. 

3. Names and Credentials. The names and credentials of the individuals who conducted the Arrangements Systems Review and the
Arrangements Transactions Review. 

  
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Appendix B 
 6 

 APPENDIX C 

CLAIMS REVIEW 
 A. Claims Review.
The IRO shall perform the Claims Review annually to cover each of the five Reporting Periods. The IRO shall perform all components of each Claims Review. 

1. Definitions. For the purposes of the Claims Review, the following definitions shall be used: 

 

	 	a.	 Overpayment: The amount of money Progenity has received in excess of the amount due and payable under
Medicare, any state Medicaid program requirements, or TriCare, as determined by the IRO in connection with the Claims Review performed under this Appendix C. 

  

	 	b.	 Paid Claim: A claim submitted by Progenity and for which Progenity has received reimbursement from the
Medicare program, a state Medicaid program, or TriCare. 

  

	 	c.	 Population: The Population shall be defined as all Paid Claims during the
12-month period covered by the Claims Review. 

 2. Claims Review Sample.
The IRO shall randomly select and review a sample of 100 Paid Claims (Claims Review Sample). The Paid Claims shall be reviewed based on the supporting documentation available at Progenity’s office or under Progenity’s control
and applicable Medicare and state Medicaid program requirements to determine whether the medical necessity of the items and services furnished was appropriately documented, and whether the claim was correctly coded, submitted, and reimbursed. For
each Paid Claim in the Claims Review Sample that results in an Overpayment, the IRO shall review the system(s) and process(es) that generated the Paid Claim and identify any problems or weaknesses that may have resulted in the identified
Overpayments. The IRO shall provide its observations and recommendations on suggested improvements to the system(s) and the process(es) that generated the Paid Claim. 

3. Other Requirements. 
  

	 	a.	 Supplemental Materials. The IRO shall request all documentation and materials required for its review of
the Paid Claims in the Claims Review Sample and Progenity shall furnish such documentation and materials to the IRO prior to the IRO initiating its review of the Claims Review Sample. If the IRO accepts any

  
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Appendix C 
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supplemental documentation or materials from Progenity after the IRO has completed its initial review of the Claims Review Sample (Supplemental Materials), the IRO shall identify in the Claims
Review Report the Supplemental Materials, the date the Supplemental Materials were accepted, and the relative weight the IRO gave to the Supplemental Materials in its review. In addition, the IRO shall include a narrative in the Claims Review
Report describing the process by which the Supplemental Materials were accepted and the IRO’s reasons for accepting the Supplemental Materials. 

  

	 	b.	 Paid Claims without Supporting Documentation. Any Paid Claim for which Progenity cannot produce
documentation shall be considered an error and the total reimbursement received by Progenity for such Paid Claim shall be deemed an Overpayment. Replacement sampling for Paid Claims with missing documentation is not permitted. 

 

	 	c.	 Use of First Samples Drawn. For the purposes of the Claims Review Sample discussed in this Appendix, the
first set of Paid Claims selected shall be used (i.e., it is not permissible to generate more than one list of random samples and then select one for use with the Claims Review Sample). 

4. Repayment of Identified Overpayments. Progenity shall repay within 60 days the Overpayment(s) identified by the IRO in the Claims
Review Sample, in accordance with the requirements of 42 U.S.C. § 1320a-7k(d) and any applicable regulations or Centers for Medicare and Medicaid Services (CMS) guidance (the “CMS overpayment
rule”). If Progenity determines that the CMS overpayment rule requires that an extrapolated Overpayment be repaid, Progenity shall repay that amount at the mean point estimate as calculated by the IRO. Progenity shall make available to OIG all
documentation that reflects the refund of the Overpayment(s) to the payor. OIG, in its sole discretion, may refer the findings of the Claims Review Sample (and any related work papers) received from Progenity to the appropriate Medicare or state
Medicaid program contractor for appropriate follow up by the payor. 
 B. Claims Review Report. The IRO shall prepare a Claims Review Report as
described in this Appendix for each Claims Review performed. The following information shall be included in the Claims Review Report. 
 1.
Claims Review Methodology. 
  

	 	a.	 Claims Review Population. A description of the Population subject to the Claims Review.

  
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Appendix C 
 2 

	 	b.	 Claims Review Objective. A clear statement of the objective intended to be achieved by the Claims
Review. 

  

	 	c.	 Source of Data. A description of (1) the process used to identify Paid Claims in the Population and
(2) the specific documentation relied upon by the IRO when performing the Claims Review (e.g., medical records, physician orders, certificates of medical necessity, requisition forms, local medical review policies (including title and
policy number), CMS program memoranda (including title and issuance number), Medicare carrier or intermediary manual or bulletins (including issue and date), other policies, regulations, or directives). 

 

	 	d.	 Review Protocol. A narrative description of how the Claims Review was conducted and what was evaluated.

  

	 	e.	 Supplemental Materials. A description of any Supplemental Materials as required by A.3.a., above.

 2. Statistical Sampling Documentation. 
  

	 	a.	 A copy of the printout of the random numbers generated by the “Random Numbers” function of the
statistical sampling software used by the IRO. 

  

	 	b.	 A description or identification of the statistical sampling software package used by the IRO.

 3. Claims Review Findings. 
  

	 	a.	 Narrative Results. 

 

	 	i.	 A description of Progenity’s billing and coding system(s), including the identification, by position
description, of the personnel involved in coding and billing. 

  

	 	ii.	 A description of controls in place at Progenity to ensure that all items and services billed to Medicare or a
state Medicaid program are medically necessary and appropriately documented. 

  

	 	iii.	 A narrative explanation of the IRO’s findings and supporting rationale (including reasons for errors,
patterns noted, etc.) 

  
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Appendix C 
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regarding the Claims Review, including the results of the Claims Review Sample. 

  

	 	b.	 Quantitative Results. 

 

	 	i.	 Total number and percentage of instances in which the IRO determined that the coding of the Paid Claims
submitted by Progenity differed from what should have been the correct coding and in which such difference resulted in an Overpayment to Progenity. 

  

	 	ii.	 Total number and percentage of instances in which the IRO determined that a Paid Claim was not appropriately
documented and in which such documentation errors resulted in an Overpayment to Progenity. 

  

	 	iii.	 Total number and percentage of instances in which the IRO determined that a Paid Claim was for items or
services that did not have appropriate documentation of medical necessity and resulted in an Overpayment to Progenity. 

  

	 	iv.	 Total dollar amount of all Overpayments in the Claims Review Sample. 

 

	 	v.	 Total dollar amount of Paid Claims included in the Claims Review Sample. 

 

	 	vi.	 Error Rate in the Claims Review Sample. The Error Rate shall be calculated by dividing the Overpayment in the
Claims Review Sample by the total dollar amount associated with the Paid Claims in the Claims Review Sample. 

  

	 	vii.	 An estimate of the actual Overpayment in the Population at the mean point estimate. 

 

	 	viii.	 A spreadsheet of the Claims Review results that includes the following information for each Paid Claim: Federal
health care program billed, beneficiary health insurance claim number, date of service, code submitted (e.g., DRG, CPT code, etc.), code reimbursed, allowed amount reimbursed by payor, correct code (as determined by the IRO), correct allowed
amount (as determined by the IRO), dollar difference between allowed amount reimbursed by payor and the correct allowed amount. 

  
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Appendix C 
 4 

	 	c.	 Recommendations. The IRO’s report shall include any recommendations for improvements to
Progenity’s billing and coding system or to Progenity’s controls for ensuring that all items and services billed to Medicare or a state Medicaid program are medically necessary and appropriately documented, based on the findings of the
Claims Review. 

 4. Credentials. The names and credentials of the individuals who: (1) designed the
statistical sampling procedures and the review methodology utilized for the Claims Review and (2) performed the Claims Review. 

  
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Appendix C 
 5Exhibit 10.4

 

These
securities have not been registered with the United States Securities and Exchange Commission or the Securities Commission of any
state pursuant to an exemption from registration under regulation d promulgated under the securities act of 1933, as amended (the
 “act”). this warrant shall not constitute an offer to sell nor a solicitation of an offer to buy the securities
in any jurisdiction in which such offer or solicitation would be unlawful. the securities are “restricted” and may
not be resold or transferred except as permitted under the act pursuant to registration or exemption there from.

 

COMMON STOCK PURCHASE WARRANT

 

To Purchase Shares of $0.0001 Par Value
Common Stock (“Common Stock”) of

 

Applied UV, Inc.

 

March 31, 2020

 

THIS CERTIFIES that,
for value received, Max Munn (the “Holder”) is entitled, upon the terms and subject to the conditions hereinafter set
forth, at any time on or after the date hereof (the “Issuance Date”) and on or prior to the date that is the fifth
anniversary date of the date hereof (the “Expiration Date”), but not thereafter, to subscribe for and purchase
from Applied UV, Inc., a Delaware corporation (the “Company”) 400,000 shares of the Common Stock (the “Warrant
Shares”) at an exercise price equal to the greater of (x) $1.00 per share and (y) the Market Value of the Common
Stock on the Issuance Date (the “Exercise Price”).

 

“Market Value
on the Issuance Date” means the per share market value of the Common Stock as set forth in a valuation prepared by an
independent valuation company engaged by the Company that is reasonable under Regulation 409A-1(b)(5)(iv)(B) of the Internal Revenue
Service Code as a valuation for the Common Stock as of the Issuance Date; provided however, if on the date hereof the Common Stock
is listed on a national exchange or quoted on an established quotation system, then “Market Value on the Issuance Date”
shall mean the closing price of the Common Stock on such national exchange or quotation system on the Trading Day (as defined in
Section 1(b)) immediately prior to the Issuance Date.

 

		1.	Exercise of Warrant.

 

		a.	Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at
any time or times on or after the date hereof and on or before the Expiration Date by delivery to the Company (or such other office
or agency of the Company as it may designate by notice in writing to the registered Holder at the address of the Holder appearing
on the books of the Company of a duly executed facsimile copy (or e-mail attachment) of the Notice of Exercise in the form annexed
hereto. Within the earlier of (i) three (3) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement
Period (as defined in Section 1(b)) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise
Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United
States bank unless the cashless exercise procedure specified in Section 1(b) below is specified in the applicable Notice of Exercise.
No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization)
of any Notice of Exercise form be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to
physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation
within three (3) Trading Days of the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant
resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering
the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased.
The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases.
The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The
Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph,
following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder
at any given time may be less than the amount stated on the face hereof.

 

     

     

    

 

		b.	In lieu of paying the aggregate Exercise Price as set forth in Section 1(a), the Holder may elect
to receive Warrant Shares equal to the value of this Warrant (or the portion thereof being canceled) by surrender of this Warrant
at the principal office of the Company together with notice of such election, in which event the Company shall issue to the Holder
a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) = as
applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice
of Exercise is (1) both executed and delivered pursuant to Section 1(a) hereof on a day that is not a Trading Day or (2) both executed
and delivered pursuant to Section 1(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as
defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option
of the Holder, either (x) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (y)
the Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s
execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours”
on a Trading Day and is delivered within two (2) hours thereafter pursuant to Section 1(a) hereof or (iii) the VWAP on the date
of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both
executed and delivered pursuant to Section 1(a) hereof after the close of “regular trading hours” on such Trading Day;

 

    2

     

    

 

(B) = the
Exercise Price of this Warrant, as adjusted hereunder; and

 

(X) = the
number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such
exercise were by means of a cash exercise rather than a cashless exercise.

 

If Warrant Shares are issued in
such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act of 1933,
as amended, the Warrant Shares shall take on any registered characteristics of the Warrants being exercised. The Company agrees
not to take any position contrary to this Section 1(b).

 

“Bid Price”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed
or quoted on a Trading Market, the bid price of the Common Stock for the time in question (or the nearest preceding date) on the
Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30
a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market, the volume weighted
average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common
Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink
Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting
prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value
of a share of Common Stock as is determined in good faith by the Board of Directors of the Company after taking into consideration
factors it deems appropriate, including, without limitation, recent sale and offer prices of the Common Stock in private transactions
negotiated at arm’s length.

 

“Standard Settlement Period”
means (i) the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market
with respect to the Common Stock as in effect on the date of delivery of the Notice of Exercise; or if the Common Stock is not
publicly traded (ii) three Trading Days.

 

“Trading Day”
means (i) a day on which the principal Trading Market is open for trading or, if the Common Stock is not quoted or listed in any
market or exchange, (ii) any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States
or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Trading Market”
means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question:
the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange,
OTCQB or OTCQX (or any successors to any of the foregoing).

 

    3

     

    

 

“VWAP” means,
for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or
quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding
date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading
Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if OTCQB or OTCQX is not a Trading Market,
the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable,
(c) if the Common Stock is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Stock are then
reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding
to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all
other cases, the fair market value of a share of Common Stock as is determined in good faith by the Board of Directors of the Company
after taking into consideration factors it deems appropriate, including, without limitation, recent sale and offer prices of the
Common Stock in private transactions negotiated at arm’s length.

 

Notwithstanding anything herein
to the contrary, on the Expiration Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section
1(b).

 

		c.	In the event that the Warrant is not exercised in full, the number of Warrant Shares shall be reduced
by the number of such Warrant Shares for which this Warrant is exercised and/or surrendered, and the Company, if requested by Holder
and at its expense, shall within five (5) Trading Days issue and deliver to the Holder a new Warrant of like tenor in the name
of the Holder or as the Holder (upon payment by Holder of any applicable transfer taxes) may request, reflecting such adjusted
Warrant Shares. Notwithstanding anything to the contrary set forth herein, upon exercise of any portion of this Warrant in accordance
with the terms hereof, the Holder shall not be required to physically surrender this Warrant to the Company unless such Holder
is purchasing the full amount of Warrant Shares represented by this Warrant. The Holder and the Company shall maintain records
showing the number of Warrant Shares so purchased hereunder and the dates of such purchases or shall use such other method, reasonably
satisfactory to the Holder and the Company, so as not to require physical surrender of this Warrant upon each such exercise. The
Holder, by acceptance of this Warrant or a new Warrant, acknowledge and agree that, by reason of the provisions of this Section,
following exercise of any portion of this Warrant, the number of Warrant Shares which may be purchased upon exercise of this Warrant
may be less than the number of Warrant Shares set forth on the face hereof. Certificates for shares of Common Stock (or a statement
from the Company’s transfer agent reflecting shares of Common Stock) purchased hereunder shall be delivered to the Holder
hereof within five (5) Business Days after the date on which this Warrant shall have been exercised as aforesaid. The Holder may
withdraw its Notice of Exercise at any time if the Company fails to timely deliver the relevant certificates or statement to the
Holder as provided in this Agreement. A Notice of Exercise shall be deemed sent on the date of delivery if delivered before 8:00
p.m. New York Time on such date, or the day following such date if delivered after 8:00 p.m. New York Time; provided that the Company
is only obligated to deliver Warrant Shares against delivery of the Exercise Price from the holder hereof (other than with respect
to a cashless exercise) and, if the Holder is purchasing the full amount of Warrant Shares represented by this Warrant, surrender
of this Warrant (or appropriate affidavit and/or indemnity in lieu thereof).

 

    4

     

    

 

		2.	No Fractional Shares or Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. In lieu of issuance of a fractional share upon any exercise hereunder,
the Company will either round up to nearest whole number of shares or pay the cash value of that fractional share, which cash value
shall be calculated on the basis of the average closing price of the Common Stock during the five (5) Trading Days immediately
preceding the date of exercise.

 

		3.	Charges, Taxes and Expenses. Issuance of certificates for shares of Common Stock
upon the exercise of this Warrant shall be made without charge to the Holder hereof for any issue or transfer tax or other incidental
expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such
certificates shall be issued in the name of the Holder of this Warrant or in such name or names as may be directed by the Holder
of this Warrant.

 

		4.	Closing of Books. The Company will at no time close its shareholder books or records
in any manner which interferes with the timely exercise of this Warrant.

 

		5.	No Rights as Shareholder until Exercise. The Holder shall not be entitled to vote
or receive dividends or be deemed the holder of Warrant Shares or any other securities of the Company that may at any time be issuable
on the exercise hereof for any purpose, nor shall anything contained herein be construed to confer upon the Holder, as such, any
of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any corporate action (whether upon any recapitalization,
issuance of stock, reclassification of stock, change of par value, or change of stock to no par value, consolidation, merger, conveyance
or otherwise) or to receive notice of meetings, or to receive dividends or subscription rights or otherwise until the Warrant shall
have been exercised as provided herein. However, at the time of the exercise of this Warrant pursuant to Section 1 hereof, the
Warrant Shares so purchased hereunder shall be deemed to be issued to such Holder as the record owner of such shares as of the
close of business on the date on which this Warrant shall have been exercised.

 

		6.	Loss, Theft, Destruction or Mutilation of Warrant; Exchange. The Company represents,
warrants and covenants that (a) upon receipt by the Company of evidence and/or indemnity reasonably satisfactory to it of the loss,
theft, destruction or mutilation of any Warrant or stock certificate representing the Warrant Shares, and in case of loss, theft
or destruction, of indemnity reasonably satisfactory to it, and (b) upon surrender and cancellation of such Warrant or stock certificate,
if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation,
in lieu of this Warrant or stock certificate, without any charge there for. This Warrant is exchangeable at any time for an equal
aggregate number of Warrants of different denominations, as requested by the holder surrendering the same, or in such denominations
as may be requested by the Holder following determination of the Exercise Price. No service charge will be made for such registration
or transfer, exchange or reissuance.

 

    5

     

    

 

		7.	Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a Saturday, Sunday or a legal holiday, then such
action may be taken or such right may be exercised on the next succeeding day not a legal holiday.

 

		8.	Effect of Certain Events. If at any time while this Warrant or any portion thereof
is outstanding and unexpired there shall be a transaction (by merger or otherwise) in which more than 50% of the voting power of
the Company is disposed of (collectively, a “Sale or Merger Transaction”), the Holder of this Warrant shall
have the right thereafter to purchase, by exercise of this Warrant and payment of the aggregate Exercise Price in effect immediately
prior to such action, the kind and amount of shares and other securities and property which it would have owned or have been entitled
to receive after the happening of such transaction had this Warrant been exercised immediately prior thereto, subject to further
adjustment as provided in Section 9.

 

		9.	Adjustments of Exercise Price and Number of Warrant Shares. The number of and kind
of securities purchasable upon exercise of this Warrant and the Exercise Price shall be subject to adjustment from time to time
as set forth in this Section 9.

 

		a.	Subdivisions, Combinations, Stock Dividends and other Issuances. If the Company shall,
at any time while this Warrant is outstanding, (i) pay a stock dividend or otherwise make a distribution or distributions on any
equity securities (including instruments or securities convertible into or exchangeable for such equity securities) in shares of
Common Stock, (ii) subdivide outstanding shares of Common Stock into a larger number of shares, or (iii) combine outstanding Common
Stock into a smaller number of shares, then the Exercise Price shall be multiplied by a fraction, the numerator of which shall
be the number of shares of Common Stock outstanding before such event and the denominator of which shall be the number of shares
of Common Stock outstanding after such event. Any adjustment made pursuant to this Section 9(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision or combination. The number of shares which may be purchased
hereunder shall be increased proportionately to any reduction in Exercise Price pursuant to this paragraph 9(a), so that after
such adjustments the aggregate Exercise Price payable hereunder for the increased number of shares shall be the same as the aggregate
Exercise Price in effect just prior to such adjustments.

 

    6

     

    

 

		b.	Merger, etc. If at any time after the date hereof there shall be a merger or consolidation
of the Company with or into or a transfer of all or substantially all of the assets of the Company to another entity, then the
Holder shall be entitled to receive upon or after such transfer, merger or consolidation becoming effective, and upon payment of
the Exercise Price then in effect, the number of shares or other securities or property of the Company or of the successor corporation
resulting from such merger or consolidation, which would have been received by the Holder for the shares of stock subject to this
Warrant had this Warrant been exercised just prior to such transfer, merger or consolidation becoming effective or to the applicable
record date thereof, as the case may be. The Company will not merge or consolidate with or into any other corporation, or sell
or otherwise transfer its property, assets and business substantially as an entirety to another corporation, unless the corporation
resulting from such merger or consolidation (if not the Company), or such transferee corporation, as the case may be, shall expressly
assume in writing the due and punctual performance and observance of each and every covenant and condition of this Warrant to be
performed and observed by the Company.

 

		d.	Reclassification, etc. If at any time after the date hereof there shall be a reorganization
or reclassification of the securities as to which purchase rights under this Warrant exist into the same or a different number
of securities of any other class or classes, then the Holder shall thereafter be entitled to receive upon exercise of this Warrant,
during the period specified herein and upon payment of the Exercise Price then in effect, the number of shares or other securities
or property resulting from such reorganization or reclassification, which would have been received by the Holder for the shares
of stock subject to this Warrant had this Warrant at such time been exercised.

Simultaneously with any adjustment
to the Exercise Price pursuant to this Section, the number of Warrant Shares that may be purchased upon exercise of this Warrant
shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for
the increased or decreased number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior
to such adjustment.

 

		10.	Voluntary Adjustment by the Company. The Company may at its option, at any time during
the term of this Warrant, reduce but not increase the then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company.

 

		11.	Notice of Adjustment. Whenever the number of Warrant Shares or number or kind of
securities or other property purchasable upon the exercise of this Warrant or the Exercise Price is adjusted, the Company, at its
expense, shall promptly mail to the Holder of this Warrant a notice setting forth the number of Warrant Shares (and other securities
or property) purchasable upon the exercise of this Warrant and the Exercise Price of such Warrant Shares after such adjustment
and setting forth the computation of such adjustment and a brief statement of the facts requiring such adjustment.

 

    7

     

    

 

		12.	Authorized Shares. The Company covenants that during the period the Warrant is outstanding
and exercisable, it will reserve and keep available from its authorized and unissued Common Stock a sufficient number of shares
to provide solely for the issuance of the Warrant Shares upon the exercise of any and all purchase rights under this Warrant. The
Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with
the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise
of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that
such Warrant Shares may be issued as provided herein without violation of any applicable law, regulation, or rule of any applicable
market or exchange.

 

		13.	Compliance with Securities Laws. The Holder hereof acknowledges that the Warrant
Shares acquired upon the exercise of this Warrant, if not registered (or if no exemption from registration exists), will have restrictions
upon resale imposed by state and federal securities laws. Each certificate representing the Warrant Shares issued to the Holder
upon exercise (if not registered, for resale or otherwise, or if no exemption from registration exists) will bear substantially
the following legend: THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND,
ACCORDINGLY, MAY NOT BE OFFERED, TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

		14.	Miscellaneous.

 

		a.	Issue Date; Choice of Law; Venue; Jurisdiction. The provisions of this Warrant shall
be construed and shall be given effect in all respects as if it had been issued and delivered by the Company on the date hereof.
This Warrant shall be binding upon any successors or assigns of the Company. This Warrant will be construed and enforced in accordance
with and governed by the laws of the State of New York, except for matters arising under the Act, without reference to principles
of conflicts of law. Each of the parties consents to the exclusive jurisdiction of the Federal and State Courts sitting in the
County of New York in the State of New York in connection with any dispute arising under this Warrant and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on forum non conveniens or venue, to the bringing
of any such proceeding in such jurisdiction.

 

		b.	Modification and Waiver. This Warrant and any provisions hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.
Any amendment effected in accordance with this paragraph shall be binding upon the Holder, each future holder of this Warrant and
the Company. No waivers of, or exceptions to, any term, condition or provision of this Warrant, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.

 

    8

     

    

 

		c.	Notices. Any notice or other communication required or permitted to be given hereunder
shall be in writing by facsimile, mail or personal delivery and shall be effective upon actual receipt of such notice. The addresses
for such communications shall be to the addresses as shown on the books of the Company. A party may from time to time change the
address to which notices to it are to be delivered or mailed hereunder by notice in accordance with the provisions of this Section
14(c).

 

		d.	Severability. Whenever possible, each provision of this Warrant shall be interpreted
in such manner as to be effective and valid under applicable law, but if any provision of this Warrant is held to be invalid, illegal
or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect the validity, legality or enforceability of any other provision of this Warrant in such jurisdiction or affect
the validity, legality or enforceability of any provision in any other jurisdiction, but this Warrant shall be reformed, construed
and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

		e.	Specific Enforcement. The Company and the Holder acknowledge and agree that irreparable
damage would occur in the event that any of the provisions of this Warrant were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to
prevent or cure breaches of the provisions of this Warrant and to enforce specifically the terms and provisions hereof, this being
in addition to any other remedy to which either of them may be entitled by law or equity.

 

		f.	Counterparts/Execution. This Warrant may be executed by facsimile and in any number
of counterparts, and each such counterpart hereof shall be deemed to be an original instrument, but all such counterparts together
shall constitute one agreement. Execution and delivery of this Warrant by facsimile transmission (including delivery of documents
in Adobe PDF format) shall constitute execution and delivery of this Warrant for all purposes, with the same force and effect as
execution and delivery of an original manually signed copy hereof.

  

[SIGNATURE PAGE TO FOLLOW]

 

    9

     

    

  

IN WITNESS WHEREOF,
the Company has caused this Common Stock Purchase Warrant to be executed by its officers thereunto duly authorized.

 

	 	Applied
    UV, Inc.
	 	 
	 	 
	 	By:  ______________________
	 	Name: Max Munn
	 	Title:   President
	 	 
	 	 
	 	By:  ______________________
	 	Name: Ross Carmel
	 	Title: Secretary

 

 

 

    10

     

    

 

NOTICE OF EXERCISE

 

To:Applied UV, Inc.

 

(1)       The
undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only
if exercised in full), and tenders herewith payment of the aggregate Exercise Price in full, together with all applicable transfer
taxes, if any.

 

(2)       Payment
shall take the form of (check applicable box):

 

[   ] in lawful money of the United
States; or

 

[   ] if cashless exercise, the
cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 1(b), to
exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure
set forth in subsection 1(b).

 

(3)       Please
issue a certificate or certificates representing said shares of Common Stock in the name of the undersigned or in such other name
as is specified below:

 

	_______________________________
	(Name)
	_______________________________
	(Address)
	 
	_______________________________

 

(3)       Please
issue a new Warrant for the unexercised portion of the attached Warrant in the name of the undersigned or in such other name as
is specified below:

 

	 	___________________________________
	 	(Name)
	 	 
	____________________	___________________________________
	(Date)	(Signature)
	 	 
	 	___________________________________
	 	(Address)
	Dated:	 
	 	 
	______________________________	 
	Signature	 

  

    11

     

    

 

ASSIGNMENT FORM

 

(To assign the
foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED,
the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

	Name:	_______________________________________________
	 	(Please Print)
	Address:	_______________________________________________
	
         

         

        Phone Number:

         

        Email Address:

         
	
        (Please Print)

         

        _______________________________________________

        

         

        _______________________________________________

         

	Dated: _______________ __, ______	 
	Holder’s
Signature: ________________________	 
	Holder’s
Address: _________________________	

 

 

    12

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