Purchase Order Terms and Conditions

Updated:

These Purchase Order Terms and Conditions (the “POTC”) apply to all purchases of goods or services (each, a “Product”) by Sonex Health, Inc. (“Sonex”) from the vendor identified on the purchase order coversheet issued by Sonex (the “PO Coversheet”; such vendor, “Seller”). The POTC, the PO Coversheet, any specifications referenced on or attached to the PO Coversheet (the “Specifications”), any executed nondisclosure agreement between the parties (the “NDA”), and any executed supplier quality agreement between the parties (the “SQA”) are collectively the “PO.” In case of conflict, the following order of precedence applies (highest to lowest): (1) PO Coversheet; (2) SQA (for quality matters only); (3) this POTC; (4) NDA; (5) Specifications; and (6) other documents referenced by Sonex.

Formation; Battle of the Forms. The PO is Sonex’s offer to Seller. Acceptance is expressly limited to the terms of the PO. Seller accepts the PO by the earliest of (a) shipping any Product; (b) accepting payment; or (c) commencing performance. Any different or additional terms in any Seller acknowledgment, invoice, shipping document, or writing are objected to and rejected and shall not become part of the parties’ agreement. Sonex may revoke or modify the PO before Seller accepts. After acceptance, Sonex may modify the PO by written notice; if the modification affects price or schedule, Seller must promptly notify Sonex and the parties will negotiate in good faith.

1. Products; Specifications.

Seller shall manufacture and deliver the Products described on the PO Coversheet in accordance with the Specifications, this PO, and all applicable laws. Sonex retains all right, title, and interest in Specifications and any Sonex background intellectual property. Seller irrevocably assigns to Sonex all right, title, and interest in any improvements, derivatives, deliverables, or work product created for Sonex under the PO, and grants Sonex a perpetual, royalty-free, sublicensable license to any Seller background technology to the extent necessary to use the Products. Sonex grants Seller a limited, nonexclusive, nontransferable license to use the Specifications solely to perform under the PO.

2. Price; Taxes.

Prices are as stated on the PO Coversheet and are firm for the term of the PO. No additional charges (including freight, handling, insurance, duties, or surcharges) apply unless Sonex agrees in writing. Seller is responsible for all taxes it is legally required to pay, including income, franchise, and employment taxes. Sonex is responsible for sales and use taxes it is legally required to pay, which shall be separately stated on the invoice. Prices are exclusive of VAT and customs duties, which are Seller’s responsibility unless otherwise stated on the PO Coversheet.

3. Payment.

Invoices must reference the PO number, part number, and quantity. Payment is due Net 45 days from the later of Sonex’s receipt of a conforming invoice or receipt of the conforming Product. Sonex may withhold payment of disputed amounts pending resolution. Sonex may audit invoices and setoff amounts due to Seller against any Sonex claim under this or any other agreement between the parties. Seller waives all liens.

4. Delivery; Title; Risk of Loss.

Delivery is DDP Sonex’s designated facility (Incoterms 2020) unless otherwise stated on the PO Coversheet. Risk of loss and title pass to Sonex on delivery to Sonex, and revert to Seller during returns, recalls, and reshipments. Time is of the essence. If Seller fails to meet a delivery date, Sonex may direct expedited routing at Seller’s expense or cancel affected Product without penalty. Seller shall package and ship in accordance with Sonex’s instructions and insure Products in transit at Seller’s cost. Sonex’s count on receipt is final absent manifest error.

5. Inspection; Acceptance.

All Products are subject to inspection and testing for 30 days after receipt. Non-conforming Products may be, at Sonex’s option, rejected, returned at Seller’s expense, held for disposition, repaired, replaced, or refunded, in addition to Sonex’s other remedies. Inspection or acceptance does not waive Sonex’s rights for latent defects, warranty claims, or defects not reasonably discoverable on inspection.

6. Warranties.

Seller represents and warrants that each Product will, for the longer of (a) 24 months from delivery or (b) the shelf life or warranty period stated in the Specifications or on the PO Coversheet:

  • (a) be new, genuine, sourced through authorized channels, and not counterfeit, gray-market, or diverted;
  • (b) be fit for the general and particular purposes disclosed to Seller;
  • (c) be free from defects in materials and workmanship;
  • (d) conform to the Specifications, any samples, and this PO;
  • (e) be manufactured in accordance with applicable current Good Manufacturing Practice, 21 CFR Part 820 (as amended by the Quality Management System Regulation effective February 2, 2026), ISO 13485:2016, and all applicable laws;
  • (f) have good and marketable title, free of liens; and
  • (g) not infringe or misappropriate any third-party intellectual property (except to the extent an infringement claim arises solely from Sonex-provided Specifications and Seller had no reason to know of the infringement).

Seller acknowledges Sonex relies on Seller as an expert in manufacturing and supplying the Products. In the event of breach, Seller shall, at Sonex’s option and Seller’s cost, promptly repair, replace, or refund the affected Product; if Seller fails to do so, Sonex may cover from alternative sources and charge the excess to Seller.

7. Quality; Records; Audit.

Seller shall maintain a quality management system compliant with ISO 13485:2016 (or equivalent as applicable to the Products), maintain records supporting compliance with Sections 6(c)–(e) for the longer of four (4) years or the retention period required under 21 CFR § 820.180, and permit Sonex to audit Seller’s facilities and records on ten (10) business days’ notice during ordinary business hours. Seller shall give Sonex at least thirty (30) days’ prior written notice of any change to a Product, Specification, manufacturing location, sub-tier supplier, or process that could affect form, fit, function, safety, efficacy, or regulatory status of a Product, and shall not implement any such change without Sonex’s prior written consent.

8. Regulatory; Complaints; Recalls; Field Actions; MDR.

Seller shall:

  • (a) notify Sonex within twenty-four (24) hours of any actual, suspected, or potential defect, non-conformance, adverse event, or circumstance likely to result in a recall, market withdrawal, field corrective action, or MDR-reportable event affecting any Product;
  • (b) cooperate with any investigation, complaint, or FDA (or other regulator) inquiry, and support any recall, withdrawal, or field action controlled by Sonex;
  • (c) permit inspection of Seller’s facilities by FDA and other regulators and notify Sonex within five (5) business days of any FDA Form 483 observation, warning letter, or comparable regulatory action affecting the Products;
  • (d) maintain lot traceability and support UDI compliance under 21 CFR Part 830 as applicable; and
  • (e) reimburse Sonex for reasonable costs of any recall, withdrawal, or field action to the extent caused by Seller’s non-conformance or breach.

9. Insurance.

Seller shall maintain, at its expense, insurance with financially sound carriers rated A- or better by AM Best, including:

  • Commercial General Liability, including products and completed operations: $1,000,000 per occurrence / $2,000,000 aggregate;
  • Workers’ Compensation: statutory; Employer’s Liability $1M/$1M/$1M;
  • Automobile Liability: $1,000,000 combined single limit;
  • Umbrella/Excess liability over General Liability, Employers Liability, and Automobile Liability: $5,000,000;
  • Products/Completed Operations coverage (for finished-device or Product-integrating suppliers): $5,000,000;
  • Cyber Liability (for Sellers handling Sonex data or accessing Sonex systems): $4,000,000; and
  • Errors & Omissions (for Sellers providing contract manufacturing, contracted services, or providing consulting services to Sonex): $2,000,000

Sonex shall be named as additional insured with waivers of subrogation in Sonex’s favor and primary and noncontributory language on the CGL, Auto, and Umbrella policies. Certificates of insurance shall be provided on request and at renewal.

10. Indemnification.

Seller shall defend, indemnify, and hold harmless Sonex, its affiliates, and their respective officers, directors, employees, agents, successors, and assigns (each, an “Indemnified Party”) from and against all third-party claims, and all resulting losses, damages, liabilities, settlements, judgments, fines, penalties, costs, and expenses (including reasonable attorneys’ fees), arising out of or related to (a) Seller’s breach of any representation, warranty, or covenant; (b) any Product defect, non-conformance, or recall; (c) infringement or misappropriation of any third-party intellectual property (except infringement arising solely from Sonex-provided Specifications); (d) personal injury, death, or property damage caused by any Product or Seller act or omission; or (e) Seller’s negligence, gross negligence, or willful misconduct or violation of law. Sonex shall promptly notify Seller of any claim, tender defense, and reasonably cooperate. Seller shall control defense with counsel reasonably acceptable to Sonex; Sonex may participate at its own expense. Seller may not settle a claim without Sonex’s consent if the settlement includes any admission, non-monetary relief, or does not fully release the Indemnified Party.

11. Confidentiality.

The NDA (if any) governs confidential information. If no NDA is in place, Seller shall (a) hold Sonex’s nonpublic information in confidence for five (5) years from disclosure (indefinitely for trade secrets); (b) use it only to perform under this PO; (c) protect it with no less than reasonable care and the same care it uses for its own similar information; and (d) return or destroy it on request. Standard exceptions apply for information (i) publicly known through no fault of Seller; (ii) independently developed without use of Sonex’s information; (iii) received from a third party without confidentiality obligation; or (iv) compelled by law (subject to prompt notice and cooperation with Sonex to seek protective treatment). Seller shall not use Sonex’s name, marks, or logos in any advertising, publicity, case study, or press release without Sonex’s prior written consent.

12. Cancellation.

Sonex may cancel the PO in whole or in part for convenience by written notice. For special-order Products manufactured to Sonex Specifications, Sonex’s liability on convenience cancellation is limited to Seller’s marginal costs actually incurred before notice, less credit for reusable materials, and Seller shall deliver the paid-for portion. For all other Products, Sonex’s liability is limited to the PO price for conforming Products shipped before notice. Sonex may cancel for cause on Seller’s (i) breach not cured within ten (10) business days after notice; or (ii) insolvency, bankruptcy, assignment for creditors, liquidation, or receivership. On cancellation for cause, Sonex has no cancellation liability, and Seller shall reimburse Sonex for cover costs and other damages. Sections 1, 6–11, 13–17, and 19–20 survive cancellation.

13. Compliance with Laws; Anti-Corruption; Trade.

Seller shall comply with all applicable laws and maintain all required permits and licenses. Seller represents and warrants that:

  • (a) neither Seller nor any of its affiliates, officers, directors, employees, agents, or subcontractors involved in performance is debarred, suspended, excluded, or convicted under 21 U.S.C. § 335a, 42 U.S.C. § 1320a-7, or listed on the OIG LEIE or SAM.gov exclusion lists;
  • (b) Seller complies with the U.S. Foreign Corrupt Practices Act, the UK Bribery Act 2010, the federal Anti-Kickback Statute (42 U.S.C. § 1320a-7b), and all applicable anti-corruption and healthcare fraud laws;
  • (c) Seller complies with the U.S. Export Administration Regulations, International Traffic in Arms Regulations, and OFAC sanctions programs;

14. Data Protection and Cybersecurity.

For any Seller that accesses, processes, or hosts Sonex information or systems, Seller shall (a) maintain reasonable administrative, physical, and technical safeguards aligned with the NIST Cybersecurity Framework or SOC 2 Type II; (b) notify Sonex within forty-eight (48) hours of any confirmed or reasonably suspected security incident involving Sonex data or interfaces; and (c) cooperate with Sonex’s investigation and response.

15. Limitation of Liability.

Seller is liable for all direct, incidental, consequential, and other damages resulting from non-conforming Products or breach of the PO. Sonex’s aggregate liability under the PO shall not exceed the price for conforming Products delivered under the PO, and Sonex shall not be liable for special, consequential, incidental, punitive, or indirect damages; provided, this cap and exclusion do not apply to Sonex’s payment obligation for conforming Product delivered, Sonex’s obligations under Section 11 (Confidentiality), or Sonex’s gross negligence or willful misconduct.

16. Force Majeure.

Neither party is liable for delay or non-performance caused by an event beyond its reasonable control, including acts of God, war, terrorism, embargo, and government action, provided the affected party (a) gives prompt written notice; (b) uses commercially reasonable efforts to mitigate; and (c) resumes performance promptly. Increased cost, currency fluctuation, market conditions, and labor disputes affecting only Seller are not force majeure events. If Seller’s non-performance continues for thirty (30) days, Sonex may cover from alternative sources without penalty and/or cancel affected PO without liability.

17. Electronic Contracting; Notices.

The parties consent to electronic contracting and signatures under the E-SIGN Act (15 U.S.C. § 7001) and the Minnesota Uniform Electronic Transactions Act (Minn. Stat. ch. 325L). Notices must be in writing and are effective on (a) personal delivery; (b) two business days after nationally recognized overnight courier; or (c) email to the address stated on the PO Coversheet with confirmation of receipt.

18. Assignment.

Seller may not assign or subcontract any right or obligation without Sonex’s prior written consent. Sonex may freely assign, including to affiliates and in connection with any merger, sale of assets, or reorganization. Prohibited assignments are void.

19. General.

All remedies are cumulative. Sonex may offset amounts owed to Seller against any claim. The PO is the entire agreement and supersedes prior discussions on its subject. Amendments require a writing signed by both parties. No waiver is effective unless in a signed writing. The parties are independent contractors. There are no third-party beneficiaries. Headings are for convenience only. If any provision is unenforceable, the remainder remains in effect. This POTC is governed by Minnesota law (excluding conflicts of law). The parties consent to the exclusive personal and subject-matter jurisdiction of the state and federal courts sitting in Hennepin County, Minnesota, and waive any objection to venue or forum non conveniens.

20. Definitions Recap; Interpretation.

Capitalized terms have the meanings assigned above. “Including” means “including without limitation.” References to statutes and regulations include successor provisions.

21. Artificial Intelligence; Restrictions on Data Use.

(a) Definitions. “AI/ML Technology” means any artificial intelligence, machine learning, neural network, large language model, generative, or other automated system that learns from, is trained on, or derives parameters, weights, or outputs from data.

“Sonex Data” means, collectively, Sonex’s Confidential Information, the Specifications, and any other data, materials, designs, images, documents, or information that Seller accesses, receives, collects, generates, or derives from or on behalf of Sonex in connection with the PO, in each case in any form and whether or not marked confidential.

(b) No Training or Development. Seller shall not, and shall not permit any affiliate, subcontractor, or third party to, use Sonex Data to train, fine-tune, develop, test, validate, benchmark, or improve any AI/ML Technology, or to create any derivative model, dataset, weights, or embeddings. This restriction applies regardless of whether Sonex Data is used in identifiable, aggregated, anonymized, or de-identified form, and Seller shall not aggregate or de-identify Sonex Data for any such purpose.

(c) No Ingestion into AI Tools. Seller shall not input, upload, or expose Sonex Data to any third-party, public, or externally hosted AI/ML Technology (including any generative AI service) except pursuant to Sonex’s prior written consent and a written agreement that prohibits the provider from retaining or using Sonex Data to train or improve its models.

(d) Ownership; No Residual Rights. As between the parties, Sonex retains all right, title, and interest in Sonex Data and in any model, output, insight, or work product to the extent trained on or derived from Sonex Data. Seller acquires no license or residual right to use Sonex Data for any purpose other than performing under the PO.

(e) Disclosure of Seller’s AI Use. Seller shall notify Sonex in writing before using any AI/ML Technology to perform under the PO where such use involves Sonex Data, and shall remain fully responsible for the accuracy, quality, and regulatory compliance of any Product or deliverable so produced.

(f) Deletion; Certification. Upon Sonex’s request or expiration or cancellation of the PO, Seller shall promptly delete or return all Sonex Data and any derivatives thereof and, on request, certify such deletion in writing.

(g) Remedies. A breach of this Section is deemed a breach of Section 11 (Confidentiality). Seller acknowledges that any breach may cause irreparable harm for which monetary damages are inadequate, and Sonex is entitled to seek injunctive relief without posting bond, in addition to its other remedies.