APPTEC WARRANTY

AppTec Laboratory Services ("AppTec") agrees to perform its services in keeping with the standards set forth in AppTec proposals, quotes, Customer Approved Study Protocols, generally prevailing industry standards, Good Laboratory Practice Regulations (“Regulations”) or cGMP Testing Procedures applicable to the Study being performed, as amended from time to time.

SERVICE COMMITMENT

AppTec will endeavor to perform its services in a timely fashion, and will advise its Customer in a timely manner in the event of circumstances which may occasion any significant delay.

PROPRIETARY INFORMATION

Proprietary Rights. Unless otherwise set forth in the applicable Statement of Work: Customer Intellectual Property. Subject to AppTec’s rights in the AppTec Tools, upon full payment to AppTec of the fees due for the applicable Project, AppTec hereby assigns to Customer all rights and title to, and Customer shall own, the Research Work Productand/or Test Data and Information, including all patent, copyright, trade secret, and other intellectual property rights therein (“Customer Intellectual Property”). Customer shall also retain all right, title, and interest in the Samples provided by Customer hereunder. Notwithstanding anything to the contrary herein, AppTec shall retain and own all right, title, and interest in the AppTec Tools, including all intellectual property rights therein. “AppTec Tools” means AppTec’s processes, techniques, methods, programs, equipment, samples, materials, technology, skills, information and know-how of general application that AppTec may use in connection with providing the Services.

LIMITATION OF LIABILITY

AppTec makes no warranty, express or implied, except as set forth herein. AppTec shall not be liable for any claim of breach of warranty unless such claim is submitted in writing to the offices of AppTec within three (3) months following the date the services giving rise to the claim were performed. Except as provided herein, AppTec shall not be liable to the Customer or any third party for any claim, whether based upon breach of warranty or any other theory. Without limiting the generality of the foregoing, AppTec shall not be liable for any consequential, incidental or other damages, including, without limitation, loss of profits, business or damage to goodwill, regardless of the foreseeability of any of the foregoing. AppTec's liability for breach of the AppTec Laboratory Services Warranty or any implied or statutory warranties or any claimed to arise by operation of law shall be limited to either 1) Refund of the price paid by Customer to AppTec for any test, protocol or part thereof, adjudged or mutually agreed not to have been performed in accordance with the AppTec Laboratory Services Warranty or 2) Reperformance of the test, protocol or part thereof. THE WARRANTIES SET FORTH IN THIS PARAGRAPH ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, INCLUDING THE WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE WAIVED BY CUSTOMER.

CHANGE IN SCOPE OF WORK

Customer shall have the right to request reasonable changes and/or modifications (“Changes”) to the Protocol of a Study which AppTec has agreed to conduct and which has not been completed. All such Changes in a Protocol shall be in writing and shall be signed by authorized representatives of AppTec and Customer to be considered effective. If such Changes result in a change in the cost of the Study, the fee for the Study shall be adjusted commensurate with such change. If such Changes affect the projected completion date and/or report date of the Study, the completion and report due dates shall be adjusted commensurate with such effect. AppTec reserves the right to change/modify its test methods. AppTec will notify Customer of such changes and Customer must approve the changes in writing prior to implementation by AppTec with Customer’s test articles. Customer will not unreasonably withhold approval of these changes. Unplanned deviations to a test method during the performance of that method are not Changes as defined in this paragraph and are therefore not subject to Customer review/approval before implementation.

STUDY REPORT

AppTec shall deliver a report of findings for each study performed. If Customer requests a draft report, Customer shall have fourteen (14) days from receipt of the draft report to review the report and provide comments to AppTec. Within twenty one (21) days of receipt of Customer comments, AppTec will provide Customer with the final report that will have had AppTec Quality Assurance (QA) or Technical Management (if appropriate for the Study) review and approval prior to being sent to Customer. If no comments are received from Customer within fourteen (14) days following delivery of the draft report, the draft report shall become the final report, a copy of which shall be delivered to Customer after AppTec QA or Technical Management (if appropriate for the Study)review and approval.

TERMINATION OF STUDY

If any study, protocol or part thereof shall be terminated, as a result of Customer preference or inherent test article condition which would prevent the completion of a valid study, Customer shall be liable to AppTec for the services actually performed and materials, reagents, expenses, etc. consumed, employed, or specially obtained for such study, protocol or part thereof. If Customer cancels any study, protocol or part thereof before commencement, Customer shall pay AppTec a test cancellation fee equal to the lesser of 50-75% of the price of the test or $200.00 per test article, plus the cost of any materials or reagents specially obtained by AppTec for such study, protocol or part thereof.

UNEXPECTED STUDY RESULT / INVALID RESULT/ OUT OF SPECIFICATION RESULT

If, within fourteen (14) days of receiving a valid study result, Customer notifies AppTec in writing that the result is unexpected, AppTec will initiate a laboratory investigation of the result. The Customer and AppTec will agree on an appropriate course of action pending the results of the laboratory investigation. If AppTec observes an invalid result it will notify Customer within 48 hours of learning of such result. Customer and AppTec will agree on the appropriate course of action to investigate the invalid result. In cases where Customer specifications have been provided to AppTec, if AppTec observes an Out Of Specification (OOS) result it will notify Customer within 48 hours of learning of such result. Customer and AppTec will agree on the appropriate course of action to investigate the OOS result. If AppTec determines that an unexpected, invalid, or OOS result is due to the inherent condition of the test article and not due to laboratory error, Customer shall be liable to AppTec for the services performed, including any retests, and materials, reagents, expenses, etc. consumed, employed, or specially obtained during the course of the laboratory investigation. If the unexpected, invalid, or OOS result was caused by a combination of test article condition and laboratory error, or a reasonable determination of cause cannot be ascertained, Customer shall be liable for 50% of the services performed, including any retests, and 100% of the cost of any materials or reagents specially obtained by AppTec during the course of the laboratory investigation. Customer is not liable to AppTec for unexpected, invalid, or OOS results due to AppTec laboratory error, and AppTec at its

discretion shall perform a retest, or provide a refund of any payments made by Customer. In the event of an unexpected/OOS result where AppTec does not feel an investigation is warranted based on the scientific evidence from the original test, AppTec reserves the right to charge for the investigation. The customer will be made aware of and required to approve these charges prior to the start of the investigation.

INDEMNIFICATION

Customer shall indemnify and hold harmless AppTec, its officers, directors, agents and employees from and against any and all losses, costs, damages and/or expenses (including, without limitation, reasonable costs of counsel), incurred by any such indemnitee as a result of or in connection with any claim by any party for injury (physical, emotional, psychological or other) or death of any person or physical damage to any property arising out of the testing, development, manufacture, sale or other use or distribution of any material or product which is the direct or indirect subject of any study, protocol, or part thereof performed by AppTec, provided such injury, death or property damage is not the result of AppTec's reckless or willful misconduct in carrying out its obligations under this Agreement.

FORCE MAJEURE

AppTec shall not be held responsible for failure or delay in performance of its obligations under or in connection with this Agreement due to, but not limited to, the following: acts of God, government actions, labor disputes, civil disturbances, power outages, fire, natural disasters, material shortages, failure of suppliers or subcontractors.

INVOICING

Unless otherwise specified in an AppTec Price Quotation or Proposal submitted to Customer, invoicing for work performed shall be submitted by AppTec to Customer when a Final Report is sent to Customer. In the event that Customer requests a Draft Final Report, Customer will be invoiced at the time the Draft Final Report is issued.

PRICE ADJUSTMENTS

The Pricing for testing services is subject to change with 30 Day notice or as otherwise agreed to in the Statement of Work and Price Quote provided to the Customer.

DISPUTE RESOLUTION

In the event of any dispute arising under this Agreement, senior executives of AppTec and Customer (“the parties”) with decision making authority will enter into good faith negotiations to resolve the dispute. The parties agree to submit any unresolved dispute to a sole mediator selected by the parties as soon as reasonably possible (but no later than sixty (60) days after notice). If not thus resolved, the matter shall be submitted to an arbitration proceeding in Minneapolis, MN and the parties shall share equally the filing fees, arbitration fess, or other costs of such proceedings, except that each party shall be responsible for it own attorney’s fees and other out-of-pocket arbitration expenses unless the arbitrators decide otherwise. The proceeding shall be conducted under the then prevailing rules for commercial arbitration of the American Arbitration Association, by a panel of three (3) arbitrators reasonably acceptable to both of the parties, one of whom must have substantial experience in the field of contract testing services. The arbitrators shall have the authority to permit limited discovery to the extent required by a party in order to establish its case. The decision of the arbitrators shall be final and binding and may be entered and enforced in any court of competent jurisdiction. Any monetary award shall be payable in U.S. dollars, free of any tax, offset or other deduction. Any determination of the arbitration shall be confidential to the parties hereto and binding solely on the parties hereto.

ENTIRE AGREEMENT

This Agreement and any schedules or protocols part thereof contains the complete and final agreement between the parties, and supersedes all previous understandings relating to the subject matter hereof, whether oral or written. This Agreement may only be modified by a written agreement signed by duly authorized representatives of the parties.