10KSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

———————

FORM 10-KSB

———————

ýANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December, 31, 2007

¨TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from: _____________ to _____________

———————

BioLife Solutions, Inc.

 (Name of small business issuer in its charter)

———————

Delaware	0-18170	94-3076866
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

3303 Monte Villa Parkway, Suite 310, Bothell, WA 98021

(Address of Principal Executive Office) (Zip Code)

(425) 402-1400

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

———————

Securities registered under Section 12(b) of the Exchange Act:  None

Securities registered under Section 12(g) of the Exchange Act:  Common Stock, par value $.001 per share

Check whether the issuer is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. ¨  

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No¨

Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12G-2 of the Exchange Act).  Yes ¨  Nox

Issuer's revenues for the fiscal year ended December 31, 2007 were $972,262.

As of March 28, 2008, the aggregate market value of voting stock held by non-affiliates was $960,520.

As of March 28, 2008, there were 69,606,520 shares of Common Stock (par value $.001 per share) outstanding.

Transitional Small Business Disclosure Format (check one). Yes ¨  Nox

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

Note: The terms “the Company,” “us,” “we” and “our” refer to BioLife Solutions, Inc.

General

BioLife Solutions, Inc. ("BioLife” or the “Company”) was incorporated in 1998 in Delaware as a wholly owned subsidiary of Cryomedical Sciences, Inc. ("Cryomedical"), a company that was engaged in manufacturing and marketing cryosurgical products.  We develop and market patented hypothermic storage and cryopreservation solutions for cells, tissues, and organs.  Our proprietary HypoThermosol^® and CryoStor™ preservation media are marketed directly to companies, laboratories, and academic institutions engaged in research and commercial clinical applications.  Our line of serum-free and protein-free preservation solutions are fully defined and formulated to reduce preservation-induced, delayed-onset cell damage and death.  This platform enabling technology provides academic and clinical researchers significant imp rovement in post-thaw cell, tissue, and organ viability and function.

In May 2002, Cryomedical implemented a restructuring and recapitalization program designed to shift its focus away from cryosurgery toward addressing the biopreservation needs of the life sciences, biotech and related markets.  On June 25, 2002 the Company completed the sale of its cryosurgery product line and related intellectual property assets to Irvine, CA-based Endocare, Inc. (NASDAQ: ENDO). In the transaction, the Company transferred ownership of all of its cryosurgical installed base, inventory, and related intellectual property, in exchange for $2.2 million in cash and 120,022 shares of Endocare restricted common stock.  In conjunction with the sale of Cryomedical’s cryosurgical assets, Cryomedical’s Board of Directors also approved merging BioLife into Cryomedical and changing its name to BioLife Solutions, Inc.  In September 2002, Cryomedical changed its name to BioLife Solutions, Inc. and began to trade under t he new ticker symbol, “BLFS”, on the OTCBB.

Our principal executive offices are located at 3303 Monte Villa Parkway, Suite 310, Bothell, WA 98021 and our telephone number is (425) 402-1400.  

Technological Overview

Time management is a crucial aspect of many facets of academic research and clinical practice including cell and gene therapy.  Modern therapies must be accomplished under time constraints if they are to be effective.  This problem becomes especially critical in the field of cell and tissue therapy, where harvested cell culture and tissue, if maintained at body temperature (98.6ºF/37ºC), will lose viability over time.  To slow the "metabolic engine" of harvested cells and tissues, chilling is required.  However, chilling is of mixed benefit.  Although cooling successfully reduces metabolism (i.e., lowers demand for oxygen), chilling, or hypothermia, is also damaging to cells.  To solve this problem, transplant surgeons, for example, will flush the donor tissue with a cold solution designed to provide short-term preservation support after removal of the organ from the donor and during transportatio n.  Clinicians engaged in cell and gene therapy will also attempt to maintain the original and derived cellular material in a cold solution before and after application of the specific cell or gene therapy technique, and during necessary transportation.  Traditional support solutions range from simple "balanced salt" (electrolyte) formulations to complex mixtures of electrolytes, energy substrates such as sugars, acid buffers, osmolytes and antibiotics.  Clinically, there is not a great deal of protective difference between these various solutions and few offer long-term protection.  Often, the basis for selection of a liquid preservation media is a matter of local preference dictated primarily by the traditional source of supply at an academic research institute, transplant center, or cellular therapy company.

Because of the cascading destructive cellular effects that begin with the reduction or arrest of metabolism as a result of cooling, and end with cell death through apoptosis, development of new methods of cell and tissue preservation are important to ensure that cell-based and tissue-engineered products survive the trip from the factory to the operating room in good working order and do not die during transplantation.  Poor post-thaw cell, tissue and organ viability and function are the key unmet needs in the field of preservation of biologic material.

Our scientific research activities over the last 20 years enabled a detailed understanding of the molecular basis for the cryogenic destruction of cells through apoptosis.  This research led directly to the development of our specifically formulated and patented HypoThermosol® ("HTS") technology.  Working from our HTS technology base, we developed a family of proprietary cell, tissue and organ specific hypothermic storage and cryopreservation media solutions to address  the current unmet needs of academic and clinical researchers and transplant physicians.  Our products are specifically formulated to:

1

•

minimize cell and tissue swelling

•

remove free radicals upon formation

•

maintain appropriate ion balances

•

provide regenerative, high energy substrates to stimulate recovery upon warming

•

avoid the creation of an acidic state (acidosis)

•

inhibit the onset of apoptosis

A key feature of our products is their fully “defined” nature.  All of our products are serum-free, protein-free and packaged under sterile conditions using USP grade or highest quality available synthetic components.

The results of independent testing demonstrate that our patented HypoThermosol solutions significantly improve cell and tissue post-thaw viability and function, which may, in turn, improve clinical outcomes for existing and new cell and tissue therapy applications.  Our proprietary HypoThermosol technology is optimized based on low temperature molecular biology principles and genetic analysis.  Competing preservation media products are often formulated with culture media, animal serum, a sugar, and in the case of cryopreservation media, a cryoprotectant such as DMSO.  A key differentiator of our proprietary formulations is the tuning and optimizing of the key ionic component concentrations for hypothermic environments, as opposed to normal body temperature around 37°C

BioLife Products

Hypothermosol

HypoThermosol is a family of cell-specific, optimized hypothermic (2-8°C) preservation media that allows for improved and extended preservation of biologic source material and manufactured cell and tissue based clinical products.  A full line of customized HypoThermosol preservation solutions are available to researchers and clinicians to preserve cells and tissue in low temperature environments for extended periods. Our HypoThermosol family of preservation media for the hypothermic maintenance and cryopreservation of mammalian cell systems include:

HypoThermosol® FRS

This solution has been formulated to decrease the free radical accumulation in cells undergoing prolonged hypothermic preservation. Numerous investigators have shown that an increase in free radicals can lead to either pathological cell death or apoptosis (programmed cell death) in clinical conditions.  HypoThermosol®-FRS is very effective at extending the shelf life and improving the post-preservation viability and function of numerous cell and tissue types.

HypoThermosol Purge

HypoThermosol-Purge is an acellular flush solution specifically designed for use during the transition from normothermic to mild hypothermic temperatures (37°C to 20°C) to rinse culture media and native fluids from tissue and whole organ systems prior to suspension in a preservation solution.

CryoStor™

Based on our proprietary HypoThermosol® technology, we developed CryoStor™, a family of optimized cryopreservation media designed for frozen storage (temperature of -196°C) of cells and tissues.  Its purpose is to extend the cryopreservation window for gene and cell therapy and tissue engineering. CryoStor™ is uniquely formulated to address the molecular-biological aspects of cellular stress as a response to the preservation process thereby directly reducing the level of preservation-induced, delayed-onset cell damage and death.

CryoStor™ CS5

CryoStor™ CS5 is a base cryopreservation solution which is designed to incorporate the principles which led to the successful development of the HypoThermosol® series with the incorporation of agents to modulate the physical damaging effects associated with ice formation and cellular freezing such as dimethyl sulfoxide (“DMSO”).  As a result of solution design, utilization of the CryoStor™ platform facilitates substantially improved post-thaw cell survival and function and allows for the maintenance of this enhanced recovery with substantially reduced levels of cryoprotective agents such as DMSO.

2

CryoStor™ CS10

CryoStor™ CS10, a member of the CryoStor™ Series of solutions, addresses the molecular-biological properties of systems undergoing preservation processes.   CryoStor™ CS-10 contains increased concentrations of cryoprotective agents (10% DMSO).

CryoStor™ DLite

CryoStor™ DLite, a member of the CryoStor™ Series of solutions, addresses the molecular-biological properties of systems undergoing preservation processes.  CryoStor™ DLite has been further formulated to provide reduced concentrations of cryoprotective agents (2% DMSO), for use in applications where a reduction in the levels of DMSO is preferred.

Market Opportunity

Recent advances in cord blood banking, adult stem cell banking, cell therapy, and tissue engineering have highlighted the significant and unmet requirement to maintain the health and viability of biological material across time and space.  

At the leading edge of biomedicine is cell therapy, which involves a method of growing human cells that may be able to treat cancers and a variety of chronic disorders.  Embryonic stem cells are the earliest precursor of human differentiated cells.  Adult stem cells, as their name suggests, rely on other sources of stem cells rather than from the blastocysts of embryos.  Many researchers believe that cell therapy may revolutionize the treatment of chronic disorders by allowing scientists to utilize stem cells from these sources, as well as from umbilical cord blood, the umbilical cord, placental tissue, the amniotic membrane, amniotic fluid, dental pulp from avulsed teeth, adipose tissue, bone marrow, and skeletal muscle to grow new cells that specifically replace and treat diseased tissue.  Applications include the treatment of heart disease, Parkinson’s, Alzheimer’s, stroke, spinal cord injuries, burns and other wo unds.

Time management in cell therapy becomes especially critical where very scarce and fragile source cells or tissues are extracted from a patient, transported to a culture laboratory, and then transported back to the patient to be inserted into the target tissue, organ, or blood stream.  Because this entire process can take months and may involve transportation over long distances, cellular viability is of paramount importance.  

Similar to techniques used in whole organ transplantation, clinicians engaged in cell therapy will attempt to maintain the original and derived cellular material in a cold solution to extend cell viability before and after application of the specific cell or gene therapy technique, and during necessary transportation.  

Tissue engineering has led to the development of several artificial tissue substitutes for the therapeutic treatment of injury and disease.  The process of preparing engineered tissue involves isolation of cells, manipulation and purification, expansion to larger quantities – often requiring appropriate media and support materials, some mechanism to control differentiation and longevity of the cells, and processes and conditions for maintaining viability during transportation and storage.  The development of effective delivery systems for engineered tissue has been the subject of enormous investment for the last several years.  The delivery systems serve to protect cells from arduous conditions during culture and distribution, and these delivery systems are often vital for protection of cells.  

Areas such as vaccine and medicine development and toxicological testing, for application in clinical, military, law enforcement, cosmetic, academic, environmental and pharmaceutical settings, also rely heavily on the utilization of biological components.  As with the biological components in these areas, development, banking, distribution and storage of these biologics is a critical component for successful and ultimately their practical application.  

Common to each of these markets is the need for hypothermic preservation media that yields both extended survival time and superior post-preservation performance when contrasted with current processes and non-specific solutions currently in use.  For companies in these market segments, the therapeutic benefit they deliver to clinicians and patients is dependent on establishing a reasonable shelf-life for the end product.  The Company’s products address this underlying and unmet need by providing an enabling technology – a platform of superior preservation media to the entire biotechnology industry.

In the third and fourth quarters of 2006, we engaged the services of an industry leading consulting firm to estimate the current and future worldwide demand for preservation media.  An estimated demand model was created for both short term hypothermic storage and long term cryopreservation of cells, tissue, and whole organs.  Based on the work done by the consulting firm, we believe the aggregate worldwide demand for our products in its target market segments could be $200 million in 2007, and growing to nearly $350 million by the end of 2011.  The specific market segments used to create the aggregate total available market for our products include:

3

·

Cell and tissue banks

·

Cell suppliers

·

Cord blood collection and storage

·

Toxicity testing

·

Hair transplantation

·

Reproductive biology

·

Tissue engineering

·

Organ transplantation

·

Cellular therapy

·

Pharmaceutical drug discovery

We are unable to forecast our potential product sales in any of these markets because most of these markets are in their infancy, and it should be noted that some of these segments the Company does not currently and may never participate in as a result of a number of factors.

Sales and Marketing

On May 12, 2005, we signed an Exclusive Private Labeling and Distribution Agreement with VWR International, Inc., a global leader in the distribution of scientific supplies, pursuant to which we manufactured our HypoThermosol® and CryoStor™ product lines under the VWR label for sale by VWR to non-clinical customers in North America and Western Europe.  We maintained the right to directly market our products to all clinical and non-clinical markets under its own label throughout the world.  

On February 25, 2008, the Company sent of notice of termination, effective February 29, 2008, to VWR International of the Exclusive Private Label Distribution Agreement, executed by the parties on May 5, 2005, such notice being given due to VWR’s failure to cure a breach of the agreement.

In addition to our direct sales activities, we are currently identifying and evaluating potential strategic distribution partners for our target market segments.

Manufacturing

On October 26, 2007, the Company entered into the following non-exclusive agreements with Bioserv Inc, a division of NextPharma Technologies, Inc., a leading contract manufacturing organization (“CMO”) and provider of product development, contract manufacturing and distribution outsourcing services to the pharmaceutical, specialty pharmaceutical, generics and biotech industries;

1.

Manufacturing Services Agreement for the production of the Company’s products on a contracted basis, with a 12 month term. This agreement includes penalties BioLife would incur if certain order changes, cancellations, or postponement are required.

2.

Quality Agreement outlining the quality and regulatory requirements under which the Company’s products will be manufactured by Bioserv, to remain in effect so long as a Manufacturing Services Agreement exists between the parties.

3.

Storage Services Agreement, with a 12 month term, and cancellation provision for either party for convenience with 60 days prior written notice, except that if Bioserv cancels the agreement, the effective date of termination will not be less than 60 days following the completion of any production order scheduled or paid for by BioLife.

4.

Order Fulfillment Services Agreement, with a 12 month term, and cancellation provision for convenience for either party with 60 days prior written notice, except the Bioserv may not cancel the agreement prior to the effective termination of the Storage Services Agreement between the parties.

We may elect to contract with additional manufacturers for our products, to meet customer demand and to maximize our gross and operating margins. However, there are a limited number of CMO’s that are capable of manufacturing the Company’s products, so if it becomes necessary to identify an alternative CMO or, alternatively, manufacture the products

4

in-house, or if Bioserv is unable to fulfill our purchase orders for any reason, we may experience delays in producing finished goods and fulfilling customer orders.  This could have a material adverse effect on the business of the Company.

Governmental Regulation

Governmental regulation in the United States and other countries is a significant factor affecting the research and development, manufacture and marketing of our products.  In the United States, the FDA has broad authority under the Federal Food, Drug and Cosmetic Act and the Public Health Service Act to regulate the distribution, manufacture and sale of medical devices.  Foreign sales of medical devices are subject to foreign governmental regulation and restrictions which vary from country to country.

The process of obtaining FDA and other required regulatory clearances or approvals is lengthy and expensive.  There can be no assurance that, if needed, we will be able to obtain necessary clearances or approvals for clinical testing or for manufacturing or marketing of those of our products.  Failure to comply with applicable regulatory approvals can, among other things, result in warning letters, fines, suspensions of regulatory approvals, product recalls, operating restrictions and criminal prosecution.  In addition, governmental regulations may be established which could prevent, delay, modify or rescind regulatory clearance or approval of our products.

Regulatory clearances or approvals, if granted, may include significant limitations on the indicated uses for which our products may be marketed.  In addition, to obtain such clearances or approvals, the FDA and foreign regulatory authorities may impose numerous other requirements on the Company.  FDA enforcement policy strictly prohibits the marketing of approved medical devices for unapproved uses.  In addition, product approvals can be withdrawn for failure to comply with regulatory standards or the occurrence of unforeseen problems following initial marketing.  There can be no assurance that we will be able to obtain regulatory clearances or approvals for products on a timely basis or at all, and delays in receipt of, or failure to receive such, approvals, or the loss of previously obtained approvals, or the failure to comply with existing or future regulatory requirements, would have a material adverse effect on our busin ess, financial condition and results of operations.

As an excipient component of other developed technologies, HypoThermosol® and CryoStor™ are not subject to specific FDA pre-market approval.  In particular, the Company is not required to sponsor formal prospective, controlled clinical-trials in order to establish safety and efficacy.  However, it is highly likely that all potential customers would require us to comply with Current Good Manufacturing Procedures (“cGMP”) as mandated by FDA.

There can be no assurance that we will not be required to obtain approval from the FDA prior to marketing any of our products in the future.  We do not market our products for use in embryo and gamete preservation or for tissue or organ transplants, and expect that we will need to obtain pre market approval from the FDA before we do so.  This would entail substantial financial and other resources and could take several years before the products are approved, if at all.  On March 26, 2008, we submitted a Master File to the FDA for CryoStor.  This enhanced regulatory notice provides the FDA with information regarding the quality of components used in the formulation of CryoStor, the manufacturing process, our quality system, and stability testing we have performed.  Customers engaged in clinical applications who wish to notify the FDA of their intention to use CryoStor in their product development and manufacturing process can now request a cross-reference to our Master File.

Intellectual Property

We currently have six issued US patents, numbered 6,045,990, 5,405,942, 4,923,442, 5,405,742, 6,921,633, and 5,514,536.

In February 2003, the Company filed a patent application (Serial No. 10/372,379) entitled “Method and Use of Protein Microarray Technology and Proteomic Analysis to Determine Efficacy of Human and Xenographic Cell, Tissue and Organ Transplant” which contains claims related to systems, tools, and methods for assessing the success of the transplant of a cell, tissue, or organ before and after transplant.  

To the extent that any unique applications of our technologies are developed by our scientists, such applications may not be subject to any protection, and there can also be no assurance that we will develop additional patentable processes or products or, if developed, that we would be able to obtain patents with respect thereto, or that others may not assert claims successfully with respect to such patents or patent applications.  Furthermore, we might not be able to afford the expense of any litigation which might be necessary to enforce its rights under any patents we may obtain, and there can be no assurance that we would be successful in any such suit.  Also, there is no assurance that our proposed products will not infringe on patents owned by others.

5

In addition to the Company’s corporate logo and name, BioLife has trademarked the following product names:

·

HypoThermosol

·

GelStor

·

BioPak

·

Powering the Preservation Sciences

While we believe that the protection of patents and trademarks is important to our business, we also rely on a combination of trade secrets, nondisclosure and confidentiality agreements, know-how and continuing technological innovation to maintain our competitive position.  Despite these precautions, it may be possible for unauthorized third parties to copy certain aspects of the Company’s products or to obtain and use information that the Company regards as proprietary.  The laws of some foreign countries in which the Company may sell its products do not protect the Company’s proprietary rights to the same extent as do the laws of the United States.

Research and Development

From its inception through March 2004, the Company conducted its internal research through Small Business Innovative Research (“SBIR”) grants.  

In 2004, the Company elected to discontinue engaging directly in the SBIR program to support it’s research and development activities.  Accordingly, based upon numerous discussions with the Small Business Administration and a review of applicable SBIR rules and regulations, on March 15, 2004, the Company entered into a research agreement with Cell Preservation Services, Inc. (“CPSI”) to outsource to CPSI all BioLife research currently funded through SBIR grants.  CPSI is owned by John M. Baust, a former employee of BioLife, and the son of John G. Baust, the past Chief Scientific Officer of BioLife.  The research agreement was designed to comply with the rules and regulations applicable to the performance of research with respect to SBIR grants, and established a format pursuant to which CPSI would (a) take over the processing of the then existing applications for SBIR grants applied for by BioLife (“Current Proj ects”), (b) apply for additional SBIR grants for future research projects related to BioLife’s core products (“Future Projects”), (c) perform a substantial portion of the principal work to be done, in terms of (i) time spent, and (ii) research, in connection with Current Projects and Future Projects (the “Research”), and (d) utilize BioLife personnel as consultants with respect to the Research.  In conjunction therewith, BioLife granted to CPSI a non-exclusive, royalty free license (with no right to sublicense) to use BioLife’s technology solely for the purpose of conducting the Research in connection with the Current Projects and Future Projects.  Pursuant to the research agreement, (x) BioLife was to, among other things, provide CPSI with (i) suitable facilities in which to conduct the Research, including basic research equipment and office equipment (“Facilities”), and (ii) management services (“Management Services”), and (y) CPSI was to (i) accept assignment of Current Projects, (ii) be responsible for conducting the Research with respect to Current Projects and Future Projects, (iii) as mutually agreed to by the parties and within the confines of the rules and regulations applicable to the performance of the Research with respect to SBIR grants, utilize BioLife’s personnel as consultants, (iv) provide suitable experienced personnel, including, without limitation, a principal investigator/program director, to conduct the Research, (v) comply with all federal laws, rules and regulations applicable to SBIR grants and file all necessary forms and reports with the federal agency awarding the SBIR grants, and (vi) utilize the Facilities and Management Services and pay BioLife fees with respect thereto.  BioLife owns all right, title and interest in and to any technology, inventions, designs, ideas, and the like (whether or not patentable) that emanates from the Current Projects and Future Projects related to BioLife’s core products a nd technology.

On January 8, 2007, the Company sent a written notice to Cell Preservation Services, Inc. (“CPSI”) that the Company elected not to renew the Research Agreement, which was set to expire on March 15, 2007, but would be automatically renewed for one-year periods unless notice of non-renewal was given by either party at least sixty (60) days prior to the expiration of the then current term. (See Item 3 – Legal Proceedings).

We currently employ three research scientists, all of whom hold Ph.D degrees in molecular biology or related fields.  We also conduct collaborative research with several leading academic and commercial entities in our strategic markets.

During 2007, the Company spent $413,376 on its own research and development activities.

Our Scientific Advisory Board (SAB) is comprised of external members including leaders in the fields of cellular therapy, preservation of biologic material, and regulatory compliance.  We intend to expand the SAB with additional members who by their individual experience, will provide us guidance and counsel in the areas of research and development and market development.  The current members are:

6

·

Shelly Heimfeld, Ph.D, Director of the Cellular Therapy Laboratory at the Fred Hutchinson Cancer Research Center in Seattle, and President of the International Society of Cellular Therapy.  Dr. Heimfeld is internationally recognized for research in hematopoietic-derived stem cells and the development of cell processing technologies for improved cancer therapy.

·

Dayong Gao, Ph.D, professor of biomedical engineering at the University of Washington in Seattle.  Dr. Gao has been actively engaged in cryopreservation research for more than 20 years, having authored over 130 peer-reviewed journal articles on cryopreservation.

·

Darin Weber, Ph.D, a leading regulatory expert for cellular and tissue based products, and former FDA cellular therapy reviewer. Dr. Weber’s knowledge of the regulatory landscape for cell and gene therapy is extensive and directly relevant to our business since the Company’s preservation solutions are a critical process component in several active clinical trials for new cellular therapy products.

·

Scott R. Burger, MD, principal, Advanced Cell and Gene Therapy, a consulting firm specializing in cell, gene, and tissue-based therapies.  Dr. Burger works with clients in industry and academic centers worldwide, providing assistance in process development and validation, GMP/GTP manufacturing, GMP facility design and operation, regulatory affairs, technology evaluation, and strategic analysis.

·

Erik J. Woods, Ph.D, Co-founder, CEO and Laboratory Director of The Genesis Bank, a private cord blood bank, and also Director of Genome Resources, an anonymous donor and client depositor sperm bank.  Both laboratories are FDA registered and CLIA compliant.

·

Lizabeth J. Cardwell, principal, Compliance Consulting, LLC, a private consulting business offering quality and regulatory consulting services to cell therapy, medical device, and pharmaceutical companies.

Competition

The life sciences industry is highly competitive.  Most of our potential competitors have considerably greater financial, technical, marketing, and other resources than the Company.

Our competitors include Invitrogen, Lonza, Sigma Aldrich, and less than 5 other much smaller companies.

The Company expects competition to intensify with respect to the areas in which it is involved as technical advances are made and become more widely known.

Employees

The Company's business is highly dependent upon its ability to attract and retain qualified scientific, technical and management personnel.  BioLife had seven full-time employees at December 31, 2007, 3 general administration, 3 research and development  and 1 sales and marketing. The Company is not a party to any collective bargaining agreements.

Reports to Security Holders

This annual report on Form 10-KSB, including the exhibits and schedules filed as part of the annual report, may be inspected at the public reference facility maintained by the Securities and Exchange Commission ("SEC") at its public reference room at 450 Fifth Street, NW, Washington, DC 20549 and copies of all or any part thereof may be obtained from that office upon payment of the prescribed fees.  You may call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room and you may request copies of the documents upon payment of a duplicating fee, by writing to the SEC.  In addition, the SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants, including us, that file electronically with the SEC which can be accessed at www.sec.gov.

The Company also makes its periodic and current reports available, free of charge, on its website, www.BioLifeSolutions.com, as soon as reasonably practicable after such material is electronically filed with the SEC.  Information available on our website is not a part of, and should not be incorporated into, this annual report on Form 10-KSB.

7

Safe Harbor for Forward-Looking Statements Under the Securities Litigation Reform Act of 1995; Risk Factors

This Annual Report on Form 10-KSB and other reports, releases, and statements (both written and oral) issued by the Company and its officers from time to time may contain statements concerning the Company’s future results, future performance, intentions, objectives, plans, and expectations that are deemed to be “forward-looking statements.”  Such statements are made in reliance upon safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  The Company’s actual results, performance, and achievements may differ significantly from those discussed or implied in the forward-looking statements as a result of a number of known and unknown risks and uncertainties including, without limitation, those discussed below and in “Management’s Discussion and Analysis or Plan of Operation.”  In light of the significant uncertainties inherent in such forward-looking statements, the inclusion of such statements should not be regarded as a representation by the Company or any other person that the Company’s objectives and plans will be achieved.  Words such as “believes,” “anticipates,” “expects,” “intends,” “may,” and similar expressions are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements.  The Company undertakes no obligation to revise any of these forward-looking statements.

ITEM 2. DESCRIPTION OF PROPERTY

Rental expense for all of the Company’s facilities for the year ended December 31, 2007 totaled approximately $140,177.

In November 2006, BioLife renewed an original 3-year lease for a one year term with Field Afar Properties, LLC whereby BioLife leased 6,161 square feet of office, laboratory, and manufacturing space in Owego, NY at a rental rate of $6,200 per month.  The lease expired on January 15, 2008.  John G. Baust, the Company’s former Chief Executive Officer and President, and more recently until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer; John M. Baust, the Company’s former Director of Research and Development; and Judy Baust, wife of John G. Baust and mother of John M. Baust are members of Field Afar Properties, LLC.

In March 2007, the Company signed a lease for 2,783 square feet of office and laboratory space in Bothell, WA at an initial  rental rate of $3,500 per month.  The Company terminated this lease in July 2007.

In July 2007, the Company signed a 4-year lease, commencing August 1, 2007, for 4,366 square feet of office and laboratory space in Bothell, WA at an initial rental rate of $6,367 per month.  The Company is also responsible for paying its proportionate share of property taxes and other operating expenses as defined in the lease.

ITEM 3. LEGAL PROCEEDINGS

On February 7, 2007, Kristi Snyder, a former employee of the Company filed a complaint in the New York State Supreme Court, County of Broome, against the Company alleging a breach of an employment agreement and seeking damages of up to $300,000 plus attorneys’ fees.  This case currently is in discovery and depositions are being scheduled.  The Company does not believe there is any merit to such lawsuit and is vigorously defending its position.

On April 6, 2007, the Company was served with a complaint filed by John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer, in the New York State Supreme Court, County of Tioga, against the Company seeking, among other things, damages under his employment agreement to be determined upon trial of the action plus attorneys’ fees, a declaratory judgment that he did not breach his fiduciary duties to the Company, and that his covenant not to compete is void as against public policy or unenforceable as a matter of law, and to enjoin the Company from commencing an action against him in Delaware courts seeking damages for breaches of his fiduciary obligations to the Company.  This case is in discovery and depositions are in process.  The Company does not believe there is any merit to such lawsuit and is defending the same vigorously.

On June 15, 2007, the Company filed a lawsuit in the State of New York Supreme Court, County of Tioga against Cell Preservation Services, Inc. (“CPSI”) and Coraegis Bioinnovations, Inc. (“Coraegis”), both of which are owned and/or controlled by John M. Baust, a former employee of the Company and the son of John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer, both of whose employment with the Company was terminated on January 8, 2007.

On March 15, 2004, the Company had entered into a Research Agreement with CPSI, pursuant to which CPSI took over the processing of the Company’s existing, and, on behalf of the Company, was to apply for additional SBIR grants, and, in each case, was to perform the research with respect to such grants.  In connection therewith, the Company granted to CPSI a limited license to use the Company’s technology (“BioLife’s Technology”), including the Company’s proprietary cryopreservation solutions (collectively, “Intellectual Property”), solely for the purpose of conducting the research pertaining to the SBIR grants, and CPSI agreed to keep confidential all Company confidential information disclosed to

8

CPSI (“Confidential Information”).  On January 8, 2007, the Company informed CPSI that the Research Agreement would not be extended and would terminate in accordance with its terms on March 15, 2007.

The lawsuit states various causes of action, including, (1) repeated violations of the Research Agreement by CPSI by improperly using BioLife’s Technology, Intellectual Property and Confidential Information for its own purposes, (2) the unlawful misappropriation by CPSI and Coraegis, of the Company’s trade secrets, (3) unfair competition on the part of CPSI and Coraegis through their unlawful misappropriation and misuse of BioLife’s Technology, Intellectual Property and Confidential Information, and (4) the conversion of BioLife’s Technology, Intellectual Property and Confidential Information by CPSI and Coraegis to their own use without the Company’s permission.

The lawsuit seeks, among other things, (1) to enjoin CPSI from continuing to violate the Research Agreement, (2) damages as a result of CPSI’s breaches of the Research Agreement, (3) to enjoin CPSI and Coraegis from any further use of the Company’s trade secrets, (4) damages (including punitive damages) as a result of CPSI’s and Coraegis’ misappropriation of the Company’s trade secrets, (5) to enjoin CPSI and Coraegis from any further use of BioLife’s Technology, Intellectual Property and Confidential Information, (6) damages (including punitive damages) as a result of CPSI’s and Coraegis’ unfair competition against the Company, and (7) damages (including punitive damages) as a result of CPSI’s and Coraegis’ conversion of BioLife’s Technology, Intellectual Property and Confidential Information to their own use.  This case is in discovery and depositions are in process.

On December 4, 2007, John M. Baust, the son of John G, Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer, filed a complaint in the New York State Supreme Court, County of Tioga, against the Company and Michael Rice, the Company’s Chairman and Chief Executive Officer, alleging, among other things, a breach of an employment agreement and defamation of character and seeking damages against the Company in excess of $300,000 plus attorneys fees.  The case currently is in discovery. The Company does not believe there is any merit to this lawsuit and will defend it vigorously.

On December 27, 2007, John M. Baust, the son of John G, Baust, the Company’s former Chief Executive Officer and Chief Scientific Officer, filed a complaint with the State of New York, Division of Human Rights alleging unlawful discrimination practices against the Company based on wrongful termination due to retaliation for bringing complaints of sexual harassment on the part of Michael Rice, the Company’s Chairman and Chief Executive Officer.  The Company responded to the complaint on January 14, 2008.  On March 5, 2008, the Company was notified by the Division that this complaint was ordered dismissed and the filed closed due to the Division’s lack of jurisdiction in the matter, having determined that the civil suit filed by John M. Baust had precedence and precluded the Division from asserting jurisdiction.  The determination may be appealed within sixty (60) days from the date thereof.

On December 27, 2007, John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer, filed a complaint with the State of New York, Division of Human Rights alleging unlawful discrimination practices against the Company based on wrongful termination due to retaliation for bringing complaints of sexual harassment on the part of Michael Rice, the Company’s Chairman and Chief Executive Officer.  The Company responded to the complaint on January 22, 2008.  On March 5, 2008, the Company was notified by the Division that this complaint was ordered dismissed and the filed closed due to the Division’s lack of jurisdiction in the matter, having determined that the civil suit filed by John G. Baust had precedence and precluded the Division from asserting jurisdiction.  The determination may be appealed within six ty (60) days from the date thereof.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

9

PART II

ITEM 5.  MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES

Price Range of Common Stock

The common stock, par value $.001 per share, of the Company ("Common Stock") is traded on the OTC Bulletin Board under the symbol "BLFS."  The following table sets forth the high and low closing prices for the Common Stock as reflected on the OTCBB for the periods indicated. Such prices represent inter-dealer prices, without retail mark-up, mark down or commission, and may not represent actual transactions.

	Price Range
	High		Low
Quarter Ended:
March 31, 2006	$	0.12	$	0.07
June 30, 2006	$	0.10	$	0.06
September 30, 2006	$	0.10	$	0.07
December 31, 2006	$	0.09	$	0.06
March 31, 2007	$	0.11	$	0.10
June 30, 2007	$	0.11	$	0.09
September 30, 2007	$	0.11	$	0.10
December 31, 2007	$	0.06	$	0.05

Holders

As of December 31, 2007, there were 571 holders of record of the Common Stock.

Dividend History and Policy

The Company has never paid cash dividends on its Common Stock and does not anticipate that any cash dividends will be paid in the foreseeable future.

Private Placements

In March 2006, in an effort to secure additional capital, the Board of Directors approved a plan to raise additional capital from the holders of its outstanding warrants and stock options at a reduced price of $0.04 per share, in order to (a) prevent further dilution by the issuance of additional securities to outsiders, and (b) to restructure the capitalization of the Company.  Under the terms of the plan, the Company offered to:

1.

the holders of the Company’s (a) 12,000 shares of Series F Preferred Stock, convertible into 4,800,000 shares of the Company’s Common Stock, and (b) the 6,000 Series F Warrants to purchase 2,400,000 shares of the Company’s Common Stock at $.375 per share purchased in conjunction with the Series F Preferred Stock,  the right to exercise the Series F Warrants and purchase the shares of Common Stock issuable upon exercise thereof at $.04 per share (same number of shares at a lower price), provided that (a) simultaneously with the exercise of such right, the holder converts their shares of Series F Preferred Stock into shares of the Company’s Common Stock, and (b) the conversion of the Series F Preferred Stock and exercise of the Series F Warrants take place on or before May 1, 2006;

2.

the holders of the Company’s (a) 55.125 shares of Series G Preferred. Stock, convertible into 17,226,563 shares of the Company’s Common Stock, and (b) the 55.125 Series G Warrants to purchase 17,226,563 of the Company’s Common Stock at $.08 per share purchased in conjunction with the Series G Preferred Stock, the right to exercise the Series G Warrants and purchase the shares of Common Stock issuable upon exercise thereof at $.04 per share (same number of shares at a lower price), provided that (a) simultaneously with the exercise of such right, they convert their shares of Series G Preferred Stock into shares of the Company’s Common Stock, and (b) the conversion of the Series G Preferred Stock and exercise of the Series G Warrants take place on or before May 1, 2006;

10

3.

the holders of all exercisable Stock Options to purchase shares of the Company’s Common Stock (an aggregate of 3,511,000 shares of the Company’s Common Stock) at prices ranging from $.08-$2.50 per share, the right to exercise such Stock Options and purchase the shares of Common Stock issuable upon exercise thereof at $.04 per share (the same number of shares at a lower exercise price), provided that the exercise of such stock options takes place on or before May 1, 2006; and

4.

the holders of all Warrants to purchase shares of the Company’s Common Stock (an aggregate of 7,640,295 shares of the Company’s Common Stock) at prices ranging from $.08-$41.25 per share, the right to exercise such warrants and purchase the shares of Common Stock issuable upon exercise thereof at $.04 per share (the same number of shares at a lower price), provided the exercise of the warrants takes place on or before May 1, 2006.

The offering was conditioned upon all shares of the Company’s Series F Preferred Stock and Series G Preferred Stock converting into Common Stock of the Company.

The offering was completed on May 1, 2006 and the Company was able to raise $879,341 in cash and reduce liabilities by $113,187 through (a) the exercise of warrants to purchase 23,022,783 shares of the Company’s Common Stock at $0.04, and (b) the exercise of stock options to purchase 2,547,000 shares of the Company’s Common Stock at $0.04.  As part of the plan, 12,000 shares of the Company’s Series F Preferred Stock were converted to 4,800,000 shares of Common Stock and 55.125 shares of the Company’s Series G Preferred Shares were converted to 17,226,563 shares of Common Stock.  The sale of the shares of the Company’s Common Stock underlying the Series F warrants, the Series G warrants, the Stock Options, and warrants, and the conversion of the Series F Preferred Stock and the Series G Preferred Stock into shares of Common Stock, were exempt from registration under the Securities Act pursuant to Rule 506 of Regulation D and Rule 903 of Regulation S.

On February 12, 2007, the Company entered into a Note Purchase Agreement with Thomas Girschweiler, a director and stockholder of the Company.  On February 13, 2007, the Company entered into a Note Purchase Agreement with Walter Villiger, an affiliate of the Company.  Pursuant to such agreements, Messrs. Girschweiler and Villiger (together, the “Investors”) purchased from the Company promissory notes (“February Notes”) in the aggregate principal amount of $750,000.  Each February Note, together with interest accrued thereon at the rate of seven percent (7%) per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (x) the second anniversary of the date of such February Note, or (y) an Event of Default (as defined in the February Notes).  In addition, if the February Note is outstanding at the time of any bona fide equity financing of the Company of at least $1,000,000 (excluding conversion of the February Notes) (a “Financing”), then the Investor may convert the February Note into that number of shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 85% of the per share or per unit purchase price of the New Equity Securities.  In connection with the purchase of the February Notes, each Investor received a loan origination fee equal to 10% of the principal amount of the February Note purchased by such Investor, payable in shares of the Company’s common stock based on the closing price of the shares on the OTCBB on the day preceding the date of purchase of the February Note.  The February Notes were sold pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.

On June 11, 2007, the Company entered into a Note Purchase Agreement with each of the Investors, pursuant to which the Investors purchased from the Company promissory notes (“June Notes”) in the aggregate amount of $1,000,000, which June Notes, together with interest accrued thereon at the rate of seven percent (7%) per annum (together, the “Conversion Amount”),   (i) shall become due and payable in one lump sum on the earlier of (x) June 30, 2008, or (y) an Event of Default (as defined in the June Notes), and (ii), if outstanding at the time of any bona fide equity financing of the Company of at least One Million Dollars ($1,000,000), excluding conversion of the June Notes (a “Financing”), at the option of the Investor, may be converted into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) a s is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Securities. The June Notes were sold pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.

On September 4, 2007, the Company entered into a Note Purchase Agreement with each of the Investors, pursuant to which the Investors purchased from the Company promissory notes (“September Notes”) in the aggregate amount of $1,000,000, which September Notes, together with interest accrued thereon at the rate of seven percent (7%) per annum (together, the “Conversion Amount”),   (i) shall become due and payable in one lump sum on the earlier of (x) September 30, 2008, or (y) an Event of Default (as defined in the September Notes), and (ii), if outstanding at the time of any bona fide equity financing of the Company of at least One Million Dollars ($1,000,000), excluding conversion of the February Notes, June Notes and September Notes (a “Financing”), at the option of the Investor, may be converted into that number of fully paid

11

and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Securities. The September Notes were sold pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.

On January 11, 2008, the Company entered into a Secured Convertible Multi-Draw Term Loan Facility Agreement with each of  the Investors, pursuant to which each Investor extended to the Company a secured convertible multi-draw term loan facility (the “Facility”) of $2,500,000, which Facility (a) incorporates (i) a refinancing of existing indebtedness of the Company to the Investor,  represented by the February Notes, June Notes and September Notes, and accrued interest thereon, in the aggregate amount of $1,431,563.30, (ii) a current advance of $300,000, and (iii) a commitment to advance to the Company, from time to time, additional amounts up to a maximum of $768,436.70, (b) bears interest at the rate of 7% per annum on the principal balance outstanding from time to time, (c) is evidenced by a secured convertible multi-draw term loan note (the “Multi-Draw Term Loan Note”), due and payable, together with accrued i nterest thereon, the earlier of (i) January 11, 2010, or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (d) if outstanding at the time of any bona fide equity financing of the Company of at least Two Million Dollars ($2,000,000) (a “Financing”), at the option of the Investor, may be converted into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the quotient obtained by dividing the principal amount of the Facility outstanding at the time of the conversion plus accrued interest thereon by 85% of the per share or per unit purchase price of the New Equity Securities, and (e) is secured by all of the Company’s assets. The notes were sold pursuant to an exemption from registration under Regulation S of the Securities Act of 1933, as amended.  The Multi-Draw Term Loan Note is secured by a lien on all of the assets of the Company.

ITEM 6.    MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion should be read in conjunction with the Company's financial statements and notes thereto set forth elsewhere herein. The discussion of the results from operations includes only the Company's continuing operations.

Liquidity and Capital Resources

At December 31, 2007, the Company had cash and cash equivalents of $56,497, compared to cash and cash equivalents of $118,674 at December 31, 2006.  At December 31, 2007, the Company had working capital of $123,770, compared to working capital of $135,314 at December 31, 2006.  

During the year ended December 31, 2007, net cash used in operating activities was $(2,708,979) as compared to net cash used by operating activities of $(712,196) for the year ended December 31, 2006.

Net cash used in investing activities totaled $(105,546) during the year ended December 31, 2007 which resulted from the purchase of property and equipment. Net cash used in investing activities totaled $(35,555) during the year ended December 31, 2006 resulting from the purchase of property and equipment.  

Net cash provided by financing activities totaled $2,752,348 for the year ended December 31, 2007, which resulted primarily from the issuance of promissory notes to two shareholders (see Item 5).  Net cash provided by financing activities totaled $681,330 for the year ended December 31, 2006 resulting from proceeds received from the exercise of options and warrants of $879,341, collections of stock subscription receivables of $21,276 offset by principal note payments totaling $28,450 and an increase in restricted cash of $190,837.

In February 2007, in order to secure capital necessary to continue its operations, the Company borrowed $750,000 in equal amounts, from Thomas Girschweiler, a director and stockholder of the Company, and Walter Villiger, an affiliate of the Company, each a non-U.S. Person (as defined in Regulation S of the Securities Act of 1933, as amended) (collectively, the “Investors”).  Each loan was evidenced by a Promissory Note (“February Notes”).  Each February Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) the second anniversary of the date of the February Note, (b) an Event of Default (as defined in the February Notes) or (c) sale, merger or change in control of the Company, as defined.  In addition, if the February Note is outstanding at the time of any bona fide equity financing o f the Company of at least $1,000,000 (excluding conversion of the February Notes) (a “Financing”), then the February Note holder may convert the February Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 85% of the per share or per unit purchase price of the New Equity Securities.  

12

In June 2007, the Company borrowed an additional $1,000,000, in equal amounts, from the Investors.  Each loan was represented by a Promissory Note (“June Note”).  Each June Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) June 30, 2008 or (b) an Event of Default (as defined in the June Notes).  In addition, if the June Note is outstanding at the time of any bona fide equity financing of the Company of at least $1,000,000 (excluding conversion of the June Notes) (a “Financing”), then the June Note holder may convert the June Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase pri ce of the New Equity Securities.

In September 2007, the Company borrowed an additional $1,000,000, in equal amounts, from the Investors. Each loan was represented by a Promissory Note (“September Note”).  Each September Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) September 30, 2008 or (b) an Event of Default (as defined in the September Notes).  In addition, if the September Note is outstanding at the time of any bona fide equity financing of the Company of at least $1,000,000 (excluding conversion of the February Notes, June Notes and September Notes) (a “Financing”), then the September Note holder may convert the September Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Securities.

On January 11, 2008, the Company entered into a Secured Convertible Multi-Draw Term Loan Facility Agreement with each of  the Investors, pursuant to which each Investor extended to the Company a secured convertible multi-draw term loan facility (the “Facility”) of $2,500,000, which Facility (a) incorporates (i) a refinancing of the existing indebtedness of the Company to the Investor, represented by the February Notes, June Notes and September Notes, and accrued interest thereon, in the aggregate amount of $1,431,563.30, (ii) a current advance of $300,000, and (iii) a commitment to advance to the Company, from time to time, additional amounts up to a maximum of $768,436.70, (b) bears interest at the rate of 7% per annum on the principal balance outstanding from time to time, (c) is evidenced by a secured convertible multi-draw term loan note (the “Multi-Draw Term Loan Note”), due and payable, together with accrued int erest thereon, the earlier of (i) January 11, 2010, or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (d) if outstanding at the time of any bona fide equity financing of the Company of at least Two Million Dollars ($2,000,000) (a “Financing”), at the option of the Investor, may be converted into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the quotient obtained by dividing the principal amount of the Facility outstanding at the time of the conversion plus accrued interest thereon by 85% of the per share or per unit purchase price of the New Equity Securities, and (e) is secured by all of the Company’s assets.  The Multi-Draw Term Loan Note is secured by a lien on all the assets of the Company.

The Company believes that continued and full access to the Multi-Draw Term Loan Note, in combination with cash generated from operations, will provide sufficient funds through December 31, 2008. However, should the Company’s internal revenue forecasts fail to be achieved, if its cost of goods and operating expense projections are exceeded, or if the ability to draw on the Multi-Draw Term Loan Note is restricted or terminated, the Company will require additional capital in the short term. Although the Investors who have provided the Multi-Draw Term Loan Note have historically demonstrated a willingness to provide additional capital to the Company, there is no assurance they will continue to do so in the future, or, if they chose to do so, under what terms. If the Investors become unwilling to provide additional funds through the Multi-Draw Term Loan Note, the Company will need to find immediate additional sources of capital and there can be no assurance that such capital would be available at all, or if available, that the terms of such financing would not be dilutive to other stockholders. If the Company is unable to secure additional capital as circumstances require, it may not be able to continue its operations. Future capital requirements will depend on many factors, including the ability to market and sell the Company’s product line, research and development programs, the scope and results of clinical trials, the time and costs involved in obtaining regulatory approvals, the costs involved in obtaining and enforcing patents or any litigation by or against third parties regarding intellectual property, the status of competitive products, the maintenance of sales and marketing capabilities, and the establishment of collaborative relationships with other parties.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon its financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States.  The preparation of these financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses and related disclosures.  On an ongoing basis, the Company evaluates estimates, including those related to allowance for doubtful accounts, inventories, fixed assets,

13

determination of fair value of stock based option compensation, income taxes, contingencies and litigation.  The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of the Company’s judgments on the carrying value of assets and liabilities.  Actual results may differ from these estimates under different assumptions or conditions.

The Company believes that the following accounting policies involve more significant judgments and estimates in the preparation of the financial statements.  The Company maintains an allowance for doubtful accounts for estimated losses that may result from the inability of its customers to make payments.  If the financial condition of the Company’s customers were to deteriorate, resulting in their inability to make payments, the Company may be required to make additional allowances.  The Company writes down inventory for estimated obsolete or unmarketable inventory to the lower of cost or market based on assumptions of future demand.  If the actual demand and market conditions are less favorable than projected, additional write-downs may be required.  Also, the Company uses the Black Scholes method to determine the fair value of stock based compensation, which requires assumptions as to expected volatility, risk- free interest rate and expected lives of the equity instruments.

Results of Operations (Year ended December 31, 2007 compared to the year ended December 31, 2006)

The following discussion should be read in conjunction with the Company’s audited financial statements and notes thereto that appear elsewhere in this report.

Revenue

Revenue for the year ended December 31, 2007 increased $369,043 or 61%, to $972,262, compared to $603,219 for the year ended December 31, 2006.  In 2007, the Company had product sales of $945,595, an increase of $342,376 or 57%, as compared to $603,219 in 2006. The Company had licensing revenue of $26,667 for the year ended December 31, 2007, compared to no licensing revenue for the year ended December 31, 2006. The increase in product sales resulted from a combination of increased use of our products by existing customers and the acquisition of new customers in the cell therapy and cord blood banking markets.  

Cost of Product Sales

For the year ended December 31, 2007, the cost of product sales totaled $463,106 as compared to $298,065 for the year ended December 31, 2006. The increase in cost of product sales is primarily the result of increased production costs associated with the increase in product sales.  The Company’s gross margin as a percentage of revenue was 52.4% in 2007 as compared to 50.6% in 2006. The Company’s gross margin was adversely impacted in the fourth quarter of the year as manufacturing yields and fixed production expenses fluctuated as a result of initiating the outsource of our manufacturing to Bioserv Corp., our CMO.

Research and development

Expenses relating to research and development for the year ended December 31, 2007 increased 621% to $413,376, compared to $57,330 for the year ended December 31, 2006.  This increase was primarily due to contracted research payments to support clinical study activity, an increase in headcount, travel expenses, and legal expenses incurred in the ongoing development of our intellectual property portfolio.    

Sales and marketing

For the year ended December 31, 2007, sales and marketing expenses increased $376,899, or 114%, to $708,661, compared to $331,762 for the year ended December 31, 2006. The increase in 2007 was due to increased sales and marketing activities such as tradeshows, additional headcount, severance, and travel expenses associated with sales campaigns.  

General and administrative expenses

For the year ended December 31, 2007, general and administrative expenses increased $491,709, or 35% to $1,902,126, compared to $1,410,417 for the year ended December 31, 2006.  The increase in general and administrative expenses was primarily due to higher legal and professional fees related to litigation filed by and against the Company in 2007, increased financial, accounting and IT related consulting fees, and higher facility expense due to the new lease in Bothell, WA running concurrently with the former lease which terminated in early 2008.

On October 25, 2007, the Company entered into a relationship with Bioserv Corporation as our CMO.  Start-up costs of $198,490 were incurred in the quarter ended September 30, 2007 related to this.  

14

Interest expense

For year ended December 31, 2007, interest expense was $113,400.  For the year ended December 31, 2006, interest expense was $56,544.  This increase is primarily the result of interest accrued on $2,750,000 in promissory notes that were issued in 2007.

Operating expenses and net income

For the year ended December 31, 2007, operating expenses increased $1,423,144, or 79% to $3,222,653, compared to $1,799,509 for the year ended December 31, 2006.  The Company reported a net loss of $(2,851,774) for the year ended December 31, 2007, compared to a net loss of $(1,134,018) for the year ended December 31, 2006.  

Cash and cash equivalents

At December 31, 2007, the Company had cash and cash equivalents of $56,497, compared to cash and cash equivalents of $118,674 at December 31, 2006.  At December 31, 2007, the Company had working capital of $123,770, compared to working capital $135,314 at December 31, 2006.  

Contract Obligations

In November 2006, BioLife renewed an original 3-year lease for a one year term with Field Afar Properties, LLC whereby BioLife leased 6,161 square feet of office, laboratory, and manufacturing space in Owego, NY at a rental rate of $6,200 per month.  The lease expired on January 15, 2008.  John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer; John M. Baust, the Company’s former Director of Research and Development; and Judy Baust, wife of John G. Baust and mother of John M. Baust are members of Field Afar Properties, LLC

In March 2007, the Company signed a short term lease for 2,783 square feet of office and laboratory space in Bothell, WA at an initial rental rate of $3,500 per month.  The Company terminated this lease in July 2007.

In July 2007, the Company signed a 4-year lease, commencing August 1, 2007, for 4,366 square feet of office and laboratory space in Bothell, WA at an initial rental rate of $6,367 per month.  The Company is also responsible for paying its proportionate share of property taxes and other operating expenses as defined in the lease.

Risk Factors

The risks presented below may not be all of the risks the Company may face.  These are the factors that the Company believes could cause actual results to be different from expected and historical results.  Other sections of this report include additional factors that could have an effect on the Company’s business and financial performance.  The industry in which the Company competes is very competitive and changes rapidly.  Sometimes new risks emerge and management may not be able to predict all of them or how they may cause actual results to be different from those contained in any forward-looking statements.  You should not rely upon forward-looking statements as a prediction of future results.

The Company has a history of losses and may never achieve or maintain profitability.

The Company has incurred annual operating losses since inception, and may continue to incur operating losses because new products will require substantial development, clinical, regulatory, manufacturing, marketing and other expenditures.  For the fiscal years ended December 31, 2007 and December 31, 2006, the Company had net losses of $(2,851,774) and $(1,134,018), respectively.  As of December 31, 2007, the Company’s accumulated deficit was $(44,667,753).  The Company may not be able to successfully commercialize its current or future products, achieve significant revenues from sales, or achieve or sustain profitability.  Successful completion of the Company’s development program and its transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support its cost structure.

The market for the Company’s Common Stock is limited and its stock price is volatile.

The Company’s Common Stock, traded on the OTC Bulletin Board, has historically traded at low average daily volumes, resulting in a limited market for the purchase and sale of the Company’s Common Stock on the OTC Bulletin Board.

The market prices of many publicly traded companies, including emerging companies in the health care industry, have been, and can be expected to be, highly volatile.  The future market price of the Company’s common stock could be significantly impacted by:

·

future sales of the Company’s common stock,

15

·

announcements of technological innovations for new commercial products by the Company’s present or potential competitors,

·

developments concerning proprietary rights,

·

adverse results in the Company’s field or with clinical tests,

·

adverse litigation,

·

unfavorable legislation or regulatory decisions,

·

public concerns regarding the Company’s products,

·

variations in quarterly operating results,

·

general trends in the health care industry, and

·

other factors outside of the Company’s control.

There is uncertainty surrounding the Company’s ability to successfully commercialize its preservative solutions.

The Company’s growth depends, in part, on its continued ability to successfully develop, commercialize and market the Company’s HypoThermosol® and CryoStor™preservative solutions.  Even in markets that do not require the Company to undergo clinical trials and obtain regulatory approvals, the Company’s line of HypoThermosol® and CryoStor™preservative solutions will not be used unless they present an attractive alternative to competitive products and the benefits and cost savings achieved through their use outweigh the cost of the solutions.

The success of the Company’s HypoThermosol® and CryoStor™preservative solutions is dependant, in part, on the commercial success of new cell and gene therapy technology.

The Company is developing preservative media for, and marketing its HypoThermosol® and CryoStor™preservative solutions to, biotechnology companies and research institutions engaged in research and development of cell, gene and tissue reengineering therapy.  Although the Company, as a component supplier, may not be subject to the same formal prospective, controlled clinical-trials to establish safety and efficacy, and to substantial regulatory oversight by the FDA and other regulatory bodies, with respect to the commercialized end products or therapies developed by these biotechnology companies and research institutions, the development of these therapies are years away from commercialization, and demand, if any, for the HypoThermosol® and CryoStor™preservative solutions in these markets, is expected to be limited fo r several years.  

The Company faces significant competition.

The life sciences industry is highly competitive. Most of our potential competitors have considerably greater financial, technical, marketing, and other resources than the Company.

Our competitors include Invitrogen, Lonza, Sigma Aldrich, and less than 5 other much smaller companies.

The Company expects competition to intensify with respect to the areas in which it is involved as technical advances

Many of the Company’s competitors are significantly larger than the Company and have greater financial, technical, research, marketing, sales, distribution and other resources than the Company. Additionally, the Company believes there will be intense price competition with respect to the Company’s products.  There can be no assurance that the Company’s competitors will not succeed in developing or marketing technologies and products that are more effective or commercially attractive than any that are being developed or marketed by the Company, or that such competitors will not succeed in obtaining regulatory approval, introducing, or commercializing any such products prior to the Company.  Such developments could have a material adverse effect on the Company’s business, financial condition and results of operations.  Further, even if the Company is able to compete successfully, there can be no assurance that it could do so in a profitable manner.

The Company’s success will depend on its ability to attract and retain key personnel.

In order to execute its business plan, the Company must attract, retain and motivate highly qualified managerial, technical and sales personnel.  If the Company fails to attract and retain skilled scientific and sales personnel, the Company’s research and development and sales efforts will be hindered.   The Company’s future success depends to a significant degree upon the continued services of key scientific and technical personnel.  If the Company does not attract and retain qualified personnel it will not be able to achieve its growth objectives.

16

If the Company fails to protect its intellectual property rights, the Company’s competitors may take advantage of its ideas and compete directly against it.

The Company’s success will depend to a significant degree on its ability to secure and protect intellectual proprietary rights and enforce patent and trademark protections relating to the Company’s technology.  While the Company believes that the protection of patents and trademarks is important to its business, the Company also relies on a combination of copyright, trade secret, nondisclosure and confidentiality agreements, know-how and continuing technological innovation to maintain its competitive position. From time to time, litigation may be advisable to protect its intellectual property position.  However, these legal means afford only limited protection and may not adequately protect the Company’s rights or permit it to gain or keep any competitive advantage. Any litigation in this regard could be costly, and it is possible that the Company will not have sufficient resources to fully pursue litigation or to pro tect the Company’s intellectual property rights. This could result in the rejection or invalidation of the Company’s existing and future patents.  Any adverse outcome in litigation relating to the validity of its patents, or any failure to pursue litigation or otherwise to protect its patent position, could materially harm the Company’s business and financial condition.  In addition, confidentiality agreements with the Company’s employees, consultants, customers, and key vendors may not prevent the unauthorized disclosure or use of the Company’s technology. It is possible that these agreements will be breached or that they will not be enforceable in every instance, and that the Company will not have adequate remedies for any such breach.  Enforcement of these agreements may be costly and time consuming.  Furthermore, the laws of foreign countries may not protect the Company’s intellectual property rights to the same extent as the laws of the United States. &n bsp; 

Because the life sciences industry is litigious, the Company may be sued for allegedly violating the intellectual property rights of others.

The life sciences industry in the past has been characterized by a substantial amount of litigation and related administrative proceedings regarding patents and intellectual property rights. In addition, many life science companies have used litigation against emerging growth companies as a means of gaining a competitive advantage.

Should third parties file patent applications or be issued patents claiming technology claimed by the Company in pending applications, the Company may be required to participate in interference proceedings in the U.S. Patent and Trademark Office to determine the relative priorities of its inventions and the third parties’ inventions.  The Company could also be required to participate in interference proceedings involving its issued patents and pending applications of another entity.  An adverse outcome in an interference proceeding could require the Company to cease using the technology or to license rights from prevailing third parties.   Third parties may claim that the Company is using their patented inventions and may go to court to stop the Company from engaging in its normal operations and activities.  These lawsuits are expensive to defend and conduct and would also consume and divert the time and attentio n of the Company’s management.  A court may decide that the Company is infringing on a third party’s patents and may order the Company to cease the infringing activity.  The court could also order the Company to pay damages for the infringement.  These damages could be substantial and could harm the Company’s business, financial condition and operating results.   If the Company is unable to obtain any necessary license following an adverse determination in litigation or in interference or other administrative proceedings, the Company would have to redesign its products to avoid infringing a third party’s patent and temporarily or permanently discontinue manufacturing and selling some of its products. If this were to occur, it would negatively impact future sales.

If the Company fails to obtain or maintain necessary regulatory clearances or approvals for products, or if approvals are delayed or withdrawn, the Company will be unable to commercially distribute and market its products or any product modifications.

Government regulation has a significant impact on the Company’s business.  Government regulation in the United States and other countries is a significant factor affecting the research and development, manufacture and marketing of the Company’s products.  In the United States, the FDA has broad authority under the Federal Food, Drug and Cosmetic Act to regulate the distribution, manufacture and sale of medical devices.  Foreign sales of drugs and medical devices are subject to foreign governmental regulation and restrictions, which vary from country to country. The process of obtaining FDA and other required regulatory clearances and approvals is lengthy and expensive. The Company may not be able to obtain or maintain necessary approvals for clinical testing or for the manufacturing or marketing of its products.  Failure to comply with applicable regulatory approvals can, among other things, result in fines, susp ension or withdrawal of regulatory approvals, product recalls, operating restrictions, and criminal prosecution.  In addition, governmental regulations may be established which could prevent, delay, modify or rescind regulatory approval of the Company’s products.  Any of these actions by the FDA, or change in FDA regulations, may adversely impact the Company’s business and financial condition.

17

Regulatory approvals, if granted, may include significant limitations on the indicated uses for which the Company’s products may be marketed. In addition, to obtain such approvals, the FDA and foreign regulatory authorities may impose numerous other requirements on the Company.  FDA enforcement policy prohibits the marketing of approved medical devices for unapproved uses.  Furthermore, product approvals can be withdrawn for failure to comply with regulatory standards or unforeseen problems following initial marketing.  The Company may not be able to obtain or maintain regulatory approvals for its products on a timely basis, or at all, and delays in receipt of or failure to receive such approvals, the loss of previously obtained approvals, or failure to comply with existing or future regulatory requirements would have a significant negative effect on the Company’s financial condition.

The Company is dependent on outside suppliers for all of its manufacturing supplies.

The Company relies on outside suppliers for all of its manufacturing supplies, parts and components.  Although the Company believes it could develop alternative sources of supply for most of these components within a reasonable period of time, there can be no assurance that, in the future, its current or alternative sources will be able to meet all of the Company’s demands on a timely basis.  Unavailability of necessary components could require the Company to re-engineer its products to accommodate available substitutions which would increase costs to the Company and/or have a material adverse effect on manufacturing schedules, products performance and market acceptance.

The Company is dependent on a single source contract manufacturing organization (“CMO”) to manufacture its products.

On October 26, 2007, the Company entered into non-exclusive agreements with Bioserv Corp., a San Diego, CA based CMO. It relies entirely on this CMO as the sole source for the production of its line of preservation products.  If the existing CMO is unable or unwilling to meet the demand for finished products, or if the components or finished products they supply do not meet quality and/or other specifications, or if the Company is unable to meet the terms of the agreement, it could materially and adversely affect its ability to fulfill customer orders in a timely manner, if at all.  This situation may in turn, adversely affect the relationship with its customers.  There are a limited number of alternative CMO’s that are capable of manufacturing the Company’s  products, so if it becomes necessary to identify an alternative CMO, or, alternatively, manufacture the products in-house, the Company may face delays in producing finish ed goods and fulfilling customer orders.

18

ITEM 7.  FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

BioLife Solutions, Inc.

Bothell, Washington

We have audited the accompanying balance sheet of BioLife Solutions, Inc. ("the Company") as of December 31, 2007, and the related statements of operations, stockholders' equity, and cash flows for the year then ended.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes ass essing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BioLife Solutions, Inc. as of December 31, 2007, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 2 to the financial statements, the Company has been unable to generate sufficient income for operations in order to meet its operating needs.  Additionally, the Company used approximately $2.7 million in cash for operating activities during the year ended December 31, 2007, and has an accumulated deficit of approximately $45 million at December 31, 2007.  These conditions raise substantial doubt about the Company's ability to continue as a going concern.  Management's plans regarding those matters are also described in Note 2.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ PETERSON SULLIVAN PLLC

Seattle, Washington

March 27, 2008

19

To the Board of Directors and Stockholders

BioLife Solutions, Inc.

Bothell, Washington

We have audited the accompanying Balance Sheet of BioLife Solutions, Inc. as of December 31, 2006, and the related Statements of Operations, Stockholders’ Equity and Cash Flows for the year then ended.  These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of BioLife Solutions, Inc. as of December 31, 2006, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States of America.  

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has been unable to generate sufficient income from operations to meet its operating needs and may not have sufficient liquidity to meet its financial obligations in the future. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ ARONSON AND COMPANY

Rockville, Maryland

March 26, 2007

20

BioLife Solutions, Inc.

Balance Sheets

			December 31,		December 31,
			2007		2006
Assets
Current assets
		Cash and cash equivalents	$	56,497	$	118,674
		Cash - restricted		-		190,837
		Accounts receivable, trade, net of allowance for doubtful accounts
		of $5,000 and $2,000 at December 31, 2007 and 2006, respectively		300,505		98,980
		Inventories		99,062		92,751
		Prepaid expenses and other current assets		113,514		14,414
Total current assets				569,578		515,656
Property and equipment
Leasehold improvements				42,448		59,264
Furniture and computer equipment				93,425		48,387
Manufacturing and other equipment				180,197		128,448
Subtotal				316,070		236,099
Less: Accumulated depreciation and amortization				(203,380)		(191,323)
Net property and equipment				112,690		44,776
Deferred financing costs, net				43,750		-
Total assets			$	726,018	$	560,432
Liabilities and Stockholders’ Equity (Deficiency)
Current liabilities
	Accounts payable		$	64,460	$	66,418
	Accounts payable, related parties			32,678		23,879
	Accrued expenses			87,246		30,087
	Accrued interest, related parties			107,325		-
	Accrued compensation			145,766		62,481
	Note payable – LDC Loan – current portion			-		197,477
	Deferred revenue			8,333		-
Total current liabilities				445,808		380,342
Long term liabilities
Promissory notes payable, related parties				2,750,000		-
Total liabilities				3,195,808		380,342
Commitments and Contingencies
Stockholders' equity (deficiency)
		Common stock, $0.001 par value; 100,000,000
		shares authorized, 69,606,520 and 68,773,188 shares issued     and outstanding at December 31, 2007 and 2006, respectively		69,607		68,773
		Additional paid-in capital		42,128,356		41,936,284
		Accumulated deficit		(44,667,753)		(41,815,979)
		Subtotal		(2,469,790)		189,078
		Stock subscriptions receivable		-		(8,988)
Total stockholders' equity (deficiency)				(2,469,790)		180,090
Total liabilities and stockholders' equity (deficiency)			$	726,018	$	560,432

The accompanying Notes to Financial Statements are an integral part of these financial statements

21

BioLife Solutions, Inc.

Statements of Operations

		Years Ended
		December 31,
		2007		2006
Revenue
Product sales		$	945,595	$	603,219
Licensing revenue			26,667		-
Total revenue			972,262		603,219
Cost of product sales			463,106		298,065
	Gross margin		509,156		305,154
Operating expenses
	Research and development		413,376		57,330
	Sales and marketing		708,661		331,762
	General and administrative		1,902,126		1,410,417
Contract manufacturing start-up costs			198,490		-
Total  operating expenses			3,222,653		1,799,509
Operating loss			(2,713,497)		(1,494,355)
	Other income (expenses)
	Interest income		12,196		13,766
	Other income		1,497		-
	Interest expense		(113,400)		(56,544)
	Insurance recovery		-		406,388
	Loss on disposal of property and equipment		(7,320)		(3,273)
	Amortization of deferred financing costs		(31,250)		-
	Total other income (expenses)		(138,277)		360,337
	Net Loss	$	(2,851,774)	$	(1,134,018)
	Basic and diluted net loss per common share	$	(0.04)	$	(0.02)
Basic and diluted weighted average common shares used to calculate net loss per common share			69,460,402		52,868,865

The accompanying Notes to Financial Statements are an integral part of these financial statements

22

BioLife Solutions, Inc.

Statements of Stockholders’ Equity

	Convertible    Series F & G Preferred Stock		Common Stock		Additional Paid-in	Deferred	Accumulated	Stock Subscriptions	Total Stockholders'
	Shares	Amount	Shares	Amount	Capital	Compensation	Deficit	Receivable	Equity(Deficiency)
Balance, January 1, 2006	12,055	$ 12	12,413,209	$12,413	$40,739,041	$ (31,024)	$(40,681,961)	-	$          38,481
Reclassification of deferred stock compensation pursuant to adoption of SFAS 123R	-	-	-	-	(31,024)	31,024	-	-	-
Preferred Stock dividends paid in common shares	-	-	8,763,633	8,764	(8,764)	-	-	-	-
Conversion of Series F & G preferred stock	(12,055)	(12)	22,026,563	22,026	(22,014)	-	-	-	-
Exercise of options and warrants to purchase common stock	-	-	25,569,783	25,570	997,222	-	-	(30,264)	992,528
Stock-based compensation	-	-	-	-	261,823	-	-	-	261,823
Collection of stock subscriptions receivable	-	-	-	-	-	-	-	21,276	21,276
Net loss	-	-	-	-	-	-	(1,134,018)	-	(1,134,018)
Balance, December 31, 2006	-	$    -	68,773,188	$68,773	$41,936,284	-	$(41,815,979)	$(8,988)	$   180,090
Stock issued for financing costs related to notes payable	-	-	833,332	834	74,166	-	-	-	75,000
Stock-based compensation	-	-	-	-	117,906	-	-	-	117,906
Collection of stock subscriptions receivable	-	-	-	-	-	-	-	8,988	8,988
Net loss	-	-	-	-	-	-	(2,851,774)	-	(2,851,774)
Balance, December 31, 2007	-	$    -	69,606,520	$69,607	$42,128,356	$                   -	$(44,667,753)	$                   -	$(2,469,790)

The accompanying Notes to Financial Statements are an integral part of these financial statements

23

BioLife Solutions, Inc.

Statements of Cash Flows

			Years Ended December 31,
			2007		2006
Cash flows from operating activities
Net loss			$	(2,851,774)	$	(1,134,018)
Adjustments to reconcile net loss to net cash used in operating activities
	Depreciation			30,313		49,760
	Loss on disposal of property and equipment			7,320		3,273
	Amortization of deferred financing costs			31,250		-
	Stock-based compensation expense			117,906		218,030
	Non-cash interest expense			-		43,793
Change in operating net assets and liabilities
	(Increase) Decrease in
		Accounts receivable, trade		(201,525)		(22,637)
		Inventories		(6,311)		30,662
		Prepaid expenses and other current assets		(99,101)		(14,414)
	Increase (Decrease) in
		Accounts payable		(1,958)		55,171
		Accounts payable, related parties		8,799		15,150
		Accrued expenses		57,159		(15,649)
		Accrued interest, related parties		107,325		-
		Accrued compensation		83,285		58,683
		Deferred revenue		8,333		-
Net cash used in operating activities				(2,708,979)		(712,196)
Cash flows from investing activities
	Purchase of property and equipment			(105,546)		(35,555)
Net cash used in investing activities				(105,546)		(35,555)
Cash flows from financing activities
	Decrease (increase) in restricted cash			190,837		(190,837)
	Proceeds from notes payable			2,750,000		-
	Principal payments on note payable			(197,477)		(28,450)
	Proceeds from exercise of options and warrants			-		879,341
	Collection of stock subscriptions receivable			8,988		21,276
Net cash provided by financing activities				2,752,348		681,330
Net decrease in cash and cash equivalents				(62,177)		(66,421)
Cash and cash equivalents - beginning of year				118,674		185,095
Cash and cash equivalents - end of year			$	56,497	$	118,674

The accompanying Notes to Financial Statements are an integral part of these financial statements

24

BIOLIFE SOLUTIONS, INC.

NOTES TO FINANCIAL STATEMENTS

1.

Organization and significant accounting policies

BioLife Solutions, Inc. ("BioLife” or the “Company”) was incorporated in 1998 in Delaware as a wholly owned subsidiary of Cryomedical Sciences, Inc. ("Cryomedical"), a company that was engaged in manufacturing and marketing cryosurgical products.  The Company develops and markets patented hypothermic storage and cryopreservation solutions for cells, tissues, and organs.  Its proprietary HypoThermosol^® and CryoStor™ preservation media are marketed directly to companies, laboratories, and academic institutions engaged in research and commercial clinical applications.  Its line of serum-free and protein-free preservation solutions are fully defined and formulated to reduce preservation-induced, delayed-onset cell damage and death.  This platform enabling technology provides academic and clinical researchers significant improvement in post-thaw cell, tissu e, and organ viability and function.

Net income (loss) per share:  Basic net income (loss) per common share is calculated by dividing the net income (loss) by the weighted average number of common shares outstanding during the period.  Diluted earnings per share is calculated using the weighted average number of common shares outstanding plus dilutive common stock equivalents outstanding during the period.  Common stock equivalents are excluded for the years ending December 31, 2007 and 2006 as they are anti-dilutive.  Common stock equivalents include stock options, warrants, convertible preferred stock, and convertible debt.

Cash equivalents:  Cash equivalents consist primarily of interest-bearing money market accounts.  The Company considers all highly liquid debt instruments purchased with an initial maturity of three months or less to be cash equivalents. The Company maintains cash balances which may exceed Federally insured limits.  The Company does not believe that this results in any significant credit risk.

Inventories:  Inventories represent preservation solutions and raw materials and are stated at the lower of cost or market.  Cost is determined using the first-in, first-out (“FIFO”) method.

Accounts receivable:  Accounts receivable are stated at principal amounts and do not bear interest.  The Company provides an allowance for doubtful accounts based on an evaluation of customer account balances past due ninety days from the date of invoicing.  Accounts considered uncollectible are charged against the established allowance.

Property and equipment:  Furniture and equipment are stated at cost and are depreciated using the straight-line method over estimated useful lives of three to five years.  Leasehold improvements are stated at cost and are amortized using the straight-line method over the lesser of the life of the asset or the remaining term of the lease.

Revenue recognition:  The Company recognizes product revenue, including shipping and handling charges billed to customers, upon shipment of product when title and risk of loss pass to customers.  Shipping and handling costs are classified as part of cost of product sales.  Generally, revenue related to licensing agreement activity is recognized ratably over the estimated term of the service period.  Payments received in advance of the related licensing agreement period are recorded as deferred revenue and recognized when earned.

Income taxes:  The Company accounts for income taxes using an asset and liability method which generally requires recognition of deferred tax assets and liabilities for the expected future tax effects of events that have been included in the financial statements or tax returns.  Under this method, deferred tax assets and liabilities are recognized for the future tax effects of differences between tax bases of assets and liabilities, and financial reporting amounts, based upon enacted tax laws and statutory rates applicable to the periods in which the differences are expected to affect taxable income.  The Company evaluates the likelihood of realization of deferred tax assets and provides an allowance where, in management’s opinion, it is more likely than not that the asset will not be realized.

In July 2006, the Financial Accounting Standards Board (“FASB”) issued FASB interpretation No. 48 (“FIN No. 48”).  This interpretation clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with Statement of Financial Accounting Standard (“SFAS”) No. 109.  This interpretation prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken in a tax return.  It also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition.  FIN No. 48 is effective for fiscal years beginning after December 15, 2006.  The adoption of this interpretation did not have a material impact on the Company’s results of operations or financial position.  

25

As such, the Company has not recorded any liabilities for uncertain tax positions or any related interest and penalties.  The Company’s tax returns are open to audit for the years ending December 31, 2004 to 2007.

Advertising:  Advertising costs are expensed as incurred and totaled $2,853 and $16,857 for the years ended December 31, 2007 and 2006, respectively.  

Contract Manufacturing Organization (“CMO”) costs: The Company outsources its manufacturing to a CMO.  One-time start-up costs are expensed as incurred and amounted to $198,490 for the year ended December 31, 2007.  No such costs were incurred during the year ended December 31, 2006.

Use of estimates:  The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period.  Actual results could differ from those estimates.

Fair value of financial instruments:  The Company generally has the following financial instruments: cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and notes payable.  The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair value based on the short-term nature of these financial instruments.  The carrying value of notes payable approximate their fair value because interest rates of notes payable approximate market interest rates.

Business segments:  As described above, the Company’s activities are directed in the life sciences field of biopreservation products and services.  As of December 31, 2007 and 2006 this is the Company’s only business segment.

Research and Development:  Research and development costs are expensed as incurred.

Stock-based compensation:  In December 2004, the FASB issued SFAS No. 123(R) (revised 2004) "Share-Based Payment" (“SFAS 123(R)”).  This statement replaces SFAS No. 123, "Accounting for Stock-Based Compensation," and supersedes Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees." This statement requires that the cost resulting from all share-based payment transactions be recognized in the financial statements.  Pro forma disclosure is no longer an alternative.  This statement establishes fair value as the measurement objective in accounting for share-based   payment arrangements and requires all entities to apply a fair-value-based measurement method in accounting for share-based payment transactions with employees.  This statement uses the terms compensation and payment in their broadest senses to refer to th e consideration paid for goods or services, regardless of whether the supplier is an employee.

The Company adopted SFAS No. 123(R) effective January 1, 2006 and is recognizing the cost of stock-based compensation, consisting primarily of stock options and warrants, using the “Modified Prospective Application” transition method whereby the cost of new awards and awards modified, repurchased or cancelled after January 1, 2006 and the portion of awards for which the requisite service has not been rendered (unvested awards) that are outstanding as of January 1, 2006, is recognized as the requisite service is rendered on or after the effective  date, January 1, 2006.  Under the modified prospective application transition method, no restatement of previously issued financial statements is required.  Compensation expense is measured and recognized beginning in 2006 as follows:

AWARDS GRANTED AFTER DECEMBER 31, 2005 - Awards are measured at their fair value at date of grant.  The resulting compensation expense is recognized in the Statement of Operations ratably over the vesting period of the award (requisite service period).  For 2006, the Company recognized approximately $20,362 of additional non-cash, share-based compensation expense due to the adoption of SFAS 123(R), which increased the loss from operations and net loss by such amount.  This expense had no effect on the Company’s net loss per share for the year ended December 31, 2006.

For all grants issued after December 31, 2005, the amount of recognized compensation expense is adjusted based upon an estimated forfeiture rate which is derived from historical data.

AWARDS GRANTED PRIOR TO JANUARY 1, 2006 - Awards were measured at their fair value at the date of original grant.  Compensation expense associated with the unvested portion of these options at January 1, 2006 is recognized in the Statement of Operations ratably over the remaining vesting period.   For 2006, the Company recognized approximately $94,569 of additional non-cash, share-based compensation expense due to the adoption

26

of SFAS 123(R), which increased the loss from operations and net loss by such amount.  This expense had no effect on the Company’s net loss per share for the year ended December 31, 2006.

Modified awards are treated as an exchange of the original award for a new award and compensation cost is incurred for any incremental value.  Incremental compensation is measured as the excess, if any, of the fair value of the modified award over the fair value of the original award immediately before its terms are modified.  Incremental compensation and interest expense of approximately $147,000 was recorded in connection with the repricing of previously awarded option and warrant awards during 2006.

The fair value of options at the date of grant is determined under the Black-Scholes option-pricing model.  During the years ended December 31, 2007 and 2006, the following weighted-average assumptions were used:

Assumptions	2007	2006
Risk-free rate	4.67%	4.86%
Annual rate of dividends	-	-
Historical volatility	74.56%	71.34%
Option life	6.4 years	6.6 years

SFAS No. 123(R) requires that the Company recognize compensation expense for only the portion of options that are expected to vest.  Therefore, management applies an estimated forfeiture rate that is derived from historical employee termination data and adjusted for expected future employee turnover rates.  The Company’s stock price volatility, option lives and expected forfeiture rates involve management’s best estimates at the time of such determination, all of which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option.

Recent Accounting Pronouncements:  

In September 2006, the FASB issued SFAS No 157 Fair Value Measurement (“FAS 157”).  SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements but does not require any new fair value measurements effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years, except for nonfinancial assets and liabilities which has been delayed until after November 15, 2008.  The Company does not expect the adoption of SFAS 157 to have a significant impact on its financial statements.

In February 2007 the FASB issued SFAS No. 159, The Fair Value Option for Financial Assets and Financial Liabilities, including an amendment of FASB Statement No. 115, (“SFAS 159”) was issued. SFAS 159 permits companies to choose to measure many financial instruments and certain other items at fair value that are not currently required to be measured at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. SFAS 159 will be effective for fiscal years beginning after November 15, 2007. The Company’s currently evaluating the impact this standard would have on our financial statements, but do not believe the impact of the adoption will be material.

In June 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-3, Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research and Development Activities (“EITF 07-03”), which is effective for fiscal years beginning after December 15, 2007.  EITF 07-3 requires that nonrefundable advance payments for future research and development activities be deferred and capitalized.  Such amounts will be recognized as an expense as the goods are delivered or the related services are performed.  The Company does not expect the adoption of EITF 07-3 to have a material impact on its financial results.

In December 2007, the Emerging Issues Task Force of the FASB issued EITF Issue No. 07-1, Accounting for Collaborative Arrangements (“EITF 07-1”), which is effective for fiscal years beginning after December 15, 2008. EITF 07-1 provides income statement classification and related disclosure guidance for participants in a collaborative arrangement. The Company does not expect the adoption of EITF 07-1 to have a material impact on its financial results.

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements — an amendment of Accounting Research Bulletin No. 51 (“SFAS 160”), which amends Accounting Research Bulletin No. 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is effective for the Company’s fiscal year beginning January 1, 2009. The Company does not expect the adoption of SFAS 160 to have a material impact on its financial results.

27

In December 2007, the FASB issued SFAS No. 141R, Business Combinations (“SFAS 141R”), which establishes principles and requirements for recognizing and measuring identifiable assets and goodwill acquired, liabilities assumed, and any noncontrolling interest in an acquisition, at their fair value as of the acquisition date. SFAS 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. This standard will change the Company’s accounting treatment for business combinations, if any,  on a prospective basis.

2.

Financial condition

The Company has been unable to generate sufficient income from operations in order to meet its operating needs.  This raises doubt about the Company’s ability to continue as a going concern.

At December 31, 2007, the Company had cash and cash equivalents of $56,497, compared to cash and cash equivalents of $118,674 at December 31, 2006. At December 31, 2007, the Company had working capital of $123,770, compared to working capital of $135,314 at December 31, 2006.

During the year ended December 31, 2007, net cash used in operating activities was $(2,708,979) as compared to net cash used by operating activities of $(712,196) for the year ended December 31, 2006.

Net cash used in investing activities totaled $(105,546) during the year ended December 31, 2007 which resulted from the purchase of property and equipment. Net cash used in investing activities totaled $(35,555) during the year ended December 31, 2006 resulting from the purchase of property and equipment.

Net cash provided by financing activities totaled $2,752,348 for the year ended December 31, 2007, which resulted primarily from the issuance of promissory notes to two shareholders (see below). Net cash provided by financing activities totaled $681,330 for the year ended December 31, 2006 resulting from proceeds received from the exercise of options and warrants of $879,341, collections of stock subscription receivables of $21,276 offset by principal note payments totaling $28,450 and an increase in restricted cash of $190,837.

In February 2007, in order to secure capital necessary to continue its operations, the Company borrowed $750,000 in equal amounts, from Thomas Girschweiler, a director and stockholder of the Company, and Walter Villiger, an affiliate of the Company, each a non-U.S. Person (as defined in Regulation S of the Securities Act of 1933, as amended) (collectively, the “Investors”). Each loan was evidenced by a Promissory Note (“February Notes”). Each February Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) the second anniversary of the date of the February Note, (b) an Event of Default (as defined in the February Notes) or (c) sale, merger or change in control of the Company, as defined. In addition, if the February Note is outstanding at the time of any bona fide equit y financing of the Company of at least $1,000,000 (excluding conversion of the February Notes) (a “Financing”), then the February Note holder may convert the February Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 85% of the per share or per unit purchase price of the New Equity Securities.

In June 2007, the Company borrowed an additional $1,000,000, in equal amounts, from the Investors. Each loan was represented by a Promissory Note (“June Note”). Each June Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) June 30, 2008 or (b) an Event of Default (as defined in the June Notes). In addition, if the June Note is outstanding at the time of any bona fide equity financing of the Company of at least $1,000,000 (excluding conversion of the June Notes) (a “Financing”), then the June Note holder may convert the June Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Securities.

In September 2007, the Company borrowed an additional $1,000,000, in equal amounts, from the Investors. Each loan was represented by a Promissory Note (“September Note”). Each September Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) September 30, 2008 or (b) an Event of Default (as defined in the September Notes). In addition, if the September Note is outstanding at the time of any bona fide equity financing of the Company of at least $1,000,000 (excluding conversion of the February Notes, June Notes and September Notes) (a “Financing”), then the September Note holder may convert the September Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities& #148;) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Securities.

28

On January 11, 2008, the Company entered into a Secured Convertible Multi-Draw Term Loan Facility Agreement with each of the Investors, pursuant to which each Investor extended to the Company a secured convertible multi-draw term loan facility (the “Facility”) of $2,500,000, which Facility (a) incorporates (i) a refinancing of the existing indebtedness of the Company to the Investor, represented by the February Notes, June Notes and September Notes, and accrued interest thereon, in the aggregate amount of $1,431,563.30, (ii) a current advance of $300,000, and (iii) a commitment to advance to the Company, from time to time, additional amounts up to a maximum of $768,436.70, (b) bears interest at the rate of 7% per annum on the principal balance outstanding from time to time, (c) is evidenced by a secured convertible multi-draw term loan note (the “Multi-Draw Term Loan Note”), due an d payable, together with accrued interest thereon, the earlier of (i) January 11, 2010, or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (d) if outstanding at the time of any bona fide equity financing of the Company of at least Two Million Dollars ($2,000,000) (a “Financing”), at the option of the Investor, may be converted into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the quotient obtained by dividing the principal amount of the Facility outstanding at the time of the conversion plus accrued interest thereon by 85% of the per share or per unit purchase price of the New Equity Securities, and (e) is secured by all of the Company’s assets. The Multi-Draw Term Loan Note is secured by a lien on all the assets of the Company.

The Company believes that continued and full access to the Multi-Draw Term Loan Note, in combination with cash generated from operations, will provide sufficient funds through December 31, 2008. However, should the Company’s internal revenue forecasts fail to be achieved, if its cost of goods and operating expense projections are exceeded, or if the ability to draw on the Multi-Draw Term Loan Note is restricted or terminated, the Company will require additional capital in the short term. Although the Investors who have provided the Multi-Draw Term Loan Note have historically demonstrated a willingness to provide additional capital to the Company, there is no assurance they will continue to do so in the future, or, if they chose to do so, under what terms. If the Investors become unwilling to provide additional funds through the Multi-Draw Term Loan Note, the Company will need to find immediate additional sources of capital and there can be no assurance that such capital would be available at all, or if available, that the terms of such financing would not be dilutive to other stockholders. If the Company is unable to secure additional capital as circumstances require, it may not be able to continue its operations. Future capital requirements will depend on many factors, including the ability to market and sell the Company’s product line, research and development programs, the scope and results of clinical trials, the time and costs involved in obtaining regulatory approvals, the costs involved in obtaining and enforcing patents or any litigation by or against third parties regarding intellectual property, the status of competitive products, the maintenance of sales and marketing capabilities, and the establishment of collaborative relationships with other parties.

These financial statements assume that the Company will continue as a going concern.  If the Company is unable to continue as a going concern, the Company may be unable to realize its assets and discharge its liabilities in the normal course of business.  The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern.

3.

Inventories

Inventories consist of the following at December 31, 2007 and 2006:

	2007		2006
Raw materials	$	9,820	$	33,335
Finished goods		89,242		59,416
Total	$	99,062	$	92,751

The Company has a policy of segregating from its finished product inventory its preservation solutions inventory with labeled expiration dates that have passed.  During June 2006, the Company suffered a loss related to this segregated inventory and subsequently submitted an insurance claim.  The Company settled the claim in December 2006, which resulted in a total gain of $406,388.

29

4.

Notes payable

At December 31, 2007 and 2006, notes payable consisted of the following:

		2007		2006
Note payable to Tioga County LDC, secured by all assets, payable
in monthly installments of $3,258, including interest of 5%,
final payment made in February 2007.			$	197,477
Notes payable to Thomas Girschweiler and Walter Villiger, secured by all assets, principal balances of all notes payable outstanding at 12/31/07 due in full in 2010, including interest of 7% (see Note 11)	$	2,750,000		-
Total notes payable		2,750,000		197,477
Less: current portion		-		197,477
				-
Long-term portion	$	2,750,000	$

In December 2006, the Company received an insurance settlement check of $190,837 which was made payable to the Company and the Tioga County LDC (“the LDC”).  Since the insurance settlement was related to assets lost in a flood which served as collateral on the note, the LDC subsequently called the note and demanded the Company sign over the insurance check to be applied to the outstanding note balance.  The Company agreed to these terms and paid the remaining balance of the note in February 2007.   The amount of the settlement check has been reflected as restricted cash in the accompanying financial statements at December 31, 2006.

As described more fully in Note 11, on January 11, 2008, the Company entered into a Secured Convertible Multi-Draw Term Loan Facility Agreement with the current lenders which allowed the refinancing of existing indebtedness and related accrued interest totaling $107,325.  Based on SFAS No. 6 guidance, the Company is reporting the total amount of the notes payable on December 31, 2007 as long-term liabilities due to this refinancing.

5.

Income taxes

Income tax benefit reconciled to tax calculated at statutory rates is as follows:

	2007		2006
Federal tax (benefit) at statutory rate	$	(969,603)	$	(385,566)
State income tax (benefit), net of federal tax (benefit)		(141,163)		(56,134)
Expiration of net operating loss carryforwards		1,754,509		982,673
Expiration of tax credits		125,000		88,000
Change in valuation allowance		(773,234)		(676,692)
Non-deductible stock-based compensation		-		57,214
Other		4,491		(9,495)
Provision for income taxes, net	$	-	$	-

30

At December 31, 2007 and 2006, the components of the Company’s deferred taxes are as follows:

		2007		2006
Deferred tax assets (liabilities)
Net operating loss carryforwards	$	12,264,456	$	12,946,597
Tax credits		442,000		567,000
Accrued compensation		30,460		24,194
Depreciation		(3,379)		16,073
Stock-based compensation		90,688		44,766
Other		1,948		777
Total		12,826,173		13,599,407
Less:  Valuation allowance		(12,826,173)		(13,599,407)
Net deferred tax asset	$	-	$	-

The Company has the following net operating loss and research and development (R&D) tax credit carryforwards

available at December 31, 2007:

	Net Operating  Losses		R&D Tax Credits
Year of Expiration
2008	$	5,893,000	$	150,000
2009		1,431,000		114,000
2010		1,562,000		145,000
2011		5,277,000		33,000
2012		1,570,000		-
2013		1,425,000		-
2014		1,234,000		-
2020		2,849,000		-
2021		4,168,000		-
2023		1,217,000		-
2024		646,000		-
2025		589,000		-
2026		873,000		-
2027		2,753,000		-
Total	$	31,487,000	$	442,000

In the event of a significant change in the ownership of the Company, the utilization of such loss and tax credit carryforwards could be substantially limited.

31

6.

Stockholders’ equity

In March 2006, in an effort to secure additional capital, the Board of Directors approved a plan to raise additional capital from the holders of its outstanding warrants and stock options at a reduced price of $0.04 per share, in order to (a) prevent further dilution by the issuance of additional securities to outsiders, and (b) to restructure the capitalization of the Company.  Under the terms of the plan, the Company offered to:

1.

the holders of the Company’s (a) 12,000 shares of Series F Preferred Stock, convertible into 4,800,000 shares of the Company’s Common Stock, and (b) the 6,000 Series F Warrants to purchase 2,400,000 shares of the Company’s Common Stock at $.375 per share purchased in conjunction with the Series F Preferred Stock,  the right to exercise the Series F Warrants and purchase the shares of Common Stock issuable upon exercise thereof at $.04 per share (same number of shares at a lower price), provided that (a) simultaneously with the exercise of such right, the holder converts his shares of Series F Preferred Stock into shares of the Company’s Common Stock, and (b) the conversion of the Series F Preferred Stock and exercise of the Series F Warrants take place on or before May 1, 2006;

2.

the holders of the Company’s (a) 55.125 shares of Series G Preferred. Stock, convertible into 17,226,563 shares of the Company’s Common Stock, and (b) the 55.125 Series G Warrants to purchase 17,226,563 of the Company’s Common Stock at $.08 per share purchased in conjunction with the Series G Preferred Stock, the right to exercise the Series G Warrants and purchase the shares of Common Stock issuable upon exercise thereof at $.04 per share (same number of shares at a lower price), provided that (a) simultaneously with the exercise of such right, they convert their shares of Series  G Preferred Stock into shares of the Company’s Common Stock, and (b) the conversion of the Series G Preferred Stock and exercise of the Series G Warrants take place on or before May 1, 2006;

3.

the holders of all exercisable Stock Options to purchase shares of the Company’s Common Stock (an aggregate of 3,511,000 shares of the Company’s Common Stock) at prices ranging from $.08-$2.50 per share, the right to exercise such Stock Options and purchase the shares of Common Stock issuable upon exercise thereof at $.04 per share (the same number of shares at a lower exercise price), provided that the exercise of such stock options takes place on or before May 1, 2006; and

4.

the holders of all Warrants to purchase shares of the Company’s Common Stock (an aggregate of 7,640,295 shares of the Company’s Common Stock) at prices ranging from $.08-$41.25 per share, the right to exercise such warrants and purchase the shares of Common Stock issuable upon exercise thereof at $.04 per share (the same number of shares at a lower price), provided the exercise of the warrants takes place on or before May 1, 2006.

The offering was conditioned upon all shares of the Company’s Series F Preferred Stock and Series G Preferred Stock converting into Common Stock of the Company.

The offering was completed on May 1, 2006 and the Company was able to raise $879,341 in cash and reduce liabilities by $113,187 through (a) the exercise of warrants to purchase 23,022,783 shares of the Company’s Common Stock at $0.04, and (b) the exercise of stock options to purchase 2,547,000 shares of the Company’s Common Stock at $0.04.  As part of the plan, 12,000 shares of the Company’s Series F Preferred Stock were converted to 4,800,000 shares of Common Stock and 55.125 shares of the Company’s Series G Preferred Shares were converted to 17,226,563 shares of Common Stock.  After the conversion, the company terminated all designations of Series F and G Preferred Shares.  In addition, on May 1, 2006, the Company declared, effective as of December 31, 2005, $507,808 and $217,181 in accumulated dividends payable on the Series F preferred stock and Series G preferred stock, respectively, which dividends were pa id in common stock of the Company on May 1, 2006.  The total number of shares paid in connection with such dividends was 8,763,633.  After the payment of such dividends, the issuance of shares of common stock in connection with the conversion of the Series F preferred stock and Series G preferred and the aforementioned exercise of options and warrants, the Company had 68,773,188 shares of common stock issued and outstanding.

Preferred Series F stock:  In October 2001, the Company completed a private placement of 5,000 Units, raising approximately $1,000,000.  Each Unit was priced at $200.01 and consisted of two shares of Series F convertible preferred stock, convertible into 800 shares of common stock, and one warrant to purchase 400 shares of common stock at $0.375 per share, on or before October 2006.  The Company retained an advisor to assist the Company in finding qualified investors to purchase the Units.  The Advisor was entitled to a finder’s fee equal to 10 percent of the monies received by the Company, payable in Units valued at $200.01 per Unit.  The Advisor was also entitled to a cash fee of 7 percent with respect to the monies received by the Company upon exercise of the warrants.  The Units were placed with investors in the United States and Europe, and the sales of the Units were exempt from Registration under t he Securities Act pursuant to Rule 506 of Regulation D and Rule 903 of Regulation S.

32

In December 2001, the Company received an additional $200,000 after completing a private placement of an additional 1,000 Units under the same terms as the Units issued in October 2001.

In connection with the private placement of Units in 2001, the Company issued warrants to purchase 240,000 shares of the Company’s common stock to the Advisor.

In May 2006, all 12,000 shares of the Company’s Series F preferred stock were converted to 4,800,000 shares of common stock.  After the conversion, the Company terminated all designations of Series F Preferred Shares.

Preferred Series G stock:  In December 2003, the Company completed a private placement of 55.125 Units, raising $1,226,533 in cash, net of issuance costs of $23,467 and $128,125 as payment of accrued salaries to certain employees.  Each Unit was priced at $25,000 and consisted of one share of Series G convertible non-redeemable preferred stock, convertible into 312,500 shares of common stock, and one warrant to purchase 312,500 shares of common stock at $0.08 per share, on or before October 2013.  The Units were placed with investors in the United States and Europe, and the sales of the Units were exempt from Registration under the Securities Act pursuant to Rule 506 of Regulation D and Rule 903 of Regulation S.

In connection with the issuance of the Series G preferred stock, the Company recorded a deemed dividend of $521,000 in accordance with the accounting requirements for a beneficial conversion feature.  The proceeds received in the Series G offering were first allocated between the convertible instrument and the Series G warrant on a relative fair value basis.  A calculation then was performed to determine the difference between the effective conversion price and the fair market value of the common stock at the date of issuance.

In May 2006, all 55.125 shares of the Company’s Series G preferred stock were converted to 17,226,563 shares of common stock.  After the conversion, the Company terminated all designations of Series G Preferred Shares.

Warrants:  The following table summarizes warrant activity for the years ended December 31, 2007 and 2006:

	Year Ended		Year Ended
	December 31, 2007		December 31, 2006
		Wgtd. Avg.		Wgtd. Avg.
		Exercise		Exercise
	Shares	Price	Shares	Price
Outstanding at beginning
of year	4,244,075	$      0.46	27,266,858	$      0.20
Exercised	-	-	(23,022,783)	(0.04)
Cancelled	(5,000)	0.53
Outstanding at end of year	4,239,075	$      0.46	4,244,075	$      0.46
Warrants exercisable at
year end	4,239,075	$      0.46	4,244,075	$      0.46

The outstanding warrants have expiration dates between August 2008 and December 2013.

The total intrinsic value of warrants exercised was $0 and $690,683 during the years ended December 31, 2007 and 2006, respectively.

Stock compensation plans:  The Company’s 1988 Stock Option Plan was approved and adopted by the Board of Directors in July 1988 and had a term of ten years.  The plan expired in 1998.  The options are exercisable for up to ten years from the grant date.

During 1998, the Company adopted the 1998 Stock Option Plan.  Under the plan, an aggregate of 4,000,000 shares of common stock are reserved for issuance upon the exercise of options granted under the plan.  In September 2005, the shareholders approved an increase in the number of shares available for issuance to 10,000,000 shares.  The purchase price of the common stock underlying each option may not be less than the fair market value at the date the option is granted (110% of fair market value for optionees that own more than 10% of the voting power of the Company).  The options are exercisable for up to ten years from the grant date.  The plan expires August 30, 2008.  

33

The following is a summary of stock option activity under the plans for 2007 and 2006, and the status of stock options outstanding and available under the plans at December 31, 2007 and 2006:

	Year Ended		Year Ended
	December 31, 2007		December 31, 2006
		Wgtd. Avg.		Wgtd. Avg.
		Exercise		Exercise
	Shares	Price	Shares	Price
Outstanding at beginning
of year	5,439,000	$      0.15	5,566,000	$      0.31
Granted	4,325,000	0.09	2,440,000	0.07
Exercised	-	-	(2,547,000)	(0.04)
Forfieted	(2,920,000)	(0.10)	(20,000)	(0.08)
Outstanding at end of year	6,844,000	$      0.12	5,439,000	$      0.15
Stock options exercisable at
year end	1,875,000	$      0.22	2,215,666	$      0.24

The weighted average grant-date fair value of option awards granted was $.06 and $.05 per share during the years ended December 31, 2007 and 2006, respectively.

The total intrinsic value of options exercised was $0 and $76,410 for the years ended December 31, 2007 and 2006, respectively.

The following table summarizes information about stock options outstanding at December 31, 2007:

		Weighted
	Number	Average	Weighted
	Outstanding	Remaining	Average
Exercise	at December	Contractual	Exercise
Prices	31, 2007	Life	Price
0.07	1,700,000	8.62	$          0.07
0.08	3,485,000	8.82	$          0.08
0.085	500,000	8.33	$         0.085
0.09	160,000	9.85	$          0.09
0.10	640,000	9.60	$          0.10
0.25	150,000	4.50	$          0.25
1.25	209,000	0.89	$          1.25
	6,844,000	8.50	$          0.12

Total unrecognized compensation cost at December 31, 2007 of $161,013 is expected to be recognized over a weighted average period of 3 years.

During the year ended December 31, 2007, the Company issued ten-year options to employees and directors to purchase 4,325,000 common shares.  Options to purchase 1,250,000 shares were awarded to five outside directors which will be 100% vested on the first anniversary date of the awards.  Options to purchase 1,750,000 shares were awarded to two employees that vest as follows:  one third on the first anniversary date of the awards, one third on the second anniversary date of the awards, and the remainder on the third anniversary date of the awards. Options to purchase 1,325,000 shares were awarded to seven employees that vest as follows:  one quarter on the first anniversary date of the awards, one quarter on the second anniversary date of the awards, one quarter on the third anniversary date of the awards, and the remainder on the fourth anniversary date of the awards.

During the year ended December 31, 2006, the Company issued ten-year options to employees and directors to purchase 2,440,000 common shares.  Options to purchase 500,000 shares were awarded to an outside director which were 25%

34

exercisable upon grant with the remaining shares vesting to the extent of 125,000 shares on the next three anniversary dates of the award.  Options to purchase 1,940,000 shares were awarded to employees that vest as follows:  one third on the first anniversary date of the awards, one third on the second anniversary date of the awards, and the remainder on the third anniversary date of the awards.  

Certain options awarded during 2006 and 2007 contain provisions which allow for the automatic proportionate adjustment of the number of shares covered and the exercise price of each share in the event that the Company changes its shares of common stock by a stock dividend, stock split, combination, reclassification, exchange, merger or consolidation.  

At December 31, 2007, there are 6,114,075 shares of common stock that could be issued upon the exercise of stock warrants and options.  The following table summarizes the potential shares to be issued upon exercise of the above instruments:

	Shares
Common stock options	1,875,000
Common stock warrants	4,239,075
Total	6,114,075

7.

Related party transactions

The Company incurred $169,204 and $64,535 in legal fees during the years ended December 31, 2007 and 2006, respectively, for services provided by a law firm in which a director and stockholder of the Company is a partner.  In 2007, the Company granted options to purchase 250,000 shares of common stock to this director and stockholder with an exercise price of $0.08 which vests one year from grant date and has a life of 10 years.  At December 31, 2007 and 2006, accounts payable, related parties includes $32,678 and $8,066, respectively, due to the related party for services rendered.

On March 15, 2004, the Company entered into three-year Research Agreement with Cell Preservation Services, Inc. (“CPSI”) to outsource to CPSI all of the Company’s research that was funded through SBIR grants.  CPSI is owned by John M. Baust, a former employee of BioLife who is also the son of John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer.  The Research Agreement established a format pursuant to which CPSI (a) took over the processing of existing applications of SBIR grants applied for by BioLife, (b) applied for additional SBIR grants for future research projects, (c) performed a substantial portion of the principal work to be done, in terms of (i) time spent, and (ii) research, in connection with existing and future projects, and (d) utilized BioLife personnel as consultants with r espect to the research.  In conjunction therewith BioLife granted to CPSI a non-exclusive, royalty free license (with no right to sublicense) to use BioLife’s technology soley for the purpose of conducting the research in connection with the projects.  Pursuant to the Research Agreement BioLife provides CPSI with (a) facilities in which to conduct the research including basic research equipment and office equipment, and (b) management services.  On January 8, 2007, the Company sent a written notice to CPSI that the Company has elected not to renew the Research Agreement, which expired on March 14, 2007.  No facilities or management fees were received during 2007 or 2006.

In November 2006, BioLife renewed an original three-year lease for a one year term with Field Afar Properties, LLC whereby BioLife leased 6,161 square feet of office, laboratory, and manufacturing space in Owego, NY at a rental rate of $6,200 per month.  The lease expired on January 15, 2008.  John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer; John M. Baust, the Company’s former Director of Research and Development; and Judy Baust, wife of John G. Baust and mother of John M. Baust are members of Field Afar Properties, LLC.  For the years ended December 31, 2007 and December 31, 2006, the Company paid rents of $74,400 and $74,400, respectively.

During 2006, the Company, CPSI and Field Afar, LLC experienced damage and destruction of property and equipment as a result of a flood.  Accounts payable as of December 31, 2006 includes $4,409 and $11,404 due to CPSI and Field Afar, LLC, respectively, in connection with an insurance claim submitted and recovered by the Company.

On August 7, 2007, the Board of Directors of the Company agreed to outsource to Roderick de Greef, a director of the Company, the task of overseeing the Company’s financing activities, internal accounting functions and SEC reporting, and assisting in the search for, and reviewing, strategic alternatives, on a part-time basis (up to 80 hours per month on an as needed basis), effective as of July 1, 2007 (since he was effectively serving the Company in such capacity since such date), on terms to be agreed upon by Mike Rice, the President of the Company, and Mr. de Greef, and approved by the Board.  

35

Subsequent to August 7, 2007, Mr. Rice and Mr. de Greef agreed to the following terms: (1) a fee of $10,000 per month, (2) reimbursement of business expenses, (3) 90 day advance notice of termination by the Company, and (4) the payment of one (1) year’s fees ($120,000) if terminated in connection with a Change of Control transaction.  As used herein the term Change of Control means  (A) there shall be consummated (1) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have the same proportionate ownership of at least 50% of common stock of the surviving corporation immediately after the merger, or (2) a ny sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; (B) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or (C) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the Company’s outstanding Common Stock.  On November 14, 2007, the arrangement was approved by the Board of Directors of the Company.  The Company paid consulting fees of $60,000 for year ended December 31, 2007.

8.

Commitments and Contingencies

Leases:  In July 2007, the Company signed a 4-year lease, commencing August 1, 2007, for 4,366 square feet of office and laboratory space in Bothell, WA at an initial rental rate of $6,367 per month.  The Company is also responsible for paying its proportionate share of property taxes and other operating expenses as defined in the lease.

The following is a schedule of future minimum lease payments required under the facility lease:

Year Ending
December 31
2008		79,460
2009		82,638
2010		85,944
2011		52,139
Total	$	300,181

Rental expense for facility leases for the years ended December 31, 2007 and 2006, totaled $140,177 and $74,440, respectively.

Employment agreement:  The Company has an employment agreement with the Chief Executive Officer of the Company which automatically renews for successive one year periods in the event either party does not send the other a “termination notice” not less than 90 days prior to the expiration of the initial term or any subsequent term. The agreement provides for certain minimum compensation per month and incentive bonuses at the discretion of the Board of Directors.  Under certain conditions, the Company may be required to continue to pay the base salary under the agreement for a period of one to two years.

Litigation:  On February 7, 2007, Kristi Snyder, a former employee of the Company filed a complaint in the New York State Supreme Court, County of Broome, against the Company alleging a breach of an employment agreement and seeking damages of up to $300,000 plus attorneys’ fees.  This case currently is in discovery and depositions are being scheduled.  The Company does not believe there is any merit to such lawsuit and is vigorously defending its position.

On April 6, 2007, the Company was served with a complaint filed by John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer, in the New York State Supreme Court, County of Tioga, against the Company seeking, among other things, damages under his employment agreement to be determined upon trial of the action plus attorneys’ fees, a declaratory judgment that he did not breach his fiduciary duties to the Company, and that his covenant not to compete is void as against public policy or unenforceable as a matter of law, and to enjoin the Company from commencing an action against him in Delaware courts seeking damages for breaches of his fiduciary obligations to the Company.  This case is in discovery and depositions are in process.  The Company does not believe there is any merit to such lawsuit and is defen ding the same vigorously.

36

On June 15, 2007, the Company filed a lawsuit in the State of New York Supreme Court, County of Tioga against Cell Preservation Services, Inc. (“CPSI”) and Coraegis Bioinnovations, Inc. (“Coraegis”), both of which are owned and/or controlled by John M. Baust, a former employee of the Company and the son of John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer, both of whose employment with the Company was terminated on January 8, 2007.

On March 15, 2004, the Company had entered into a Research Agreement with CPSI, pursuant to which CPSI took over the processing of the Company’s existing, and, on behalf of the Company, was to apply for additional, SBIR grants, and, in each case, was to perform the research with respect to such grants.  In connection therewith, the Company granted to CPSI a limited license to use the Company’s technology (“BioLife’s Technology”), including the Company’s proprietary cryopreservation solutions (collectively, “Intellectual Property”), solely for the purpose of conducting the research pertaining to the SBIR grants, and CPSI agreed to keep confidential all Company confidential information disclosed to CPSI (“Confidential Information”).  On January 8, 2007, the Company informed CPSI that the Research Agreement would not be extended and would terminate in accordance with its terms on March 15, 2007.

The lawsuit states various causes of action, including, (1) repeated violations of the Research Agreement by CPSI by improperly using BioLife’s Technology, Intellectual Property and Confidential Information for its own purposes, (2) the unlawful misappropriation by CPSI and Coraegis, of the Company’s trade secrets, (3) unfair competition on the part of CPSI and Coraegis through their unlawful misappropriation and misuse of BioLife’s Technology, Intellectual Property and Confidential Information, and (4) the conversion of BioLife’s Technology, Intellectual Property and Confidential Information by CPSI and Coraegis to their own use without the Company’s permission.

The lawsuit seeks, among other things, (1) to enjoin CPSI from continuing to violate the Research Agreement, (2) damages as a result of CPSI’s breaches of the Research Agreement, (3) to enjoin CPSI and Coraegis from any further use of the Company’s trade secrets, (4) damages (including punitive damages) as a result of CPSI’s and Coraegis’ misappropriation of the Company’s trade secrets, (5) to enjoin CPSI and Coraegis from any further use of BioLife’s Technology, Intellectual Property and Confidential Information, (6) damages (including punitive damages) as a result of CPSI’s and Coraegis’ unfair competition against the Company, and (7) damages (including punitive damages) as a result of CPSI’s and Coraegis’ conversion of BioLife’s Technology, Intellectual Property and Confidential Information to their own use.  This case is in discovery and depositions are in process.

On December 4, 2007, John M. Baust, the son of John G, Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer, filed a complaint in the New York State Supreme Court, County of Tioga, against the Company and Michael Rice, the Company’s Chairman and Chief Executive Officer, alleging, among other things, a breach of an employment agreement and defamation of character and seeking damages against the Company in excess of $300,000 plus attorneys fees.  The case currently is in discovery. The Company does not believe there is any merit to this lawsuit and will defend it vigorously.

On December 27, 2007, John M. Baust, the son of John G, Baust, the Company’s former Chief Executive Officer and Chief Scientific Officer, filed a complaint with the State of New York, Division of Human Rights alleging unlawful discrimination practices against the Company based on wrongful termination due to retaliation for bringing complaints of sexual harassment on the part of Michael Rice, the Company’s Chairman and Chief Executive Officer.  The Company responded to the complaint on January 14, 2008.  On March 5, 2008, the Company was notified by the Division that this complaint was ordered dismissed and the filed closed due to the Division’s lack of jurisdiction in the matter, having determined that the civil suit filed by John M. Baust had precedence and precluded the Division from asserting jurisdiction.  The determination may be appealed within sixty (60) days from the date thereof.

On December 27, 2007, John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer, filed a complaint with the State of New York, Division of Human Rights alleging unlawful discrimination practices against the Company based on wrongful termination due to retaliation for bringing complaints of sexual harassment on the part of Michael Rice, the Company’s Chairman and Chief Executive Officer.  The Company responded to the complaint on January 22, 2008.  On March 5, 2008, the Company was notified by the Division that this complaint was ordered dismissed and the filed closed due to the Division’s lack of jurisdiction in the matter, having determined that the civil suit filed by John G. Baust had precedence and precluded the Division from asserting jurisdiction.  The determination may be appealed within sixty (60) days from the date thereof.

The Company has not made any accrual related to future litigation outcomes as of December 31, 2007.

37

9.

Concentration of risk

Significant customers:  Sales to individual customers representing more than 10% of total revenues totaled approximately $253,000 and $234,000 in 2007 and 2006, respectively.  These amounts represent revenues from one customer in 2007 and one customer in 2006.  

At December 31, 2007, two customers accounted for approximately 52% of total accounts receivable, and at December 31, 2006, two customers accounted for approximately 52% of total accounts receivable.

Sole source CMO:  The Company relies entirely on Bioserv Inc, a division of NextPharma Technologies, Inc., a CMO located in San Diego, CA., as its sole source for the production of its line of preservation products.  If the existing CMO is unable or unwilling to meet the demand for finished products, or if the components or finished products they supply do not meet quality and/or other specifications, or if the Company is unable to meet the terms of the agreement, it could materially and adversely affect its ability to fulfill customer orders in a timely manner, if at all.  This situation may in turn, adversely affect the relationship with its customers.

10.

Supplemental cash flow disclosures

Actual cash payments:  Cash payments were as follows for the years ended December 31, 2007 and 2006:

	2007		2006
Interest	$	6,074	$	12,751

No cash was paid for income taxes for the years ended December 31, 2007 and 2006.

Non-cash investing and financing activities:  During the year ended December 31, 2006, in conjunction with employees’ exercise of stock options and warrants to purchase Company common stock, the Company received consideration in the form of forgiveness of $113,187 in accrued vacation pay and travel allowances as well as the assumption of $30,264 in stock subscriptions receivable.  During the year ended December 31, 2006, 12,055 shares of Company Series F and G preferred stock were converted into 22,026,563 shares of Company common stock.  Additionally, $724,989 in Series F and G preferred stock dividends were declared and paid in 8,763,633 shares of Company common stock.

The Company issued a total of 833,332 shares to the current note holders in consideration for financing fees related to the promissory notes executed in February 2007. The total shares were valued at $75,000.

11.

Subsequent events

On January 11, 2008, the Company entered into a Secured Convertible Multi-Draw Term Loan Facility Agreement with each of  Thomas Girschweiler, a director and stockholder of the Company,  and Walter Villiger, an affiliate of the Company, each a non-U.S. Person (“U.S. Person” being defined in Regulation S of the Securities Act of 1933, as amended) (collectively, the “Investors”), pursuant to which each Investor extended to the Company a secured convertible multi-draw term loan facility (the “Facility”) of $2,500,000, which Facility (a) incorporates (i) a refinancing of existing indebtedness of the Company to the Investor and accrued interest thereon, in the aggregate amount of $1,431,563.30, (ii) a current advance of $300,000, and (iii) a commitment to advance to the Company, from time to time, additional amounts up to a maximum of $768,436.70, (b) bears interest at the rate of 7% per annum on the principal balance outstanding from time to time, (c) is evidenced by a secured convertible multi-draw term loan note (the “Multi-Draw Term Loan Note”), due and payable, together with accrued interest thereon, the earlier of (i) January 11, 2010, or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (d) if outstanding at the time of any bona fide equity financing of the Company of at least Two Million Dollars ($2,000,000) (a “Financing”), at the option of the Investor, may be converted into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the quotient obtained by dividing the principal amount of the Facility outstanding at the time of the conversion plus accrued interest thereon by 85% of the per share or per unit purchase price of the New Equity Securities, and (e) is secured by all of the Company’s assets.

On February 25, 2008, the Company sent of notice of termination, effective February 29, 2008, to VWR International (“VWR”) of the Exclusive Private Label Distribution Agreement, executed by the parties on May 5, 2005, such notice being given due to VWR’s failure to cure a breach of the agreement.   

38

ITEM 8: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On July 10, 2007, Aronson and Company was dismissed as the Company’s auditors. The decision to dismiss Aronson and Company was approved by the Company’s Board of Directors. Aronson and Company served as the Registrant's independent auditor for the Company’s fiscal years ended December 31, 2005 and 2006.  Aronson and Company’s report on the Company’s financial statements for the years ended December 31, 2005 and 2006 (the “Report”) did not contain an adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles. However, the Report was modified to include an explanatory paragraph wherein Aronson expressed substantial doubt about the Registrant’s ability to continue as a going concern.

During the Company’s fiscal years ended December 31, 2005 and 2006, and during the period from January 1, 2006 until July 10, 2007, there were no disagreements with Aronson and Company on any matter of accounting principles or practices, financial statement disclosures, or auditing scope or procedure, which disagreements, if not resolved to Aronson and Company satisfaction, would have caused Aronson and Company to make reference thereto in their report on the Registrant’s financial statements for this fiscal year.

On July 24, 2007, the Company engaged Peterson Sullivan PLLC, (“Peterson”), Certified Public Accountants, as the Company's independent accountant to report on the Company’s balance sheet as of December 31, 2007, and the related statements of operations, stockholders' equity and cash flows for the year then ended. The decision to appoint Peterson was a result of the Company relocating  its corporate headquarters to Bothell, Washington from Owego, New York, and the desire to have a local accounting firm.  Prior to engaging the new accountant, the Company did not consult with Peterson regarding the application of accounting principles to any contemplated or completed transactions nor the type of audit opinion that might be rendered on the Company’s financial statements, and neither written nor oral advice was provided that would be an important factor considered by the Company in reaching a decision as to an accounting, auditing or financial repo rting issue.

ITEM 8A.  CONTROLS AND PROCEDURES

 Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of the financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. This process includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with au thorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of the internal control over financial reporting to future periods are subject to risk that the internal control may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Our management conducted an initial phase evaluation of the effectiveness of our internal control over financial reporting based on the framework in “Internal Control — Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), as of December 31, 2007. This initial phase consisted of a top-down approach to risk assessment as provided for by SEC guidance and did not identify any material weaknesses. However, based on the stage of completion of our assessment, in particular, the lack of the testing phase of the operating effectiveness of our internal controls, we conclude that as of December 31, 2007, our internal control over financial reporting was not effective.

Since the completion of the internal control design phase of our evaluation of the effectiveness of our internal control over financial reporting, we have been working with our consulting firm to develop a plan which will be designed to test the operating effectiveness of our internal controls. We anticipate that this phase of the project will be completed by the end of

39

2008, in order to be in a position to provide a full and complete evaluation of the effectiveness of our internal control over financial reporting to be filed as part of the Form 10-K filing for the year ending December 31, 2008.

Disclosure controls and procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report, pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended. Based on that evaluation, our chief executive officer has concluded that our disclosure controls and procedures, as of the end of the period covered by this report, were effective.

Changes in internal control over financial reporting

There has been no change in our internal control over financial reporting during the fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

40

PART III

ITEM 9.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following table and text set forth the names and ages of all directors and executive officers and one key employee of the Company as of March 31, 2008.  The Board of Directors is comprised of only one class.  All of the directors will serve until the next annual meeting of shareholders, and until their successors are elected and qualified, or until their earlier death, retirement, resignation or removal.  There are no family relationships among directors and executive officers.  Also provided herein are brief descriptions of the business experience of each director and executive officer during the past five years (based on information supplied by them) and an indication of directorships held by each director in other companies subject to the reporting requirements under the Federal securities laws.

		Position and Offices
Name	Age	With the Company
Michael Rice	45	Chief Executive Officer,
		President, and Director
Laurie Smith	48	Controller
Howard S. Breslow	68	Director, Secretary
Roderick de Greef	47	Director
Thomas Girschweiler	50	Director
Raymond Cohen	48	Director
Andrew Hinson	42	Director

Michael Rice has been President and Chief Executive Officer and a director of the Company since August 2006.  From October 2004 to August 2006, Mr. Rice served as Sr. Business Development Manager for the Medical & Wireless Products Group at AMI Semiconductor, Inc. (NASDAQ: AMIS).  Prior thereto, from October 2000 to October 2004 he served as Director of Marketing & Business Development, Western Region Sales Manager, and Director, Commercial Sales at Cardiac Science, Inc. (NASDAQ: CSCX), from May 1998 to October 2000 as Vice President, Sales and Marketing at TEGRIS Corporation, and from May 1986 to May 1998 in several sales and marketing roles at Physio Control Corporation.

Laurie Smith has served as Controller of the Company since September 2007.  Prior to joining BioLife, she served as Finance Manager at Northstar Neuroscience, Inc., a public medical device company, from its inception in June 1999 to April 2007.  Prior thereto, from August 1996 to July 1998 she served as Accounting Manager at Heartstream, Inc., and from August 1992 to June 1996 as Senior Accountant at Panlabs, Inc.

Howard S. Breslow has served as a director of the Company since July 1988.  He has been a practicing attorney in New York City for more than 40 years and is a member of the law firm of Breslow & Walker, LLP, New York, New York, which firm serves as general counsel to the Company.  

Roderick de Greef has served on the Company’s Board of Directors since June 19, 2000.  Effective July 1, 2007, Mr. de Greef was retained by the Company as an outside consultant to provide oversight of the Company’s financing activities, internal accounting functions and SEC reporting, and assist in the search for, and reviewing, strategic alternatives. Mr. de Greef is the principal of Taveyanne Capital Advisers, Inc., a firm providing corporate finance consulting services.  Mr. de Greef has served as the Chief Financial Officer of Cambridge Heart from October 2005 to July 2007.  Mr. de Greef served as the Executive Vice President, Chief Financial Officer and Secretary of Cardiac Science, Inc. from March 2001 to September 2005.  From 1995 to 2001, Mr. de Greef provided corporate finance advisory services to a number of early stage companies including Cardiac Science, where he was instrumental in securing equity ca pital beginning in 1997, and advising on merger and acquisition activity.  From 1989 to 1995, Mr. de Greef was Vice President and Chief Financial Officer of BioAnalogics, Inc. and International BioAnalogics, Inc., both publicly held development stage medical technology

41

companies located in Portland, Oregon.  From 1986 to 1989, Mr. de Greef was Controller and then Chief Financial Officer of publicly held Brentwood Instruments, Inc.  Mr. de Greef also serves on the board of directors of Endologix, Inc., a public medical device company located in Irvine, California, and Elephant Talk Communications, Inc., a public telecommunications based in Orange, California.

Thomas Girschweiler joined the Board in 2003.  Mr. Girschweiler has been engaged in corporate financing activities on his own behalf since 1996.  From 1981 to 1996 he was an investment banker with Union Bank of Switzerland.  Mr. Girschweiler was graduated at the Swiss Banking School.

Raymond Cohen joined the Board in May 2006.   Mr. Cohen currently serves as Chief Executive Officer of Laguna Hills, CA-based Symphony Medical, Inc., a venture capital backed privately-held developer of biologic solutions for the treatment of cardiac conduction abnormalities. Mr. Cohen also a director of Bothell, WA-based Cardiac Science Corporation (NASDAQ: CSCX), a global leader in advanced cardiac monitoring and defibrillation products formed by the merger of Quinton Cardiology Systems, Inc., and Cardiac Science, Inc., where he served as Chief Executive Officer for nine years.  Mr. Cohen also serves as a member of the Board of Directors of Syncroness, Inc., a privately-held contract engineering and product development firm based in Westminster, CO.  He is a member of the Advisory Board for the College of Osteopathic Medicine, Western University of Health Sciences in Pomona, CA.

Andrew Hinson joined the Board in February 2007.  He currently is the Vice President for Clinical and Regulatory Affairs for Symphony Medical, Inc., a developer of proprietary biopolymer and cellular-based biologic therapies to effectively treat chronic and post-operative atrial fibrillation and other cardiac conduction abnormalities.  Mr. Hinson has diverse experience in the cell and gene therapy markets and extensive experience managing clinical trials for new biologic based therapies for cardiac, neurologic, and gastrointestinal applications.  

Committee Membership, Meetings and Attendance

During the fiscal year ended December 31, 2007, there were:

o 6 meetings of the Board of Directors;

o no meetings of the Audit and Finance Committee; (as it was newly formed in February 2008)

o no meetings of the Compensation Committee (as it was newly formed in February 2008); and

o no meetings of the Nominating and Corporate Governance Committee (as it was newly formed in February 2008).

Each director attended or participated in at least 75% of the meetings of the Board of Directors held during our fiscal year ended December 31, 2007.

Board Committees

In February 2008 our Board of Directors has established three standing committees: Audit and Finance, Nominating and Corporate Governance, and Compensation.

Audit and Finance Committee

On February 11, 2008, we formed a separately designated standing Audit & Finance Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934 (the “Exchange Act”). Our Audit Committee is currently composed of Messrs. Girschweiler, Cohen and de Greef. The Board of Directors has determined that Mr. de Greef is an “audit committee financial expert” as defined in Item 407(d)(5)(ii) of Regulation S-K. The Audit Committee has the sole authority and responsibility to select, evaluate and replace our independent registered public accounting firm or nominate the independent auditors for stockholder approval. The Audit Committee must pre-approve all audit engagement fees and terms and all non-audit engagements with the independent auditors. The Audit Committee consults with management but does not delegate these responsibilities.

The Audit Committee reviewed and discussed our audited financial statements as of and for the year ended December 31, 2007 with the Board of Directors.

42

Compensation Committee

Our Compensation Committee was formed on February 11, 2008 and consists of Messrs., Hinson, Cohen and Girschweiler. Therefore, the Compensation Committee did not meet in fiscal 2007. Our Compensation Committee will award stock options to officers and employees. The Compensation Committee has overall responsibility for approving and evaluating the executive officer compensation plans, policies and programs of the company.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee was formed on February 11, 2008 and consists of Messrs. Hinson, de Greef and Breslow. Therefore, the Nominating and Corporate Governance Committee did not meet in fiscal 2007. The Nominating and Corporate Governance Committee is responsible for (1) reviewing suggestions of candidates for director made by directors and others; (2) identifying individuals qualified to become Board members, and recommending to the Board the director nominees for the next annual meeting of stockholders; (3) recommending to the Board director nominees for each committee of the Board; (4) recommending to the Board the corporate governance principles applicable to the company; and (5) overseeing the annual evaluation of the Board and management. Pursuant to the Nominating and Corporate Governance Committee charter, there is no difference in the manner in which a nominee is evaluated based on whether the nominee is recommended by a stockholder or otherwise.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Company’s executive officers, directors, and beneficial owners of more than 10% of any class of its equity securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 (collectively, the “Reporting Persons”) are required to file reports of ownership and changes in beneficial ownership of the Company’s equity securities with the Securities Exchange Commission. Copies of those reports also must be furnished to the Company.  Based solely on review of the copies of such forms furnished by the Company, the Company believes that during the year ended December 31, 2007, the Reporting Persons complied with all applicable Section 16(a) filing requirements.

Code of Ethics

The Company has always encouraged its employees, including officers and directors to conduct business in an honest and ethical manner.  Additionally, it has always been our policy to comply with all applicable laws and provide accurate and timely disclosure.  Accordingly, the Board has adopted formal written codes of ethics for both our executive officers and for our directors.

Our codes of ethics are designed to deter wrongdoing and promote honest and ethical conduct and compliance with applicable laws and regulations.  These codes also incorporate our expectations of our executives that enable us to provide accurate and timely disclosure in our filings with the Securities and Exchange Commission and other public communications.  Our code of ethics is posted on our website, www.BioLifeSolutions.com.  Any future changes or amendments to our code of ethics, and any waiver of our codes of ethics will be posted on our website when applicable.

43

ITEM 10.  EXECUTIVE COMPENSATION

The following table sets forth certain information concerning the compensation paid by the Company to its Chief Executive Officer, its two highest compensated executive officers (other than the Chief Executive Officer) and any additional executive officers who received salary and bonus payments in excess of $100,000 during the fiscal year ended December 31, 2007 (collectively the  “Named Executive Officers”).

SUMMARY COMPENSATION TABLE

							Nonqualified
Name and Principal				Stock	Option	Non-Equity Incentive Plan	Deferred Compensation	All Other
Positions  (a)	Year  (b)	Salary ($) (c)	Bonus ($) (d)	Awards ($) (e)	Awards ($) (f) (1)	Compensation ($) (g)	Earnings ($) (h)	Compensation ($)  (i)	Total ($) (j)
Michael Rice	2007	200,000	100,000	-	39,461 (2)	-	-	-	339,461
President, Chief	2006	79,861	25,000	-	9,254 (2)	-	-	-	114,115
Executive Officer and
Director (8/06 – present)
John G. Baust	2007	39,091	-	-	-	-	-	-	39,091
President, Chief	2006	224,253(3)	-	-	119,249 (4)	-	-	157,560 (5)	501,062
Executive Officer and   Director (through 8/06)   Chief Scientific Officer   and Board Chairman   (8/06 – 1/07)
Matthew Snyder	2007	140,000	-	-	9,763 (2)	-	-	18,138 (6)	167,901
Vice President	2006	29,167	-	-	405 (2)	-	-	2,912 (6)	32,484
(10/06 – 12/07)

(1)

See Item 7, note 1, for a description on the valuation methodology of stock option awards.

(2)

Amounts are a result of options granted to each officer.

(3)

Includes voluntary salary reduction in 2006 of $15,747 to support cash flow.

(4)

Includes $70,905 for ten-year option awards granted during 2001, 2002 and 2005 to purchase 1,000,000 shares with each award and $48, 344 for fully vested option and warrant award to purchase 2,258,555 shares which were repriced to $0.04 per share and exercised during 2006.  The 2001 and 2002 awards vest ratably over a five-year period, commencing with the first anniversary date of the date of grant and the 2005 award vest ratably over a four-year period, commencing with the first anniversary date of the date of grant. See “Private Placements” under Item 5 for a further description of the repriced option and warrant awards.

(5)

Includes $89,503 for payment for unused vacation time and travel allowance, and $68,057 for the excess of the fair market value of the shares acquired when repriced options and warrants were exercised over the reduced exercise price therof.

(6)

Represents sales commissions

Employment Agreements

The Company has an employment agreement with Michael Rice, its President and Chief Executive Officer, which agreement automatically renews for successive one year periods in the event either party does not send the other a “termination notice” not less than 90 days prior to the expiration of the initial term or any subsequent term.  The agreement provides for a salary of $200,000 per year and an incentive bonus based on certain quarterly milestones, to be determined by the Board of Directors.  The officer also received ten-year incentive stock options to purchase 1,500,000 shares of common stock at $.07 per share (the fair market value on the date of grant), which vest to the extent of 500,000 shares on each of the first three anniversary dates of the date of grant.  The Company amended this employment agreement on February 7, 2007 to provide that if, in connection with a & #147;change in control,” Mr. Rice’s employment is terminated without “Cause” or he resigns for “Good Reason,” he will be entitled to the continued payment of salary and bonuses and the reimbursement of medical insurance premiums for 24 months following the change in control event.  On February 11, 2008, Mr. Rice’s salary was increased to $300,000 per annum, retroactive to January 1, 2008 and his quarterly bonus plan was supplanted for 2008 with an annual review by the Board of Directors to take place in early 2009.

44

On July 26, 2006, the Company entered into an employment agreement with John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Company’s Chairman, Sr. Vice President and Chief Scientific Officer, pursuant to which (A) he was employed by the Company for an initial term of one (1) year, which term automatically renewed for additional one (1) year periods, unless not less than 90 days prior to the commencement of any such one (1) year period the Company notified Dr. Baust, in writing, that the term of the agreement would not be extended, (B) he was to receive a base salary of $20,000 per month through January 26, 2007, and thereafter $10,000 per month, and was to be entitled to annual bonuses of up to 50% of his base salary based upon the achievement of specific milestones to be accomplished by the Company (voluntarily or in voluntarily) within three (3) months after a Change of Control, the Company was to continue to pay his base salary for a period of 24 consecutive months, and (D) in the event his employment was terminated by the Company without cause, the Company was to continue to pay him his base salary through the end of the then current term of the agreement and any bonus to which he might be entitled through the end of the quarter during which such termination takes effect.  Dr. Baust’s employment was terminated on January 7, 2007.

The Company had an employment agreement with Matthew Snyder, its Vice President of Sales, which expired on October 17, 2007.  The agreement automatically renewed for successive one year periods in the event either party did not send the other a “termination notice” not less than 90 days prior to the expiration of the initial term or any subsequent term.  The agreement provided for a salary of $140,000 per year and commissions of 2% of all Company product sales.   The officer also received ten-year incentive stock options to purchase 100,000 shares of common stock at $0.07 per share (the fair market value on the date of grant), which vest to the extent of 33,333 shares on each of the first two anniversary dates of the date of grant and 33,334 shares on the third anniversary date of the grant.  

On December 4, 2007, the Company entered into a Separation Agreement with Matthew Snyder, the Company’s Vice President-Sales, pursuant to which (a) Mr. Snyder’s Employment Agreement with the Company was cancelled, (b) Mr. Snyder agreed to remain in the employ of the Company, through December 31, 2007, in the same capacity as he was then employed, and (c) thereafter, through March 30, 2008, the Company would (i) make severance payments to Mr. Snyder at the rate of $140,000 per annum, on the same basis and in accordance with the same procedures (including the withholding of taxes) as is applicable to the Company’s normal payroll procedures, and (ii) continue to pay for Mr. Snyder’s health insurance.

The following table provides information related to outstanding equity awards for each of the Named Executive Officers as of December 31, 2007:

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

	OPTION AWARDS					STOCK AWARDS
			Equity Incentive Plan Awards:					Equity Incentive Plan Awards:	Equity Incentive Plan Awards:
Name (a)	Number of Securities Underlying Unexercised Options (#) Exercisable (b)	Number of Securities Underlying Unexercised Options (#) Unexercisable (c)	Number of Securities Underlying Unexercised Unearned Options (#) (d)	Option Exercise Price ($) (e)	Option Expiration Date (f)	Number of Shares or Units of Stock That Have Not Vested (#) (g)	Market Value of Shares or Units of Stock That Have Not Vested ($) (h)	Number of Unearned Shares, units or Other Rights That Have Not Vested (#) (i)	Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) (j)
Michael Rice	500,000	1,000,000	-	0.07	8/7/2016 (1)	-	-	-	-
Michael Rice	-	1,000,000	-	0.08	2/7/2017 (2)	-	-	-	-
Matthew Snyder	33,000	67,000	-	0.07	10/17/2016 (3)	-	-	-	-

(1)

This award vests 500,000 shares on each of 8/7/2007, 8/7/2008, and 8/7/2009

(2)

This award vests 333,333 shares on each of 2/7/2008, 2/7/2009, and 333,334 shares on 2/7/2010

(3)

This award vested 33,333 shares on 10/17/2007. The remainder cancelled upon employment termination 12/31/07

45

Compensation of Directors

Beginning in 2006, outside directors are compensated $1,500 per meeting for attending board meetings and $750 per meeting for telephonic board meetings.  A total of $21,750 in director compensation was recorded during the year ended December 31, 2007.

The following table sets forth compensation paid to outside directors during the fiscal year ended December 31, 2007:

DIRECTOR COMPENSATION

Name  (a)	Fees Earned or Paid in Cash ($)  (b)	Stock Awards ($)  (c)	Option Awards ($) (d)	Non-Equity Incentive Plan Compensation ($) (e)	Non-Qualified Deferred Compensation Earnings ($) (f)	All Other Compensation ($) (g)	Total ($) (j)
Howard Breslow (1)	4,500	-	12,162	-	-	-	16,662
Thomas Girschweiler (2)	4,500	-	12,162	-	-	-	16,662
Roderick de Greef (3)	5,250	-	12,162	-	-	61,500	78,912
Raymond Cohen (4)	6,000	-	17,933	-	-	3,750	27,683
Andrew Hinson (5)	1,500	-	12,162	-	-	-	13,662

(1)

As of December 31, 2007, Mr. Breslow owned the following options and warrants, all of which were exercisable:  options to purchase 394,000 shares of Common Stock and warrants to purchase 2,078,910 shares of Common Stock. An additional grant of 250,000 options was awarded 2/7/07 which vests 100% on 2/7/08.

(2)

As of December 31, 2007, Mr. Girschweiler had received a grant of 250,000 options which vests 100% on 2/7/08.

(3)

As of December 31, 2007, Mr. de Greef owned the following options and warrants, all of which were exercisable:  options to purchase 250,000 shares of Common Stock and warrants to purchase 1,250,000 shares of Common Stock. An additional grant of 250,000 options was awarded 2/7/07 which vests 100% on 2/7/08.

(4)

As of December 31, 2007, Mr. Cohen had received a grant of 500,000 options upon joining the Board of Directors 5/1/06, of which 165,000 shares are vested. An additional grant of 250,000 options was awarded 2/7/07 which vests 100% on 2/7/08.

(5)

As of December 31, 2007, Mr. Hinson had received a grant of 250,000 options upon joining the Board of Directors 2/7/07 which vests 100% on 2/7/08.

On August 7, 2007, the Board of Directors of the Company agreed to outsource to Roderick de Greef, a director of the Company, the task of overseeing the Company’s financing activities, internal accounting functions and SEC reporting, and assisting in the search for, and reviewing, strategic alternatives, on a part-time basis (up to 80 hours per month on an as needed basis), effective as of July 1, 2007 (since he was effectively serving the Company in such capacity since such date), on terms to be agreed upon by Mike Rice, the President of the Company, and Mr. de Greef, and approved by the Board.  Subsequent to August 7, 2007, Mr. Rice and Mr. de Greef agreed to the following terms: (1) a fee of $10,000 per month, (2) reimbursement of business expenses, (3) 90 day advance notice of termination by the Company, and (4) the payment of one (1) year’s fees ($120,000) if terminated in connection with a Change of Control transaction. & nbsp;As used herein the term Change of Control means  (A) there shall be consummated (1) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have the same proportionate ownership of at least 50% of common stock of the surviving corporation immediately after the merger, or (2) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; (B) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or (C) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) ), shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the Company’s outstanding Common Stock.  On November 14, 2007, the arrangement was approved by the Board of Directors of the Company.

46

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 28, 2008, certain information regarding the beneficial ownership of Common Stock by (i) each stockholder known by the Company to be the beneficial owner of more than 5% of the outstanding shares thereof; (ii) each director of the Company; (iii) each Named Executive Officer of the Company; and (iv) all of the Company’s current directors and executive officers as a group.  

Name and Address of Beneficial Owner	Common Stock (1)	Percentage of Class
Michael Rice (Officer and Director) c/o BioLife Solutions, Inc. 3303 Monte Villa Pkwy, Suite 310 Bothell, WA  98021	2,500,000 (2)	3.6%
Matthew Snyder (Officer) c/o BioLife Solutions, Inc. 3303 Monte Villa Pkwy, Suite 310 Bothell, WA  98021	33,000 (3)	.05%
John G. Baust c/o CPSI 2 Court Street Owego, NY 13827	3,694,722	5.3%
Howard S. Breslow, Esq. (Director) c/o Breslow & Walker, LLP 767 Third Avenue New York, NY 10017	2,776,510 (4)	4.0%
Roderick de Greef (Director) c/o BioLife Solutions, Inc. 3303 Monte Villa Pkwy, Suite 310 Bothell, WA  98021	5,399,163 (5)	7.5%
Walter Villiger c/o BioLife Solutions, Inc. 3303 Monte Villa Pkwy, Suite 310 Bothell, WA  98021	19,240,081	27.6%
Thomas Girschweiler (Director) c/o BioLife Solutions, Inc. 3303 Monte Villa Pkwy, Suite 310 Bothell, WA  98021	14,656,552 (6)	21.1%
Beskivest Chart LTD Goodmans Bay Center West Bay Street & Sea View Drive Nassau, Bahamas	7,255,026	10.4%
Raymond Cohen (Director) c/o BioLife Solutions, Inc. 3303 Monte Villa Pkwy, Suite 310 Bothell, WA  98021 Andrew Hinson c/o BioLife Solutions, Inc. 3303 Monte Villa Pkwy, Suite 310 Bothell, WA  98021	805,000 (7) 250,000 (8)	1.2% .36%
All officers and directors as a group (six persons)	26,387,225	37.9%

_____________________________________________________________

(1)

Shares of Common Stock subject to options and warrants that are exercisable or will be exercisable are deemed outstanding for computing the number of shares beneficially owned.  The percentage of the outstanding shares includes those currently outstanding, but such options and warrants are not deemed outstanding for computing the percentage of any other person.  Except as indicated by footnote, and subject to community property laws where applicable, the Company believes that the persons named in the table have sole voting and investment power with respect to all shares shown as beneficially owned by them.

47

(2)

Includes 2,500,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company’s 1998 Stock Option Plan, of which 833,000 shares of Common Stock are attributable to options exercisable within 60 days of March 28, 2008.

(3)

Includes 33,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company’s 1998 Stock Option Plan, of which 33,000 shares of Common Stock were exercised 3/30/08

(4)

Includes 644,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company’s 1998 Stock Option Plan and 2,078,910 shares of Common Stock issuable upon the exercise of outstanding warrants, all of which options and warrants are currently exercisable, and 53,600 common shares.

(5)

Includes 500,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company’s 1998 Stock Option Plan, 1,250,000 shares of Common Stock issuable upon the exercise of outstanding warrants, all of which options and warrants are currently exercisable, and 3,649,163 common shares.

(6)

Includes 250,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company’s 1998 Stock Option Plan, all of which options are currently exercisable, and 14,406,552 common shares.

(7)

Includes 750,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company’s 1998 Stock Option Plan, of which 580,000 shares of Common Stock are attributable to options exercisable within 60 days of March 28, 2008, and 55,000 common shares.

(8)

Includes 250,000 shares of Common Stock issuable upon the exercise of outstanding stock options under the Company’s 1998 Stock Option Plan, all of which options are currently exercisable.

Securities Authorized for Issuance under Equity Compensation Plan

Plan category	Number of securities to be issued upon exercise of outstanding options (in thousands)	Weighted average  exercise price of outstanding options	Number of securities remaining  available for future issuance (in thousands)
Equity compensation plans approved by security holders	6,844	$.12	1,176
Equity compensation plans not approved by security holders	4,239	$.46	-
Total	11,083	$.25	1,176

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Howard S. Breslow, a director of the Company, is a member of Breslow & Walker, LLP, general counsel to the Company.  Mr. Breslow currently owns 53,600 shares of Common Stock of the Company and holds rights to purchase an aggregate of 2,434,910 additional shares pursuant to stock options and warrants issued to him and/or affiliates.  The Company incurred approximately $169,204 in legal fees during the year ended December 31, 2007 for services provided by Breslow & Walker, LLP.  At December 31, 2007, accounts payable includes $32,678 due to Breslow & Walker, LLP.

On March 15, 2004, the Company entered into three-year Research Agreement with Cell Preservation Services, Inc. (“CPSI”) to outsource to CPSI all of the Company’s research that was funded through SBIR grants.  CPSI is owned by John M. Baust, a former employee of BioLife who is also the son of John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer.  The Research Agreement established a format pursuant to which CPSI (a) took over the processing of existing applications of SBIR grants applied for by BioLife, (b) applied for additional SBIR grants for future research projects, (c) performed a substantial portion of the principal work to be done, in terms of (i) time spent, and (ii) research, in connection with existing and future projects, and (d) utilized BioLife personnel as consultants with r espect to the research.  In conjunction therewith BioLife granted to CPSI a non-exclusive, royalty free license (with no right to sublicense) to use BioLife’s technology soley for the purpose of conducting the research in connection with the projects.  Pursuant to the Research Agreement BioLife provides CPSI with (a) facilities in which to conduct the research including basic research equipment and office equipment, and (b) management services.  On January 8, 2007, the Company sent a written notice to CPSI that the Company has elected not to renew the Research Agreement, which expired on March 14, 2007.  No facilities or management fees were received during 2007.

48

Effective January 8, 2004, the Company entered into a non-cancelable operating lease for its corporate and manufacturing facilities in Owego, New York that initially expired in February 2007.  During 2006, the lease was extended through February 2008.  The lease required payments of $6,200 per month.  The building is partially owned by John G. Baust, the Company’s former Chief Executive Officer and President, and more recently, until January 8, 2007, the Chairman, Sr. Vice President and Chief Scientific Officer and John M. Baust, the Company’s former Director, Research and Development.  

In February 2007, in order to secure capital necessary to continue its operations, the Company borrowed $750,000 in equal amounts, from Thomas Girschweiler, a director and stockholder of the Company, and Walter Villiger, an affiliate of the Company, each a non-U.S. Person (as defined in Regulation S of the Securities Act of 1933, as amended) (collectively, the “Investors”).  Each loan was evidenced by a Promissory Note (“February Notes”).  Each February Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) the second anniversary of the date of the February Note, (b) an Event of Default (as defined in the February Notes) or (c) sale, merger or change in control of the Company, as defined.  In addition, if the February Note is outstanding at the time of any bona fide equity financing o f the Company of at least $1,000,000 (excluding conversion of the February Notes) (a “Financing”), then the February Note holder may convert the February Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 85% of the per share or per unit purchase price of the New Equity Securities.  

In June 2007, the Company borrowed an additional $1,000,000, in equal amounts, from the Investors.  Each loan was represented by a Promissory Note (“June Note”).  Each June Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) June 30, 2008 or (b) an Event of Default (as defined in the June Notes).  In addition, if the June Note is outstanding at the time of any bona fide equity financing of the Company of at least $1,000,000 (excluding conversion of the June Notes) (a “Financing”), then the June Note holder may convert the June Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Secur ities.

In September 2007, the Company borrowed an additional $1,000,000, in equal amounts, from the Investors. Each loan was represented by a Promissory Note (“September Note”).  Each September Note, together with interest accrued thereon at the rate of 7% per annum (collectively, the “Conversion Amount”), is due and payable in one lump sum on the earlier of (a) September 30, 2008 or (b) an Event of Default (as defined in the September Notes).  In addition, if the September Note is outstanding at the time of any bona fide equity financing of the Company of at least $1,000,000 (excluding conversion of the February Notes, June Notes and September Notes) (a “Financing”), then the September Note holder may convert the September Note into that number of shares or units of the equity securities of the Company sold in the Financing (“New Equity Securities”) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Securities.

On January 11, 2008, the Company entered into a Secured Convertible Multi-Draw Term Loan Facility Agreement with each of  the Investors, pursuant to which each Investor extended to the Company a secured convertible multi-draw term loan facility (the “Facility”) of $2,500,000, which Facility (a) incorporates (i) a refinancing of the existing indebtedness of the Company to the Investor, represented by the February Notes, June Notes and September Notes, and accrued interest thereon, in the aggregate amount of $1,431,563.30, (ii) a current advance of $300,000, and (iii) a commitment to advance to the Company, from time to time, additional amounts up to a maximum of $768,436.70, (b) bears interest at the rate of 7% per annum on the principal balance outstanding from time to time, (c) is evidenced by a secured convertible multi-draw term loan note (the “Multi-Draw Term Loan Note”), due and payable, together with accrued int erest thereon, the earlier of (i) January 11, 2010, or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (d) if outstanding at the time of any bona fide equity financing of the Company of at least Two Million Dollars ($2,000,000) (a “Financing”), at the option of the Investor, may be converted into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the quotient obtained by dividing the principal amount of the Facility outstanding at the time of the conversion plus accrued interest thereon by 85% of the per share or per unit purchase price of the New Equity Securities, and (e) is secured by all of the Company’s assets.  The Multi-Draw Term Loan Note is secured by a lien on all the assets of the Company.

49

On August 7, 2007, the Board of Directors of the Company agreed to outsource to Roderick de Greef, a director of the Company, the task of overseeing the Company’s financing activities, internal accounting functions and SEC reporting, and assisting in the search for, and reviewing, strategic alternatives, on a part-time basis (up to 80 hours per month on an as needed basis), effective as of July 1, 2007 (since he was effectively serving the Company in such capacity since such date), on terms to be agreed upon by Mike Rice, the President of the Company, and Mr. de Greef, and approved by the Board.  Subsequent to August 7, 2007, Mr. Rice and Mr. de Greef agreed to the following terms: (1) a fee of $10,000 per month, (2) reimbursement of business expenses, (3) 90 day advance notice of termination by the Company, and (4) the payment of one (1) year’s fees ($120,000) if terminated in connection with a Change of Control transaction.  As used herein the term Change of Control means  (A) there shall be consummated (1) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have the same proportionate ownership of at least 50% of common stock of the surviving corporation immediately after the merger, or (2) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; (B) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; or (C) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “ Exchange Act”)), shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the Company’s outstanding Common Stock.  On November 14, 2007, the arrangement was approved by the Board of Directors of the Company.  The Company paid consulting fees of $60,000 for year ended December 31, 2007.

ITEM 13.  EXHIBITS, LISTS AND REPORTS ON FORM 8-K

(a)

The following documents are filed as part of this report:

(1)

Financial Statements

The financial statements filed as part of this report begin on page F-1.

(2)

Exhibits included herein:

See Exhibit Index below filed as part of this report in Form 10-KSB  

ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aronson & Company acted as the independent auditors for the Company through reporting period March 31, 2007.  Beginning with the reporting period June 30, 2007 the Company retained the services of Peterson Sullivan LLP. The following table sets forth the aggregate fees billed and expected to be billed by, both, Aronson & Company for audit and review services rendered in connection with the financial statements and reports for the year ending December 31, 2006 and quarter ending March 31, 2007, and Peterson Sullivan for audit and review services rendered in connection with the financial statements and reports for the year ending December 31, 2007, and, quarters ending June 30, 2007 and September 31, 2007, on behalf of the Company:

	December 31,
	2007		2006
Audit fees	$	87,779	$	96,570
Tax fees		2,950		7,250
All other fees		-		-
Total	$	90,729	$	103,820

The Board of Directors pre-approves all audit and non-audit services to be performed by the Company's independent auditors.

50

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 31, 2008

BIOLIFE SOLUTIONS, INC.
By:	/s/ Michael Rice
	Michael Rice
	Chief Executive Officer and Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ Michael Rice	Director	March 31, 2008
Michael Rice
/s/ Roderick de Greef	Director	March 31, 2008
Roderick de Greef
/s/ Howard S. Breslow	Director	March 31, 2008
Howard S. Breslow
/s/ Thomas Girschweiler	Director	March 31, 2008
Thomas Girschweiler
/s/ Raymond Cohen	Director	March 31, 2008
Raymond Cohen
/s/ Andrew Hinson	Director	March 31, 2008
Andrew Hinson

51

Index to Exhibits

Exhibit

Number

 Document

 3.1

Certificate of Incorporation, as amended. (1)

3.2

By-Laws, and amendment, dated March 19, 1990, thereto. (1)

 4.1

Specimen of Common Stock Certificate. (1)

10.1

Stock Option Plan, dated July 7, 1988, and amendment, dated July 19, 1989. (1)

10.2

1998 Stock Option Plan (2)

10.3

Employment Agreement dated July 26, 2006 between the Company and Michael Rice (3) ^

10.4

Amendment to Employment Agreement dated February 7, 2007 between the Company and Michael Rice (4) *^

10.5

Employment Agreement dated October 17, 2006 between the Company and Mathew Snyder (3) *^

10.6

Employment Agreement dated July 26, 2006 between the Company and John G. Baust (5) *^

10.7

Severance Agreement dated December 4, 2007 between the Company and Mathew Snyder (6) *^

10.8

Research Agreement dated March 15, 2004 between the Company and CPSI (7)

10.9

Note Purchase Agreement dated February 12, 2007 between the Company and Thomas Girschweiler (8)*

10.10

Promissory Note dated February 12, 2007 issued by the Company to Thomas Girschweiler (8)*

10.11

Note Purchase Agreement dated February 13, 2007 between the Company and Walter Villiger (8)*

10.12

Promissory Note dated February 13, 2007 issued by the Company to Walter Villiger (8)*

10.13

Note Purchase Agreement dated September 4, 2007 between the Company and Thomas Girschweiler (10)*

10.14

Promissory Note dated September 4, 2007 issued by the Company to Thomas Girschweiler (10)*

10.15

Note Purchase Agreement dated September 4, 2007 between the Company and Walter Villiger (10)*

10.16

Promissory Note dated September 4, 2007 issued by the Company to Walter Villiger (10)*

10.17

Secured Convertible Multi-Draw Term Loan Facility Agreement dated January 11, 2008, between the Company and Thomas Girschweiler (11)*

10.18

Secured Convertible Multi-Draw Term Loan Facility Agreement dated January 11, 2008, between the Company and Walter Villiger (11)*

10.19

Manufacturing Service Agreement dated October 26, 2007 between the Company and Bioserv, Inc., a division of NextPharma Technologies, Inc. (12)*

10.24

Storage Services Agreement dated October 26, 2007 between the Company and Bioserv, Inc., a division of NextPharma Technologies, Inc. (12)*

10.25

Order Fulfillment Services Agreement dated October 26, 2007 between the Company and Bioserv, Inc., a division of NextPharma Technologies, Inc. (12)*

10.26

Lease Agreement dated August 1, 2007 for facility space 3303 Monte Villa Parkway, Bothell, WA 98021*

10.27

Consulting Agreement dated August 7, 2007 between the Company and Roderick de Greef (13)*

31*

Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32*

Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(1)

Incorporated by reference to the Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31, 2000.

(2)

Incorporated by reference to the Company’s Definitive Proxy Statement for the special meeting of stockholders held on December 16, 1998.

(3)

Incorporated by reference to the Company’s annual report on Form 10-KSB for the year ended December 31, 2006.

(4)

Incorporated by reference to the Company’s current report on Form 8-K filed February 12, 2007.

(5)

Incorporated by reference to the Company’s current report on Form 8-K filed July 28, 2006.

(6)

Incorporated by reference to the Company’s current report on Form 8-K filed December 5, 2007.

(7)

Incorporated by reference to the Company’s annual report on Form 10-KSB for the year ended December 31, 2003.

(8)

Incorporated by reference to the Company’s current report on Form 8-K filed February 15, 2007.

(9)

Incorporated by reference to the Company’s current report on Form 8-K filed September 6, 2007.

(10)

Incorporated by reference to the Company’s current report on Form 8-K filed January 14, 2008.

(11)

Incorporated by reference to the Company’s current report on Form 8-K filed October 30, 2007.

(12)

Incorporated by reference to the Company’s current report on Form 8-K filed November 19, 2007.

* Filed herewith

^ Compensatory plan or arrangement

EX-10

Exhibit 10.4

ADDENDUM TO EMPLOYMENT AGREEMENT

This addendum (the “Addendum”) to the Employment Agreement effective August 8, 2006, between BioLife Solutions Inc., (the “Company”) and Michael P. Rice, its Chief Executive Officer (“Executive”) is effective as of the 7^th day of February 2007.

The provisions of Section 7 c iii (C): Termination, By the Company Without Cause or Resignation by Executive For Good Reason, are hereby changed and agreed to as follows:

(C) subject to Executive’s continued compliance with the provisions of Section 8 of this Agreement, continued payment of the Base Salary for (1) one year after the date of such termination, or (2) in the event of a change of control, (a) continued payment of the Base Salary and quarterly bonus payments and (b) reimbursement to Executive for medical insurance premiums at a net amount not less the amount of family COBRA coverage in effect as of the Effective Date of this Addendum, until twenty (24) four months after the effective date of the change of control event; and

IN WITNESS WHEREOF, the parties hereto have duly executed this Addendum as of the Effective Date.

“Company”
BioLife Solutions, Inc.
By:	/s/ Roderick de Greef
Name: Its:	Roderick de Greef Director
	“Executive”
By:	/s/Michael P. Rice
Name:	Michael P. Rice

EX-10

Exhibit 10.7

SEPARATION AGREEMENT

SEPARATION AGREEMENT (this “Agreement”) made this ___ day of December, 2007 by and between Matt Snyder, an individual residing at 18339 NE 201st Drive Woodinville, WA 98077 (“Officer”) and BioLife Solutions, Inc., a Delaware corporation having its principal executive offices at 3303 Monte Villa Parkway, Suite 310, Bothell, WA  98021 (“BioLife”).

W I T N E S S E T H:

WHEREAS, Officer currently is employed by BioLife pursuant to the terms of an Employment Agreement (the “Employment Agreement”), which Employment Agreement currently extends through October 16, 2008; and

WHEREAS, Officer has informed BioLife that he (a) believes there has been a change in his duties, responsibilities and status as in effect at the time of execution of the Employment Agreement and (b) intends to leave the employ of BioLife for Good Reason under the terms of the Employment Agreement; and

WHEREAS, Officer would be entitled to six (6) months severance in the event he leaves the employ of BioLife and Good Reason exists therefor; and

WHEREAS, BioLife is of the opinion that Officer’s duties, responsibilities and status have not changed from that in effect at the time of execution of the Employment Agreement and Good Reason does not exist for Officer leaving BioLife; and

WHEREAS, the Parties desire to resolve their differences by (a) canceling the Employment Agreement, and (b) providing for (i) the continued employment of Officer through December 31, 2007, and (ii) three (3) months severance benefits for Officer thereafter;

NOW, THEREFORE, in consideration of the premises and of the representations, mutual covenants and obligations herein contained, the parties hereto agree as follows:

1.

The Employment Agreement is hereby cancelled.  Officer shall remain as an employee of BioLife through December 31, 2007 (the “Expiration Date”), serving BioLife in the same capacity as he had previously served under the Employment Agreement.  Officer agrees to use his best efforts in performing his duties and responsibilities hereunder through the Expiration Date, at which time Officer shall leave the employ of BioLife.

2.

Provided that Officer is not in breach of this Separation Agreement:

(a)

From January 1, 2007 through March 30, 2007, BioLife shall make payments to Officer at the rate of $140,000 per annum, on the same basis and in accordance with the same procedures (including the withholding of taxes) as is applicable to BioLife’s normal payroll procedures;

(b)

From January 1, 2007 through March 30, 2007, BioLife shall make payments for Officer’s health insurance premiums.

3.

Officer represents that he has returned all property of BioLife in his possession and control including, but not limited to, all documents, books, records, reports, files, correspondence, notebooks, equipment, manuals, notes, specifications, mailing lists, credit cards, computers, equipment, software, plans, manuals, guides, memoranda, lists,  charts, advertising materials, and any data and other property delivered to or acquired by Officer by or on behalf of BioLife or delivered to or acquired by Officer by or from an agent, representative or customer of BioLife, and all records compiled by Officer which pertain to the business of BioLife.

4.

Officer represents and warrants that he has fully disclosed to BioLife, and covenants that he will fully disclose to BioLife, with all necessary detail for a complete understanding of the same, any and all developments, client and potential client lists, know how, discoveries, inventions, improvements, conceptions, ideas, writings, processes, formulae, contracts, methods, works, and the like, whether or not patentable or copyrightable, which were or are conceived, made, acquired, or written by Officer, solely or jointly with another, while employed by BioLife and which are substantially related to the business or activities of BioLife (collectively, “Proprietary Rights”).  Officer hereby assigns and transfers, and agrees to assign and transfer, all his rights, title, and interests in the Proprietary Rights to BioLife or its nominee.  Officer represents and warrants that he has delivered to BioLi fe any and all drawings, notes, specifications, and data relating to the Proprietary Rights.  All copyrightable Proprietary Rights shall be considered to be “works made for hire.”  Whenever requested to do so by BioLife, Officer shall execute and deliver to BioLife any and all applications, assignments or other instruments and do such other acts that BioLife shall reasonably request, at BioLife’s sole expense, to apply for and obtain patents and/or copyrights in any and all countries or to otherwise protect BioLife’s interest in the Proprietary Rights and/or to vest title thereto to BioLife.  Officer shall assist BioLife in obtaining such copyrights and patents on reasonable notice and at mutually convenient times, and Officer agrees to testify in any prosecution or litigation involving any of the Proprietary Rights; provided, however, Officer shall be reasonably compensated for his time and reimbursed for any out-of-pocket expenses incurred in rendering such assistance or giving or preparing to give such testimony.

2

5.

(a)

Officer is aware of confidential information of BioLife, including, but not limited to, trade secrets, product information, technical information, software programs, software code, designs, prototypes, methods, techniques, plans, processes, strategies, product pricing, research and development activities, sales goals, marketing information, customer and potential customer lists, vendor lists, and other information which BioLife is obligated to keep confidential pursuant to its obligations to third parties (collectively, “Confidential Information”).  Officer shall maintain in confidence and shall not use for his own benefit, directly or indirectly, any Confidential Information, and shall not publish, disseminate, or disclose any Confidential Information without the express written permission of BioLife.  The term “Confidential Information” shall not include information which becomes pu blic knowledge without the breach of any obligation of confidentiality of Officer.  In the event of a breach or a threatened breach by Officer of the provisions of this Section 5(a), BioLife shall be entitled to an injunction, without being required to post any bond or prove special damages, restraining Officer from disclosing, in whole or in part, the Confidential Information, or from rendering any services to any person, firm, corporation, association, or other entity to whom such Confidential Information, in whole or in part, has been disclosed or is threatened to be disclosed.  Nothing contained herein shall be construed as prohibiting BioLife from pursuing any other remedies available to BioLife for such breach or threatened breach, including the recovery of damages from Officer.

(b)

During the period of time that Officer is receiving the payments provided for in Section 2(a) and for a period of twelve months immediately following such period he will not (i) compete with, or, directly or indirectly, own, manage, operate, control, loan money to, or participate in the ownership, operation or control of, or be connected with as a director, partner, consultant, agent, independent contractor or otherwise, or acquiesce in the use of his name in any other business or organization which is in competition with BioLife in any geographical area in which BioLife is then conducting business or any geographical area in which, to the knowledge of Officer, BioLife plans to conduct business within twenty four months from the date thereof, or (ii) solicit or interfere with, or endeavor to entice away from BioLife, any of its employees (or any person that was an employee of BioLife on the date of this Agreement) or cus tomers without the written consent of BioLife.  Since a breach of the provisions of this Section 5(b) could not adequately be compensated by money damages and will cause irreparable injury to BioLife, BioLife shall be entitled, in addition to any other right or remedy available to it, to an injunction or restraining order restraining such breach or a threatened breach, and no bond or other security shall be required in connection therewith, and Officer hereby consents to the issuance of any such injunction or restraining order.  Officer agrees that the provisions of this Section 5(b) are reasonable and necessary to protect BioLife and its business.  It is the desire and intent of the parties that the provisions of this Section 5(b) shall be enforced to the fullest extent permitted under the public policies and laws applied in each jurisdiction in which enforcement is sought.  If any restriction contained in this Section 5(b) shall be deemed to be invalid, illegal or unenforceable by reaso n of the extent, duration or geographical scope thereof, or otherwise, then the court making such determination shall have the right to reduce such extent, duration, geographical scope or other provision hereof and in its reduced form such restriction shall then be enforceable in the manner contemplated hereby.

3

6.

Officer shall not make any statements, either directly or through other persons or entities, which are disparaging to BioLife, or its officers, directors, employees, services, products, operations, or prospects, and BioLife shall not make any statements, either directly or through other persons or entities which are disparaging to Officer. BioLife shall, and it shall instruct the executive officers and directors to limit any of their statements regarding the resignation of Officer’s employment to Officer’s desire to pursue other opportunities (other than discussions solely among BioLife’s board members and/or BioLife’s counsel).  

7.

(a)

Officer for himself, and for the executors and administrators of his estate, his heirs, his personal representatives (collectively, the “Officer Parties”), hereby unconditionally releases and forever discharges BioLife, its officers, directors, employees, agents, representatives, managers, members, and shareholders, and the respective executors, administrators, heirs, personal representatives, successors and assigns of each of the foregoing (collectively, in their capacities as such, the “BioLife Parties”), from any and all claims, actions, causes of action, suits, sums of money, debts, dues, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, demands or damages, of any nature whatsoever or by reason of any matter, cause or thing, whether arising in contract, statute, regulation, policy, tort, equity, or otherwise, regardless of whether known or unknown, which, against BioLife or any of the other BioLife Parties, Officer or any of the Officer Parties ever had, now has or hereafter can, shall or may have, from the beginning of the world to the date hereof, including, but not limited to, any matter relating to or arising out of the employment of Officer or the termination thereof (including, without limitation, any and all claims (x) arising out of the Employment Agreement, and (y) of wrongful discharge, breach of any implied or express contract, whether oral or written, intentional or negligent infliction of emotional harm, defamation, or any other tort).

(b)

BioLife hereby unconditionally releases and forever discharges Officer and the Officer Parties from any and all claims, actions, causes of action, suits, sums of money, debts, dues, accounts, reckonings, bonds, bills, covenants, contracts, controversies, agreements, promises, demands or damages of any nature whatsoever or by reason of any matter, cause or thing, whether arising in contract, statute, regulation, policy, tort, equity, or otherwise, regardless of whether known or unknown, with respect to Officer’s employment (other than for violations of law or fraud), which, against Officer or any of the Officer Parties, BioLife  ever had, now has or hereafter can, shall or may have, from the beginning of the world to the date hereof.   

(c)

No party shall file any administrative or judicial complaints, charges, lawsuits, claims, demands or actions of any kind based on or with respect to the termination of the employment of Officer, or any other matter with respect to which the releases set forth in Sections 7(a) or (b) have been granted.  Nothing contained herein shall preclude any party from bringing an action to enforce its rights as set forth in this Agreement.

4

8.

(a)

Any notice or other communication required or permitted under this Agreement shall be in writing and delivered personally, or sent by facsimile or sent by reputable overnight delivery service and properly addressed as follows:

To Officer:

By Overnight Delivery – to the address set forth above

By Facsimile –

To BioLife:

By Overnight Delivery – to the address set forth above

By Facsimile - (425) 402-1433

(b)

Any party may from time to time change its address and facsimile number for the purposes of notices to that party by a similar notice specifying a new address or facsimile number, but no such change shall be deemed to have been given until it is actually received by the party sought to be changed with its contents.

(c)

All notices and other communications required or permitted under this Agreement which are addressed as provided in this Section 8 if delivered personally or by courier, shall be effective upon delivery, if sent by facsimile, shall be delivered upon receipt of proof of transmission.

9.

In the event that any one or more of the provisions of this Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.  This Agreement will survive the termination of any arrangements contained herein and is binding on and will inure to the benefit of each of the parties and their respective officers, directors, employees, agents, representatives, managers, members, shareholders, heirs, executors, administrators, successors and assigns (each of whom are intended third party beneficiaries).

10.

This Agreement shall be governed by and construed in accordance with the laws of the State of Washington, without giving any effect to any doctrine pertaining to the conflict of laws.  The parties hereto irrevocably (a) submit to the jurisdiction of any state or federal court of competent jurisdiction sitting in the State of Washington in any action or proceeding arising out of or relating to this Agreement, (b) agree that all claims with respect to such action or proceeding shall be heard and determined in such a Washington state or federal court, (c) waive, to the fullest extent possible, the defense of an inconvenient forum, and (d) TO THE EXTENT PERMITTED BY LAW, WAIVE TRIAL BY JURY IN ANY SUCH ACTION OR PROCEEDING.  The parties hereby consent to and grant any such court jurisdiction over the persons of such parties and over the subject matter of any such dispute, and agree that delivery or mailing of proces s or other papers in connection with any such action or proceeding in the manner provided in Section 8 hereof or in such other manner as may be permitted by law shall be valid and sufficient service thereof.

11.

Each of the parties agrees to do and perform or cause to be done and performed all further acts and shall execute and deliver all other documents necessary on its part to carry out the intent and accomplish the purposes of this Agreement and the transactions contemplated hereby.

5

12.

This Agreement sets forth the entire agreement between the parties hereto concerning the subject matter hereof, and supersedes any and all previous agreements between them relating to such subject matter including, without limitation, the Employment Agreement.  

13.

This Agreement cannot be altered, amended, changed, waived, terminated, or modified in any respect unless the same shall be in writing and signed by the party to be charged therewith.  The failure of any party hereto at any time or times to enforce any provisions of this Agreement or to require performance by any other party of any provisions hereof shall in no way be construed to be a waiver of this Agreement or the right of any party thereafter to enforce each and every provision in accordance with the terms of this Agreement.

14.

This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which, when taken together, shall constitute one and the same instrument.

15.

Each party shall bear its own expenses in connection with the negotiation, execution, and delivery of this Agreement.

16.

The parties acknowledge that each party and its counsel has reviewed and revised, or had an opportunity to review and revise, this Agreement, and the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

17.

Except as otherwise required by law, the parties agree to keep confidential the terms of this Agreement and not to disclose any term of this Agreement to any other person or entity, except for each party’s accountants and attorneys, and those employees of BioLife who need to know such information for the purpose of carrying out their duties, who are informed by BioLife of the confidential nature of such information, and who agree to act in accordance with the terms of this Section 17.

18.

Unless required by law, Officer shall not assist any third party claimant in any suit, arbitration, or other proceeding against BioLife or any of its officers, directors or employees.

IN WITNESS WHEREOF, the parties have each executed this Agreement as of the date first written above.

BioLife Solutions, Inc.
By:	/s/ Michael P. Rice
Name: Title:	Michael P. Rice Chairman & CEO
	Officer:
By:	/s/Matt Snyder
Name:	Matt Snyder

6

EX-10

Exhibit 10.9

NOTE PURCHASE AGREEMENT

This Note Purchase Agreement (this "Agreement") is entered into this 12^th day of February, 2007, by and between BioLife Solutions, Inc., a Delaware corporation having its executive offices at 171 Front Street, Owego, NY 13827 (the "Company") and Thomas Girschweiler, with an address at Wissmannstrasse 15, 8057 Zurich, Switzerland (the "Investor").

W I T N E S S E T H:

WHEREAS, the Company is seeking to raise up to $1,000,000 through the sale of promissory notes bearing interest at the rate of seven percent (7%) per annum (each, a “Note”), which Note, plus all accrued interest thereon, (a) shall become due and payable in one lump sum on the earlier of (i) February 12, 2009 or (ii) an Event of Default (as defined in the Note), and (b), at the option of the Investor, may be converted into New Equity Securities (as defined in the Note) upon the consummation of a Financing (as defined in the Note) at a per share or per unit price equal to 85% of the per share or per unit purchase price of the New Equity Securities sold in the Financing; and

WHEREAS, the Company anticipates contracting for the sale of the Notes with non U.S. Persons (the term "U.S. Persons" being defined in Regulation S ("Regulation S") of the Securities Act of 1933, as amended (the "Act")), in reliance upon an exemption from registration provided for under Regulation S of the Act; and

WHEREAS, the Company desires to sell to the Investor, and the Investor desires to purchase from the Company, a Note in the principal amount of $375,000.00US;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties agree as follows:

1.

Purchase and Sale of Note; Delivery of Securities; Payment; Loan Origination Fee.

1.1

Purchase and Sale of Note.  The Company hereby sells, transfers, and assigns to the Investor, and the Investor hereby purchases and acquires from the Company, a Note in the principal amount of $375,000.00US (the "Purchase Price").

1.2

Payment of Purchase Price; Delivery of Note.  Concurrently with the execution and delivery of this Agreement, (a) the Investor is delivering to the Company a certified or cashier's check (or other form of payment acceptable to the Company, in its sole discretion) in an amount equal to the Purchase Price, or shall transfer such sum to the account of the Company by wire transfer, and (b) the Company is delivering, or within a reasonable period of time, will deliver, to the Investor the Note purchased hereunder, which shall be in definitive form registered in the name of the Investor.

1.3

Loan Origination Fee.  In consideration for the purchase by Investor of the Note, the Company will pay to Investor, as soon as practicable after the date hereof, a Loan Origination Fee of $37,500.00US (10% of the Purchase Price), payable in shares of the Company’s Common Stock (the “Fee Shares”), which Fee Shares shall be valued at the closing price therefor on the OTCBB on the day preceding the date hereof.

2.

Representations, Warranties, and Covenants of Investor.  Investor hereby represents and warrants to , and covenants with, the Company as follows:

2.1

Offshore Transaction.  () Investor is not a U.S. person ("U.S. Person") as that term is defined in Regulation S; () the Note and the Fee Shares were not offered to Investor in the United States; () at the time of execution of this Agreement and the time of any offer to Investor to purchase the Note hereunder and receive the Fee Shares as a Loan Origination Fee, Investor was physically outside the United States; () Investor is purchasing the Note and acquiring the Fee Shares for Investor’s own account and not for the account of or for the benefit of any U.S. Person; and () Investor is not an underwriter, dealer, distributor, or other person who is participating, pursuant to a contractual arrangement, in the distribution of the Note offered or sold or the Fee Shares delivered in reliance on Regulation S.

2.2

Investor's Independent Investigation.  Investor, in subscribing for the Note and receiving the Fee Shares hereunder, has relied solely upon an independent investigation made by Investor and Investor’s representatives, if any, and has, prior to the date hereof, been given access to and the opportunity to examine all books and records of the Company, and all material contracts and documents of the Company which have been filed as exhibits to the Company's filings made under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act").  In making Investor’s investment decision to purchase the Note and receive the Fee Shares, Investor is not relying on any oral or written representations or assurances from the Company or any other person other than as set forth in this Agreement.  Investor has received and reviewed the Company's Annual Report on Form 10-KSB for the year ended December 31, 2005 and the Company's Form 10-QSB for the quarters ended March 31, 2006 and June 30, 2006, and September 30, 2006.  Investor has such experience in business and financial matters that Investor is capable of evaluating the risk of Investor’s investment and determining the suitability of Investor’s investment.  Investor is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Act.  

2.3

Investor's Economic Risk.  Investor understands and acknowledges that an investment in the Note involves a high degree of risk.  Investor acknowledges that there are limitations on the liquidity of the Note and the Fee Shares.  Investor represents that Investor is able to bear the economic risk of an investment in the Note, including a possible total loss of investment.  In making this statement Investor hereby represents and warrants to the Company that Investor has adequate means of providing for Investor's current needs and contingencies; and that Investor is able to afford to hold the Note and the Fee Shares for an indefinite period.  Further, Investor has no present need for liquidity in the Note or the Fee Shares and Investor is willing to accept such investment risks.

2.4

No Government Recommendation or Approval.  Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Note.

2.5

Company's Reliance on Representations of Investor.  Investor understands that the Note is being offered and sold and the Fee Shares delivered to Investor in reliance on specific exemptions from the registration requirements of U.S. securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments, and understandings of Investor set forth herein in order to determine the applicability of such exemptions to Investor’s acquisition of the Note and Fee Shares and suitability to acquire the Note.

2.6

Note and Fee Shares Not Registered Under the Act or Any State Act.  Investor understands that the offer and sale of the Note and delivery of the Fee Shares have not been registered under the Act or any state securities laws ("State Acts") and that they are being offered and sold and delivered pursuant to Regulation S based in part upon the representations of Investor contained herein.  The Note and Fee Shares may not be offered, sold, or otherwise transferred in the United States or to U.S. Persons unless such offers, sales, and transfers are registered under the Act and applicable State Acts or are made pursuant to an available exemption from the registration requirements of those laws.

2.7

Investment Intent.  Investor is acquiring the Note and Fee Shares for Investor’s own account for investment and not as a nominee and not with a view to the distribution thereof.  Investor understands that Investor must bear the economic risk of this investment indefinitely unless the Note and Fee Shares are registered pursuant to the Act and any applicable State Acts, or an exemption from such registration is available.  Investor represents and warrants to the Company, as of the date of this Agreement, that Investor has no present plan or intention to sell the Note or Fee Shares in the United States at any predetermined time, and has made no predetermined arrangements to sell the Note or Fee Shares.

2.8

Investor's Power and Authority.  Investor has the full power and authority to execute, deliver, and perform this Agreement.  This Agreement, when executed and delivered by Investor, will constitute a valid and legally binding obligation of Investor, enforceable in accordance with its terms.

2.9

Representation Regarding Signatory.  Investor represents and warrants that Investor's signatory, if any, is duly authorized to execute this Agreement on behalf of Investor.

2.10

No Tax Advice From Company or Its Agents.  Investor has had an opportunity to review with Investor’s own tax advisors the foreign, U.S. federal, state and local tax consequences of this investment, and the transactions contemplated by this Agreement.  Investor is relying solely on such advisors and not on any statements or representations of the Company or any of its agents and understands that Investor (and not the Company) shall be responsible for Investor's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

2.11

No Legal Advice from Company or Its Agents.  Investor acknowledges that Investor has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with Investor’s own legal counsel.  Investor is relying solely on such counsel and not on any statements or representations of the Company or any of its agents for legal advice with respect to this investment or the transactions contemplated by this Agreement, except for representations, warranties and covenants set forth herein.

2.12

No Scheme to Evade Registration.  Investor's acquisition of the Note and Fee Shares is not a transaction (or any element of a series of transactions) that is part of a plan or scheme to evade the registration provisions of the Act.

2.13

Deliveries Outside the United States.  Investor understands that () the Note may not be converted within the United States or by or on behalf of a U.S. Person, and that the New Equity Securities may not be delivered within the United States upon conversion of the Note, other than in offerings deemed to meet the definition of "offshore transactions" (as defined in Regulation S), unless registered under the Act or an exemption from such registration is available, (b) the Note shall bear an appropriate legend to such effect, and (c) the Company will make a notation on its transfer books to such effect.

3.

Resales of the Note, Fee Shares and New Equity Securities by Investor; Hedging; Legends.  

3.1

Resales of the Note, Fee Shares and New Equity Securities; Hedging.  Investor understands that the Note, the Fee Shares and New Equity Securities are deemed to be "restricted securities" as defined in Rule 144 under the Act.  Investor acknowledges, covenants and agrees, with respect to the Note, the Fee Shares and New Equity Securities, (a) that they will only be resold by Investor, and the Company is to refuse to register any transfer not made, in accordance with Regulation S, or pursuant to an exemption from registration under the Act and applicable State Acts, or pursuant to an effective and current registration statement under the Act, and (b) not to engage in hedging transactions unless in compliance with the Act.  Until the restrictions on transfer terminate as provided in Section 3.3 hereof, Investor shall cause a transferee of the Note, the Fee Shares or New Equity Securities to execute, prior to the transfer, an agreement containing investor representations and covenants reasonably requested by the Company and substantially similar to those contained in Sections 2 and 3 hereof.

3.2

Legend.  To insure compliance with the provisions of the Act and State Acts, the Note, the Fee Shares and New Equity Securities shall bear a legend (the "Regulation S Restrictive Legend") substantially as follows:

"THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES  MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT."

3.3

Termination of Restrictions; Removal of Legend.  

(a)

The Regulation S Restrictive Legend may be removed (and the restrictions on the transferability of the Note, the Fee Shares and New Equity Securities shall terminate) when () the sale of the Note, the Fee Shares and New Equity Securities, as the case may be, have been registered under the Act and sold by the holder thereof in accordance with such registration, () a written opinion to the effect that such restrictions are no longer required or necessary under any federal or state securities law or regulation has been received from counsel for the holder thereof (provided that such counsel, and the form and substance of such opinion, are reasonably satisfactory to the Company) or counsel for the Company, () the Note, the Fee Shares and New Equity Securities, as the case may be, have been sold without registration under the Act in compliance with Rule 144 or Rule 144A promulgated under the Act, () the Company is reasona bly satisfied that the holder of the Note, the Fee Shares and New Equity Securities, as the case may be, shall be entitled to sell the Note, the Fee Shares and New Equity Securities in accordance with the terms of Subsection (k) of Rule 144 or of Rule 144A promulgated under the Act, or () a letter or an order has been issued to the holder thereof by the staff of the Securities and Exchange Commission (the "Commission") stating that no enforcement action shall be recommended by such staff or taken by the Commission if the Note, the Fee Shares or New Equity Securities, as the case may be, are transferred in the United States or to a U.S. Person without registration under the Act in accordance with the conditions set forth in such letter or order and such letter or order specifies that no subsequent restrictions on transfer are required.

(b)

Whenever the restrictions imposed by this Section 3 shall terminate as hereinabove provided, the holder of the Note, the Fee Shares or New Equity Securities, as the case may be, then outstanding as to which such restrictions shall have terminated shall be entitled to receive from the Company, without expense to such holder, a new certificate for the Note, the Fee Shares or New Equity Securities, as the case may be, not bearing the Regulation S Restrictive Legend.

4.

Representations and Warranties of Company.  The Company represents and warrants to Investor as follows:

4.1

Organization, Good Standing, and Qualification.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business or properties of the Company.

4.2

Authorization.  All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder, and the authorization, issuance, and delivery of the Note and Fee Shares and, upon conversion of the Note, the New Equity Securities, have been taken.  This Agreement constitutes valid and legally binding obligation of the Company, enforceable in accordance with its terms.  The Company has obtained all consents and approvals required for it to execute, deliver, and perform this Agreement.  

4.3

No Conflicts.  The Company is not in violation or default of any provisions of its Certificate of Incorporation or By-laws, as amended and in effect on and as of the date of this Agreement, or of any material provision of any instrument or contract to which it is a party or by which it is bound or of any material provision of any federal or state judgment, writ, decree, order, statute, rule or governmental regulation applicable to the Company, except where such violation, default or conflict would have no material adverse affect on the Company's business or financial condition, or on the transactions contemplated herein. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

4.4

Valid Issuance of Securities.  The New Equity Securities, when issued, sold, and delivered in accordance with the terms hereof or the Note, as the case may be, and for the consideration expressed herein or in the Note, as the case may be, will be duly and validly issued, fully paid and non-assessable, free of any preemptive rights, and the holders thereof shall not be subject to personal liability solely by reason of being such holders.  The Note, when issued, sold, and delivered, in accordance with this Agreement, shall be duly executed, issued, and delivered, and shall constitute valid and legally binding obligation of the Company, enforceable in accordance

with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws affecting creditors' rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance).  The Fee Shares, when issued and delivered in accordance with the terms hereof, will be duly and validly issued, fully paid and non-assessable.

4.5

Current Public Information.  The Company is a "reporting issuer" as defined in Regulation S and it has a class of securities registered under Section 12(b) or 12(g) of the Exchange Act or is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, and has filed on a timely basis all the materials required to be filed as reports pursuant to the Exchange Act for a period of at least twelve months preceding the date hereof (or for such shorter period as the Company was required by law to file such material), and all such filings have been made on a timely basis.  

4.6

Use of Proceeds.  As of the date hereof, the Company expects to use the net proceeds from the sale of the Note for working capital and general corporate purposes, including the funding of research and development and marketing.

5.

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made in and wholly to be performed in that jurisdiction.  

6.

Entire Agreement; Amendments.  This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein.  Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termination is sought.

7.

Written Notices, Etc.  Any notice, demand, or request required or permitted to be given by either the Company or Investor pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally, by overnight courier, or by registered or certified mail, return receipt requested, or by facsimile or other standard form of telecommunication or electronic transmission, to the parties at their respective addresses set forth above.

8.

Execution in Counterparts Permitted.  This Agreement may be executed by facsimile in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

9.

Survival; Severability.  Investor's and the Company's representations and warranties shall survive the closing of the transaction.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement, to the extent permitted by law, shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

10.

Titles; Gender.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  The use in the Agreement of a masculine, feminine or neuter pronoun shall be deemed to include a reference to the others.

11.

Assignment.  Neither party to this Agreement may assign this Agreement without the prior written consent of the other (which may be withheld for any reason).  

12.

Indemnification.  The Company shall indemnify and hold harmless Investor against any liabilities suffered or incurred by Investor and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of the Company contained in this Agreement.  Investor shall indemnify and hold harmless the Company and each of its officers, directors, stockholders, employees, control persons, and agents (each, a "Company Indemnified Party") who is or may be a party to any threatened, pending, or completed action, suit or proceeding of any kind, against any liabilities suffered or incurred by a Company Indemnified Party and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of Investor contained in this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

	BioLife Solutions, Inc.
By:	/s/ Mike Rice
	Mike Rice
	President & CEO
	/s/ Thomas Girschweiler
	Thomas Girschweiler
	Investor

EX-10

Exhibit 10.10

THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

$375,000.00US

                Owego, New York

     February 12, 2007

BIOLIFE SOLUTIONS, INC.

PROMISSORY NOTE

BioLife Solutions, Inc., a Delaware corporation (the “Maker”), for value received, hereby promises to pay to Thomas Girschweiler (the “Holder”), the principal amount of three hundred seventy five thousand Dollars ($375,000.00US) (the “Issue Price”), together with interest on the unpaid amount thereof, in accordance with the terms hereof, from the date hereof until paid or converted in accordance with the terms hereof.  

1.

Promissory Note (“Note”).

1.1

Interest Rate.  The rate of interest hereunder (“Interest Rate”) shall equal seven percent (7%) per annum and shall be computed on the basis of a 365 day year for the actual number of days elapsed; provided that in no event shall the interest rate be less than the minimum rate of interest required in order to avoid the imputation of interest for federal income tax purposes.

1.2

Payment.  Subject to the provisions of  Section 4 regarding the automatic conversion of this Note upon a Financing (as defined therein), the Issue Price plus all accrued interest thereon shall become due and payable in one lump sum on the earlier of (a) February 12, 2009 (the “Due Date”) or (b) an Event of Default (as defined below).  The Maker may at any time prepay in whole or in part the principal and interest accrued under this Note.  Any payment will be applied first to the payment of any and all accrued and unpaid interest through the payment date and second to the payment of principal remaining due hereunder.  Payment shall be made at the offices or residence of the Holder, or at such other place as the Holder shall have designated to the Maker in writing, in lawful money of the United States of America.

1.3

Note Purchase Agreement.  This Note is issued pursuant to a Note Purchase Agreement, dated the date hereof, by and between Maker and Holder and is subject and entitled to the terms, conditions, covenants, and agreements contained therein.

2.

Acquisition.   In the event the Maker is to be acquired, whether by means of a merger, sale of all or substantially all of the assets of the Maker, sale of securities representing more than fifty percent (50%) of the equity interests in Maker, or otherwise, prior to the Due Date (an “Acquisition”), then the Issue Price plus all accrued but previously unpaid interest thereon shall become due and payable in one lump sum immediately upon the closing of such Acquisition.

3.

Events of Default.  The Issue Price and accrued interest on this Note shall, at the option of the Holder, become due and payable, subject to applicable law, upon the happening of any one of the following specified events:

(a)

a decree or order of a court having jurisdiction is entered adjudging the Maker a bankrupt or insolvent, or issuing sequestration or process of execution against, or against any substantial part of, the property of the Maker, or appointing a receiver of the Maker or any substantial part of its property, or ordering the winding-up or liquidation of its affairs, unless the Maker actively and diligently contests in good faith such decree or order and has such decree or order stayed on or before 60 days after the issue of such decree or order by a court;

(b)

an order is made or a resolution is passed for the winding-up or liquidation of the Maker, or the Maker institutes proceedings to be adjudicated a bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it, or consents to the filing of any such petition or to the appointment of a receiver of the Maker or any substantial part of its property, or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due, or takes corporate action in furtherance of any of the aforesaid purposes;

(c)

the Maker defaults in observing or performing any material covenant or condition of this Note or the Unit Purchase Agreement on its part to be observed or performed, and such default continues for a period of fifteen (15) days after notice in writing has been given to the Maker by the Holder specifying such default and requiring the Maker to rectify the same;

2

(d)

an encumbrancer takes possession of all or substantially all of the property of the Maker, or any process of execution is levied or enforced upon or against all or substantially all of the property of the Maker and remains unsatisfied for such period as would permit any such property to be sold thereunder, unless the Maker actively and diligently contests in good faith such process, but in that event the Maker shall, if the Holder so requires, give security which, in the discretion of the holder, is sufficient to pay in full the amount thereby claimed in case the claim is held to be valid.

4.

Conversion.

4.1

Conversion.   If this Note is outstanding at the time of any bona fide equity financing of the Maker of at least One Million Dollars ($1,000,000), excluding conversion of this Note (a “Financing”), then, concurrently with the consummation of the Financing, Holder shall have the right (but not the obligation) (“Conversion Right”) to convert this Note, plus all accrued and unpaid interest thereon (the “Conversion Amount”) into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Maker sold in the Financing (the “New Equity Securities”) as is equal to the Conversion Amount divided by 85% of the per share or per unit purchase price of the New Equity Securities.  The date of the consummation of the Financing is hereinafter referred to as the “Closing Conversion Date”).

4.2

Conversion Procedure.  

(a)

The Maker shall provide the Holder written notice of the Financing at least fifteen (15) days prior to the Closing Date.

(b)

In order to exercise the Conversion Right, Holder shall provide the Maker at least five (5) days prior to the Closing Date written notice that the Holder elects to convert the Note on the Closing Date.

4.3

Termination of Rights Upon Conversion.  Upon the Closing Date, subject to the completion of the Financing, the Holder of this Note shall have no further rights under this Note, whether or not this Note is surrendered.

4.4

Fractional Shares. No fractional shares or units of New Equity Securities of the Maker will be issued in connection with any conversion hereunder but rather any such fractional shares or units shall be rounded up to the nearest whole share or unit.

4.5

Delivery of Stock Certificates.  As promptly as practicable after the Closing Date, (a) the Maker shall give notice to the Holder of the conversion of this Note into the New Equity Securities, (b) the Holder shall return this Note to the Maker, and (c) the Maker, at its expense, shall issue and deliver to the Holder of this Note a certificate or certificates evidencing the number of full New Equity Securities issuable to the Holder upon such conversion.

3

5.

Miscellaneous.

5.1

Transfer of Note.  This Note shall not be transferable or assignable in any manner and no interest shall be pledged or otherwise encumbered by the Holder without the consent of the Maker, which consent shall not be unreasonably withheld.

5.2

Titles and Subtitles.  The titles and subtitles used in this Note are for convenience only and are not to be considered in construing or interpreting this Note.

5.3

Attorneys’ Fees.  If any action at law or in equity is necessary to enforce or interpret the terms of this Note, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and disbursements in addition to any other relief to which such party may be entitled.

5.4

Amendments and Waivers.  This Note may be amended and the observance of any other term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Maker and the Holder.  The Maker waives presentment, demand for performance, notice of nonperformance, protest, notice of protest, and notice of dishonor.  No delay on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right under this Note.

5.5

Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

5.6

Governing Law.  This Note shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to its conflicts of laws principles.

Executed as of the date first written above.

MAKER:
BIOLIFE SOLUTIONS, INC.
a Delaware corporation
By:	/s/ Michael P. Rice
Name: Title:	Michael P. Rice President and Chief Executive Officer
Address:	171 Front Street, Owego, NY13827

4

EX-10

Exhibit 10.11

NOTE PURCHASE AGREEMENT

This Note Purchase Agreement (this "Agreement") is entered into this 13^th day of February, 2007, by and between BioLife Solutions, Inc., a Delaware corporation having its executive offices at 171 Front Street, Owego, NY 13827(the "Company") and Walter Villiger, with an address at Paradiesstrasse 25 CH – 8645 Jona, Switzerland (the "Investor").

W I T N E S S E T H:

WHEREAS, the Company is seeking to raise up to $1,000,000 through the sale of promissory notes bearing interest at the rate of seven percent (7%) per annum (each, a “Note”), which Note, plus all accrued interest thereon, (a) shall become due and payable in one lump sum on the earlier of (i) February 13, 2009 or (ii) an Event of Default (as defined in the Note), and (b), at the option of the Investor, may be converted into New Equity Securities (as defined in the Note) upon the consummation of a Financing (as defined in the Note) at a per share or per unit price equal to 85% of the per share or per unit purchase price of the New Equity Securities sold in the Financing; and

WHEREAS, the Company anticipates contracting for the sale of the Notes with non U.S. Persons (the term "U.S. Persons" being defined in Regulation S ("Regulation S") of the Securities Act of 1933, as amended (the "Act")), in reliance upon an exemption from registration provided for under Regulation S of the Act; and

WHEREAS, the Company desires to sell to the Investor, and the Investor desires to purchase from the Company, a Note in the principal amount of $375,000.00US;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties agree as follows:

1.

Purchase and Sale of Note; Delivery of Securities; Payment; Loan Origination Fee.

1.1

Purchase and Sale of Note.  The Company hereby sells, transfers, and assigns to the Investor, and the Investor hereby purchases and acquires from the Company, a Note in the principal amount of $375,000.00US (the "Purchase Price").

1.2

Payment of Purchase Price; Delivery of Note.  Concurrently with the execution and delivery of this Agreement, (a) the Investor is delivering to the Company a certified or cashier's check (or other form of payment acceptable to the Company, in its sole discretion) in an amount equal to the Purchase Price, or shall transfer such sum to the account of the Company by wire transfer, and (b) the Company is delivering, or within a reasonable period of time, will deliver, to the Investor the Note purchased hereunder, which shall be in definitive form registered in the name of the Investor.

1.3

Loan Origination Fee.  In consideration for the purchase by Investor of the Note, the Company will pay to Investor, as soon as practicable after the date hereof, a Loan Origination Fee of $37,500.00US (10% of the Purchase Price), payable in shares of the Company’s Common Stock (the “Fee Shares”), which Fee Shares shall be valued at the closing price therefor on the OTCBB on the day preceding the date hereof.

2.

Representations, Warranties, and Covenants of Investor.  Investor hereby represents and warrants to, and covenants with, the Company as follows:

2.1

Offshore Transaction.  () Investor is not a U.S. person ("U.S. Person") as that term is defined in Regulation S; () the Note and the Fee Shares were not offered to Investor in the United States; () at the time of execution of this Agreement and the time of any offer to Investor to purchase the Note hereunder and receive the Fee Shares as a Loan Origination Fee, Investor was physically outside the United States; () Investor is purchasing the Note and acquiring the Fee Shares for Investor’s own account and not for the account of or for the benefit of any U.S. Person; and () Investor is not an underwriter, dealer, distributor, or other person who is participating, pursuant to a contractual arrangement, in the distribution of the Note offered or sold or the Fee Shares delivered in reliance on Regulation S.

2.2

Investor's Independent Investigation.  Investor, in subscribing for the Note and receiving the Fee Shares hereunder, has relied solely upon an independent investigation made by Investor and Investor’s representatives, if any, and has, prior to the date hereof, been given access to and the opportunity to examine all books and records of the Company, and all material contracts and documents of the Company which have been filed as exhibits to the Company's filings made under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act").  In making Investor’s investment decision to purchase the Note and receive the Fee Shares, Investor is not relying on any oral or written representations or assurances from the Company or any other person other than as set forth in this Agreement.  Investor has received and reviewed the Company's Annual Report on Form 10-KSB for the year ended December 31, 2005 and the Company's Form 10-QSB for the quarters ended March 31, 2006 and June 30, 2006, and September 30, 2006.  Investor has such experience in business and financial matters that Investor is capable of evaluating the risk of Investor’s investment and determining the suitability of Investor’s investment.  Investor is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Act.  

2.3

Investor's Economic Risk.  Investor understands and acknowledges that an investment in the Note involves a high degree of risk.  Investor acknowledges that there are limitations on the liquidity of the Note and the Fee Shares.  Investor represents that Investor is able to bear the economic risk of an investment in the Note, including a possible total loss of investment.  In making this statement Investor hereby represents and warrants to the Company that Investor has adequate means of providing for Investor's current needs and contingencies; and that Investor is able to afford to hold the Note and the Fee Shares for an indefinite period.  Further, Investor has no present need for liquidity in the Note or the Fee Shares and Investor is willing to accept such investment risks.

2.4

No Government Recommendation or Approval.  Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Note.

2.5

Company's Reliance on Representations of Investor.  Investor understands that the Note is being offered and sold and the Fee Shares delivered to Investor in reliance on specific exemptions from the registration requirements of U.S. securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments, and understandings of Investor set forth herein in order to determine the applicability of such exemptions to Investor’s acquisition of the Note and Fee Shares and suitability to acquire the Note.

2.6

Note and Fee Shares Not Registered Under the Act or Any State Act.  Investor understands that the offer and sale of the Note and delivery of the Fee Shares have not been registered under the Act or any state securities laws ("State Acts") and that they are being offered and sold and delivered pursuant to Regulation S based in part upon the representations of Investor contained herein.  The Note and Fee Shares may not be offered, sold, or otherwise transferred in the United States or to U.S. Persons unless such offers, sales, and transfers are registered under the Act and applicable State Acts or are made pursuant to an available exemption from the registration requirements of those laws.

2.7

Investment Intent.  Investor is acquiring the Note and Fee Shares for Investor’s own account for investment and not as a nominee and not with a view to the distribution thereof.  Investor understands that Investor must bear the economic risk of this investment indefinitely unless the Note and Fee Shares are registered pursuant to the Act and any applicable State Acts, or an exemption from such registration is available.  Investor represents and warrants to the Company, as of the date of this Agreement, that Investor has no present plan or intention to sell the Note or Fee Shares in the United States at any predetermined time, and has made no predetermined arrangements to sell the Note or Fee Shares.

2.8

Investor's Power and Authority.  Investor has the full power and authority to execute, deliver, and perform this Agreement.  This Agreement, when executed and delivered by Investor, will constitute a valid and legally binding obligation of Investor, enforceable in accordance with its terms.

2.9

Representation Regarding Signatory.  Investor represents and warrants that Investor's signatory, if any, is duly authorized to execute this Agreement on behalf of Investor.

2.10

No Tax Advice From Company or Its Agents.  Investor has had an opportunity to review with Investor’s own tax advisors the foreign, U.S. federal, state and local tax consequences of this investment, and the transactions contemplated by this Agreement.  Investor is relying solely on such advisors and not on any statements or representations of the Company or any of its agents and understands that Investor (and not the Company) shall be responsible for Investor's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

2.11

No Legal Advice from Company or Its Agents.  Investor acknowledges that Investor has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with Investor’s own legal counsel.  Investor is relying solely on such counsel and not on any statements or representations of the Company or any of its agents for legal advice with respect to this investment or the transactions contemplated by this Agreement, except for representations, warranties and covenants set forth herein.

2.12

No Scheme to Evade Registration.  Investor's acquisition of the Note and Fee Shares is not a transaction (or any element of a series of transactions) that is part of a plan or scheme to evade the registration provisions of the Act.

2.13

Deliveries Outside the United States.  Investor understands that () the Note may not be converted within the United States or by or on behalf of a U.S. Person, and that the New Equity Securities may not be delivered within the United States upon conversion of the Note, other than in offerings deemed to meet the definition of "offshore transactions" (as defined in Regulation S), unless registered under the Act or an exemption from such registration is available, (b) the Note shall bear an appropriate legend to such effect, and (c) the Company will make a notation on its transfer books to such effect.

.

Resales of the Note, Fee Shares and New Equity Securities by Investor; Hedging; Legends.  

3.1

Resales of the Note, Fee Shares and New Equity Securities; Hedging.  Investor understands that the Note, the Fee Shares and New Equity Securities are deemed to be "restricted securities" as defined in Rule 144 under the Act.  Investor acknowledges, covenants and agrees, with respect to the Note, the Fee Shares and New Equity Securities, (a) that they will only be resold by Investor, and the Company is to refuse to register any transfer not made, in accordance with Regulation S, or pursuant to an exemption from registration under the Act and applicable State Acts, or pursuant to an effective and current registration statement under the Act, and (b) not to engage in hedging transactions unless in compliance with the Act.  Until the restrictions on transfer terminate as provided in Section 3.3 hereof, Investor shall cause a transferee of the Note, the Fee Shares or New Equity Securities to execute, prior to the transfer, an agreement containing investor representations and covenants reasonably requested by the Company and substantially similar to those contained in Sections 2 and 3 hereof.

3.2

Legend.  To insure compliance with the provisions of the Act and State Acts, the Note, the Fee Shares and New Equity Securities shall bear a legend (the "Regulation S Restrictive Legend") substantially as follows:

"THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES  MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT."

3.3

Termination of Restrictions; Removal of Legend.  

(a)

The Regulation S Restrictive Legend may be removed (and the restrictions on the transferability of the Note, the Fee Shares and New Equity Securities shall terminate) when () the sale of the Note, the Fee Shares and New Equity Securities, as the case may be, have been registered under the Act and sold by the holder thereof in accordance with such registration, () a written opinion to the effect that such restrictions are no longer required or necessary under any federal or state securities law or regulation has been received from counsel for the holder thereof (provided that such counsel, and the form and substance of such opinion, are reasonably satisfactory to the Company) or counsel for the Company, () the Note, the Fee Shares and New Equity Securities, as the case may be, have been sold without registration under the Act in compliance with Rule 144 or Rule 144A promulgated under the Act, () the Company is reasona bly satisfied that the holder of the Note, the Fee Shares and New Equity Securities, as the case may be, shall be entitled to sell the Note, the Fee Shares and New Equity Securities in accordance with the terms of Subsection (k) of Rule 144 or of Rule 144A promulgated under the Act, or () a letter or an order has been issued to the holder thereof by the staff of the Securities and Exchange Commission (the "Commission") stating that no enforcement action shall be recommended by such staff or taken by the Commission if the Note, the Fee Shares or New Equity Securities, as the case may be, are transferred in the United States or to a U.S. Person without registration under the Act in accordance with the conditions set forth in such letter or order and such letter or order specifies that no subsequent restrictions on transfer are required.

(b)

Whenever the restrictions imposed by this Section 3 shall terminate as hereinabove provided, the holder of the Note, the Fee Shares or New Equity Securities, as the case may be, then outstanding as to which such restrictions shall have terminated shall be entitled to receive from the Company, without expense to such holder, a new certificate for the Note, the Fee Shares or New Equity Securities, as the case may be, not bearing the Regulation S Restrictive Legend.

4.

Representations and Warranties of Company.  The Company represents and warrants to Investor as follows:

4.1

Organization, Good Standing, and Qualification.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business or properties of the Company.

4.2

Authorization.  All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder, and the authorization, issuance, and delivery of the Note and Fee Shares and, upon conversion of the Note, the New Equity Securities, have been taken.  This Agreement constitutes valid and legally binding obligation of the Company, enforceable in accordance with its terms.  The Company has obtained all consents and approvals required for it to execute, deliver, and perform this Agreement.  

4.3

No Conflicts.  The Company is not in violation or default of any provisions of its Certificate of Incorporation or By-laws, as amended and in effect on and as of the date of this Agreement, or of any material provision of any instrument or contract to which it is a party or by which it is bound or of any material provision of any federal or state judgment, writ, decree, order, statute, rule or governmental regulation applicable to the Company, except where such violation, default or conflict would have no material adverse affect on the Company's business or financial condition, or on the transactions contemplated herein. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

4.4

Valid Issuance of Securities.  The New Equity Securities, when issued, sold, and delivered in accordance with the terms hereof or the Note, as the case may be, and for the consideration expressed herein or in the Note, as the case may be, will be duly and validly issued, fully paid and non-assessable, free of any preemptive rights, and the holders thereof shall not be subject to personal liability solely by reason of being such holders.  The Note, when issued, sold, and delivered, in accordance with this Agreement, shall be duly executed, issued, and delivered, and shall constitute valid and legally binding obligation of the Company, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws affecting creditors' rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance).  The Fee Shares, when issued and delivered in accordance with the terms hereof, will be duly and validly issued, fully paid and non-assessable.

4.5

Current Public Information.  The Company is a "reporting issuer" as defined in Regulation S and it has a class of securities registered under Section 12(b) or 12(g) of the Exchange Act or is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, and has filed on a timely basis all the materials required to be filed as reports pursuant to the Exchange Act for a period of at least twelve months preceding the date hereof (or for such shorter period as the Company was required by law to file such material), and all such filings have been made on a timely basis.  

4.6

Use of Proceeds.  As of the date hereof, the Company expects to use the net proceeds from the sale of the Note for working capital and general corporate purposes, including the funding of research and development and marketing.

5.

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made in and wholly to be performed in that jurisdiction.  

6.

Entire Agreement; Amendments.  This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein.  Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termination is sought.

7.

Written Notices, Etc.  Any notice, demand, or request required or permitted to be given by either the Company or Investor pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally, by overnight courier, or by registered or certified mail, return receipt requested, or by facsimile or other standard form of telecommunication or electronic transmission, to the parties at their respective addresses set forth above.

8.

Execution in Counterparts Permitted.  This Agreement may be executed by facsimile in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

9.

Survival; Severability.  Investor's and the Company's representations and warranties shall survive the closing of the transaction.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement, to the extent permitted by law, shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

10.

Titles; Gender.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  The use in the Agreement of a masculine, feminine or neuter pronoun shall be deemed to include a reference to the others.

11.

Assignment.  Neither party to this Agreement may assign this Agreement without the prior written consent of the other (which may be withheld for any reason).  

12.

Indemnification.  The Company shall indemnify and hold harmless Investor against any liabilities suffered or incurred by Investor and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of the Company contained in this Agreement.  Investor shall indemnify and hold harmless the Company and each of its officers, directors, stockholders, employees, control persons, and agents (each, a "Company Indemnified Party") who is or may be a party to any threatened, pending, or completed action, suit or proceeding of any kind, against any liabilities suffered or incurred by a Company Indemnified Party and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of Investor contained in this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

BioLife Solutions, Inc.
By:	/s/ Mike Rice
Name:	Mike Rice, President & CEO
By:	/s/ Walter Villiger
Name:	Walter Villiger
	Investor

EX-10

Exhibit 10.12

THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

$375,000.00US

                Owego, New York

     February 13, 2007

BIOLIFE SOLUTIONS, INC.

PROMISSORY NOTE

BioLife Solutions, Inc., a Delaware corporation (the “Maker”), for value received, hereby promises to pay to Walter Villiger (the “Holder”), the principal amount of three hundred seventy five thousand Dollars ($375,000.00US) (the “Issue Price”), together with interest on the unpaid amount thereof, in accordance with the terms hereof, from the date hereof until paid or converted in accordance with the terms hereof.  

1.

Promissory Note (“Note”).

1.1

Interest Rate.  The rate of interest hereunder (“Interest Rate”) shall equal seven percent (7%) per annum and shall be computed on the basis of a 365 day year for the actual number of days elapsed; provided that in no event shall the interest rate be less than the minimum rate of interest required in order to avoid the imputation of interest for federal income tax purposes.

1.2

Payment.  Subject to the provisions of  Section 4 regarding the automatic conversion of this Note upon a Financing (as defined therein), the Issue Price plus all accrued interest thereon shall become due and payable in one lump sum on the earlier of (a) February 13, 2009 (the “Due Date”) or (b) an Event of Default (as defined below).  The Maker may at any time prepay in whole or in part the principal and interest accrued under this Note.  Any payment will be applied first to the payment of any and all accrued and unpaid interest through the payment date and second to the payment of principal remaining due hereunder.  Payment shall be made at the offices or residence of the Holder, or at such other place as the Holder shall have designated to the Maker in writing, in lawful money of the United States of America.

1.3

Note Purchase Agreement.  This Note is issued pursuant to a Note Purchase Agreement, dated the date hereof, by and between Maker and Holder and is subject and entitled to the terms, conditions, covenants, and agreements contained therein.

2.

Acquisition.   In the event the Maker is to be acquired, whether by means of a merger, sale of all or substantially all of the assets of the Maker, sale of securities representing more than fifty percent (50%) of the equity interests in Maker, or otherwise, prior to the Due Date (an “Acquisition”), then the Issue Price plus all accrued but previously unpaid interest thereon shall become due and payable in one lump sum immediately upon the closing of such Acquisition.

3.

Events of Default.  The Issue Price and accrued interest on this Note shall, at the option of the Holder, become due and payable, subject to applicable law, upon the happening of any one of the following specified events:

(a)

a decree or order of a court having jurisdiction is entered adjudging the Maker a bankrupt or insolvent, or issuing sequestration or process of execution against, or against any substantial part of, the property of the Maker, or appointing a receiver of the Maker or any substantial part of its property, or ordering the winding-up or liquidation of its affairs, unless the Maker actively and diligently contests in good faith such decree or order and has such decree or order stayed on or before 60 days after the issue of such decree or order by a court;

(b)

an order is made or a resolution is passed for the winding-up or liquidation of the Maker, or the Maker institutes proceedings to be adjudicated a bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it, or consents to the filing of any such petition or to the appointment of a receiver of the Maker or any substantial part of its property, or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due, or takes corporate action in furtherance of any of the aforesaid purposes;

(c)

the Maker defaults in observing or performing any material covenant or condition of this Note or the Unit Purchase Agreement on its part to be observed or performed, and such default continues for a period of fifteen (15) days after notice in writing has been given to the Maker by the Holder specifying such default and requiring the Maker to rectify the same;

2

(d)

an encumbrancer takes possession of all or substantially all of the property of the Maker, or any process of execution is levied or enforced upon or against all or substantially all of the property of the Maker and remains unsatisfied for such period as would permit any such property to be sold thereunder, unless the Maker actively and diligently contests in good faith such process, but in that event the Maker shall, if the Holder so requires, give security which, in the discretion of the holder, is sufficient to pay in full the amount thereby claimed in case the claim is held to be valid.

4.

Conversion.

4.1

Conversion.   If this Note is outstanding at the time of any bona fide equity financing of the Maker of at least One Million Dollars ($1,000,000), excluding conversion of this Note (a “Financing”), then, concurrently with the consummation of the Financing, Holder shall have the right (but not the obligation) (“Conversion Right”) to convert this Note, plus all accrued and unpaid interest thereon (the “Conversion Amount”) into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Maker sold in the Financing (the “New Equity Securities”) as is equal to the Conversion Amount divided by 85% of the per share or per unit purchase price of the New Equity Securities.  The date of the consummation of the Financing is hereinafter referred to as the “Closing Conversion Date”).

4.2

Conversion Procedure.  

(a)

The Maker shall provide the Holder written notice of the Financing at least fifteen (15) days prior to the Closing Date.

(b)

In order to exercise the Conversion Right, Holder shall provide the Maker at least five (5) days prior to the Closing Date written notice that the Holder elects to convert the Note on the Closing Date.

4.3

Termination of Rights Upon Conversion.  Upon the Closing Date, subject to the completion of the Financing, the Holder of this Note shall have no further rights under this Note, whether or not this Note is surrendered.

4.4

Fractional Shares. No fractional shares or units of New Equity Securities of the Maker will be issued in connection with any conversion hereunder but rather any such fractional shares or units shall be rounded up to the nearest whole share or unit.

4.5

Delivery of Stock Certificates.  As promptly as practicable after the Closing Date, (a) the Maker shall give notice to the Holder of the conversion of this Note into the New Equity Securities, (b) the Holder shall return this Note to the Maker, and (c) the Maker, at its expense, shall issue and deliver to the Holder of this Note a certificate or certificates evidencing the number of full New Equity Securities issuable to the Holder upon such conversion.

3

5.

Miscellaneous.

5.1

Transfer of Note.  This Note shall not be transferable or assignable in any manner and no interest shall be pledged or otherwise encumbered by the Holder without the consent of the Maker, which consent shall not be unreasonably withheld.

5.2

Titles and Subtitles.  The titles and subtitles used in this Note are for convenience only and are not to be considered in construing or interpreting this Note.

5.3

Attorneys’ Fees.  If any action at law or in equity is necessary to enforce or interpret the terms of this Note, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and disbursements in addition to any other relief to which such party may be entitled.

5.4

Amendments and Waivers.  This Note may be amended and the observance of any other term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Maker and the Holder.  The Maker waives presentment, demand for performance, notice of nonperformance, protest, notice of protest, and notice of dishonor.  No delay on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right under this Note.

5.5

Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

5.6

Governing Law.  This Note shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to its conflicts of laws principles.

Executed as of the date first written above.

MAKER:
BIOLIFE SOLUTIONS, INC.
a Delaware corporation
By:	/s/ Michael P. Rice
Name: Title:	Michael P. Rice President and Chief Executive Officer
Address:	171 Front Street, Owego, NY13827

4

EX-10

Exhibit 10.17

THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES  MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

$500,000.00

Bothell, Washington

   September 4, 2007

BIOLIFE SOLUTIONS, INC.

PROMISSORY NOTE

BioLife Solutions, Inc., a Delaware corporation (the “Maker”), for value received, hereby promises to pay to Walter Villiger (the “Holder”), the principal amount of Five Hundred Thousand Dollars ($500,000) (the “Issue Price”), together with interest on the unpaid amount thereof, in accordance with the terms hereof, from the date hereof until paid or converted in accordance with the terms hereof.  

1.

Promissory Note (“Note”).

1.1

Interest Rate.  The rate of interest hereunder (“Interest Rate”) shall equal seven percent (7%) per annum and shall be computed on the basis of a 365 day year for the actual number of days elapsed; provided that in no event shall the interest rate be less than the minimum rate of interest required in order to avoid the imputation of interest for federal income tax purposes.

1.2

Payment.  Subject to the provisions of  Section 4 regarding the conversion of this Note upon a Financing (as defined therein), the Issue Price plus all accrued interest thereon shall become due and payable in one lump sum on the earlier of (a) September 30, 2008 (the “Due Date”) or (b) an Event of Default (as defined below).  The Maker may at any time prepay in whole or in part the principal and interest accrued under this Note.  Any payment will be applied first to the payment of any and all accrued and unpaid interest through the payment date and second to the payment of principal remaining due hereunder.  Payment shall be made at the offices or residence of the Holder, or at such other place as the Holder shall have designated to the Maker in writing, in lawful money of the United States of America.

1.3

Note Purchase Agreement.  This Note is issued pursuant to a Note Purchase Agreement, dated the date hereof, by and between Maker and Holder and is subject and entitled to the terms, conditions, covenants, and agreements contained therein.

2.

Acquisition.   In the event the Maker is to be acquired, whether by means of a merger, sale of all or substantially all of the assets of the Maker, sale of securities representing more than fifty percent (50%) of the equity interests in Maker, or otherwise, prior to the Due Date (an “Acquisition”), then the Issue Price plus all accrued but previously unpaid interest thereon shall become due and payable in one lump sum immediately upon the closing of such Acquisition.

3.

Events of Default.  The Issue Price and accrued interest on this Note shall, at the option of the Holder, become due and payable, subject to applicable law, upon the happening of any one of the following specified events:

(a)

a decree or order of a court having jurisdiction is entered adjudging the Maker a bankrupt or insolvent, or issuing sequestration or process of execution against, or against any substantial part of, the property of the Maker, or appointing a receiver of the Maker or any substantial part of its property, or ordering the winding-up or liquidation of its affairs, unless the Maker actively and diligently contests in good faith such decree or order and has such decree or order stayed on or before 60 days after the issue of such decree or order by a court;

(b)

an order is made or a resolution is passed for the winding-up or liquidation of the Maker, or the Maker institutes proceedings to be adjudicated a bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it, or consents to the filing of any such petition or to the appointment of a receiver of the Maker or any substantial part of its property, or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due, or takes corporate action in furtherance of any of the aforesaid purposes;

(c)

the Maker defaults in observing or performing any material covenant or condition of this Note or the Unit Purchase Agreement on its part to be observed or performed, and such default continues for a period of fifteen (15) days after notice in writing has been given to the Maker by the Holder specifying such default and requiring the Maker to rectify the same;

2

(d)

an encumbrancer takes possession of all or substantially all of the property of the Maker, or any process of execution is levied or enforced upon or against all or substantially all of the property of the Maker and remains unsatisfied for such period as would permit any such property to be sold thereunder, unless the Maker actively and diligently contests in good faith such process, but in that event the Maker shall, if the Holder so requires, give security which, in the discretion of the holder, is sufficient to pay in full the amount thereby claimed in case the claim is held to be valid.

4.

Conversion.

4.1

Conversion.   If this Note is outstanding at the time of any bona fide equity financing of the Maker of at least One Million Dollars ($1,000,000), excluding conversion of this Note or any other notes issued by Maker to Holder (a “Financing”), then, concurrently with the consummation of the Financing, Holder shall have the right (but not the obligation) (“Conversion Right”) to convert this Note, plus all accrued and unpaid interest thereon (the “Conversion Amount”) into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Maker sold in the Financing (the “New Equity Securities”) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Securities.  The date of the consummation of the Financing is hereinafter referred to as the “Closing Conversion Date”).

4.2

Conversion Procedure.  

(a)

The Maker shall provide the Holder written notice of the Financing at least fifteen (15) days prior to the Closing Date.

(b)

In order to exercise the Conversion Right, Holder shall provide the Maker at least five (5) days prior to the Closing Date written notice that the Holder elects to convert the Note on the Closing Date.

4.3

Termination of Rights Upon Conversion.  Upon the Closing Date, subject to the completion of the Financing, the Holder of this Note shall have no further rights under this Note, whether or not this Note is surrendered.

4.4

Fractional Shares. No fractional shares or units of New Equity Securities of the Maker will be issued in connection with any conversion hereunder but rather any such fractional shares or units shall be rounded up to the nearest whole share or unit.

4.5

Delivery of Stock Certificates.  As promptly as practicable after the Closing Date, (a) the Maker shall give notice to the Holder of the conversion of this Note into the New Equity Securities, (b) the Holder shall return this Note to the Maker, and (c) the Maker, at its expense, shall issue and deliver to the Holder of this Note a certificate or certificates evidencing the number of full New Equity Securities issuable to the Holder upon such conversion.

3

5.

Miscellaneous.

5.1

Transfer of Note.  This Note shall not be transferable or assignable in any manner and no interest shall be pledged or otherwise encumbered by the Holder without the consent of the Maker, which consent shall not be unreasonably withheld.

5.2

Titles and Subtitles.  The titles and subtitles used in this Note are for convenience only and are not to be considered in construing or interpreting this Note.

5.3

Attorneys’ Fees.  If any action at law or in equity is necessary to enforce or interpret the terms of this Note, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and disbursements in addition to any other relief to which such party may be entitled.

5.4

Amendments and Waivers.  This Note may be amended and the observance of any other term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Maker and the Holder.  The Maker waives presentment, demand for performance, notice of nonperformance, protest, notice of protest, and notice of dishonor.  No delay on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right under this Note.

5.5

Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

5.6

Governing Law.  This Note shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to its conflicts of laws principles.

Executed as of the date first written above.

MAKER:
BIOLIFE SOLUTIONS, INC.
a Delaware corporation
By:	/s/ Michael Rice
Name: Title:	Michael Rice CEO, President
Address:	3303 Monte Villa Parkway
	Suite 310
	Bothell, WA 98021

4

EX-10

Exhibit 10.18

NOTE PURCHASE AGREEMENT

This Note Purchase Agreement (this "Agreement") is entered into this 4th day of September, 2007, by and between BioLife Solutions, Inc., a Delaware corporation having its executive offices at 3303 Monte Villa Parkway, Suite 310, Bothell, WA 98021 (the "Company") and Thomas Girschweiler, with an address at Wissmannstrasse 15, CH 8057, Zurich, Switzerland (the "Investor").

W I T N E S S E T H:

WHEREAS, the Company is seeking to raise up to $1,000,000 through the sale of  promissory notes bearing interest at the rate of seven percent (7%) per annum (each, a “Note”), which Note, plus all accrued interest thereon, (a) shall become due and payable in one lump sum on the earlier of (i) September 30, 2008  or (ii) an Event of Default (as defined in the Note), and (b), at the option of the Investor, may be converted into New Equity Securities (as defined in the Note) upon the consummation of a Financing (as defined in the Note) at a per share or per unit price equal to 100% of the per share or per unit purchase price of the New Equity Securities sold in the Financing; and

WHEREAS, the Company anticipates contracting for the sale of the Notes with non U.S. Persons (the term "U.S. Persons" being defined in Regulation S ("Regulation S") of the Securities Act of 1933, as amended (the "Act")), in reliance upon an exemption from registration provided for under Regulation S of the Act; and

WHEREAS, the Company desires to sell to the Investor, and the Investor desires to purchase from the Company, a Note in the principal amount of $500,000;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties agree as follows:

1.

Purchase and Sale of Note; Delivery of Securities; Payment; Loan Origination Fee.

1.1

Purchase and Sale of Note.  The Company hereby sells, transfers, and assigns to the Investor, and the Investor hereby purchases and acquires from the Company, a Note in the principal amount of $500,000 (the "Purchase Price").

1.2

Payment of Purchase Price; Delivery of Note.  Concurrently with the execution and delivery of this Agreement, (a) the Investor is delivering to the Company a certified or cashier's check (or other form of payment acceptable to the Company, in its sole discretion) in an amount equal to the Purchase Price, or shall transfer such sum to the account of the Company by wire transfer, and (b) the Company is delivering, or within a reasonable period of time, will deliver, to the Investor the Note purchased hereunder, which shall be in definitive form registered in the name of the Investor.

2..

Representations, Warranties, and Covenants of Investor.  Investor hereby represents and warrants to, and covenants with, the Company as follows:

2.1

Offshore Transaction.  () Investor is not a U.S. person ("U.S. Person") as that term is defined in Regulation S; () the Note was not offered to Investor in the United States; () at the time of execution of this Agreement and the time of any offer to Investor to purchase the Note hereunder, Investor was physically outside the United States; () Investor is purchasing the Note for Investor’s own account and not for the account of or for the benefit of any U.S. Person; and () Investor is not an underwriter, dealer, distributor, or other person who is participating, pursuant to a contractual arrangement, in the distribution of the Note offered or sold in reliance on Regulation S.

2.2

Investor's Independent Investigation.  Investor, in subscribing for the Note hereunder, has relied solely upon an independent investigation made by Investor and Investor’s representatives, if any, and has, prior to the date hereof, been given access to and the opportunity to examine all books and records of the Company, and all material contracts and documents of the Company which have been filed as exhibits to the Company's filings made under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act").  In making Investor’s investment decision to purchase the Note, Investor is not relying on any oral or written representations or assurances from the Company or any other person other than as set forth in this Agreement.  Investor has received and reviewed the Company's Annual Report on Form 10-KSB for the year ended December 31, 2006 and the Company's Form 10-QSB for the quarters ended March 31, 2007 and June 30, 2007.  Investor has such experience in business and financial matters that Investor is capable of evaluating the risk of Investor’s investment and determining the suitability of Investor’s investment.  Investor is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Act.  

2.3

Investor's Economic Risk.  Investor understands and acknowledges that an investment in the Note involves a high degree of risk.  Investor acknowledges that there are limitations on the liquidity of the Note.  Investor represents that Investor is able to bear the economic risk of an investment in the Note, including a possible total loss of investment.  In making this statement Investor hereby represents and warrants to the Company that Investor has adequate means of providing for Investor's current needs and contingencies; and that Investor is able to afford to hold the Note for an indefinite period.  Further, Investor has no present need for liquidity in the Note and Investor is willing to accept such investment risks.

2.4

No Government Recommendation or Approval.  Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Note.

2.5

Company's Reliance on Representations of Investor.  Investor understands that the Note is being offered and sold to Investor in reliance on specific exemptions from the registration requirements of U.S. securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments, and understandings of Investor set forth herein in order to determine the applicability of such exemptions to Investor’s acquisition of the Note and suitability to acquire the Note.

2.6

Note Not Registered Under the Act or Any State Act.  Investor understands that the offer and sale of the Note has not been registered under the Act or any state securities laws ("State Acts") and that they are being offered and sold and delivered pursuant to Regulation S based in part upon the representations of Investor contained herein.  The Note may not be offered, sold, or otherwise transferred in the United States or to U.S. Persons unless such offers, sales, and transfers are registered under the Act and applicable State Acts or are made pursuant to an available exemption from the registration requirements of those laws.

2.7

Investment Intent.  Investor is acquiring the Note for Investor’s own account for investment and not as a nominee and not with a view to the distribution thereof.  Investor understands that Investor must bear the economic risk of this investment indefinitely unless the Note is registered pursuant to the Act and any applicable State Acts, or an exemption from such registration is available.  Investor represents and warrants to the Company, as of the date of this Agreement, that Investor has no present plan or intention to sell the Note in the United States at any predetermined time, and has made no predetermined arrangements to sell the Note.

2.8

Investor's Power and Authority.  Investor has the full power and authority to execute, deliver, and perform this Agreement.  This Agreement, when executed and delivered by Investor, will constitute a valid and legally binding obligation of Investor, enforceable in accordance with its terms.

2.9

Representation Regarding Signatory.  Investor represents and warrants that Investor's signatory, if any, is duly authorized to execute this Agreement on behalf of Investor.

2.10

No Tax Advice From Company or Its Agents.  Investor has had an opportunity to review with Investor’s own tax advisors the foreign, U.S. federal, state and local tax consequences of this investment, and the transactions contemplated by this Agreement.  Investor is relying solely on such advisors and not on any statements or representations of the Company or any of its agents and understands that Investor (and not the Company) shall be responsible for Investor's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

2.11

No Legal Advice from Company or Its Agents.  Investor acknowledges that Investor has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with Investor’s own legal counsel.  Investor is relying solely on such counsel and not on any statements or representations of the Company or any of its agents for legal advice with respect

to this investment or the transactions contemplated by this Agreement, except for representations, warranties and covenants set forth herein.

2.12

No Scheme to Evade Registration.  Investor's acquisition of the Note is not a transaction (or any element of a series of transactions) that is part of a plan or scheme to evade the registration provisions of the Act.

2,13

Deliveries Outside the United States.  Investor understands that () the Note may not be converted within the United States or by or on behalf of a U.S. Person, and that the New Equity Securities may not be delivered within the United States upon conversion of the Note, other than in offerings deemed to meet the definition of "offshore transactions" (as defined in Regulation S), unless registered under the Act or an exemption from such registration is available, (b) the Note shall bear an appropriate legend to such effect, and (c) the Company will make a notation on its transfer books to such effect.

3.

Resales of the Note and New Equity Securities by Investor; Hedging; Legends.  

3.1

Resales of the Note and New Equity Securities; Hedging.  Investor understands that the Note and New Equity Securities are deemed to be "restricted securities" as defined in Rule 144 under the Act.  Investor acknowledges, covenants and agrees, with respect to the Note and New Equity Securities, (a) that they will only be resold by Investor, and the Company is to refuse to register any transfer not made, in accordance with Regulation S, or pursuant to an exemption from registration under the Act and applicable State Acts, or pursuant to an effective and current registration statement under the Act, and (b) not to engage in hedging transactions unless in compliance with the Act.  Until the restrictions on transfer terminate as provided in Section 3.3 hereof, Investor shall cause a transferee of the Note or New Equity Securities to execute, prior to the transfer, an agreement containing inv estor representations and covenants reasonably requested by the Company and substantially similar to those contained in Sections 2 and 3 hereof.

3.2

Legend.  To insure compliance with the provisions of the Act and State Acts, the Note and New Equity Securities shall bear a legend (the "Regulation S Restrictive Legend") substantially as follows:

"THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM

THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES  MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT."

3.3

Termination of Restrictions; Removal of Legend.  

(a)

The Regulation S Restrictive Legend may be removed (and the restrictions on the transferability of the Note and New Equity Securities shall terminate) when () the sale of the Note and New Equity Securities, as the case may be, have been registered under the Act and sold by the holder thereof in accordance with such registration, () a written opinion to the effect that such restrictions are no longer required or necessary under any federal or state securities law or regulation has been received from counsel for the holder thereof (provided that such counsel, and the form and substance of such opinion, are reasonably satisfactory to the Company) or counsel for the Company, () the Note and New Equity Securities, as the case may be, have been sold without registration under the Act in compliance with Rule 144 or Rule 144A promulgated under the Act, () the Company is reasonably satisfied that the holder of the Note and Ne w Equity Securities, as the case may be, shall be entitled to sell the Note and New Equity Securities in accordance with the terms of Subsection (k) of Rule 144 or of Rule 144A promulgated under the Act, or () a letter or an order has been issued to the holder thereof by the staff of the Securities and Exchange Commission (the "Commission") stating that no enforcement action shall be recommended by such staff or taken by the Commission if the Note or New Equity Securities, as the case may be, are transferred in the United States or to a U.S. Person without registration under the Act in accordance with the conditions set forth in such letter or order and such letter or order specifies that no subsequent restrictions on transfer are required.

(b)

Whenever the restrictions imposed by this Section 3 shall terminate as hereinabove provided, the holder of the Note or New Equity Securities, as the case may be, then outstanding as to which such restrictions shall have terminated shall be entitled to receive from the Company, without expense to such holder, a new certificate for the Note or New Equity Securities, as the case may be, not bearing the Regulation S Restrictive Legend.

4.

Representations and Warranties of Company.  The Company represents and warrants to Investor as follows:

4.1

Organization, Good Standing, and Qualification.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business or properties of the Company.

4.2

Authorization.  All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder, and the authorization, issuance, and delivery of the Note and, upon conversion of the Note, the New Equity Securities, have been taken.  This Agreement constitutes valid and legally binding obligation of the Company, enforceable in accordance with its terms.  The Company has obtained all consents and approvals required for it to execute, deliver, and perform this Agreement.  

4.3

No Conflicts.  The Company is not in violation or default of any provisions of its Certificate of Incorporation or By-laws, as amended and in effect on and as of the date of this Agreement, or of any material provision of any instrument or contract to which it is a party or by which it is bound or of any material provision of any federal or state judgment, writ, decree, order, statute, rule or governmental regulation applicable to the Company, except where such violation, default or conflict would have no material adverse affect on the Company's business or financial condition, or on the transactions contemplated herein. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

4.4

Valid Issuance of Securities.  The New Equity Securities, when issued, sold, and delivered in accordance with the terms hereof or the Note, as the case may be, and for the consideration expressed herein or in the Note, as the case may be, will be duly and validly issued, fully paid and non-assessable, free of any preemptive rights, and the holders thereof shall not be subject to personal liability solely by reason of being such holders.  The Note, when issued, sold, and delivered, in accordance with this Agreement, shall be duly executed, issued, and delivered, and shall constitute valid and legally binding obligation of the Company, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws affecting creditors' rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance).  

4.5

Current Public Information.  The Company is a "reporting issuer" as defined in Regulation S and it has a class of securities registered under Section 12(b) or 12(g) of the Exchange Act or is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, and has filed on a timely basis all the materials required to be filed as reports pursuant to the Exchange Act for a period of at least twelve months preceding the date hereof (or for such shorter period as the Company was required by law to file such material), and all such filings have been made on a timely basis.  

4.6

Use of Proceeds.  As of the date hereof, the Company expects to use the net proceeds from the sale of the Note for working capital and general corporate purposes, including the funding of research and development and marketing.

5.

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made in and wholly to be performed in that jurisdiction.  

6.

Entire Agreement; Amendments.  This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein.  Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termination is sought.

7.

Written Notices, Etc.  Any notice, demand, or request required or permitted to be given by either the Company or Investor pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally, by overnight courier, or by registered or certified mail, return receipt requested, or by facsimile or other standard form of telecommunication or electronic transmission, to the parties at their respective addresses set forth above.

8.

Execution in Counterparts Permitted.  This Agreement may be executed by facsimile in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

9.

Survival; Severability.  Investor's and the Company's representations and warranties shall survive the closing of the transaction.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement, to the extent permitted by law, shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

10.

Titles; Gender.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  The use in the Agreement of a masculine, feminine or neuter pronoun shall be deemed to include a reference to the others.

11.

Assignment.  Neither party to this Agreement may assign this Agreement without the prior written consent of the other (which may be withheld for any reason).

12.

Indemnification.  The Company shall indemnify and hold harmless Investor against any liabilities suffered or incurred by Investor and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of the Company contained in this Agreement.  Investor shall indemnify and hold harmless the Company and each of its officers, directors, stockholders, employees, control persons, and agents (each, a "Company Indemnified Party") who is or may be a party to any threatened, pending, or completed action, suit or proceeding of any kind, against any liabilities suffered or incurred by a Company Indemnified Party and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of Investor contained in this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

	BioLife Solutions, Inc.
By:	/s/ Mike Rice
	Mike Rice
	President & CEO
	/s/ Thomas Girschweiler
	Thomas Girschweiler
	Investor

EX-10

Exhibit 10.19

NOTE PURCHASE AGREEMENT

This Note Purchase Agreement (this "Agreement") is entered into this 4th day of September, 2007, by and between BioLife Solutions, Inc., a Delaware corporation having its executive offices at 3303 Monte Villa Parkway, Suite 310, Bothell, WA 98021 (the "Company") and Walter Villiger, with an address at Paradiesstrasse 35, CH-8645, Jona, Switzerland (the "Investor").

W I T N E S S E T H:

WHEREAS, the Company is seeking to raise up to $1,000,000 through the sale of  promissory notes bearing interest at the rate of seven percent (7%) per annum (each, a “Note”), which Note, plus all accrued interest thereon, (a) shall become due and payable in one lump sum on the earlier of (i) September 30, 2008  or (ii) an Event of Default (as defined in the Note), and (b), at the option of the Investor, may be converted into New Equity Securities (as defined in the Note) upon the consummation of a Financing (as defined in the Note) at a per share or per unit price equal to 100% of the per share or per unit purchase price of the New Equity Securities sold in the Financing; and

WHEREAS, the Company anticipates contracting for the sale of the Notes with non U.S. Persons (the term "U.S. Persons" being defined in Regulation S ("Regulation S") of the Securities Act of 1933, as amended (the "Act")), in reliance upon an exemption from registration provided for under Regulation S of the Act; and

WHEREAS, the Company desires to sell to the Investor, and the Investor desires to purchase from the Company, a Note in the principal amount of $500,000;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties agree as follows:

1.

Purchase and Sale of Note; Delivery of Securities; Payment; Loan Origination Fee.

1.1

Purchase and Sale of Note.  The Company hereby sells, transfers, and assigns to the Investor, and the Investor hereby purchases and acquires from the Company, a Note in the principal amount of $500,000 (the "Purchase Price").

1.2

Payment of Purchase Price; Delivery of Note.  Concurrently with the execution and delivery of this Agreement, (a) the Investor is delivering to the Company a certified or cashier's check (or other form of payment acceptable to the Company, in its sole discretion) in an amount equal to the Purchase Price, or shall transfer such sum to the account of the Company by wire transfer, and (b) the Company is delivering, or within a reasonable period of time, will deliver, to the Investor the Note purchased hereunder, which shall be in definitive form registered in the name of the Investor.

2.

Representations, Warranties, and Covenants of Investor.  Investor hereby represents and warrants to, and covenants with, the Company as follows:

2.1

Offshore Transaction.  () Investor is not a U.S. person ("U.S. Person") as that term is defined in Regulation S; () the Note was not offered to Investor in the United States; () at the time of execution of this Agreement and the time of any offer to Investor to purchase the Note hereunder, Investor was physically outside the United States; () Investor is purchasing the Note for Investor’s own account and not for the account of or for the benefit of any U.S. Person; and () Investor is not an underwriter, dealer, distributor, or other person who is participating, pursuant to a contractual arrangement, in the distribution of the Note offered or sold in reliance on Regulation S.

2.2

Investor's Independent Investigation.  Investor, in subscribing for the Note hereunder, has relied solely upon an independent investigation made by Investor and Investor’s representatives, if any, and has, prior to the date hereof, been given access to and the opportunity to examine all books and records of the Company, and all material contracts and documents of the Company which have been filed as exhibits to the Company's filings made under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act").  In making Investor’s investment decision to purchase the Note, Investor is not relying on any oral or written representations or assurances from the Company or any other person other than as set forth in this Agreement.  Investor has received and reviewed the Company's Annual Report on Form 10-KSB for the year ended December 31, 2006 and the Company's Form 10-QSB for the quarters ended March 31, 2007 and June 30, 2007.  Investor has such experience in business and financial matters that Investor is capable of evaluating the risk of Investor’s investment and determining the suitability of Investor’s investment.  Investor is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Act.  

2.3

Investor's Economic Risk.  Investor understands and acknowledges that an investment in the Note involves a high degree of risk.  Investor acknowledges that there are limitations on the liquidity of the Note.  Investor represents that Investor is able to bear the economic risk of an investment in the Note, including a possible total loss of investment.  In making this statement Investor hereby represents and warrants to the Company that Investor has adequate means of providing for Investor's current needs and contingencies; and that Investor is able to afford to hold the Note for an indefinite period.  Further, Investor has no present need for liquidity in the Note and Investor is willing to accept such investment risks.

2.4

No Government Recommendation or Approval.  Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Note.

2.5

Company's Reliance on Representations of Investor.  Investor understands that the Note is being offered and sold to Investor in reliance on specific exemptions from the registration requirements of U.S. securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments, and understandings of Investor set forth herein in order to determine the applicability of such exemptions to Investor’s acquisition of the Note and suitability to acquire the Note.

2.6

Note Not Registered Under the Act or Any State Act.  Investor understands that the offer and sale of the Note has not been registered under the Act or any state securities laws ("State Acts") and that they are being offered and sold and delivered pursuant to Regulation S based in part upon the representations of Investor contained herein.  The Note may not be offered, sold, or otherwise transferred in the United States or to U.S. Persons unless such offers, sales, and transfers are registered under the Act and applicable State Acts or are made pursuant to an available exemption from the registration requirements of those laws.

2.7

Investment Intent.  Investor is acquiring the Note for Investor’s own account for investment and not as a nominee and not with a view to the distribution thereof.  Investor understands that Investor must bear the economic risk of this investment indefinitely unless the Note is registered pursuant to the Act and any applicable State Acts, or an exemption from such registration is available.  Investor represents and warrants to the Company, as of the date of this Agreement, that Investor has no present plan or intention to sell the Note in the United States at any predetermined time, and has made no predetermined arrangements to sell the Note.

2.8

Investor's Power and Authority.  Investor has the full power and authority to execute, deliver, and perform this Agreement.  This Agreement, when executed and delivered by Investor, will constitute a valid and legally binding obligation of Investor, enforceable in accordance with its terms.

2.9

Representation Regarding Signatory.  Investor represents and warrants that Investor's signatory, if any, is duly authorized to execute this Agreement on behalf of Investor.

2.10

No Tax Advice From Company or Its Agents.  Investor has had an opportunity to review with Investor’s own tax advisors the foreign, U.S. federal, state and local tax consequences of this investment, and the transactions contemplated by this Agreement.  Investor is relying solely on such advisors and not on any statements or representations of the Company or any of its agents and understands that Investor (and not the Company) shall be responsible for Investor's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

2.11

No Legal Advice from Company or Its Agents.  Investor acknowledges that Investor has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with Investor’s own legal counsel.  Investor is relying solely on such counsel and not on any statements or representations of the Company or any of its agents for legal advice with respect to this investment or the transactions contemplated by this Agreement, except for representations, warranties and covenants set forth herein.

2.12

No Scheme to Evade Registration.  Investor's acquisition of the Note is not a transaction (or any element of a series of transactions) that is part of a plan or scheme to evade the registration provisions of the Act.

2.13

Deliveries Outside the United States.  Investor understands that () the Note may not be converted within the United States or by or on behalf of a U.S. Person, and that the New Equity Securities may not be delivered within the United States upon conversion of the Note, other than in offerings deemed to meet the definition of "offshore transactions" (as defined in Regulation S), unless registered under the Act or an exemption from such registration is available, (b) the Note shall bear an appropriate legend to such effect, and (c) the Company will make a notation on its transfer books to such effect.

3.

Resales of the Note and New Equity Securities by Investor; Hedging; Legends.  

3.1

Resales of the Note and New Equity Securities; Hedging.  Investor understands that the Note and New Equity Securities are deemed to be "restricted securities" as defined in Rule 144 under the Act.  Investor acknowledges, covenants and agrees, with respect to the Note and New Equity Securities, (a) that they will only be resold by Investor, and the Company is to refuse to register any transfer not made, in accordance with Regulation S, or pursuant to an exemption from registration under the Act and applicable State Acts, or pursuant to an effective and current registration statement under the Act, and (b) not to engage in hedging transactions unless in compliance with the Act.  Until the restrictions on transfer terminate as provided in Section 3.3 hereof, Investor shall cause a transferee of the Note or New Equity Securities to execute, prior to the transfer, an agreement containing inv estor representations and covenants reasonably requested by the Company and substantially similar to those contained in Sections 2 and 3 hereof.

3.2

Legend.  To insure compliance with the provisions of the Act and State Acts, the Note and New Equity Securities shall bear a legend (the "Regulation S Restrictive Legend") substantially as follows:

"THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  

THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES  MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT."

3.3

Termination of Restrictions; Removal of Legend.  

(a)

The Regulation S Restrictive Legend may be removed (and the restrictions on the transferability of the Note and New Equity Securities shall terminate) when () the sale of the Note and New Equity Securities, as the case may be, have been registered under the Act and sold by the holder thereof in accordance with such registration, () a written opinion to the effect that such restrictions are no longer required or necessary under any federal or state securities law or regulation has been received from counsel for the holder thereof (provided that such counsel, and the form and substance of such opinion, are reasonably satisfactory to the Company) or counsel for the Company, () the Note and New Equity Securities, as the case may be, have been sold without registration under the Act in compliance with Rule 144 or Rule 144A promulgated under the Act, () the Company is reasonably satisfied that the holder of the Note and Ne w Equity Securities, as the case may be, shall be entitled to sell the Note and New Equity Securities in accordance with the terms of Subsection (k) of Rule 144 or of Rule 144A promulgated under the Act, or () a letter or an order has been issued to the holder thereof by the staff of the Securities and Exchange Commission (the "Commission") stating that no enforcement action shall be recommended by such staff or taken by the Commission if the Note or New Equity Securities, as the case may be, are transferred in the United States or to a U.S. Person without registration under the Act in accordance with the conditions set forth in such letter or order and such letter or order specifies that no subsequent restrictions on transfer are required.

(b)

Whenever the restrictions imposed by this Section 3 shall terminate as hereinabove provided, the holder of the Note or New Equity Securities, as the case may be, then outstanding as to which such restrictions shall have terminated shall be entitled to receive from the Company, without expense to such holder, a new certificate for the Note or New Equity Securities, as the case may be, not bearing the Regulation S Restrictive Legend.

4.

Representations and Warranties of Company.  The Company represents and warrants to Investor as follows:

4.1

Organization, Good Standing, and Qualification.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of State of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business or properties of the Company.

4.2

Authorization.  All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder, and the authorization, issuance, and delivery of the Note and, upon conversion of the Note, the New Equity Securities, have been taken.  This Agreement constitutes valid and legally binding obligation of the Company, enforceable in accordance with its terms.  The Company has obtained all consents and approvals required for it to execute, deliver, and perform this Agreement.  

4.3

No Conflicts.  The Company is not in violation or default of any provisions of its Certificate of Incorporation or By-laws, as amended and in effect on and as of the date of this Agreement, or of any material provision of any instrument or contract to which it is a party or by which it is bound or of any material provision of any federal or state judgment, writ, decree, order, statute, rule or governmental regulation applicable to the Company, except where such violation, default or conflict would have no material adverse affect on the Company's business or financial condition, or on the transactions contemplated herein. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision, instrument or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

4.4

Valid Issuance of Securities.  The New Equity Securities, when issued, sold, and delivered in accordance with the terms hereof or the Note, as the case may be, and for the consideration expressed herein or in the Note, as the case may be, will be duly and validly issued, fully paid and non-assessable, free of any preemptive rights, and the holders thereof shall not be subject to personal liability solely by reason of being such holders.  The Note, when issued, sold, and delivered, in accordance with this Agreement, shall be duly executed, issued, and delivered, and shall constitute valid and legally binding obligation of the Company, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws affecting creditors' rights, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance).  

4.5

Current Public Information.  The Company is a "reporting issuer" as defined in Regulation S and it has a class of securities registered under Section 12(b) or 12(g) of the Exchange Act or is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, and has filed on a timely basis all the materials required to be filed as reports pursuant to the Exchange Act for a period of at least twelve months preceding the date hereof (or for such shorter period as the Company was required by law to file such material), and all such filings have been made on a timely basis.  

4.6

Use of Proceeds.  As of the date hereof, the Company expects to use the net proceeds from the sale of the Note for working capital and general corporate purposes, including the funding of research and development and marketing.

5.

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made in and wholly to be performed in that jurisdiction.  

6.

Entire Agreement; Amendments.  This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein.  Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termination is sought.

7.

Written Notices, Etc.  Any notice, demand, or request required or permitted to be given by either the Company or Investor pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally, by overnight courier, or by registered or certified mail, return receipt requested, or by facsimile or other standard form of telecommunication or electronic transmission, to the parties at their respective addresses set forth above.

8.

Execution in Counterparts Permitted.  This Agreement may be executed by facsimile in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

9.

Survival; Severability.  Investor's and the Company's representations and warranties shall survive the closing of the transaction.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement, to the extent permitted by law, shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

10.

Titles; Gender.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  The use in the Agreement of a masculine, feminine or neuter pronoun shall be deemed to include a reference to the others.

11.

Assignment.  Neither party to this Agreement may assign this Agreement without the prior written consent of the other (which may be withheld for any reason).  

12.

Indemnification.  The Company shall indemnify and hold harmless Investor against any liabilities suffered or incurred by Investor and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of the Company contained in this Agreement.  Investor shall indemnify and hold harmless the Company and each of its officers, directors, stockholders, employees, control persons, and agents (each, a "Company Indemnified Party") who is or may be a party to any threatened, pending, or completed action, suit or proceeding of any kind, against any liabilities suffered or incurred by a Company Indemnified Party and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of Investor contained in this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

	BioLife Solutions, Inc.
By:	/s/ Mike Rice
	Mike Rice
	President & CEO
	/s/ Walter Villiger
	Walter Villiger
	Investor

EX-10

Exhibit 10.20

THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES  MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT.

$500,000.00

Bothell, Washington

   September 4, 2007

BIOLIFE SOLUTIONS, INC.

PROMISSORY NOTE

BioLife Solutions, Inc., a Delaware corporation (the “Maker”), for value received, hereby promises to pay to Thomas Girschweiler (the “Holder”), the principal amount of Five Hundred Thousand Dollars ($500,000) (the “Issue Price”), together with interest on the unpaid amount thereof, in accordance with the terms hereof, from the date hereof until paid or converted in accordance with the terms hereof.  

1.

Promissory Note (“Note”).

1.1

Interest Rate.  The rate of interest hereunder (“Interest Rate”) shall equal seven percent (7%) per annum and shall be computed on the basis of a 365 day year for the actual number of days elapsed; provided that in no event shall the interest rate be less than the minimum rate of interest required in order to avoid the imputation of interest for federal income tax purposes.

1.2

Payment.  Subject to the provisions of  Section 4 regarding the conversion of this Note upon a Financing (as defined therein), the Issue Price plus all accrued interest thereon shall become due and payable in one lump sum on the earlier of (a) September 30, 2008 (the “Due Date”) or (b) an Event of Default (as defined below).  The Maker may at any time prepay in whole or in part the principal and interest accrued under this Note.  Any payment will be applied first to the payment of any and all accrued and unpaid interest through the payment date and second to the payment of principal remaining due hereunder.  Payment shall be made at

the offices or residence of the Holder, or at such other place as the Holder shall have designated to the Maker in writing, in lawful money of the United States of America.

1.3

Note Purchase Agreement.  This Note is issued pursuant to a Note Purchase Agreement, dated the date hereof, by and between Maker and Holder and is subject and entitled to the terms, conditions, covenants, and agreements contained therein.

2

Acquisition.   In the event the Maker is to be acquired, whether by means of a merger, sale of all or substantially all of the assets of the Maker, sale of securities representing more than fifty percent (50%) of the equity interests in Maker, or otherwise, prior to the Due Date (an “Acquisition”), then the Issue Price plus all accrued but previously unpaid interest thereon shall become due and payable in one lump sum immediately upon the closing of such Acquisition.

3.

Events of Default.  The Issue Price and accrued interest on this Note shall, at the option of the Holder, become due and payable, subject to applicable law, upon the happening of any one of the following specified events:

(a)

a decree or order of a court having jurisdiction is entered adjudging the Maker a bankrupt or insolvent, or issuing sequestration or process of execution against, or against any substantial part of, the property of the Maker, or appointing a receiver of the Maker or any substantial part of its property, or ordering the winding-up or liquidation of its affairs, unless the Maker actively and diligently contests in good faith such decree or order and has such decree or order stayed on or before 60 days after the issue of such decree or order by a court;

(b)

an order is made or a resolution is passed for the winding-up or liquidation of the Maker, or the Maker institutes proceedings to be adjudicated a bankrupt or insolvent, or consents to the institution of bankruptcy or insolvency proceedings against it, or consents to the filing of any such petition or to the appointment of a receiver of the Maker or any substantial part of its property, or makes a general assignment for the benefit of creditors, or admits in writing its inability to pay its debts generally as they become due, or takes corporate action in furtherance of any of the aforesaid purposes;

(c)

the Maker defaults in observing or performing any material covenant or condition of this Note or the Unit Purchase Agreement on its part to be observed or performed, and such default continues for a period of fifteen (15) days after notice in writing has been given to the Maker by the Holder specifying such default and requiring the Maker to rectify the same;

(d)

an encumbrancer takes possession of all or substantially all of the property of the Maker, or any process of execution is levied or enforced upon or against all or substantially all of the property of the Maker and remains unsatisfied for such period as would permit any such property to be sold thereunder, unless the Maker actively and diligently contests in good faith such process, but in that event the Maker shall, if the Holder so requires, give security which, in the discretion of the holder, is sufficient to pay in full the amount thereby claimed in case the claim is held to be valid.

2

4.

Conversion.

4.1

Conversion.   If this Note is outstanding at the time of any bona fide equity financing of the Maker of at least One Million Dollars ($1,000,000), excluding conversion of this Note or any other notes issued by Maker to Holder (a “Financing”), then, concurrently with the consummation of the Financing, Holder shall have the right (but not the obligation) (“Conversion Right”) to convert this Note, plus all accrued and unpaid interest thereon (the “Conversion Amount”) into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Maker sold in the Financing (the “New Equity Securities”) as is equal to the Conversion Amount divided by 100% of the per share or per unit purchase price of the New Equity Securities.  The date of the consummation of the Financing is hereinafter referred to as the “Closing Conversion Date”).

4.2

Conversion Procedure.  

(a)

The Maker shall provide the Holder written notice of the Financing at least fifteen (15) days prior to the Closing Date.

(b)

In order to exercise the Conversion Right, Holder shall provide the Maker at least five (5) days prior to the Closing Date written notice that the Holder elects to convert the Note on the Closing Date.

4.3

Termination of Rights Upon Conversion.  Upon the Closing Date, subject to the completion of the Financing, the Holder of this Note shall have no further rights under this Note, whether or not this Note is surrendered.

4.4

Fractional Shares. No fractional shares or units of New Equity Securities of the Maker will be issued in connection with any conversion hereunder but rather any such fractional shares or units shall be rounded up to the nearest whole share or unit.

4.5

Delivery of Stock Certificates.  As promptly as practicable after the Closing Date, (a) the Maker shall give notice to the Holder of the conversion of this Note into the New Equity Securities, (b) the Holder shall return this Note to the Maker, and (c) the Maker, at its expense, shall issue and deliver to the Holder of this Note a certificate or certificates evidencing the number of full New Equity Securities issuable to the Holder upon such conversion.

5.

Miscellaneous.

5.1

Transfer of Note.  This Note shall not be transferable or assignable in any manner and no interest shall be pledged or otherwise encumbered by the Holder without the consent of the Maker, which consent shall not be unreasonably withheld.

5.2

Titles and Subtitles.  The titles and subtitles used in this Note are for convenience only and are not to be considered in construing or interpreting this Note.

3

5.3

Attorneys’ Fees.  If any action at law or in equity is necessary to enforce or interpret the terms of this Note, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and disbursements in addition to any other relief to which such party may be entitled.

5.4

Amendments and Waivers.  This Note may be amended and the observance of any other term of this Note may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of the Maker and the Holder.  The Maker waives presentment, demand for performance, notice of nonperformance, protest, notice of protest, and notice of dishonor.  No delay on the part of the Holder in exercising any right hereunder shall operate as a waiver of such right under this Note.

5.5

Severability.  If one or more provisions of this Note are held to be unenforceable under applicable law, such provision shall be excluded from this Note and the balance of the Note shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

5.6

Governing Law.  This Note shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to its conflicts of laws principles.

Executed as of the date first written above.

	MAKER:
	BIOLIFE SOLUTIONS, INC.
	a Delaware corporation
By:	/s/Michael Rice
Name:	Michael Rice
Title:	CEO, President
Address:	3303 Monte Villa Parkway
	Suite 310
	Bothell, WA 98021

4

EX-10

Exhibit 10.21

SECURED CONVERTIBLE MULTI-DRAW

TERM LOAN FACILITY AGREEMENT

This Secured Convertible Multi-Draw Term Loan Facility Agreement (“Agreement”) is entered into as of the 11th day of January, 2008, by and between BioLife Solutions, Inc., a Delaware corporation having its executive officers at 3303 Monte Villa Parkway, Suite 310, Bothell, WA 98021 (the “Company”) and Thomas Girschweiler, with an address at Wissmannstrasse 15, CH 8057, Zurich, Switzerland (“Girschweiler”) and Walter Villiger, with an address at Paradiesstrasse 25, CH-8645, Jona, Switzerland (“Villiger”) (Girschweiler and Villiger being hereinafter collectively referred to as the “Investors” and individually as an “Investor”).

W I T N E S S E T H:

WHEREAS, each Investor has advanced to the Company the sum of $1,375,000, represented by convertible promissory notes, dated February 12, 2007 ($375,000), June 11, 2007 ($500,000) and September 4, 2007 ($500,000) (collectively, the “Notes”), which Notes, together with interest thereon, are due and payable on February 12, 2009, June 30, 2008 and September 30, 2008, respectively; and

WHEREAS, the Company wishes to (a) refinance the Notes with, and (b), from time to time, borrow additional monies from, the Investors; and

WHEREAS, each Investor is willing to extend to the Company a secured convertible multi-draw term loan facility (the “Facility”) of $2,500,000, which Facility shall (a) incorporate (i) a refinancing of the Investor’s Notes and accrued interest thereon, in the aggregate amount of $1,431,563.30, and (ii) a commitment from each Investor to advance to the Company, from time to time, additional amounts up to a maximum of $768,436.70, (b) bear interest at the rate of 7% per annum on the principal balance outstanding from time to time, (c) be evidenced by a secured convertible multi-draw term loan note in the form attached hereto as Exhibit A (the “Multi-Draw Term Loan Note”), (d) become due and payable, together with accrued interest thereon, on the earlier of (i) January 11, 2010 (the “Maturity Date”), or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (e) if ou tstanding at the time of any bona fide equity financing of the Company of at least $2,000,000 (a “Financing”), at the option of the Investor, be converted into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the quotient obtained by dividing the principal amount of the Facility outstanding at the time of conversion plus accrued interest thereon (the “Conversion Amount”) by 85% of the per share or per unit purchase price of the New Equity Securities, and (f) be secured by all of the Company’s assets;

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration the receipt of which is hereby acknowledged, it is agreed as follows:

1.

The Facility.

(a)

Commitment to Extend Facility.

Each Investor hereby agrees to make available to the Company (“Advances”), from time to time during the period commencing with the date hereof through the Maturity Date, for working capital purposes, the principal sum of $2,500,000, consisting of:

(i)

A refinancing of the Investor’s Notes and accrued interest thereon in the aggregate amount of $1,431,563.30;

(ii)

$300,000 being advanced concurrently with the execution and delivery of this Agreement; and

(iii)

Additional advances of up to an aggregate of $768,436.70 (each an “Additional Advance”) in accordance with Section 3 hereof.

(b)

Multi-Draw Term Loan Note.

  Each Facility shall be evidenced by a Multi-Draw Term Loan Note, which Multi-Draw Term Loan Note shall (a) bear interest at the rate of 7% per annum, (b) become due and payable, together with accrued interest thereon on the earlier of (i) the Maturity Date, or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (c) if outstanding at time of a Financing, at the option of the Investor, be converted into that number of New Equity Securities as is equal to the Conversion  Amount divided by 85% of the per share or per unit price of the New Equity Securities, and (d) be secured by all of the Company’s assets.

2.

Closing.

Concurrently with the execution and delivery of this Agreement (a) the Company is issuing to each Investor a Multi-Draw Term Loan Note, registered in the name of the Investor, in the principal amount of $2,500,000, (b) each Investor is delivering to the Company the Investor’s Notes, and by wire transfer the amount set forth in Section 1(a)(ii) above, and (c) the parties are executing and delivering a Security Agreement in the form attached hereto as Exhibit B.

3.

Additional Advances.

Prior to the Maturity Date, the Company shall give each Investor written notice (an “Additional Borrowing Notice”) of each additional request for an Additional Advance by delivering an Additional Borrowing Notice to the Investor no less than ten days prior to the date selected by the Company for payment of each Additional Advance.  Each Borrowing Notice shall set forth the amount of the Additional Advance being requested by the Company, the date selected by the Company for payment of the Additional Advance, and an explanation of the need for the Additional Advance. Within five (5) business days of the Investor’s receipt of an Additional Borrowing Notice, the Investor shall make a reasonable effort to give written notice to the Company stating the Investor’s intention to either (a) make the entire amount of the requested Additional Advance available to the Company, (b) make a different amo unt available to the Company, or (c) not to make any amount available to the Company at such time. The Investor shall be entitled to elect any of the foregoing options in its sole and absolute discretion.  Advances

2

by each Investor are limited in the aggregate to the stated principal amount of the Investor’s Multi-Draw Term Loan Note.

4.

Representations, Warranties, and Covenants of Investors.  Each Investor severally and not jointly hereby represents and warrants to, and covenants with, the Company as follows:

4.1

Offshore Transaction.  () Investor is not a U.S. person ("U.S. Person") as that term is defined in Regulation S; () the Multi-Draw Term Loan Note was not offered to Investor in the United States; () at the time of execution of this Agreement and the time of any offer to Investor to purchase the Multi-Draw Term Loan Note hereunder, Investor was physically outside the United States; () Investor is purchasing the Multi-Draw Term Loan Note for Investor’s own account and not for the account of or for the benefit of any U.S. Person; and () Investor is not an underwriter, dealer, distributor, or other person who is participating, pursuant to a contractual arrangement, in the distribution of the Multi-Draw Term Loan Note offered or sold in reliance on Regulation S.

4.2

Investor's Independent Investigation.  Investor, in subscribing for the Multi-Draw Term Loan Note hereunder, has relied solely upon an independent investigation made by Investor and Investor’s representatives, if any, and has, prior to the date hereof, been given access to and the opportunity to examine all books and records of the Company, and all material contracts and documents of the Company which have been filed as exhibits to the Company's filings made under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act").  In making Investor’s investment decision to purchase the Multi-Draw Term Loan Note, Investor is not relying on any oral or written representations or assurances from the Company or any other person other than as set forth in this Agreement.  Investor has received and reviewed the Company's Annual Report on Form 10-KSB for the year end ed December 31, 2006 and the Company's Form 10-QSB for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007.  Investor has such experience in business and financial matters that Investor is capable of evaluating the risk of Investor’s investment and determining the suitability of Investor’s investment.  Investor is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Act.  

4.3

Investor's Economic Risk.  Investor understands and acknowledges that an investment in the Multi-Draw Term Loan Note involves a high degree of risk.  Investor acknowledges that there are limitations on the liquidity of the Multi-Draw Term Loan Note.  Investor represents that Investor is able to bear the economic risk of an investment in the Multi-Draw Term Loan Note, including a possible total loss of investment.  In making this statement Investor hereby represents and warrants to the Company that Investor has adequate means of providing for Investor's current needs and contingencies; and that Investor is able to afford to hold the Multi-Draw Term Loan Note for an indefinite period.  Further, Investor has no present need for liquidity in the Multi-Draw Term Loan Note and Investor is willing to accept such investment risks.

4.4

No Government Recommendation or Approval.  Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Multi-Draw Term Loan Note.

3

4.5

Company's Reliance on Representations of Investor.  Investor understands that the Multi-Draw Term Loan Note is being offered and sold to Investor in reliance on specific exemptions from the registration requirements of U.S. securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments, and understandings of Investor set forth herein in order to determine the applicability of such exemptions to Investor’s acquisition of the Multi-Draw Term Loan Note and suitability to acquire the Multi-Draw Term Loan Note.

4.6

Multi-Draw Term Loan Note Not Registered Under the Act or Any State Act.  Investor understands that the offer and sale of the Multi-Draw Term Loan Note has not been registered under the Act or any state securities laws ("State Acts") and that they are being offered and sold and delivered pursuant to Regulation S based in part upon the representations of Investor contained herein.  The Multi-Draw Term Loan Note may not be offered, sold, or otherwise transferred in the United States or to U.S. Persons unless such offers, sales, and transfers are registered under the Act and applicable State Acts or are made pursuant to an available exemption from the registration requirements of those laws.

4.7

Investment Intent.  Investor is acquiring the Multi-Draw Term Loan Note for Investor’s own account for investment and not as a nominee and not with a view to the distribution thereof.  Investor understands that Investor must bear the economic risk of this investment indefinitely unless the Multi-Draw Term Loan Note is registered pursuant to the Act and any applicable State Acts, or an exemption from such registration is available.  Investor represents and warrants to the Company, as of the date of this Agreement, that Investor has no present plan or intention to sell the Multi-Draw Term Loan Note in the United States at any predetermined time, and has made no predetermined arrangements to sell the Multi-Draw Term Loan Note.

4.8

Investor's Power and Authority.  Investor has the full power and authority to execute, deliver, and perform this Agreement.  This Agreement, when executed and delivered by Investor, will constitute a valid and legally binding obligation of Investor, enforceable in accordance with its terms.

4.9

Representation Regarding Signatory.  Investor represents and warrants that Investor's signatory, if any, is duly authorized to execute this Agreement on behalf of Investor.

4.10

No Tax Advice From Company or Its Agents.  Investor has had an opportunity to review with Investor’s own tax advisors the foreign, U.S. federal, state and local tax consequences of this investment, and the transactions contemplated by this Agreement.  Investor is relying solely on such advisors and not on any statements or representations of the Company or any of its agents and understands that Investor (and not the Company) shall be responsible for Investor's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

4

4.11

No Legal Advice from Company or Its Agents.  Investor acknowledges that Investor has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with Investor’s own legal counsel.  Investor is relying solely on such counsel and not on any statements or representations of the Company or any of its agents for legal advice with respect to this investment or the transactions contemplated by this Agreement, except for representations, warranties and covenants set forth herein.

4.12

No Scheme to Evade Registration.  Investor's acquisition of the Multi-Draw Term Loan Note is not a transaction (or any element of a series of transactions) that is part of a plan or scheme to evade the registration provisions of the Act.

4.13

Deliveries Outside the United States.  Investor understands that () the Multi-Draw Term Loan Note may not be converted within the United States or by or on behalf of a U.S. Person, and that the New Equity Securities may not be delivered within the United States upon conversion of the Multi-Draw Term Loan Note, other than in offerings deemed to meet the definition of "offshore transactions" (as defined in Regulation S), unless registered under the Act or an exemption from such registration is available, (b) the Multi-Draw Term Loan Note shall bear an appropriate legend to such effect, and (c) the Company will make a notation on its transfer books to such effect.

5.

Resales of the Multi-Draw Term Loan Note and New Equity Securities by Investor; Hedging; Legends.  

5.1

Resales of the Multi-Draw Term Loan Note and New Equity Securities; Hedging.  Investor understands that the Multi-Draw Term Loan Note and New Equity Securities are deemed to be "restricted securities" as defined in Rule 144 under the Act.  Investor acknowledges, covenants and agrees, with respect to the Multi-Draw Term Loan Note and New Equity Securities, (a) that they will only be resold by Investor, and the Company is to refuse to register any transfer not made, in accordance with Regulation S, or pursuant to an exemption from registration under the Act and applicable State Acts, or pursuant to an effective and current registration statement under the Act, and (b) not to engage in hedging transactions unless in compliance with the Act.  Until the restrictions on transfer terminate as provided in Section 5.3 hereof, Investor shall cause a transferee of the Multi-Draw Term Loan Note or New Equity Securities to execute, prior to the transfer, an agreement containing investor representations and covenants reasonably requested by the Company and substantially similar to those contained in Sections 4 and 5 hereof.

5.2

Legend.  To insure compliance with the provisions of the Act and State Acts, the Multi-Draw Term Loan Note and New Equity Securities shall bear a legend (the "Regulation S Restrictive Legend") substantially as follows:

"THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER

5

REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES  MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT."

5.3

Termination of Restrictions; Removal of Legend.  

(a)

The Regulation S Restrictive Legend may be removed (and the restrictions on the transferability of the Multi-Draw Term Loan Note and New Equity Securities shall terminate) when () the sale of the Multi-Draw Term Loan Note and New Equity Securities, as the case may be, have been registered under the Act and sold by the holder thereof in accordance with such registration, () a written opinion to the effect that such restrictions are no longer required or necessary under any federal or state securities law or regulation has been received from counsel for the holder thereof (provided that such counsel, and the form and substance of such opinion, are reasonably satisfactory to the Company) or counsel for the Company, () the Multi-Draw Term Loan Note and New Equity Securities, as the case may be, have been sold without registration under the Act in compliance with Rule 144 or Rule 144A promulgated under the Act, () the Com pany is reasonably satisfied that the holder of the Multi-Draw Term Loan Note and New Equity Securities, as the case may be, shall be entitled to sell the Multi-Draw Term Loan Note and New Equity Securities in accordance with the terms of Subsection (k) of Rule 144 or of Rule 144A promulgated under the Act, or () a letter or an order has been issued to the holder thereof by the staff of the Securities and Exchange Commission (the "Commission") stating that no enforcement action shall be recommended by such staff or taken by the Commission if the Note Multi-Draw Term Loan or New Equity Securities, as the case may be, are transferred in the United States or to a U.S. Person without registration under the Act in accordance with the conditions set forth in such letter or order and such letter or order specifies that no subsequent restrictions on transfer are required.

(b)

Whenever the restrictions imposed by this Section 5 shall terminate as hereinabove provided, the holder of the Multi-Draw Term Loan Note or New Equity Securities, as the case may be, then outstanding as to which such restrictions shall have terminated shall be entitled to receive from the Company, without expense to such holder, a new certificate for the Multi-Draw Term Loan Note or New Equity Securities, as the case may be, not bearing the Regulation S Restrictive Legend.

.

6.

Representations and Warranties of Company.  The Company represents and warrants to Investor as follows:

6.1

Organization, Good Standing, and Qualification.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of State of Delaware and has all requisite corporate power and authority to carry on its business as now

6

conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business or properties of the Company.

6.2

Authorization.  All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder, and the authorization, issuance, and delivery of the Multi-Draw Term Loan Note and, upon conversion of the Multi-Draw Term Loan Note, the New Equity Securities, have been taken.  This Agreement constitutes valid and legally binding obligation of the Company, enforceable in accordance with its terms.  The Company has obtained all consents and approvals required for it to execute, deliver, and perform this Agreement.  

6.3

No Conflicts.  The Company is not in violation or default of any provisions of its Certificate of Incorporation or By-laws, as amended and in effect on and as of the date of this Agreement, or of any material provision of any instrument or contract to which it is a party or by which it is bound or of any material provision of any federal or state judgment, writ, decree, order, statute, rule or governmental regulation applicable to the Company, except where such violation, default or conflict would have no material adverse affect on the Company's business or financial condition, or on the transactions contemplated herein. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision , instrument or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

6.4

Valid Issuance of Securities.  The New Equity Securities, when issued, sold, and delivered in accordance with the terms hereof or the Multi-Draw Term Loan Note, as the case may be, and for the consideration expressed herein or in the Multi-Draw Term Loan Note, as the case may be, will be duly and validly issued, fully paid and non-assessable, free of any preemptive rights, and the holders thereof shall not be subject to personal liability solely by reason of being such holders.  The Multi-Draw Term Loan Note, when issued, sold, and delivered, in accordance with this Agreement, shall be duly executed, issued, and delivered, and shall constitute valid and legally binding obligation of the Company, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws affecting creditors' righ ts, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance).  

6.5

Current Public Information.  The Company is a "reporting issuer" as defined in Regulation S and it has a class of securities registered under Section 12(b) or 12(g) of the Exchange Act or is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, and has filed on a timely basis all the materials required to be filed as reports pursuant to the Exchange Act for a period of at least twelve months preceding the date hereof (or for such shorter period as the Company was required by law to file such material), and all such filings have been made on a timely basis.  

7

6.6

Use of Proceeds.  As of the date hereof, the Company expects to use the net proceeds from the sale of the Note for working capital and general corporate purposes, including the funding of research and development and marketing.

7.

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made in and wholly to be performed in that jurisdiction.  

8.

Entire Agreement; Amendments.  This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein.  Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termination is sought.

9.

Written Notices, Etc.  Any notice, demand, or request required or permitted to be given by either the Company or Investor pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally, by overnight courier, or by registered or certified mail, return receipt requested, or by facsimile or other standard form of telecommunication or electronic transmission, to the parties at their respective addresses set forth above.

10.

Execution in Counterparts Permitted.  This Agreement may be executed by facsimile in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

11.

Survival; Severability.  Investors’ and the Company's representations and warranties shall survive the closing of the transaction.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement, to the extent permitted by law, shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

12.

Titles; Gender.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  The use in the Agreement of a masculine, feminine or neuter pronoun shall be deemed to include a reference to the others.

13.

Assignment.  Neither party to this Agreement may assign this Agreement without the prior written consent of the other (which may be withheld for any reason).  

14.

Indemnification.  The Company shall indemnify and hold harmless Investors against any liabilities suffered or incurred by Investors and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of the Company contained in this Agreement.  Each Investor, severally and not jointly, shall indemnify and hold harmless the Company and each of its officers, directors, stockholders, employees, control persons, and agents

8

(each, a "Company Indemnified Party") who is or may be a party to any threatened, pending, or completed action, suit or proceeding of any kind, against any liabilities suffered or incurred by a Company Indemnified Party and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of Investor contained in this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

	BioLife Solutions, Inc.
By:	/s/ Mike Rice
	Mike Rice
	President & CEO
	/s/ Thomas Girschweiler
	Thomas Girschweiler
	Investor
	/s/Walter Villiger
	Walter Villiger

9

EX-10

Exhibit 10.22

SECURED CONVERTIBLE MULTI-DRAW

TERM LOAN FACILITY AGREEMENT

This Secured Convertible Multi-Draw Term Loan Facility Agreement (“Agreement”) is entered into as of the 11th day of January, 2008, by and between BioLife Solutions, Inc., a Delaware corporation having its executive officers at 3303 Monte Villa Parkway, Suite 310, Bothell, WA 98021 (the “Company”) and Thomas Girschweiler, with an address at Wissmannstrasse 15, CH 8057, Zurich, Switzerland (“Girschweiler”) and Walter Villiger, with an address at Paradiesstrasse 25, CH-8645, Jona, Switzerland (“Villiger”) (Girschweiler and Villiger being hereinafter collectively referred to as the “Investors” and individually as an “Investor”).

W I T N E S S E T H:

WHEREAS, each Investor has advanced to the Company the sum of $1,375,000, represented by convertible promissory notes, dated February 12, 2007 ($375,000), June 11, 2007 ($500,000) and September 4, 2007 ($500,000) (collectively, the “Notes”), which Notes, together with interest thereon, are due and payable on February 12, 2009, June 30, 2008 and September 30, 2008, respectively; and

WHEREAS, the Company wishes to (a) refinance the Notes with, and (b), from time to time, borrow additional monies from, the Investors; and

WHEREAS, each Investor is willing to extend to the Company a secured convertible multi-draw term loan facility (the “Facility”) of $2,500,000, which Facility shall (a) incorporate (i) a refinancing of the Investor’s Notes and accrued interest thereon, in the aggregate amount of $1,431,563.30, and (ii) a commitment from each Investor to advance to the Company, from time to time, additional amounts up to a maximum of $768,436.70, (b) bear interest at the rate of 7% per annum on the principal balance outstanding from time to time, (c) be evidenced by a secured convertible multi-draw term loan note in the form attached hereto as Exhibit A (the “Multi-Draw Term Loan Note”), (d) become due and payable, together with accrued interest thereon, on the earlier of (i) January 11, 2010 (the “Maturity Date”), or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (e) if ou tstanding at the time of any bona fide equity financing of the Company of at least $2,000,000 (a “Financing”), at the option of the Investor, be converted into that number of fully paid and non-assessable shares or units of the equity security(ies) of the Company sold in the Financing (“New Equity Securities”) as is equal to the quotient obtained by dividing the principal amount of the Facility outstanding at the time of conversion plus accrued interest thereon (the “Conversion Amount”) by 85% of the per share or per unit purchase price of the New Equity Securities, and (f) be secured by all of the Company’s assets;

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration the receipt of which is hereby acknowledged, it is agreed as follows:

1.

The Facility.

(a)

Commitment to Extend Facility.

Each Investor hereby agrees to make available to the Company (“Advances”), from time to time during the period commencing with the date hereof through the Maturity Date, for working capital purposes, the principal sum of $2,500,000, consisting of:

(i)

A refinancing of the Investor’s Notes and accrued interest thereon in the aggregate amount of $1,431,563.30;

(ii)

$300,000 being advanced concurrently with the execution and delivery of this Agreement; and

(iii)

Additional advances of up to an aggregate of $768,436.70 (each an “Additional Advance”) in accordance with Section 3 hereof.

(b)

Multi-Draw Term Loan Note.

  Each Facility shall be evidenced by a Multi-Draw Term Loan Note, which Multi-Draw Term Loan Note shall (a) bear interest at the rate of 7% per annum, (b) become due and payable, together with accrued interest thereon on the earlier of (i) the Maturity Date, or (ii) an Event of Default (as defined in the Multi-Draw Term Loan Note), (c) if outstanding at time of a Financing, at the option of the Investor, be converted into that number of New Equity Securities as is equal to the Conversion  Amount divided by 85% of the per share or per unit price of the New Equity Securities, and (d) be secured by all of the Company’s assets.

2.

Closing.

Concurrently with the execution and delivery of this Agreement (a) the Company is issuing to each Investor a Multi-Draw Term Loan Note, registered in the name of the Investor, in the principal amount of $2,500,000, (b) each Investor is delivering to the Company the Investor’s Notes, and by wire transfer the amount set forth in Section 1(a)(ii) above, and (c) the parties are executing and delivering a Security Agreement in the form attached hereto as Exhibit B.

3.

Additional Advances.

Prior to the Maturity Date, the Company shall give each Investor written notice (an “Additional Borrowing Notice”) of each additional request for an Additional Advance by delivering an Additional Borrowing Notice to the Investor no less than ten days prior to the date selected by the Company for payment of each Additional Advance.  Each Borrowing Notice shall set forth the amount of the Additional Advance being requested by the Company, the date selected by the Company for payment of the Additional Advance, and an explanation of the need for the Additional Advance. Within five (5) business days of the Investor’s receipt of an Additional Borrowing Notice, the Investor shall make a reasonable effort to give written notice to the Company stating the Investor’s intention to either (a) make the entire amount of the requested Additional Advance available to the Company, (b) make a different amo unt available to the Company, or (c) not to make any amount available to the Company at such time. The Investor shall be entitled to elect any of the foregoing options in its sole and absolute discretion.  Advances

2

by each Investor are limited in the aggregate to the stated principal amount of the Investor’s Multi-Draw Term Loan Note.

4.

Representations, Warranties, and Covenants of Investors.  Each Investor severally and not jointly hereby represents and warrants to, and covenants with, the Company as follows:

4.1

Offshore Transaction.  () Investor is not a U.S. person ("U.S. Person") as that term is defined in Regulation S; () the Multi-Draw Term Loan Note was not offered to Investor in the United States; () at the time of execution of this Agreement and the time of any offer to Investor to purchase the Multi-Draw Term Loan Note hereunder, Investor was physically outside the United States; () Investor is purchasing the Multi-Draw Term Loan Note for Investor’s own account and not for the account of or for the benefit of any U.S. Person; and () Investor is not an underwriter, dealer, distributor, or other person who is participating, pursuant to a contractual arrangement, in the distribution of the Multi-Draw Term Loan Note offered or sold in reliance on Regulation S.

4.2

Investor's Independent Investigation.  Investor, in subscribing for the Multi-Draw Term Loan Note hereunder, has relied solely upon an independent investigation made by Investor and Investor’s representatives, if any, and has, prior to the date hereof, been given access to and the opportunity to examine all books and records of the Company, and all material contracts and documents of the Company which have been filed as exhibits to the Company's filings made under the Act and the Securities Exchange Act of 1934, as amended (the "Exchange Act").  In making Investor’s investment decision to purchase the Multi-Draw Term Loan Note, Investor is not relying on any oral or written representations or assurances from the Company or any other person other than as set forth in this Agreement.  Investor has received and reviewed the Company's Annual Report on Form 10-KSB for the year end ed December 31, 2006 and the Company's Form 10-QSB for the quarters ended March 31, 2007, June 30, 2007 and September 30, 2007.  Investor has such experience in business and financial matters that Investor is capable of evaluating the risk of Investor’s investment and determining the suitability of Investor’s investment.  Investor is an accredited investor as defined in Rule 501 of Regulation D promulgated under the Act.  

4.3

Investor's Economic Risk.  Investor understands and acknowledges that an investment in the Multi-Draw Term Loan Note involves a high degree of risk.  Investor acknowledges that there are limitations on the liquidity of the Multi-Draw Term Loan Note.  Investor represents that Investor is able to bear the economic risk of an investment in the Multi-Draw Term Loan Note, including a possible total loss of investment.  In making this statement Investor hereby represents and warrants to the Company that Investor has adequate means of providing for Investor's current needs and contingencies; and that Investor is able to afford to hold the Multi-Draw Term Loan Note for an indefinite period.  Further, Investor has no present need for liquidity in the Multi-Draw Term Loan Note and Investor is willing to accept such investment risks.

4.4

No Government Recommendation or Approval.  Investor understands that no United States federal or state agency, or similar agency of any other country, has reviewed, approved, passed upon, or made any recommendation or endorsement of the Company or the purchase of the Multi-Draw Term Loan Note.

3

4.5

Company's Reliance on Representations of Investor.  Investor understands that the Multi-Draw Term Loan Note is being offered and sold to Investor in reliance on specific exemptions from the registration requirements of U.S. securities laws and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments, and understandings of Investor set forth herein in order to determine the applicability of such exemptions to Investor’s acquisition of the Multi-Draw Term Loan Note and suitability to acquire the Multi-Draw Term Loan Note.

4.6

Multi-Draw Term Loan Note Not Registered Under the Act or Any State Act.  Investor understands that the offer and sale of the Multi-Draw Term Loan Note has not been registered under the Act or any state securities laws ("State Acts") and that they are being offered and sold and delivered pursuant to Regulation S based in part upon the representations of Investor contained herein.  The Multi-Draw Term Loan Note may not be offered, sold, or otherwise transferred in the United States or to U.S. Persons unless such offers, sales, and transfers are registered under the Act and applicable State Acts or are made pursuant to an available exemption from the registration requirements of those laws.

4.7

Investment Intent.  Investor is acquiring the Multi-Draw Term Loan Note for Investor’s own account for investment and not as a nominee and not with a view to the distribution thereof.  Investor understands that Investor must bear the economic risk of this investment indefinitely unless the Multi-Draw Term Loan Note is registered pursuant to the Act and any applicable State Acts, or an exemption from such registration is available.  Investor represents and warrants to the Company, as of the date of this Agreement, that Investor has no present plan or intention to sell the Multi-Draw Term Loan Note in the United States at any predetermined time, and has made no predetermined arrangements to sell the Multi-Draw Term Loan Note.

4.8

Investor's Power and Authority.  Investor has the full power and authority to execute, deliver, and perform this Agreement.  This Agreement, when executed and delivered by Investor, will constitute a valid and legally binding obligation of Investor, enforceable in accordance with its terms.

4.9

Representation Regarding Signatory.  Investor represents and warrants that Investor's signatory, if any, is duly authorized to execute this Agreement on behalf of Investor.

4.10

No Tax Advice From Company or Its Agents.  Investor has had an opportunity to review with Investor’s own tax advisors the foreign, U.S. federal, state and local tax consequences of this investment, and the transactions contemplated by this Agreement.  Investor is relying solely on such advisors and not on any statements or representations of the Company or any of its agents and understands that Investor (and not the Company) shall be responsible for Investor's own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

4

4.11

No Legal Advice from Company or Its Agents.  Investor acknowledges that Investor has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with Investor’s own legal counsel.  Investor is relying solely on such counsel and not on any statements or representations of the Company or any of its agents for legal advice with respect to this investment or the transactions contemplated by this Agreement, except for representations, warranties and covenants set forth herein.

4.12

No Scheme to Evade Registration.  Investor's acquisition of the Multi-Draw Term Loan Note is not a transaction (or any element of a series of transactions) that is part of a plan or scheme to evade the registration provisions of the Act.

4.13

Deliveries Outside the United States.  Investor understands that () the Multi-Draw Term Loan Note may not be converted within the United States or by or on behalf of a U.S. Person, and that the New Equity Securities may not be delivered within the United States upon conversion of the Multi-Draw Term Loan Note, other than in offerings deemed to meet the definition of "offshore transactions" (as defined in Regulation S), unless registered under the Act or an exemption from such registration is available, (b) the Multi-Draw Term Loan Note shall bear an appropriate legend to such effect, and (c) the Company will make a notation on its transfer books to such effect.

5.

Resales of the Multi-Draw Term Loan Note and New Equity Securities by Investor; Hedging; Legends.  

5.1

Resales of the Multi-Draw Term Loan Note and New Equity Securities; Hedging.  Investor understands that the Multi-Draw Term Loan Note and New Equity Securities are deemed to be "restricted securities" as defined in Rule 144 under the Act.  Investor acknowledges, covenants and agrees, with respect to the Multi-Draw Term Loan Note and New Equity Securities, (a) that they will only be resold by Investor, and the Company is to refuse to register any transfer not made, in accordance with Regulation S, or pursuant to an exemption from registration under the Act and applicable State Acts, or pursuant to an effective and current registration statement under the Act, and (b) not to engage in hedging transactions unless in compliance with the Act.  Until the restrictions on transfer terminate as provided in Section 5.3 hereof, Investor shall cause a transferee of the Multi-Draw Term Loan Note or New Equity Securities to execute, prior to the transfer, an agreement containing investor representations and covenants reasonably requested by the Company and substantially similar to those contained in Sections 4 and 5 hereof.

5.2

Legend.  To insure compliance with the provisions of the Act and State Acts, the Multi-Draw Term Loan Note and New Equity Securities shall bear a legend (the "Regulation S Restrictive Legend") substantially as follows:

"THE ISSUANCE OF THE SECURITIES EVIDENCED HEREBY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THE SECURITIES WERE ISSUED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER

5

REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD, OR OTHERWISE TRANSFERRED UNLESS SUCH OFFERS, SALES, AND TRANSFERS ARE REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS, ARE MADE PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS, OR ARE MADE IN ACCORDANCE WITH REGULATION S PROMULGATED UNDER THE ACT.  FURTHERMORE, HEDGING TRANSACTIONS INVOLVING THE SECURITIES  MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE ACT."

5.3

Termination of Restrictions; Removal of Legend.  

(a)

The Regulation S Restrictive Legend may be removed (and the restrictions on the transferability of the Multi-Draw Term Loan Note and New Equity Securities shall terminate) when () the sale of the Multi-Draw Term Loan Note and New Equity Securities, as the case may be, have been registered under the Act and sold by the holder thereof in accordance with such registration, () a written opinion to the effect that such restrictions are no longer required or necessary under any federal or state securities law or regulation has been received from counsel for the holder thereof (provided that such counsel, and the form and substance of such opinion, are reasonably satisfactory to the Company) or counsel for the Company, () the Multi-Draw Term Loan Note and New Equity Securities, as the case may be, have been sold without registration under the Act in compliance with Rule 144 or Rule 144A promulgated under the Act, () the Com pany is reasonably satisfied that the holder of the Multi-Draw Term Loan Note and New Equity Securities, as the case may be, shall be entitled to sell the Multi-Draw Term Loan Note and New Equity Securities in accordance with the terms of Subsection (k) of Rule 144 or of Rule 144A promulgated under the Act, or () a letter or an order has been issued to the holder thereof by the staff of the Securities and Exchange Commission (the "Commission") stating that no enforcement action shall be recommended by such staff or taken by the Commission if the Note Multi-Draw Term Loan or New Equity Securities, as the case may be, are transferred in the United States or to a U.S. Person without registration under the Act in accordance with the conditions set forth in such letter or order and such letter or order specifies that no subsequent restrictions on transfer are required.

(b)

Whenever the restrictions imposed by this Section 5 shall terminate as hereinabove provided, the holder of the Multi-Draw Term Loan Note or New Equity Securities, as the case may be, then outstanding as to which such restrictions shall have terminated shall be entitled to receive from the Company, without expense to such holder, a new certificate for the Multi-Draw Term Loan Note or New Equity Securities, as the case may be, not bearing the Regulation S Restrictive Legend.

.

6.

Representations and Warranties of Company.  The Company represents and warrants to Investor as follows:

6.1

Organization, Good Standing, and Qualification.  The Company is a corporation duly organized, validly existing, and in good standing under the laws of State of Delaware and has all requisite corporate power and authority to carry on its business as now

6

conducted and as proposed to be conducted.  The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on the business or properties of the Company.

6.2

Authorization.  All corporate action on the part of the Company necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of the Company hereunder, and the authorization, issuance, and delivery of the Multi-Draw Term Loan Note and, upon conversion of the Multi-Draw Term Loan Note, the New Equity Securities, have been taken.  This Agreement constitutes valid and legally binding obligation of the Company, enforceable in accordance with its terms.  The Company has obtained all consents and approvals required for it to execute, deliver, and perform this Agreement.  

6.3

No Conflicts.  The Company is not in violation or default of any provisions of its Certificate of Incorporation or By-laws, as amended and in effect on and as of the date of this Agreement, or of any material provision of any instrument or contract to which it is a party or by which it is bound or of any material provision of any federal or state judgment, writ, decree, order, statute, rule or governmental regulation applicable to the Company, except where such violation, default or conflict would have no material adverse affect on the Company's business or financial condition, or on the transactions contemplated herein. The execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby will not result in any such violation or conflict with or constitute, with or without the passage of time and giving of notice, either a default under any such provision , instrument or contract or an event which results in the creation of any lien, charge or encumbrance upon any assets of the Company.

6.4

Valid Issuance of Securities.  The New Equity Securities, when issued, sold, and delivered in accordance with the terms hereof or the Multi-Draw Term Loan Note, as the case may be, and for the consideration expressed herein or in the Multi-Draw Term Loan Note, as the case may be, will be duly and validly issued, fully paid and non-assessable, free of any preemptive rights, and the holders thereof shall not be subject to personal liability solely by reason of being such holders.  The Multi-Draw Term Loan Note, when issued, sold, and delivered, in accordance with this Agreement, shall be duly executed, issued, and delivered, and shall constitute valid and legally binding obligation of the Company, enforceable in accordance with its terms (except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, arrangement, moratorium, or other similar laws affecting creditors' righ ts, and subject to general equity principles and to limitations on availability of equitable relief, including specific performance).  

6.5

Current Public Information.  The Company is a "reporting issuer" as defined in Regulation S and it has a class of securities registered under Section 12(b) or 12(g) of the Exchange Act or is required to file reports pursuant to Section 13 or 15(d) of the Exchange Act, and has filed on a timely basis all the materials required to be filed as reports pursuant to the Exchange Act for a period of at least twelve months preceding the date hereof (or for such shorter period as the Company was required by law to file such material), and all such filings have been made on a timely basis.  

7

6.6

Use of Proceeds.  As of the date hereof, the Company expects to use the net proceeds from the sale of the Note for working capital and general corporate purposes, including the funding of research and development and marketing.

7.

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to agreements made in and wholly to be performed in that jurisdiction.  

8.

Entire Agreement; Amendments.  This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof, and no party shall be liable or bound to any other party in any manner by any warranties, representations, or covenants except as specifically set forth herein.  Neither this Agreement nor any term hereof may be amended, waived, discharged, or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge, or termination is sought.

9.

Written Notices, Etc.  Any notice, demand, or request required or permitted to be given by either the Company or Investor pursuant to the terms of this Agreement shall be in writing and shall be deemed given when delivered personally, by overnight courier, or by registered or certified mail, return receipt requested, or by facsimile or other standard form of telecommunication or electronic transmission, to the parties at their respective addresses set forth above.

10.

Execution in Counterparts Permitted.  This Agreement may be executed by facsimile in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

11.

Survival; Severability.  Investors’ and the Company's representations and warranties shall survive the closing of the transaction.  If any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable, or void, this Agreement, to the extent permitted by law, shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party.

12.

Titles; Gender.  The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.  The use in the Agreement of a masculine, feminine or neuter pronoun shall be deemed to include a reference to the others.

13.

Assignment.  Neither party to this Agreement may assign this Agreement without the prior written consent of the other (which may be withheld for any reason).  

14.

Indemnification.  The Company shall indemnify and hold harmless Investors against any liabilities suffered or incurred by Investors and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of the Company contained in this Agreement.  Each Investor, severally and not jointly, shall indemnify and hold harmless the Company and each of its officers, directors, stockholders, employees, control persons, and agents

8

(each, a "Company Indemnified Party") who is or may be a party to any threatened, pending, or completed action, suit or proceeding of any kind, against any liabilities suffered or incurred by a Company Indemnified Party and not otherwise reimbursed, arising from or due to any material breach of a representation, warranty, or covenant of Investor contained in this Agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

	BioLife Solutions, Inc.
By:	/s/ Mike Rice
	Mike Rice
	President & CEO
	/s/ Thomas Girschweiler
	Thomas Girschweiler
	Investor
	/s/Walter Villiger
	Walter Villiger

9

EX-10

Exhibit 10.23

ORDER FULFILLMENT AND SHIPPING SERVICES AGREEMENT

This Order Fulfillment and Shipping Services Agreement (“Agreement”) is entered into as of October ____, 2007 (the “Effective Date”), by and between Bioserv Corporation, a California corporation and subsidiary of NextPharma Technologies (“Bioserv”) having its principal place of business at 5340 Eastgate Mall, San Diego, CA 92121 and BioLife Solutions, Inc, a Delaware corporation (“Client”), having its principal place of business at 3303 Monte Villa Parkway, Suite 310, Bothell, WA  98021.

Client is in the business of developing preservation media products and Bioserv is in the business of providing order fulfillment and shipping services for Client’s products.

Client desires to engage the services of Bioserv, on a non-exclusive basis, for order fulfillment and shipping of Client’s Product (as defined below), all upon the terms and conditions set forth in this Agreement.

Bioserv and Client wish to formalize their contract services relationship pursuant to the terms and conditions below.

Therefore, in consideration of the respective covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1.0

DEFINITIONS

1.1

DEFINED TERMS.  As used herein, the terms below have the following meanings.  Any such terms, unless the context otherwise requires, may be used in the singular or plural; depending upon the reference.

“FDA” shall mean the United States Food and Drug Administration.

“Product” shall mean Client’s products, manufactured and warehoused by Bioserv for Client under separate agreements, and fulfilled/shipped by Bioserv under this Agreement.

“Regulations” shall mean any applicable United States laws, statutes, ordinances, regulations, rules, notice requirements, court decisions, agency guidelines, principles of law and orders of any federal, state or local government and any other government and any other governmental department or agency.

“Packaging” shall mean labeling and bottle, cap and boxes as appropriate.

“cGxP” shall mean those practices and standards required to comply with all current United States governmental regulatory requirements, including, without limitation, “Good Laboratory Practices” (e.g., 21 C.F.R. 58 et seq.), “Good Clinical Practices” (e.g., 21 C.F.R. 50 et seq.), and “Quality System Regulation” (e.g., 21 C.F.R. 820 et seq.).

1

2.0

ORDER FULFILLENT AND SHIPPING

2.1

Bioserv order fulfillment and shipping:

2.1.1

Bioserv will fulfill and ship all orders transmitted by Client per Client’s procedures as specified in Addendum I.

2.1.2

Bioserv will charge the cost for shipping all orders to Client’s shipping account with no markup.

2.1.3

Client will provide Bioserv all required shipping materials and supplies.  If Client requests Bioserv to procure shipping materials and supplies on behalf of Client, Client will pay Bioserv the actual costs plus 30%.

2.2

Service Fees

During the term of this agreement, the fees for the services are as follows:

2.2.1

The order fulfillment and shipping services will be provided based on the fee schedule found in the Addendum II, to be invoiced quarterly commencing October 12, 2007.   

2.2.2

The addition or cancellation of any items or services, other than those listed in Addendum I, will result in a price adjustment to the fees in Addendum II if the parties, after consulting with each other regarding the additional services, mutually agree in writing that such a price adjustment is warranted.

2.2.3

The payment terms are Net 30 days from Client’s receipt of any invoice, invoiced on a quarterly basis with a 1% finance charge per month on all undisputed amounts past due after thirty (30) days.

2.2.4

Quotations for additional services shall be included at agreed upon rates when signed by both parties and invoiced under the same terms in section 2.2.3.   

3.0

BIOSERV OBLIGATIONS

3.1

Good Manufacturing Practices (GMP) and Other Obligations

3.1.1

Bioserv and the Client have executed a Quality Agreement that addresses roles and responsibilities for cGXP compliance. This agreement should be referenced for details.

3.1.2

 Bioserv is licensed by the State of California and registered by the Federal FDA for both Device and Drug manufacture.  Bioserv will keep these licenses and registrations current during the course of this Agreement.

3.1.3

Bioserv shall comply with its own SOPs and procedures, the only exception will be those procedures supplied by Client and agreed by Bioserv, which shall supersede Bioserv procedures.

2

3.1.4

Bioserv shall use industry standard efforts to protect Client’s materials and Product from loss, damage, theft or destruction (collectively “loss”) while under Bioserv control and/or custody.

3.1.5

Bioserv does not warrant the function or fitness of products shipped by Bioserv for Client.  

3.1.6

Bioserv understands that the Client’s web based sales order and inventory fulfillment systems are hosted by a third party.  Notwithstanding a connection issue preventing Bioserv from fulfilling and/or shipping an order for Client, Bioserv shall fulfill all orders within 48 hours from the posting of new orders by Client in the referenced systems, or within 24 hours if specified by Client on an individual order basis.

3.1.7

Bioserv shall strive at all times to keep the Client provided user name and password for Client’s web based sales order and inventory management systems restricted to Bioserv’s employees that have a business need for the information, and solely to enable Bioserv to perform its duties under this agreement.

4.0

 CLIENT OBLIGATIONS

4.1

Any services other than those set forth in this Agreement, shall be subject to the parties’ mutual written agreement.

4.2

Client personnel shall follow Bioserv GMP procedures and conduct their business in such a way as to meet GMP requirements.

4.3

Client retains sole responsibility for final Product release.

4.4

The 24-hour Client contact telephone number is 425-402-1400.  

4.5

Client retains sole responsibility for all costs, insurance and risks relating to the shipping of the Product to and from the Bioserv facility.

5.0

TERMS AND TERMINATION

5.1

Term and Termination

5.1.1

This Agreement shall commence on the Effective Date and continue, unless terminated earlier pursuant to the terms in this section 5.1 for one (1) year.

5.1.2

Client may terminate this Agreement, without cause, by notifying Bioserv in writing with 60 days advance notice.

5.1.3

Bioserv may terminate the agreement, without cause, by notifying Client in writing with sixty (60) days’ notice in advance, except that the effective date of cancellation shall not be sooner than the effective date of cancellation of the long term storage agreement between the parties.

5.1.4

Either party shall have the right to earlier terminate this Agreement upon the breach by the other party of a material provision of this Agreement and that other

3

party’s failure to cure such breach within thirty (30) days following written notice thereof from the non-breaching party.

5.1.5

Termination or expiration of this Agreement shall not relieve either party from any liability or obligation that accrued prior to such termination or expiration.  Upon termination or expiration of this Agreement, all Product(s) shall be returned to Client or a designee of Client, at Client’s sole cost and expense and in accordance with Client’s instructions.   

5.1.6

The following provisions shall survive any expiration or termination of this Agreement:  Sections 2.2.3, 4.3, 8.0, 9.0, and 11.0.

6.0

REPRESENTATIONS AND WARRANTIES

6.1

Each party represents and warrants to the other that:

6.1.1

It has full power and authority to enter into this Agreement and perform all obligations and conditions to be performed by it under this Agreement without any restriction by any other Agreement or otherwise;

6.1.2

The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action of that party; and

6.1.3

This Agreement constitutes the legal, valid and binding obligation of that party.

7.0

PRODUCT OWNERSHIP and TRADEMARKS

7.1

Client shall provide Product to Bioserv solely for order fulfillment and shipping services under this Agreement.  Bioserv shall use the Product solely and exclusively for the performance of such services.  Bioserv shall not, directly or indirectly, use or exploit, or permit use or exploitation of the Product for any other purpose whatsoever, or otherwise transfer, or permit the transfer of, the Product to any third party for any purpose or use without the prior authorization of Client.  Title to the Product shall remain at all times in Client’ name, except that Title to the Product shall transfer to Client’s end customer upon acceptance by Client’s designated shipping carrier at the time of pick up from Bioserv.  Upon the expiration or earlier termination of this Agreement, all Product provided to Bioserv shall be returned to Client unless other arrangements are otherwise authorized in writing by Client.

7.2

Neither party shall have the right to use the name of the other party, or the other party’s trademarks, service marks, logos, or other similar marks in any manner, except with the prior written approval of that party.

8.0

CONFIDENTIALITY

8.1

“Confidential Information” with respect to a party hereto shall mean all technical, business and financial information including, where appropriate and without limitation, all information, data, patent disclosures, patent applications, know-how, structures, models, techniques, processes and methods, compositions, compounds, apparatus, customer names, customer information and products relating to the same disclosed by a party hereto (“the Disclosing Party”) to the other party hereto (the “Receiving Party”) or

4

obtained by the Receiving Party through observation or examination of information, but only to the extent that such information is maintained as confidential by the Disclosing Party and is marked or otherwise identified as confidential when disclosed to the Receiving Party or, in the case of information given verbally, is identified as confidential in a written document sent to the Receiving Party within thirty (30) days of such verbal disclosure to the Receiving Party.

8.2

Bioserv may disclose certain Confidential Information to Client, and Client may disclose certain Confidential Information to Bioserv, each on the terms and conditions of this Agreement.  The parties mutually agree to maintain Confidential Information received from each other in confidence for five (5) years from the Effective Date of this Agreement.

8.3

The Receiving Party hereby acknowledges that the Disclosing Party is the owner or licensee of the Confidential Information.  The Receiving Party shall not use or disclose any of the Confidential Information of the Disclosing Party at any time except for the sole purpose of performing its obligations under this Agreement.  The Receiving Party shall not disclose any of the Confidential information other than on a need-to-know basis, as reasonably necessary for performing its obligations hereunder, to its directors, officers, employees, attorneys, accountants, bankers, financial advisors or consultants who are bound by written agreements with the Receiving Party to maintain the Confidential Information in confidence or who are otherwise under obligations of confidentiality to the Receiving Party (collectively, the “Representatives”).

8.4

Notwithstanding the foregoing, (i) the Receiving Party shall have the right to disclose Confidential Information to the extent required by applicable law or regulation, provided that the Receiving Party shall give the Disclosing Party prompt prior written notice and reasonable opportunity to object to such use or disclosure, or to request confidential treatment of the Confidential Information; and (ii) the Receiving Party’s nonuse and nondisclosure obligations above shall not apply to such Confidential Information as the Receiving Party can establish by written documentation to:

8.4.1

Have been publicly known prior to disclosure by the Disclosing Party of such information to the Receiving Party;

8.4.2

Have become publicly known, without fault on the part of the Receiving Party, subsequent to disclosure by the Disclosing Party of such information to the Receiving Party;

8.4.3

Have been received by the Receiving Party at any time from a source, other than the Disclosing Party, lawfully having possession of and the right to disclose such information;

8.4.4

Have been otherwise known by the Receiving Party prior to disclosure by the Disclosing Party to the Receiving Party of such information; or

8.4.5

Have been independently developed by the Receiving Party without use of such information.

5

8.5

Bioserv shall not disclose, other than to its Representatives on a need to know basis or as otherwise permitted under this Agreement, the fact that discussions or negotiations are taking place concerning a possible transaction, or any of the terms, conditions or other facts with respect to this Agreement (including the status thereof), except as required by applicable law or regulation.  Neither party shall use the trade names, trademarks or other marks of the other party in any advertising, promotions or publicity without prior written consent of the other party.

8.6

The confidentiality obligations with respect to Confidential Information disclosed under the Agreement shall remain in effect during the term of this Agreement and for a period totaling five (5) years after termination of this Agreement.

9.0

LIMITATION OF LIABILITY  

9.1

Bioserv shall not in any event be liable for any damage, theft or other loss to the Product, materials or other property in the possession or control of Bioserv unless such loss results solely from negligence or the intentional wrongful acts or omissions of Bioserv.  Client acknowledges and agrees that, except as provided in this paragraph, the insurance described in Section 10 below shall constitute its sole recourse in the event of any loss to the Product, materials and/or other property of Client in the possession or control of Bioserv.   Bioserv’s maximum liability for damages under this Agreement, whether in contract or tort, shall be limited to the fees paid by Client to Bioserv for the relevant services under this Agreement.

9.2

NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT OR SPECIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.  WITHOUT LIMITING ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT WILL BIOSERV’S LIABILITY TO CLIENT EXCEED THE TOTAL FEES PAID TO BIOSERV UNDER THIS AGREEMENT.

10.0

INSURANCE   

10.1

At its sole expense, Client shall obtain and keep in force during the term of this Agreement, and for so long thereafter as any Product, materials or other property is in the possession or control of Bioserv, the following insurance, on an occurrence basis:

10.1.1

All-Risk Property Insurance including, without limitation, change of environment/spoilage coverage, in an amount adequate to cover the replacement cost of all Product, material and other Client property that may be in the possession or control of Bioserv.  Without limiting the foregoing, Client shall hold harmless Bioserv from and against all loss of or to the Property, and shall obtain a waiver of subrogation endorsement from the insurance carrier for the replacement value of all such Product, material and property.

6

10.1.2

Commercial General Liability in an amount no less than $1,000,000 per each occurrence and $2,000,000 in the aggregate covering bodily injury, broad form property damage, personal injury, products and completed operations, contractual liability, and independent contractor’s liability.  Bioserv and its officers and employees shall be included as Additional Insureds and a waiver of subrogation endorsement shall be obtained from the carrier in favor of Bioserv.  

10.1.3

Workers’ Compensation on a statutory basis and Employers’ Liability Insurance with $1,000,000 per accident for bodily injury and diseases to cover Client employees while on Bioserv premises.    

10.2

All of the above required insurance policies shall conform to the following requirements: (a) the insurer shall be qualified to do business in California; (b) Certificates of Insurance shall be delivered to Bioserv at commencement of the term and certificates of renewal at least 30 days prior to the expiration of each policy; (c) each policy shall require notice to Bioserv in writing by the insurer at least 30 days prior to any cancellation or expiration of such policy, or any reduction in the amounts of insurance carried or other restrictive modification of any policies; and (d) the insurance coverages shall be primary and non-contributing with respect to any insurance that may be maintained by Bioserv.  Additionally, the requ ired coverages and their limits in no way lessen nor affect Client’s other obligations or liabilities set forth in this Agreement.  

10.3

Upon the signing of this Agreement, Client shall provide Bioserv with a written declaration of the replacement cost of all Product and other property to be placed in the possession or control of Bioserv, and shall provide a written update of the replacement cost by no later than thirty (30) days after each addition to or removal from Bioserv’s possession and control.

7

11.0

MISCELLANEOUS

11.1

Relationship of the Parties.  The relationship between the parties is that of independent contractors, and this Agreement does not establish or create a partnership, joint venture, or other agency relationship between the parties.

11.2

Notices.  Any notice or other communication required or desired to be given to any party under this Agreement shall be in writing and shall be deemed given: (a) three business days after such notice is deposited in the United States mail, first-class postage prepaid, and addressed to that party at the address for such party set forth in this section of this Agreement; (b) one business day after delivered to Federal Express or any other similar express delivery service for delivery to that party at that address; or (c) when sent by facsimile transmission, with electronic confirmation, to that party at its facsimile number set forth in this section of this Agreement.  Any notice delivered by facsimile transmission will be deemed delivered upon electronic confirmation provided the notice is also deposited in the U.S. mail, first-class postage prepaid.  Any party may change i ts address or facsimile number for notices under this Agreement by giving the other party written notice of such change.

11.2.1

Client notice contact and address:

Michael P. Rice

BioLife Solutions, Inc.

3303 Monte Villa Parkway, Suite 310

Bothell, WA  98021

Facsimile: (425) 402-1433

11.2.2

Bioserv Corporation notice contact and address:

Kathleen primes, VP of Operations

Bioserv Corporation

5340 Eastgate Mall

San Diego, CA 92121

Facsimile:  (858) 450-0785

11.3

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California (without regard to its choice of law rules), and the parties to this Agreement hereby submit to the jurisdiction and venue of the California courts, both state and federal, in San Diego County, California.

11.4

Severability.  If a court or other body of competent jurisdiction declares any term of this Agreement invalid or unenforceable, the remaining terms of this Agreement will continue in full force and effect.

11.5

Non-Waiver.  The failure of either Client or Bioserv to insist upon strict performance of any provision of this Agreement or to exercise any right hereunder shall not constitute a waiver of that provision of or right under this Agreement or of any other provision of or right under this Agreement.

8

11.6

Complete Agreement.  This Agreement sets forth the entire agreement between Client and Bioserv regarding the subject matter hereunder, whether written or oral, and fully supersedes any and all prior and contemporaneous agreements or understandings between Client and Bioserv pertaining to the subject matter hereof.  This Agreement may not be amended, supplemented or otherwise modified except by an instrument in writing signed by both Client and Bioserv.

11.7

Assignment.  Neither party shall have the right to assign this Agreement, or any of such party’s rights or obligations under this Agreement, without the prior written consent of the other party.  However, either party may assign this Agreement without the other’s consent in connection with the merger consolidation or sale of all or substantially all of assets or equity interests of such party.  Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective successors and assigns of the parties.

IN WITNESS WHEREOF, the undersigned acknowledge and accept the terms of this Agreement and duly execute this Agreement.

	BIOSERV CORPORATION		BIOLIFE SOLUTIONS, INC.
By:	/s/ Kathleen Primes	By:	/s/ Michael P. Rice
	Kathleen Primes		Michael P. Rice
	VP of Operations		Chairman and CEO

ADDENDUM I – ORDER FULFILLMENT AND SHIPPING PROCEDURES

Client shall make available to Bioserv, and pay all associated costs during the term of the Agreement for, an account in Client’s web-based sales order and inventory management systems.  

Bioserv shall access this account Monday-Friday of each week and unless specified otherwise by Client, fulfill all orders within 48 hours from the time of entry of the sales order by Client.

If requested by Client, Bioserv shall fulfill and ship any order within 24 hours from the time of entry of the sales order by Client.

Unless specified otherwise by Client on an individual order basis, Bioserv shall configure all shipments for overnight delivery to Client’s end customer location.

Bioserv shall log off Client’s web based sales order and inventory management system at the close of business each day.

Bioserv shall generate and implement SOPs, approved by BioLife, that describe the relevant procedures necessary to work with SalesForce.com and the Precisio inventory management module.

9

ADDENDUM II – SERVICE FEES

Service	Fee	What is Included
Standard Shipment (up to 100 finished goods containers per shipment)		Preparation of shipment including labor and paperwork per Bioserv’s BioLife handling and shipping SOP (to be developed).  Standard shipment turnaround time is 48 hours.
Expedited Shipment (up to 100 finished goods containers per shipment)		Preparation of shipment including labor and paperwork per Bioserv’s BioLife handling and shipping SOP (to be developed).  Expedited shipment turnaround time is 24 hours.

10

EX-10

EXHIBIT 10.25

STORAGE SERVICES AGREEMENT

This Storage and Handling Services Agreement (“Agreement”) is entered into as of October ____, 2007 (the “Effective Date”), by and between Bioserv Corporation, a California corporation and a subsidiary of NextPharma Technologies (“Bioserv”) having its principal place of business at 5340 Eastgate Mall, San Diego, CA 92121 and BioLife Solutions, Inc, a Delaware corporation (“Client”), having its principal place of business at 3303 Monte Villa Parkway, Suite 310, Bothell, WA  98021.

Client is in the business of developing preservation media products and Bioserv is in the business of providing warehousing and storage services in connection with Client’s products.

Client desires to engage the services of Bioserv, on a non-exclusive basis, for the warehousing and storage of Client’s Product (as defined below), all upon the terms and conditions set forth in this Agreement.

Bioserv and Client wish to formalize their contract services relationship pursuant to the terms and conditions below.

Therefore, in consideration of the respective covenants and promises contained herein and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties agree as follows:

1.0

DEFINITIONS

1.1

DEFINED TERMS.  As used herein, the terms below have the following meanings.  Any such terms, unless the context otherwise requires, may be used in the singular or plural; depending upon the reference.

“FDA” shall mean the United States Food and Drug Administration.

“Product” shall mean Client’s products, manufactured by Bioserv for Client under a separate agreement, and stored/handled by Bioserv under this Agreement.

“Regulations” shall mean any applicable United States laws, statutes, ordinances, regulations, rules, notice requirements, court decisions, agency guidelines, principles of law and orders of any federal, state or local government and any other government and any other governmental department or agency.

“Packaging” shall mean labeling and bottle, cap and boxes as appropriate.

“cGxP” shall mean those practices and standards required to comply with all current United States governmental regulatory requirements, including, without limitation, “Good Laboratory Practices” (e.g., 21 C.F.R. 58 et seq.), “Good Clinical Practices” (e.g., 21 C.F.R. 50 et seq.),  and Quality System Regulations (QSR) (e.g., 21 CFR 820).

1

2.0

STORAGE

2.1

Bioserv Storage

2.1.1

Bioserv will store and handle the Product at facilities located at 5340 Eastgate Mall, San Diego, CA 92121 (the “Facility”).    As part of the services hereunder, Bioserv shall have available for storage of the Product the required temperature and shelf space as stated in Addendum I to this Contract in an appropriate storage location in the Facility.  The designated storage area shall be continuously monitored as a part of the Facility temperature alarm system.

2.2

Service Fees

During the term of this agreement, the fees for the services are as follows:

2.2.1

The Storage Areas will be provided based on the fee schedule found in the Addendum II, to be invoiced quarterly commencing October 1, 2007.   

2.2.2

The addition or cancellation of any items or services, other than those listed in Addendum I, will result in a price adjustment to the fees in Addendum II if the parties, after consulting with each other regarding the additional services, mutually agree in writing that such a price adjustment is warranted

2.2.3

The payment terms are Net 30 days from Client’s receipt of any invoice, invoiced on a quarterly basis with a 1% finance charge per month on all undisputed amounts past due after thirty (30) days.

2.2.4

Quotations for additional services shall be included at agreed upon rates when signed by both parties and invoiced under the same terms in section 2.2.3.   

3.0

BIOSERV OBLIGATIONS

3.1

Good Manufacturing Practices (GMP)

3.1.1

Bioserv is licensed by the State of California and registered by the Federal FDA for both Device and Drug manufacture.  Bioserv will keep these licenses and registrations current during the course of this Agreement.

3.1.2

Bioserv shall comply with its own SOPs and procedures, the only exception will be those procedures supplied by Client and agreed by Bioserv, which shall supersede Bioserv procedures and as are described in part in Addendum 1.

3.1.3

Any Client materials found by Bioserv to be in non-compliance with Client specifications will be clearly identified and segregated.  Client shall be notified in writing of non-conforming materials.

3.1.4

Bioserv shall use industry standard efforts to protect Client’s materials and Product from loss, damage, theft or destruction (collectively “loss”) while under Bioserv control and/or custody.

2

3.1.5

Bioserv does not warrant the function or fitness of products stored by Bioserv for Client.  

3.1.6

Bioserv shall designate an area with the appropriate storage environment, for all incoming materials purchased or submitted by Client.  These materials shall be accompanied by proper identifying documentation.

3.1.7

Bioserv recognizes that Client products and procedures are highly proprietary and the exclusive property of Client.  Bioserv will not have any rights to use, or disclose to third parties, these procedures except as directed in writing by Client  Neither Bioserv nor its employees will discuss or divulge these processes with any third parties except with written consent from Client or as required by law.  All these restrictions will survive the expiration or earlier termination of this agreement by five (5) years.

3.1.7

Bioserv shall provide Client access to the Product stored at the Facility at all times during normal business hours, which for purposes of this Agreement shall be defined as the hours between 7:00 AM and 5:00 PM P.S.T., Monday through Friday, unless otherwise agreed by both parties.  If after hours access is required, Client will submit the request at least forty-eight (48) hours prior to the need.

4.0

 CLIENT OBLIGATIONS

4.1

Any services other than those set forth in this Agreement, shall be subject to the parties’ mutual written agreement.

4.2

Client understands that the Storage Area will be under Bioserv control and therefore open to audit by the FDA.

4.3

Client personnel shall follow Bioserv GMP procedures and conduct their business in such a way as to meet GMP requirements.

4.4

Client retains sole responsibility for final Product release.

4.5

The 24-hour Client contact telephone number is 425-402-1400.  

4.6

Client retains sole responsibility for all costs, insurance and risks relating to the shipping of the Product to and from the Bioserv facility.

3

5.0

TERMS AND TERMINATION

5.1

Term and Termination

5.1.1

This Agreement shall commence on the Effective Date and continue, unless terminated earlier pursuant to the terms in this section 5.1 for a period of one (1) year.

5.1.2

Client may terminate this Agreement, without cause, by notifying Bioserv in writing with 60 days advance notice, with a cancellation fee of 25% of the next three months Storage Area fees.

5.1.3

Bioserv may terminate the agreement, without cause, by notifying Client in writing with sixty (60) days’ notice in advance, except that the effective date of cancellation shall not be sooner than 60 days following the completion date of any future production runs booked or paid for by Client.

5.1.4

Either party shall have the right to earlier terminate this Agreement upon the breach by the other party of a material provision of this Agreement and that other party’s failure to cure such breach within thirty (30) days following written notice thereof from the non-breaching party.

5.1.5

Termination or expiration of this Agreement shall not relieve either party from any liability or obligation that accrued prior to such termination or expiration.  Upon termination or expiration of this Agreement, all Product(s) shall be returned to Client or a designee of Client, at Client’s sole cost and expense and in accordance with Client’s instructions.   

5.1.6

The following provisions shall survive any expiration or termination of this Agreement:  Sections 2.2.3, 4.4, 4.6, 8.0, 9.0, and 11.0.

6.0

REPRESENTATIONS AND WARRANTIES

6.1

Each party represents and warrants to the other that:

6.1.1

It has full power and authority to enter into this Agreement and perform all obligations and conditions to be performed by it under this Agreement without any restriction by any other Agreement or otherwise;

6.1.2

The execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action of that party; and

6.1.3

This Agreement constitutes the legal, valid and binding obligation of that party.

4

7.0

PRODUCT OWNERSHIP and TRADEMARKS

7.1

Client shall provide Product to Bioserv solely for storage and handling services under this Agreement.  Bioserv shall use the Product solely and exclusively for the performance of such services.  Bioserv shall not, directly or indirectly, use or exploit, or permit use or exploitation of the Product for any other purpose whatsoever, or otherwise transfer, or permit the transfer of, the Product to any third party for any purpose or use without the prior authorization of Client.  Title to the Product shall remain at all times in Client’ name.  Upon the expiration or earlier termination of this Agreement, all Product provided to Bioserv shall be returned to Client unless other arrangements are otherwise authorized in writing by Client.

7.2

Neither party shall have the right to use the name of the other party, or the other party’s trademarks, service marks, logos, or other similar marks in any manner, except with the prior written approval of that party.

8.0

CONFIDENTIALITY

8.1

“Confidential Information” with respect to a party hereto shall mean all technical, business and financial information including, where appropriate and without limitation, all information, data, patent disclosures, patent applications, know-how, structures, models, techniques, processes and methods, compositions, compounds, apparatus, customer names, customer information and products relating to the same disclosed by a party hereto (“the Disclosing Party”) to the other party hereto (the “Receiving Party”) or obtained by the Receiving Party through observation or examination of information, but only to the extent that such information is maintained as confidential by the Disclosing Party and is marked or otherwise identified as confidential when disclosed to the Receiving Party or, in the case of information given verbally, is identified as confidential in a writte n document sent to the Receiving Party within thirty (30) days of such verbal disclosure to the Receiving Party.

8.2

Bioserv may disclose certain Confidential Information to Client, and Client may disclose certain Confidential Information to Bioserv, each on the terms and conditions of this Agreement.  The parties mutually agree to maintain Confidential Information received from each other in confidence for five (5) years from the Effective Date of this Agreement.

8.3

The Receiving Party hereby acknowledges that the Disclosing Party is the owner or licensee of the Confidential Information.  The Receiving Party shall not use or disclose any of the Confidential Information of the Disclosing Party at any time except for the sole purpose of performing its obligations under this Agreement.  The Receiving Party shall not disclose any of the Confidential information other than on a need-to-know basis, as reasonably necessary for performing its obligations hereunder, to its directors, officers, employees, attorneys, accountants, bankers, financial advisors or consultants who are bound by written agreements with the Receiving Party to maintain the Confidential Information in confidence or who are otherwise under obligations of confidentiality to the Receiving Party (collectively, the “Representatives”).

5

8.4

Notwithstanding the foregoing, (i) the Receiving Party shall have the right to disclose Confidential Information to the extent required by applicable law or regulation, provided that the Receiving Party shall give the Disclosing Party prompt prior written notice and reasonable opportunity to object to such use or disclosure, or to request confidential treatment of the Confidential Information; and (ii) the Receiving Party’s nonuse and nondisclosure obligations above shall not apply to such Confidential Information as the Receiving Party can establish by written documentation to:

8.4.1

Have been publicly known prior to disclosure by the Disclosing Party of such information to the Receiving Party;

8.4.2

Have become publicly known, without fault on the part of the Receiving Party, subsequent to disclosure by the Disclosing Party of such information to the Receiving Party;

8.4.3

Have been received by the Receiving Party at any time from a source, other than the Disclosing Party, lawfully having possession of and the right to disclose such information;

8.4.4

Have been otherwise known by the Receiving Party prior to disclosure by the Disclosing Party to the Receiving Party of such information; or

8.4.5

Have been independently developed by the Receiving Party without use of such information.

8.5

Bioserv shall not disclose, other than to its Representatives on a need to know basis or as otherwise permitted under this Agreement, the fact that discussions or negotiations are taking place concerning a possible transaction, or any of the terms, conditions or other facts with respect to this Agreement (including the status thereof), except as required by applicable law or regulation.  Neither party shall use the trade names, trademarks or other marks of the other party in any advertising, promotions or publicity without prior written consent of the other party.

8.6

The confidentiality obligations with respect to Confidential Information disclosed under the Agreement shall remain in effect during the term of this Agreement and for a period totaling five (5) years after termination of this Agreement.

9.0

LIMITATION OF LIABILITY  

9.1

Bioserv shall not in any event be liable for any damage, theft or other loss to the Product, materials or other property in the possession or control of Bioserv unless such loss results solely from negligence or the intentional wrongful acts or omissions of Bioserv.  Client acknowledges and agrees that, except as provided in this paragraph, the insurance described in Section 10 below shall constitute its sole recourse in the event of any loss to the Product, materials and/or other property of Client in the possession or control of Bioserv.   Bioserv’s maximum liability for damages under this Agreement, whether in contract or tort, shall be limited to the fees paid by Client to Bioserv for the relevant services under this Agreement.

6

9.2

NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY CONSEQUENTIAL, INCIDENTAL, INDIRECT OR SPECIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.  WITHOUT LIMITING ANY OTHER PROVISION OF THIS AGREEMENT, IN NO EVENT WILL BIOSERV’S LIABILITY TO CLIENT EXCEED THE TOTAL FEES PAID TO BIOSERV UNDER THIS AGREEMENT.

10.0

INSURANCE   

10.1

At its sole expense, Client shall obtain and keep in force during the term of this Agreement, and for so long thereafter as any Product, materials or other property is in the possession or control of Bioserv, the following insurance, on an occurrence basis:

10.1.1

All-Risk Property Insurance including, without limitation, change of environment/spoilage coverage, in an amount adequate to cover the replacement cost of all Product, material and other Client property that may be in the possession or control of Bioserv.  Without limiting the foregoing, Client shall hold harmless Bioserv from and against all loss of or to the Property, and shall obtain a waiver of subrogation endorsement from the insurance carrier for the replacement value of all such Product, material and property.

10.1.2

Commercial General Liability in an amount no less than $1,000,000 per each occurrence and $2,000,000 in the aggregate covering bodily injury, broad form property damage, personal injury, products and completed operations, contractual liability, and independent contractor’s liability.  Bioserv and its officers and employees shall be included as Additional Insureds and a waiver of subrogation endorsement shall be obtained from the carrier in favor of Bioserv.  

10.1.3

Workers’ Compensation on a statutory basis and Employers’ Liability Insurance with $1,000,000 per accident for bodily injury and diseases to cover Client employees while on Bioserv premises.    

7

10.2

All of the above required insurance policies shall conform to the following requirements: (a) the insurer shall be qualified to do business in California; (b) Certificates of Insurance shall be delivered to Bioserv at commencement of the term and certificates of renewal at least 30 days prior to the expiration of each policy; (c) each policy shall require notice to Bioserv in writing by the insurer at least 30 days prior to any cancellation or expiration of such policy, or any reduction in the amounts of insurance carried or other restrictive modification of any policies; and (d) the insurance coverages shall be primary and non-contributing with respect to any insurance that may be maintained by Bioserv.  Additionally, the requ ired coverages and their limits in no way lessen nor affect Client’s other obligations or liabilities set forth in this Agreement.  

10.3

Upon the signing of this Agreement, Client shall provide Bioserv with a written declaration of the replacement cost of all Product and other property to be placed in the possession or control of Bioserv, and shall provide a written update of the replacement cost by no later than thirty (30) days after each addition to or removal from Bioserv’s possession and control.

11.0

MISCELLANEOUS

11.1

Relationship of the Parties.  The relationship between the parties is that of independent contractors, and this Agreement does not establish or create a partnership, joint venture, or other agency relationship between the parties.

11.2

Notices.  Any notice or other communication required or desired to be given to any party under this Agreement shall be in writing and shall be deemed given: (a) three business days after such notice is deposited in the United States mail, first-class postage prepaid, and addressed to that party at the address for such party set forth in this section of this Agreement; (b) one business day after delivered to Federal Express or any other similar express delivery service for delivery to that party at that address; or (c) when sent by facsimile transmission, with electronic confirmation, to that party at its facsimile number set forth in this section of this Agreement.  Any notice delivered by facsimile transmission will be deemed delivered upon electronic confirmation provided the notice is also deposited in the U.S. mail, first-class postage prepaid.  Any party may change i ts address or facsimile number for notices under this Agreement by giving the other party written notice of such change.

11.2.1

Client notice contact and address:

Michael P. Rice

BioLife Solutions, Inc.

3303 Monte Villa Parkway, Suite 310

Bothell, WA  98021

Facsimile: (425) 402-1433

11.2.2

Bioserv Corporation notice contact and address:

Kathleen Primes, VP of Operations

Bioserv Corporation

8

5340 Eastgate Mall

San Diego, CA 92121

Facsimile:  (858) 450-0785

11.3

Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of California (without regard to its choice of law rules), and the parties to this Agreement hereby submit to the jurisdiction and venue of the California courts, both state and federal, in San Diego County, California.

11.4

Severability.  If a court or other body of competent jurisdiction declares any term of this Agreement invalid or unenforceable, the remaining terms of this Agreement will continue in full force and effect.

11.5

Non-Waiver.  The failure of either Client or Bioserv to insist upon strict performance of any provision of this Agreement or to exercise any right hereunder shall not constitute a waiver of that provision of or right under this Agreement or of any other provision of or right under this Agreement.

11.6

Complete Agreement.  This Agreement sets forth the entire agreement between Client and Bioserv regarding the subject matter hereunder, whether written or oral, and fully supersedes any and all prior and contemporaneous agreements or understandings between Client and Bioserv pertaining to the subject matter hereof.  This Agreement may not be amended, supplemented or otherwise modified except by an instrument in writing signed by both Client and Bioserv.

11.7

Assignment.  Neither party shall have the right to assign this Agreement, or any of such party’s rights or obligations under this Agreement, without the prior written consent of the other party.  However, either party may assign this Agreement without the other’s consent in connection with the merger consolidation or sale of all or substantially all of assets or equity interests of such party.  Subject to the foregoing, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by and against the respective successors and assigns of the parties.

IN WITNESS WHEREOF, the undersigned acknowledge and accept the terms of this Agreement and duly execute this Agreement.

BIOSERV CORPORATION

BIOLIFE SOLUTIONS, INC.

By: _/s/Kathleen Primes_____________

By: _/s/Michael P. Rice________________

Kathleen Primes

Michael P. Rice

VP of Operations

Chairman and CEO

9

ADDENDUM I – STORAGE REQUIREMENTS

1.

Physical segregation from any other client material, raw materials, work in process, etc

2.

Dark environment so as to prevent ambient light from affecting the color of the Product

3.

cGMP requirements for established written procedures addressing cleanliness and security, segregation, labeling, chain of custody, inventory management (FIFO), distribution records, etc. according 21 CFR 820 subpart H.

4.

Continuously monitored storage at a temperature from 2°C - 8°C by a calibrated monitoring system.

5.

Emergency back up power supplied to the storage area where BioLife’s Products are stored to provide uninterrupted power to the refrigeration system and alarm system so as to provide continuously maintained ambient temperature of the storage area from 2°C - 8°C.

10

ADDENDUM II – SERVICE FEES

Ft3	Price/Month	What is Included
160		Assumes 160 ft3 of storage space at 2 to 8oC.  Includes space allocation within specified controlled temperature storage area, cost of power, validation of storage area, 7/24 monitoring and security
500		Assumes 500 ft3 of storage space at 2 to 8oC.  Includes space allocation within specified controlled temperature storage area, cost of power, validation of storage area, 7/24 monitoring and security.

11

EX-10

EXHIBIT 10.26

MANUFACTURING SERVICES AGREEMENT

This agreement (“Agreement”) is entered into effective as of October ____, 2007 (the “Effective Date”), by and between BioLife Solutions, Inc, a Delaware corporation with offices at 3303 Monte Villa Parkway, Suite 310, Bothell, WA  98021 (“Client”), and Bioserv Corporation a California corporation with offices at 5340 Eastgate Mall, San Diego, CA 92121 (“Bioserv”).

This Agreement is intended to establish the master terms under which Bioserv will provide Services to manufacture Client’s Products identified in one or more signed Addenda to this Agreement.  

Therefore, Client and Bioserv agree as follows:

1.

Definitions

1.1

 “Addendum” or “Addenda” refer to the contractual, financial and project protocol details of the Services, including without limitation, the Specifications and the Master Batch Records, as agreed in writing between Bioserv and Client for each job to be performed at Bioserv relative to each different Product.

1.2

“Confidential Information” will have the meaning stated in the Mutual Nondisclosure Agreement signed by Bioserv and Client, which shall remain in full force and effect.  

1.3

“Effective Date” will be the date specified above in the introductory paragraph of this Agreement.

1.4

“FDA” means the United States Food and Drug Administration or any successor agency thereof.

1.5

“Good Manufacturing Practices” mean the set of guidelines established by the FDA by which drugs and medical devices are manufactured.

1.6

“Intellectual Property” means inventions, designs, and improvements, whether or not patentable, all patent rights and all other intellectual property and proprietary rights in such inventions, designs, and improvements; copyrightable works (including derivative works) and all copyrights therein; and trade secrets, ideas, process techniques, know-how and data (including all rights therein).

1.7

“Master Batch Records” means the document containing the formulae, manufacturing process and analytic test specifications for the applicable Products.

1.8

“Products” mean the Client products listed in Appendix A, or later made subject to this Agreement by Addendum signed by Bioserv and Client.  

1.9

“Services” mean the work to be performed by Bioserv as set forth in a signed Addendum.

1.10

“Specifications” shall mean the specifications approved in writing by Bioserv and Client for the applicable Products.  Some, but not all of the Specifications are included as part of the Master Batch Records.

2.

Master Agreement and Addenda

2.1

Master Agreement.  This Agreement is a contractually binding master contract to permit the parties to include one or more manufacturing projects under its terms.  However, Client is not required to engage the Services of Bioserv, and Bioserv is not required to provide Services to Client, except to the extent they each sign an Addendum to this Agreement.  Each Addendum so signed will then be subject to the terms and conditions of this Agreement.

2.2

Issuance of Addenda.  If from time to time Client and Bioserv desire Bioserv to provide Services with respect to Products for which there is not yet an Addendum, the parties anticipate the following procedures; provided, however, that these procedures may vary on a case-by-case basis, and either party may reject or opt out of this process at any point before the respective Addendum is signed: (a) Client issues a request for quotation; (b) Bioserv issues a quotation; (c) Client accepts the quotation; (d) Client submits the Addendum to Bioserv; (e) Bioserv submits its revisions to the proposed Addendum along with its proposed schedule; (f) once agreed, the Addendum is signed by the parties and then forms a binding contract between Client and Bioserv; (g) Client submits a purchase order and deposit (first payment) to Bioserv; (h) Bioserv accepts the purchase order and deposit; and (i) Bioserv commences the Servic es.  

2.3

Reference to Master Agreement.  Each Addendum will specifically refer to this Agreement. This Agreement incorporates by reference all of the provisions of each Addendum, and the entirety of this Agreement shall include all Addenda.

2.4

Conflicts.  If any provision of an Addendum is in direct conflict with this Agreement so that the provisions of both cannot be given effect, the terms of the Addendum shall control the specific issue to the extent of the inconsistency.  The provisions of this Agreement shall govern all contracts between Bioserv and Client to the exclusion of any other terms and conditions, including without limitation, any terms and conditions pre-printed on any purchase order, invoices and similar contractual documents used in the performance of this Agreement.

2.5

Changes to Addenda.  Changes to any Addendum shall be made only by a written amendment signed by Bioserv and Client.

1

3.

Compliance and Standards

3.1

Bioserv Performance.  Subject to the provisions of this Agreement, Bioserv will perform the Services described in the applicable Addendum with industry standard care and skill.  Additionally, Bioserv shall comply with the applicable Specifications, Master Batch Record, Good Manufacturing Practices, the United States Food, Drug and Cosmetic Act, (29 United States Code, section 301 et seq.), as amended, and other United States health and safety laws and regulations applicable to the processing of the Products, as well as the Quality Agreement executed by the Client and Bioserv  Throughout the term of this Agreement, Bioserv shall maintain its Device and Drug Establishment Registrations (FDA); Device and Drug Manufacturing Licenses (State of California); and any other applicable registrations and licenses required in the United States to perform the Services.  

3.2

Client Performance.  In all matters relating to the performance of this Agreement, Client shall comply with the United States Food, Drug and Cosmetic Act, as amended, and other United States health and safety laws and regulations applicable to the Products.  Additionally, Client shall be responsible for ensuring the Products are compatible with materials used in the process, such as stoppers, vials, tubing, containers and filters.  Client is responsible for providing complete and accurate scientific data to Bioserv regarding the Products and requirements for manufacturing, including but not limited to formulation, fill and finish.  Client shall be responsible for all regulatory issues concerning Product submissions, listing, labeling and end use, as applicable, and Client shall be responsible for final Product release.  

3.3

Changes.  Bioserv shall promptly notify Client in writing regarding changes to production processes, environmental changes, and similar material matters that might impact safety, processing or compliance with the Specifications, and shall implement such changes only after such written notice is received and approved in writing by Client.  Conversely, Client shall obtain Bioserv’s written approval before changes are made to the Specifications, or other changes are made that may have a material impact on Bioserv or the processing or use of the Products.  In either case, Client and Bioserv will review cost impact and adjust pricing and other terms accordingly.

3.5

Documentation and Reporting.  Bioserv shall keep complete and systematic written records of Bioserv’s operations in connection with the performance of the Addenda, and shall retain all such records for the period required by applicable law or guidelines, or for three  years after completion of the Addendum, whichever is greater.  Bioserv will provide Client with the original of the Batch History Record (BHR) and retain a copy for it’s records. All documentation and submissions to regulatory authorities in support of the Products are the responsibility of Client.  

2

4.

Forecasts, Orders and Deliveries

4.1

Forecasts.  Client shall provide Bioserv with a 6-month firm forecast that will allow Bioserv to order, receive and approve raw materials prior to the issuance of the Purchase Order.  Client will be financially responsible for any raw materials ordered from this Firm Forecast.  

4.2

Purchase Orders.  All purchase orders shall be sent by first class mail, email or facsimile. Client shall issue purchase orders to Bioserv for Product production lots at least 60 days prior to the desired production completion date provided that the requirements stated in Section 5.1 a – c are met.  Within 5 business days after Bioserv’s receipt of the purchase order, Bioserv shall either accept the purchase order or provide a written explanation for rejection.  

4.3    

Shipping.  Bioserv shall ship Products to the address set forth as specified in the Order Fulfillment Agreement executed by Client and Bioserv on a per order basis.   Client shall pay all transportation, insurance, and freight charges from the point of shipment, and Client shall also pay all customs duties.  Unless otherwise specifically ordered, all shipments of Products will be by surface transportation.

4.4

Non-Conforming Product.  Reference the Quality Agreement executed by Client and Bioserv.

3

5.

Scheduling, Cancellation and Postponement

5.1

Bioserv Scheduling Policy.  To maintain a smooth manufacturing schedule, to offer reasonable flexibility to Client, and to allow the Bioserv project managers to provide Client with estimated filling dates for the purposes of completing a timeline, the following scheduling policy shall apply to this Agreement.  The Bioserv manufacturing division will set Bioserv’s manufacturing schedule, and only those projects that have achieved the following project milestones will be confirmed on the schedule:  

(a)

Receipt of signed Addendum, an accepted purchase order and the requested deposit;

(b)

All required validations/qualifications/engineering runs are performed and approved;

(c)

Production batch record approved by Client and Bioserv;

(d)

All equipment and preparation items in-house and available for use;

(e)

Components, excipients and/or active ingredients have been received and released.

Accommodations may be negotiated, as Bioserv recognizes that some Products have sensitive active ingredients that must be chilled, filled and lyophilized within a short time window.  Once on the manufacturing schedule, Client will be notified of the actual fill date.  A postponement or cancellation caused by Client will incur fees as described below.  Bioserv will work closely with Client to achieve Client’s scheduling requirements.  Bioserv’s manufacturing schedule is necessarily complex, and Bioserv reserves the right to change the schedule to permit maximum utilization of the facility.  Should scheduling changes be necessary, Bioserv shall notify Client and in no event shall Bioserv’s actual production date be greater than 15 days from the original production date accepted by Bioserv.

5.2

Cancellation and Postponement Policy.  If Client cancels all or any part of any purchase order, Client will pay a cancellation fee pursuant to the following schedule, in addition to payment for raw materials, Services and supplies that were used, performed or purchased by Bioserv on behalf of Client.  All hours incurred by Bioserv for such Services will be charged to Client at $200/hour.  

For Notifications prior to…	Fee Assessed
>60 days	20% of fill/lyophilization fee
30 – 60 days	50% of fill/lyophilization fee
15 – 29 days	75% of fill/lyophilization fee
<15 days	100% of fill/lyophilization fee

For orders postponed, the following fee schedule will apply, in addition to payment for raw materials, supplies and Services that must be replaced, replenished or re-done as a result of the postponement , provided that such materials, supplies and Services were used, purchased or performed on behalf of Client under this Agreement ..

For Notifications prior to…	Fee Assessed
>60 days	No charge
30 – 60 days	20% of fill/lyophilization fee
15 – 29 days	30% of fill/lyophilization fee
8 – 14 days	40% of fill/lyophilization fee
<8 days	50% of fill/lyophilization fee

A postponement of greater than 60 days will be considered a cancellation.  A new quote and manufacturing order will be required to renew the order.  Based on the schedule, new date selection may be limited.

6.

Pricing and Payment Terms

6.1

Purchase Price.  The initial prices shall be specified in the respective Addendum.  The parties agree to review and, if appropriate, to adjust pricing in twelve-month intervals during the term of this Agreement.  The prices shall be quoted and paid in United States Dollars.

6.2

Raw Materials Charges.   If Bioserv procures approved raw materials and finished goods packaging materials on behalf of Client, Client shall pay Bioserv a service charge for such purchases, and will reimburse Bioserv for the cost of the materials as part of the purchase price.  The Bioserv service charge for this purpose will be the cost of the materials plus 20% unless otherwise provided in the applicable Addendum.  The parties agree that the service charges for raw materials and finished goods packing materials will be reviewed and modified on the same review schedule as the prices noted above.

6.3    

Invoicing.  Bioserv will submit invoices to Client upon successful sterility testing of each production lot.  All invoices shall be sent by first class mail, email or facsimile, and will state the aggregate and unit invoice price for the Products in the shipment.

6.4

Payment.  Client shall pay all amounts correctly invoiced by Bioserv within 30 days after the date of such invoice.  Client shall pay a late fee, commencing on the due date, on all delinquent payments.  The late fee shall be the lesser of 1.5% per month (18% per annum) or the maximum rate allowed under applicable law.  Without limiting any other remedies, Bioserv may withhold future deliveries if payment is not received in a timely manner.  

6.5

Taxes.  All prices for any Products are exclusive of any export, foreign import, federal, state or local tax or excise.  Any such tax or excise paid by Bioserv (other than taxes on Bioserv’s income) shall be reimbursed by Client, and shall appear as a separate item on the Bioserv invoice; provided, however, that Bioserv shall not pay any such tax or excise if Bioserv receives a valid tax exemption certificate from Client prior to shipment.  

7.0

Limited Warranties.  

7.1

Bioserv Warranty.  Bioserv warrants that Products manufactured by Bioserv for Client will meet the Specifications and Master Batch Records, and will be manufactured in accordance with all applicable state and United States federal regulations relevant to the processing of the Products.  Bioserv does not warrant the function or fitness of Products manufactured by Bioserv, and Bioserv makes no representations or warranties regarding the effectiveness of the Products for any purpose whatsoever.  EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION 7, BIOSERV SPECIFICALLY DISCLAIMS, ALL REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, REGARDING THE PRODUCTS AND SERVICES CONTEMPLATED BY THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT.

8.0

Liability

8.1

Acknowledgment.  Client acknowledges that Bioserv has quoted its fees in reliance upon the limitations on liability described in this Section 8.

8.2

Finished Product Limitation.   Bioserv’s liability for finished Product shall be limited to sterility based on documented filter validation from Client, or a waiver to use the specified filter signed by Client.  The liability arising therefrom will be limited to the replacement cost of the affected materials.  

8.3

Clinical Trial Limitation.  Client shall indemnify, defend and hold Bioserv and its employees and successors harmless from any claim, damage, loss, costs and liability, including attorney’s fees, incurred by or made against Bioserv, arising from or relating in any way to any claim asserted by any participant in any clinical trial for Client’s Products; provided that: (a) Bioserv notifies Client in writing within ten days of such claim; (b) Client has sole control of the defense and all related settlement negotiations; and (c) Bioserv provides Client with the assistance, information and authority necessary to perform Client‘s obligations under this paragraph.

8.3

General Limitation.  Without limiting the foregoing provisions of this Section 8, in no event will Bioserv’s total liability to Client exceed the amounts invoiced by and paid to Bioserv for the relevant Products.  Additionally, even if Bioserv has been advised of the possibility of such damages, UNDER NO CIRCUMSTANCES WILL BIOSERV BE LIABLE TO CLIENT UNDER ANY THEORY FOR ANY INCIDENTAL, CONSEQUENTIAL OR SPECIAL DAMAGES ARISING FROM ANY LOSS RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT, SUCH AS BUT NOT LIMITED TO, LOSS OF REVENUE, LOST PROFITS OR LOST BUSINESS.   

8.4

Insurance.  During the term of this Agreement and for a period one year thereafter, Bioserv and Client shall each carry Commercial General Liability Insurance, combined single limit, including without limitation, Product Liability and, in the case of Client, Product Liability coverage.  The insurance shall cover amounts not less than two million dollars ($2,000,000) for each occurrence and in the aggregate.  

9.0

Intellectual Property and Other Property Rights

9.1

Confidentiality.  All Confidential Information disclosed by either party to the other under this Agreement shall be subject to the Mutual Nondisclosure Agreement signed by Bioserv and Client, dated effective May 10, 2007, which agreement shall remain in full force and effectin accordance with its terms.

9.2

Limited License.  Subject to the provisions of this Agreement, Client hereby grants to Bioserv a non-transferable, non-exclusive license (without rights to sublicense) under Client’s Intellectual Property covering the Products solely to the extent necessary for Bioserv to perform its obligations under this Agreement.  No implied rights or licenses relating to any Client Intellectual Property are granted under this Agreement and Client expressly reserves all rights in and to its Intellectual Property.  

9.3

Intellectual Property Indemnification.  Client shall indemnify, defend and hold Bioserv and its employees and successors harmless from any claim, damage, loss, costs and liability, including attorney’s fees, incurred by or made against Bioserv, arising from or relating in any way to any claim that the Services or the Products infringe any third party Intellectual Property; provided that: (a) Bioserv notifies Client in writing within ten days of such claim; (b) Client has sole control of the defense and all related settlement negotiations; and (c) Bioserv provides Client with the assistance, information and authority necessary to perform Client‘s obligations under this paragraph.

9.4

Title and Ownership of Materials.   Client shall remain the sole owner of all right, title and interest to any and all materials, documents and equipment supplied or provided to Bioserv by Client, and any and all materials purchased by Bioserv specifically for Client’s benefit, evidenced by a confirming order , which is paid by Client.  Bioserv shall remain the sole owner of all right, title and interest to any and all materials purchased by Bioserv not specifically for Client’s benefit, not evidenced by a confirming purchase order, or not paid for by Client.  All Client material in the possession of Bioserv shall be maintained in designated, segregated locations, as determined by Bioserv.   Terms for long-term storage of Client property will be detailed in a separate Storage and Handling Services Agreement between Client and Bioserv.  

10.

Term and Termination

10.1

Term.  This Agreement shall be effective as of the Effective Date and shall continue in force for 12_months, unless earlier terminated as provided in this Section 10.  Each Addendum shall take effect as of the effective date designated therein.  Termination of any Addendum shall not affect any other Addendum, except that in the case of a termination of this Agreement under Sections 10.2 or 10.3 below, the termination shall also terminate all then open Addenda.   

4

10.2

Default.  If either party defaults in the performance of any of its material obligations under this Agreement, and does not cure such default within 30 days after written notice, then the non-defaulting party, at its option, may terminate this Agreement by giving written notice of termination to the defaulting party.  

10.3

Insolvency.  This Agreement may be terminated by either party, upon written notice, (a) upon the institution of receivership or bankruptcy proceedings that are not dismissed within 60 days thereafter, or (b) upon the other party’s dissolution or ceasing to conduct business in the normal course.

10.4

Return of Property.  Within a reasonable time after the effective date of the termination of this Agreement, Bioserv shall deliver to Client all Client materials, data, and information, subject to Section 9.4 above.  Client shall be responsible to instruct Bioserv where to ship items and Client shall be responsible to pay the costs of shipping such items.  If Client fails to pickup, pay for or accept delivery of its materials within a reasonable time after termination of the Agreement, Client shall be responsible to pay Bioserv for the cost of storing the materials; provided, however, that Bioserv shall not have any obligation to store the materials and may dispose of the materials in any manner permitted by applicable law.  

10.5

Remedies.  Compliance with this Section 7 does not limit or waive either party’s potential remedies for a breach of this Agreement.  Termination of this Agreement shall not release either party from any obligation or right that accrued to that party prior to the effective date of termination or which later accrues from an act or omission which occurred prior to the effective date of termination.  

10.6

Survival.  In addition to the other provisions of this Agreement explicitly stated to survive termination of this Agreement, Sections 7.0, 8.0 and 9.0 shall survive such termination in accordance with their terms.

11.

General Provisions

11.1

Governing Law and Venue.  This Agreement shall be governed by and interpreted in accordance with the laws of the State of California, without reference to its conflict of laws provisions.  Any legal proceeding that relates in any way to this Agreements shall be subject to the exclusive jurisdiction of the federal and state courts in the County of San Diego, State of California.

11.2

Partial Invalidity.  If any provision in this Agreement is be held by a court of competent jurisdiction to be invalid or unenforceable, that provision shall be severed from the remainder of this Agreement, and the remaining provisions shall remain in full force and effect.  

11.3

Relationship of the Parties.  Bioserv and Client are independent contractors under this Agreement.  Nothing contained in this Agreement is intended nor is it to be construed so as to constitute Bioserv and Client as partners or joint venturers with respect to this Agreement.   

11.4

Modification.  No alteration, amendment, waiver, cancellation or any other change in any term or condition of this Agreement shall be valid or binding on any party unless the same shall have been mutually agreed in writing by both parties.

11.5

Waiver.  The failure of any party to enforce at any time any of the provisions of this Agreement, or the failure to require at any time performance by the other parties of any of the provisions of this Agreement, shall in no way be construed to be a present or future waiver of such provisions, nor in any way affect the right of any party to enforce each and every such provision thereafter.  The express waiver by any party of any provision, condition or requirement of this Agreement shall not constitute a waiver of any further obligation to comply with such provision, condition or requirement.  

11.6

Assignment.  No party may assign any of its rights or obligations (by operation of law or otherwise) hereunder without the prior written consent of the other party, which shall not be unreasonably withheld, provided, that any party shall have the right to assign its rights and obligations under this Agreement to a successor in business or an acquirer of all or substantially all of its business or assets to which this Agreement pertains without obtaining the consent of the other party.  Subject to the foregoing, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.  

11.7

Notices.  All notices required to be given under this Agreement must be made in writing and delivered (a) two days after deposit with regularly scheduled commercial delivery service, Federal Express or equivalent; or (b) on the date of personal delivery to an officer or authorized representative.  Notices mailed or sent by commercial delivery shall be made to the addresses stated at the signatures to this Agreement.  Any party may change its address for notice by written notice given in accordance with the foregoing requirements.  Despite the foregoing, actual receipt of written notice shall constitute notice on the date received.    

11.8

Force Majeure.  Notwithstanding anything else in this Agreement, no default, delay or failure to perform on the part of any party shall be considered a breach of this Agreement if such default, delay or failure to perform is shown to be due to causes beyond the reasonable control of the party charged with a default, including, but not limited to, causes such as strikes, lockouts or other labor disputes, riots, civil disturbances, actions or inaction’s of governmental authorities or suppliers, epidemics, war, terrorist attacks, embargoes, severe weather, fire, earthquakes or other acts of God; provided, that for the duration of such force majeure the party charged with such default must continue to use all reasonable efforts to overcome such force majeure event.  

11.9

Dispute Resolution.  In the event of any disagreement with respect to this Agreement that the responsible project coordinators are unable to resolve, the matter shall be referred to one corporate officer of each party.  The officers shall negotiate in good faith to resolve the dispute within 30 days.  If the negotiations do not result in a mutually satisfactory resolution of the issue in question, then the matter shall be resolved by any procedure agreed to by such individuals or, in the absence of such an agreed procedure, in court.

5

11.10

Entire Agreement.  The provisions contained in this Agreement and each Addendum hereto, constitute the entire agreement between the parties and supersede all previous agreements and understandings, whether oral or written, between the parties hereto with respect to the subject matter hereof and thereof, except the confidentiality agreement referenced above.   

11.11

Export Controls.  The parties shall comply with all applicable laws, regulations and restrictions of the United States concerning the export of products, technical data and direct products thereof including, with­out limitation, all regulations regarding export, asset control and destination control of the Commerce, Treasury, State and Defense Depart­ments of the United States Government, and the Export Administration Act of 1979, as amended from time to time.

11.12

Third Party Beneficiaries.

This Agreement is made solely for the benefit of  Bioserv and Client, and their respective successors and permitted assigns.  Nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any others.  

BIOSERV CORPORATION

CLIENT,  

By:  _/s/Jeanne M. Dunham_____________

By:  _/s/Michael P. Rice______________

Jeanne M Dunham

Michael P. Rice

President & CEO

Chairman& CEO

5340 Eastgate Mall

3303 Monte Villa Parkway, Suite 310

 San Diego, CA 92121

Bothell, WA  98021

6

ADDENDUM TO

MANUFACTURING SERVICES AGREEMENT

This Addendum (the “Addendum”) to the Manufacturing Services Agreement (the “Agreement”) is entered into by Client, a Delaware corporation (“Client”) and Bioserv Corporation, a California corporation, effective as of October _____, 2007.  This Addendum is made a part of, and hereby incorporates by this reference, all of the provisions of the Agreement.

BIOSERV CORPORATION

CLIENT,  

By:  _/s/Jeanne M. Dunham___________

By:  _/s/Michael P. Rice_____________

Jeanne M. Dunham

Michael P. Rice

President & CEO

Chairman & CEO

5340 Eastgate Mall

3303 Monte Villa Parkway

Suite 310  

San Diego, CA 92121

Bothell, WA  98021

7

EX-10

Exhibit 10.27

LEASE

BETWEEN

MONTE VILLA FARMS LLC

LANDLORD,

AND

BIOLIFE SOLUTIONS

TENANT

FOR PREMISES

AT

3303 MONTE VILLA PARKWAY, SUITE 310

BOTHELL, WASHINGTON

DATED AS OF AUGUST 1, 2007

BioLife lease

4/1/2008

INDEX

SECTION

TITLE

PAGE

1.

DEMISE AND TERM OF DEMISE

1

2.

RENT, TAXES, ASSESSMENTS AND OTHER CHARGES

2

3.

USE OF PREMISES: COMPLIANCE WITH LAWS

9

4.

REPRESENTATIONS BY TENANT AND LANDLORD

10

5.

INSURANCE

11

6.

DAMAGE OR DESTRUCTION

12

7.

CONDEMNATION

13

8.

SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATE

15

9.

REPAIRS, MAINTENANCE, ALTERATIONS, ETC.

17

10.

INTENTIONALLY OMITTED

19

11.

ASSIGNMENT, SUBLETTING AND MORTGAGING

19

12.

INDEMNITY

20

13.

DEFAULT PROVISIONS, LANDLORD'S REMEDIES

22

14.

BANKRUPTCY AND INSOLVENCY

26

15.

ENTRY BY LANDLORD, ETC.

27

16.

COVENANT OF QUIET ENJOYMENT

28

17.

EFFECT OF CONVEYANCE, LIMITS OF LIABILITY OF LANDLORD, DEFINITION OF "LANDLORD"  28

18.

SURRENDER, HOLDING OVER BY TENANT

29

19.

CURING DEFAULTS; FEES AND EXPENSES

30

20.

MECHANICS AND OTHER LIENS

30

21.

SIGNS, ADDRESS

31

22.

WAIVERS AND SURRENDERS TO BE IN WRITING, RIGHT TO TERMINATE

31

23.

COVENANTS BINDING ON SUCCESSORS AND ASSIGNS

32

24.

RESOLUTION OF DISPUTES

32

25.

NOTICES

32

26.

DEFINITIONS; HEADINGS; CONSTRUCTION OF LEASE

33

27.

FORCE MAJEURE

34

28.

BROKERAGE

35

29.

MISCELLANEOUS PROVISIONS

35

30.

COMPLIANCE WITH ENVIRONMENTAL LAWS

36

31.

SECURITY

39

32.

ACCESS

39

33.

NET LEASE

39

34.

SECURITY DEPOSIT

40

35.      RENEWAL.

40
36.      RIGHT OF FIRST OFFER.

40

i

BioLife Lease

4/1/2008

EXHIBITS

EXHIBIT A

THE PROPERTY, BUILDINGS, PARKING LOT AND COMMON AREA

EXHIBIT A-1   

LEGAL DESCRIPTION

EXHIBIT B

RENTAL SCHEDULE

EXHIBIT C

DEMISED PREMISES IN ADMINISTRATION BUILDING

EXHIBIT D

TENANT IMPROVEMENTS

ii

BioLife Lease

4/1/2008

LEASE

THIS LEASE (the "Lease") is entered into this as of July 24, 2007 between MONTE VILLA FARMS LLC, a Washington limited liability company (the "Landlord"), and BIOLIFE SOLUTIONS, a Delaware corporation (the "Tenant") and amends and entirely replaces all other agreements between Landlord and Tenant and any of Tenant’s subsidiaries or related companies.

W I T N E S S E T H:

Recitals:

WHEREAS, Landlord is the owner of that certain land located in Bothell, Washington and the improvements and buildings thereon (the "Property"), more particularly described in Exhibit A-1 attached hereto and made a part hereof, and

WHEREAS, various buildings located on the land are known as the Administrative Building consisting of approximately 90,868 square feet, the Production Building consisting of approximately 171,816 square feet, the North Barn consisting of approximately 13,576 square feet and the South Barn consisting of approximately 6,769 square feet (the Administrative Building, the Production Building, the North Barn and the South Barn are sometimes collectively referred to as the "Buildings");

WHEREAS, there is also located on the Property a paved and striped parking area consisting of approximately 750 parking spaces (hereinafter referred to as the "Parking Lot"), and

WHEREAS, the Property, Buildings and the Parking Lot are depicted on Exhibits A and A-1 attached hereto.

WHEREAS, Tenant is desirous of leasing agreed square footage as follows:  approximately 4,366 rentable square feet described and outlined on Exhibit C attached hereto ("Demised Premises"), and Landlord is desirous of leasing the Demised Premises to Tenant on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by each of the parties hereto, Landlord and Tenant agree as follows:

1.

DEMISE AND TERM OF DEMISE

1.1

(a)

The “Commencement Date” shall be July 31, 2007.  Tenant shall have early access to the Premises upon Lease execution at no charge for the purpose of installing Tenant Improvements and tenant fixtures, approved by Landlord.

(b)

This Lease shall be and become effective as of the Commencement Date. As of the Commencement Date, the terms and provisions of this Lease shall govern and control the respective rights and obligations of Landlord and Tenant with respect to the Demised Premises and the Property.

1

BioLife lease

4/1/2008

1.2

Landlord demises and leases unto Tenant, and Tenant hires and takes from Landlord, in consideration of the rents to be paid and the covenants, agreements and conditions to be performed, observed and fulfilled by Tenant, the Demised Premises described on Exhibit C, attached hereto and made a part hereof (as same may be modified from time to time in accordance with this Lease).  The Demised Premises is approximately 4,366 rentable square feet; provided, however, if at any time during the Lease Term the rentable square footage of the Demised Premises and/or Buildings increases or decreases due to an actual physical change in the Demised Premises and/or the Common Area or upon remeasurement of the Demised Premises and/or the Buildings, the actual rentable square footage of the Demised Premises shall be recalculated and the parties shall execute an amendment to this Lease to memorialize such adjustment.

1.3

The common area of the Property (the "Common Area") shall mean those interior and exterior portions of the Property designated on Exhibit A, including the improvements and facilities used for parking areas, access and perimeter roads, landscaped areas, exterior walks, fitness area, and washrooms and common hallways located in the Administrative Building, the Production Building, the North Barn, the South Barn, and the Parking Lot as of the date hereof as shown on Exhibit A. Tenant shall have the non-exclusive right, during the term of this Lease, to use the Common Area, in a reasonable manner, for itself, its employees, invitees, guests, contractors and licensees for parking, ingress, egress and similar uses and Tenant acknowledges that all other tenants or occupants of all or any portion of the Property for themselves, and their employees, invitees, guests, contractors, subtenants (if any) and licensees shall also have similar rights to use the Common Area. Landlord shall have the right, at any time and from time to time (a) to grant to any tenant or tenants which hereafter leases or lease all or any of the Property the same rights which inure to Tenant and other tenants as herein described, and/or (b) to (i) limit Tenant to the use of thirteen (13) parking spaces in the Parking Lot and to reasonably designate the location thereof and (ii) alter, modify, increase or reduce the Common Area, provided that access to and from the Demised Premises shall not be materially or adversely affected thereby.  Landlord will make a good faith effort to continue to provide a fitness area as a part of the Common Area. All Common Areas shall be subject to the exclusive control and management of Landlord, subject to the rights of Tenant and any other tenants of the Property to use and have access to the Common Area, and subject to such rights as Landlord shall have pursuant to this Lease or otherwise.

1.4

The term of the Lease (the "Term") commenced on the Commencement Date and shall terminate and expire midnight on July 31, 2011 (the "Expiration Date"). Tenant shall, within ten (10) days after request by Landlord, execute, acknowledge and deliver to Landlord an instrument in form and substance reasonably acceptable to Landlord confirming (i) the Commencement Date and the Expiration Date, but no such instrument shall be required to make the provisions of this Section 1.4 effective.

2.

RENT, TAXES, ASSESSMENTS AND OTHER CHARGES

2.1

Commencing as of the Commencement Date, Tenant shall pay to Landlord basic annual rent as shown on Exhibit B based on the rentable area of the Demised Premises, as adjusted from time to time in accordance with the terms and conditions of this Lease (the “Basic Annual Rent”).

2

BioLife lease

4/1/2008

2.2

Such Basic Annual Rent shall be paid by Tenant to Landlord in equal monthly installments, in advance, on the first day of each calendar month during the Term without notice, demand, abatement, deduction, counterclaim or set off of any kind. Tenant shall pay the rent in lawful money of the United States.  Any obligation of Tenant for payment of rent which shall have accrued during the Term shall survive the expiration or termination of this Lease.

2.3

The installments of Basic Annual Rent payable under Section 2.1 for the partial calendar months at the beginning and end of the Term shall be pro-rated in the proportion of the number of days in the partial calendar month to the number of days in the year.

2.4

Whenever under the terms of this Lease any sum of money is required to be paid by Tenant in addition to the Basic Annual Rent, and said additional amount so to be paid shall be designated as "Additional Rent," and collectible as such with any installment of rental thereafter falling due hereunder, or, if no such installment thereunder shall fall due, on demand. Rent or rental for purposes of this Lease shall mean Basic Annual Rent plus all Additional Rent, including, but not limited to, Tenant's Proportionate Share of Taxes and Operating Expenses.

2.5

"Tenant's Taxes" shall mean all taxes, assessments, license fees and other governmental charges or impositions levied or assessed against or with respect to Tenant's personal property, furnishings, equipment, movable partitions, business machines and other trade fixtures installed, located or attached to the Property. Tenant shall pay all Tenant's Taxes before delinquency and, at Landlord's request, shall furnish Landlord satisfactory evidence thereof.  If any lien shall at any time be filed against the Property or any part thereof with respect to Tenant's Taxes not paid by Tenant when due, or any judgment, attachment or levy is filed or recorded against the Property or any part thereof with respect thereto, Tenant, within thirty (30) days after the attachment thereof, shall cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. If Tenant shal l fail to cause such lien, judgment, attachment or levy to be discharged within the period aforesaid, then, in addition to any other right or remedy, Landlord may, but shall not be obligated to, discharge the same by bonding proceedings, if permitted by law (and if not so permitted, by deposit in court). Any amount so incurred by Landlord, including all costs and expenses paid by Landlord in connection therewith, together with interest thereon at the rate of 15% per annum (or, if lower, the maximum rate permitted by law) from the respective dates of Landlord's so incurring any such amount, cost or expenses, shall constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

2.6

For purposes of this Lease, the following terms shall be defined as follows:

(a)

"Tenant's Proportionate Share" shall mean the ratio, expressed as a percentage, of the number of rentable square feet comprising the Demised Premises from time to time (approximately 4,366 square feet as of the date of this Lease) (which shall hereafter be adjusted upon any increase or reduction in accordance with this Lease) to the agreed total number of rentable square feet in the Buildings (283,029), that is to say 1.54% as of the Commencement Date, subject to later adjustment in accordance herewith.  If at any time during the Lease Term the rentable square footage of the Demised Premises and/or the Buildings increases or decreases due to an actual physical change in the Demised Premises and/or the Common Areas or upon remeasurement of the Demised Premises and/or the Buildings, Tenant’s Proportionate Share shall be recalculated to equal the actual rentable square footage of the

3

BioLife lease

4/1/2008

Demised Premises divided by the actual total rental square footage of the Buildings and the parties shall execute an amendment to this Lease to memorialize such adjustment.

(b)

"Fiscal Year" shall mean each fiscal year of Landlord or part thereof during the Term, as such fiscal year may be changed at any time and from time to time in the sole discretion of Landlord. The fiscal year of Landlord as of the date hereof is January 1 through December 31.

(c)

"Lease Year" shall mean a period of one (1) year commencing on the Commencement Date and thereafter commencing upon each anniversary thereof.

(d)

"Operating Expenses" shall mean and include all amounts, expenses and costs of whatever nature that Landlord incurs because of or in connection with the operation, insuring, maintenance, equipping, securing, policing, protection, repair, or management (the "Operating Expenses"), Operating Expenses shall be determined on an accrual basis in accordance with sound management accounting principles consistently applied and shall include, but shall not be limited to, the following:

(1)

Costs and expenses of maintenance, equipping, securing, policing, garbage disposal, and repair of the Property, including Common Areas.

(2)

Costs of maintenance and replacement of landscaping.

(3)

Costs of providing utilities and services to the Common Area.

(4)

Premiums for property (including coverage for earthquake, flood and terrorism if carried by Landlord), liability, worker's compensation, plate glass, rental income and other insurance and commercially reasonable deductible amounts under such insurance paid in connection with repair or restoration of the Property after any damage or destruction.

(5)

Fees and charges for licenses, permits and inspections reasonably necessary for the operation of the Property.

(6)

Costs of capital improvements required to meet changed governmental regulations or which are, reasonably and in good faith, intended to reduce Operating Expenses, such costs, together with interest on the unamortized balance at the rate paid by Landlord on funds borrowed for the purpose of constructing such capital improvements (or, if Landlord funds such costs itself in lieu of borrowing such amount, deemed interest equivalent to the interest at a commercially reasonable rate that would have been incurred had such amount been borrowed by Landlord), to be amortized over such reasonable periods as Landlord shall determine, consistent with generally accepted accounting principles.

(7)

Costs associated with the construction, repair or maintenance of any on-site Property management offices or related facilities.

(8)

Reasonable and customary property management fees, not to exceed 5% of gross revenue.

4

BioLife lease

4/1/2008

(9)

Costs for accounting, legal and other professional services incurred in connection with the management and operation of the Property and the calculation of Operating Expenses and Taxes (as defined below), provided that Tenant shall not be responsible for paying for any professional costs in leasing space to tenants or evicting tenants from their current space.

(10)

The reasonable cost of contesting the validity or applicability of any governmental enactments that may affect the Property.

(11)

Wages, salaries, fees, related taxes, insurance costs, benefits (including amounts payable under medical, pension and welfare plans and any amounts payable under collective bargaining agreements) and reimbursement of expenses of and relating to all personnel principally engaged in operating, repairing, managing, replacing and maintaining the Property.

(12)

All supplies, tools, equipment and materials used in operating, equipping, repairing and maintaining the Property.

(13)

Cost of security and security personnel, devices and systems (including, without limitation, any security office on the Property).

Notwithstanding any contrary provision of this Lease, Operating Expenses shall not include:  (i) capital improvements other than those specifically enumerated above in clause (6) of the definition of Operating Expenses; (ii) costs of special or additional services rendered to individual tenants (including Tenant) for which a special charge is made; (iii) interest and principal payments on loans or indebtedness secured by the Property or ground rent payments (if any); (iv) costs of improvements for other tenants of the Property; (v) costs of services or other benefits of a type which are not available to Tenant but which are available to other tenants or occupants, and costs for which Landlord is reimbursed by other tenants of the Property other than through payment of tenants' shares of Operating Expenses and Taxes, (vi) leasing commissions, attorneys' fees and other expenses incurred in connection with negotiations of disputes with other te nants, prospective tenants or occupants of the Property, or in connection with the enforcement or violation by Landlord or such tenant or occupant of any lease; (vii) depreciation or amortization, other than as specifically enumerated above in the definition of Operating Expenses, (viii) costs, fines or penalties incurred due to Landlord's violation of any law or governmental regulation, (ix) the excess of the cost of supplies and services provided by subsidiaries and affiliates of Landlord, or Landlord itself, over competitive costs by independent suppliers and contractors of comparable buildings in the vicinity of the Property; (x) Taxes.

If Landlord does not furnish during any Fiscal Year any particular work or service (the cost of which, if performed by Landlord, would constitute an Operating Expense) to a tenant which has undertaken to perform such work or service in lieu of the performance thereof by Landlord, then Operating Expenses shall be deemed to be increased by an amount equal to the additional expense which would reasonably have been incurred during such Fiscal Year by Landlord if it had, at its cost, furnished such work or service to such tenant; provided, however, Landlord shall not be entitled to be reimbursed for an amount in excess of the actual Operating, Expenses. If during any Fiscal Year less than 95% of the leasable square feet of the Property is leased and occupied by tenants, then the Operating Expenses for such Lease Year shall be

5

BioLife lease

4/1/2008

increased proportionately to reflect the amount of the Operating Expenses which, in Landlord's reasonable judgment, would have been incurred during such Lease Year if 95% of the leasable square feet of the Property was leased and occupied by tenants.

(e)

"Taxes" shall mean and include all real property taxes and general, special or district assessments or other governmental impositions, of whatever kind, nature or origin, imposed on or by reason of the ownership or use of the Property; governmental charges, fees or assessments for transit (including without limitation, area wide traffic improvement assessments and transportation system management fees), housing, police, fire or other governmental service or purported benefits to the Property; personal property taxes assessed on the personal property of Landlord used in or related to the operation of the Property service payments in lieu of taxes and taxes and assessments of every kind and nature whatsoever levied or assessed in addition to, in lieu of or in substitution for existing or additional real or personal property taxes on the Property or the personal property described above, taxes and assessments on the gros s or net rental receipts of Landlord derived from the Property (excluding, however, state and federal personal or corporate income taxes measured by the net income of Landlord from all sources and inheritance, franchise or estate taxes), and the reasonable cost of contesting by appropriate proceedings the amount or validity of any taxes, assessments or charges described above. Taxes shall also include any personal property taxes imposed upon the furniture, fixtures, machinery, equipment, apparatus, systems and appurtenances of Landlord used in connection with the Property for the operation thereof.  Taxes shall also include the amount of all fees, costs and expenses (including, without limitation, attorneys' fees and court costs), if any, paid or incurred by Landlord each Fiscal Year in seeking or obtaining any refund or reduction of Taxes or for contesting or protesting any imposition of taxes, whether or not successful and whether or not attributable to Taxes assessed, paid or incurred in such Fiscal Year.

2.7

(a)

In addition to the Basic Annual Rent, Tenant shall pay, with respect to each Fiscal Year, Tenant's Proportionate Share of all Operating Expenses and Taxes. Tenant's Proportionate Share of Operating Expenses shall be paid in monthly installments in advance on the first day of each calendar month during such Fiscal Year in the Term in amounts sufficient to satisfy payment of the Operating Expenses for such Fiscal Year as reasonably estimated by Landlord from time to time prior to, or during, any Fiscal Year and communicated to Tenant by written notice (the "Estimated Operating Expense Adjustment"). If Landlord does not deliver such a notice (an "Estimate") prior to the commencement of any Fiscal Year, Tenant shall continue to pay Estimated Operating Expense Adjustment as provided in the most recently received Estimate (or Updated Estimate, as defined below) until the Estimate for such Fiscal Year is del ivered to Tenant. If, from time to time during any Fiscal Year, Landlord reasonably determines that Operating Expenses for such Fiscal Year have increased or will increase, Landlord may deliver to Tenant an updated Estimate ("Updated Estimate") for such Fiscal Year, Monthly payments of Estimated Operating Expense Adjustment paid subsequent to Tenant's receipt of the Estimate or Updated Estimate for any Fiscal Year shall be in the amounts provided in such Estimate or Updated Estimate, as the case may be. In addition, Tenant shall pay to Landlord within thirty (30) days after receipt of such Estimate or Updated Estimate, the amount, if any, by which the aggregate of the Estimated Operating Expense Adjustment provided in such Estimate or Updated Estimate, as the case may be, with respect to prior months in such Fiscal Year exceeds the aggregate of the Estimated Operating Expense Adjustment paid by Tenant with respect to such prior months.

6

BioLife lease

4/1/2008

After the end of each Fiscal Year, Landlord shall send to Tenant a statement (the "Final Operating Expense Adjustment Statement") showing (i) the calculation of the Operating Expense Adjustment for such Fiscal Year, (ii) the aggregate amount of the Estimated Operating Expense Adjustment previously paid by Tenant for such Fiscal Year, and (iii) the amount, if any, by which the aggregate amount of the installments of Estimated Operating Expense Adjustment paid by Tenant with respect to such Fiscal Year exceeds or is less than the Expense Adjustment for such Fiscal Year. Tenant shall pay the amount of any deficiency to Landlord within thirty (30) days of the sending of such statement. At Landlord's option, any excess shall either be credited against payments past or next due hereunder or refunded by Landlord, provided Tenant is not then in default hereunder.  At the end of the term, any amou nts will be paid directly back to Tenant.

On reasonable advance written notice given by Tenant within thirty (30) days following the receipt by Tenant of the Final Operating Expense Adjustment Statement, Landlord shall make available to Tenant Landlord's books and records maintained with respect to the Operating Expenses for such Fiscal Year. If Tenant wishes to contest any item within any Final Operating Expense Adjustment Statement, Tenant shall do so in a written notice (a "Contest Notice") received by Landlord within thirty (30) days following Tenant's inspection of Landlord's books and records, but in any event not later than sixty (60) days after Landlord shall have made its books and records available to Tenant for inspection.  The Contest Notice shall specify in detail the item or items being contested and the specific grounds therefore. However, the giving of such Contest Notice shall not relieve Tenant from the obligation to pay any deficiency i n such statement or the Landlord from the obligation to pay (by refund or credit) any excess in such statement in accordance with this Section. Notwithstanding anything else in this Section to the contrary, if Tenant fails to give such Contest Notice within said thirty (30) day period or fails to pay any deficiency in such statement in accordance with this Section, whether or not contested, Tenant shall have no further right to contest any item or items in such statement and Tenant shall be deemed to accept such statement.

For thirty (30) days after receipt of Tenant's Contest Notice, Landlord and Tenant shall attempt to resolve such dispute.  If such dispute shall not be resolved within such thirty (30) day period (the resolution to be evidenced by a writing signed by Landlord and Tenant), the dispute shall be resolved by arbitration as follows: The party desiring arbitration (the "First Party") shall give notice to that effect to the other party, and shall in such notice appoint a person as arbitrator on its behalf. Within fifteen (15) days after its receipt of such notice, the other party by notice to the First Party shall appoint an arbitrator on its behalf, if the second arbitrator shall not be so appointed within such fifteen (15) days, the First Party may give a second notice to the other party demanding that the other party appoint an arbitrator within ten (10) days of its receipt of such second notice and if the other party shall not do so within such ten (10) day period, then the arbitrator appointed by the First Party shall appoint the second arbitrator. The two arbitrators appointed pursuant to the above shall try to appoint the third arbitrator. If, within twenty (20) days after the appointment of the second arbitrator, they shall not have agreed upon the appointment of the third arbitrator, either of the parties upon notice to the other party may request such appointment by the Office of the American Arbitration Association (the "AAA") closest to the Property, or in its absence, refusal, failure or inability to act, may apply to the presiding judge of the court of the State of Washington with Jurisdiction over the matters covered by this Lease (the "Court") for the appointment of such third arbitrator and the other party shall not raise any question as to the Court's power and jurisdiction to entertain the application and make the appointment. Each arbitrator shall be a qualified person w ho shall have

7

BioLife lease

4/1/2008

at least ten (10) years experience in a calling connected with the matter of the dispute. The arbitration shall be conducted in accordance with the then prevailing, rules of the AAA, under the auspices of the office of the AAA closest to the Property, The arbitrators shall render their decision and award in writing upon concurrence of at least two (2) of their members, within thirty (30) days after the appointment of the third arbitrator. Such decision and award shall be binding and conclusive on the parties, shall constitute an "award" of the arbitrators within the meaning of the AAA rules and applicable law, and counterpart copies thereof shall be delivered to each of the parties. In rendering such decision and award, the arbitrators shall not add to, subtract from, or otherwise modify the provisions of this Lease and shall apply applicable federal and/or state law. Judgment may be had under the decision and award o f the arbitrators so rendered in any court of competent jurisdiction'.  Each party shall pay the fees and expenses of the arbitrator appointed by or for it. The fees and expenses of the third arbitrator, and all other expenses of the arbitration (other than the fees and disbursements of attorneys or witnesses for each party), shall be borne by the parties equally.

(b)

Tenant's Proportionate Share of Taxes with respect to each Fiscal Year shall be paid in monthly installments in advance on the first day of each calendar month during such Fiscal Year in the Term in amounts sufficient to satisfy payment of Tenant's Proportionate Share of Taxes For such Fiscal Year as reasonably estimated by Landlord from time to time prior to or during any Fiscal Year and communicated to Tenant by written notice (the "Estimated Tax Payment," and the actual, final amount due from Tenant on account of Taxes, the "Tax Payment")). If Landlord does not deliver such a notice (an "Estimate") prior to the commencement of any Fiscal Year, Tenant shall continue to pay Estimated Tax Payment as provided in the most recently received Estimate (or Updated Estimate, as defined below) until the Estimate for such Fiscal Year is delivered to Tenant. If, from time to time during any Fis cal Year, Landlord reasonably determines that Taxes for such Fiscal Year have increased or will increase, Landlord may deliver to Tenant an updated Estimate ("Updated Estimate") for such Fiscal Year. Monthly payments of Estimated Tax Payment paid subsequent to Tenant's receipt of the Estimate or Updated Estimate for any Fiscal Year shall be in the amounts provided in such Estimate or Updated Estimate, as the case may be. In addition, Tenant shall pay to Landlord within thirty (30) days after receipt of such Estimate or Updated Estimate, the amount, if any, by which the aggregate of the Estimated Tax Payment provided in such Estimate or Updated Estimate, as the case may be, with respect to prior months in such Fiscal Year exceeds the aggregate of the Estimated Tax Payment paid by Tenant with respect to such prior months.

(c)

Within sixty (60) days after a final real estate tax bill with respect to the Property is received by Landlord or any other determination of Taxes with respect to a Fiscal Year occurs (whether due to the receipt of a bill, the filing of a return, the settlement or adjudication of disputed Taxes, or otherwise), or as soon thereafter as practicable, Landlord shall send to Tenant a statement (the "Tax Adjustment Statement") showing (i) the calculation (or recalculation) of the Tax Payment for such Fiscal Year, (ii) the aggregate amount of the Estimated Tax Payment previously paid by Tenant for such Fiscal Year, and (iii) the amount, if any, by which the aggregate amount of the installments of Estimated Tax Payment paid by Tenant with respect to such Fiscal Year exceeds or is less than the Tax Payment for such Fiscal Year. Tenant shall pay the amount of any deficiency to Landlord within thirty (30) days after the sending of such statement. At Landlord's option, any excess shall either be credited against payments past or next due hereunder or refunded by Landlord, provided Tenant is not then in default hereunder.

8

BioLife lease

4/1/2008

2.8

Tenant shall (i) pay (at the rates charged by the utility providers to Landlord) 100% of all charges for electric current (including, without limitation, for lighting the Demised Premises and supplying HVAC to the Demised Premises), water, gas (if any), telephone, and other utilities consumed relative to the Demised Premises, and (ii) be responsible (at Tenant's expense) of providing, installing, repairing, maintaining and operating all conduits, risers, cables, pipes and other electrical, mechanical and other facilities and installations which are required in connection with the consumption of such utilities at the Demised Premises.   Tenant shall not have any extra charges for HVAC or any utilities used at on the weekends.  Tenant shall be charged twenty dollars ($20) per hour for HVAC used between 6:00 pm and 4:00 am Sunday through Saturday.  Upon the completion of one (1) year of the term, Tenant shall have the right to request that Landlord and Tenant revisit use of extra hours HVAC and the charge for such.  Tenant shall have control over the temperature and other utilities serving the Demised Premises.  Also, Landlord and Tenant shall share any additional utility costs that arise out of the air conditioning and other utilities needs of the Tenant’s computer room.  

2.9

Landlord shall provide the following services for the Property: (i) city water from regular building outlets for drinking, lavatory and toilet purposes, (ii) janitorial and maintenance service for the Property (it being understood that should Landlord so elect then Tenant at its expense shall provide janitorial service to the Demised Premises using contractors reasonably acceptable to Landlord which shall provide insurance coverage reasonably acceptable to Landlord), (iii) all utilities for the Common Area, and (iv) periodic inspections of the drain valves, hydrants and fire pumps on the Property.  The cost of the services to be provided by Landlord described in this Section 2.9 shall constitute Operating Expenses.

2.10

If Tenant shall fail to pay, within twenty (20) days of the date when the same is due and payable, any rent or other charge pursuant to this Lease (including, without limitation, basic annual rent, or additional rent), Tenant shall upon demand pay Landlord a late charge of five (5%) percent of the amount past due, or, if such late charge shall exceed the maximum late charge permitted by law, the Tenant shall pay the maximum late charge permitted by law.  Additionally, such amounts not paid shall accrue interest at the rate of one and one-half percent (1.5%) (or the highest rate allowable by law if lower) per month until paid.  Such interest shall be cumulative.

3.

USE OF PREMISES: COMPLIANCE WITH LAWS

3.1

Subject to Section 3.2, the Demised Premises may be used only for general office and cleanroom, subject to and in accordance with all Legal Requirements (hereafter defined) and for no other purpose. Landlord shall not be deemed to have made any representation, warranty or agreement that any such use by Tenant or all or any of the Property shall be or remain lawful or otherwise permitted under any Legal Requirements.

3.2

Tenant shall not use or occupy or permit anything to be done in or on the Demised Premises or the Property, in whole or in part, in a manner which would in any way violate any certificate of occupancy affecting the Demised Premises or the Property, make void or voidable any insurance then in force with respect thereto, or which may make it more costly or impossible to obtain fire or other insurance thereon, cause or be apt to cause structural or other material injury to the Buildings or any part thereof, constitute a public or private nuisance, or which may violate any present or future, ordinary or extraordinary, foreseen or unforeseen Legal

9

BioLife lease

4/1/2008

Requirements or Insurance Requirements, (hereinafter defined). In addition, Tenant shall not allow any animals to be kept on the Premises or use or allow the Demised Premises to be used for residential or dwelling purposes.

3.3

Tenant shall, at its expense, promptly comply or cause compliance with, and not jeopardize or make more costly Landlord's compliance with (but it being agreed that except as may otherwise be expressly set forth to the contrary in this Lease, compliance with the following shall be the obligation of Tenant at Tenant's expense):

3.3.1

the requirements of every statute, law, ordinance, regulation, rule, requirement, order or directive, including but not limited to the Americans with Disabilities Act of 1990, now or hereafter made by any federal, state, city or county government or any department, political subdivision, bureau, agency, office or officer thereof, or of any other governmental authority having jurisdiction with respect to and applicable to (i) the Demised Premises, (ii) the condition, equipment, maintenance, use or occupation of the Demised Premises, including, without limitation, such of the foregoing applicable to the making of any alteration or addition in or to any structure appurtenant thereto and to pollution and environmental control, and (iii) subtenants of Tenant (all of the foregoing being herein referred to as "Legal Requirements"), and

3.3.2

the rules, regulations, orders and other requirements of the National and any local Board of Fire Underwriters, or other body having the same or similar functions and having jurisdiction of and which are applicable to, the Demised Premises and of any liability, fire or other insurance policy which Tenant or Landlord is required hereunder to maintain (herein referred to as "Insurance Requirements"), whether or not such compliance involves changes in the use of the Demised Premises or any part thereof, or be required on account of any particular use to which the Demised Premises, or any part thereof may be put, and whether or not any such Legal Requirements or Insurance Requirements be of a kind not now within the contemplation of the parties hereto.

4.

REPRESENTATIONS BY TENANT AND LANDLORD

4.1

Except for the improvements listed in Exhibit D, Tenant covenants and agrees that it will accept the Demised Premises in its existing "as is" state or condition as of the Commencement Date and without any representation or warranty, express or implied, in fact or by law, by Landlord or its agents and without recourse to Landlord or its agents, as to the nature, condition, or usability thereof, or the use or occupancy which may be made thereof, except as may be otherwise specifically provided in this Lease.

4.2

Tenant agrees that it will not establish any new air vents within twenty (20) feet of any other tenant’s air intakes on the roof without prior notice to, and approval of Landlord.

4.3

Nothing, in this Lease shall limit or restrict the right of the Landlord, from time to time, and in the Landlord's sole discretion, to execute, enter into, amend, modify, terminate and/or cancel any leases or occupancy agreements respecting the Property (or any parts thereof), other than this Lease, nor shall any such acts or actions by Landlord give rise to any right or remedy in favor of Tenant.

10

BioLife lease

4/1/2008

5.

INSURANCE

5.1

During the Term, Tenant, at Tenant's sole cost and expense, shall carry and maintain:

5.1.1

Commercial general public liability insurance, including property damage liability coverage, protecting and indemnifying Tenant, Landlord (and naming Landlord, its managing agent and the holder of any mortgage encumbering the Property as additional insured thereon) and any designee of Landlord against any and all claims for damages to person or property, or for loss of life or of property occurring in or about the Demised Premises or arising out of the ownership, maintenance, use or occupancy thereof or from any of the matters indicated in Section 12 or elsewhere in this Lease against which Tenant is required to indemnify Landlord. The coverage limits of the policy shall be those amounts reasonably requested by Landlord but at least $1,000,000 per occurrence and $2,000,000 in the aggregate for any policy year.

5.1.2

All policies of insurance carried by Tenant pursuant to this Lease shall name as insureds Landlord, and if required, any fee mortgagee or other designee of Landlord, as their respective interests may appear; provided, however, that rent insurance, if any, shall be carried solely in favor of Landlord. To the extent Landlord receives and applies proceeds of rent insurance, if any, Tenant shall receive a credit against fixed rental payable hereunder. Subject to the rights of any fee mortgagee, all losses made under the policy or policies shall be adjusted by Landlord and the proceeds thereof shall be payable to the Landlord. The originals or duplicate originals of such policies or certificates shall be delivered to Landlord except when such originals or duplicate originals are required to be held by any fee mortgagee, in which case certificates of insurance shall be delivered to Landlord. Policies or certificates with respect to renewal policies shall be delivered to Landlord by Tenant (i) initially not later than the Commencement Date and (ii) thereafter not less than 30 days prior to the expiration of the original policies, or succeeding renewals, as the case may be, in each case together with receipts or other evidence that the premiums thereon have been paid for at least six months. In the event the Tenant is not able to deliver the insurance policies or certificates prior to the renewal date as aforesaid, the Tenant may deliver binders in lieu of such policies or certificates to the Landlord; provided, however, that the insurance policies or certificates shall be delivered within sixty (60) days after the expiration of the original policies or succeeding renewals but in no event later than fifteen (15) days prior to the expiration date of the binder. Premiums on policies shall not be financed in any manner whereby the lender, on default or otherwise, shall have the right or privilege of surrendering or canceling the policies, provided, however, that Tenant may pay premiums in quarter or semi-annual installments so long as such method of payment does not constitute a default under any fee Mortgage. Each policy of insurance required under this program shall have attached thereto an endorsement that such policy shall not be canceled or modified without at least thirty (30) days prior written notice to the Landlord, and, if required, to any fee mortgagee. Each such policy shall contain a provision that no act or omission of Tenant shall affect or limit the obligation of the insurance company to pay the amount of any loss sustained and a provision waiving any right of the insured against the Landlord. All insurance required to be carried by Tenant under this Lease shall be effected under valid and enforceable policies issued by insurers which are licensed to do business in the State of Washington and have

11

BioLife lease

4/1/2008

been approved in writing by Landlord (which approval Landlord agrees not to unreasonably withhold).

5.1.3

Fire and extended coverage insurance covering Tenant's personal property, improvements and alterations, against loss or damage by fire and other risks now or hereafter embraced by "all risk" coverage, with vandalism and malicious mischief endorsements, to the extent of at least 90% of then full replacement values. The proceeds from any such policy shall be used by Tenant for the replacement of personal property or the restoration of Tenant's improvements or alterations.

5.1.4

Worker's compensation insurance as required by Legal Requirements.

5.2

Landlord and Tenant hereby release each other and each other's officers, directors, shareholders, principals, employees and agents, from liability or responsibility for any loss or damage to property covered by valid and collectible fire insurance with standard extended coverage endorsement, whether such insurance is carried by Tenant or any other tenant or occupant of the Property, or any part thereof.  This release shall apply not only to liability and responsibility of the parties to each other, but shall also extend to liability and responsibility for anyone claiming through or under the parties by way of subrogation or otherwise. This release shall apply even if the fire or other casualty shall have been caused by the fault or negligence of a party or anyone for whom a party may be responsible. However, this release shall apply only with respect to loss or damage actually recovered from an insurance company. This release sha ll not apply to loss or damage of property of a party unless the loss or damage or personal injury occurs during the times the fire or extended coverage insurance policies of a party contain a clause or endorsement to the effect that any release shall not adversely affect or impair the policies or prejudice the right of the party to recover thereunder. Landlord and Tenant each agree that any fire and extended coverage insurance policies covering the Property or contents shall include this clause or endorsement as long as the same shall be obtainable without extra cost, or if extra cost shall be charged therefor, so long as the other party pays the extra cost. If extra cost shall be chargeable, the party whose policy is subject to the extra cost shall advise the other thereof, and of the amount of the extra cost. Tenant shall also obtain the agreement of its worker's compensation insurance carrier to waive all right of subrogation against Landlord.

5.3

No policy furnished by Tenant pursuant to Section 5.1 shall have a deductible or self-insured retainage amount in excess of $25,000, except that public liability insurance may have a deductible of up to $50,000, fire and extended coverage may have a deductible of up to $50,000, and earthquake coverage may have a deductible of up to the greater of $100,000 or 5% of the loss.  Tenant will indemnify, defend and hold harmless Landlord for any difference between a $10,000 deductible and a $25,000 deductible.

6.

DAMAGE OR DESTRUCTION

6.1

Tenant shall immediately give notice to Landlord of every case of fire, explosion, destruction or damage by the elements or other casualty.

6.2

If at any time during the Term, the Demised Premises shall be damaged in whole or in material part, or wholly or partially destroyed, by fire or other casualty (including

12

BioLife lease

4/1/2008

any casualty for which insurance coverage was not obtained) of any kind or nature, regardless of whether said damage or destruction resulted from an act of God, the fault of the Tenant, the Landlord, or from any cause whatsoever, then, in that event neither party shall be required to replace, repair or rebuild the damaged or destroyed improvements (except that Tenant shall be required to turn over to Landlord the insurance proceeds payable in connection with such damage or destruction); provided, however, that if the damage or destruction results from the sole or partial fault of Tenant and is not fully covered by insurance or the insurance proceeds received by the Landlord are insufficient therefore, the Tenant shall be required to replace, repair or rebuild the damaged or destroyed improvements to substantially their condition prior to the casualty event.

6.3

Upon thirty (30) days written notice of the casualty event, the Landlord shall have the option, to (i) replace, repair and rebuild any and all damaged or destroyed improvements, or (ii) to terminate this Lease as of a specified date, in which latter event all rent shall be apportioned as of the date of such damage or destruction, and this Lease shall terminate as of the specified date, but all insurance proceeds shall be paid to Landlord as aforesaid, and Tenant shall remain obligated under Section 6.2 in the event the insurance proceeds are insufficient to fully replace, repair or rebuild. In the event Landlord proceeds to replace, repair and rebuild, this Lease shall not terminate, Landlord shall cause the Demised Premises and the Common Areas to be repaired or restored to the extent insurance proceeds are available to the Landlord as speedily as its good faith efforts will allow, and there shall be a proportional abatement of the b asic and additional rent reserved under this Lease during such period as the Demised Premises remain untenantable based on the extent to which the Demised Premises are untenantable. Tenant shall also have the option to terminate this Lease effective as of the date of the damage or destruction, in the event:  (a) a portion of the Demised Premises which is material to Tenant's operations have been damaged or destroyed and are untenantable, and Landlord shall not provide to Tenant within 120 days after the date of damage or destruction substitute space of reasonably equivalent size and functionality (either on a temporary or permanent basis), and (b) (x) the damaged or destroyed portion of the Demised Premises cannot reasonably be repaired within 120 days of such date as set forth in an opinion to that effect of an architect or engineer retained by Tenant (at its expense) and reasonably acceptable to Landlord, (y) Landlord shall not give written notice of Landlord's election under clause (i) above within t he specified thirty (30) day period, or (z) Landlord, after having elected to repair, shall not restore the Demised Premises substantially to its condition prior to the event causing the damage or destruction. Tenant's options to terminate shall be exercised by written notice to Landlord within 45 days of the casualty event, with respect to clauses (x) and (y) and within 135 days after the date of such damage or destruction with respect to clause (z).

6.4

Tenant agrees that the foregoing provisions are in lieu of any other rights or remedies that Tenant may have against Landlord pursuant to the laws of the State of Washington in the event of any damage or destruction to all or any part of the Demised Premises or any other portion of the Property.

7.

CONDEMNATION

7.1

If the whole of the Demised Premises shall be taken under the power of eminent domain by any public or private authority or in the event of sale to such authority in lieu of formal proceedings of eminent domain, then this Lease shall cease and terminate as of the date

13

BioLife lease

4/1/2008

of such taking or sale, which date is defined, for all purposes of this Section 7, as the date the public or private authority has the right to possession of the property being taken or sold.

7.2

In the event of any taking or sale of all or any part of the Demised Premises, the entire proceeds of the award or sale shall be paid to Landlord, and Tenant shall have no right to any part thereof, provided, however, that nothing contained herein shall be construed to prevent Tenant from recovering any allowance for its personal property or for moving expenses which the law permits to be made to tenants, so long as such allowance does not diminish the award paid to Landlord.

7.3

If any public or private authority shall, under the power of eminent domain, make a taking, or should a sale in lieu thereof occur of less than the whole of the Demised Premises, then Landlord may, at its election, terminate this Lease by giving Tenant written notice of the exercise of its election within twenty (20) days after the nature and extent of the taking or sale have been finally determined. In the event of termination by Landlord under the provisions of this Section 7.3, this Lease shall cease and terminate as of the date of such taking or sale. If Landlord does not so terminate this Lease, subject to Section 7.5, this Lease shall continue in full force and effect.

7.4

In the event of a partial taking or sale not resulting in a termination of this Lease pursuant to Section 7.3, Landlord shall, if Landlord's fee mortgagee consents thereto, effectuate all such repairs and restoration as are necessary to restore the Demised Premises for the operation of Tenant's business, to the extent net proceeds of the award or sale are available, but nothing contained herein shall be construed so as to require Landlord to pay any cost of repair in excess of the net proceeds of the award or sale price received from the condemning authority and allocable to the Demised Premises. In such case, as of the date of the taking, the basic and additional rent reserved hereunder shall be reduced, but only until such time as Landlord completes its repair or restoration in accordance herewith, by an amount that is in the same ratio to the rental then in effect as the value of the portion of the Demised Premises taken or sold bears to the total value of the Demised Premises immediately before the date of taking or sale. If the net proceeds of the award or sale are not sufficient to repair or restore the Demised Premises, Tenant may, at its own expense, complete such repairs or restoration, in accordance with the terms of this Lease.

7.5

Tenant shall have the option, to be exercised by written notice to Landlord within fifteen (15) days after such taking or sale, to terminate this Lease in the event (i) more than 10% of the square footage of the Demised Premises is taken in condemnation, or (ii) the Lease continues notwithstanding a partial condemnation of more than 10% of the square footage of the Demised Premises and within 120 days after the condemnation, Landlord does not restore the Demised Premises substantially to their condition prior to the condemnation.

7.6

The taking of the Demised Premises or any part thereof by military or other public authority shall constitute a taking of the Demised Premises under the power of eminent domain only when the use and occupancy by the taking authority has continued for longer than 90 consecutive days. During the 90-day period all the provisions of this Lease shall remain in full force and effect, except that rental reserved (but not the additional rent) shall be abated during such period of taking based on the extent to which the taking interferes with

14

BioLife lease

4/1/2008

Tenant's use of the Demised Premises. Landlord shall be entitled to whatever award may be paid for the use and occupation of the Demised Premises for the period involved.

8.

SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATE

8.1

This Lease is and shall be subject and subordinate in all respects to all bona fide mortgages which may now or hereafter affect the Property, to each and every advance made or hereafter to be made under such mortgages, and to all renewals, modifications, consolidations, replacements, and extensions of such mortgages irrespective of the date of the execution and/or recording thereof (provided, however, that Landlord shall use its good faith efforts to obtain from such mortgagee a non-disturbance agreement as described in the last sentence of this Section 8.1). This Section 8.1 shall be self-operative and no further instrument of subordination shall be required. In confirmation of such subordination, Tenant agrees, without payment to Tenant of any consideration therefore, to execute and deliver any instrument that Landlord or the holder of any such mortgage or any of their respective successors in interest may request to e vidence such subordination within twenty (20) days of request.  Tenant may state in the subordination document any objections or issues outstanding it has relative to the Lease or the Landlord’s performance thereunder.  Tenant hereby irrevocably appoints Landlord its attorney in fact to execute such instrument on behalf of Tenant, should Tenant refuse or fail to do so promptly after request. The mortgages to which this Lease is, at the time referred to, subject and subordinate shall sometimes be collectively called "superior mortgage." Landlord shall, upon the request of Tenant, use its good faith efforts to obtain a non-disturbance agreement from the holder of any superior mortgage, to the effect that in the event of the foreclosure of the superior mortgage Tenant's possession of the Demised Premises shall not be disturbed provided that Tenant shall not be in default under this Lease, provided, however, (1) Landlord (i) shall not be required to incur any material costs or liabilitie s in connection therewith, and (ii) shall not have any liability to Tenant if Landlord shall fail to procure such agreement, and (2) this Lease and the obligations of Tenant shall not be affected should Landlord fail to procure such agreement despite such good faith efforts.

8.2

In the event of any act or omission of Landlord which would give Tenant the right, immediately or after lapse of a period of time, to cancel or terminate this Lease, or to claim a partial or total eviction, Tenant shall not exercise such right: (i) until it has given written notice of such act or omission to the holder of each superior mortgage whose name and address shall previously have been furnished to Tenant in writing, and (ii) unless such act or omission shall be one which is not capable of being remedied by Landlord or such mortgage holder within thirty (30) days, until a thirty (30) day period for remedying such act or omission shall have elapsed following the giving of such notice, provided such holder shall with due diligence give Tenant written notice of intention to, and commence and continue to, remedy such act or omission.

8.3

If the holder of a superior mortgage shall succeed to the rights of Landlord, then at the request of such party so succeeding to Landlord's rights (“Successor Landlord”) and upon such Successor Landlord's written agreement to accept Tenant's attornment, Tenant shall attorn to and recognize Successor Landlord as Tenant's landlord under this Lease and shall promptly, without payment to Tenant of any consideration therefor, execute and deliver any instrument that such Successor Landlord may request to evidence such attornment. Tenant hereby irrevocably appoints Landlord or Successor Landlord the attorney-in-fact of Tenant to

15

BioLife lease

4/1/2008

execute and deliver such instrument on behalf of Tenant, should Tenant refuse or fail to do so promptly after request. Upon such attornment, this Lease shall continue in full force and effect as, or as if it were, a direct lease between Successor Landlord and Tenant upon all of the terms, conditions, and covenants as are set forth in this Lease and shall be applicable after such attornment, except that Successor Landlord shall not: (i) be obligated to repair, restore, replace, or rebuild the Property, in case of total or substantially total damage or destruction, beyond such repair, restoration or rebuilding as can reasonably be accomplished with the net proceeds of insurance actually received by, or made available to, Successor Landlord; (ii) be liable for any previous act or omission of Landlord; (iii) be subject to any prior defenses or offsets; (iv) be bound by any modification of this Lease not expressly provided for in th is Lease or by any previous prepayment of more than one month's rent, unless such modification or prepayment shall have been expressly approved in writing by the holder of the superior mortgage through or by reason of which Successor Landlord shall have succeeded to the rights of Landlord; or (v) be liable for the performance of Landlord's covenants and agreements contained in this Lease to any extent other than to Successor Landlord's ownership in the Property, and no other property of Successor Landlord shall be subject to levy, attachment, execution or other enforcement procedure for the satisfaction of Tenant's remedies.

8.4

In the event that a bona fide institutional lender shall request reasonable modifications to this Lease, then Tenant shall not unreasonably withhold, condition or delay its written consent to such modifications provided that the same do not, in Tenant's reasonable judgment (and Tenant shall not demand the payment to Tenant of any consideration for consent thereto), increase the obligations of Tenant hereunder or materially adversely affect Tenant’s operations or leasehold interest hereby.

8.5

Tenant agrees, at any time, (and without payment to Tenant of any consideration therefor), upon not less than ten (10) days' prior notice by Landlord, to execute, acknowledge and deliver to Landlord, (i) a current certified income statement and balance sheet of Tenant and (ii) a statement in writing addressed to Landlord (and/or Landlord's designee) certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), stating the dates to which the rent has been paid, stating such other information concerning this Lease and Tenant's tenancy as Landlord reasonably shall request, and stating whether or not there exists any default in the performance by Landlord of any term, covenant or condition contained in this Lease and, if so, specifying each such default, it being intended that any financial reports and such s tatement delivered pursuant to this Section 8.5 may be relied upon by Landlord and by any mortgagee or prospective mortgagee of any mortgage affecting the Property or any purchaser or prospective purchaser of the Property. When so requested by Landlord, such statement shall be submitted in writing under oath by a person or persons having knowledge of the statements made therein.

16

BioLife lease

4/1/2008

9.

REPAIRS, MAINTENANCE, ALTERATIONS, ETC.

9.1.1

Except as otherwise expressly provided in this Lease, Landlord at its cost shall maintain, repair or improve as needed, all portions of the Demised Premises (while Tenant is occupying same as permitted hereunder), and, except as otherwise expressly provided herein, Tenant shall not be required to maintain or make any repairs, replacements, improvements or alterations in or to the Demised Premises.  Notwithstanding the foregoing, in the event that Tenant activates and uses for more than five (5) days the separate air filtration and circulation systems of the clean room located within the Demised Premises, then Tenant shall be obligated to repair and maintain such systems during Tenant’s period of operation thereof; provided, however, that neither Tenant nor Landlord shall be obligated under this Section 9.1.1 to make or pay for any repairs or expenditures to the clean room systems that could properly be capitalized under gene rally accepted accounting principles.

9.1.2

Landlord shall (subject to reimbursement by Tenant of Operating Expenses) be responsible for maintenance, repairs or replacement of the roof, HVAC systems (except any HVAC equipment installed by or exclusively for Tenant), and elevator systems, unless the same is occasioned by the acts or omissions of Tenant, its agents, employees, guests, licensees, invitees, guests, subtenants (if any), subtenants, assignees, successors or independent contractors, in which event Tenant shall be responsible for such repairs, maintenance or replacement.

9.2

Landlord shall not be liable for any failure of water supply, gas or electric current or of any utility or for any injury or damage to person or property caused by or resulting from gasoline, oil, steam, gas, electricity, or hurricane, tornado, flood, wind or similar storms or disturbances, or water, rain or snow which may leak or flow from the street, sewers, gas mains or any sub-surface area or from any part of the Property, or leakage of gasoline or oil from pipes, appliances, sewer or plumbing works therein, or from any other place, or for interference with light or other incorporeal hereditaments by anyone, or caused by operations by or of any public or quasi-public work.

9.3

Tenant shall have the right to make, at its sole cost and expense, additions, alterations and changes (collectively, "Alterations") in or to the Demised Premises, provided Tenant shall not then be in default in the performance of any of the covenants in this Lease, subject to the following conditions:

9.3.1

No Alterations shall be commenced except after fifteen (15) days' prior written notice to Landlord, which shall include reasonably detailed final plans and specifications and working drawings of the proposed Alterations and the name of the contractor.

9.3.2

No Alterations costing in excess of $50,000 (and no Alterations which, when aggregated with all other Alterations, proposed or performed during the Term shall exceed $100,000) and no structural or Building system or exterior Alterations, or Alterations affecting any Common Area, regardless of cost, shall be made without the prior written consent of Landlord, which shall not be unreasonably withheld as to interior, non-structural, non-Building system Alterations.

17

BioLife lease

4/1/2008

9.3.3

No Alterations shall be undertaken until Tenant shall have procured and paid for, so far as the same may be required from time to time, all permits and authorizations of all governmental authorities having jurisdiction, and shall have provided to Landlord evidence substantiating to Landlord's reasonable satisfaction that such permits and authorizations have issued.

9.3.4

All Alterations shall be made promptly (unavoidable delays excepted), in a good and workmanlike manner and in compliance with all applicable permits, authorizations and all Legal Requirements and all Insurance Requirements.

9.3.5

Anything in this Lease to the contrary notwithstanding, no Alterations shall be made by Tenant if they reduce the value or serviceability of the Property, increase the risk of casualty or the cost of insurance or increase the risk of environmental pollution.

9.3.6

Before commencing the Alterations and at all times during construction, Tenant's contractor shall maintain builder's risk insurance coverage satisfactory to Landlord.

9.3.7

If the estimated cost of the Alterations exceeds $100,000, Tenant at its cost shall furnish to Landlord a performance and completion bond issued by an insurance company qualified to do business in Washington and reasonably acceptable to Landlord, in a sum equal to the cost of the Alterations (as determined by the construction contract between Tenant and its contractor) guaranteeing the completion of the Alterations free and clear of all liens and other charges, and in accordance with the plans and specifications.

9.4

All Alterations, whether temporary or permanent in character, which may be made upon the Demised Premises either by Landlord or Tenant, except furniture, trade fixtures or equipment (other than HVAC equipment) installed at the expense of Tenant, shall be the property of Landlord and shall remain upon and be surrendered with the Demised Premises as a part thereof at the expiration or any termination of this Lease, without compensation to Tenant; provided, however, Landlord may elect within thirty (30) days before the expiration of the Term, or within five (5) days after termination of the Term, to require Tenant, at Tenant's cost, to remove any Alterations that Tenant has made to the Demised Premises at any time before or during the Term. If Landlord so elects, Tenant at its cost shall restore the Demised Premises to the condition designated by Landlord in its election, and repair any damage caused by the removal of Alterations, before the last day of the Term, or within thirty (30) days after notice of election is given, whichever is later. This Section shall survive the expiration or termination of this Lease.  Tenant Improvements in Exhibit D will not need to be removed.

9.5

If Tenant is not then in default of any provisions of this Lease, Tenant shall have the right to remove from the Demised Premises immediately before the expiration of the Term, or within twenty (20) days after the sooner termination of the Term, any trade equipment and other equipment (not including any building equipment) and furniture, which has been affixed to the Demised Premises by Tenant, as long as Tenant at its cost promptly restores any damage caused by the removal, provided Tenant shall be responsible and pay for the cost of repairing any damage caused by such removal.

18

BioLife lease

4/1/2008

10.

INTENTIONALLY OMITTED

11.

ASSIGNMENT, SUBLETTING AND MORTGAGING

11.1

Neither Tenant, nor Tenant's successors or assigns, shall (unless expressly permitted to do so) assign, mortgage, pledge or encumber this Lease, in whole or in part, or sublet the Demised Premises, in whole or in part, or permit the same or any portion thereof to be used or occupied by others, without the prior consent in writing and approval of credit by Landlord in each instance which consent shall not be unreasonably withheld, conditioned or delayed.  If this Lease be so assigned or transferred, or if all or any part of the Demised Premises be sublet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, transferee, subtenant or occupant, and apply the net amount collected to the rent reserved herein, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of any agreement, term, covenant or condition of this Lease, or the acceptance of the assignee, transferee, subt enant or occupant as tenant, or a release of Tenant from the performance or further performance by Tenant of the terms, covenants and conditions of this Lease, and Tenant shall continue to be liable under this Lease. The consent by Landlord to an assignment, mortgage, pledge, encumbrance, transfer, management contract or subletting shall not be construed to relieve Tenant from obtaining the express consent in writing of Landlord to any further assignment, mortgage, pledge, encumbrance, transfer, management contract or subletting. Landlord shall have the right to reasonably withhold its consent to an assignment or subletting, mortgage, pledge or other encumbrance. Notwithstanding anything to the contrary herein contained, an assignment of this Lease shall include, without limitation the following: (a) if Tenant shall be a corporation and fifty percent (50%) or more of its voting stock or all or substantially all its assets shall be sold, mortgaged, assigned, pledged, encumbered or otherwise transferred (other than as collateral security for a bona fide loan to a bona fide lender) (and whether in one (1) single transaction or in more than one (1) successive transaction); or (b) if Tenant shall be a partnership, limited liability company, joint venture, syndicate or other group and all or any portion of the interest of any partner, member or other equity holder shall be sold or otherwise transferred (however this provision shall not, as to a corporation or other entity whose stock or other equity interests are publicly traded on a recognized stock exchange, be applicable to sales of stock or other equity interests on such stock exchange).  Notwithstanding the forgoing, Tenant may sublease or assign all or a portion of the Premises to an affiliate, parent, subsidiary or operating division of Tenant, or to any entity acquiring all or substantially all of the Tenant’s assets or stock without Landlord’s approval.  Tenant shall give Landlord notice of said sublease or assignment.

11.2

Any approved subtenant will be required to have the same financial capacity of that of the Tenant or otherwise be satisfactory to Landlord.

11.3

If Tenant shall desire to assign this Lease or sublet all or a portion of the Premises, Tenant shall submit to Landlord a written request for Landlord's consent to such assignment or subletting, which request shall include the following information:  (a) the name and address of the proposed assignee or subtenant; (b) in the case of a proposed subletting, a description identifying the space to be sublet and the term of such subletting; (c) the nature and character of the business of the proposed assignee or subtenant; (d) in the case of a proposed assignment, a current financial statement of the proposed subtenant or assignee; and (e) the proposed assignment or sublease.  

19

BioLife lease

4/1/2008

11.4

Tenant, within twenty (20) days of its receipt of Landlord's request therefor, shall reimburse Landlord for all reasonable out-of-pocket costs incurred by Landlord in considering whether or not to consent, including reasonable attorney's fees and disbursements and the reasonable costs of making investigations regarding the proposed subtenant or assignee.  In the event Landlord grants its consent, but before the subtenant or assignee shall take possession, Tenant shall deliver to Landlord a fully-executed counterpart of the sublease or instrument of assignment.

11.5

If Tenant shall sublease any portion of the Premises or assign this Lease, Tenant shall pay to Landlord fifty percent (50%) of any consideration received by Tenant (net of reasonable costs incurred by Tenant to effect any such assignment or sublet, such as advertising, brokerage, legal and construction expenses) from the subtenant or assignee, as the case may be, to the extent such consideration exceeds the Basic Annual Rent and Additional Rent payable hereunder.

11.6

Notwithstanding any assignment of this Lease or subletting of all or any part of the Demised Premises, whether made with or without Landlord's consent, the Tenant originally named herein, and each successor Tenant, shall be and remain jointly and severally liable for all obligations of Tenant hereunder.

12.

INDEMNITY

Notwithstanding that joint or concurrent liability may be imposed upon Landlord by statute, ordinance, rule, regulation, order, or court decision, Tenant shall, notwithstanding any insurance furnished pursuant hereto or otherwise, indemnify, protect, defend and hold harmless Landlord from and against any and all liability, fines, suits, claims, obligations, damages, losses, penalties, demands, actions and judgments, and costs and reasonable expenses of any kind or nature (including reasonable attorneys' fees), by anyone whomsoever, arising after or relating to or accruing during the period after the date hereof and due to or arising out of:

12.1

any work or thing done in, on or about the Demised Premises or the Common Area or any part thereof by Tenant or anyone claiming through or under Tenant or the respective employees, agents, licensees, contractors, servants or subtenants of Tenant or any such person;

12.2

any use, possession, occupation, operation, maintenance or management of the Demised Premises or any part thereof, or the Common Area or any part thereof by Tenant, including, without limitation, any air, land, water or other pollution caused by Tenant;

12.3

any negligence or wrongful act or omission on the part of Tenant or any person claiming through or under Tenant or the respective employees, agents, licensees, invitees, guests, subtenants (if any), contractors, servants or subtenants of Tenant or any such person;

12.4

any accident or injury to any person (including death) or damage to property (including loss of property) occurring in or on the Demised Premises or any part thereof or the Common Area or any part thereof and arising from actions or omissions of Tenant or the employees, agents, licensees, invitees, guests, subtenants (if any) contractors, servants or subtenants of Tenant;

20

BioLife lease

4/1/2008

12.5

any failure on the part of Tenant to perform or comply with any of the covenants, agreements, terms, provisions, conditions or limitations contained in this Lease; and

12.6

any failure on the part of Tenant to perform or comply with Legal Requirements or Insurance Requirements.

In case any claim, action or proceeding is raised or brought against Landlord (and/or any of the other indemnified parties above described) by reason of any of the foregoing, Landlord, shall promptly provide notice of such action or proceeding to Tenant.  No delay by Landlord in giving such notice to Tenant shall in any way impair, waive or affect the obligations of Tenant to indemnify, defend, and hold harmless Landlord except to the extent of actual prejudice to Tenant arising solely and directly from such delay.  Tenant, at Tenant's expense, thereupon shall assume and, through competent counsel, diligently conduct the defense of such claim, action or proceeding. Upon such assumption by Tenant, Landlord, at the expense of Tenant, shall cooperate with Tenant in all reasonable respects in the conduct of such defense. The duty of Landlord to cooperate shall (to the extent reasonable) include, but not be limited to, at the expe nse of Tenant, making available then present employees of Landlord and/or its Affiliates to act as witnesses and consult with counsel, and assist in the location and production of documents. Landlord shall, to the extent reasonable, subject to such reasonable confidentiality requirements as Landlord may impose, and at the cost of Tenant (including without limitation reproduction costs), make available to Tenant the books and records of Landlord relevant to the proceedings. The obligations of Tenant shall include but not be limited to, taking all steps necessary or appropriate to the defense or settlement of such claim, action, proceeding or litigation. Provided that Tenant has performed and is performing its obligations pursuant to this Section 12, Landlord may participate, through counsel of Landlord's choice, at Landlord's expense, in the defense of any such claim, action, proceeding or litigation, but Tenant shall direct and control the defense thereof Tenant or its counsel shall keep Landlord apprised at all times of the status of the action or proceeding. The establishment of limits of coverage for the insurance required by Section 5 shall not serve in any way to limit Tenant's obligations pursuant to this Section 12. Anything herein to the contrary notwithstanding, (i) Tenant shall not enter into or consent or agree to the settlement of any claim, litigation, action, or suit respecting which for Tenant is obligated to indemnify, or defend Landlord pursuant hereto, without the express prior written consent of Landlord, in Landlord's sole discretion, unless, in each such case (as demonstrated to the reasonable satisfaction of Landlord):  (1) Tenant has and does fully and completely indemnify and hold Landlord harmless from and against all liability, fines, suits, claims, obligations, damages, losses, penalties, demands, actions and judgments, and costs and reasonable expenses of any kind or nature (including reasonable attorneys' fees), by anyone whomsoever, resulting from or arising, out of such settlement: and (2) Landlord is fully released from all liability, fines, suits, claims, obligations, damages, losses, penalties, demands, actions and judgments, and costs and reasonable expenses of any kind or nature respecting such claim, litigation, action, or suit, and (3) such settlement shall not in any manner adversely affect the Property, or the use, development, maintenance, repair or occupancy thereof, and (ii) Tenant shall not issue, disseminate, distribute or publish, or agree to, consent to, or approve, any statement or press release in connection with such settlement, without the prior written consent of Landlord, which shall not be unreasonably withheld. The provisions of this Section 12 shall survive the expiration or termination of this Lease.

21

BioLife lease

4/1/2008

12.7

Waiver of Subrogation.  Notwithstanding anything to the contrary herein, the parties hereto release each other and their respective agents, employees, successors, assignees and subtenants from all liability for damage to any property that is caused by or results from a risk which is actually insured against, which is required to be insured against under this Lease, or which would normally be covered by all risk property insurance, without regard to the negligence or willful misconduct of the entity so released.  All of Landlord's and Tenant's repair and indemnity obligations under the Lease shall be subject to the waiver contained in this paragraph.

13.

DEFAULT PROVISIONS, LANDLORD'S REMEDIES

13.1

Any of the following events ("Events of Default") shall constitute a default under this Lease:

13.1.1

Tenant's failure to pay any installment of Basic Annual Rent or any Additional Rent within five (5) days of the date on which the same was due and payable; or

13.1.2

Tenant's doing or permitting anything to be done, whether by action or inaction, contrary to any of Tenant's obligations pursuant to this Lease, or otherwise any breach of this Lease or failure by Tenant to perform any of its obligations under this Lease (except as to the payment of rent, additional rent and the matters set forth in Sections 13.1.3, 13.1.4 and 14), and such situation, breach or failure shall continue and shall not be remedied by Tenant within thirty (30) days after Landlord shall have given to Tenant notice specifying the same; or, if the default cannot with due diligence be cured within a period of thirty (30) days and the continuance of which will not subject Landlord (or any of its directors, officers, shareholders, partners, agents or employees) to the risk of criminal or civil liability or foreclosure of any superior mortgage or any other lien on the Property, Tenant shall not promptly and di ligently prosecute to completion all steps necessary to remedy the same, or

13.1.3

The occurrence of any event whereby this Lease, any interest in it, the estate thereby granted or, any portion thereof, or the unexpired balance of the Term would by operation of law or otherwise pass to any entity other than Tenant, except as expressly permitted by Section 11; or

13.1.4

Tenant vacates the Demised Premises (defined as an absence for more than fifteen (15) consecutive days without prior notice to Landlord), or Tenant abandons the Demised Premises (defined as an absence of more than five (5) days or more while Tenant is in breach of some other term of this Lease).  The fact that Tenant is not in occupancy from the Commencement Date to Tenant’s actual occupancy of the Demised Premises following notice to Tenant by Landlord that the Demised Premises are available for occupancy (but in no event later than 30 days following such notice) shall not be considered vacation or abandonment pursuant to this Section 3.1.4.  Tenant’s vacation or abandonment of the Demised Premises shall not be subject to any notice or right to cure.

13.1.5

Tenant becomes insolvent, voluntarily or involuntarily bankrupt or a receiver, assignee or other liquidating officer is appointed for Tenant’s business.

22

BioLife lease

4/1/2008

13.1.6

Tenant’s interest in the Demised Premises, or any part thereof, is taken by execution or other process of law directed against Tenant, or is taken upon or subject to any attachment by any creditor of Tenant, if such attachment is not discharged within fifteen (15) days after being levied.

13.2

Upon the occurrence of any Event of Default, the Landlord may exercise any one or more of the following remedies, in addition to all other remedies provided in this Lease and by law or in equity:

13.2.1

Landlord may recover from Tenant: (i) the worth at the time of award of the unpaid Basic Annual Rent and Additional Rent which had been earned at the time of termination (including interest at a default rate of eighteen percent (18%) per annum); (ii) the worth at the time of award of the amount by which the unpaid Basic Annual Rent and additional rent which would have been earned after termination until the time of award exceeds the amount of such Basic Annual Rent and additional rent loss that Tenant proves could have been reasonably avoided (including interest at a default rate of eighteen percent (18%) per annum); (iii) the worth at the time of award of the amount by which the unpaid Basic Annual Rent and additional rent for the balance of the Term after the time of award exceeds the amount of such Basic Annual Rent and additional rent loss that Tenant proves could be reasonably avoided discounting such amount by the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%), and (iv) any other amount necessary to compensate Landlord for all the detriment caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom.

For purposes of computing unpaid Basic Annual Rent and additional rent for the balance of the Term pursuant to clause (iii) above, unpaid Basic Annual Rent and Additional Rent shall consist of the sum of (A) the total Basic Annual Rent for the balance of the Term plus (B) Tenant's obligation to pay the Operating Expenses and Taxes and such other items of additional rent specified in this Lease to be paid in whole or in part by Tenant for the balance of the Term. For purposes of computing Tenant's obligation to pay the Operating Expenses and Taxes and such other items of additional rent for the Lease Year of the Event of Default and each future Lease Year in the Term such amounts shall be assumed to be equal to the amount of additional rent that was payable by Tenant in respect of Operating Expenses and Taxes and such other items of additional rent for the Lease Year prior to, the Lease Year in which the Event of Default occurs c ompounded at a rate equal to the mean average rate of inflation for the three (3) Lease Years preceding the Lease Year of the Event of Default, as determined by using the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index (All Urban Consumers, all items, 1982-84 equals 100) (the "CPI") for the metropolitan area or region of which the Property is a part. If such index is discontinued or revised during the Term, such other government index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the index had not been discontinued or revised. If no replacement index exists then Landlord shall select as a replacement index that index which, in Landlord's opinion, is generally recognized as the successor index.

13.2.2

Landlord may sell at public or private sale all or any part of the goods, chattels, fixtures and other personal property belonging to Tenant which are or may be put into the Demised Premises during the Term, except for Tenant's business records whether exempt or not from sale under execution or attachment (it being agreed that said property shall at

23

BioLife lease

4/1/2008

all times be bound with a lien in favor of Landlord and shall be chargeable for all rent and for the fulfillment of the other covenants and agreements herein contained) and apply the proceeds of such sale, first, to the payment of costs and expenses of conducting the sale or caring for or storing said property (including all attorney's fees), second, toward the payment of any indebtedness, including (without limitation) indebtedness for rental, which may be or may become due from Tenant to Landlord, and third, to pay Tenant, on demand in writing, any surplus remaining after all indebtedness of Tenant to Landlord has been fully paid.

13.2.3

Landlord may perform, on behalf of Tenant, any obligation of Tenant under this Lease which Tenant has failed to perform, the cost of which performance by Landlord, together with interest thereon at the Default Rate from the date of such expenditure, shall be deemed additional rent and shall be payable by Tenant to Landlord upon demand.

13.2.4

The Landlord may give the Tenant a notice (the "Termination Notice") of its intention to terminate this Lease specifying a day not less than ten (10) days thereafter, and, upon the day specified in the Termination Notice, this Lease and the term and estate hereby granted shall expire and terminate and all rights of the Tenant under this Lease shall expire and terminate, but the Tenant shall remain liable for damages as hereinafter set forth. Notwithstanding the foregoing, the Landlord may institute dispossess proceedings for non-payment of rent, distraint or other proceedings to enforce the payment of rent without giving the Termination Notice.  No act by Landlord other than the giving of a Termination Notice shall terminate this Lease.

13.2.5

The Landlord may exercise any and all other legal and/or equitable rights or remedies which it may have.

13.3

Upon any such termination or expiration of this Lease, or other termination of Tenant's possession under this Lease, the Tenant shall peaceably quit and surrender the Demised Premises to the Landlord, and the Landlord or Landlord's agents and employees may without further notice immediately or at any time thereafter enter upon or re-enter the Demised Premises or any part thereof, and possess or repossess itself or themselves thereof either by summary dispossess proceedings, ejectment, any suitable action or proceeding at law, agreement, force or otherwise (without thereby creating any breach of the peace), and may dispossess and remove Tenant and all other persons and property from the Demised Premises without being liable to indictment, prosecution, or damages therefor, and may repossess the same, and may remove any persons therefrom, to the end that Landlord may have, hold and enjoy the Demised Premises again. The words "enter& quot; or "reenter," "possess" or "repossess" as used in this Lease are not restricted to their technical legal meaning.

13.4

In the event of any breach or threatened breach by Tenant of any of the agreements, terms, covenants or conditions contained in this Lease, Landlord shall be entitled to enjoin such breach or threatened breach and shall have the right to invoke any right and remedy allowed at law or in equity or provided in this Lease.

13.5

Each right and remedy of the Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Landlord of any one or more of the rights or remedies provided

24

BioLife lease

4/1/2008

for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise.

13.6

Suit or suits for the recovery of damages, or any installments thereof, may be brought by Landlord from time to time at its election, and nothing contained in this Lease shall be deemed to require Landlord to postpone suit until the date when the term of this Lease would have expired if it had not been so terminated under the provisions of this Section 13 or under any provision of law, or had Landlord not re-entered the Demised Premises. Nothing contained in this Lease shall be construed to limit or preclude recovery by Landlord against Tenant of any sums or damages to which Landlord may lawfully be entitled by reason of any default under this Lease or otherwise on the part of Tenant. Nothing contained in this Lease shall be construed to limit or prejudice the right of Landlord to prove and obtain as liquidated damages by reason of the termination of this Lease or reentry on the Demised Premises for the default of Tenant an amo unt equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceeding in which, such damages are to be proved.

13.7

Upon the termination or expiration of this Lease, or other termination of Tenant's possession under this Lease due to Tenant's default, the Tenant hereby authorizes and empowers the Landlord, at the Landlord's option (without imposing any duty upon the Landlord to do so), to re-enter the Demised Premises as agent for the Tenant or any successor-occupant of the Demised Premises under the Tenant, or for its own account or otherwise, and to relet the same for any term expiring either prior to the original expiration date hereof, or simultaneously therewith, or beyond such date, and to receive rent and apply same to pay all fees and expenses incurred by the Landlord as a result of such Event of Default, including without limitation any legal fees and expenses arising therefrom, the cost of re-entry and re-letting and to the payment of the rent and other charges due hereunder, and, at the expense of Tenant, make such repairs or alterations and shall necessary or appropriate, in the reasonable judgment of Landlord to facilitate such reletting. No entry, re-entry or reletting by the Landlord, whether by summary proceedings, termination or otherwise, shall discharge the Tenant from its liability to the Landlord as set forth herein. If Landlord does relet the Demised Premises, Landlord may relet the entirety thereof, or any part thereof, alone or together with other premises, for such term(s) (which may be greater or less than the period which otherwise would have constituted the balance of the Term) and on such terms and conditions (which may include concessions or free rent and alterations of the Demised Premises) as Landlord, in its sole discretion, may determine, but Landlord shall not be liable for, nor shall Tenant's obligations hereunder be diminished by reason of, any failure by Landlord to relet the Demised Premises or any failure by Landlord to collect any rent due upon such reletting.

13.8

The Tenant shall be liable for all costs, charges and expenses, including reasonable attorney's fees and disbursements, incurred by the Landlord by reason of the occurrence of any Event of Default.

13.9

The Tenant, and on behalf of any and all persons claiming through or under the Tenant, including creditors of all kinds, does hereby waive and surrender all rights and privileges which they or any of them might have under or by reason of any present or future law,

25

BioLife lease

4/1/2008

to redeem the Demised Premises or to have a continuance of this Lease for the Term after being dispossessed or ejected therefrom by the valid order of a court of competent jurisdiction.

13.10

The provisions of this Section 13 shall survive the expiration or termination of this Lease.

14.

BANKRUPTCY AND INSOLVENCY

14.1

Neither Tenant's interest in this Lease, nor any estate hereby created in Tenant nor any interest herein, shall pass to any trustee or receiver or assignee for the benefit of creditors or otherwise by operation of law.

14.2

In the event the interest or estate created in Tenant hereby shall be taken in execution or by other process of law, or if Tenant is adjudicated insolvent by a court of competent jurisdiction other than the United States Bankruptcy Court, or if a receiver or trustee of the property of Tenant shall be appointed by reason of the insolvency or inability of Tenant to pay its debts, or if Tenant shall file a voluntary petition or proceeding under any federal or state law dealing with bankruptcy, insolvency, reorganization or any other adjustment of its debts, or if any assignment shall be made of the property of Tenant for the benefit of creditors, then and in any such event, this Lease and-all rights of Tenant hereunder shall automatically cease and terminate with the same force and effect as though the date of such event were the date originally set forth herein and fixed for the expiration of the Term, and Tenant shall vacate and surren der the Premises but shall remain liable as herein provided.

14.3

Tenant shall not cause or give cause for the appointment of a trustee or receiver of the assets of Tenant and shall not make any assignment for the benefit of creditors or become or be adjudicated insolvent, or file any voluntary petition or commence any voluntary proceeding in respect thereto. The allowance of any petition under any insolvency law except under the Bankruptcy Code or the appointment of a trustee or receiver of Tenant or of its assets, shall be conclusive evidence that Tenant caused, or gave cause therefor, unless such allowance of the petition, or the appointment of a trustee or receiver, is vacated within forty-five (45) days after such allowance or appointment. Any act described in this Section 14.3 shall be deemed a material breach of Tenant's obligations hereunder, and this Lease shall thereupon automatically terminate. Landlord does, in addition, reserve any and all other remedies provided in this Lease or by law or in equity.

14.4

In the event Section 14.1 shall be deemed unenforceable by the United States Bankruptcy Court this Section 14.4 shall apply; otherwise this Section 14.4 shall have not force or effect.  Upon the filing of a petition by or against Tenant under the United States Bankruptcy Code:

14.4.1

Tenant, as debtor and as debtor in possession, and any trustee who may be appointed agree as follows: (a) to perform each and every obligation of Tenant under this Lease, until such time as this Lease is either rejected or assumed by order of the United States Bankruptcy Court; and (b) to pay monthly in advance on the first day of each month as reasonable compensation for use and occupancy on the Premises an amount equal to all rent, additional rent and other charges otherwise due pursuant to this Lease; and (c) to reject or assume this Lease within sixty (60) days of the filing of such petition under Chapter 7 of the

26

BioLife lease

4/1/2008

Bankruptcy Code or within 120 days (or such shorter term as Landlord, in its sole discretion, may deem reasonable so long as notice of such period is given) of the filing of a petition under any other Chapter; and (d) to give Landlord at least forty-five (45) days' prior written notice of any proceeding relating to any assumption of this Lease; and (e) to give Landlord at least thirty (30) days' prior written notice of any abandonment of the Premises; any such abandonment to be deemed a rejection of this Lease; and (f) to do all other things of benefit to Landlord otherwise required under the Bankruptcy Code; and (g) to be deemed to have rejected this Lease in the event of the failure to comply with any of the above, and (h) to have consented to the entry of an order by an appropriate United States Bankruptcy Court providing all of the above, waiving notice and hearing of the entry of same.

14.4.2

No Event of Default or default of this Lease by Tenant either prior to or subsequent to the filing of such a petition, shall be deemed to have been waived unless expressly done so in writing by Landlord.

14.4.3

Included within and in addition to any other conditions or obligations imposed upon Tenant or its successor in the event of assumption and/or assignment are the following: (a) the cure of any monetary defaults and the reimbursement of pecuniary loss within not more than thirty (30) days of assumption and/or assignment; and (b) the deposit of an additional sum equal to three months' rent to be held pursuant to the terms of Section 34 of this Lease; and (c) the use of the Demised Premises as set forth in Section 3 of this Lease, and (d) the prior written consent of any mortgagee to which this Lease has been assigned as collateral security; and (e) the Demised Premises, at all times, remains a single leasehold structure and no physical changes of any kind may be made to the Demised Premises unless in compliance with the applicable provisions of this Lease.

15.

ENTRY BY LANDLORD, ETC.

15.1

Except in the case of an emergency and upon 24 hour notice, Tenant shall permit Landlord and its authorized representatives to enter the Demised Premises, or any part thereof, at all reasonable times for the purpose of (a) performing work in the Demised Premises if and to the extent required to be performed by Landlord (including, without limitation, to perform such work as shall be required to be performed by Legal Requirements (to the extent not the obligation of Tenant under this Lease) in the event that portions of the Property (other than the Demised Premises) shall be leased to persons other than Tenant), provided, however, that (except in the event of an emergency) Landlord shall give Tenant reasonable prior notice of such entry and shall conduct such work so as not to unreasonably interfere with the normal conduct of Tenant's business in the Demised Premises, or (b) curing defaults of Tenant in accordance with, and (except in the event of an emergency) after such notice (if any) as may be required by, the provisions of Section 13. In addition, Tenant, after reasonable prior notice, shall permit Landlord and fee mortgagees and their respective authorized representatives, to enter the Demised Premises, or any part thereof, at all reasonable times during usual business hours for the purpose of inspecting the same.

15.2

Landlord shall also have the right, after reasonable prior notice, to enter the Demised Premises, or any part thereof, at all reasonable times during usual business hours for the purpose of showing the same to appraisers, prospective lenders and prospective purchasers or

27

BioLife lease

4/1/2008

fee mortgagees thereof and, at any time within six months prior to the expiration of this Lease, for the purpose of showing the same to prospective tenants.

15.3

If, at any time during which Landlord or any fee mortgagee shall have the right to enter the Demised Premises, admission to the Demised Premises, for the purposes aforesaid cannot be obtained, they, or their respective agents, servants, employees, contractors and representatives, may (on such notice, if any, as may be reasonable under the circumstances, which notice need not be in writing if an emergency exists in respect of the protection of the Demised Premises) enter the Demised Premises and accomplish such purpose. Any entry on the Demised Premises by Landlord or a fee mortgagee shall be at such times and by such methods (other than in the event of such an emergency) as will cause as little inconvenience, annoyance, disturbance, loss of business or other damage to Tenant as may be reasonably practicable in the circumstances.

16.

COVENANT OF QUIET ENJOYMENT

16.1

Landlord covenants that Tenant, on paying the rents and performing and observing all the covenants and conditions contained in this Lease, shall and may peaceably and quietly have, hold and enjoy the Demised Premises during the Term in accordance with the terms of this Lease, subject, however, to the terms of this Lease.

17.

EFFECT OF CONVEYANCE, LIMITS OF LIABILITY OF LANDLORD, DEFINITION OF "LANDLORD"

17.1

The term "Landlord" as used in this Lease shall mean and include only the owner or owners (and any mortgagee in possession) at the time in question of the fee estate in the Property, so that in the event of any transfer or transfers (by operation of law or otherwise) of the title to such fee estate, Landlord herein named (and in case of any subsequent transfers or conveyances, the then transferor) shall be and hereby is automatically freed and relieved, from and after the date of such transfer or conveyance, of all liability in respect of the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed, provided that (a) any funds in which Tenant has an interest, in the hands of such Landlord or the then transferor at the time of such transfer, shall then be turned over to the transferee, and (b) any amount then due and payable to Tenant by Landlord or the then transferor under any provision of this Lease shall then be paid to Tenant and (c) the transferee shall be deemed to have assumed and agreed to perform, subject to the limitations of this Section 17 (and without further agreement between or among the parties or their successors in interest, and/or the transferee) and only during and in respect of the transferee's period of ownership, all of the terms, covenants and conditions in this Lease contained on the part of Landlord thereafter to be performed, which terms, covenants and conditions shall be deemed to "run with the land," it being intended hereby that the terms, covenants and conditions contained in this Lease on the part of Landlord shall, subject as aforesaid, be binding on Landlord, its successors and assigns, only during and in respect of their respective successive periods of ownership.

17.2

It is specifically understood and agreed that in the event of a breach by Landlord of any of the terms, covenants or conditions of this Lease to be performed by Landlord, the monetary liability of Landlord in relation to any such breach shall be limited to the equity of Landlord in the Property, including Landlord's interest in this Lease, the Property, moneys held

28

BioLife lease

4/1/2008

by any trustee for the benefit of Landlord and any sums at the time due or to become due under this Lease. Tenant shall look only to Landlord's equity in the Property for the performance and observance of the terms, covenants and conditions of this Lease to be performed or observed by Landlord and for the satisfaction of Tenant's remedies for the collection of any award, judgment or other judicial process requiring the payment of money by Landlord in the event of a default in the full and prompt payment and performance of any of Landlord's obligations hereunder. No property or assets of Landlord, other than Landlord's equity in the Property, shall be subject to lien, levy, execution or other enforcement procedure for the satisfaction of Tenant's remedies in any matter whatsoever arising out of or in any way connected with this Lease or any of its provisions, any negotiations in connection therewith, the relationship of Landlord and Tenant hereunder or the use and occupancy of the Property; and in confirmation of the foregoing, if any such lien, levy, execution or other enforcement procedure so arising shall be on or in respect of any property or assets of Landlord, other than Landlord's equity in the Property, Tenant shall promptly release any property or assets of Landlord, other than Landlord's equity in the Property, from such lien, levy, execution or other enforcement procedure by executing and delivering, at Tenant's expense and without charge to Landlord, any instrument or instruments, in recordable form, to that effect prepared by Landlord (but any such 'instrument of release shall not release any such lien, levy, execution or other endorsement procedure on or in respect of Landlord's equity in the Property). Tenant hereby appoints Landlord its attorney-in-fact for the purposes of executing such instrument or instruments of release if Tenant fails or refuses to do so promptly after request.

18.

SURRENDER, HOLDING OVER BY TENANT

18.1

On the expiration or termination of this Lease, Tenant shall peaceably and quietly leave, surrender and deliver to Landlord the Demised Premises, together with all Alterations which may have been made upon the Demised Premises (except to the extent that Landlord may require Tenant under Section 9.4 hereof to remove such Alterations and restore the Demised Premises), all of the foregoing to be surrendered in the condition received at the Commencement Date, reasonable use, wear and tear excepted and free of occupants. If as a result of or in the course of the removal of Tenant's property any damage occurs to the Demised Premises, Tenant shall pay to Landlord the reasonable cost of repairing such damage. If Tenant fails to quit and surrender the Demised Premises upon the expiration or termination of this Lease, it shall be liable to Landlord for the damages caused to Landlord by reason of such holdover and it is agreed that such damages shall be liquidated in an amount equal to the amount set forth below.  The acceptance by Landlord of such damages or rental after termination of this Lease shall not be construed as consent to continued occupancy, nor shall such holding over constitute a renewal or extension of this Lease. Landlord may, at its option, construe such holding over as a tenancy from month to month, subject to all the terms, covenants and conditions of this Lease, except as to duration thereof, and in that event the Tenant shall pay Basic Annual Rent and Additional Rent in advance at the rate of 175% of the rate provided in this Lease as effective during the last month thereof; provided however, if Landlord does not have a tenant committed to lease all or a portion of the premises, the rate shall be one hundred twenty five percent (125%) of the rate provided for in this lease effective during the last month thereof (“Final Rate”) for ninety (90) days immediately following the Expiration Date; effective the 91^{s t} day following the Expiration Date the rate shall be one hundred fifty percent (150%) of the Final Rate.  Effective the 151^st day following Expiration Date the rate shall be one hundred seventy five percent (175%) of the Final Rate.  Tenant's obligation to observe or perform this covenant shall survive

29

BioLife lease

4/1/2008

the expiration or termination of this Lease. Notwithstanding the foregoing, upon the expiration of the Lease for any reason whatsoever, Tenant shall have the right and obligation to remove all of its fixtures, furniture, machinery, and equipment from the Demised Premises, provided Tenant promptly shall repair any damage caused by such removal.

19.

CURING DEFAULTS; FEES AND EXPENSES

19.1

If Tenant shall fail to pay any imposition or to make any other payment required hereunder or shall otherwise default in the full and prompt performance of any covenant contained herein and to be performed on Tenant's part, Landlord, without being under any obligation to do so and without thereby waiving such default, may, after fifteen (15) days' written notice to Tenant, or such notice (which may be oral) as may be reasonable in the circumstances if any emergency exists in respect of the protection of the Demised Premises, make such payment or perform such covenant "for the account and at the expense of Tenant and may enter upon the Demised Premises for any such purpose and take all action thereon as may be necessary therefor in the sole judgment of Landlord.

19.2

All sums so paid by Landlord in connection with the payment or performance by it of any of the obligations of Tenant hereunder and all actual and reasonable costs, expenses and disbursements paid in connection therewith or enforcing or endeavoring to enforce any right under or in connection with this Lease, or pursuant to law, together with interest thereon at the rate of 18% per annum (or, if lower, the maximum rate permitted by law) from the respective dates of the making of each such payment shall constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord within fifteen (15) days after demand by Landlord. Landlord shall not be limited, in the proof of any damages which Landlord may claim against Tenant arising out of or by reason of Tenant's failure to provide and keep in force insurance as required by Section 5 hereof, to the amount of the insurance premium or premiums not paid or incurre d by Tenant.

19.3

The provisions of this Section 19 shall serve the expiration or termination of this Lease.

20.

MECHANICS AND OTHER LIENS

20.1

If any mechanic's, laborer's or materialman's lien shall at any time be filed against the Property or any part thereof with respect to any work done, or labor or materials furnished, or caused to be furnished, by Tenant or anyone claiming through or under Tenant, or any judgment, attachment or levy is filed or recorded against the Property or any part thereof by anyone claiming through or under Tenant, Tenant, within thirty (30) days after notice of the filing thereof, shall cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. If Tenant shall fail to cause such lien, judgment, attachment or levy to be discharged within the period aforesaid, then, in addition to any other right or remedy, Landlord may, but shall not be obligated to, discharge the same by bonding proceedings, if permitted by law (and if not so permitted, by deposit in court). Any amount so paid by Landlord, including all costs and expenses paid by Landlord in connection therewith, together with interest thereon at the rate of 18% per annum (or, if lower, the maximum rate permitted by law) from the respective dates of Landlord's so paying any such amount, cost

30

BioLife lease

4/1/2008

or expense, shall constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

20.2

Nothing contained in this Lease shall be deemed or construed in any way as constituting the consent or request of Landlord, express or implied, by inference or otherwise, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration to or repair of the Demised Premises, or any part thereof, or as giving Tenant any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to the filing of any mechanic's liens against Landlord's interest in the Demised Premises. Notice is hereby given that Landlord shall not be liable for any labor or materials furnished or to be furnished to Tenant upon credit, and that no mechanic's or other lien for any such labor or materials shall attach to or affect the reversion or estate or interest of Landlord in and to the Demise d Premises.

21.

      SIGNS, ADDRESS

21.1

Landlord shall have the right to change the name or street address of the Property, to install, maintain, move, remove and reinstall signs on and off the Property identifying the Property and advertising any or all of the Property, including, the Demised Premises as for sale or for rent. Tenant shall not place any signs (i) on the exterior of the Property, or (ii) in the Common Areas.  Landlord shall continue to provide existing or comparable monument signage for Tenant.  The size, design, construction and placement of all such signs shall be subject to Landlord's prior written consent, which shall not be unreasonably withheld, and shall be at Tenant's sole cost and expense.

22.

WAIVERS AND SURRENDERS TO BE IN WRITING, RIGHT TO TERMINATE

22.1

The receipt, acceptance and/or deposit (including the endorsement of any check) of full or partial rent by Landlord with knowledge of any breach of this Lease by Tenant or of any default on the part of Tenant in the observance or performance of any of the provisions or covenants of this Lease shall not be deemed to be a waiver of any such provision, covenant or breach of this Lease. No waiver or modification by Landlord, unless in writing and signed by Landlord, shall discharge or invalidate any provision or covenant or affect the right of Landlord to enforce the same in the event of any subsequent breach or default. The failure on the part of Landlord to insist in any one or more instances upon the strict performance of any of the provisions or covenants of this Lease, or to enforce any covenant or provision herein contained consequent upon a breach of any provision of this Lease shall not affect or alter this Lease or be construed a s a waiver or relinquishment of such provisions or covenants or of the right to insist upon strict performance or to exercise such right, remedy or election, but the same shall continue and remain in full force and effect with respect to any then existing or subsequent breach, act or omission whether of a similar nature or otherwise. The receipt, acceptance and/or deposit (including the endorsement of any check) by Landlord of any rent or any other sum of money or any other consideration hereunder paid by Tenant after the termination, in any manner, of the Term, or after the giving by Landlord of a termination notice, shall not reinstate, continue or extend the Term, or destroy, or in any manner impair the efficacy of any such termination notice as may have been given hereunder by Landlord to Tenant prior to the receipt, acceptance and/or

31

BioLife lease

4/1/2008

deposit (including the endorsement of any check) of any such rent, or other sum of money or other consideration, unless so agreed to in writing and signed by Landlord. Neither acceptance of the keys nor any other act or thing done by Landlord or any agent or employee shall be deemed to be an acceptance of a surrender of the Premises, or any part thereof, excepting only an agreement in writing signed by Landlord. No payment by Tenant or receipt, acceptance and/or deposit (including the endorsement of any check) by Landlord of a lesser amount than the correct rent shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check be deemed to effect or evidence an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance or pursue any other remedy in this Lease provided.

23.

COVENANTS BINDING ON SUCCESSORS AND ASSIGNS

23.1

All of the terms, covenants and conditions of this Lease shall apply to and inure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the parties, except as expressly otherwise herein provided. If there shall be more than one Tenant, they shall all be bound jointly and severally by the terms, covenants and agreements herein contained. No rights, however, shall inure to the benefit of any assignee or subtenant of Tenant unless the assignment or subletting, as the case may be, has been made in accordance with the provisions set forth in Section 11.

24.

RESOLUTION OF DISPUTES

24.1

THE PARTIES HERETO WAIVE A TRIAL BY JURY (TO THE EXTENT PERMITTED BY LAW) ON ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN THEM OR THEIR SUCCESSORS UNDER OR IN ANY WAY CONNECTED WITH THIS LEASE OR ANY OF ITS PROVISIONS, ANY NEGOTIATIONS IN CONNECTION THEREWITH, THE RELATIONSHIP OF LANDLORD AND TENANT, OR TENANT'S USE OR OCCUPATION OF THE PREMISES, INCLUDING ANY CLAIM OF INJURY OR ANY EMERGENCY OR OTHER STATUTORY REMEDY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE.

25.

NOTICES

25.1

Any statement, demand, election, request, notice, approval, consent or other communication, (collectively, "notice") authorized or required by this Lease must be in writing and shall be deemed given when delivered by (a) hand, against receipt, (b) one (1) business day after sending by reputable overnight courier which provides for acknowledgment of receipt, or (c) three (3) business days after mailing by United States certified mail, return receipt requested, addressed to the intended recipient at the following address as:

If to Landlord:

Monte Villa Farms LLC

3301 Monte Villa Parkway, Suite 101

Bothell, WA  98021

Attention: Robert E. Hibbs

32

BioLife lease

4/1/2008

with a copy to:

Premier Advisors, LLC

Monte Villa Farms

3301 Monte Villa Parkway, Suite 101

Bothell, WA 98021

If to Tenant:

BioLife Solutions

3303 Monte Villa Parkway, Suite 310

Bothell, WA  98021

Payments due to Landlord under this Lease shall be made according to the following:

Electronic Payments:

Wells Fargo Bank, N.A.

Seattle Private Client Services,

999 Third Avenue, 14th Floor

Seattle, WA 98104

Routing #:

125008547

To Credit:

Monte Villa Farms LLC

Account #:

8755057331

Notify:

Traci Herrera, 206-343-8372

Or mail to:

Monte Villa Farms LLC

P.O. Box 84532

Seattle, WA  98124-5832

Any notices by a party signed by counsel to such party shall be deemed a notice signed by such party. Notice shall be deemed given on the date of delivery or the date delivery is refused. Any party may change its address for notices, and Landlord may change its address for payments, by providing to the other party written notice in the manner required by this Section 25.

26.

DEFINITIONS; HEADINGS; CONSTRUCTION OF LEASE

26.1

For the purposes of this Lease, unless the context otherwise requires:

26.1.1

The term "Landlord's agents" shall be deemed to include agents, servants, employees and contractors of landlord.

26.1.2

The term "person" shall be deemed to include individuals, corporations, partnerships, firms, associations and any other legal or business entities.

26.1.3

The term "unavoidable delays" shall mean any and all delays beyond the reasonable control of the party otherwise responsible, including delays caused by the other party, governmental restrictions, governmental preemption, strikes, labor disputes, lockouts, shortage of labor or materials, acts of God, enemy action, civil commotion, riot or insurrection, fire, holdover tenancies or other unavoidable casualty or any other cause beyond the responsible party's control, but shall not include delays occasioned by lack of money.

33

BioLife lease

4/1/2008

26.1.4

The terms "include," "including" and "such as" shall be construed as if followed by the phrase "without being limited to". The words "herein." "hereto" "hereby," "hereunder" and words of similar import shall be construed to refer to this Lease as a whole and not to any particular Section hereof unless expressly so stated.

26.2

The various terms which are defined in other Sections of this Lease shall have the meanings specified in such other Sections for all purposes of this Lease unless the context otherwise requires.

26.3

The Section headings in this Lease and the Table of Contents prefixed to this Lease are inserted only as a matter of convenience and reference and are not to be given any effect whatsoever in construing this Lease.

26.4

All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities in question may require.

27.

FORCE MAJEURE

27.1

Whenever the performance of any obligation of either party hereunder shall be delayed, hindered or prevented due to unavoidable delays, the time for performance of such obligation, unless other provision is expressly made therefor in this Lease, shall be extended, subject to and limited by the following conditions:

27.1.1

The extension shall be for no longer a period than the delay actually so occasioned;

27.1.2

The party delayed shall promptly notify the other party of the cessation of such unavoidable delay and of the extent of the delay which the party delayed claims was occasioned thereby;

27.1.3

No statement of fact contained in any such notice shall be binding on the party receiving such notice; and

27.1.4

In no event shall lack of funds be deemed a matter beyond either party's control.

27.1.5

Interruptions of any service to be provided by Landlord under this Lease or of any utility or other service to the Demised Premises or the Property, in whole or in part caused by any unavoidable delay, inability of Landlord to obtain electricity, fuel, water, other utilities or supplies, or by the act or default of Tenant or any person other than Landlord, or otherwise by any other cause or causes beyond the reasonable control of Landlord, shall not be deemed an eviction or disturbance of Tenant's use and possession of the Demised Premises, the Common Area, or any part thereof, or render Landlord liable for damages, or give rise to any offset, set off, abatement, or reduction in any rent, additional rent, or other amount payable by Tenant under this Lease, or otherwise or relieve Tenant from performance of Tenant's obligations under this Lease.

34

BioLife lease

4/1/2008

28.

BROKERAGE

28.1

Landlord and Tenant each warrant and represent that other than Jeff Durrell of Pacific Real Estate Partners, Tenant had no other brokerage involved in this Lease transaction. Landlord shall pay to Pacific Real Estate Partners upon Tenant’s occupancy and receipt by Landlord of Tenant’s Security Deposit a fee equivalent to 5% of the Basic Rent for the term of this Lease.

29.

MISCELLANEOUS PROVISIONS

29.1

This Lease sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Premises. There are no oral agreements or understandings between the parties hereto affecting this Lease and this Lease supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between the parties hereto with respect to the subject matters hereof, and none thereof shall be used to interpret or construe this Lease. Except as otherwise herein expressly provided, no subsequent alteration, amendment, change, waiver or addition to or of any provision of this Lease, nor any surrender of the Term, shall be binding upon Landlord or Tenant unless reduced to writing and signed by the party against whom the same is charged or such party's successors in interest.

29.2

This Lease shall not be recorded by either party without the consent of the other.

29.3

This Lease shall be governed in all respects by the laws of the State of Washington.

29.4

This Lease may be executed in several counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.

29.5

All obligations of Tenant which shall not have been performed prior to the end of the Term or which by their nature involve performance, in any particular, after the end of the Term, or which cannot be ascertained to have been fully performed until after the end of the Term, shall survive the expiration or termination of the Term.

29.6

If any term, covenant, condition, or provision of this Lease or the application thereof to any person or circumstance shall, at any time or to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant, condition, and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

29.7

Anything in this Lease to the contrary notwithstanding, in the event that (a) any act or omission of Tenant shall require the consent or approval of Landlord pursuant to this Lease, and (b) this Lease provides that Landlord shall not unreasonably withhold such consent or approval, and (c) Tenant shall claim that Landlord has unreasonably withheld such consent or approval, then the sole recourse of Tenant upon the inability of the parties to agree shall be to bring an appropriate action in a court of competent Jurisdiction against Landlord

35

BioLife lease

4/1/2008

solely to issue a determination of whether the withholding of such consent or approval by Landlord is "reasonable" or "unreasonable", and Tenant shall not be entitled to any damages or other remedy other than specific performance for the issuance by Landlord of such consent or approval if such court of competent jurisdiction shall determine that such withholding of consent was unreasonable, provided, however, Tenant shall be entitled to pursue all remedies at law or in equity if it shall be determined by a court of competent jurisdiction (beyond all right of appeal) that in withholding its consent Landlord acted maliciously and in bad faith (for which Tenant shall have the burden of proof).

29.8

To the maximum extent provided by law, Landlord shall have a lien on all improvements, fixtures, materials and other personal property of Tenant which at any time is located at or affixed to any part or portion of the Property.

30.

COMPLIANCE WITH ENVIRONMENTAL LAWS

30.1

Tenant shall, at its sole cost and expense, comply with the requirements of every federal, state, county, municipal or other governmental law, ordinance, rule, regulation, requirement and/or directive pertaining to the environment (an "Environmental Law" or "Environmental Laws"), including, but not limited to, the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), and the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S. § 9601 et seq.) affecting, binding upon, or respecting Tenant’s use of Hazardous Substances (hereinafter defined) in the Demised Premises. In this regard, Tenant shall, at its sole cost and expense, make all submissions to, provide all information to, and comply with all requirements of any governmental authority enforcing Environmental Laws respecting Tenant’s use of Hazardous Substances i n the Demised Premises. Should any governmental authority determine that action is necessary to clean up, remove and/or eliminate any spill or discharges by Tenant (or by any of Tenant's agents, servants, employees, invitees, guests, subtenants (if any) licensees, or contractors) (“Tenant’s Agents”) of Hazardous Substances (hereinafter defined) in or about the Demised Premises or the Common Area (except to the extent such discharge or spill in the Common Area is caused by the particular act of any third party tenant of any other space at the Property) and/or that a cleanup plan must be prepared and submitted in connection with such release, then, in that event, Tenant shall, at its sole cost and expense, take any and all action required and carry out any and all approved plans and complete, at Tenant's sole cost and expense, all cleanup, removal and remediation required by Environmental Laws.  As used herein, "Hazardous Substances" means any substance that is toxic, ignit able, reactive, or corrosive, or that is regulated by any local government, the State of Washington or the United States Government, any and all material or substances that are defined as "hazardous waste," "extremely hazardous waste," or a "hazardous substance" pursuant to state, federal or local governmental law, any asbestos, polychlorobiphinyls (PCBs) and petroleum products or by-products. Tenant's obligations pursuant to this Section 30.1 shall arise whenever required by any appropriate governmental agency. At the expiration or earlier termination of this Lease Tenant, at Tenant's expense, immediately shall (i) remove or cause to be removed to the extent required by Environmental Laws all Hazardous Substances brought by Tenant or Tenant’s Agents in, on, under or about the Demised Premises (and/or any other portions of the Property, except to the extent that such Hazardous Substances have been discharged at, in, on, under or about portions of the Property other t han the Demised Premises by any other tenant), and (ii) clean up and remediate to the extent required by Environmental Laws all releases of Hazardous Substances by Tenant or Tenant’s Agents in the Demised Premises (and/or any other portions of

36

BioLife lease

4/1/2008

the Property, except to the extent that such Hazardous Substances have been discharged at, in, on, under or about portions of the Property other than the Demised Premises by any other tenant), as required under all Environmental Laws.

30.2

For purposes of this provision, the term "Environmental Documents" shall mean all environmental documentation concerning the Demised Premises, the Property or its environs in the possession or under the control of Tenant, including, without limitation, all drafts and final versions of all sampling plans, cleanup plans, preliminary assessment plans and reports, site investigation plans and reports, remedial investigation plans and reports, remedial action plans and reports or the equivalent, sampling results, sampling reports, data, diagrams, charts, maps, analyses, conclusions, quality assurance/quality control documentation, correspondence to or from the Washington Department of Ecology ("WDOE") or any other municipal, county, state or federal governmental authority, submissions to the WDOE or any municipal, county, state or federal governmental authority and directives, orders, approvals and disappr ovals issued by the WDOE or any other municipal, county, state or federal governmental authority, During the term of the Lease, promptly upon receipt by Tenant or Tenant's representatives, Tenant shall deliver to Landlord all Environmental Documents concerning the Property, or any portion thereof, including the Demised Premises, or generated by or on behalf of Tenant with respect to the Property or any portion thereof, whether currently or hereafter existing.

30.3

Tenant shall notify Landlord in advance of all meetings scheduled between Tenant or Tenant's representatives and the WDOE or any other authority with respect to the Demised Premises, and Landlord and Landlord's representatives shall have the right, without the obligation, to attend and participate in all such meetings, at Landlord's sole expense.

30.4

Tenant shall at all times indemnify, defend (with counsel selected by Tenant and reasonably satisfactory to Landlord) and hold harmless Landlord and Landlord's employees, officers, directors, shareholders, affiliates, partners, agents, professionals and consultants (collectively, the "Indemnitees") against and from any and all claims, suits, liabilities, actions, debts, damages, costs, losses, obligations, judgments, charges and expenses, including sums paid in settlement of claims, of any nature whatsoever suffered or incurred by any of the Indemnitees to the extent caused by:

30.4.1

The actual discharge by Tenant (or by any of Tenant's agents, servants, employees, invitees, guests, subtenants (if any) licensees, or contractors), on or after the Commencement Date, of Hazardous in, on, under, about, or affecting the Property, whether or not the same originates or emanates from the Demised Premises;

Tenant's obligations under this Section 30 shall arise upon the discovery of any Hazardous Substance discharged by Tenant or Tenant’s Agents in violation of Environmental Laws, whether or not any other federal agency or state or local or agency or political subdivision or any court, administrative panel or tribunal has taken or contemplates taking action in connection with the presence of any Hazardous Substances.

30.5

Tenant shall not, directly or indirectly, make any use of the Demised Premises, or the Property which may be prohibited by any Environmental Laws or which may fail or comply with or violate the provisions or conditions of any environmental permit held by Landlord or Tenant with respect to the Demised Premises or the Property, including, without

37

BioLife lease

4/1/2008

limitation, any such permit governing the use, contamination, pollution or conservation of air, water or land or the protection of the environment or of the use, storage, treatment or disposal of toxic or hazardous substances ("Environmental Permits"), or which may jeopardize the continuation or renewal of any such Environmental Permit.

30.6

Tenant shall regularly monitor its compliance with all applicable Environmental Laws, Tenant’s Environmental Permits and Environmental Plans; such monitoring shall be in accordance with all applicable Environmental Laws, Environmental Permits and Environmental Plans and with Tenant's established policies for such monitoring. Tenant shall, when requested by Landlord at reasonable intervals, provide to Landlord copies of the reports showing such monitoring and compliance and such other information and documentation respecting such monitoring and compliance as Landlord reasonably may request from time to time.

30.7

Tenant shall promptly provide Landlord, as soon as received by Tenant, with copies of all of Tenant's Environmental Permits and of any official warnings, citations or charges received by Tenant that Tenant has or may have failed to comply with or has or may have violated any Environmental Law or any Environmental Permit at the Demised Premises or the Property.  Tenant shall promptly supply Landlord with any notices, correspondence and submissions made by Tenant to WDOE, the United States Environmental Protection Agency, or any other local, state or federal authority which requires submission of any information concerning Environmental Laws or Environmental Permits, or Hazardous Substances or other environmental matters. Tenant shall also promptly supply Landlord with all documentation, notices and correspondence delivered to Tenant by any such authority with respect to Environmental Laws, Environmental Permits, environmental matt ers or Hazardous Substances or other environmental matters.

30.8

Notwithstanding anything to the contrary herein, (i) to the best knowledge of Landlord, (a) no Hazardous Substance is present on the Property or the soil, surface water or groundwater thereof, (b) no underground storage tanks are present on the Property, and (c) no action, proceeding or claim is pending or threatened regarding the Property concerning any Hazardous Substances or pursuant to any Environmental Law and (ii) under no circumstance shall Tenant be liable for any losses, costs, claims, liabilities and damages (including attorneys' and consultants' fees) of every type and nature, directly or indirectly arising out of or in connection with any Hazardous Substance present at any time on or about the Property, or the soil, air, improvements, groundwater or surface water thereof, or the violation of any Environmental Laws, except to the extent that any of the foregoing actually results from the release or emission o f Hazardous Substances by Tenant or Tenant’s Agents.

30.9

This Section 30 shall survive the expiration or earlier termination of this Lease. Tenant's failure to abide by the terms of this Section 30 shall be restrainable by injunction, and shall constitute an Event of Default under the Lease.

38

BioLife lease

4/1/2008

31.

 SECURITY

31.1

Tenant, at Tenant's cost and expense, shall be obligated to provide adequate and proper security to the Demised Premises, and to properly regulate access to same without thereby adversely affecting the use and enjoyment of the Property by Landlord or by other tenants or occupants.  Tenant shall have the right to participate in the use of the existing card key access system in the Property or any replacement thereof.

32.

  ACCESS

32.1

Tenant agrees that every other tenant or occupant of the Buildings (as same may change from time to time), and their respective employees, invitees, guests, contractors, subtenants (if any) and licensees, at all times shall have reasonable, non-discriminatory access to and use of Common Area, and in, upon, over, across and through the Common Area, in common with Tenant, and to the same extent enjoyed by Tenant, for ingress to and egress from the Buildings, and access to the premises demised by such tenant or occupant and to the Common Area, and for use of the Common Area.

32.2

Tenant agrees that Landlord, from time to time, may promulgate and/or amend reasonable, non-discriminatory rules and regulations for the use of Common Areas, and/or for access as provided in Section 32. 1, and that upon receiving copies of such rules and regulations (from time to time) Tenant shall abide by same and cause its employees, invitees, guests, contractors, subtenants (if any) and licensees to abide by same.

32.3

For so long as the existing restaurant ("Restaurant ") located in the North Barn is operated (there being no obligation on the part of Landlord or any other person to continue or cause the continued operation of the Restaurant), Tenant and its employees, invitees, and agents shall have access to and the right to use the Restaurant. Tenant acknowledges that Landlord and/or the operator of the Restaurant shall have the right to set or cause to be set all prices for goods at the Restaurant in its sole discretion and that Landlord or the operator of the Restaurant shall have the sole discretion to reduce services or terminate operation of the Restaurant at any time without liability to Tenant.  Landlord assumes no responsibility for, and Tenant, on behalf of its employees, guests, invitees or otherwise, waives any claim it may have now or in the future for the action of the operator of the Restaurant or its agents, e mployees, invitees, guests or suppliers or for any profits derived from the Operator of the Restaurant.

33.

NET LEASE

33.1

Landlord and Tenant agree that except as otherwise expressly provided in this Lease, (i) this is a full service Lease , and (ii) if, for any reason whatsoever, Tenant's use or occupancy of enjoyment of the Demised Premises shall be disturbed, prevented or interfered with for any reason whatsoever (other than Landlord's willful and intentional violation of the terms and provisions of this Lease) Tenant shall continue to pay the rent and additional rent without abatement, suspension or reduction.

39

BioLife lease

4/1/2008

34.

SECURITY DEPOSIT

Tenant will deposit with Landlord upon signing this Lease a Security Deposit equal to two month’s Basic Annual Rent and Operating Expenses.  If Tenant defaults under any provisions of this Lease, Landlord will have the unconditional right to draw on the Security Deposit in the full amount thereof or in any lesser amount or amounts as Landlord may determine, in its sole and absolute discretion apply all or any part of the Security Deposit to the payment of sums due, including damages suffered by Landlord due to such default in addition to any other remedy which Landlord may possess.  

35.

RENEWAL OPTION

Tenant shall have the option to renew this Lease for one (1) renewal term of three (3) years (herein referred to individually as a "Renewal Term") which shall commence on the day following the expiration of the Term defined in this Lease and end on the third anniversary of the commencement date of the Renewal Term, unless the Renewal Term shall sooner terminate pursuant to the terms of this Lease or otherwise.  The Renewal Term shall commence only if (i) Tenant shall have notified Landlord in writing at least nine (9) months prior to the expiration of the then existing Term, and (ii) immediately prior to the expiration of the Term, this Lease shall be in full force and effect and no Event of Default shall have occurred and be continuing.  Time is of the essence with respect to the giving of the notice of Tenant's exercise of a renewal option.  A Renewal Term shall be subject to all of the agreements, terms, covenants and conditions hereof binding upon Tenant and Landlord, except that the basic annual rent (as defined in Section 2.1) shall be at the greater of the current rent under the Lease or the then fair market rent, escalating annually at the then market escalation rate.  Upon the commencement of a Renewal Term, (x) such Renewal Term shall be added to and become part of the Term (but shall not be considered part of the initial Term, (y) any reference to "this Lease", to the "Term", the "term of this Lease" or any similar expression shall be deemed to include such Renewal Term, and (z) the Expiration Date shall become the expiration of such Renewal Term.

36.

RIGHT OF FIRST OFFER

Tenant shall have the ongoing right of first offer (“Right of First Offer”) to lease contiguous space (“Offer Space”) on the 3^rd floor of the building, subject to existing rights of tenants.  Tenant shall have twenty days from notice by Landlord of additional space becoming available to exercise this option.  The offer shall be for a term of not less than three years at the greater of the current rent under the Lease or the then market rate.  If this right is exercised with less than three years remaining on the Lease, then the Lease shall automatically renew for three years, so that the term on the Offer Space is not less than three years.

40

BioLife lease

4/1/2008

IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year first above written.

LANDLORD

MONTE VILLA FARMS LLC

a Washington limited liability company

                  _/s/Robert E. Hibbs________

                  By:  Robert E. Hibbs

                   Its Managing Member

TENANT

BioLife Solutions, a Delaware corporation

By:_/s/Michael P. Rice______________

Name:____________________________

41

BioLife lease

4/1/2008

STATE OF WASHINGTON

)

)ss:

COUNTY OF SNOHOMISH

)

I certify that I know or have satisfactory evidence that Robert E. Hibbs is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he/she was authorized to execute this instrument and acknowledged it as the Managing  Member of Monte Villa Farms LLC a Washington limited liability company, to be the free and voluntary act of such party for the uses and purposes mentioned in this instrument.

DATED: _________________________________, 2007.

  Print Name:  

  NOTARY PUBLIC in and for the State of

  Washington, residing at

  My Appointment expires:  

STATE OF WASHINGTON

)

)ss:

COUNTY OF

)

I certify that I know or have satisfactory evidence that __________________ is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he/she was authorized to execute this instrument and acknowledged it as the ____________ of  BioLife Solutions, a Delaware corporation, to be the free and voluntary act of such party for the uses and purposes mentioned in this instrument.

DATED: _________________________________, 2008.

  Print Name:  

  NOTARY PUBLIC in and for the State of

  Washington, residing at

  My Appointment expires:  

42

BioLife lease

4/1/2008

EXHIBIT A

THE PROPERTY, BUILDINGS, PARKING LOT AND COMMON AREAS

43

BioLife lease

4/1/2008

EXHIBIT A-1

LEGAL DESCRIPTION

Lots 12, 13, 14, 15 and 16 of Quadrant Monte Villa Center, according to the plat thereof, recorded in Volume 54 of Plats, pages 165 through 169, inclusive, records of Snohomish County, Washington.

Situate in the City of Bothell, County of Snohomish, State of Washington.

44

BioLife lease

4/1/2008

EXHIBIT B

BASIC ANNUAL RENT

The initial Basic Annual Rent shall be $17.50 per rentable square foot per year.  Basic Annual Rent shall be increased by four percent (4%) per annum.

Landlord has the right to create up to 50,000 sq ft of additional space on the Property

(the “Additional Space”). The creation of the Additional Space will reduce the Operating Expenses for the Premises (the “Additional Space Expense Reduction”). Tenant agrees that should Landlord create the Additional Space then the Rent shall be increased (effective as of the date of the inclusion of the Additional Space) by the amount of any Additional Space Expense Reduction.  Such a reduction shall be computed (within six months of the inclusion of Additional Space) by subtracting (i) the Tenant’s Proportionate Share of the Operating Expenses and Taxes computed after the inclusion of the Additional Space in the square footage calculations from (ii) Tenant’s Proportionate Share of the Operating Expenses and Taxes computed before the inclusion of the Additional Space in the square footage calculations.  Landlord shall provide Tenant with such computations for Tenant’s review.

45

BioLife lease

4/1/2008

EXHIBIT C

DEMISED PREMISES IN ADMINISTRATION BUILDING

46

BioLife lease

4/1/2008

EXHIBIT D

TENANT IMPROVEMENTS

Landlord, at its sole cost and expense except as provided below, shall perform the improvements listed on this Exhibit D to Tenant’s Premises.  

·

The office area shall be leased as-is.  For the area on the west side of the corridor (1329 USF), Landlord shall provide an improvement allowance of $10.00 per square foot.  

·

The furniture that is currently in the space is available for Tenant’s use at no cost.

47

BioLife lease

4/1/2008

EX-10

Exhibit 10.28

CONSULTING AGREEMENT

This Consulting Agreement (“Agreement”) is made and entered into as of November 15, 2007 by and between BioLife Solutions, Inc., a Delaware (the “Company”), and Roderick de Greef (“Consultant”).  In consideration of the mutual promises contained herein, the parties agree as follows:

1.

SERVICES AND COMPENSATION

(a)

Consultant will provide oversight of the Company’s financing activities, internal accounting functions and SEC reporting, and assist in the search for, and reviewing, strategic alternatives, on a part-time basis (up to 80 hours per month on an as needed basis), effective as of July 1, 2007 (since Consultant was effectively serving the Company in such capacity since such date).  

(b)

For the Services, the Company shall pay Consultant $10,000 (ten thousand dollars) per calendar month.  In addition, the Company shall reimburse Consultant for any office and travel expenses incurred by Consultant in carrying out the Services.  Company will make two monthly payments of $5,000 (five thousand dollars) on the 1^st and the 15^th of each month.

(c)

Consultant acknowledges and agrees that Consultant will be an independent contractor of the Company and not an employee.

2.

CONFIDENTIALITY

(a)

“Confidential Information” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, developments, inventions, processes, formulas, technology, designs, engineering or other business information disclosed by the Company either directly or indirectly.

(b)

Consultant will not, during or subsequent to the term of this Agreement, use the Company's Confidential Information for any purpose whatsoever other than the performance of the Services on behalf of the Company or disclose the Company's Confidential Information to any third party without the Company's prior express written consent, and it is understood that said Confidential Information shall remain the sole property of the Company.  Confidential Information does not include information (i) which is known to Consultant at the time of disclosure to Consultant by the Company as evidenced by written records of Consultant, (ii) has become publicly known and made generally available through no wrongful act of Consultant, or (iii) has been rightfully received by Consultant from a third party who is authorized to make such disclosure.

(c)

Consultant agrees that Consultant will not, during the term of this Agreement, improperly use or disclose any proprietary information or trade secrets of any person or entity with which Consultant has an agreement or duty to keep in confidence, if any, and that Consultant will not bring onto the premises of the Company any unpublished document or proprietary information belonging to such person or entity unless consented to in writing by such person or entity.

- 1 -

(d)

Consultant recognizes that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of such information and to use it only for certain limited purposes.  Consultant agrees that Consultant owes the Company and such third parties, during the term of this Agreement and thereafter, a duty to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out the Services for the Company consistent with the Company's agreement with such third party.

(e)

Consultant will not, during or subsequent to the term of this Agreement, take data or materials from the premises of the Company unless specifically authorized to do so on a case by case basis.  Upon the termination of this Agreement, or upon Company's earlier request, Consultant will deliver to the Company all of the Company's property or Confidential Information in tangible form that Consultant may have in Consultant's possession or control.

3.

TERM AND TERMINATION

(a)

This Agreement will commence on the date first written above and will continue until termination of this Agreement as provided below.  

(b)

Either party may terminate this Agreement, for any reason or no reason whatsoever, upon giving a (90) ninety day written notice thereof to the other party.  However, if this Agreement is terminated as a result of a Change of Control; the Company will make a payment of one year’s fees ($120,000).  As used herein the term Change of Control shall mean  (A) there shall be consummated (1) any consolidation or merger of the Company in which the Company is not the continuing or surviving corporation or pursuant to which shares of the Company’s Common Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Common Stock immediately prior to the merger have the same proportionate ownership of at least 50% of common stock of the surviving corporation immediately after the merger, or (2) any sa le, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; (B) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the Company; (C) any person (as such term is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), shall become the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the Company’s outstanding Common Stock.

(c)

Upon termination of this Agreement, all rights and duties of the parties toward each other shall cease except:

(i)

that the Company shall be obliged to pay, within fifteen (15) days of the effective date of termination, all amounts owing to Consultant for unpaid Services and related expenses, if any, in accordance with the provisions of Section 1 (Services and Compensation) hereof; and

(ii)

Sections 2 (Confidentiality) for up to 3 years and 4 (Miscellaneous) shall survive termination of this Agreement.

- 2 -

(d)

Following any notice of termination of this Agreement given pursuant to Section 3(b), Consultant shall fully cooperate with the Company in all matters relating to the winding up of Consultant's pending work on behalf of the Company and the orderly transfer of any such pending work to such other persons as may be designated by the Company prior to termination.

4.

MISCELLANEOUS

(a)

Arbitration.  Any dispute or controversy arising out of or relating to any interpretation, construction, performance or breach of this Agreement, shall be settled by arbitration to be held in Boston, Massachusetts in accordance with the rules then in effect of the American Arbitration Association.  The decision of the arbitrator shall be final, conclusive and binding on the parties to the arbitration.  Judgment may be entered on the arbitrator's decision in any court of competent jurisdiction.  The arbitrator may grant injunctions or other relief in such dispute or controversy.  

(b)

Law and Venue.  This Agreement shall be governed by and construed in accordance with the laws of Delaware.  

(c)

Entire Agreement. This Agreement sets forth the entire agreement of the parties and supersede any prior agreements between them with respect to the subject matter hereof.  Waiver of any term or provision of this Agreement or forbearance to enforce any term or provision by either party shall not constitute a waiver as to any subsequent breach or failure of the same term or provision or a waiver of any other term or provision of this Agreement.

(d)

Counterparts.  This Agreement may be signed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same agreement.

(e)

Assignment.  The rights and obligations of Consultant are personal in nature and may not be assigned or delegated without the Company's prior written consent.  This Agreement shall inure to the benefit of and be binding on the parties and on each of their respective heirs, executors, administrators, personal representatives, successors and permitted assigns.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

Consultant: By: /s/Roderick de Greef_ Roderick de Greef
Address: 7 Searles Road Windham, NH  03087
BioLife Solutions, Inc.: By: /s/Mike Rice_______________ Mike Rice, Chief Executive Officer
Address:  

- 3 -

EX-10

Exhibit 10.29

LEASE

BETWEEN

MONTE VILLA FARMS LLC

LANDLORD,

AND

BIOLIFE SOLUTIONS

TENANT

FOR PREMISES

AT

3303 MONTE VILLA PARKWAY, SUITE 310

BOTHELL, WASHINGTON

DATED AS OF AUGUST 1, 2007

INDEX

SECTION

TITLE

PAGE

1.

DEMISE AND TERM OF DEMISE

1

2.

RENT, TAXES, ASSESSMENTS AND OTHER CHARGES

2

3.

USE OF PREMISES: COMPLIANCE WITH LAWS

9

4.

REPRESENTATIONS BY TENANT AND LANDLORD

10

5.

INSURANCE

11

6.

DAMAGE OR DESTRUCTION

12

7.

CONDEMNATION

13

8.

SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATE

15

9.

REPAIRS, MAINTENANCE, ALTERATIONS, ETC.

17

10.

INTENTIONALLY OMITTED

19

11.

ASSIGNMENT, SUBLETTING AND MORTGAGING

19

12.

INDEMNITY

20

13.

DEFAULT PROVISIONS, LANDLORD'S REMEDIES

22

14.

BANKRUPTCY AND INSOLVENCY

26

15.

ENTRY BY LANDLORD, ETC.

27

16.

COVENANT OF QUIET ENJOYMENT

28

17.

EFFECT OF CONVEYANCE, LIMITS OF LIABILITY OF LANDLORD, DEFINITION OF "LANDLORD"  28

18.

SURRENDER, HOLDING OVER BY TENANT

29

19.

CURING DEFAULTS; FEES AND EXPENSES

30

20.

MECHANICS AND OTHER LIENS

30

21.

SIGNS, ADDRESS

31

22.

WAIVERS AND SURRENDERS TO BE IN WRITING, RIGHT TO TERMINATE

31

23.

COVENANTS BINDING ON SUCCESSORS AND ASSIGNS

32

24.

RESOLUTION OF DISPUTES

32

25.

NOTICES

32

26.

DEFINITIONS; HEADINGS; CONSTRUCTION OF LEASE

33

27.

FORCE MAJEURE

34

28.

BROKERAGE

35

29.

MISCELLANEOUS PROVISIONS

35

30.

COMPLIANCE WITH ENVIRONMENTAL LAWS

36

31.

SECURITY

39

32.

ACCESS

39

33.

NET LEASE

39

34.

SECURITY DEPOSIT

40

35.      RENEWAL.

40
36.      RIGHT OF FIRST OFFER.

40

i

EXHIBITS

EXHIBIT A

THE PROPERTY, BUILDINGS, PARKING LOT AND COMMON AREA

EXHIBIT A-1   

LEGAL DESCRIPTION

EXHIBIT B

RENTAL SCHEDULE

EXHIBIT C

DEMISED PREMISES IN ADMINISTRATION BUILDING

EXHIBIT D

TENANT IMPROVEMENTS

ii

LEASE

THIS LEASE (the "Lease") is entered into this as of July 24, 2007 between MONTE VILLA FARMS LLC, a Washington limited liability company (the "Landlord"), and BIOLIFE SOLUTIONS, a Delaware corporation (the "Tenant") and amends and entirely replaces all other agreements between Landlord and Tenant and any of Tenant’s subsidiaries or related companies.

W I T N E S S E T H:

Recitals:

WHEREAS, Landlord is the owner of that certain land located in Bothell, Washington and the improvements and buildings thereon (the "Property"), more particularly described in Exhibit A-1 attached hereto and made a part hereof, and

WHEREAS, various buildings located on the land are known as the Administrative Building consisting of approximately 90,868 square feet, the Production Building consisting of approximately 171,816 square feet, the North Barn consisting of approximately 13,576 square feet and the South Barn consisting of approximately 6,769 square feet (the Administrative Building, the Production Building, the North Barn and the South Barn are sometimes collectively referred to as the "Buildings");

WHEREAS, there is also located on the Property a paved and striped parking area consisting of approximately 750 parking spaces (hereinafter referred to as the "Parking Lot"), and

WHEREAS, the Property, Buildings and the Parking Lot are depicted on Exhibits A and A-1 attached hereto.

WHEREAS, Tenant is desirous of leasing agreed square footage as follows:  approximately 4,366 rentable square feet described and outlined on Exhibit C attached hereto ("Demised Premises"), and Landlord is desirous of leasing the Demised Premises to Tenant on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the above recitals and for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by each of the parties hereto, Landlord and Tenant agree as follows:

1.

DEMISE AND TERM OF DEMISE

1.1

(a)

The “Commencement Date” shall be July 31, 2007.  Tenant shall have early access to the Premises upon Lease execution at no charge for the purpose of installing Tenant Improvements and tenant fixtures, approved by Landlord.

(b)

This Lease shall be and become effective as of the Commencement Date. As of the Commencement Date, the terms and provisions of this Lease shall govern and control the respective rights and obligations of Landlord and Tenant with respect to the Demised Premises and the Property.

1

1.2

Landlord demises and leases unto Tenant, and Tenant hires and takes from Landlord, in consideration of the rents to be paid and the covenants, agreements and conditions to be performed, observed and fulfilled by Tenant, the Demised Premises described on Exhibit C, attached hereto and made a part hereof (as same may be modified from time to time in accordance with this Lease).  The Demised Premises is approximately 4,366 rentable square feet; provided, however, if at any time during the Lease Term the rentable square footage of the Demised Premises and/or Buildings increases or decreases due to an actual physical change in the Demised Premises and/or the Common Area or upon remeasurement of the Demised Premises and/or the Buildings, the actual rentable square footage of the Demised Premises shall be recalculated and the parties shall execute an amendment to this Lease to memorialize such adjustment.

1.3

The common area of the Property (the "Common Area") shall mean those interior and exterior portions of the Property designated on Exhibit A, including the improvements and facilities used for parking areas, access and perimeter roads, landscaped areas, exterior walks, fitness area, and washrooms and common hallways located in the Administrative Building, the Production Building, the North Barn, the South Barn, and the Parking Lot as of the date hereof as shown on Exhibit A. Tenant shall have the non-exclusive right, during the term of this Lease, to use the Common Area, in a reasonable manner, for itself, its employees, invitees, guests, contractors and licensees for parking, ingress, egress and similar uses and Tenant acknowledges that all other tenants or occupants of all or any portion of the Property for themselves, and their employees, invitees, guests, contractors, subtenants (if any) and licensees shall also have similar rights to use the Common Area. Landlord shall have the right, at any time and from time to time (a) to grant to any tenant or tenants which hereafter leases or lease all or any of the Property the same rights which inure to Tenant and other tenants as herein described, and/or (b) to (i) limit Tenant to the use of thirteen (13) parking spaces in the Parking Lot and to reasonably designate the location thereof and (ii) alter, modify, increase or reduce the Common Area, provided that access to and from the Demised Premises shall not be materially or adversely affected thereby.  Landlord will make a good faith effort to continue to provide a fitness area as a part of the Common Area. All Common Areas shall be subject to the exclusive control and management of Landlord, subject to the rights of Tenant and any other tenants of the Property to use and have access to the Common Area, and subject to such rights as Landlord shall have pursuant to this Lease or otherwise.

1.4

The term of the Lease (the "Term") commenced on the Commencement Date and shall terminate and expire midnight on July 31, 2011 (the "Expiration Date"). Tenant shall, within ten (10) days after request by Landlord, execute, acknowledge and deliver to Landlord an instrument in form and substance reasonably acceptable to Landlord confirming (i) the Commencement Date and the Expiration Date, but no such instrument shall be required to make the provisions of this Section 1.4 effective.

2.

RENT, TAXES, ASSESSMENTS AND OTHER CHARGES

2.1

Commencing as of the Commencement Date, Tenant shall pay to Landlord basic annual rent as shown on Exhibit B based on the rentable area of the Demised Premises, as adjusted from time to time in accordance with the terms and conditions of this Lease (the “Basic Annual Rent”).

2

2.2

Such Basic Annual Rent shall be paid by Tenant to Landlord in equal monthly installments, in advance, on the first day of each calendar month during the Term without notice, demand, abatement, deduction, counterclaim or set off of any kind. Tenant shall pay the rent in lawful money of the United States.  Any obligation of Tenant for payment of rent which shall have accrued during the Term shall survive the expiration or termination of this Lease.

2.3

The installments of Basic Annual Rent payable under Section 2.1 for the partial calendar months at the beginning and end of the Term shall be pro-rated in the proportion of the number of days in the partial calendar month to the number of days in the year.

2.4

Whenever under the terms of this Lease any sum of money is required to be paid by Tenant in addition to the Basic Annual Rent, and said additional amount so to be paid shall be designated as "Additional Rent," and collectible as such with any installment of rental thereafter falling due hereunder, or, if no such installment thereunder shall fall due, on demand. Rent or rental for purposes of this Lease shall mean Basic Annual Rent plus all Additional Rent, including, but not limited to, Tenant's Proportionate Share of Taxes and Operating Expenses.

2.5

"Tenant's Taxes" shall mean all taxes, assessments, license fees and other governmental charges or impositions levied or assessed against or with respect to Tenant's personal property, furnishings, equipment, movable partitions, business machines and other trade fixtures installed, located or attached to the Property. Tenant shall pay all Tenant's Taxes before delinquency and, at Landlord's request, shall furnish Landlord satisfactory evidence thereof.  If any lien shall at any time be filed against the Property or any part thereof with respect to Tenant's Taxes not paid by Tenant when due, or any judgment, attachment or levy is filed or recorded against the Property or any part thereof with respect thereto, Tenant, within thirty (30) days after the attachment thereof, shall cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. If Tenant shal l fail to cause such lien, judgment, attachment or levy to be discharged within the period aforesaid, then, in addition to any other right or remedy, Landlord may, but shall not be obligated to, discharge the same by bonding proceedings, if permitted by law (and if not so permitted, by deposit in court). Any amount so incurred by Landlord, including all costs and expenses paid by Landlord in connection therewith, together with interest thereon at the rate of 15% per annum (or, if lower, the maximum rate permitted by law) from the respective dates of Landlord's so incurring any such amount, cost or expenses, shall constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

2.6

For purposes of this Lease, the following terms shall be defined as follows:

(a)

"Tenant's Proportionate Share" shall mean the ratio, expressed as a percentage, of the number of rentable square feet comprising the Demised Premises from time to time (approximately 4,366 square feet as of the date of this Lease) (which shall hereafter be adjusted upon any increase or reduction in accordance with this Lease) to the agreed total number of rentable square feet in the Buildings (283,029), that is to say 1.54% as of the Commencement Date, subject to later adjustment in accordance herewith.  If at any time during the Lease Term the rentable square footage of the Demised Premises and/or the Buildings increases or decreases due to an actual physical change in the Demised Premises and/or the Common Areas or upon remeasurement of the Demised Premises and/or the Buildings, Tenant’s Proportionate Share shall be recalculated to equal the actual rentable square footage of the

3

Demised Premises divided by the actual total rental square footage of the Buildings and the parties shall execute an amendment to this Lease to memorialize such adjustment.

(b)

"Fiscal Year" shall mean each fiscal year of Landlord or part thereof during the Term, as such fiscal year may be changed at any time and from time to time in the sole discretion of Landlord. The fiscal year of Landlord as of the date hereof is January 1 through December 31.

(c)

"Lease Year" shall mean a period of one (1) year commencing on the Commencement Date and thereafter commencing upon each anniversary thereof.

(d)

"Operating Expenses" shall mean and include all amounts, expenses and costs of whatever nature that Landlord incurs because of or in connection with the operation, insuring, maintenance, equipping, securing, policing, protection, repair, or management (the "Operating Expenses"), Operating Expenses shall be determined on an accrual basis in accordance with sound management accounting principles consistently applied and shall include, but shall not be limited to, the following:

(1)

Costs and expenses of maintenance, equipping, securing, policing, garbage disposal, and repair of the Property, including Common Areas.

(2)

Costs of maintenance and replacement of landscaping.

(3)

Costs of providing utilities and services to the Common Area.

(4)

Premiums for property (including coverage for earthquake, flood and terrorism if carried by Landlord), liability, worker's compensation, plate glass, rental income and other insurance and commercially reasonable deductible amounts under such insurance paid in connection with repair or restoration of the Property after any damage or destruction.

(5)

Fees and charges for licenses, permits and inspections reasonably necessary for the operation of the Property.

(6)

Costs of capital improvements required to meet changed governmental regulations or which are, reasonably and in good faith, intended to reduce Operating Expenses, such costs, together with interest on the unamortized balance at the rate paid by Landlord on funds borrowed for the purpose of constructing such capital improvements (or, if Landlord funds such costs itself in lieu of borrowing such amount, deemed interest equivalent to the interest at a commercially reasonable rate that would have been incurred had such amount been borrowed by Landlord), to be amortized over such reasonable periods as Landlord shall determine, consistent with generally accepted accounting principles.

(7)

Costs associated with the construction, repair or maintenance of any on-site Property management offices or related facilities.

(8)

Reasonable and customary property management fees, not to exceed 5% of gross revenue.

4

(9)

Costs for accounting, legal and other professional services incurred in connection with the management and operation of the Property and the calculation of Operating Expenses and Taxes (as defined below), provided that Tenant shall not be responsible for paying for any professional costs in leasing space to tenants or evicting tenants from their current space.

(10)

The reasonable cost of contesting the validity or applicability of any governmental enactments that may affect the Property.

(11)

Wages, salaries, fees, related taxes, insurance costs, benefits (including amounts payable under medical, pension and welfare plans and any amounts payable under collective bargaining agreements) and reimbursement of expenses of and relating to all personnel principally engaged in operating, repairing, managing, replacing and maintaining the Property.

(12)

All supplies, tools, equipment and materials used in operating, equipping, repairing and maintaining the Property.

(13)

Cost of security and security personnel, devices and systems (including, without limitation, any security office on the Property).

Notwithstanding any contrary provision of this Lease, Operating Expenses shall not include:  (i) capital improvements other than those specifically enumerated above in clause (6) of the definition of Operating Expenses; (ii) costs of special or additional services rendered to individual tenants (including Tenant) for which a special charge is made; (iii) interest and principal payments on loans or indebtedness secured by the Property or ground rent payments (if any); (iv) costs of improvements for other tenants of the Property; (v) costs of services or other benefits of a type which are not available to Tenant but which are available to other tenants or occupants, and costs for which Landlord is reimbursed by other tenants of the Property other than through payment of tenants' shares of Operating Expenses and Taxes, (vi) leasing commissions, attorneys' fees and other expenses incurred in connection with negotiations of disputes with other te nants, prospective tenants or occupants of the Property, or in connection with the enforcement or violation by Landlord or such tenant or occupant of any lease; (vii) depreciation or amortization, other than as specifically enumerated above in the definition of Operating Expenses, (viii) costs, fines or penalties incurred due to Landlord's violation of any law or governmental regulation, (ix) the excess of the cost of supplies and services provided by subsidiaries and affiliates of Landlord, or Landlord itself, over competitive costs by independent suppliers and contractors of comparable buildings in the vicinity of the Property; (x) Taxes.

If Landlord does not furnish during any Fiscal Year any particular work or service (the cost of which, if performed by Landlord, would constitute an Operating Expense) to a tenant which has undertaken to perform such work or service in lieu of the performance thereof by Landlord, then Operating Expenses shall be deemed to be increased by an amount equal to the additional expense which would reasonably have been incurred during such Fiscal Year by Landlord if it had, at its cost, furnished such work or service to such tenant; provided, however, Landlord shall not be entitled to be reimbursed for an amount in excess of the actual Operating, Expenses. If during any Fiscal Year less than 95% of the leasable square feet of the Property is leased and occupied by tenants, then the Operating Expenses for such Lease Year shall be

5

increased proportionately to reflect the amount of the Operating Expenses which, in Landlord's reasonable judgment, would have been incurred during such Lease Year if 95% of the leasable square feet of the Property was leased and occupied by tenants.

(e)

"Taxes" shall mean and include all real property taxes and general, special or district assessments or other governmental impositions, of whatever kind, nature or origin, imposed on or by reason of the ownership or use of the Property; governmental charges, fees or assessments for transit (including without limitation, area wide traffic improvement assessments and transportation system management fees), housing, police, fire or other governmental service or purported benefits to the Property; personal property taxes assessed on the personal property of Landlord used in or related to the operation of the Property service payments in lieu of taxes and taxes and assessments of every kind and nature whatsoever levied or assessed in addition to, in lieu of or in substitution for existing or additional real or personal property taxes on the Property or the personal property described above, taxes and assessments on the gros s or net rental receipts of Landlord derived from the Property (excluding, however, state and federal personal or corporate income taxes measured by the net income of Landlord from all sources and inheritance, franchise or estate taxes), and the reasonable cost of contesting by appropriate proceedings the amount or validity of any taxes, assessments or charges described above. Taxes shall also include any personal property taxes imposed upon the furniture, fixtures, machinery, equipment, apparatus, systems and appurtenances of Landlord used in connection with the Property for the operation thereof.  Taxes shall also include the amount of all fees, costs and expenses (including, without limitation, attorneys' fees and court costs), if any, paid or incurred by Landlord each Fiscal Year in seeking or obtaining any refund or reduction of Taxes or for contesting or protesting any imposition of taxes, whether or not successful and whether or not attributable to Taxes assessed, paid or incurred in such Fiscal Year.

2.7

(a)

In addition to the Basic Annual Rent, Tenant shall pay, with respect to each Fiscal Year, Tenant's Proportionate Share of all Operating Expenses and Taxes. Tenant's Proportionate Share of Operating Expenses shall be paid in monthly installments in advance on the first day of each calendar month during such Fiscal Year in the Term in amounts sufficient to satisfy payment of the Operating Expenses for such Fiscal Year as reasonably estimated by Landlord from time to time prior to, or during, any Fiscal Year and communicated to Tenant by written notice (the "Estimated Operating Expense Adjustment"). If Landlord does not deliver such a notice (an "Estimate") prior to the commencement of any Fiscal Year, Tenant shall continue to pay Estimated Operating Expense Adjustment as provided in the most recently received Estimate (or Updated Estimate, as defined below) until the Estimate for such Fiscal Year is del ivered to Tenant. If, from time to time during any Fiscal Year, Landlord reasonably determines that Operating Expenses for such Fiscal Year have increased or will increase, Landlord may deliver to Tenant an updated Estimate ("Updated Estimate") for such Fiscal Year, Monthly payments of Estimated Operating Expense Adjustment paid subsequent to Tenant's receipt of the Estimate or Updated Estimate for any Fiscal Year shall be in the amounts provided in such Estimate or Updated Estimate, as the case may be. In addition, Tenant shall pay to Landlord within thirty (30) days after receipt of such Estimate or Updated Estimate, the amount, if any, by which the aggregate of the Estimated Operating Expense Adjustment provided in such Estimate or Updated Estimate, as the case may be, with respect to prior months in such Fiscal Year exceeds the aggregate of the Estimated Operating Expense Adjustment paid by Tenant with respect to such prior months.

6

After the end of each Fiscal Year, Landlord shall send to Tenant a statement (the "Final Operating Expense Adjustment Statement") showing (i) the calculation of the Operating Expense Adjustment for such Fiscal Year, (ii) the aggregate amount of the Estimated Operating Expense Adjustment previously paid by Tenant for such Fiscal Year, and (iii) the amount, if any, by which the aggregate amount of the installments of Estimated Operating Expense Adjustment paid by Tenant with respect to such Fiscal Year exceeds or is less than the Expense Adjustment for such Fiscal Year. Tenant shall pay the amount of any deficiency to Landlord within thirty (30) days of the sending of such statement. At Landlord's option, any excess shall either be credited against payments past or next due hereunder or refunded by Landlord, provided Tenant is not then in default hereunder.  At the end of the term, any amou nts will be paid directly back to Tenant.

On reasonable advance written notice given by Tenant within thirty (30) days following the receipt by Tenant of the Final Operating Expense Adjustment Statement, Landlord shall make available to Tenant Landlord's books and records maintained with respect to the Operating Expenses for such Fiscal Year. If Tenant wishes to contest any item within any Final Operating Expense Adjustment Statement, Tenant shall do so in a written notice (a "Contest Notice") received by Landlord within thirty (30) days following Tenant's inspection of Landlord's books and records, but in any event not later than sixty (60) days after Landlord shall have made its books and records available to Tenant for inspection.  The Contest Notice shall specify in detail the item or items being contested and the specific grounds therefore. However, the giving of such Contest Notice shall not relieve Tenant from the obligation to pay any deficiency i n such statement or the Landlord from the obligation to pay (by refund or credit) any excess in such statement in accordance with this Section. Notwithstanding anything else in this Section to the contrary, if Tenant fails to give such Contest Notice within said thirty (30) day period or fails to pay any deficiency in such statement in accordance with this Section, whether or not contested, Tenant shall have no further right to contest any item or items in such statement and Tenant shall be deemed to accept such statement.

For thirty (30) days after receipt of Tenant's Contest Notice, Landlord and Tenant shall attempt to resolve such dispute.  If such dispute shall not be resolved within such thirty (30) day period (the resolution to be evidenced by a writing signed by Landlord and Tenant), the dispute shall be resolved by arbitration as follows: The party desiring arbitration (the "First Party") shall give notice to that effect to the other party, and shall in such notice appoint a person as arbitrator on its behalf. Within fifteen (15) days after its receipt of such notice, the other party by notice to the First Party shall appoint an arbitrator on its behalf, if the second arbitrator shall not be so appointed within such fifteen (15) days, the First Party may give a second notice to the other party demanding that the other party appoint an arbitrator within ten (10) days of its receipt of such second notice and if the other party shall not do so within such ten (10) day period, then the arbitrator appointed by the First Party shall appoint the second arbitrator. The two arbitrators appointed pursuant to the above shall try to appoint the third arbitrator. If, within twenty (20) days after the appointment of the second arbitrator, they shall not have agreed upon the appointment of the third arbitrator, either of the parties upon notice to the other party may request such appointment by the Office of the American Arbitration Association (the "AAA") closest to the Property, or in its absence, refusal, failure or inability to act, may apply to the presiding judge of the court of the State of Washington with Jurisdiction over the matters covered by this Lease (the "Court") for the appointment of such third arbitrator and the other party shall not raise any question as to the Court's power and jurisdiction to entertain the application and make the appointment. Each arbitrator shall be a qualified person w ho shall have

7

at least ten (10) years experience in a calling connected with the matter of the dispute. The arbitration shall be conducted in accordance with the then prevailing, rules of the AAA, under the auspices of the office of the AAA closest to the Property, The arbitrators shall render their decision and award in writing upon concurrence of at least two (2) of their members, within thirty (30) days after the appointment of the third arbitrator. Such decision and award shall be binding and conclusive on the parties, shall constitute an "award" of the arbitrators within the meaning of the AAA rules and applicable law, and counterpart copies thereof shall be delivered to each of the parties. In rendering such decision and award, the arbitrators shall not add to, subtract from, or otherwise modify the provisions of this Lease and shall apply applicable federal and/or state law. Judgment may be had under the decision and award o f the arbitrators so rendered in any court of competent jurisdiction'.  Each party shall pay the fees and expenses of the arbitrator appointed by or for it. The fees and expenses of the third arbitrator, and all other expenses of the arbitration (other than the fees and disbursements of attorneys or witnesses for each party), shall be borne by the parties equally.

(b)

Tenant's Proportionate Share of Taxes with respect to each Fiscal Year shall be paid in monthly installments in advance on the first day of each calendar month during such Fiscal Year in the Term in amounts sufficient to satisfy payment of Tenant's Proportionate Share of Taxes For such Fiscal Year as reasonably estimated by Landlord from time to time prior to or during any Fiscal Year and communicated to Tenant by written notice (the "Estimated Tax Payment," and the actual, final amount due from Tenant on account of Taxes, the "Tax Payment")). If Landlord does not deliver such a notice (an "Estimate") prior to the commencement of any Fiscal Year, Tenant shall continue to pay Estimated Tax Payment as provided in the most recently received Estimate (or Updated Estimate, as defined below) until the Estimate for such Fiscal Year is delivered to Tenant. If, from time to time during any Fis cal Year, Landlord reasonably determines that Taxes for such Fiscal Year have increased or will increase, Landlord may deliver to Tenant an updated Estimate ("Updated Estimate") for such Fiscal Year. Monthly payments of Estimated Tax Payment paid subsequent to Tenant's receipt of the Estimate or Updated Estimate for any Fiscal Year shall be in the amounts provided in such Estimate or Updated Estimate, as the case may be. In addition, Tenant shall pay to Landlord within thirty (30) days after receipt of such Estimate or Updated Estimate, the amount, if any, by which the aggregate of the Estimated Tax Payment provided in such Estimate or Updated Estimate, as the case may be, with respect to prior months in such Fiscal Year exceeds the aggregate of the Estimated Tax Payment paid by Tenant with respect to such prior months.

(c)

Within sixty (60) days after a final real estate tax bill with respect to the Property is received by Landlord or any other determination of Taxes with respect to a Fiscal Year occurs (whether due to the receipt of a bill, the filing of a return, the settlement or adjudication of disputed Taxes, or otherwise), or as soon thereafter as practicable, Landlord shall send to Tenant a statement (the "Tax Adjustment Statement") showing (i) the calculation (or recalculation) of the Tax Payment for such Fiscal Year, (ii) the aggregate amount of the Estimated Tax Payment previously paid by Tenant for such Fiscal Year, and (iii) the amount, if any, by which the aggregate amount of the installments of Estimated Tax Payment paid by Tenant with respect to such Fiscal Year exceeds or is less than the Tax Payment for such Fiscal Year. Tenant shall pay the amount of any deficiency to Landlord within thirty (30) days after the sending of such statement. At Landlord's option, any excess shall either be credited against payments past or next due hereunder or refunded by Landlord, provided Tenant is not then in default hereunder.

8

2.8

Tenant shall (i) pay (at the rates charged by the utility providers to Landlord) 100% of all charges for electric current (including, without limitation, for lighting the Demised Premises and supplying HVAC to the Demised Premises), water, gas (if any), telephone, and other utilities consumed relative to the Demised Premises, and (ii) be responsible (at Tenant's expense) of providing, installing, repairing, maintaining and operating all conduits, risers, cables, pipes and other electrical, mechanical and other facilities and installations which are required in connection with the consumption of such utilities at the Demised Premises.   Tenant shall not have any extra charges for HVAC or any utilities used at on the weekends.  Tenant shall be charged twenty dollars ($20) per hour for HVAC used between 6:00 pm and 4:00 am Sunday through Saturday.  Upon the completion of one (1) year of the term, Tenant shall have the right to request that Landlord and Tenant revisit use of extra hours HVAC and the charge for such.  Tenant shall have control over the temperature and other utilities serving the Demised Premises.  Also, Landlord and Tenant shall share any additional utility costs that arise out of the air conditioning and other utilities needs of the Tenant’s computer room.  

2.9

Landlord shall provide the following services for the Property: (i) city water from regular building outlets for drinking, lavatory and toilet purposes, (ii) janitorial and maintenance service for the Property (it being understood that should Landlord so elect then Tenant at its expense shall provide janitorial service to the Demised Premises using contractors reasonably acceptable to Landlord which shall provide insurance coverage reasonably acceptable to Landlord), (iii) all utilities for the Common Area, and (iv) periodic inspections of the drain valves, hydrants and fire pumps on the Property.  The cost of the services to be provided by Landlord described in this Section 2.9 shall constitute Operating Expenses.

2.10

If Tenant shall fail to pay, within twenty (20) days of the date when the same is due and payable, any rent or other charge pursuant to this Lease (including, without limitation, basic annual rent, or additional rent), Tenant shall upon demand pay Landlord a late charge of five (5%) percent of the amount past due, or, if such late charge shall exceed the maximum late charge permitted by law, the Tenant shall pay the maximum late charge permitted by law.  Additionally, such amounts not paid shall accrue interest at the rate of one and one-half percent (1.5%) (or the highest rate allowable by law if lower) per month until paid.  Such interest shall be cumulative.

3.

USE OF PREMISES: COMPLIANCE WITH LAWS

3.1

Subject to Section 3.2, the Demised Premises may be used only for general office and cleanroom, subject to and in accordance with all Legal Requirements (hereafter defined) and for no other purpose. Landlord shall not be deemed to have made any representation, warranty or agreement that any such use by Tenant or all or any of the Property shall be or remain lawful or otherwise permitted under any Legal Requirements.

3.2

Tenant shall not use or occupy or permit anything to be done in or on the Demised Premises or the Property, in whole or in part, in a manner which would in any way violate any certificate of occupancy affecting the Demised Premises or the Property, make void or voidable any insurance then in force with respect thereto, or which may make it more costly or impossible to obtain fire or other insurance thereon, cause or be apt to cause structural or other material injury to the Buildings or any part thereof, constitute a public or private nuisance, or which may violate any present or future, ordinary or extraordinary, foreseen or unforeseen Legal

9

Requirements or Insurance Requirements, (hereinafter defined). In addition, Tenant shall not allow any animals to be kept on the Premises or use or allow the Demised Premises to be used for residential or dwelling purposes.

3.3

Tenant shall, at its expense, promptly comply or cause compliance with, and not jeopardize or make more costly Landlord's compliance with (but it being agreed that except as may otherwise be expressly set forth to the contrary in this Lease, compliance with the following shall be the obligation of Tenant at Tenant's expense):

3.3.1

the requirements of every statute, law, ordinance, regulation, rule, requirement, order or directive, including but not limited to the Americans with Disabilities Act of 1990, now or hereafter made by any federal, state, city or county government or any department, political subdivision, bureau, agency, office or officer thereof, or of any other governmental authority having jurisdiction with respect to and applicable to (i) the Demised Premises, (ii) the condition, equipment, maintenance, use or occupation of the Demised Premises, including, without limitation, such of the foregoing applicable to the making of any alteration or addition in or to any structure appurtenant thereto and to pollution and environmental control, and (iii) subtenants of Tenant (all of the foregoing being herein referred to as "Legal Requirements"), and

3.3.2

the rules, regulations, orders and other requirements of the National and any local Board of Fire Underwriters, or other body having the same or similar functions and having jurisdiction of and which are applicable to, the Demised Premises and of any liability, fire or other insurance policy which Tenant or Landlord is required hereunder to maintain (herein referred to as "Insurance Requirements"), whether or not such compliance involves changes in the use of the Demised Premises or any part thereof, or be required on account of any particular use to which the Demised Premises, or any part thereof may be put, and whether or not any such Legal Requirements or Insurance Requirements be of a kind not now within the contemplation of the parties hereto.

4.

REPRESENTATIONS BY TENANT AND LANDLORD

4.1

Except for the improvements listed in Exhibit D, Tenant covenants and agrees that it will accept the Demised Premises in its existing "as is" state or condition as of the Commencement Date and without any representation or warranty, express or implied, in fact or by law, by Landlord or its agents and without recourse to Landlord or its agents, as to the nature, condition, or usability thereof, or the use or occupancy which may be made thereof, except as may be otherwise specifically provided in this Lease.

4.2

Tenant agrees that it will not establish any new air vents within twenty (20) feet of any other tenant’s air intakes on the roof without prior notice to, and approval of Landlord.

4.3

Nothing, in this Lease shall limit or restrict the right of the Landlord, from time to time, and in the Landlord's sole discretion, to execute, enter into, amend, modify, terminate and/or cancel any leases or occupancy agreements respecting the Property (or any parts thereof), other than this Lease, nor shall any such acts or actions by Landlord give rise to any right or remedy in favor of Tenant.

10

5.

INSURANCE

5.1

During the Term, Tenant, at Tenant's sole cost and expense, shall carry and maintain:

5.1.1

Commercial general public liability insurance, including property damage liability coverage, protecting and indemnifying Tenant, Landlord (and naming Landlord, its managing agent and the holder of any mortgage encumbering the Property as additional insured thereon) and any designee of Landlord against any and all claims for damages to person or property, or for loss of life or of property occurring in or about the Demised Premises or arising out of the ownership, maintenance, use or occupancy thereof or from any of the matters indicated in Section 12 or elsewhere in this Lease against which Tenant is required to indemnify Landlord. The coverage limits of the policy shall be those amounts reasonably requested by Landlord but at least $1,000,000 per occurrence and $2,000,000 in the aggregate for any policy year.

5.1.2

All policies of insurance carried by Tenant pursuant to this Lease shall name as insureds Landlord, and if required, any fee mortgagee or other designee of Landlord, as their respective interests may appear; provided, however, that rent insurance, if any, shall be carried solely in favor of Landlord. To the extent Landlord receives and applies proceeds of rent insurance, if any, Tenant shall receive a credit against fixed rental payable hereunder. Subject to the rights of any fee mortgagee, all losses made under the policy or policies shall be adjusted by Landlord and the proceeds thereof shall be payable to the Landlord. The originals or duplicate originals of such policies or certificates shall be delivered to Landlord except when such originals or duplicate originals are required to be held by any fee mortgagee, in which case certificates of insurance shall be delivered to Landlord. Policies or certificates with respect to renewal policies shall be delivered to Landlord by Tenant (i) initially not later than the Commencement Date and (ii) thereafter not less than 30 days prior to the expiration of the original policies, or succeeding renewals, as the case may be, in each case together with receipts or other evidence that the premiums thereon have been paid for at least six months. In the event the Tenant is not able to deliver the insurance policies or certificates prior to the renewal date as aforesaid, the Tenant may deliver binders in lieu of such policies or certificates to the Landlord; provided, however, that the insurance policies or certificates shall be delivered within sixty (60) days after the expiration of the original policies or succeeding renewals but in no event later than fifteen (15) days prior to the expiration date of the binder. Premiums on policies shall not be financed in any manner whereby the lender, on default or otherwise, shall have the right or privilege of surrendering or canceling the policies, provided, however, that Tenant may pay premiums in quarter or semi-annual installments so long as such method of payment does not constitute a default under any fee Mortgage. Each policy of insurance required under this program shall have attached thereto an endorsement that such policy shall not be canceled or modified without at least thirty (30) days prior written notice to the Landlord, and, if required, to any fee mortgagee. Each such policy shall contain a provision that no act or omission of Tenant shall affect or limit the obligation of the insurance company to pay the amount of any loss sustained and a provision waiving any right of the insured against the Landlord. All insurance required to be carried by Tenant under this Lease shall be effected under valid and enforceable policies issued by insurers which are licensed to do business in the State of Washington and have

11

been approved in writing by Landlord (which approval Landlord agrees not to unreasonably withhold).

5.1.3

Fire and extended coverage insurance covering Tenant's personal property, improvements and alterations, against loss or damage by fire and other risks now or hereafter embraced by "all risk" coverage, with vandalism and malicious mischief endorsements, to the extent of at least 90% of then full replacement values. The proceeds from any such policy shall be used by Tenant for the replacement of personal property or the restoration of Tenant's improvements or alterations.

5.1.4

Worker's compensation insurance as required by Legal Requirements.

5.2

Landlord and Tenant hereby release each other and each other's officers, directors, shareholders, principals, employees and agents, from liability or responsibility for any loss or damage to property covered by valid and collectible fire insurance with standard extended coverage endorsement, whether such insurance is carried by Tenant or any other tenant or occupant of the Property, or any part thereof.  This release shall apply not only to liability and responsibility of the parties to each other, but shall also extend to liability and responsibility for anyone claiming through or under the parties by way of subrogation or otherwise. This release shall apply even if the fire or other casualty shall have been caused by the fault or negligence of a party or anyone for whom a party may be responsible. However, this release shall apply only with respect to loss or damage actually recovered from an insurance company. This release sha ll not apply to loss or damage of property of a party unless the loss or damage or personal injury occurs during the times the fire or extended coverage insurance policies of a party contain a clause or endorsement to the effect that any release shall not adversely affect or impair the policies or prejudice the right of the party to recover thereunder. Landlord and Tenant each agree that any fire and extended coverage insurance policies covering the Property or contents shall include this clause or endorsement as long as the same shall be obtainable without extra cost, or if extra cost shall be charged therefor, so long as the other party pays the extra cost. If extra cost shall be chargeable, the party whose policy is subject to the extra cost shall advise the other thereof, and of the amount of the extra cost. Tenant shall also obtain the agreement of its worker's compensation insurance carrier to waive all right of subrogation against Landlord.

5.3

No policy furnished by Tenant pursuant to Section 5.1 shall have a deductible or self-insured retainage amount in excess of $25,000, except that public liability insurance may have a deductible of up to $50,000, fire and extended coverage may have a deductible of up to $50,000, and earthquake coverage may have a deductible of up to the greater of $100,000 or 5% of the loss.  Tenant will indemnify, defend and hold harmless Landlord for any difference between a $10,000 deductible and a $25,000 deductible.

6.

DAMAGE OR DESTRUCTION

6.1

Tenant shall immediately give notice to Landlord of every case of fire, explosion, destruction or damage by the elements or other casualty.

6.2

If at any time during the Term, the Demised Premises shall be damaged in whole or in material part, or wholly or partially destroyed, by fire or other casualty (including

12

any casualty for which insurance coverage was not obtained) of any kind or nature, regardless of whether said damage or destruction resulted from an act of God, the fault of the Tenant, the Landlord, or from any cause whatsoever, then, in that event neither party shall be required to replace, repair or rebuild the damaged or destroyed improvements (except that Tenant shall be required to turn over to Landlord the insurance proceeds payable in connection with such damage or destruction); provided, however, that if the damage or destruction results from the sole or partial fault of Tenant and is not fully covered by insurance or the insurance proceeds received by the Landlord are insufficient therefore, the Tenant shall be required to replace, repair or rebuild the damaged or destroyed improvements to substantially their condition prior to the casualty event.

6.3

Upon thirty (30) days written notice of the casualty event, the Landlord shall have the option, to (i) replace, repair and rebuild any and all damaged or destroyed improvements, or (ii) to terminate this Lease as of a specified date, in which latter event all rent shall be apportioned as of the date of such damage or destruction, and this Lease shall terminate as of the specified date, but all insurance proceeds shall be paid to Landlord as aforesaid, and Tenant shall remain obligated under Section 6.2 in the event the insurance proceeds are insufficient to fully replace, repair or rebuild. In the event Landlord proceeds to replace, repair and rebuild, this Lease shall not terminate, Landlord shall cause the Demised Premises and the Common Areas to be repaired or restored to the extent insurance proceeds are available to the Landlord as speedily as its good faith efforts will allow, and there shall be a proportional abatement of the b asic and additional rent reserved under this Lease during such period as the Demised Premises remain untenantable based on the extent to which the Demised Premises are untenantable. Tenant shall also have the option to terminate this Lease effective as of the date of the damage or destruction, in the event:  (a) a portion of the Demised Premises which is material to Tenant's operations have been damaged or destroyed and are untenantable, and Landlord shall not provide to Tenant within 120 days after the date of damage or destruction substitute space of reasonably equivalent size and functionality (either on a temporary or permanent basis), and (b) (x) the damaged or destroyed portion of the Demised Premises cannot reasonably be repaired within 120 days of such date as set forth in an opinion to that effect of an architect or engineer retained by Tenant (at its expense) and reasonably acceptable to Landlord, (y) Landlord shall not give written notice of Landlord's election under clause (i) above within t he specified thirty (30) day period, or (z) Landlord, after having elected to repair, shall not restore the Demised Premises substantially to its condition prior to the event causing the damage or destruction. Tenant's options to terminate shall be exercised by written notice to Landlord within 45 days of the casualty event, with respect to clauses (x) and (y) and within 135 days after the date of such damage or destruction with respect to clause (z).

6.4

Tenant agrees that the foregoing provisions are in lieu of any other rights or remedies that Tenant may have against Landlord pursuant to the laws of the State of Washington in the event of any damage or destruction to all or any part of the Demised Premises or any other portion of the Property.

7.

CONDEMNATION

7.1

If the whole of the Demised Premises shall be taken under the power of eminent domain by any public or private authority or in the event of sale to such authority in lieu of formal proceedings of eminent domain, then this Lease shall cease and terminate as of the date

13

of such taking or sale, which date is defined, for all purposes of this Section 7, as the date the public or private authority has the right to possession of the property being taken or sold.

7.2

In the event of any taking or sale of all or any part of the Demised Premises, the entire proceeds of the award or sale shall be paid to Landlord, and Tenant shall have no right to any part thereof, provided, however, that nothing contained herein shall be construed to prevent Tenant from recovering any allowance for its personal property or for moving expenses which the law permits to be made to tenants, so long as such allowance does not diminish the award paid to Landlord.

7.3

If any public or private authority shall, under the power of eminent domain, make a taking, or should a sale in lieu thereof occur of less than the whole of the Demised Premises, then Landlord may, at its election, terminate this Lease by giving Tenant written notice of the exercise of its election within twenty (20) days after the nature and extent of the taking or sale have been finally determined. In the event of termination by Landlord under the provisions of this Section 7.3, this Lease shall cease and terminate as of the date of such taking or sale. If Landlord does not so terminate this Lease, subject to Section 7.5, this Lease shall continue in full force and effect.

7.4

In the event of a partial taking or sale not resulting in a termination of this Lease pursuant to Section 7.3, Landlord shall, if Landlord's fee mortgagee consents thereto, effectuate all such repairs and restoration as are necessary to restore the Demised Premises for the operation of Tenant's business, to the extent net proceeds of the award or sale are available, but nothing contained herein shall be construed so as to require Landlord to pay any cost of repair in excess of the net proceeds of the award or sale price received from the condemning authority and allocable to the Demised Premises. In such case, as of the date of the taking, the basic and additional rent reserved hereunder shall be reduced, but only until such time as Landlord completes its repair or restoration in accordance herewith, by an amount that is in the same ratio to the rental then in effect as the value of the portion of the Demised Premises taken or sold bears to the total value of the Demised Premises immediately before the date of taking or sale. If the net proceeds of the award or sale are not sufficient to repair or restore the Demised Premises, Tenant may, at its own expense, complete such repairs or restoration, in accordance with the terms of this Lease.

7.5

Tenant shall have the option, to be exercised by written notice to Landlord within fifteen (15) days after such taking or sale, to terminate this Lease in the event (i) more than 10% of the square footage of the Demised Premises is taken in condemnation, or (ii) the Lease continues notwithstanding a partial condemnation of more than 10% of the square footage of the Demised Premises and within 120 days after the condemnation, Landlord does not restore the Demised Premises substantially to their condition prior to the condemnation.

7.6

The taking of the Demised Premises or any part thereof by military or other public authority shall constitute a taking of the Demised Premises under the power of eminent domain only when the use and occupancy by the taking authority has continued for longer than 90 consecutive days. During the 90-day period all the provisions of this Lease shall remain in full force and effect, except that rental reserved (but not the additional rent) shall be abated during such period of taking based on the extent to which the taking interferes with

14

Tenant's use of the Demised Premises. Landlord shall be entitled to whatever award may be paid for the use and occupation of the Demised Premises for the period involved.

8.

SUBORDINATION, ATTORNMENT, ESTOPPEL CERTIFICATE

8.1

This Lease is and shall be subject and subordinate in all respects to all bona fide mortgages which may now or hereafter affect the Property, to each and every advance made or hereafter to be made under such mortgages, and to all renewals, modifications, consolidations, replacements, and extensions of such mortgages irrespective of the date of the execution and/or recording thereof (provided, however, that Landlord shall use its good faith efforts to obtain from such mortgagee a non-disturbance agreement as described in the last sentence of this Section 8.1). This Section 8.1 shall be self-operative and no further instrument of subordination shall be required. In confirmation of such subordination, Tenant agrees, without payment to Tenant of any consideration therefore, to execute and deliver any instrument that Landlord or the holder of any such mortgage or any of their respective successors in interest may request to e vidence such subordination within twenty (20) days of request.  Tenant may state in the subordination document any objections or issues outstanding it has relative to the Lease or the Landlord’s performance thereunder.  Tenant hereby irrevocably appoints Landlord its attorney in fact to execute such instrument on behalf of Tenant, should Tenant refuse or fail to do so promptly after request. The mortgages to which this Lease is, at the time referred to, subject and subordinate shall sometimes be collectively called "superior mortgage." Landlord shall, upon the request of Tenant, use its good faith efforts to obtain a non-disturbance agreement from the holder of any superior mortgage, to the effect that in the event of the foreclosure of the superior mortgage Tenant's possession of the Demised Premises shall not be disturbed provided that Tenant shall not be in default under this Lease, provided, however, (1) Landlord (i) shall not be required to incur any material costs or liabilitie s in connection therewith, and (ii) shall not have any liability to Tenant if Landlord shall fail to procure such agreement, and (2) this Lease and the obligations of Tenant shall not be affected should Landlord fail to procure such agreement despite such good faith efforts.

8.2

In the event of any act or omission of Landlord which would give Tenant the right, immediately or after lapse of a period of time, to cancel or terminate this Lease, or to claim a partial or total eviction, Tenant shall not exercise such right: (i) until it has given written notice of such act or omission to the holder of each superior mortgage whose name and address shall previously have been furnished to Tenant in writing, and (ii) unless such act or omission shall be one which is not capable of being remedied by Landlord or such mortgage holder within thirty (30) days, until a thirty (30) day period for remedying such act or omission shall have elapsed following the giving of such notice, provided such holder shall with due diligence give Tenant written notice of intention to, and commence and continue to, remedy such act or omission.

8.3

If the holder of a superior mortgage shall succeed to the rights of Landlord, then at the request of such party so succeeding to Landlord's rights (“Successor Landlord”) and upon such Successor Landlord's written agreement to accept Tenant's attornment, Tenant shall attorn to and recognize Successor Landlord as Tenant's landlord under this Lease and shall promptly, without payment to Tenant of any consideration therefor, execute and deliver any instrument that such Successor Landlord may request to evidence such attornment. Tenant hereby irrevocably appoints Landlord or Successor Landlord the attorney-in-fact of Tenant to

15

execute and deliver such instrument on behalf of Tenant, should Tenant refuse or fail to do so promptly after request. Upon such attornment, this Lease shall continue in full force and effect as, or as if it were, a direct lease between Successor Landlord and Tenant upon all of the terms, conditions, and covenants as are set forth in this Lease and shall be applicable after such attornment, except that Successor Landlord shall not: (i) be obligated to repair, restore, replace, or rebuild the Property, in case of total or substantially total damage or destruction, beyond such repair, restoration or rebuilding as can reasonably be accomplished with the net proceeds of insurance actually received by, or made available to, Successor Landlord; (ii) be liable for any previous act or omission of Landlord; (iii) be subject to any prior defenses or offsets; (iv) be bound by any modification of this Lease not expressly provided for in th is Lease or by any previous prepayment of more than one month's rent, unless such modification or prepayment shall have been expressly approved in writing by the holder of the superior mortgage through or by reason of which Successor Landlord shall have succeeded to the rights of Landlord; or (v) be liable for the performance of Landlord's covenants and agreements contained in this Lease to any extent other than to Successor Landlord's ownership in the Property, and no other property of Successor Landlord shall be subject to levy, attachment, execution or other enforcement procedure for the satisfaction of Tenant's remedies.

8.4

In the event that a bona fide institutional lender shall request reasonable modifications to this Lease, then Tenant shall not unreasonably withhold, condition or delay its written consent to such modifications provided that the same do not, in Tenant's reasonable judgment (and Tenant shall not demand the payment to Tenant of any consideration for consent thereto), increase the obligations of Tenant hereunder or materially adversely affect Tenant’s operations or leasehold interest hereby.

8.5

Tenant agrees, at any time, (and without payment to Tenant of any consideration therefor), upon not less than ten (10) days' prior notice by Landlord, to execute, acknowledge and deliver to Landlord, (i) a current certified income statement and balance sheet of Tenant and (ii) a statement in writing addressed to Landlord (and/or Landlord's designee) certifying that this Lease is unmodified and in full force and effect (or if there have been modifications, that the same is in full force and effect as modified and stating the modifications), stating the dates to which the rent has been paid, stating such other information concerning this Lease and Tenant's tenancy as Landlord reasonably shall request, and stating whether or not there exists any default in the performance by Landlord of any term, covenant or condition contained in this Lease and, if so, specifying each such default, it being intended that any financial reports and such s tatement delivered pursuant to this Section 8.5 may be relied upon by Landlord and by any mortgagee or prospective mortgagee of any mortgage affecting the Property or any purchaser or prospective purchaser of the Property. When so requested by Landlord, such statement shall be submitted in writing under oath by a person or persons having knowledge of the statements made therein.

16

9.

REPAIRS, MAINTENANCE, ALTERATIONS, ETC.

9.1.1

Except as otherwise expressly provided in this Lease, Landlord at its cost shall maintain, repair or improve as needed, all portions of the Demised Premises (while Tenant is occupying same as permitted hereunder), and, except as otherwise expressly provided herein, Tenant shall not be required to maintain or make any repairs, replacements, improvements or alterations in or to the Demised Premises.  Notwithstanding the foregoing, in the event that Tenant activates and uses for more than five (5) days the separate air filtration and circulation systems of the clean room located within the Demised Premises, then Tenant shall be obligated to repair and maintain such systems during Tenant’s period of operation thereof; provided, however, that neither Tenant nor Landlord shall be obligated under this Section 9.1.1 to make or pay for any repairs or expenditures to the clean room systems that could properly be capitalized under gene rally accepted accounting principles.

9.1.2

Landlord shall (subject to reimbursement by Tenant of Operating Expenses) be responsible for maintenance, repairs or replacement of the roof, HVAC systems (except any HVAC equipment installed by or exclusively for Tenant), and elevator systems, unless the same is occasioned by the acts or omissions of Tenant, its agents, employees, guests, licensees, invitees, guests, subtenants (if any), subtenants, assignees, successors or independent contractors, in which event Tenant shall be responsible for such repairs, maintenance or replacement.

9.2

Landlord shall not be liable for any failure of water supply, gas or electric current or of any utility or for any injury or damage to person or property caused by or resulting from gasoline, oil, steam, gas, electricity, or hurricane, tornado, flood, wind or similar storms or disturbances, or water, rain or snow which may leak or flow from the street, sewers, gas mains or any sub-surface area or from any part of the Property, or leakage of gasoline or oil from pipes, appliances, sewer or plumbing works therein, or from any other place, or for interference with light or other incorporeal hereditaments by anyone, or caused by operations by or of any public or quasi-public work.

9.3

Tenant shall have the right to make, at its sole cost and expense, additions, alterations and changes (collectively, "Alterations") in or to the Demised Premises, provided Tenant shall not then be in default in the performance of any of the covenants in this Lease, subject to the following conditions:

9.3.1

No Alterations shall be commenced except after fifteen (15) days' prior written notice to Landlord, which shall include reasonably detailed final plans and specifications and working drawings of the proposed Alterations and the name of the contractor.

9.3.2

No Alterations costing in excess of $50,000 (and no Alterations which, when aggregated with all other Alterations, proposed or performed during the Term shall exceed $100,000) and no structural or Building system or exterior Alterations, or Alterations affecting any Common Area, regardless of cost, shall be made without the prior written consent of Landlord, which shall not be unreasonably withheld as to interior, non-structural, non-Building system Alterations.

17

9.3.3

No Alterations shall be undertaken until Tenant shall have procured and paid for, so far as the same may be required from time to time, all permits and authorizations of all governmental authorities having jurisdiction, and shall have provided to Landlord evidence substantiating to Landlord's reasonable satisfaction that such permits and authorizations have issued.

9.3.4

All Alterations shall be made promptly (unavoidable delays excepted), in a good and workmanlike manner and in compliance with all applicable permits, authorizations and all Legal Requirements and all Insurance Requirements.

9.3.5

Anything in this Lease to the contrary notwithstanding, no Alterations shall be made by Tenant if they reduce the value or serviceability of the Property, increase the risk of casualty or the cost of insurance or increase the risk of environmental pollution.

9.3.6

Before commencing the Alterations and at all times during construction, Tenant's contractor shall maintain builder's risk insurance coverage satisfactory to Landlord.

9.3.7

If the estimated cost of the Alterations exceeds $100,000, Tenant at its cost shall furnish to Landlord a performance and completion bond issued by an insurance company qualified to do business in Washington and reasonably acceptable to Landlord, in a sum equal to the cost of the Alterations (as determined by the construction contract between Tenant and its contractor) guaranteeing the completion of the Alterations free and clear of all liens and other charges, and in accordance with the plans and specifications.

9.4

All Alterations, whether temporary or permanent in character, which may be made upon the Demised Premises either by Landlord or Tenant, except furniture, trade fixtures or equipment (other than HVAC equipment) installed at the expense of Tenant, shall be the property of Landlord and shall remain upon and be surrendered with the Demised Premises as a part thereof at the expiration or any termination of this Lease, without compensation to Tenant; provided, however, Landlord may elect within thirty (30) days before the expiration of the Term, or within five (5) days after termination of the Term, to require Tenant, at Tenant's cost, to remove any Alterations that Tenant has made to the Demised Premises at any time before or during the Term. If Landlord so elects, Tenant at its cost shall restore the Demised Premises to the condition designated by Landlord in its election, and repair any damage caused by the removal of Alterations, before the last day of the Term, or within thirty (30) days after notice of election is given, whichever is later. This Section shall survive the expiration or termination of this Lease.  Tenant Improvements in Exhibit D will not need to be removed.

9.5

If Tenant is not then in default of any provisions of this Lease, Tenant shall have the right to remove from the Demised Premises immediately before the expiration of the Term, or within twenty (20) days after the sooner termination of the Term, any trade equipment and other equipment (not including any building equipment) and furniture, which has been affixed to the Demised Premises by Tenant, as long as Tenant at its cost promptly restores any damage caused by the removal, provided Tenant shall be responsible and pay for the cost of repairing any damage caused by such removal.

18

10.

INTENTIONALLY OMITTED

11.

ASSIGNMENT, SUBLETTING AND MORTGAGING

11.1

Neither Tenant, nor Tenant's successors or assigns, shall (unless expressly permitted to do so) assign, mortgage, pledge or encumber this Lease, in whole or in part, or sublet the Demised Premises, in whole or in part, or permit the same or any portion thereof to be used or occupied by others, without the prior consent in writing and approval of credit by Landlord in each instance which consent shall not be unreasonably withheld, conditioned or delayed.  If this Lease be so assigned or transferred, or if all or any part of the Demised Premises be sublet or occupied by anybody other than Tenant, Landlord may collect rent from the assignee, transferee, subtenant or occupant, and apply the net amount collected to the rent reserved herein, but no such assignment, subletting, occupancy or collection shall be deemed a waiver of any agreement, term, covenant or condition of this Lease, or the acceptance of the assignee, transferee, subt enant or occupant as tenant, or a release of Tenant from the performance or further performance by Tenant of the terms, covenants and conditions of this Lease, and Tenant shall continue to be liable under this Lease. The consent by Landlord to an assignment, mortgage, pledge, encumbrance, transfer, management contract or subletting shall not be construed to relieve Tenant from obtaining the express consent in writing of Landlord to any further assignment, mortgage, pledge, encumbrance, transfer, management contract or subletting. Landlord shall have the right to reasonably withhold its consent to an assignment or subletting, mortgage, pledge or other encumbrance. Notwithstanding anything to the contrary herein contained, an assignment of this Lease shall include, without limitation the following: (a) if Tenant shall be a corporation and fifty percent (50%) or more of its voting stock or all or substantially all its assets shall be sold, mortgaged, assigned, pledged, encumbered or otherwise transferred (other than as collateral security for a bona fide loan to a bona fide lender) (and whether in one (1) single transaction or in more than one (1) successive transaction); or (b) if Tenant shall be a partnership, limited liability company, joint venture, syndicate or other group and all or any portion of the interest of any partner, member or other equity holder shall be sold or otherwise transferred (however this provision shall not, as to a corporation or other entity whose stock or other equity interests are publicly traded on a recognized stock exchange, be applicable to sales of stock or other equity interests on such stock exchange).  Notwithstanding the forgoing, Tenant may sublease or assign all or a portion of the Premises to an affiliate, parent, subsidiary or operating division of Tenant, or to any entity acquiring all or substantially all of the Tenant’s assets or stock without Landlord’s approval.  Tenant shall give Landlord notice of said sublease or assignment.

11.2

Any approved subtenant will be required to have the same financial capacity of that of the Tenant or otherwise be satisfactory to Landlord.

11.3

If Tenant shall desire to assign this Lease or sublet all or a portion of the Premises, Tenant shall submit to Landlord a written request for Landlord's consent to such assignment or subletting, which request shall include the following information:  (a) the name and address of the proposed assignee or subtenant; (b) in the case of a proposed subletting, a description identifying the space to be sublet and the term of such subletting; (c) the nature and character of the business of the proposed assignee or subtenant; (d) in the case of a proposed assignment, a current financial statement of the proposed subtenant or assignee; and (e) the proposed assignment or sublease.  

19

11.4

Tenant, within twenty (20) days of its receipt of Landlord's request therefor, shall reimburse Landlord for all reasonable out-of-pocket costs incurred by Landlord in considering whether or not to consent, including reasonable attorney's fees and disbursements and the reasonable costs of making investigations regarding the proposed subtenant or assignee.  In the event Landlord grants its consent, but before the subtenant or assignee shall take possession, Tenant shall deliver to Landlord a fully-executed counterpart of the sublease or instrument of assignment.

11.5

If Tenant shall sublease any portion of the Premises or assign this Lease, Tenant shall pay to Landlord fifty percent (50%) of any consideration received by Tenant (net of reasonable costs incurred by Tenant to effect any such assignment or sublet, such as advertising, brokerage, legal and construction expenses) from the subtenant or assignee, as the case may be, to the extent such consideration exceeds the Basic Annual Rent and Additional Rent payable hereunder.

11.6

Notwithstanding any assignment of this Lease or subletting of all or any part of the Demised Premises, whether made with or without Landlord's consent, the Tenant originally named herein, and each successor Tenant, shall be and remain jointly and severally liable for all obligations of Tenant hereunder.

12.

INDEMNITY

Notwithstanding that joint or concurrent liability may be imposed upon Landlord by statute, ordinance, rule, regulation, order, or court decision, Tenant shall, notwithstanding any insurance furnished pursuant hereto or otherwise, indemnify, protect, defend and hold harmless Landlord from and against any and all liability, fines, suits, claims, obligations, damages, losses, penalties, demands, actions and judgments, and costs and reasonable expenses of any kind or nature (including reasonable attorneys' fees), by anyone whomsoever, arising after or relating to or accruing during the period after the date hereof and due to or arising out of:

12.1

any work or thing done in, on or about the Demised Premises or the Common Area or any part thereof by Tenant or anyone claiming through or under Tenant or the respective employees, agents, licensees, contractors, servants or subtenants of Tenant or any such person;

12.2

any use, possession, occupation, operation, maintenance or management of the Demised Premises or any part thereof, or the Common Area or any part thereof by Tenant, including, without limitation, any air, land, water or other pollution caused by Tenant;

12.3

any negligence or wrongful act or omission on the part of Tenant or any person claiming through or under Tenant or the respective employees, agents, licensees, invitees, guests, subtenants (if any), contractors, servants or subtenants of Tenant or any such person;

12.4

any accident or injury to any person (including death) or damage to property (including loss of property) occurring in or on the Demised Premises or any part thereof or the Common Area or any part thereof and arising from actions or omissions of Tenant or the employees, agents, licensees, invitees, guests, subtenants (if any) contractors, servants or subtenants of Tenant;

20

12.5

any failure on the part of Tenant to perform or comply with any of the covenants, agreements, terms, provisions, conditions or limitations contained in this Lease; and

12.6

any failure on the part of Tenant to perform or comply with Legal Requirements or Insurance Requirements.

In case any claim, action or proceeding is raised or brought against Landlord (and/or any of the other indemnified parties above described) by reason of any of the foregoing, Landlord, shall promptly provide notice of such action or proceeding to Tenant.  No delay by Landlord in giving such notice to Tenant shall in any way impair, waive or affect the obligations of Tenant to indemnify, defend, and hold harmless Landlord except to the extent of actual prejudice to Tenant arising solely and directly from such delay.  Tenant, at Tenant's expense, thereupon shall assume and, through competent counsel, diligently conduct the defense of such claim, action or proceeding. Upon such assumption by Tenant, Landlord, at the expense of Tenant, shall cooperate with Tenant in all reasonable respects in the conduct of such defense. The duty of Landlord to cooperate shall (to the extent reasonable) include, but not be limited to, at the expe nse of Tenant, making available then present employees of Landlord and/or its Affiliates to act as witnesses and consult with counsel, and assist in the location and production of documents. Landlord shall, to the extent reasonable, subject to such reasonable confidentiality requirements as Landlord may impose, and at the cost of Tenant (including without limitation reproduction costs), make available to Tenant the books and records of Landlord relevant to the proceedings. The obligations of Tenant shall include but not be limited to, taking all steps necessary or appropriate to the defense or settlement of such claim, action, proceeding or litigation. Provided that Tenant has performed and is performing its obligations pursuant to this Section 12, Landlord may participate, through counsel of Landlord's choice, at Landlord's expense, in the defense of any such claim, action, proceeding or litigation, but Tenant shall direct and control the defense thereof Tenant or its counsel shall keep Landlord apprised at all times of the status of the action or proceeding. The establishment of limits of coverage for the insurance required by Section 5 shall not serve in any way to limit Tenant's obligations pursuant to this Section 12. Anything herein to the contrary notwithstanding, (i) Tenant shall not enter into or consent or agree to the settlement of any claim, litigation, action, or suit respecting which for Tenant is obligated to indemnify, or defend Landlord pursuant hereto, without the express prior written consent of Landlord, in Landlord's sole discretion, unless, in each such case (as demonstrated to the reasonable satisfaction of Landlord):  (1) Tenant has and does fully and completely indemnify and hold Landlord harmless from and against all liability, fines, suits, claims, obligations, damages, losses, penalties, demands, actions and judgments, and costs and reasonable expenses of any kind or nature (including reasonable attorneys' fees), by anyone whomsoever, resulting from or arising, out of such settlement: and (2) Landlord is fully released from all liability, fines, suits, claims, obligations, damages, losses, penalties, demands, actions and judgments, and costs and reasonable expenses of any kind or nature respecting such claim, litigation, action, or suit, and (3) such settlement shall not in any manner adversely affect the Property, or the use, development, maintenance, repair or occupancy thereof, and (ii) Tenant shall not issue, disseminate, distribute or publish, or agree to, consent to, or approve, any statement or press release in connection with such settlement, without the prior written consent of Landlord, which shall not be unreasonably withheld. The provisions of this Section 12 shall survive the expiration or termination of this Lease.

21

12.7

Waiver of Subrogation.  Notwithstanding anything to the contrary herein, the parties hereto release each other and their respective agents, employees, successors, assignees and subtenants from all liability for damage to any property that is caused by or results from a risk which is actually insured against, which is required to be insured against under this Lease, or which would normally be covered by all risk property insurance, without regard to the negligence or willful misconduct of the entity so released.  All of Landlord's and Tenant's repair and indemnity obligations under the Lease shall be subject to the waiver contained in this paragraph.

13.

DEFAULT PROVISIONS, LANDLORD'S REMEDIES

13.1

Any of the following events ("Events of Default") shall constitute a default under this Lease:

13.1.1

Tenant's failure to pay any installment of Basic Annual Rent or any Additional Rent within five (5) days of the date on which the same was due and payable; or

13.1.2

Tenant's doing or permitting anything to be done, whether by action or inaction, contrary to any of Tenant's obligations pursuant to this Lease, or otherwise any breach of this Lease or failure by Tenant to perform any of its obligations under this Lease (except as to the payment of rent, additional rent and the matters set forth in Sections 13.1.3, 13.1.4 and 14), and such situation, breach or failure shall continue and shall not be remedied by Tenant within thirty (30) days after Landlord shall have given to Tenant notice specifying the same; or, if the default cannot with due diligence be cured within a period of thirty (30) days and the continuance of which will not subject Landlord (or any of its directors, officers, shareholders, partners, agents or employees) to the risk of criminal or civil liability or foreclosure of any superior mortgage or any other lien on the Property, Tenant shall not promptly and di ligently prosecute to completion all steps necessary to remedy the same, or

13.1.3

The occurrence of any event whereby this Lease, any interest in it, the estate thereby granted or, any portion thereof, or the unexpired balance of the Term would by operation of law or otherwise pass to any entity other than Tenant, except as expressly permitted by Section 11; or

13.1.4

Tenant vacates the Demised Premises (defined as an absence for more than fifteen (15) consecutive days without prior notice to Landlord), or Tenant abandons the Demised Premises (defined as an absence of more than five (5) days or more while Tenant is in breach of some other term of this Lease).  The fact that Tenant is not in occupancy from the Commencement Date to Tenant’s actual occupancy of the Demised Premises following notice to Tenant by Landlord that the Demised Premises are available for occupancy (but in no event later than 30 days following such notice) shall not be considered vacation or abandonment pursuant to this Section 3.1.4.  Tenant’s vacation or abandonment of the Demised Premises shall not be subject to any notice or right to cure.

13.1.5

Tenant becomes insolvent, voluntarily or involuntarily bankrupt or a receiver, assignee or other liquidating officer is appointed for Tenant’s business.

22

13.1.6

Tenant’s interest in the Demised Premises, or any part thereof, is taken by execution or other process of law directed against Tenant, or is taken upon or subject to any attachment by any creditor of Tenant, if such attachment is not discharged within fifteen (15) days after being levied.

13.2

Upon the occurrence of any Event of Default, the Landlord may exercise any one or more of the following remedies, in addition to all other remedies provided in this Lease and by law or in equity:

13.2.1

Landlord may recover from Tenant: (i) the worth at the time of award of the unpaid Basic Annual Rent and Additional Rent which had been earned at the time of termination (including interest at a default rate of eighteen percent (18%) per annum); (ii) the worth at the time of award of the amount by which the unpaid Basic Annual Rent and additional rent which would have been earned after termination until the time of award exceeds the amount of such Basic Annual Rent and additional rent loss that Tenant proves could have been reasonably avoided (including interest at a default rate of eighteen percent (18%) per annum); (iii) the worth at the time of award of the amount by which the unpaid Basic Annual Rent and additional rent for the balance of the Term after the time of award exceeds the amount of such Basic Annual Rent and additional rent loss that Tenant proves could be reasonably avoided discounting such amount by the discount rate of the Federal Reserve Bank of San Francisco at the time of the award, plus one percent (1%), and (iv) any other amount necessary to compensate Landlord for all the detriment caused by Tenant's failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom.

For purposes of computing unpaid Basic Annual Rent and additional rent for the balance of the Term pursuant to clause (iii) above, unpaid Basic Annual Rent and Additional Rent shall consist of the sum of (A) the total Basic Annual Rent for the balance of the Term plus (B) Tenant's obligation to pay the Operating Expenses and Taxes and such other items of additional rent specified in this Lease to be paid in whole or in part by Tenant for the balance of the Term. For purposes of computing Tenant's obligation to pay the Operating Expenses and Taxes and such other items of additional rent for the Lease Year of the Event of Default and each future Lease Year in the Term such amounts shall be assumed to be equal to the amount of additional rent that was payable by Tenant in respect of Operating Expenses and Taxes and such other items of additional rent for the Lease Year prior to, the Lease Year in which the Event of Default occurs c ompounded at a rate equal to the mean average rate of inflation for the three (3) Lease Years preceding the Lease Year of the Event of Default, as determined by using the United States Department of Labor, Bureau of Labor Statistics Consumer Price Index (All Urban Consumers, all items, 1982-84 equals 100) (the "CPI") for the metropolitan area or region of which the Property is a part. If such index is discontinued or revised during the Term, such other government index or computation with which it is replaced shall be used in order to obtain substantially the same result as would be obtained if the index had not been discontinued or revised. If no replacement index exists then Landlord shall select as a replacement index that index which, in Landlord's opinion, is generally recognized as the successor index.

13.2.2

Landlord may sell at public or private sale all or any part of the goods, chattels, fixtures and other personal property belonging to Tenant which are or may be put into the Demised Premises during the Term, except for Tenant's business records whether exempt or not from sale under execution or attachment (it being agreed that said property shall at

23

all times be bound with a lien in favor of Landlord and shall be chargeable for all rent and for the fulfillment of the other covenants and agreements herein contained) and apply the proceeds of such sale, first, to the payment of costs and expenses of conducting the sale or caring for or storing said property (including all attorney's fees), second, toward the payment of any indebtedness, including (without limitation) indebtedness for rental, which may be or may become due from Tenant to Landlord, and third, to pay Tenant, on demand in writing, any surplus remaining after all indebtedness of Tenant to Landlord has been fully paid.

13.2.3

Landlord may perform, on behalf of Tenant, any obligation of Tenant under this Lease which Tenant has failed to perform, the cost of which performance by Landlord, together with interest thereon at the Default Rate from the date of such expenditure, shall be deemed additional rent and shall be payable by Tenant to Landlord upon demand.

13.2.4

The Landlord may give the Tenant a notice (the "Termination Notice") of its intention to terminate this Lease specifying a day not less than ten (10) days thereafter, and, upon the day specified in the Termination Notice, this Lease and the term and estate hereby granted shall expire and terminate and all rights of the Tenant under this Lease shall expire and terminate, but the Tenant shall remain liable for damages as hereinafter set forth. Notwithstanding the foregoing, the Landlord may institute dispossess proceedings for non-payment of rent, distraint or other proceedings to enforce the payment of rent without giving the Termination Notice.  No act by Landlord other than the giving of a Termination Notice shall terminate this Lease.

13.2.5

The Landlord may exercise any and all other legal and/or equitable rights or remedies which it may have.

13.3

Upon any such termination or expiration of this Lease, or other termination of Tenant's possession under this Lease, the Tenant shall peaceably quit and surrender the Demised Premises to the Landlord, and the Landlord or Landlord's agents and employees may without further notice immediately or at any time thereafter enter upon or re-enter the Demised Premises or any part thereof, and possess or repossess itself or themselves thereof either by summary dispossess proceedings, ejectment, any suitable action or proceeding at law, agreement, force or otherwise (without thereby creating any breach of the peace), and may dispossess and remove Tenant and all other persons and property from the Demised Premises without being liable to indictment, prosecution, or damages therefor, and may repossess the same, and may remove any persons therefrom, to the end that Landlord may have, hold and enjoy the Demised Premises again. The words "enter& quot; or "reenter," "possess" or "repossess" as used in this Lease are not restricted to their technical legal meaning.

13.4

In the event of any breach or threatened breach by Tenant of any of the agreements, terms, covenants or conditions contained in this Lease, Landlord shall be entitled to enjoin such breach or threatened breach and shall have the right to invoke any right and remedy allowed at law or in equity or provided in this Lease.

13.5

Each right and remedy of the Landlord provided for in this Lease shall be cumulative and shall be in addition to every other right or remedy provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by the Landlord of any one or more of the rights or remedies provided

24

for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by Landlord of any or all other rights or remedies provided for in this Lease or now or hereafter existing at law or in equity or by statute or otherwise.

13.6

Suit or suits for the recovery of damages, or any installments thereof, may be brought by Landlord from time to time at its election, and nothing contained in this Lease shall be deemed to require Landlord to postpone suit until the date when the term of this Lease would have expired if it had not been so terminated under the provisions of this Section 13 or under any provision of law, or had Landlord not re-entered the Demised Premises. Nothing contained in this Lease shall be construed to limit or preclude recovery by Landlord against Tenant of any sums or damages to which Landlord may lawfully be entitled by reason of any default under this Lease or otherwise on the part of Tenant. Nothing contained in this Lease shall be construed to limit or prejudice the right of Landlord to prove and obtain as liquidated damages by reason of the termination of this Lease or reentry on the Demised Premises for the default of Tenant an amo unt equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceeding in which, such damages are to be proved.

13.7

Upon the termination or expiration of this Lease, or other termination of Tenant's possession under this Lease due to Tenant's default, the Tenant hereby authorizes and empowers the Landlord, at the Landlord's option (without imposing any duty upon the Landlord to do so), to re-enter the Demised Premises as agent for the Tenant or any successor-occupant of the Demised Premises under the Tenant, or for its own account or otherwise, and to relet the same for any term expiring either prior to the original expiration date hereof, or simultaneously therewith, or beyond such date, and to receive rent and apply same to pay all fees and expenses incurred by the Landlord as a result of such Event of Default, including without limitation any legal fees and expenses arising therefrom, the cost of re-entry and re-letting and to the payment of the rent and other charges due hereunder, and, at the expense of Tenant, make such repairs or alterations and shall necessary or appropriate, in the reasonable judgment of Landlord to facilitate such reletting. No entry, re-entry or reletting by the Landlord, whether by summary proceedings, termination or otherwise, shall discharge the Tenant from its liability to the Landlord as set forth herein. If Landlord does relet the Demised Premises, Landlord may relet the entirety thereof, or any part thereof, alone or together with other premises, for such term(s) (which may be greater or less than the period which otherwise would have constituted the balance of the Term) and on such terms and conditions (which may include concessions or free rent and alterations of the Demised Premises) as Landlord, in its sole discretion, may determine, but Landlord shall not be liable for, nor shall Tenant's obligations hereunder be diminished by reason of, any failure by Landlord to relet the Demised Premises or any failure by Landlord to collect any rent due upon such reletting.

13.8

The Tenant shall be liable for all costs, charges and expenses, including reasonable attorney's fees and disbursements, incurred by the Landlord by reason of the occurrence of any Event of Default.

13.9

The Tenant, and on behalf of any and all persons claiming through or under the Tenant, including creditors of all kinds, does hereby waive and surrender all rights and privileges which they or any of them might have under or by reason of any present or future law,

25

to redeem the Demised Premises or to have a continuance of this Lease for the Term after being dispossessed or ejected therefrom by the valid order of a court of competent jurisdiction.

13.10

The provisions of this Section 13 shall survive the expiration or termination of this Lease.

14.

BANKRUPTCY AND INSOLVENCY

14.1

Neither Tenant's interest in this Lease, nor any estate hereby created in Tenant nor any interest herein, shall pass to any trustee or receiver or assignee for the benefit of creditors or otherwise by operation of law.

14.2

In the event the interest or estate created in Tenant hereby shall be taken in execution or by other process of law, or if Tenant is adjudicated insolvent by a court of competent jurisdiction other than the United States Bankruptcy Court, or if a receiver or trustee of the property of Tenant shall be appointed by reason of the insolvency or inability of Tenant to pay its debts, or if Tenant shall file a voluntary petition or proceeding under any federal or state law dealing with bankruptcy, insolvency, reorganization or any other adjustment of its debts, or if any assignment shall be made of the property of Tenant for the benefit of creditors, then and in any such event, this Lease and-all rights of Tenant hereunder shall automatically cease and terminate with the same force and effect as though the date of such event were the date originally set forth herein and fixed for the expiration of the Term, and Tenant shall vacate and surren der the Premises but shall remain liable as herein provided.

14.3

Tenant shall not cause or give cause for the appointment of a trustee or receiver of the assets of Tenant and shall not make any assignment for the benefit of creditors or become or be adjudicated insolvent, or file any voluntary petition or commence any voluntary proceeding in respect thereto. The allowance of any petition under any insolvency law except under the Bankruptcy Code or the appointment of a trustee or receiver of Tenant or of its assets, shall be conclusive evidence that Tenant caused, or gave cause therefor, unless such allowance of the petition, or the appointment of a trustee or receiver, is vacated within forty-five (45) days after such allowance or appointment. Any act described in this Section 14.3 shall be deemed a material breach of Tenant's obligations hereunder, and this Lease shall thereupon automatically terminate. Landlord does, in addition, reserve any and all other remedies provided in this Lease or by law or in equity.

14.4

In the event Section 14.1 shall be deemed unenforceable by the United States Bankruptcy Court this Section 14.4 shall apply; otherwise this Section 14.4 shall have not force or effect.  Upon the filing of a petition by or against Tenant under the United States Bankruptcy Code:

14.4.1

Tenant, as debtor and as debtor in possession, and any trustee who may be appointed agree as follows: (a) to perform each and every obligation of Tenant under this Lease, until such time as this Lease is either rejected or assumed by order of the United States Bankruptcy Court; and (b) to pay monthly in advance on the first day of each month as reasonable compensation for use and occupancy on the Premises an amount equal to all rent, additional rent and other charges otherwise due pursuant to this Lease; and (c) to reject or assume this Lease within sixty (60) days of the filing of such petition under Chapter 7 of the

26

Bankruptcy Code or within 120 days (or such shorter term as Landlord, in its sole discretion, may deem reasonable so long as notice of such period is given) of the filing of a petition under any other Chapter; and (d) to give Landlord at least forty-five (45) days' prior written notice of any proceeding relating to any assumption of this Lease; and (e) to give Landlord at least thirty (30) days' prior written notice of any abandonment of the Premises; any such abandonment to be deemed a rejection of this Lease; and (f) to do all other things of benefit to Landlord otherwise required under the Bankruptcy Code; and (g) to be deemed to have rejected this Lease in the event of the failure to comply with any of the above, and (h) to have consented to the entry of an order by an appropriate United States Bankruptcy Court providing all of the above, waiving notice and hearing of the entry of same.

14.4.2

No Event of Default or default of this Lease by Tenant either prior to or subsequent to the filing of such a petition, shall be deemed to have been waived unless expressly done so in writing by Landlord.

14.4.3

Included within and in addition to any other conditions or obligations imposed upon Tenant or its successor in the event of assumption and/or assignment are the following: (a) the cure of any monetary defaults and the reimbursement of pecuniary loss within not more than thirty (30) days of assumption and/or assignment; and (b) the deposit of an additional sum equal to three months' rent to be held pursuant to the terms of Section 34 of this Lease; and (c) the use of the Demised Premises as set forth in Section 3 of this Lease, and (d) the prior written consent of any mortgagee to which this Lease has been assigned as collateral security; and (e) the Demised Premises, at all times, remains a single leasehold structure and no physical changes of any kind may be made to the Demised Premises unless in compliance with the applicable provisions of this Lease.

15.

ENTRY BY LANDLORD, ETC.

15.1

Except in the case of an emergency and upon 24 hour notice, Tenant shall permit Landlord and its authorized representatives to enter the Demised Premises, or any part thereof, at all reasonable times for the purpose of (a) performing work in the Demised Premises if and to the extent required to be performed by Landlord (including, without limitation, to perform such work as shall be required to be performed by Legal Requirements (to the extent not the obligation of Tenant under this Lease) in the event that portions of the Property (other than the Demised Premises) shall be leased to persons other than Tenant), provided, however, that (except in the event of an emergency) Landlord shall give Tenant reasonable prior notice of such entry and shall conduct such work so as not to unreasonably interfere with the normal conduct of Tenant's business in the Demised Premises, or (b) curing defaults of Tenant in accordance with, and (except in the event of an emergency) after such notice (if any) as may be required by, the provisions of Section 13. In addition, Tenant, after reasonable prior notice, shall permit Landlord and fee mortgagees and their respective authorized representatives, to enter the Demised Premises, or any part thereof, at all reasonable times during usual business hours for the purpose of inspecting the same.

15.2

Landlord shall also have the right, after reasonable prior notice, to enter the Demised Premises, or any part thereof, at all reasonable times during usual business hours for the purpose of showing the same to appraisers, prospective lenders and prospective purchasers or

27

fee mortgagees thereof and, at any time within six months prior to the expiration of this Lease, for the purpose of showing the same to prospective tenants.

15.3

If, at any time during which Landlord or any fee mortgagee shall have the right to enter the Demised Premises, admission to the Demised Premises, for the purposes aforesaid cannot be obtained, they, or their respective agents, servants, employees, contractors and representatives, may (on such notice, if any, as may be reasonable under the circumstances, which notice need not be in writing if an emergency exists in respect of the protection of the Demised Premises) enter the Demised Premises and accomplish such purpose. Any entry on the Demised Premises by Landlord or a fee mortgagee shall be at such times and by such methods (other than in the event of such an emergency) as will cause as little inconvenience, annoyance, disturbance, loss of business or other damage to Tenant as may be reasonably practicable in the circumstances.

16.

COVENANT OF QUIET ENJOYMENT

16.1

Landlord covenants that Tenant, on paying the rents and performing and observing all the covenants and conditions contained in this Lease, shall and may peaceably and quietly have, hold and enjoy the Demised Premises during the Term in accordance with the terms of this Lease, subject, however, to the terms of this Lease.

17.

EFFECT OF CONVEYANCE, LIMITS OF LIABILITY OF LANDLORD, DEFINITION OF "LANDLORD"

17.1

The term "Landlord" as used in this Lease shall mean and include only the owner or owners (and any mortgagee in possession) at the time in question of the fee estate in the Property, so that in the event of any transfer or transfers (by operation of law or otherwise) of the title to such fee estate, Landlord herein named (and in case of any subsequent transfers or conveyances, the then transferor) shall be and hereby is automatically freed and relieved, from and after the date of such transfer or conveyance, of all liability in respect of the performance of any covenants or obligations on the part of Landlord contained in this Lease thereafter to be performed, provided that (a) any funds in which Tenant has an interest, in the hands of such Landlord or the then transferor at the time of such transfer, shall then be turned over to the transferee, and (b) any amount then due and payable to Tenant by Landlord or the then transferor under any provision of this Lease shall then be paid to Tenant and (c) the transferee shall be deemed to have assumed and agreed to perform, subject to the limitations of this Section 17 (and without further agreement between or among the parties or their successors in interest, and/or the transferee) and only during and in respect of the transferee's period of ownership, all of the terms, covenants and conditions in this Lease contained on the part of Landlord thereafter to be performed, which terms, covenants and conditions shall be deemed to "run with the land," it being intended hereby that the terms, covenants and conditions contained in this Lease on the part of Landlord shall, subject as aforesaid, be binding on Landlord, its successors and assigns, only during and in respect of their respective successive periods of ownership.

17.2

It is specifically understood and agreed that in the event of a breach by Landlord of any of the terms, covenants or conditions of this Lease to be performed by Landlord, the monetary liability of Landlord in relation to any such breach shall be limited to the equity of Landlord in the Property, including Landlord's interest in this Lease, the Property, moneys held

28

by any trustee for the benefit of Landlord and any sums at the time due or to become due under this Lease. Tenant shall look only to Landlord's equity in the Property for the performance and observance of the terms, covenants and conditions of this Lease to be performed or observed by Landlord and for the satisfaction of Tenant's remedies for the collection of any award, judgment or other judicial process requiring the payment of money by Landlord in the event of a default in the full and prompt payment and performance of any of Landlord's obligations hereunder. No property or assets of Landlord, other than Landlord's equity in the Property, shall be subject to lien, levy, execution or other enforcement procedure for the satisfaction of Tenant's remedies in any matter whatsoever arising out of or in any way connected with this Lease or any of its provisions, any negotiations in connection therewith, the relationship of Landlord and Tenant hereunder or the use and occupancy of the Property; and in confirmation of the foregoing, if any such lien, levy, execution or other enforcement procedure so arising shall be on or in respect of any property or assets of Landlord, other than Landlord's equity in the Property, Tenant shall promptly release any property or assets of Landlord, other than Landlord's equity in the Property, from such lien, levy, execution or other enforcement procedure by executing and delivering, at Tenant's expense and without charge to Landlord, any instrument or instruments, in recordable form, to that effect prepared by Landlord (but any such 'instrument of release shall not release any such lien, levy, execution or other endorsement procedure on or in respect of Landlord's equity in the Property). Tenant hereby appoints Landlord its attorney-in-fact for the purposes of executing such instrument or instruments of release if Tenant fails or refuses to do so promptly after request.

18.

SURRENDER, HOLDING OVER BY TENANT

18.1

On the expiration or termination of this Lease, Tenant shall peaceably and quietly leave, surrender and deliver to Landlord the Demised Premises, together with all Alterations which may have been made upon the Demised Premises (except to the extent that Landlord may require Tenant under Section 9.4 hereof to remove such Alterations and restore the Demised Premises), all of the foregoing to be surrendered in the condition received at the Commencement Date, reasonable use, wear and tear excepted and free of occupants. If as a result of or in the course of the removal of Tenant's property any damage occurs to the Demised Premises, Tenant shall pay to Landlord the reasonable cost of repairing such damage. If Tenant fails to quit and surrender the Demised Premises upon the expiration or termination of this Lease, it shall be liable to Landlord for the damages caused to Landlord by reason of such holdover and it is agreed that such damages shall be liquidated in an amount equal to the amount set forth below.  The acceptance by Landlord of such damages or rental after termination of this Lease shall not be construed as consent to continued occupancy, nor shall such holding over constitute a renewal or extension of this Lease. Landlord may, at its option, construe such holding over as a tenancy from month to month, subject to all the terms, covenants and conditions of this Lease, except as to duration thereof, and in that event the Tenant shall pay Basic Annual Rent and Additional Rent in advance at the rate of 175% of the rate provided in this Lease as effective during the last month thereof; provided however, if Landlord does not have a tenant committed to lease all or a portion of the premises, the rate shall be one hundred twenty five percent (125%) of the rate provided for in this lease effective during the last month thereof (“Final Rate”) for ninety (90) days immediately following the Expiration Date; effective the 91^{s t} day following the Expiration Date the rate shall be one hundred fifty percent (150%) of the Final Rate.  Effective the 151^st day following Expiration Date the rate shall be one hundred seventy five percent (175%) of the Final Rate.  Tenant's obligation to observe or perform this covenant shall survive

29

the expiration or termination of this Lease. Notwithstanding the foregoing, upon the expiration of the Lease for any reason whatsoever, Tenant shall have the right and obligation to remove all of its fixtures, furniture, machinery, and equipment from the Demised Premises, provided Tenant promptly shall repair any damage caused by such removal.

19.

CURING DEFAULTS; FEES AND EXPENSES

19.1

If Tenant shall fail to pay any imposition or to make any other payment required hereunder or shall otherwise default in the full and prompt performance of any covenant contained herein and to be performed on Tenant's part, Landlord, without being under any obligation to do so and without thereby waiving such default, may, after fifteen (15) days' written notice to Tenant, or such notice (which may be oral) as may be reasonable in the circumstances if any emergency exists in respect of the protection of the Demised Premises, make such payment or perform such covenant "for the account and at the expense of Tenant and may enter upon the Demised Premises for any such purpose and take all action thereon as may be necessary therefor in the sole judgment of Landlord.

19.2

All sums so paid by Landlord in connection with the payment or performance by it of any of the obligations of Tenant hereunder and all actual and reasonable costs, expenses and disbursements paid in connection therewith or enforcing or endeavoring to enforce any right under or in connection with this Lease, or pursuant to law, together with interest thereon at the rate of 18% per annum (or, if lower, the maximum rate permitted by law) from the respective dates of the making of each such payment shall constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord within fifteen (15) days after demand by Landlord. Landlord shall not be limited, in the proof of any damages which Landlord may claim against Tenant arising out of or by reason of Tenant's failure to provide and keep in force insurance as required by Section 5 hereof, to the amount of the insurance premium or premiums not paid or incurre d by Tenant.

19.3

The provisions of this Section 19 shall serve the expiration or termination of this Lease.

20.

MECHANICS AND OTHER LIENS

20.1

If any mechanic's, laborer's or materialman's lien shall at any time be filed against the Property or any part thereof with respect to any work done, or labor or materials furnished, or caused to be furnished, by Tenant or anyone claiming through or under Tenant, or any judgment, attachment or levy is filed or recorded against the Property or any part thereof by anyone claiming through or under Tenant, Tenant, within thirty (30) days after notice of the filing thereof, shall cause the same to be discharged of record by payment, deposit, bond, order of a court of competent jurisdiction or otherwise. If Tenant shall fail to cause such lien, judgment, attachment or levy to be discharged within the period aforesaid, then, in addition to any other right or remedy, Landlord may, but shall not be obligated to, discharge the same by bonding proceedings, if permitted by law (and if not so permitted, by deposit in court). Any amount so paid by Landlord, including all costs and expenses paid by Landlord in connection therewith, together with interest thereon at the rate of 18% per annum (or, if lower, the maximum rate permitted by law) from the respective dates of Landlord's so paying any such amount, cost

30

or expense, shall constitute additional rent payable by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

20.2

Nothing contained in this Lease shall be deemed or construed in any way as constituting the consent or request of Landlord, express or implied, by inference or otherwise, to any contractor, subcontractor, laborer or materialman for the performance of any labor or the furnishing of any materials for any specific improvement, alteration to or repair of the Demised Premises, or any part thereof, or as giving Tenant any right, power or authority to contract for or permit the rendering of any services or the furnishing of any materials that would give rise to the filing of any mechanic's liens against Landlord's interest in the Demised Premises. Notice is hereby given that Landlord shall not be liable for any labor or materials furnished or to be furnished to Tenant upon credit, and that no mechanic's or other lien for any such labor or materials shall attach to or affect the reversion or estate or interest of Landlord in and to the Demise d Premises.

21.

      SIGNS, ADDRESS

21.1

Landlord shall have the right to change the name or street address of the Property, to install, maintain, move, remove and reinstall signs on and off the Property identifying the Property and advertising any or all of the Property, including, the Demised Premises as for sale or for rent. Tenant shall not place any signs (i) on the exterior of the Property, or (ii) in the Common Areas.  Landlord shall continue to provide existing or comparable monument signage for Tenant.  The size, design, construction and placement of all such signs shall be subject to Landlord's prior written consent, which shall not be unreasonably withheld, and shall be at Tenant's sole cost and expense.

22.

WAIVERS AND SURRENDERS TO BE IN WRITING, RIGHT TO TERMINATE

22.1

The receipt, acceptance and/or deposit (including the endorsement of any check) of full or partial rent by Landlord with knowledge of any breach of this Lease by Tenant or of any default on the part of Tenant in the observance or performance of any of the provisions or covenants of this Lease shall not be deemed to be a waiver of any such provision, covenant or breach of this Lease. No waiver or modification by Landlord, unless in writing and signed by Landlord, shall discharge or invalidate any provision or covenant or affect the right of Landlord to enforce the same in the event of any subsequent breach or default. The failure on the part of Landlord to insist in any one or more instances upon the strict performance of any of the provisions or covenants of this Lease, or to enforce any covenant or provision herein contained consequent upon a breach of any provision of this Lease shall not affect or alter this Lease or be construed a s a waiver or relinquishment of such provisions or covenants or of the right to insist upon strict performance or to exercise such right, remedy or election, but the same shall continue and remain in full force and effect with respect to any then existing or subsequent breach, act or omission whether of a similar nature or otherwise. The receipt, acceptance and/or deposit (including the endorsement of any check) by Landlord of any rent or any other sum of money or any other consideration hereunder paid by Tenant after the termination, in any manner, of the Term, or after the giving by Landlord of a termination notice, shall not reinstate, continue or extend the Term, or destroy, or in any manner impair the efficacy of any such termination notice as may have been given hereunder by Landlord to Tenant prior to the receipt, acceptance and/or

31

deposit (including the endorsement of any check) of any such rent, or other sum of money or other consideration, unless so agreed to in writing and signed by Landlord. Neither acceptance of the keys nor any other act or thing done by Landlord or any agent or employee shall be deemed to be an acceptance of a surrender of the Premises, or any part thereof, excepting only an agreement in writing signed by Landlord. No payment by Tenant or receipt, acceptance and/or deposit (including the endorsement of any check) by Landlord of a lesser amount than the correct rent shall be deemed to be other than a payment on account, nor shall any endorsement or statement on any check be deemed to effect or evidence an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord's right to recover the balance or pursue any other remedy in this Lease provided.

23.

COVENANTS BINDING ON SUCCESSORS AND ASSIGNS

23.1

All of the terms, covenants and conditions of this Lease shall apply to and inure to the benefit of and be binding upon the respective heirs, executors, administrators, successors and assigns of the parties, except as expressly otherwise herein provided. If there shall be more than one Tenant, they shall all be bound jointly and severally by the terms, covenants and agreements herein contained. No rights, however, shall inure to the benefit of any assignee or subtenant of Tenant unless the assignment or subletting, as the case may be, has been made in accordance with the provisions set forth in Section 11.

24.

RESOLUTION OF DISPUTES

24.1

THE PARTIES HERETO WAIVE A TRIAL BY JURY (TO THE EXTENT PERMITTED BY LAW) ON ANY AND ALL ISSUES ARISING IN ANY ACTION OR PROCEEDING BETWEEN THEM OR THEIR SUCCESSORS UNDER OR IN ANY WAY CONNECTED WITH THIS LEASE OR ANY OF ITS PROVISIONS, ANY NEGOTIATIONS IN CONNECTION THEREWITH, THE RELATIONSHIP OF LANDLORD AND TENANT, OR TENANT'S USE OR OCCUPATION OF THE PREMISES, INCLUDING ANY CLAIM OF INJURY OR ANY EMERGENCY OR OTHER STATUTORY REMEDY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS LEASE.

25.

NOTICES

25.1

Any statement, demand, election, request, notice, approval, consent or other communication, (collectively, "notice") authorized or required by this Lease must be in writing and shall be deemed given when delivered by (a) hand, against receipt, (b) one (1) business day after sending by reputable overnight courier which provides for acknowledgment of receipt, or (c) three (3) business days after mailing by United States certified mail, return receipt requested, addressed to the intended recipient at the following address as:

If to Landlord:

Monte Villa Farms LLC

3301 Monte Villa Parkway, Suite 101

Bothell, WA  98021

Attention: Robert E. Hibbs

32

with a copy to:

Premier Advisors, LLC

Monte Villa Farms

3301 Monte Villa Parkway, Suite 101

Bothell, WA 98021

If to Tenant:

BioLife Solutions

3303 Monte Villa Parkway, Suite 310

Bothell, WA  98021

Payments due to Landlord under this Lease shall be made according to the following:

Electronic Payments:

Wells Fargo Bank, N.A.

Seattle Private Client Services,

999 Third Avenue, 14th Floor

Seattle, WA 98104

Routing #:

125008547

To Credit:

Monte Villa Farms LLC

Account #:

8755057331

Notify:

Traci Herrera, 206-343-8372

Or mail to:

Monte Villa Farms LLC

P.O. Box 84532

Seattle, WA  98124-5832

Any notices by a party signed by counsel to such party shall be deemed a notice signed by such party. Notice shall be deemed given on the date of delivery or the date delivery is refused. Any party may change its address for notices, and Landlord may change its address for payments, by providing to the other party written notice in the manner required by this Section 25.

26.

DEFINITIONS; HEADINGS; CONSTRUCTION OF LEASE

26.1

For the purposes of this Lease, unless the context otherwise requires:

26.1.1

The term "Landlord's agents" shall be deemed to include agents, servants, employees and contractors of landlord.

26.1.2

The term "person" shall be deemed to include individuals, corporations, partnerships, firms, associations and any other legal or business entities.

26.1.3

The term "unavoidable delays" shall mean any and all delays beyond the reasonable control of the party otherwise responsible, including delays caused by the other party, governmental restrictions, governmental preemption, strikes, labor disputes, lockouts, shortage of labor or materials, acts of God, enemy action, civil commotion, riot or insurrection, fire, holdover tenancies or other unavoidable casualty or any other cause beyond the responsible party's control, but shall not include delays occasioned by lack of money.

33

26.1.4

The terms "include," "including" and "such as" shall be construed as if followed by the phrase "without being limited to". The words "herein." "hereto" "hereby," "hereunder" and words of similar import shall be construed to refer to this Lease as a whole and not to any particular Section hereof unless expressly so stated.

26.2

The various terms which are defined in other Sections of this Lease shall have the meanings specified in such other Sections for all purposes of this Lease unless the context otherwise requires.

26.3

The Section headings in this Lease and the Table of Contents prefixed to this Lease are inserted only as a matter of convenience and reference and are not to be given any effect whatsoever in construing this Lease.

26.4

All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the identity of the person or persons or entity or entities in question may require.

27.

FORCE MAJEURE

27.1

Whenever the performance of any obligation of either party hereunder shall be delayed, hindered or prevented due to unavoidable delays, the time for performance of such obligation, unless other provision is expressly made therefor in this Lease, shall be extended, subject to and limited by the following conditions:

27.1.1

The extension shall be for no longer a period than the delay actually so occasioned;

27.1.2

The party delayed shall promptly notify the other party of the cessation of such unavoidable delay and of the extent of the delay which the party delayed claims was occasioned thereby;

27.1.3

No statement of fact contained in any such notice shall be binding on the party receiving such notice; and

27.1.4

In no event shall lack of funds be deemed a matter beyond either party's control.

27.1.5

Interruptions of any service to be provided by Landlord under this Lease or of any utility or other service to the Demised Premises or the Property, in whole or in part caused by any unavoidable delay, inability of Landlord to obtain electricity, fuel, water, other utilities or supplies, or by the act or default of Tenant or any person other than Landlord, or otherwise by any other cause or causes beyond the reasonable control of Landlord, shall not be deemed an eviction or disturbance of Tenant's use and possession of the Demised Premises, the Common Area, or any part thereof, or render Landlord liable for damages, or give rise to any offset, set off, abatement, or reduction in any rent, additional rent, or other amount payable by Tenant under this Lease, or otherwise or relieve Tenant from performance of Tenant's obligations under this Lease.

34

28.

BROKERAGE

28.1

Landlord and Tenant each warrant and represent that other than Jeff Durrell of Pacific Real Estate Partners, Tenant had no other brokerage involved in this Lease transaction. Landlord shall pay to Pacific Real Estate Partners upon Tenant’s occupancy and receipt by Landlord of Tenant’s Security Deposit a fee equivalent to 5% of the Basic Rent for the term of this Lease.

29.

MISCELLANEOUS PROVISIONS

29.1

This Lease sets forth all the covenants, promises, agreements, conditions and understandings between Landlord and Tenant concerning the Premises. There are no oral agreements or understandings between the parties hereto affecting this Lease and this Lease supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between the parties hereto with respect to the subject matters hereof, and none thereof shall be used to interpret or construe this Lease. Except as otherwise herein expressly provided, no subsequent alteration, amendment, change, waiver or addition to or of any provision of this Lease, nor any surrender of the Term, shall be binding upon Landlord or Tenant unless reduced to writing and signed by the party against whom the same is charged or such party's successors in interest.

29.2

This Lease shall not be recorded by either party without the consent of the other.

29.3

This Lease shall be governed in all respects by the laws of the State of Washington.

29.4

This Lease may be executed in several counterparts, each of which shall be an original, but all of which shall constitute one and the same instrument.

29.5

All obligations of Tenant which shall not have been performed prior to the end of the Term or which by their nature involve performance, in any particular, after the end of the Term, or which cannot be ascertained to have been fully performed until after the end of the Term, shall survive the expiration or termination of the Term.

29.6

If any term, covenant, condition, or provision of this Lease or the application thereof to any person or circumstance shall, at any time or to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant, condition, and provision of this Lease shall be valid and be enforced to the fullest extent permitted by law.

29.7

Anything in this Lease to the contrary notwithstanding, in the event that (a) any act or omission of Tenant shall require the consent or approval of Landlord pursuant to this Lease, and (b) this Lease provides that Landlord shall not unreasonably withhold such consent or approval, and (c) Tenant shall claim that Landlord has unreasonably withheld such consent or approval, then the sole recourse of Tenant upon the inability of the parties to agree shall be to bring an appropriate action in a court of competent Jurisdiction against Landlord

35

solely to issue a determination of whether the withholding of such consent or approval by Landlord is "reasonable" or "unreasonable", and Tenant shall not be entitled to any damages or other remedy other than specific performance for the issuance by Landlord of such consent or approval if such court of competent jurisdiction shall determine that such withholding of consent was unreasonable, provided, however, Tenant shall be entitled to pursue all remedies at law or in equity if it shall be determined by a court of competent jurisdiction (beyond all right of appeal) that in withholding its consent Landlord acted maliciously and in bad faith (for which Tenant shall have the burden of proof).

29.8

To the maximum extent provided by law, Landlord shall have a lien on all improvements, fixtures, materials and other personal property of Tenant which at any time is located at or affixed to any part or portion of the Property.

30.

COMPLIANCE WITH ENVIRONMENTAL LAWS

30.1

Tenant shall, at its sole cost and expense, comply with the requirements of every federal, state, county, municipal or other governmental law, ordinance, rule, regulation, requirement and/or directive pertaining to the environment (an "Environmental Law" or "Environmental Laws"), including, but not limited to, the Resource Conservation and Recovery Act of 1976 (42 U.S.C. § 6901 et seq.), and the Comprehensive Environmental Response Compensation and Liability Act of 1980 (42 U.S. § 9601 et seq.) affecting, binding upon, or respecting Tenant’s use of Hazardous Substances (hereinafter defined) in the Demised Premises. In this regard, Tenant shall, at its sole cost and expense, make all submissions to, provide all information to, and comply with all requirements of any governmental authority enforcing Environmental Laws respecting Tenant’s use of Hazardous Substances i n the Demised Premises. Should any governmental authority determine that action is necessary to clean up, remove and/or eliminate any spill or discharges by Tenant (or by any of Tenant's agents, servants, employees, invitees, guests, subtenants (if any) licensees, or contractors) (“Tenant’s Agents”) of Hazardous Substances (hereinafter defined) in or about the Demised Premises or the Common Area (except to the extent such discharge or spill in the Common Area is caused by the particular act of any third party tenant of any other space at the Property) and/or that a cleanup plan must be prepared and submitted in connection with such release, then, in that event, Tenant shall, at its sole cost and expense, take any and all action required and carry out any and all approved plans and complete, at Tenant's sole cost and expense, all cleanup, removal and remediation required by Environmental Laws.  As used herein, "Hazardous Substances" means any substance that is toxic, ignit able, reactive, or corrosive, or that is regulated by any local government, the State of Washington or the United States Government, any and all material or substances that are defined as "hazardous waste," "extremely hazardous waste," or a "hazardous substance" pursuant to state, federal or local governmental law, any asbestos, polychlorobiphinyls (PCBs) and petroleum products or by-products. Tenant's obligations pursuant to this Section 30.1 shall arise whenever required by any appropriate governmental agency. At the expiration or earlier termination of this Lease Tenant, at Tenant's expense, immediately shall (i) remove or cause to be removed to the extent required by Environmental Laws all Hazardous Substances brought by Tenant or Tenant’s Agents in, on, under or about the Demised Premises (and/or any other portions of the Property, except to the extent that such Hazardous Substances have been discharged at, in, on, under or about portions of the Property other t han the Demised Premises by any other tenant), and (ii) clean up and remediate to the extent required by Environmental Laws all releases of Hazardous Substances by Tenant or Tenant’s Agents in the Demised Premises (and/or any other portions of

36

the Property, except to the extent that such Hazardous Substances have been discharged at, in, on, under or about portions of the Property other than the Demised Premises by any other tenant), as required under all Environmental Laws.

30.2

For purposes of this provision, the term "Environmental Documents" shall mean all environmental documentation concerning the Demised Premises, the Property or its environs in the possession or under the control of Tenant, including, without limitation, all drafts and final versions of all sampling plans, cleanup plans, preliminary assessment plans and reports, site investigation plans and reports, remedial investigation plans and reports, remedial action plans and reports or the equivalent, sampling results, sampling reports, data, diagrams, charts, maps, analyses, conclusions, quality assurance/quality control documentation, correspondence to or from the Washington Department of Ecology ("WDOE") or any other municipal, county, state or federal governmental authority, submissions to the WDOE or any municipal, county, state or federal governmental authority and directives, orders, approvals and disappr ovals issued by the WDOE or any other municipal, county, state or federal governmental authority, During the term of the Lease, promptly upon receipt by Tenant or Tenant's representatives, Tenant shall deliver to Landlord all Environmental Documents concerning the Property, or any portion thereof, including the Demised Premises, or generated by or on behalf of Tenant with respect to the Property or any portion thereof, whether currently or hereafter existing.

30.3

Tenant shall notify Landlord in advance of all meetings scheduled between Tenant or Tenant's representatives and the WDOE or any other authority with respect to the Demised Premises, and Landlord and Landlord's representatives shall have the right, without the obligation, to attend and participate in all such meetings, at Landlord's sole expense.

30.4

Tenant shall at all times indemnify, defend (with counsel selected by Tenant and reasonably satisfactory to Landlord) and hold harmless Landlord and Landlord's employees, officers, directors, shareholders, affiliates, partners, agents, professionals and consultants (collectively, the "Indemnitees") against and from any and all claims, suits, liabilities, actions, debts, damages, costs, losses, obligations, judgments, charges and expenses, including sums paid in settlement of claims, of any nature whatsoever suffered or incurred by any of the Indemnitees to the extent caused by:

30.4.1

The actual discharge by Tenant (or by any of Tenant's agents, servants, employees, invitees, guests, subtenants (if any) licensees, or contractors), on or after the Commencement Date, of Hazardous in, on, under, about, or affecting the Property, whether or not the same originates or emanates from the Demised Premises;

Tenant's obligations under this Section 30 shall arise upon the discovery of any Hazardous Substance discharged by Tenant or Tenant’s Agents in violation of Environmental Laws, whether or not any other federal agency or state or local or agency or political subdivision or any court, administrative panel or tribunal has taken or contemplates taking action in connection with the presence of any Hazardous Substances.

30.5

Tenant shall not, directly or indirectly, make any use of the Demised Premises, or the Property which may be prohibited by any Environmental Laws or which may fail or comply with or violate the provisions or conditions of any environmental permit held by Landlord or Tenant with respect to the Demised Premises or the Property, including, without

37

limitation, any such permit governing the use, contamination, pollution or conservation of air, water or land or the protection of the environment or of the use, storage, treatment or disposal of toxic or hazardous substances ("Environmental Permits"), or which may jeopardize the continuation or renewal of any such Environmental Permit.

30.6

Tenant shall regularly monitor its compliance with all applicable Environmental Laws, Tenant’s Environmental Permits and Environmental Plans; such monitoring shall be in accordance with all applicable Environmental Laws, Environmental Permits and Environmental Plans and with Tenant's established policies for such monitoring. Tenant shall, when requested by Landlord at reasonable intervals, provide to Landlord copies of the reports showing such monitoring and compliance and such other information and documentation respecting such monitoring and compliance as Landlord reasonably may request from time to time.

30.7

Tenant shall promptly provide Landlord, as soon as received by Tenant, with copies of all of Tenant's Environmental Permits and of any official warnings, citations or charges received by Tenant that Tenant has or may have failed to comply with or has or may have violated any Environmental Law or any Environmental Permit at the Demised Premises or the Property.  Tenant shall promptly supply Landlord with any notices, correspondence and submissions made by Tenant to WDOE, the United States Environmental Protection Agency, or any other local, state or federal authority which requires submission of any information concerning Environmental Laws or Environmental Permits, or Hazardous Substances or other environmental matters. Tenant shall also promptly supply Landlord with all documentation, notices and correspondence delivered to Tenant by any such authority with respect to Environmental Laws, Environmental Permits, environmental matt ers or Hazardous Substances or other environmental matters.

30.8

Notwithstanding anything to the contrary herein, (i) to the best knowledge of Landlord, (a) no Hazardous Substance is present on the Property or the soil, surface water or groundwater thereof, (b) no underground storage tanks are present on the Property, and (c) no action, proceeding or claim is pending or threatened regarding the Property concerning any Hazardous Substances or pursuant to any Environmental Law and (ii) under no circumstance shall Tenant be liable for any losses, costs, claims, liabilities and damages (including attorneys' and consultants' fees) of every type and nature, directly or indirectly arising out of or in connection with any Hazardous Substance present at any time on or about the Property, or the soil, air, improvements, groundwater or surface water thereof, or the violation of any Environmental Laws, except to the extent that any of the foregoing actually results from the release or emission o f Hazardous Substances by Tenant or Tenant’s Agents.

30.9

This Section 30 shall survive the expiration or earlier termination of this Lease. Tenant's failure to abide by the terms of this Section 30 shall be restrainable by injunction, and shall constitute an Event of Default under the Lease.

38

31.

 SECURITY

31.1

Tenant, at Tenant's cost and expense, shall be obligated to provide adequate and proper security to the Demised Premises, and to properly regulate access to same without thereby adversely affecting the use and enjoyment of the Property by Landlord or by other tenants or occupants.  Tenant shall have the right to participate in the use of the existing card key access system in the Property or any replacement thereof.

32.

  ACCESS

32.1

Tenant agrees that every other tenant or occupant of the Buildings (as same may change from time to time), and their respective employees, invitees, guests, contractors, subtenants (if any) and licensees, at all times shall have reasonable, non-discriminatory access to and use of Common Area, and in, upon, over, across and through the Common Area, in common with Tenant, and to the same extent enjoyed by Tenant, for ingress to and egress from the Buildings, and access to the premises demised by such tenant or occupant and to the Common Area, and for use of the Common Area.

32.2

Tenant agrees that Landlord, from time to time, may promulgate and/or amend reasonable, non-discriminatory rules and regulations for the use of Common Areas, and/or for access as provided in Section 32. 1, and that upon receiving copies of such rules and regulations (from time to time) Tenant shall abide by same and cause its employees, invitees, guests, contractors, subtenants (if any) and licensees to abide by same.

32.3

For so long as the existing restaurant ("Restaurant ") located in the North Barn is operated (there being no obligation on the part of Landlord or any other person to continue or cause the continued operation of the Restaurant), Tenant and its employees, invitees, and agents shall have access to and the right to use the Restaurant. Tenant acknowledges that Landlord and/or the operator of the Restaurant shall have the right to set or cause to be set all prices for goods at the Restaurant in its sole discretion and that Landlord or the operator of the Restaurant shall have the sole discretion to reduce services or terminate operation of the Restaurant at any time without liability to Tenant.  Landlord assumes no responsibility for, and Tenant, on behalf of its employees, guests, invitees or otherwise, waives any claim it may have now or in the future for the action of the operator of the Restaurant or its agents, e mployees, invitees, guests or suppliers or for any profits derived from the Operator of the Restaurant.

33.

NET LEASE

33.1

Landlord and Tenant agree that except as otherwise expressly provided in this Lease, (i) this is a full service Lease , and (ii) if, for any reason whatsoever, Tenant's use or occupancy of enjoyment of the Demised Premises shall be disturbed, prevented or interfered with for any reason whatsoever (other than Landlord's willful and intentional violation of the terms and provisions of this Lease) Tenant shall continue to pay the rent and additional rent without abatement, suspension or reduction.

39

34.

SECURITY DEPOSIT

Tenant will deposit with Landlord upon signing this Lease a Security Deposit equal to two month’s Basic Annual Rent and Operating Expenses.  If Tenant defaults under any provisions of this Lease, Landlord will have the unconditional right to draw on the Security Deposit in the full amount thereof or in any lesser amount or amounts as Landlord may determine, in its sole and absolute discretion apply all or any part of the Security Deposit to the payment of sums due, including damages suffered by Landlord due to such default in addition to any other remedy which Landlord may possess.  

35.

RENEWAL OPTION

Tenant shall have the option to renew this Lease for one (1) renewal term of three (3) years (herein referred to individually as a "Renewal Term") which shall commence on the day following the expiration of the Term defined in this Lease and end on the third anniversary of the commencement date of the Renewal Term, unless the Renewal Term shall sooner terminate pursuant to the terms of this Lease or otherwise.  The Renewal Term shall commence only if (i) Tenant shall have notified Landlord in writing at least nine (9) months prior to the expiration of the then existing Term, and (ii) immediately prior to the expiration of the Term, this Lease shall be in full force and effect and no Event of Default shall have occurred and be continuing.  Time is of the essence with respect to the giving of the notice of Tenant's exercise of a renewal option.  A Renewal Term shall be subject to all of the agreements, terms, covenants and conditions hereof binding upon Tenant and Landlord, except that the basic annual rent (as defined in Section 2.1) shall be at the greater of the current rent under the Lease or the then fair market rent, escalating annually at the then market escalation rate.  Upon the commencement of a Renewal Term, (x) such Renewal Term shall be added to and become part of the Term (but shall not be considered part of the initial Term, (y) any reference to "this Lease", to the "Term", the "term of this Lease" or any similar expression shall be deemed to include such Renewal Term, and (z) the Expiration Date shall become the expiration of such Renewal Term.

36.

RIGHT OF FIRST OFFER

Tenant shall have the ongoing right of first offer (“Right of First Offer”) to lease contiguous space (“Offer Space”) on the 3^rd floor of the building, subject to existing rights of tenants.  Tenant shall have twenty days from notice by Landlord of additional space becoming available to exercise this option.  The offer shall be for a term of not less than three years at the greater of the current rent under the Lease or the then market rate.  If this right is exercised with less than three years remaining on the Lease, then the Lease shall automatically renew for three years, so that the term on the Offer Space is not less than three years.

40

IN WITNESS WHEREOF, the parties have executed this Lease as of the day and year first above written.

LANDLORD MONTE VILLA FARMS LLC
a Washington limited liability company
By:	/s/ Robert E. Hibbs
	Robert E. Hibbs Its Managing Member

TENANT
BioLife Solutions, a Delaware corporation
By:	/s/ Michael P. Rice
	Michael P. Rice
Name:

41

STATE OF WASHINGTON

)

)ss:

COUNTY OF SNOHOMISH

)

I certify that I know or have satisfactory evidence that Robert E. Hibbs is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he/she was authorized to execute this instrument and acknowledged it as the Managing  Member of Monte Villa Farms LLC a Washington limited liability company, to be the free and voluntary act of such party for the uses and purposes mentioned in this instrument.

DATED: ,2007.

Print Name:  

NOTARY PUBLIC in and for the State of

Washington, residing at

My Appointment expires:  

STATE OF WASHINGTON

)

)ss:

COUNTY OF

)

I certify that I know or have satisfactory evidence that __________________ is the person who appeared before me, and said person acknowledged that he signed this instrument, on oath stated that he/she was authorized to execute this instrument and acknowledged it as the ____________ of  BioLife Solutions, a Delaware corporation, to be the free and voluntary act of such party for the uses and purposes mentioned in this instrument.

DATED: ,2008.

Print Name:  

NOTARY PUBLIC in and for the State of

Washington, residing at

My Appointment expires:  

42

EXHIBIT A

THE PROPERTY, BUILDINGS, PARKING LOT AND COMMON AREAS

43

EXHIBIT A-1

LEGAL DESCRIPTION

Lots 12, 13, 14, 15 and 16 of Quadrant Monte Villa Center, according to the plat thereof, recorded in Volume 54 of Plats, pages 165 through 169, inclusive, records of Snohomish County, Washington.

Situate in the City of Bothell, County of Snohomish, State of Washington.

44

EXHIBIT B

BASIC ANNUAL RENT

The initial Basic Annual Rent shall be $17.50 per rentable square foot per year.  Basic Annual Rent shall be increased by four percent (4%) per annum.

Landlord has the right to create up to 50,000 sq ft of additional space on the Property

(the “Additional Space”). The creation of the Additional Space will reduce the Operating Expenses for the Premises (the “Additional Space Expense Reduction”). Tenant agrees that should Landlord create the Additional Space then the Rent shall be increased (effective as of the date of the inclusion of the Additional Space) by the amount of any Additional Space Expense Reduction.  Such a reduction shall be computed (within six months of the inclusion of Additional Space) by subtracting (i) the Tenant’s Proportionate Share of the Operating Expenses and Taxes computed after the inclusion of the Additional Space in the square footage calculations from (ii) Tenant’s Proportionate Share of the Operating Expenses and Taxes computed before the inclusion of the Additional Space in the square footage calculations.  Landlord shall provide Tenant with such computations for Tenant’s review.

45

EXHIBIT C

DEMISED PREMISES IN ADMINISTRATION BUILDING

46

EXHIBIT D

TENANT IMPROVEMENTS

Landlord, at its sole cost and expense except as provided below, shall perform the improvements listed on this Exhibit D to Tenant’s Premises.  

·

The office area shall be leased as-is.  For the area on the west side of the corridor (1329 USF), Landlord shall provide an improvement allowance of $10.00 per square foot.  

·

The furniture that is currently in the space is available for Tenant’s use at no cost.

47

EX-31

EXHIBIT 31

CERTIFICATION

I, Michael Rice, certify that:

1.  I have reviewed this annual report on Form 10-KSB of BioLife Solutions, Inc.;

2.  Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.  Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.  I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and I have:

a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

b)  Intentionally omitted;

c)  Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report my conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)  Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5.  I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Dated: March 31, 2008

/s/ Michael Rice

Michael Rice

Chief Executive Officer and

Chief Financial Officer

EX-32

EXHIBIT 32

CERTIFICATION OF PERIODIC REPORT

I, Michael Rice, Chief Executive Officer and Chief Financial Officer of BioLife Solutions, Inc. (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1.

the Annual Report on Form 10-KSB of the Company for the year ended December 31, 2007 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and

2.

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  March 31, 2008

/s/ Michael Rice

Michael Rice

Chief Executive Officer and

Chief Financial Officer