DISTRIBUTION AGREEMENT

                                                                    Exhibit 10.1








                             DISTRIBUTION AGREEMENT



                                     BETWEEN




                          LIFESTREAM TECHNOLOGIES, INC.

                                       AND



                        POLYMER TECHNOLOGY SYSTEMS, INC.









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NOTE: PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED UNDER A CONFIDENTIAL TREATMENT
REQUEST FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THE OMITTED PORTIONS,
WHICH ARE SHOWN IN THIS DOCUMENT AS [ * ], HAVE BEEN FILED WITH THE COMMISSION
AS PART OF THE CONFIDENTIAL TREATMENT REQUEST.



                                TABLE OF CONTENTS

1.      TERMS..................................................................1
2.      SCOPE..................................................................1
3.      PRICING................................................................1
4.      PAYMENT TERMS..........................................................1
5.      PURCHASE ORDERS........................................................2
        5.1    Purchase Orders.................................................2
        5.2    Forecasts and Lead-times........................................2
6.      DELIVERY AND ACCEPTANCE................................................2
        6.1    Delivery........................................................2
        6.2    Acceptance......................................................2
7.      CHANGES................................................................3
8.      WARRANTY...............................................................3
        8.1    POLYMER Warranty................................................3
        8.2    RGA Procedure...................................................3
        8.3    Exclusions From Warranty........................................3
        8.4    Remedy..........................................................3
9.      INDEMNIFICATION AND LIMITATION OF LIABILITY............................4
        9.1    POLYMER'S Indemnification.......................................4
        9.2    LIFESTREAM's Indemnification....................................4
        9.3    Procedure.......................................................4
        9.4    Limitation of Liability.........................................5
10.     TERMINATION............................................................5
        10.1   Termination for Cause...........................................5
        10.2   Termination For Convenience.....................................5
        10.3   Termination by Operation of Law.................................5
        10.4   Consequences of Termination.....................................5
11.     QUALITY................................................................6
        11.1   Specifications..................................................6
        11.2   Content of Specifications.......................................6
        11.3   Quality of Material.............................................6
        11.4   Quality Specifications..........................................6
        11.5   Inspection of Facility..........................................6
12.     FORCE MAJEURE..........................................................6
        12.1   Force Majeure Event.............................................6
        12.2   Notice of Force Majeure Event...................................7
        12.3   Termination of Force Majeure Event..............................7
        12.4   Limitations.....................................................7
        12.5   Termination for Convenience.....................................7
13.     CONFIDENTIALITY........................................................7
        13.1   Definitions.....................................................7
        13.2   Nondisclosure/Non-Circumvent Covenants..........................8
14.     INSURANCE..............................................................9
15.     INTELLECTUAL PROPERTY..................................................9
16.     MISCELLANEOUS..........................................................9
        16.1   Integration Clause..............................................9

                                       ii
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        16.2   Regulatory.....................................................10
        16.3   Expansion of Agreement.........................................10
        16.4   Order of Precedence............................................10
        16.5   Assignment.....................................................10
        16.6   Notices........................................................10
        16.7   Disputes/Arbitration/Choice of Law.............................11
        16.8   Import/Export..................................................11
        16.9   Electronic Data Interchange....................................11

EXHIBITS
EXHIBIT A, PRICING............................................................13
EXHIBIT B, SPECIFICATIONS.....................................................14
EXHIBIT C, SHIPPING LABELING..................................................15
EXHIBIT D, THE QUALITY PLAN...................................................16

                                      iii



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                             DISTRIBUTION AGREEMENT


THIS AGREEMENT (the "Agreement") is effective as of December ____, 2005 (the
"Commencement Date"), by and between LIFESTREAM TECHNOLOGIES, INC., a Nevada
corporation, having its principal place of business at 570 S. Clearwater Loop,
Bldg. 1000, Ste. D, Post Falls, ID 83854 ("LIFESTREAM" or "Customer") and
POLYMER TECHNOLOGY SYSTEMS, INC., a corporation having its principal place of
business at 7736 Zionsville Rd., Indianapolis, IN 46268 ("POLYMER"), each
referred to herein as a Party or together as the Parties.

1.       TERMS

         The initial term of this Agreement shall commence on the Commencement
Date and shall continue through the third anniversary of the Commencement Date
unless sooner terminated by mutual agreement or in accordance with this
Agreement. Upon the expiration of the initial term, unless stated otherwise in
writing by one of the Parties at least 180 days prior to expiration, this
Agreement shall renew for an additional five (5) years. Notwithstanding the
foregoing, the term of this Agreement shall automatically extend to accommodate
any purchase order ("Order") accepted hereunder and outstanding upon any
termination date, but POLYMER shall have no obligation to accept new purchase
orders during such extension.

2.       SCOPE

         This Agreement shall initially address the supply of test strips for
Total Cholesterol and HDL Cholesterol by POLYMER to LIFESTREAM (the "Products").
Such Products shall be in the same configuration as test strips currently
manufactured by POLYMER. Subject to Polymer meeting specifications and otherwise
performing pursuant to this Agreement, LIFESTREAM shall purchase its
requirements for the Products solely from POLYMER. POLYMER shall not sell ROM
keys or MEMo chip(TM)s that function with LIFESTREAM's meters, nor shall
LIFESTREAM sell ROM keys or MEMo chips that function with POLYMER's meters.

3.       PRICING

         During the term, LIFESTREAM shall have the right to purchase from
POLYMER the products specified in Exhibit A (the "Products") as such Exhibit may
be amended from time to time, at the prices set forth in Exhibit A (the
"Prices"). Prices (a) are in U.S. Dollars, (b) are based on (i) the
configuration set forth in the specifications attached hereto as Exhibit B (the
"Specifications") and (ii) the projected volumes, minimum run rates and other
assumptions set forth in Exhibit A. The Prices shall remain fixed for the term
of this Agreement, unless an increase is required due to causes beyond the
control of POLYMER.

4.       PAYMENT TERMS

         [ * ]

                                             Lifestream _____
                                               Polymer _____


                                       1
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5.       PURCHASE ORDERS

         5.1      PURCHASE ORDERS

                  (a) LIFESTREAM will issue to POLYMER specific Orders for
         Product covered by this Agreement. Each Order shall be in the form of a
         written or electronic communication and shall contain the following
         information: (i) a description of the Product by part number; (ii) the
         quantity of the Product; (iii) the estimated delivery date or shipping
         schedule; (iv) the location to which the Product is to be shipped; and
         (v) transportation instructions. Each Order shall provide an order
         number for billing purposes, and may include other instructions as may
         be appropriate under the circumstances.

                  (b) All Orders shall be confirmed by POLYMER within five (5)
         business days of receipt. If POLYMER does not accept or reject the
         Order within the five-day period, the Order shall be deemed accepted.
         In the event POLYMER is unable to meet the delivery schedule set forth
         in a proposed Order, or finds the schedule to be unacceptable for some
         other reason, the parties shall negotiate in good faith to resolve the
         disputed matter(s). POLYMER shall not be deemed to have accepted the
         Order until such dispute is resolved and set forth in writing.

         5.2      Forecasts and Lead-times

                  Within thirty (30) days of the execution of this Agreement,
         LIFESTREAM shall provide a non-binding forecast of monthly purchases
         for the following twelve months. This forecast shall be updated at
         least quarterly throughout the Term. POLYMER's standard lead-time shall
         be eight (8) weeks from acceptance of an Order, provided the order is
         in conformity with the previous forecast provided by LIFESTREAM.

6.       DELIVERY AND ACCEPTANCE

         6.1      DELIVERY

                  All Product shipments will be from POLYMER'S facility of
         manufacture and freight collect. Title to and risk of loss or damage to
         the Product shall pass to LIFESTREAM upon POLYMER'S tender of the
         Product to LIFESTREAM's carrier. POLYMER shall use reasonable means to
         mark, pack, package, crate, transport, ship and store Product to ensure
         (a) delivery of the Product to its ultimate destination in a safe
         condition, (b) compliance with all requirements of the carrier and
         destination authorities, and (c) compliance with any reasonable special
         instructions of LIFESTREAM. POLYMER shall use reasonable efforts to
         deliver the Products on the agreed-upon delivery dates and shall use
         reasonable efforts to notify LIFESTREAM of any anticipated delays;
         provided, however, that POLYMER shall not be liable for any failure to
         meet LIFESTREAM delivery dates and/or any failure to give notice of
         anticipated delays.

         6.2      ACCEPTANCE

                  Acceptance of the Product shall occur no later than fifteen
         (15) days after the arrival of the shipment of Product and shall be
         based solely on whether the Product passes a mutually agreeable
         Acceptance Test Procedure or Inspection designed to demonstrate
         compliance with the Specifications, which may include a mutually agreed
         third party audit of the finished goods as part of the quality plan
         (Exhibit D). Product cannot be rejected based on criteria that were
         unknown to POLYMER or based on test procedures that POLYMER does not
         conduct. Product shall be deemed accepted if not rejected within this
         fifteen-day period. Once a Product is accepted, all Product returns
         shall be handled in accordance with Article 8 (Warranty). Prior to
         returning any rejected Product, LIFESTREAM shall obtain a Returned
         Goods Approval ("RGA") number from POLYMER, and shall return such
         Product in accordance with POLYMER'S instructions; LIFESTREAM shall
         specify the reason for such rejection in all RGA's. In the event a
         Product is rejected, POLYMER shall have a reasonable opportunity to
         cure any defect that led to such rejection.

                                             Lifestream _____
                                               Polymer _____

                                       2
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7.       CHANGES

         LIFESTREAM and POLYMER, upon mutual agreement, may make changes within
the general scope of this Agreement. Such changes may include, but are not
limited to, changes in (1) designs, procedures, Specifications, test
specifications, (2) methods of packaging and shipment, (3) quantities of Product
to be furnished, and/or (4) delivery schedule. If any such change causes either
an increase or decrease in POLYMER'S cost or the time required for performance
of any part of the work under this Agreement, the Prices and/or delivery
schedules shall be adjusted by mutual agreement in a manner that would
adequately compensate the parties for such change, and shall be set forth in a
written amendment, executed by both parties.

8.       WARRANTY

         8.1      POLYMER WARRANTY

                  POLYMER'S warranty period is equal to the expiration dating of
         the relevant chemistry, and is limited to correction of defects in
         POLYMER'S workmanship and performance. POLYMER shall, at its option and
         at its expense, replace or issue a credit for Product found defective
         during the warranty period.

         8.2      RGA PROCEDURE

                  POLYMER shall concur in advance on all Product to be returned
         for replacement. LIFESTREAM will obtain a Returned Goods Approval (RGA)
         number from POLYMER prior to return shipment. All returns shall state
         the specific reason for such return, and will be processed in
         accordance with POLYMER'S RGA Procedure, a copy of which is available
         from POLYMER upon request, and which includes a provision that POLYMER
         shall review and approve or deny any returns prior to shipment and such
         approval will not be unreasonably withheld. POLYMER shall pay all
         transportation costs for valid returns of Product to POLYMER and for
         the shipment of the repaired or replacement Products to LIFESTREAM, and
         shall bear all risk of loss or damage to such Products until tender to
         LIFESTREAM's carrier; LIFESTREAM shall pay these charges, plus a
         handling charge, for invalid or "no defect found" returns. Any replaced
         Product shall be warranted as set forth in this Article for a period
         equal to the remainder of the original warranty.

         8.3      EXCLUSIONS FROM WARRANTY

                  This warranty does not include Products that have defects or
         failures resulting from (a) LIFESTREAM's handling or packaging in
         LIFESTREAM's environment; and (b) accident, disaster, neglect, abuse,
         misuse, improper handling, storage, shipping, or installation,
         including improper handling.

         8.4      REMEDY

                  THE SOLE REMEDY UNDER THIS WARRANTY SHALL BE REPLACEMENT OR
         CREDIT FOR DEFECTIVE PARTS AS STATED ABOVE. THIS WARRANTY IS IN LIEU OF
         ANY OTHER WARRANTIES EITHER EXPRESS OR IMPLIED, INCLUDING
         MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.

                                             Lifestream _____
                                               Polymer _____


                                       3
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9.       INDEMNIFICATION AND LIMITATION OF LIABILITY

         9.1      POLYMER'S INDEMNIFICATION

                  POLYMER shall indemnify, defend, and hold LIFESTREAM and
         LIFESTREAM affiliates, shareholders, directors, officers, employees,
         contractors, agents and other representatives (the
         "LIFESTREAM-Indemnified Parties") harmless from all Claims (i) based
         upon personal injury or death or injury to property to the extent any
         of the foregoing is proximately caused either by a defective Product,
         by the reckless or willful acts or omissions of POLYMER or its
         officers, employees, subcontractors or agents, and/or (ii) arising from
         or relating to any allegation that the Product has a design defect(s),
         and/or (iii) arising from any violation of regulations regarding the
         manufacture, distribution, marketing, or labeling of medical devices,
         and/or (iv) arising from or relating to any actual or alleged
         infringement or misappropriation of any patent, trademark, mask work,
         copyright, trade secret or any actual or alleged violation of any other
         intellectual property rights arising from or in connection with the
         Product, except to the extent that such infringement exists as a result
         of use by POLYMER of LIFESTREAM specifications. POLYMER shall have no
         obligation to indemnify the LIFESTREAM-Indemnified Parties to the
         extent such Claim results from actions or events described in Section
         8.3, Exclusions from Warranty, or would not exist except for compliance
         with specifications particular to LIFESTREAM.

         9.2      LIFESTREAM'S INDEMNIFICATION

                  LIFESTREAM shall indemnify, defend, and hold POLYMER and
         POLYMER'S affiliates, shareholders, directors, officers, employees,
         contractors, agents and other representatives (the "POLYMER-Indemnified
         Parties") harmless from all Claims (i) based upon personal injury or
         death or injury to property to the extent any of the foregoing is
         proximately caused either by a defective Product, by the negligent or
         willful acts or omissions of LIFESTREAM or its officers, employees,
         subcontractors or agents, and/or (ii) arising from or relating to any
         allegation that the Product has a design defect(s), and/or (iii)
         arising from any violation of regulations regarding the manufacture,
         distribution, marketing, or labeling of medical devices, and/or (iv)
         arising from or relating to any actual or alleged infringement or
         misappropriation of any patent, trademark, mask work, copyright, trade
         secret or any actual or alleged violation of any other intellectual
         property rights arising from or in connection with the Product, except
         to the extent that such infringement exists as a result of use by
         LIFESTREAM of POLYMER'S manufacturing processes.

         9.3      PROCEDURE

                  A Party entitled to indemnification pursuant to this Article
         (the "Indemnitee") shall promptly notify the other Party (the
         "Indemnitor") in writing of any Claims covered by this indemnity.
         Promptly after receipt of such notice, the Indemnitor shall assume the
         defense of such Claim with counsel reasonably satisfactory to the
         Indemnitee. If the Indemnitor fails, within a reasonable time after
         receipt of such notice, to assume the defense with counsel reasonably
         satisfactory to the Indemnitee or, if in the reasonable judgment of the
         Indemnitee, a direct