MANUFACTURING SERVICES AGREEMENT

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 Services.  

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.

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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.  

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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.

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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 supplie s that were used, performed or purchased by Bioserv on behalf of Client.   All hours incurred by Bioserv for such Services will be charged to Cli