<PAGE>
                                                                       Exh. 10.7

              Amendment No. 1 to Distribution and Supply Agreement

This Amendment No. 1, dated as of July 15, 2004, by and between Omrix
Biopharmaceuticals, Inc., a corporation organized under the laws of Delaware
("Omrix"), and Ethicon, Inc., a corporation organized under the laws of New
Jersey, acting by and through its Johnson & Johnson Wound Management division
("Ethicon," and together with Omrix, the "Parties" and each individually a
"Party"), amends that certain Distribution and Supply Agreement, dated as of
September 22, 2003 (as amended, the "Agreement"), by and between the Parties.
Capitalized terms which are used herein but not defined herein, shall have the
meaning assigned to such in the Agreement.

WHEREAS, pursuant to the Agreement Ethicon was appointed Omrix's exclusive
distributor of, among other Products, Quixil (i.e., a biologic surgical adhesive
in the form of a frozen liquid fibrin sealant) and FS2 (i.e., a second
generation fibrin sealant) in, respectively, the Quixil Territory and the FS2
Territory for use in the Field.

WHEREAS, the Parties desire, among other things, to expand (I) the Quixil
Territory and (II) the FS2 Territory as contemplated by Section 2.8(b) of the
Agreement to include, in each case, the United States and Canada (and their
respective territories and possessions).

WHEREAS, pursuant to terms of a Series B Convertible Preferred Stock Purchase
Agreement, dated as of the date hereof, between Omix Biopharmaceuticals, Inc.,
as issuer, and Johnson & Johnson Development Corporation, as investor, Johnson &
Johnson Development Corporation is acquiring on the date hereof for
consideration consisting of $5,000,000 in cash certain capital stock and
warrants of the issuer.

WHEREAS, The American National Red Cross ("ARC"), which served as Omrix's
exclusive distributor in the US, Canada (and their respective territories and
possessions) of Quixil under the name CROSSEAL(TM), recently terminated its
distribution arrangement with Omrix and (i) executed a termination agreement, a
redacted copy of which is attached hereto as Exhibit A-1 (the "Termination
Agreement") and (ii) agreed to execute trademark assignment agreements, in the
forms attached hereto as Exhibits B-1 and B-2, within thirty (30) days of
Omrix's request, and Omrix agrees to make such request no later than August 1,
2004.

NOW THEREFORE, in consideration of the mutual covenants and consideration set
forth herein, the Parties hereto agree as follows:

1. Expansion of the FS2 Territory; Up-Front Consideration.

     (a) "FS2 Territory", as defined in Section 2.3(a)(ii) of the Agreement, is
hereby amended to include after "Switzerland" the following "and the United
States of America and Canada and all their territories and possessions
(including Puerto Rico)." Furthermore, references to "FS2" shall be deleted from
the first and fourth lines of Section 1.43 "Restricted Countries" of the
Agreement.

     (b) In connection with the FS2 Territory expansion and as expressly
contemplated in Section 2.8(b) of the Agreement as in existence prior to the
date of this Amendment No. 1: (i) Ethicon shall pay Omrix, within three business
days after the date of this amendment, a fee equal to the Up Front Difference
(i.e., US$***); and (ii) the parties will execute an amendment to the
Development Agreement in the form attached hereto as Exhibit C-1.

      PORTIONS OF THIS EXHIBIT MARKED BY AN *** HAVE BEEN OMITTED PURSUANT
       TO A REQUEST FOR CONFIDENTIAL TREATMENT FILED SEPARATELY WITH THE
                      SECURITIES AND EXCHANGE COMMISSION.

<PAGE>

2. Expansion of the Quixil Territory; Up-Front Consideration.

     (a) "Quixil Territory", as defined in Section 2.3(a)(i) of the Agreement,
is hereby amended to include after "Switzerland" the following "and the United
States of America and Canada and all their territories and possessions
(including Puerto Rico)." Furthermore, references to "the United States" and
"Canada" are hereby deleted from clause (i) of Section 1.43 "Restricted
Countries" of the Agreement.

     (b) In connection with the Quixil Territory expansion, Ethicon shall pay
Omrix, within three business days after the date of this amendment, a fee equal
to *** U.S. DOLLARS (US$***).

3. Amendments to Carve Out Provisions.

     (a) Section 2.8(a) of the Agreement is deleted in full and replaced with
the following:

          "(a) Carve Out. For the avoidance of any doubt, and notwithstanding
          anything to the contrary herein or the Development Agreement, Ethicon
          shall have rights in the Field in the United States, Canada and all
          their territories and possessions (including Puerto Rico) to (i) FS2,
          (ii) Improved Products arising from Covered Improvements to FS2, and
          (iii) Improvements to Quixil, on the terms and conditions set forth
          herein and in the Development Agreement."

     (b) Section 2.8(b) of the Agreement is deleted in full and replaced with
the following:

          "Reserved".

     (c) Section 2.8(c) of the Agreement is deleted in full and replaced with
the following:

          "(c) Improvements to Quixil and Commercialization Thereof. For the
          avoidance of doubt, notwithstanding anything to the contrary herein or
          in the Development Agreement, Omrix shall be free to develop
          Improvements (as defined in the Development Agreement) to Quixil, but
          may not commercialize such Improvements in the Field in the Quixil
          Territory (including, the United States, Canada and their territories
          and possessions) without including Ethicon as its exclusive
          distributor in the Field for all products resulting from such
          Improvements on the terms and conditions substantially identical to
          those in the Agreement applicable to Quixil. For the avoidance of any
          doubt, Improvements to Quixil shall include, without limitation,
          improvements to Quixil which are (A) modifications to the delivery
          device accompanying Quixil and/or (B) variations to Quixil required by
          a Regulatory Agency."

4. Improvements to Quixil. Given the above mentioned changes to Section 2.8 of
the Agreement, Section 2.1 of the Agreement is hereby amended by adding after
the phrase "Quixil in the Quixil Territory," the following phrase: "Improvements
to Quixil in the Quixil Territory,". Further, Section 1.33 "Products" of the
Agreement is hereby amended by adding after the phrase "Quixil," the following
phrase: "Improvements to Quixil,".

5. Section 3.2 of the Agreement is hereby amended by adding to the end thereof
the following as clause (f):

     "(f) Ethicon shall use reasonable commercial efforts (i) to conduct the
peripheral vascular surgery study for Quixil to be initiated in the United
Kingdom, subject to the requirements of the relevant Regulatory Agency and
subject to reasonable prudent medical and commercial practices, (ii) to expand
the study (if required by FDA in order to permit the commercial distribution of
Quixil in the United States


                                        2

<PAGE>

for an indication (e.g., peripheral vascular surgery, cardiovascular surgery or
other) in addition to the current liver indication) to include up to three
additional sites in the United States and (iii) to deliver to Omrix by December
31, 2005 the results obtained from such clinical study. Ethicon will also agree
to discuss the study protocol with the FDA and Ethicon shall bear the costs of
such clinical trial and at its sole discretion in a manner consistent with
Ethicon's normal standards and practices, may discontinue the study for safety
and efficacy concerns. Omrix shall be responsible for preparing and filing by
November 1, 2004 the necessary IND (investigational new drug) filings related to
such clinical trial with the FDA."

6. Milestone Payments.

     (a) Section 4.l(b) of the Agreement is hereby amended by adding to the end
     thereof the following sentence: "If the requisite marketing authorization
     for Quixil have been received in France, Germany, Italy and the United
     Kingdom but not in Spain, this milestone shall be deemed satisfied,
     notwithstanding the definition of EU Marketing Clearance."

     (b) Section 4.1 "Fibrin Sealant Milestone Payments" of the Agreement is
     hereby amended to include the following clauses:

          "(c) In accordance with the terms and conditions of Section 5(c) of
          the Development Agreement, *** dollars (US$***) upon the
          earlier of (i) First Commercial Sale of FS2 in the US or (ii)
          forty-five (45) days after US Marketing Clearance of FS2. The
          milestone refers to the milestone specified in, and payable under,
          Section 5(c) of the Development Agreement, as amended; it is not
          payable in addition to the $*** milestone payable under Section
          5(c) of the Development Agreement, as amended.

          (d) *** Dollars (US$***) if on or before the last day of
          Fiscal Year 2007 (i) Omrix receives from the FDA a BLA letter or BLA
          supplement letter and conforms with all regulatory terms and
          conditions permitting the commercial distribution of Quixil in the US
          to support the use of Quixil in humans for an indication in addition
          to the liver indication and (ii) Ethicon's (and its Affiliates')
          aggregate volume of Quixil sold in Fiscal Year 2006 or Fiscal Year
          2007 to third parties who are not Affiliates of Ethicon equals or
          exceeds (A) *** milliliters in Fiscal Year 2006 or Fiscal Year
          2007 and (B) an average of *** milliliters per calendar month in a
          ten consecutive month period of Fiscal Year 2006 or 2007; provided,
          that, if Ethicon does not meet its obligations under Section 3.2(f) of
          the Agreement, then Omrix will not be required to satisfy clause (i)
          and the milestone payment payable under this Section 4.l(d) will be
          payable after satisfaction only of clause (ii). For the avoidance of
          any doubt, (I) in calculating whether or not Ethicon's and its
          Affiliates' sales reached or exceeded *** milliliters in a given
          Fiscal Year and an average of *** milliliters per calendar month
          for ten consecutive months of a given Fiscal Year, only the sales of
          Quixil made during such single Fiscal Year will be tallied and (II) if
          the milestone events are satisfied, Ethicon shall not be required to
          pay Omrix more than once under this clause (d). In the event clauses
          (i) and (ii)(B) above are satisfied but Ethicon's and its Affiliates'
          aggregate volume of Quixil sold in Fiscal Year 2006 or 2007 to third
          parties who are not Affiliates of Ethicon is less than *** ml but
          equal to or greater than *** ml, Omrix shall be entitled to
          receive a pro rata percentage of the $*** milestone. By way of
          example, if all the milestone events were satisfied, sales of ***
          ml would result in a milestone payment equal to $***, i.e.,
          (*** / ***) X $***.


                                        3

<PAGE>

          (e) *** Dollars (US$***) if Ethicon's (and its Affiliates') aggregate
          volume of Fibrin Sealant Products sold in Fiscal Year 2008 or Fiscal
          Year 2009 or Fiscal Year 2010 to third parties who are not Affiliates
          of Ethicon equals or exceeds (A) *** milliliters in Fiscal Year 2008
          or Fiscal Year 2009 or Fiscal Year 2010 and (B) an average of ***
          milliliters per calendar month in a ten consecutive month period of
          Fiscal Year 2008, 2009 or 2010. For the avoidance of any doubt, (I) in
          calculating whether or not Ethicon's and its Affiliates' aggregate
          sales reached or exceeded *** units in a given Fiscal Year and an
          average of *** milliliters per calendar month for ten consecutive
          months of a given Fiscal Year, only the sales of Fibrin Sealant
          Products made during such single Fiscal Year will be tallied and (II)
          if the milestone events are satisfied, Ethicon shall not be required
          to pay Omrix more than once under this clause (e). In the event clause
          (B) above is satisfied but Ethicon's and its Affiliates' aggregate
          volume of Fibrin Sealant Products sold in Fiscal Year 2008,2009 or
          2010 to third parties who are not Affiliates of Ethicon is less than
          *** ml but equal to or greater than *** ml, Omrix shall be
          entitled to receive a pro rata percentage of the $*** milestone. By
          way of example, if all the milestone events were satisfied, sales of
          *** ml would result in a milestone payment equal to $***, i.e., (*** /
          ***) X $***. For the avoidance of any doubt any payment under this
          milestone is in addition to the payment, if any, payable pursuant to
          clause (d) above.

          (f) Omrix acknowledges that the milestone payments are contingent upon
          the occurrence of certain events and if such events do not occur, such
          payments will not become obligations of Ethicon and therefore may
          never be paid. Omrix acknowledges, in furtherance of Section 3.l(a) of
          the Agreement, that the up front payment and contingent right to
          receive milestone payments and the other payments paid or payable by
          Ethicon hereunder and under the Development Agreement constitute
          complete and adequate consideration for Omrix entering into the first
          amendment to this Agreement. Omrix acknowledges that Ethicon has not
          made any representation or warranty to Omrix about its ability to
          satisfy the sales-based milestones. In fact, given Ethicon's estimated
          projections for the sales of Quixil and sales of Fibrin Sealant
          Products, Ethicon believes it may not be able to satisfy the
          milestones set forth in clauses (d) and (e) above. Accordingly, and in
          furtherance of Section 3.l(a) of the Agreement, in the event the
          conditions to any contingent milestone payments are not satisfied,
          Omrix shall have no recourse against Ethicon hereunder unless there is
          an independent breach of this Agreement."

7. Definition of "Maximum Transfer Price". The definition of "Maximum Transfer
Price" is hereby deleted in full and replaced with the following:

     ""Maximum Transfer Price" shall mean (i) in the case of Fibrin Sealant
     Products, (A) in the United States and Canada (and all their territories
     and possessions (including Puerto Rico)) (I) for Fiscal Years 2004 and
     2005, $*** per milliliter for each 1 milliliter vial or 2 milliliter vial,
     (II) for Fiscal Years 2004 and 2005, $*** per milliliter for each 5
     milliliter vial and (III) for Fiscal Year 2006 and thereafter, $*** per
     milliliter for each vial (whether 1 ml, 2 ml or 5 ml) and (B) (euro) ***
     per milliliter in the European Union, Norway, Iceland, Liechtenstein and
     Switzerland and all other portions of the Territory (other than the United
     States and the other Territories set forth above in clause (A)) and (ii) in
     the case of Thrombin, $*** per 5000 IU vial (of five (5) milliliters per
     vial) in the United States and (euro) *** per 5000 IU vial (of five (5)
     milliliters per vial) in the European Union, Norway, Iceland, Liechtenstein
     and Switzerland and all other portions of the Territory


                                        4

<PAGE>

     other than the United States; provided, however, that the Maximum Transfer
     Price shall be subject to increase from time to time through the
     adjustments set forth in Section 4.2. Maximum Transfer Prices for all other
     Products shall be agreed in writing separately by the Parties."

8. Definition of "Minimum Transfer Price". The definition of "Minimum Transfer
Price" is hereby deleted in full and replaced with the following:

     ""Minimum Transfer Price" shall mean (i) in the case of Fibrin Sealant
     Products, (A) in the United States and Canada (and all their territories
     and possessions (including Puerto Rico)) (I) for Fiscal Years 2004 and
     2005, $*** per milliliter for each 1 milliliter vial or 2 milliliter vial,
     (II) for Fiscal Years 2004 and 2005, $*** per milliliter for each 5
     milliliter vial and (III) for Fiscal Year 2006 and thereafter, $*** per
     milliliter for each vial (whether 1 ml, 2 ml or 5 ml) and (B) (euro) ***
     per milliliter in the European Union, Norway, Iceland, Liechtenstein and
     Switzerland and all other portions of the Territory other than the United
     States and the other Territories set forth above in clause (A) (provided
     that the foregoing Minimum Transfer Price for Fibrin Sealant Products shall
     be reduced by ***% after the first Fiscal Year in which *** milliliters of
     Fibrin Sealant Products are sold by Ethicon in the United States and the
     other Territories set forth above in clause (A)) and (ii) in the case of
     Thrombin, $*** per 5000 IU vial (of five (5) milliliters per vial) in the
     United States and (euro)*** per 5000 IU vial (of five (5) milliliters per
     vial) in the European Union, Norway, Iceland, Liechtenstein and Switzerland
     and all other portions of the Territory other than the United States
     (provided that the Minimum Transfer Price for Thrombin shall become US$***
     per 5000 IU vial (of five(5) milliliters per vial) in the United States and
     (euro) *** per 5000 IU vial (of five (5) milliliters per vial) in the
     European Union, Norway, Iceland, Liechtenstein and Switzerland and all
     other portions of the Territory other than the United States after the
     earlier of calendar year 2010 or the first calendar year in which *** vials
     of Thrombin are sold by Ethicon, subject to adjustment as contemplated in
     the following proviso); provided, however, that the Minimum Transfer Price
     shall be subject to proportional increase from time to time based on the
     adjustments set forth in Section 4.2. Minimum Transfer Prices for all other
     Products shall be agreed in writing separately by the Parties."

9. Purchase Price for Fibrin Sealant Products. The table in the initial clause
(a) of Exhibit C setting forth the percentage of Ethicon's aggregate Net Sales
of Fibrin Sealant Products that is payable to Omrix is hereby deleted in full
and replaced with the following:

<TABLE>
<CAPTION>
Fiscal Years                                   Percentage
------------                                   ----------
<S>                         <C>
2004 and 2005               ***
2006                        *** or, in the case of sales of Fibrin Sealant
                            Products in the US, Canada and their territories
                            and possessions, ***
2007                        *** or, in the case of sales of Fibrin Sealant
                            Products in the US, Canada and their territories
                            and possessions, ***
2008 and 2009               ***
2010 and thereafter         ***
</TABLE>

10. Purchases & Minimums.


                                        5

<PAGE>

     (a) Section 4.4(a)(ii) of the Agreement will be amended by changing both
references to "September 30, 2005" to "June 30, 2006". Additionally, the
references in the last sentence of Section 4.4(a)(ii) of the Agreement to
"October 1, 2005", "December 31, 2005" and "Fiscal Year 2004" are hereby
respectively replaced with "October 1, 2006", "December 31, 2006" and "Fiscal
Year 2005".

     (b) Section 4.4(a)(ii) of the Agreement also will be amended by adding to
the end thereof the following sentence: For the avoidance of any doubt, all
purchases of Quixil and FS2 (and Improvements thereto) made by Ethicon for
distribution in the territories (i.e., the US, Canada and their respective
territories and possessions) added by Amendment No. 1 to this Agreement shall
not be counted towards Ethicon's Fibrin Sealant Product purchase requirements
under this Section 4.4(a)(ii).

     (c) Section 4.4(a)(iii) of the Agreement will be amended by changing the
references to "Fiscal Year 2006" to "Fiscal Year 2007".

11. Cost Adjustments. The term "second twelve (12) month period" in Sections
4.2(b) and 4.2(b)(i) of the Agreement, is hereby deleted and replaced with the
term "fourth twelve (12) month period".

12. Trademarks. The first clause of the fourth sentence in Section 5.3 of the
Agreement is amended and restated as follows: "All Primary Products (other than
the Quixil Product sold under the QUIXIL(TM) trademark of Omrix) and all
Improved Products shall be packaged and marketed under trademarks and trade
dress of Ethicon, except...."

13. Representations and Covenants. Omrix hereby represents and warrants that the
representations and warranties in Section 8.1 of the Agreement are, with respect
to the execution of this amendment and performance of the Agreement as amended,
true, correct and accurate in all respects on the date hereof. Omrix further
represents and warrants that, except for the distributors identified on Exhibit
H of the Agreement, no third party has, and Omrix has not received any notice or
other communication from a third party alleging, rights to market, sell, promote
or otherwise commercialize any of the Fibrin Sealant Products.

     (a) Supply Chain. Omrix will take, and will cause ARC to take, all
commercially reasonable efforts to assist and consult with Ethicon regarding
Ethicon's commencement of the distribution of Quixil in the US and Canada, which
distribution is to begin on October 1, 2004. Accordingly, Omrix will provide, or
will cause ARC to provide, for the benefit of Ethicon the following transitional
services at cost: receipt and storage of Product received from Omrix; receipt
and processing of customer orders; pick, pack and shipment of orders to
customers; and customer order receipt verification. The transitional service
will be provided on a month-to-month basis for up to 180 days and such services
shall be provided only with respect to approximately *** Liters of Quixil less
any units sold by Omrix to third-parties in the United States and Canada between
the date of this amendment and September 30, 2004. Omrix represents that
notwithstanding the potential sales of Quixil from the date hereof until
September 30, 2004, at least *** Liters of Quixil will be reserved and subject
to such transition services.

     (b) Transfer of Clinical Trial. Ethicon is not currently interested in
taking over the existing Quixil clinical trial; however, if Ethicon notifies
Omrix that it is interested in continuing the Quixil clinical trial sponsored by
ARC, Omrix will take, and has contractually required ARC to take, all
commercially reasonable efforts to assist Ethicon in continuing such clinical
trial and becoming the sponsor. Accordingly, if and only as requested by
Ethicon, Omrix will instruct ARC to transfer, at no additional cost to Ethicon,
all of ARC'S right, title and interest in and to the clinical trial reports,
records, studies, data and/or other related materials associated with the Quixil
clinical trial, and ARC has agreed to use commercially reasonable efforts to do
so upon Omrix's request. Notwithstanding the foregoing, if


                                        6

<PAGE>

Ethicon and ARC are not able to reach by August 20, 2004 an agreement for the
terms and conditions of the transfer of the clinical trial to Ethicon, Ethicon
acknowledges that ARC will have no obligation to take any commercially
reasonable efforts to transfer the clinical trial to Ethicon.

     (c) Meeting. Omrix has scheduled and will organize a full day meeting among
suitable representatives of itself, Ethicon and ARC for purposes of coordinating
the transition to Ethicon and ensuring Ethicon is able to effectively begin the
distribution of Quixil in the territories previously serviced by ARC. The
meeting is scheduled to occur on July 15, 2004.

     (d) Trademark Assignment. Omrix will on or before August 1, 2004 request
ARC to execute and deliver to Ethicon the trademark assignment agreements, in
the forms attached hereto as Exhibits B-1 and B-2. ARC has agreed to enter into
such trademark assignment agreements within 30 days of such request.

     (d) Enforcement. Omrix covenants that it will use commercially reasonable
efforts to enforce for the benefit of Ethicon any and all rights and remedies
that Omrix has against ARC for ARC'S failure to perform its obligations under
the Termination Agreement.

14. Acknowledgment. Ethicon agrees and acknowledges that under the terms of the
Termination Agreement (i) Omrix's existing distributor, ARC, will have the right
to promote Quixil in the United States, Canada and their possessions and
territories through September 30, 2004 as Omrix's exclusive sales representative
of Quixil and (ii) Omrix will have the obligation to provide in the United
States, Canada and their possessions and territories Quixil exclusively to ARC
until September 30, 2004. Accordingly, Omrix 's obligation under the Supply
Agreement to supply Quixil to Ethicon for distribution in the US, Canada (and
their territories and possessions) and Ethicon's obligation under the Supply
Agreement to purchase and distribute Quixil in the US, Canada (and their
territories and possession), in each case will not commence until October
1, 2004.

15. Miscellaneous. Except as set forth herein, all terms, provisions and
conditions of the Agreement shall remain in full force and effect. This
amendment shall be governed by and construed in accordance with the laws of the
United States of America and the State of New York without regard to conflicts
of law, rules or principles and may be executed and delivered in any number of
separate counterparts.


                                        7

<PAGE>

IN WITNESS WHEREOF, the Parties intending legally to be bound hereby have caused
this Amendment No. 1 to the Distribution and Supply Agreement to be duly
executed as of the date first above written.

OMRE CORPORATION                        ETHICON, INC.

                                        By: Its Johnson & Johnson Wound
                                            Management Division


By:      /s/ Authorized Officer         By:      /s/ Authorized Officer
    ---------------------------------       ------------------------------------
Name:        Authorized Officer         Name:        Authorized Officer
      -------------------------------         ----------------------------------
Title:       Authorized Officer         Title:       Authorized Officer
       ------------------------------          ---------------------------------


                                        8

<PAGE>

                                   Exhibit B-1

                          Form of Trademark Assignment

                       UNITED STATES TRADEMARK ASSIGNMENT

     WHEREAS, THE AMERICAN NATIONAL RED CROSS, a U.S. corporation, having its
place of business at 430 17" Street, N.W., Washington, D.C. 20006 (hereinafter
called "Assignor"), has adopted and used the trademark identified in Exhibit A,
which trademark has been registered for in the United States Patent and
Trademark Office, also as identified in Exhibit A.

     WHEREAS, _______________, a _______________ corporation, having its place
of business at _______________________________(hereinafter called "Assignee"),
is desirous of acquiring said trademark, and registration therefor, and the good
will of the business in connection with which said trademark is used;

     NOW THEREFORE, for good and valuable consideration of the mutual agreements
of the parties and $10, the receipt and sufficiency of which are hereby
acknowledged, said Assignor does hereby sell, assign and transfer unto said
Assignee, its successors and assigns, all right, title and interest in and to
said trademark, and registration therefor, together with the good will of the
business in connection with which said trademark is used.

     IN WITNESS WHEREOF, the said Assignor has caused these presents to be
executed by its duly authorized officer on this __________ day of ____, 2004.

                                        ASSIGNOR: THE AMERICAN NATIONAL RED
                                                  CROSS


                                        BY:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                       10

<PAGE>

                                    EXHIBIT A

<TABLE>
<CAPTION>
TRADEMARK   REGISTRATION NO.
---------   ----------------
<S>         <C>
CROSSEAL        2,795,977
</TABLE>


                                       11

<PAGE>

                                   Exhibit B-1

                          Form of Trademark Assignment

                              TRADEMARK ASSIGNMENT

     WHEREAS, THE AMERICAN NATIONAL RED CROSS, a U.S. corporation, having its
place of business at 430 17th Street, N.W., Washington, D.C. 20006 (hereinafter
called "Assignor"), has adopted and used the trademark identified in Exhibit A,
for which Assignor has applied for trademark status with the Trade-marks Branch
of the Canadian Intellectual Property Office, also as identified in Exhibit A.

     WHEREAS, _______________, a ________ corporation, having its place of
business at ____________________________ (hereinafter called "Assignee"), is
desirous of acquiring said trademark, and registration therefor, and the good
will of the business in connection with which said trademark is used;

     NOW THEREFORE, for good and valuable consideration of the mutual agreements
of the parties and $10, the receipt and sufficiency of which are hereby
acknowledged, said Assignor does hereby sell, assign and transfer unto said
Assignee, its successors and assigns, all right, title and interest in and to
said trademark, and registration therefor, together with the good will of the
business in connection with which said trademark is used.

     IN WITNESS WHEREOF, the said Assignor has caused these presents to be
executed by its duly authorized officer on this ___ day of ___, 2004.

                                        ASSIGNOR THE AMERICAN NATIONAL RED CROSS


                                        BY:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                       12

<PAGE>

                                    EXHIBIT A

<TABLE>
<CAPTION>
TRADEMARK   APPLICATION NO.
---------   ---------------
<S>         <C>
CROSSEAL        1158476
</TABLE>


                                       13