<PAGE>
                                                                    Exhibit 10.1

                         LEASE AND OPERATION AGREEMENT

                     SIGNED IN TEL-AVIV ON JULY 20TH, 2000

                                  B E T W E E N

OMRIX BIOPHARMACEUTICALS LTD.
whose offices are located at Building 14, Kiribati Weitzman, Nes Zion,
(hereinafter "OMRIX")

                                   ON THE ONE PART

                                      AND

MAGEN DAVID ADOM in Israel
a statutory, not - for - profit organization, existing under the Laws of the
State of Israel, whose headquarters are located at 60 Yigal Allon Street, Tel
Aviv (hereinafter "MDA")

                                   OF THE SECOND PART

WHEREAS   With the help and the donations of the friends and of the donors of
          MDA in the United States of America as well as others around the
          world, MDA has built and erected a blood fractionation plant belonging
          to MDA within the perimeter of the Tel Hashomer hospital
          (hereinafter: "THE PLANT"), occupying part of the Building belonging
          to MDA, for the purpose of achieving such goals and purposes as
          mentioned hereinafter; and

WHEREAS   Said goals and purposes are, primarily, the establishment of a blood
          fractionation plant in order to enable the manufacture from plasma
          collected in Israel and the supply therefrom of the Licensed Products
          (as defined herein below) to the population of Israel in times of
          peace as well as in times of crisis and/or war; and

WHEREAS   In light of the aforesaid, OMRIX declares that it understands the
          importance to MDA and to the state of Israel of supplying the Israeli
          population with the Licensed Products manufactured from plasma
          collected in Israel, and states and confirms that it bases its plans
          and calculations, among others, on selling to the Israeli market the
          Licensed Products manufactured from plasma collected in Israel.; and

WHEREAS   MDA and OCTAPHARMA A.G. entered, on September 2, 1990, into a
          know-how, License and Manufacturing Contract (hereinafter "THE
          CONTRACT"); and

      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.
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                                     - 2 -


WHEREAS   On September 5, 1995, OCTAPHARMA A.G.. assigned its rights and
          duties under the Contract to OMRIX, except some duties and obligations
          towards MDA in respect of which OCTAPHARMA A.G. remains liable and
          obligated as specified in the abovementioned assignment document; and

WHEREAS   On February 27, 1996, MDA and OMRIX executed an Addendum to the
          Contract ("THE ADDENDUM"); and

WHEREAS   The parties hereto wished to drastically amend the modus operandi
          and as a result thereof also the relations between the parties, so
          that OMRIX shall lease from MDA, the Plant and the Premises (as
          hereinafter defined) and operate the Plant on its own, paying MDA a
          Rent and Lease Fee as provided herein; and

WHEREAS   Consequently the parties signed on April 17, 1997 an agreement
          which was subject to the approval of the MDA's executive committee
          ("THE 1997 AGREEMENT"); and

WHEREAS   Ever since, the parties acted in accordance with the provisions of
          the 1997 Agreement as if it had been approved by MDA's executive
          committee; and

WHEREAS   The parties wish to amend certain provisions of the 1997
          Agreement, among others, in order to further improve the level of
          cooperation between the parties; and

WHEREAS   The parties wish to enter into an agreement pertaining to the
          purchase by OMRIX, during the Term of this Agreement, of plasma from
          MDA; and

WHEREAS   Both parties hereby declare that they have the full right and
          authority to enter into this Agreement; and

WHEREAS   It is agreed that unless otherwise specifically indicated herein,
          and except for some duties and obligations towards MDA in respect of
          which OCTAPHARMA A.G. remains liable and obligated as specified in the
          aforementioned assignment documents, the 1997 Agreement replaced,
          substituted and came instead of the Contract and the Addendum; and

WHEREAS   The parties wish that this Agreement ("AGREEMENT") will replace,
          substitute, and come instead of the 1997 Agreement.

NOW THEREFORE THE PARTIES HERETO AGREE AS FOLLOWS:

1.     THE PREAMBLE, SCHEDULES AND DEFINITIONS

1.1    The preamble to this Agreement and the Schedules attached thereto form an
       integral part thereof and are as binding upon the parties as the
       Agreement itself.

1.2    The capitalized terms listed below shall have the meaning assigned to
       them, unless the context requires otherwise.

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                                     - 3 -


       LICENSED PRODUCTS (or PRODUCTS)- shall mean Licensed Products as defined
       in the Contract, with the exclusion of the words "Factor IX and such
       other products" from the definition therein.

       THE PLANT - as described in the first recital of this Agreement.

       THE PREMISES - The part of the Building hereby leased to OMRIX as marked
       in yellow on the plan of the Building attached hereto as SCHEDULE "A".

       THE BUILDING - The MDA Blood Services Center Building within the
       perimeter of the Tel Hashomer Hospital.

       SUPPLIES - Electricity, water, fuel, salt and other supplies, should they
       be agreed upon from time to time.

       SYSTEMS - The central systems located in the Building and serving the
       Building and the Plant, being at present as detailed in SCHEDULE C1
       attached hereto.

       EQUIPMENT - The machinery, equipment and instrumentation belonging to MDA
       and used for the Plant as detailed in Schedule C3 attached hereto.

       BIOLOGICAL GLUE - The Glue product produced and/or marketed by OMRIX
       under the trademark/trade name "Quixil" or under any other trademark
       and/or trade name.

       FACILITY ENGINEER - The person appointed or to be appointed by the
       parties hereto, acting as supervisor over all maintenance in the
       Building, including the Plant - as referred to in Sub Section 2.7A

       MAINTENANCE BODY - As defined in Section 2.7

       EFFECTIVE DATE - January 1st, 1997.

       ARBITRATOR - A single ruling arbitrator who shall be appointed by both
       parties. In case agreement cannot be reached as to the identity of the
       Arbitrator within 30 days as from the date on which a party hereto
       requests to refer a matter to arbitration, the issue shall be referred to
       the head of the Israeli Bar Association, who will appoint the Arbitrator.

       FDA APPROVAL - Registration by the United States Food and Drug
       Administration of the Biological Glue and permit to market the Biological
       Glue in the United States.

       TERM - Period of this agreement as referred to in Section 4

2.     THE LEASE OF THE PREMISES

       2.1    OMRIX hereby leases from MDA and MDA hereby lets to OMRIX, for
              the Term of this Agreement, the Premises in which the Plant is
              located.

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                                     - 4 -


       2.2    It is hereby understood that OMRIX may, in the future, require
              additional space in the Building. In such an event MDA will make
              its best efforts to accommodate OMRIX's requirements for
              additional space and the parties will negotiate in good faith a
              mutually agreeable arrangement for such space including the
              payment of rent therefore. Since the Effective Date, the parties
              have agreed that MDA shall lease to OMRIX additional space
              ("ADDITIONAL SPACE") as marked in yellow lines on SCHEDULE A. The
              additional rent in consideration of the Additional Space has been
              agreed to be $15 US per sq.m per month, and since OMRIX has
              undertaken to finance some construction work for MDA at a cost of
              $104,000 OMRIX shall be entitled to set off the additional rent
              against that amount. Said Additional Space shall be deemed for all
              intents and purposes to be part of the Premises, except with
              regard to the Rent and Lease Fee; the aforementioned fee with
              respect to the Additional Space and/or any future additional
              space, shall be paid, subject to the offset provisions referred to
              above, in addition to the Rent and Lease Fee, as set forth in
              section 7 hereunder.

       2.3    In addition to the Premises, MDA hereby grants OMRIX, for the
              duration of the Agreement, the non-exclusive passage rights in
              respect of other parts of the Building, as may be reasonably
              required by OMRIX, such as the warehouse entrance, the entrance
              to the Building, etc.

       2.4    Whereas the Premises and the Plant obtain their Supplies from the
              Systems, and it is the intention of the parties that all the
              Systems will continue, in the future, to supply both the Blood
              Bank Services and the offices of MDA on the one hand, and the
              Premises and Plant on the other hand, MDA hereby undertakes to
              provide for the professionally sufficient and adequate, continuous
              and uninterrupted supply of all the above Supplies to OMRIX during
              the duration of this Agreement.

              It was recognized that on the Effective Date, the mechanical state
              of the Plant and the Systems were deficient in terms of cooling
              capacity, specifically regarding the repair of the second chiller
              and the installation of a third chiller. The cost of the above
              units and the installation thereof, as well as the cost of
              rectifying the above deficiencies were borne by MDA. At MDA's
              request, OMRIX financed the above costs and has offset same,
              against amounts that were due to MDA from OMRIX.

              Both parties hereby confirm that MDA authorized OMRIX to purchase
              a third chiller, which was installed at the Premises/Plant. OMRIX
              financed the acquisition of the third chiller, the specifications
              and the price of which were already agreed upon by the parties,
              and has debited MDA for the amount paid by OMRIX for the above
              chiller. For the avoidance of any doubt it is hereby agreed and
              declared that the third chiller is not part of the Systems, and
              serves the Plant only.

              As the entrance to the Warehouse did not meet GMP standards and
              was modified to do so, the parties agreed about the installation
              of a door at the back entrance to the Premises, to be operated by
              means of remote control, and about the division of the costs
              thereof between them.

<PAGE>
                                     - 5 -


       2.5    MDA hereby acknowledges and confirms that any interruption of
              supply to OMRIX of any of the Supplies and/or prevention of access
              to the Premises and any other deed or misdeed of MDA or anybody on
              its behalf which might lead to the disruption of the operational
              activities of the Plant - which is designed and intended to
              operate 364 days a year, may cause OMRIX severe damages for which
              MDA shall be fully liable.

              In view of the above MDA hereby states and undertakes that under
              no circumstances will it disconnect or allow anybody else to
              disconnect or discontinue any of the Systems or the Supplies nor
              let any such System remain, for any period of time, out of order
              and/or inoperable, unless such interruption is absolutely required
              for the repair and maintenance and as far as such interruption
              could be foreseeable in advance, upon coordination with OMRIX.

       2.6    Without derogating from the generality of the above, MDA hereby
              undertakes to maintain, at all times, in good operating order and
              in compliance with FDA and EC GMP requirements all the Systems
              which will serve both MDA and OMRIX and will take whatever
              steps necessary - including replacement of defective or aging
              units, in order to ensure the uninterrupted supply of the
              Supplies. OMRIX declares that at the time of the signing of this
              Agreement, the maintenance is in compliance with EC GMP
              requirements. OMRIX further declares that it is not aware of any
              aspect of the maintenance, which is not in compliance with the FDA
              GMP requirements, except some items regarding which OMRIX has
              informed the Facility Engineer

              It is hereby agreed by the Parties that OMRIX shall share with MDA
              the costs of the Supplies and the costs of the operating and
              maintenance of the Systems. The division of the said costs between
              MDA and OMRIX shall be calculated in a manner as described below.
              MDA and OMRIX, respectively, will invoice each other monthly for
              the applicable charges with regard to said costs, paid by the
              invoicing party. The other Party will pay such invoiced costs
              within 30 days of the date of invoice, or offset same against
              amounts currently due to such invoicing party, provided that the
              invoicing party will provide the other Party with adequate proof
              of the payment of said underlying supplies and maintenance
              invoices.

              During the initial period starting from the Effective Date until
              December 31, 1997, the parties bore the cost of the Supplies and
              the operating cost of the Systems as follows: OMRIX ***% and MDA
              ***%. The same ratio shall prevail with respect to the cost of the
              Supplies, until either party requests the comparison and the
              re-examination of the consumption of the Supplies as set forth
              hereunder, against the consumption during calendar year 1995. Such
              consumption shall be quantified in terms of units used rather than
              monetary terms. It is agreed that, assuming MDA will not introduce
              new activities or significantly increased levels of consumption in
              its part of the Building, all the growth in consumption of the
              Supplies (in units - as opposed to price) shall be attributed to
              OMRIX. In view of the results of the above comparison, the parties
              shall make the necessary retroactive adjustments in respect of the
              calendar

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                                     - 6 -


              year which had been the subject of the comparison. Thereafter,
              such allocation percentage will be used for all future years
              unless either party significantly changes its level of activity.

              It is hereby clarified that the aforementioned comparison shall be
              made separately with regard to each of the Supplies.

              Without derogating from the aforesaid, each Party shall have the
              right to demand on an annual basis during any given year of the
              Term, that a new comparison of units be made and that a new
              allocation percentage be determined, if a Significant Change has
              occurred.

              A Significant Change shall be defined as a five percent (5%) or
              greater variation in unit consumption as compared to the previous
              applicable year in which the percentage had been established (such
              previous year shall be referred to as the "BASE YEAR"). Each
              Supply out of the following - fuel, water/sewage & electricity
              shall be separately examined and shall be separately subject to a
              new determination of the allocation percentage. All comparisons
              shall be made on a calendar year basis and if a Significant Change
              has occurred such change shall be retroactively adjusted for such
              one calendar year only. Any new allocation percentage so changed
              shall continue to be applied prospectively until the next such
              change with regard to the same Supply. The first comparison for
              the determination of a Significant Change of the allocation
              percentages with regard to each of the aforesaid Supplies shall
              use 1995 as the initial Base Year, Thereafter, subsequent
              comparisons shall be made against units consumed in the year in
              which the applicable ratio was last changed (i.e. the new Base
              Year with regard to same Supply).

              Since the parties have already reached an agreement with regard to
              the accounting up until December 31st, 1997 - the first review of
              the allocation percentages shall compare usage during the first
              year thereafter in which either party requests a new comparison,
              against 1995 usage. AN example is presented below for
              clarification, which assumes that all increases have been caused
              by OMRIX:

<TABLE>
<CAPTION>
                             FUEL         Electricity     Water/
                             Liters       KW/H            Sewage
                             ------       -----------     M(Delta)3
                                                          -------
<S>                          <C>          <C>             <C>
(1)  1998 Units              500,000       5,500,000       53,000

(2)  1995 Units               32,000       2,200,000       19,000
                             -------       ---------       -------

(3)  Difference (1) - (2)    468,000       3,300,000       34,000
                             =======       =========       ======

(4)  % Change vs. Base Year
     Units (3)/(2)              1463%            150%         179%
                             =======       =========       ======
     Allocation Change           Yes             Yes          Yes

(5)  Calculation of New
     Allocation Percentage
     to OMRIX = (3)/(1)           94%             60%          64%
                             =======       =========       ======
</TABLE>

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                                     - 7 -


              The percentages in (5) above will be used to re -allocate 1998
              amounts and will be prospectively used in 1999 pending future
              comparisons. Again in the interest of clarity an example of a 1999
              comparison is illustrated below (again all increases are assumed
              to be caused by OMRIX):

<TABLE>
<CAPTION>
                                Fuel         Electricity     Water/
                                Liters       KW/H            Sewage
                                ------       -----------     M(Delta)3
                                                             ---------
<S>                             <C>          <C>             <C>
(1)  1999 Units                  600,000      5,600,000       54,000

(2)  1998 Units                  500,000      5,500,000       53,000
                                 -------      ---------       -------

(3)  Difference( 1) - (2)        100,000        100,000        1,000
                                 =======      =========       ======

(4)  %Change vs. Base Year
     units (3)/(2)                    20%           1.8%        1.88%
                                 =======      =========       ======

     Allocation Change               Yes             No           No

(5)  Calculation of New
     Allocation % to OMRIX            95%           N/A          N/A
</TABLE>

              In years subsequent to the initial review, if all of the increases
              are attributed solely to OMRIX, the new allocation percentage
              shall be determined as follows: (current year units minus 1995
              units) divided by current year units.

              In Fuel it is (600,000 - 32,000) / 600,000 = 95%

              In the next year's comparison 1998 is still the Base year for
              Electricity & Water/Sewage but 1999 becomes the Base year for
              Fuel.

              The cost of maintenance and repair of the Systems, as well as the
              cost of the Maintenance Body and of the Facility Engineer, shall
              be divided between the parties, so that ***% of all such costs
              shall be borne by OMRIX, and ***% shall be borne by MDA.

              Provided, however, that if it appears that due to excessive use of
              the Systems or any of them by OMRIX, there has been a substantial
              increase in the cost of spare parts required for the maintenance
              of such System(s), in an amount exceeding $ 25,000 per annum, MDA
              shall have the right to demand that the question of the division
              of the cost of maintenance of such System(s) shall be reexamined
              by the parties and that following

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                                     - 8 -


              such I reexamination, if such claim is found justified, a new
              division of such costs shall be made.

       2.7    OMRIX undertakes to exercise reasonable care and to maintain the
              Premises in a proper way, fixing and repairing any damages to the
              Premises other than those caused by defective and/or
              unprofessionally made or installed parts of the Premises or of any
              installations therein. In addition, OMRIX shall replace and repair
              any damages caused by reasonable wear and tear which must be
              replaced/repaired in order to enable the continued operation of
              the Plant.

              Without derogating from the respective liability of each party to
              bear the cost of and the responsibility for maintenance and other
              works as stipulated above, it is hereby agreed, that the parties
              shall hire, for all maintenance which is the responsibility of
              MDA, as well as for all maintenance, fixing and repairing works,
              which are the responsibility of OMRIX under this sub- section 2.7
              and sub-section 3.2 hereinbelow as well as all relevant schedules,
              the services of one person or one entity only (hereinafter "the
              Maintenance BODY"). The parties hereby acknowledge, that currently
              the Maintenance Body is the Teus Group.

              In the event any one of the parties hereto chooses to
              dismiss/terminate the employment and/or relations with the Teus
              Group (or any subsequent Maintenance Body) or any employee
              thereof, the party demanding the dismissal/termination shall be
              obligated to submit to the other party a detailed written letter
              stating the reasons which are the basis for the requested
              dismissal/termination, and in such case - the other party's
              consent to such dismissal may not be unreasonably withheld.

              Upon THE dismissal/termination as aforesaid, the hiring of a
              substitute Maintenance Body and/or of a substitute employee of the
              Teus Group or of any subsequent Maintenance Body (the dismissal of
              whom was required by one of the parties) shall require the mutual
              consent of both parties.

              Without derogating from the above, in the event OMRIX believes
              that it is not able to assure or ascertain satisfactory
              maintenance of the Plant while observing the above mentioned
              mechanism of hiring/firing, OMRIX shall have the right to employ
              at its own cost and responsibility additional maintenance
              person/people who shall engage in the maintenance only of the
              Equipment, as well as the systems which only serve the
              Plant/Premises, provided however that such maintenance
              person/people shall be subject to the prior written approval of
              the Facility Engineer as to the professional capacity of the
              candidate, which approval shall not be unreasonably withheld. Such
              additional maintenance person/people shall be entitled to work
              within the maintenance workshop and all other work areas, which
              are normally used by the Maintenance Body, located in the
              Building.

              For the avoidance of doubt it is hereby clarified that all of the
              aforementioned maintenance people, whether jointly hired or hired

<PAGE>
                                     - 9 -


              separately by OMRIX - shall be subject to the professional
              supervision of the Facility Engineer.

       2.7A   The parties shall appoint, for the purpose of supervision over all
              maintenance works in the Building, including the Plant, the
              services of one person only (hereinafter: "the Facility
              Engineer"), and shall bear all costs pertaining to the employment
              of the Facility Engineer as stipulated above, i.e. - OMRIX shall
              bear ***% of all such costs and MDA shall bear ***% of all such
              costs.

              The Facility Engineer's responsibility shall be to ensure that the
              Plant, and all of the Systems and the Equipment contained therein
              are being maintained and upheld by the parties, by the Maintenance
              Body, and by the Facility Engineer himself in strict compliance
              with GMP requirements, The Facility Engineer, subject to executing
              a confidentiality agreement with OMRIX and with MDA separately,
              shall have the right to enter any part of the Building, including
              the Plant, in order to carry out his duties. Subject to the
              execution by the Facility Engineer of a confidentiality agreement
              satisfactory to OMRIX, both parties hereby undertake not to deny
              the Facility Engineer such access to any part of the Building.

              After execution of a Confidentiality Agreement satisfactory to
              OMRIX, the Facility Engineer shall be entitled to demand from each
              of the parties relevant documents and/or plans necessary in order
              to perform his duties, and the parties hereby undertake to comply
              with all such reasonable demands presented by the Facility
              Engineer.

              The parties hereby agree, that Engineer Meir Rappaport, is
              currently the Facility Engineer.

              Should Engineer Rappaport refuse to act as the Facility Engineer
              and/or is unable to do so for any reason whatsoever, then in such
              case the parties shall mutually appoint an alternative Facility
              Engineer.

              Each of the parties shall be entitled to request that the Facility
              Engineer be replaced. Any such request shall be accompanied by a
              detailed statement detailing the reasons for such request. If the
              other party does not agree to such request, the matter shall be
              referred to an Arbitrator. Any new Facility Engineer shall also
              be appointed mutually by both parties.

       2.7B   For the avoidance of doubt, it is hereby clarified that the terms
              "the Systems" and "the Supplies" indicating common systems and
              supplies, shall not include devices and/or equipment and/or the
              supplies generated therefrom, which are designated solely and
              which are used exclusively by and for one party only, even if same
              are not, wholly or partially located inside those parts of the
              Building actually held or occupied by such party. The systems
              which, at the present time, are designated for the sole use and
              responsibility of OMRIX are itemized in SCHEDULE C2 attached
              hereto.

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                                     - 10 -


              The aforesaid in this sub-section shall mean for all purposes of
              this agreement, inter alia, that said systems and/or supplies
              designated solely for the benefit and use of one party only, shall
              be deemed to be part of the equipment held by such party, and
              therefore the cost of the maintenance with regard to such systems,
              and/or the cost of such supplies, as the case may be, must be
              borne by such party.

              In case it is realized at any time that any System is actually
              used normally and continuously by one party, while the other
              party's use of such System is negligible, then the parties shall
              meet and if mutually agreed, it shall be deemed, for all intents
              and purposes, that such System is used solely by the party mostly
              using it.

       2.8    OMRIX's employees, sub-contractors, customers and visitors etc.,
              shall have at all times, free access to the Plant and the
              Building, and free access to and use of those common areas of the
              Building to which such people may reasonably need access to and/or
              use of. Any persons visiting the Building at the invitation of
              OMRIX will be accompanied by or supervised by an OMRIX employee or
              Maintenance Body employee while outside the Premises. MDA shall
              use its best efforts to obtain for OMRIX's employees the same
              approvals that it obtained for MDA's employees in order to enable
              them a free-of-charge entrance to the perimeter of the Tel
              Hashomer Hospital.

       2.9    MDA shall allow the commercial vehicles loading and unloading
              goods and products to and from the Plant, to load and unload
              freely at the part of the Building designated for that purpose. As
              far as parking of the vehicles of OMRIX's employees is concerned,
              MDA will secure the same rights for OMRIX's employees as for MDA's
              employees.

       2.10   OMRIX's employees shall not be entitled to enter the Blood Bank
              without prior coordination provided, however, that OMRIX'S
              employees and guests will have at all times free access to their
              rooms and offices, some of which are located in the Blood Services
              part of the Building.

              During the regular working hours OMRIX's employees and visitors
              shall enter the Plant through the main door of the Building, or at
              their discretion, through the back door. The access to the Plant
              at any time not within the regular working hours shall be through
              the back door only.

              OMRIX's employees will have, at any time, free access to the
              mechanical areas of the Building for the purpose of monitoring the
              Supplies and the Systems. However, except in cases of urgency,
              emergency or strike, OMRIX's employees shall not be entitled to
              engage in the maintenance of the Systems or interfere with the
              Supplies. Whenever OMRIX`s employees shall engage in the
              maintenance of the Systems, as provided above, it shall be at
              OMRIX's responsibility.

              OMRIX's employees shall have the access to any and all mechanical
              areas in the Building for the purpose of monitoring and/or
              maintaining systems and supplies and for monitoring and/or
              maintaining any Equipment, which are designated solely for or used
              for the most part by

<PAGE>
                                     - 11 -


              the Plant.

       2.11   The parties have executed an Acceptance Protocol describing the
              situation of the Plant, the Premises and the Systems, indicating
              the defects, which were known at that point of time. The above
              Acceptance Protocol shall be attached to this Agreement as
              SCHEDULE "B1". It has been agreed that in order to rectify the
              defects specified in Schedule B1 OMRIX's capital expenditures of
              $*** will be invoiced to MDA. Upon repayment or offset of the
              above amount, OMRIX shall have no further claim against MDA for
              the above defects and/or for any other defects that may be found.

       2.12   Notwithstanding section 2.11, other items were noted as defects of
              the Plant, Premises, and the Systems at the same time as the above
              and are detailed in SCHEDULE B2. It has been agreed that the items
              detailed therein will be treated as Discretionary Investments made
              by OMRIX according to Section 15 herein below, to the extent OMRIX
              has already or shall in fact repair such defects.

       2.13   It is hereby agreed that OMRIX shall be entitled to carry out from
              time to time construction changes, modifications and/or expansions
              of the Plant within the Premises, subject to observing the
              procedure outlined below.

              Once OMRIX decides to carry out construction changes and/or
              modification(s) in the Premises, it will submit to MDA for its
              approval the plans of any such changes or modifications. MDA shall
              not unreasonably object to any such works provided the plans
              submitted for its approval are accompanied by a statement of a
              construction engineer that such modifications/changes shall not
              adversely affect the Building or any part thereof. Any such
              changes or modifications shall be carried out by OMRIX at its own
              cost and responsibility.

              The aforementioned plans which shall be submitted by OMRIX, shall
              be submitted in stages as follows:

              The first stage shall be the basic and/or conceptual design of the
              required construction changes (and/or modifications) accompanied
              by a time schedule, which shall be submitted for MDA's approval
              prior to the commencement of construction (hereinafter: "THE BASIC
              DESIGN"). MDA will respond to the Basic Design within 14 days.
              Failing to do so will be deemed to be an approval of the Basic
              Design. In the event that MDA responds within said 14-day period
              with specific adverse issues, such issues will be resolved by
              OMRIX prior to the commencement of the construction
              changes/modifications. This process of resolution will be carried
              out as quickly and efficiently as reasonably possible by both
              parties.

              When available, OMRIX shall submit a detailed design to MDA
              (hereinafter: "THE DETAILED DESIGN");

<PAGE>
                                     - 12 -


              Should OMRIX desire to deviate from the Detailed Design during
              construction/modification, OMRIX shall submit all plans relating
              to the required deviation for MDA's approval;

              Not later than 45 days after completion of
              construction/modification, OMRIX shall submit to MDA "as made"
              plans and drawings with regard to the construction/modification,
              which had been undertaken.

              OMRIX shall indemnify MDA for any damages resulting from such
              construction changes. MDA agrees to maintain all plans and
              documents submitted to it by OMRIX as aforesaid as confidential
              information. Should MDA choose to use the services of an external
              engineering consultant in order to review OMRIX's
              construction/modification, then such consultant, who must be
              acceptable to OMRIX, shall be obligated to sign a confidentiality
              agreement with OMRIX as drafted by OMRIX's attorney.

       2.14   It is hereby agreed that OMRIX shall not be entitled to register a
              Long Term Lease ( ??? with the Land Registrar in respect of
              this Agreement.

       2.15   In utilizing access to and use of any part of the Building as
              permitted in sub-sections 2.3,2.7,2.8 and 2.10. OMRIX and its
              personnel shall observe all safety, security, and secrecy rules
              and regulations published by MDA from time to time and applicable
              to MDA'S employees in the Building. Such rules and regulations,
              which shall be prepared jointly by both parties hereto, shall be
              attached to this Agreement as of their publishing (and/or
              addition/modification),as Schedule C4(the "RULES").

       2.16   Should OMRIX wish to place or install items of equipment outside
              the Premises, whether necessitating structural changes in the
              Building or not necessitating such changes, it shall be entitled
              to do so upon the receipt of a prior written consent of MDA which
              shall not be unreasonably withheld. Once such a consent is
              granted, all the above provisions shall apply mutatis mutandis to
              such equipment and the installation thereof.

       2.17   Upon expiration or termination of this agreement for any reason
              before JANUARY 1st, 2007, OMRIX undertakes, if so required by MDA,
              to leave the plant in a good working condition, and capable of
              manufacturing all the Licensed Products. If the expiration or
              termination of this agreement occurs after January 1st, 2007,
              OMRIX shall hand over the plant to MDA in a good working
              condition. If however at such a point of time the plant will not
              be capable of manufacturing all the Licensed Products, and MDA
              wishes that Licensed Products or a Licensed Product should be
              manufactured at the plant, then OMRIX should participate in the
              cost of reinstating such missing manufacturing line in the maximum
              amount being 50% of the Grant to which OMRIX might be entitled
              according to the provisions of section 16.3.

3.     LEASE OF THE EQUIPMENT

<PAGE>
                                     - 13 -


       3.1    MDA hereby leases to OMRIX and OMRIX hereby leases from MDA, for
              the Term of the Agreement the machinery, equipment and
              instrumentation installed in the Plant and belonging to MDA,
              detailed in Schedule "C3"attached hereto (the "EQUIPMENT").

       3.2    OMRIX undertakes to exercise reasonable care while operating the
              Equipment and to maintain it in a proper and professional way in
              accordance with the manufacturers manuals and instructions and
              shall repair the Equipment, including replacement of parts, as
              may be necessary in order to ensure that the Equipment is in good
              operating condition at all times.

       3.3    OMRIX shall be entitled to remove and/or replace any item of
              Equipment as well as to add, replace or change any item of
              equipment or system installed in the Building by OMRIX, after
              giving ten days notice to the Facility Engineer about its
              intention to do so.

       3.4    Any item of Equipment which shall be removed BY OMRIX from the
              Plant shall be stored and maintained by OMRIX for possible future
              use. Alternatively, OMRIX will return such items of equipment to
              MDA.

       3.5    The aforesaid in sub-sections 3.3 and 3.4 shall apply mutatis
              mutandis to other items of equipment or systems owned partially or
              in their entirety by MDA.

       3.6    Should any removal or replacement of an item mentioned in
              sub-section 3.3 not involve any risk to other items of
              Equipment/equipment in the Plant and/or to the Systems, OMRIX
              shall have the right to remove or replace same at its own
              discretion and at its own responsibility. However, should such
              removal or replacement pose an adverse effect on other items
              and/or systems as aforesaid, OMRIX shall not be entitled to carry
              such removal or replacement without the prior written approval of
              MDA which shall not be unreasonably withheld. MDA shall reply to
              OMRIX's request within 14 days.

4.     THE TERM OF THE AGREEMENT

       The effective date of this Agreement is January 1, 1997 ("THE EFFECTIVE
       DATE") and unless terminated at an earlier date by OMRIX, in accordance
       with the provisions of Section 5 below, it will remain in force for a
       period of 18 years, i.e. until December 31,2014 (hereinafter: "THE TERM")

5.     EARLY TERMINATION

       5.1    OMRIX shall be entitled to terminate this Agreement on December
              31, 2001, by giving MDA a written notice not less than twelve
              (12) months before the above date.

       5.2    OMRIX shall be entitled to terminate this Agreement on December
              31, 2006, by giving MDA a written notice not less than eighteen
             (18) months

<PAGE>
                                     - 14 -


              before the above date.

       5.3    At the end of the Term, i.e. December 31, 2014, OMRIX shall have
              the right of first refusal to extend the Term of this Agreement
              for a period of an additional 8 years, on terms equal to the terms
              offered to MDA in good faith by a third party.

6.     (DELETED)

7.     THE RENT AND LEASE FEE

       7.1    In return for the lease of the Premises and the Equipment as an
              operational Plasma Fractioning Plant at its current condition and
              in return for the fulfillment of all the other undertakings of MDA
              as provided for herein, OMRIX shall pay MDA a yearly Rent and
              Lease Fee in the amount of NIS equivalent to US$ 1,000,000 (one
              million United States Dollars). The above amount represents Rent
              for the Premises in the amount of US$ 300,000 (Three hundred
              thousand United States Dollars) and a Lease Fee for the Equipment
              in the amount of US$ 700,000 (Seven hundred thousand United States
              Dollars).

       7.2    The above Rent and Lease Fee shall be adjusted, once every two (2)
              years, in accordance with the increase/decrease of the Consumer
              Price Index in the U.S.A. ("CPI") during the Term of this
              Agreement. The adjustments will be made in January of every second
              year starting as of January 1999, by which time the Rent and Lease
              Fee payable during calendar years 1999 and 2000 shall be
              established, by modifying the Rent and Lease Fee indicated in
              sub-Section 7.1 above in accordance with the change (if any), of
              the CPI between January 1997 and December 1998. The same procedure
              shall be observed every second year thereafter.

       7.3    The Rent and Lease Fee shall be paid by OMRIX to MDA each year
              in three (3) installments in the middle of each trimester i.e. on
              February 28, June 30 and October 31, of each calendar year.

              Notwithstanding the provisions of this Section 7.3 above, it is
              declared that, pursuant to an agreement between the parties, the
              Rent and Lease fee for the first two years of the lease, i.e.
              calendar years 1997 and 1998, was and/or will be paid as follows:

              7.3.1  During each of those two (2) calendar years, OMRIX paid
                     MDA Rent in the amount of US$ 120,000 (one hundred and
                     twenty thousand United States Dollars) per annum and Lease
                     Fee in the amount of US$ 480,000 (four hundred and eighty
                     thousand United States Dollars) per annum.

              7.3.2  The parties have agreed as to the deferral of payment by
                     OMRIX of the difference between the Rent and Lease Fee in
                     the amount of US$ one million per annum and between the
                     amount of US$ 600,000 per annum (which was paid by OMRIX
                     during calendar

<PAGE>
                                     - 15 -


                     years 1997/8, as aforesaid in subsection 7.3.1). The total
                     amount of the deferred payments with regard to said 2
                     years, shall be US $800,000 (hereinafter: "THE DEFERRED
                     RENT AND LEASE FEE.")

                     The Deferred Rent and Lease Fee shall be paid to MDA by
                     OMRIX by December 31st, 2001.

                     However, Should OMRIX decide not to exercise its right of
                     early termination as set forth in section 5.1 above, OMRIX
                     shall pay the Deferred Rent and Lease Fee in payments of
                     $160,000, during each of the years 2002, 2003, 2004, 2005,
                     2006 (Hereinafter: "THE ANNUAL ADDITIONAL AMOUNT"). The
                     Annual Additional Amount shall be paid by OMRIX to MDA
                     during each of the above 5 years together with the second
                     trimesteral payment due from OMRIX to MDA, as provided for
                     in this sub-section 7.3 above.

       7.4

              7.4.1  Without derogating from any of the aforesaid in this
                     section 7, and subject to receipt by OMRIX of the FDA
                     Approval for the marketing of the Biological Glue in the
                     USA, OMRIX hereby undertakes to pay MDA an additional
                     amount of $*** (***U.S dollars) annually, with regard to
                     the period commencing as of receipt of the FDA Approval,
                     and ending on December 31st, 2006, or upon the termination
                     of this Agreement, including early termination in
                     accordance with section 5.1 above (hereinafter: "THE ANNUAL
                     BONUS"). The total additional amounts to be paid by OMRIX
                     as Annual Bonuses shall not exceed the amount of US$***
                     (***U.S. dollars) (hereinafter "THE TOTAL BONUS").

                     OMRIX undertakes to make its best efforts to obtain the
                     FDA Approval as soon as possible. MDA shall refrain from
                     unreasonably raising any obstacles or taking any action
                     that may delay such process and, at the request of OMRIX,
                     will extend any assistance reasonably possible in order to
                     assist OMRIX in such effort.

                     It is agreed that the entitlement of MDA to the Total Bonus
                     or any part thereof, as the case may be, will commence only
                     upon receipt of the FDA Approval by OMRIX; (hereinafter;
                     "MDA'S ENTITLEMENT"). Actual payment by OMRIX shall start
                     upon commencement of production of the Biological Glue at
                     the Plant for sale in USA. Receipt by OMRIX of the FDA
                     Approval with regard to the Plant, shall be deemed
                     commencement of production by OMRIX, whether or not OMRIX
                     actually commences production at such time (hereinafter:
                     "THE PAYMENT COMMENCEMENT DATE").

              7.4.2  It is further agreed that the payments of Annual Bonus
                     stipulated in section 7.4.1 shall be postponed for any
                     period during which OMRIX cannot or is not permitted to
                     manufacture the Biological Glue due to Acts of God and
                     Force Majeure including, without

<PAGE>
                                     - 16 -


                     limitation, legal action taken by third parties and/or by
                     any authority and until such obstacle is removed.

              7.4.3  OMRIX hereby undertakes to inform MDA in writing no later
                     than 30 days of receipt of the FDA Approval.

                     In case OMRIX exercises its option of early termination as
                     set forth in section 5.1, and at such time OMRIX has not
                     yet received FDA approval with regard to the Plant - OMRIX
                     shall pay MDA the proportionate part of the Total Bonus,
                     for the period commencing upon receipt of FDA Approval and
                     ending on December 31st, 2001 - upon commencement of
                     production of the Biological Glue by OMRIX anywhere in the
                     world. OMRIX has indicated that the situation described
                     above is an impossibility.

                     For the avoidance of doubt - should OMRIX receive the FDA
                     Approval during the course of any calendar year - OMRIX
                     shall pay MDA the proportionate part of the Annual Bonus
                     with regard to same year, in accordance with the time
                     remaining from the date of receipt of the FDA Approval and
                     until the end of the same year.

              7.4.4  Payment of The Annual Bonus or any part thereof owed by
                     OMRIX to MDA shall be made by OMRIX to MDA in 3 equal
                     installments each year, concurrently with payment by OMRIX
                     of the Rent and Lease Fee, as provided for in sub-section
                     7.3 above.

       7.5    For the avoidance of doubt, unless specifically stated to the
              contrary, all the amounts stated in this Agreement are stated net
              of VAT. Should MDA provide OMRIX with a Tax Invoice, or with any
              other document which shall be acceptable to the Director of VAT
              and will entitle OMRIX to offset the VAT paid by it, OMRIX shall
              pay MDA, the applicable VAT.

       7.6    As of January 1st, 2007 and until the end of the Term, unless
              OMRIX exercises its right of early termination, as per sections
              5.1 or 5.2 above, OMRIX shall continue paying MDA the Rent and
              Lease Fee of US $1 million per annum as per sections 7.1, 7.2, as
              well as an additional amount per each calendar year, which shall
              be the higher of the following:

              (1)    $500,000; or

              (2)    A commission at the rate of 2% (two percent) which shall be
                     calculated from that part of annual Net Sales (as
                     hereinbelow defined) of OMRIX's products manufactured at
                     the Plant, which is in excess of $10,000,000 per annum (ten
                     million US dollars) ("THE COMMISSION").

<PAGE>
                                     - 17 -


              The total amounts payable to MDA as of the year 2007 as aforesaid,
              shall be referred to as: "THE INCREASED RENT AND LEASE FEE").

              The amount of the Rent and Lease Fee plus the amount of $500,000
              U.S out of the Increased Rent and Lease Fee shall be paid in three
              equal installments each year, as indicated in section 7.3 above.
              Should MDA be entitled to additional payment with regard to any
              specific year above said amounts (due to the Commission payable to
              MDA with regard to same year), then such additional payment shall
              be made within 30 days from the submission of the applicable
              Annual Sales Report by OMRIX.

       7.7    Unless OMRIX exercises its right of early termination as per
              section 5.1 or 5.2 - OMRIX shall submit to MDA, once a year,
              within 90 days of the end of each calendar year, as of the year
              2007, a detailed report stating OMRIX's total net sales turnover
              of all products manufactured by OMRIX at the Plant, and the
              Commission due to MDA with regard thereto. All such annual reports
              shall be certified by OMRIX's Certified Public Accountants ("THE
              ANNUAL SALES REPORTS").

              In each Annual Sales Report, OMRIX shall state the net sales of
              the products manufactured at the Plant and sold "at arm's length"
              by OMRIX or by any subsidiary/mother company/affiliated company of
              OMRIX ("THE OMRIX GROUP"). "Net Sales" shall mean sales to the
              first buyers not constituting part of the OMRIX Group, less any
              discounts, rejects, returns, refunds, replacements, and any direct
              taxes such as VAT, sales tax, etc. It is hereby agreed and
              clarified that in the event OMRIX shall appoint a major
              corporation as its distributor in certain parts of the world, and
              such corporation shall acquire shares in OMRIX, such corporation
              shall not be deemed part of the OMRIX Group.

              MDA shall have the right, in order to verify the accuracy and
              truthfulness of such Annual Sales Reports, to request an external
              audit of the Annual Sales Reports submitted by OMRIX, which shall
              be carried out at MDA's cost, by a firm of Israeli Certified
              Public Accountants of MDA's choice, provided such accountants
              shall be required to execute a confidentiality agreement with
              OMRIX. Said accountants shall maintain in strict confidence, and
              shall neither use for their own purposes nor disclose to any third
              party including MDA, any information gathered by them in the
              course of such external audit. The external auditors shall report
              to MDA, with a copy to OMRIX, their findings as to the accuracy
              and truthfulness of OMRIX's Annual Sales Reports.

              In case any dispute arises between the parties following such
              external audit, the matter will be referred by the parties to a
              mutually appointed Israeli firm of Certified Public Accountants,
              who will act as a ruling authority and whose findings shall be
              binding upon the parties and shall not be subject to appeal.

8.     MANUFACTURING IN THE PLANT AND SPECIAL TERMS REGARDING THE ISRAELI MARKET

<PAGE>
                                     - 18 -


       8.1    Subject to the provisions of sections 8.2, 8.3 hereunder OMRIX
              shall be free to manufacture in the Plant the Licensed Products,
              the Biological Glue and any other products OMRIX may wish, in any
              quantities OMRIX may determine, provided any such manufacture is
              in compliance with the prevailing laws and regulations and
              provided that priority shall be given to the manufacture from
              plasma supplied by MDA of the Licensed Products required for
              local use in Israel and ordered from OMRIX.

       8.2    With regard to manufacturing and/or marketing of the Licensed
              Products for THE Israeli market, the following conditions and
              rules shall apply:

              8.2.1  While manufacturing the Licensed Products for the Israeli
                     market, OMRIX shall use as a first priority, plasma
                     collected from donors in Israel, and purchased from MDA in
                     accordance with the provisions of section 10 below. Should
                     OMRIX decide to manufacture additional quantities of
                     Licensed Products for the Israeli market from imported
                     plasma and/or plasma derivatives, it will be free to do so
                     provided that same imported plasma and/or plasma
                     derivatives, including their source, are approved by the
                     Israeli Ministry of Health.

              8.2.2  OMRIX shall sell the Licensed Products in the Israeli
                     market at fair and competitive prices, and shall make its
                     best endeavors in good faith to meet the demands of the
                     Israeli marker as may be from time to time, of the Licensed
                     Products manufactured by OMRIX from plasma collected from
                     donors in Israel; Provided however, that if competitors
                     offer competitive products at prices which OMRIX cannot
                     match without obtaining a reasonable gross margin, then in
                     such case, OMRIX shall inform MDA about it and the parties
                     shall evaluate the situation together.

              8.2.3  In view of the fact that MDA attaches the utmost importance
                     to quoting prices as low as possible for the Licensed
                     Products to the Israeli Defense Forces ("IDF"), it is
                     hereby agreed that OMRIX shall present to the Head of the
                     MDA Blood Services, in advance, the price quotations it
                     intends to quote in any tender, bid or request for price
                     quotations for the IDF.

                     OMRlX shall offer and/or bid and/or participate in any
                     tender with regard to the Licensed Products, as well as any
                     other products produced by it in the Plant from time to
                     time, to the IDF and/or any other Israeli security force,
                     only after receiving the prior written approval of MDA.
                     Such approval shall not be unreasonably withheld.

                     OMRIX shall make its best endeavors in good faith, to
                     ensure that any such offer. presented for the approval of
                     MDA, shall be at the lowest possible prices, reasonable
                     under the circumstances.

<PAGE>
                                     - 19 -


                     MDA shall consider, at its own discretion, whether to
                     subsidize or to cause the State of Israel to subsidize the
                     products sold to the IDF or to any other security force.

              8.2.4  It is agreed that subject to the availability of plasma
                     supplied by MDA and provided that the demand for Licensed
                     Products shall not exceed the manufacturing capability of
                     OMRIX, OMRIX shall maintain an inventory of the Licensed
                     Products equivalent to one month of sales by OMRIX of such
                     Licensed Products in Israel.

       8.3    OMRIX shall submit to MDA quarterly reports, no later than 14 days
              prior to the designated date of the convening of each meeting of
              the Tripartite Committee to be established under sub-section 12.1
              hereinbelow (hereinafter: "THE REPORTS").

              The Reports shall be brought before the Tripartite Committee, and
              shall be discussed within the framework of its quarterly meetings,
              as provided for in section 12 hereinbelow.

              Each report shall describe in detail, inter alia, the following
              matters: The estimate of the Israeli market for each of the
              following products : Albumin, Factor VIII and IVGG, as well as
              OMRIX's sales forecast in the Israeli market for the forthcoming
              period for each of said products;

              The expected share of OMRIX in the entire Israeli market;
              The actual production in the Plant and the sales in units of the
              Licensed Products in Israel during the period of the Report;
              In cases whereby it shall be apparent from the Report that OMRIX
              has substantially failed to meet the forecasts for the period to
              which such Report relates, the Report shall specify also the
              average prices for which OMRIX sold the various Licensed Products
              to the various sectors of customers in the Israeli market during
              the period of such Report;
              If the sales in Israel did not meet OMRIX's forecast - what were
              the reasons for the difference between the forecast and actual
              sales, in OMRIX's opinion;
              The division of the sales in Israel among the IDF and other
              Israeli Security forces on the one hand, and the rest of the
              Israeli market on the other hand.

       8.4    For the avoidance of any doubt it is hereby declared and agreed
              that OMRIX shall not pay MDA any royalties nor any other payments
              in respect of the products manufactured by OMRIX in the Plant and
              the only amounts payable to MDA by OMRIX will be the Rent and
              Lease Fee as well as the Total Bonus or any part thereof, as
              relevant, as well as the Increased Rent and Lease Fee, including
              the Commissions (if applicable), as well AS partial reimbursement
              for the cost of the Supplies and the participation in the cost of
              the operation and the maintenance of the Systems and the
              participation in the cost of the employment of the Facility
              Engineer, as provided for in sections 2.6, 2.7, 2.7.A above and

<PAGE>
                                     - 20 -


              8.5 below, as well as payments for plasma purchased by OMRIX, as
              provided for in section 10 hereunder.

              Should any third party such as, for example, Minhal Mekarke'ei
              Israel, raise any financial demands against OMRIX or MDA as a
              result of the Lease of the Premises and/or the operation of the
              Plant by OMRIX, MDA shall settle any such demand and shall hold
              OMRIX harmless from any such claim or demand.

       8.5    The aforesaid in this section 8 shall not affect the obligation of
              OMRIX to purchase from MDA plasma and to pay for such plasma as
              per section 10 below.

       8.6    OMRIX shall bear all the direct as well as indirect costs involved
              in the operation of the plant, including the salaries of its
              employees, cost of raw materials as well as the applicable part of
              the cost of maintenance, electricity, water, telephone, and
              municipal taxes.

9.     EMPLOYEES - DELETED

10.    PURCHASE OF PLASMA

       10.1   OMRIX undertakes to purchase from MDA, during the Term of this
              Agreement, all the plasma MDA will have from time to time which
              meets the specifications as set forth in section 10.2 below, up to
              a total quantity of 32,000 liters per annum, out of which not more
              than 25% will be Liquid Plasma. Subject to availability and unless
              otherwise requested by OMRIX, MDA shall supply the Plasma to OMRIX
              in a more or less steady pace throughout each calendar year, i.e.
              approximately one twelfth of the annual quantity each month. For
              the avoidance of doubt it is hereby stated and agreed that the
              above quantity specifically refers to plasma derived from whole
              blood donations collected in Israel by MDA. OMRIX shall not be
              obliged to purchase from MDA any other type of plasma.

       10.2   OMRIX shall purchase from MDA only the plasma which shall be
              extracted from whole blood collected by MDA in Israel, in the
              regular course of business, from donors, provided such plasma
              complies with all specifications set forth in SCHEDULE "D"
              attached hereto, as maybe amended from time to time by any
              authorized agency of the European Community.

       10.3   Subject to availability of suitable plasma FROM MDA (i.e. - plasma
              which meets the criteria indicated in section 10.2 above and the
              specifications set forth in Schedule D), OMRIX shall not purchase,
              for the manufacture of the Licensed Products for the Israeli
              market, plasma from sources in Israel other than MDA.

       10.4   The parties shall execute the Standard Contract required by the
              European Community Authorities pertaining to the Quality and
              Safety of Plasma of

<PAGE>
                                     - 21 -


              Human Origin in the form attached hereto AS SCHEDULE "E". In the
              future, the parties will execute any such additional/new standard
              Agreements pertaining to the Quality of Plasma as may be required,
              from time to time, by the authorities of the EC and the
              authorities in the USA, if and to the extent MDA gets FDA
              approval for plasma from whole blood or for plasma collected by
              plasmapheresis.

       10.5   Without derogating from any of the aforesaid in this section 10,
              the Parties hereby agree, that MDA shall not be obligated to
              provide OMRIX with plasma with a concentration of Factor 8
              exceeding 0.7 International Units per I ML, unless such
              specification becomes a requirement of the US and/or EU authority.

       10.6   MDA currently does not perform NAT testing on the plasma which it
              supplies to OMRIX with regard to the Hepatitis C Virus ("HCV").
              Should the authorities of any country to which OMRIX shall sell
              the products manufactured in the Plant from plasma supplied to
              OMRIX by MDA, require that the plasma pool used in the production
              of such Products be NAT tested for HCV, OMRIX shall inform MDA
              in writing of such requirement. In order to meet such
              requirements, OMRIX shall perform NAT testing of the plasma pool
              supplied to OMRIX by MDA. Should ANY such pool be found to be
              positive for HCV, MDA shall be entitled to retest said pool in an
              attempt to invalidate the positive results. Failing such
              invalidation, MDA shall credit OMRIX for the price of the plasma
              pool. OMRIX will provide MDA with a copy of the Bleeding List of
              such plasma pool. The same procedures will apply for any future
              plasma pool testing requirements by an EU authority for which MDA
              does not test the plasma units it supplies to OMRIX.

       10.7   As of the year 2007 (unless OMRIX exercises its right of early
              termination as per sections 5.1 or 5.2), the following shall apply
              to purchase of plasma by OMRIX:. In the year 2007, OMRIX
              undertakes to purchase from MDA 33,00 liters of plasma. This
              quantity shall be increased by 1,000 liters each year so that in
              the course of the year 2014 OMRIX undertakes to purchase from MDA
              40,000 liters of plasma. The above quantities of plasma shall
              include not more than 25% of Liquid Plasma.

       10.8   Should OMRIX decide at any point of time, to manufacture all three
              Licensed Products for the Israeli market from quantities of plasma
              exceeding the minimum quantities indicated in this section 10
              above, OMRIX shall purchase any additional quantities of plasma it
              may require for such additional quantities of Licensed Products
              from MDA, subject to the availability of such additional
              quantities from MDA. If MDA shall not be able to supply such
              additional quantities of PLASMA, OMRIX shall be free to
              manufacture such additional quantities of the Licensed Products
              for the Israeli market from plasma purchased by OMRIX from foreign
              sources.

              OMRIX shall have the right of first refusal to purchase from MDA
              any quantities of plasma that MDA will be in position to supply in
              access of the minimum quantities indicated in section 10 above.

<PAGE>
                                     - 22 -


11.    PRICE OF PLASMA

       11.1   OMRIX shall pay MDA for the PLASMA supplied by MDA to OMRIX in
              accordance with Section 10 above, the price in US Dollars paid on
              average in the U.S. for equivalent plasma of the same
              specifications, quality and conditions. Such price of the plasma
              shall be established, for the purpose of the accounting between
              the parties hereto, twice a year, in accordance with the average
              prices paid in the U.S. during the preceding six (6) month period
              in respect of any relevant category (specifications) of plasma
              purchased by OMRIX from MDA. Such average price shall be
              determined, twice a year, by the Marketing Research Bureau Inc.,
              of Orange City, Connecticut, U.S.A.

              It is hereby agreed, that due to the fact that the plasma used in
              Israel is not required by the Israeli Ministry of Health to
              undergo the test known as P24 Antigen test (hereinafter: THE
              TEST"), while the U.S. price of plasma as should be determined by
              the Marketing Research Bureau Inc. of Orange City, Connecticut,
              USA, relates to plasma which does undergo the Test, OMRIX shall be
              entitled to deduct the estimated total cost of the Test from the
              equivalent U.S. reference price of each liter, insofar as the U.S.
              price for the plasma includes the cost of the Test.

              The price of the Test shall be established twice a year,
              simultaneously and in a way similar to the establishment of the
              price of the plasma itself, as provided hereinabove. If the price
              of the Test cannot be establish the price shall be deemed to be
              U.S. *** per liter of plasma.

              Notwithstanding the foregoing in this section 11.1, and due to the
              fact that it is not possible to derive Factor VIII from Liquid
              Plasma ("LP") - it is hereby agreed that the price which shall be
              paid by OMRIX for LP shall be 2/3 (two thirds) of the full price
              (including the Test) established with regard to FFP (fresh frozen
              plasma) as aforesaid (as such shall be from time to time), from
              which 2/3 of the price of the Test (as shall be established from
              time to time) shall be deducted ("PRICE OF LP").

              For example: if the full price established with regard to FFP
              shall be $ *** per liter, and the price of the Test shall be $***,
              then the Price of LP shall be: (*** 2/3) - (*** *2/3)=***$.

              It is further agreed, that the aforesaid specific arrangement with
              regard to the Price of LP, shall only apply to LP purchased by
              OMRIX later than January 1ST, 1999.

       11.2   OMRIX shall pay for the plasma supplied by MDA no later than 180
              (one hundred and eighty) days after the Date of Supply of the
              plasma to OMRIX.

              "THE DATE OF Supply" shall mean the 15th day of each calendar
              month during which any such supplies were MADE.

<PAGE>
                                     - 23 -


       11.3   The invoiced quantity of plasma for which OMRIX shall be obligated
              to pay MDA, shall be based upon the net weight of the plasma
              determined subsequent to the receipt of the bags of plasma by
              OMRIX, prior to the emptying of the bags into OMRIX's pool, less
              the weight of the bags of plasma, as described in SCHEDULE "F"
              attached hereto.

       11.4   MDA hereby waives all claims it may have, pertaining to accrued
              interest, which remains outstanding and unpaid by OMRIX, with
              regard to all plasma supplied to OMRIX until the date of execution
              of this Agreement. OMRIX hereby waives all claims it may have,
              pertaining to amounts, which OMRIX believes it has been
              overcharged by MDA, with regard to plasma supplied to OMRIX until
              December 31st, 1998.

12.    COMMITTEES

       12.1   The parties shall form a Tripartite Committee whose members shall
              be one representative of each IMDAC, MDA and OMRIX and which
              shall be headed by the Director General of MDA.

              The Tripartite Committee shall observe the adherence to the
              policies and the objectives established by the friends of MDA and
              the Donors who made possible the erection of the Building and the
              Plant, AS provided for in the preamble to this Agreement, as well
              as in sections 8.1,8.2, and 10 above, i.e. that:

       (i)    Priority is being given by OMRIX to the manufacture, from plasma
              collected in Israel and donated by donors, for local use in
              Israel, of the Licensed Products, and that OMRIX is making its
              best endeavors in good faith to sell in Israel the Licensed
              Products manufactured by it at fair and competitive prices, as
              provided for in section 8.2.3 above.

       (ii)   That the Licensed Products designated for the Israeli market are
              manufactured, as far as possible, from plasma supplied by MDA, as
              provided for in section 8.2.1 above, subject to the provisions of
              section 10 herein.

       (iii)  That OMRIX is not offering and/or bidding and/or quoting to the
              IDF prices for the Licensed Products without obtaining the prior
              WRITTEN approval of MDA for such offer and/or for such prices, as
              indicated in section 8.2.3.

       (iv)   That OMRIX is purchasing the plasma from MDA in accordance with
              the terms provided for in section 10 above.

       (v)    That the objectives of this Agreement are carried out by both
              parties.

       12.2   In addition to the Tripartite Committee, the parties hereto shall
              establish a Coordinating Committee, which shall comprise of the
              Manager of MDA Blood Services and a representative of OMRIX. The
              role of the Coordinating Committee shall be to resolve all the
              accounting disputes

<PAGE>
                                     - 24 -


              and points of friction between the parties resulting from the fact
              that the parties share the Building and the Systems.

       12.3   In addition to the two abovementioned committees, the parties
              hereto shall establish a Steering Committee, whose members shall
              be the Director General of MDA and the Chairman of OMRIX. The
              Steering Committee shall decide and resolve all the issues,
              questions and disputes which were attended to by the Tripartite
              Committee and/or the Coordinating Committee and which the above
              committees were unable to resolve. In addition, the Steering
              Committee will attend to any issue arising from this Agreement and
              shall supervise the implementation of the decisions made by the
              Tripartite Committee.

       12.4   The committees shall meet as frequently as required, but it is
              expected to be not less than once every quarter, i.e. - four times
              per annum. Each member of any of the Committees may call for a
              meeting of such Committee by giving due notice.

13.    INSURANCE

       13.1   OMRIX shall insure itself in the framework of an appropriate
              Product Liability Insurance Policy providing coverage of DM.
              10,000,000.- per annum and DM. 3,000,000.- per case. OMRIX shall
              name MDA as co-insured in the above Policy. The Policy shall
              provide for the re-establishment of the full annual amount of
              coverage in the event of payment for an Insurance Event pursuant
              to any claim against OMRIX and/or MDA.

       13.2   Subject to anything stipulated to the contrary in this agreement,
              MDA shall continue insuring the Building, the Premises and the
              Equipment for their full reasonable value and shall name OMRIX in
              the Insurance Policy as a co-insured. OMRIX shall be entitled to
              add a Rider to the above Policy insuring OMRIX against loss of
              profits and/or business interruption. OMRIX shall bear the costs
              of such Rider. In the event any new equipment shall be added to
              the Plant by OMRIX in the framework of Discretionary Investments
              including the CEP as specified in Section 15 below, any such
              additional equipment shall be insured by OMRIX and the cost of
              such insurance shall be borne by both parties pro rata to their
              title/ownership rights in such equipment.

       13.3   OMRIX shall at all times insure itself against any and all
              liabilities it may have as an Employer. OMRIX shall further insure
              itself at all times against any liabilities it may have toward any
              third party whatsoever, in connection with its being a Lessee
              and/or an operator of the Plant.

       13.4   The parties hereto shall jointly bear, in equal parts between
              them, the cost of insurance of the Systems.

14.    COMPULSORY INVESTMENTS IN THE PLANT

       14.1   If, as a result of new law, regulations, directives, requirements
              or instructions by the competent authorities, investments will
              have to be

<PAGE>
                                     - 25 -


              made in the Premises / Plant in order to preserve its license
              and/or the right to market its Products in the various markets
              ("COMPULSORY INVESTMENTS") such Compulsory Investments shall be
              borne by MDA and/or OMRIX as provided below.

              14.1.1 In the event OMRIX shall be able to increase the prices of
                     its Products because of the Compulsory Investment(s), such
                     Compulsory Investment(s) shall be borne in full by OMRIX.
                     Subject to section 14.5.3 hereunder, any such
                     equipment/investment shall be sold by OMRIX to MDA upon the
                     termination of this Agreement for its net dollar book value
                     on such date.

              14.1.2 In the event OMRIX shall not be able to increase the prices
                     of its Products as a result of the Compulsory
                     Investment(s), such Compulsory Investment(s) shall be borne
                     by OMRIX and MDA in equal parts between them or at any
                     other ratio as may be agreed upon by the Steering
                     Committee. While deciding about the split of the Compulsory
                     Investment(s) between the parties, the Steering Committee
                     shall take into account, among others, the following
                     considerations:

                     (i)    the time at which such Compulsory Investment(s) is
                            required, i.e.- the nearer the date of such
                            investment to the expiration of the Agreement, the
                            larger the part of MDA and vice versa.

                     (ii)   if the Compulsory Investment(s) is the result of new
                            requirements of the Health Authorities in a certain
                            country of minor importance, MDA's share in such
                            investment(s) shall be smaller than if the
                            requirements are made by the EC or US Authorities.

              14.1.3 Notwithstanding the aforesaid in sections 14.1.1 and
                     14.1.2, it is hereby agreed that MDA shall bear 100% of the
                     costs of any Compulsory Investment that will have to be
                     made as a result of a demand by a competent Israeli
                     Authority(s) due to the fact that the Plant is located in
                     proximity to the MDA Blood Services and/or is located
                     within the perimeter of the Tel Hashomer Hospital and/or
                     the fact that the Plant is located in proximity to an urban
                     area.

       14.2   Should any Compulsory Investment(s) be required as provided for in
              Section 14.1.2 and/or 14.1.3 above, OMRIX shall finance such
              Compulsory Investment(s), and shall off-set MDA's part of any
              such Compulsory Investment(s) against the Rent and Lease Fee
              and/or the Increased Rent and Lease Fee and/or the Annual Bonus
              and/or Commission due to MDA, subject to the provisions set
              forth in section 14.5 hereunder.

       14.2A  In the event OMRIX carries out the Compulsory Investment in stead
              of MDA, prior, during and after any such Compulsory Investment,
              OMRIX


<PAGE>
                                     - 26 -


              shall submit to MDA plans, time schedules, price lists and the
              like AND the terms of Section 15A.4 shall apply mutatis mutandis.

       14.3   In the event that the required Compulsory Investment(s) will be of
              a substantial magnitude and/or during the second part of the Term
              (i.e. - after January 1st, 2006), OMRIX shall be entitled to
              refuse to finance and/or to bear the cost of its part of any such
              Compulsory Investment(s).

              Should OMRIX refuse to finance and/or bear the cost of any part of
              the Compulsory Investment(s) in the events described in this
              section 14.3, MDA shall be entitled to finance and bear the full
              cost of any such Compulsory Investment(s).

              Refusal of MDA to finance and/or bear the cost of such Compulsory
              Investment(s), shall entitle OMRIX to bring this Agreement to an
              end.

              MDA shall be entitled to refuse to participate in any Compulsory
              Investment of a substantial magnitude and/or if such Compulsory
              Investment is required during the second part of the Term, even
              whereby OMRIX is prepared to finance the entire Compulsory
              Investment (including MDA's share), upon the occurrence of the
              following cumulative conditions:

              (1)    The requirement for such Compulsory Investment was not
                     issued by an Israeli Competent Authority; and

              (2)    MDA'S part in such Compulsory Investment exceeds the
                     Determined Amount as hereinbelow defined.

              "THE DETERMINED AMOUNT" shall mean - in a given time, and with
              respect to a certain investment - the accumulated balance of US
              $1.2 Million per year (being the Rent and Lease Fee together with
              the average estimated indexation to the CPI during the Term of
              this Agreement), per each year until December 31st 2014, as well
              as an additional amount of US $0.5 Million in respect of each year
              as from January 1st 2007 until December 31st 2011, as well as the
              Commissions which had been accumulated until such time as the
              reserve fund referred to in section 14.5.3 hereunder, after
              deducting therefrom the amount of $1 Million US per annum until
              31st December 2006, and deducting the amount of $1.25 Million US
              per annum as from January 1st 2007 until 31st December 2014.

              Notwithstanding the aforesaid in this definition hereinabove, the
              "Determined Amount" in respect of Compulsory Investments made
              prior to December 31st", 2006 shall be calculated only until
              December 31st 2006 unless it is made after July 1st 2005 and OMRIX
              did not exercise until then its right of Termination under Section
              5.2

              In case MDA refuses to participate in any Compulsory Investment
              due to the occurrence of the above conditions, OMRIX shall have
              the right to terminate the Agreement or to carry out the
              Compulsory Investment, and

<PAGE>
                                     - 27 -


              then it shall be entitled to offset MDA's part of the Compulsory
              Investment against the Rent and Lease Fee and/or the Annual Bonus
              and/or the Increased Rent and Lease Fee and/or Commission due to
              MDA, provided however, that the right of OMRIX hereunder to setoff
              shall be in respect of amounts exceeding each calendar year until
              31st December 2006 1$ Million US and thereafter $1.25 Million US
              until 31st December 2014. The aforesaid shall also be subject to
              the provisions of section 14.5 hereunder.

       14.4   Should MDA invest on its own the amounts required as Compulsory
              Investment(s) (without the participation of OMRIX) the Rent and
              Lease Fee shall be increased, as from that date onwards, at the
              rate representing the percentage of such amount invested by MDA
              ("THE NEW INVESTMENT") in relation to the total initial investment
              in the Plant - which is estimated, for this purpose, to be
              US$15,000,000(fifteen million United States Dollars) ("THE INITIAL
              INVESTMENT"). The Initial Investment shall be adjusted in
              accordance with the change in the Consumer Price Index in the
              U.S.A. between the Effective Date and the date of the relevant
              accounting between the parties.

              For the sake of clarity and exemplification: If, after a few
              years, the Initial Investment adjusted to the CPI in the U.S.A. is
              equivalent to US$16,000,000.-(sixteen million United States
              Dollars), and the New Investment will be US$320,000.-,the Rent and
              Lease Fee (as it shall be at such time, in accordance with the
              terms of this Agreement) shall be increased, as from that date
              onwards, by two (2%) percent.

       14.5   Without derogating from all of the provisions set forth in this
              section 14 (pertaining to the parties' respective shares in any
              Compulsory Investment, their respective rights not to participate
              in Compulsory Investments under certain circumstances, etc.), it
              is agreed that the following shall apply to actual payment by MDA
              (by way of set off by OMRIX), of MDA's share in the Compulsory
              Investments:

              14.5.1 Until December 31st, 2006 - OMRIX shall finance, on its
                     own, all required Compulsory Investments, including MDA's
                     share (if any), in such Compulsory Investments. OMRIX shall
                     be entitled to offset such part of MDA'S share in such
                     Compulsory Investments (against the Rent and Lease Fee
                     payable to MDA), provided that annul payments, which MDA
                     shall actually receive as Rent and Lease Fee and/or Annual
                     Bonus, shall not be less than the amount of $1 Million US
                     (net) in the course of any year during said period.

                     Without derogating from the above, during said period,
                     OMRIX shall only be entitled to offset any part of MDA'S
                     share in such Compulsory Investments, if and to the extent
                     that the balance due to MDA after the set off of MDA's
                     participation in the CEP as hereinafter defined, in a
                     certain calendar year is not less than $ 1 Million US.

<PAGE>
                                     - 28 -


              14.5.2 If OMRIX exercises its right of early termination as per
                     section 5.2 of this Agreement, and therefore this Agreement
                     comes to an end on December 31st, 2006, then:

                     Upon termination of the Agreement as aforesaid, AS part of
                     the final accounting between the parties, MDA shall pay
                     OMRIX any outstanding part of MDA's share in the
                     Compulsory Investments which had been made until such time,
                     and which had not been set-off during the course of the
                     Agreement, in accordance with the terms of subsection
                     14.5.1 above.

             14.5.2A Upon Termination of the Agreement as aforesaid in section
                     14.5.2, OMRIX to leave in the Plant also its part in the
                     Compulsory Investments made until the date of termination.
                     Immediately thereafter, the parties hereto shall start bona
                     fidea negotiations as to the price and the terms of payment
                     in respect of such investment. If such an agreement is not
                     reached regarding the price and/or the terms of payment,
                     the dispute will be referred to an arbitrator, who will be
                     an expert in the field of blood fractionation.

              14.5.3 If OMRIX shall not exercise its right of early termination
                     as per section 5.2 of this Agreement, then as of the year
                     2007, OMRIX shall be entitled to offset MDA's part in any
                     compulsory Investments (including any outstanding part, if
                     any, remaining from the period until December 31st, 2006),
                     only against any income payable to MDA (as Increased Rent
                     and Lease Fee and/or Commissions) over the amount of $ 1.25
                     Million US per annum.

                     As of the year 2007 - any amounts out of MDA'S income (from
                     Increased Rent and Lease Fee and/or Commissions), over the
                     amount of $ 1.25 Million per annum, which shall remain
                     following any offsets made by OMRIX (in accordance with the
                     aforesaid in this subsection 14.5.3) - shall be designated
                     by MDA for its future participation in any Compulsory
                     Investments (if any), and shall be presented as a special
                     reserve in MDA's financial reports. Should there be any
                     Compulsory Investments in subsequent years, in which MDA
                     shall be required to participate in accordance with the
                     terms of this section 14, then MDA shall use any such
                     designated amounts in order to pay its share in such
                     Compulsory Investments.

                     At the end of the Term of this Agreement, i.e. December
                     31st 2014, MDA shall not be required to pay OMRIX any
                     outstanding part of MDA's share in the Compulsory
                     Investments which had been made until such time, which had
                     not been set-off during the course of the Agreement, in
                     accordance with the aforesaid terms. The aforesaid shall be
                     subject to section 14.6 hereunder.

              14.5.4 For the avoidance of doubt, the right of OMRIX to set off
                     against amounts payable to MDA, in accordance with this
                     section 14 (except after the termination of this
                     agreement), shall be limited to

<PAGE>
                                     - 29 -


                     amounts due to MDA as Rent and Lease Fee and/or Increased
                     Rent and Lease Fee and/or Commissions and/or the Annual
                     Bonus only, and shall not apply to any other payments due
                     to MDA pursuant to the terms of this Agreement.

              14.5.5 Upon termination of the Agreement as aforesaid in Section
                     14.5.3, namely, if OMRIX does not exercise its option under
                     section 5.2, OMRIX shall leave free of charge OMRIX's part
                     in the Compulsory Investments in the plant.

       14.6

              14.6.1 Notwithstanding any of the aforesaid in this section 14,
                     MDA shall solely bear the cost of any Compulsory Investment
                     which shall be a result of a demand made subsequent to
                     January 1st, 2012, by competent authorities of Israel
                     and/or the US and/or the EU.

              14.6.2 MDA's obligation as aforesaid in this section 14.6 shall
                     not exceed the total amount of US $4.5 million with regard
                     to the entire period as of January 1st, 2012 and until the
                     end of the Term.

              14.6.3 Any Compulsory Investments referred to in this section
                     14.6, shall be financed by OMRIX, and OMRIX shall be
                     entitled to offset same against any amounts due to MDA from
                     OMRIX as Increased Rent and Lease Fee and/or Commissions.
                     The terms of section 14.5.3 above shall not apply to the
                     Compulsory Investments referred to in this section 14.6.
                     For the avoidance of doubt, this section 14.6 shall not
                     derogate from any of the terms of this section 14
                     (including those of section 14.5.3 above), regarding any
                     Compulsory Investments which do not fall under the
                     conditions elaborated in sections 14.6.1, 14.6.2 above.

15.    DISCRETIONARY INVESTMENTS IN THE PLANT

       Should OMRIX decide to install in the Plant new items of equipment and/or
       make any other investments in the Plant which shall not be essential in
       order to preserve the operational licenses of the Plant and/or its
       ability to export the Products made therein to the various markets
       ("DISCRETIONARY INVESTMENTS"), OMRIX shall bear all the costs of any such
       Discretionary Investments.

       Upon the termination of the Agreement and unless otherwise agreed upon by
       the parties, OMRIX shall, at its option, remove from the Plant, or sell
       to MDA at net dollar book value at the effective date of termination, any
       such new equipment being installed in the framework of Discretionary
       Investments. In the event OMRIX shall be willing to sell said equipment
       to MDA as aforesaid, it will offer MDA to purchase same as provided for
       above.
       MDA will inform OMRIX within 30 (thirty) days whether it chooses to
       purchase all of the above equipment or not.

       The aforesaid in this section 15 shall refer only to items of equipment,
       instrumentation and/or machinery, which can be easily dismantled and
       removed from the Plant. In case OMRIX makes any Discretionary
       Investments, pertaining to any items of equipment, instrumentation,
       machinery, Systems and/or

<PAGE>
                                     - 30 -


       upgrading of Systems, which have become an integral and/or inseparable
       part of the Plant, MDA shall purchase same at a price which shall be
       negotiated in good faith by the parties; Should the parties fail to reach
       agreement as to the price of such items, the dispute shall be referred to
       an Arbitrator, who will be an expert in the field of blood fractionation.
       In order to determine the price of such items, said Arbitrator shall be
       presented with the following assumptions:

       (l)    The duty of OMRIX to return the Plant to MDA properly maintained
              and in a fully operational condition, as set forth in section 16
              hereunder;

       (2)    The value to MDA of the Systems and/or items installed and/or
              built and/or improved in the framework of this section 15, as a
              going concern.

       MDA shall be released from its obligation to purchase the integral or
       inseparable parts of the Systems in the event MDA (or any third party)
       shall not operate the Plant as a fractionation Plant in the course of a
       period of 5 years after OMRIX shall vacate the Plant and the premises.

       In the event MDA shall notify OMRIX, prior to the expiration of the
       agreement as aforesaid, about its intentions not to operate the Plant as
       a fractionation Plant, OMRIX shall be entitled to remove from the Plant,
       free of charge, in coordination with MDA, any such item or part of the
       Systems.

       The aforesaid in this section 15 shall not derogate from the terms set
       forth in section 15A hereunder.

15A.   THE CAPACITY EXPANSION PROGRAM

       15A.1. Within the framework of Discretionary Investments, as set forth in
              section 15 above, OMRIX hereby declares that it intends to expand
              the capacity of the Plant, thereby enabling the Plant to process a
              quantity of approximately 100,000 liters of plasma per annum,
              consequently increasing the manufacturing capability of the
              Licensed Products as well as that of the Biological Glue and/or
              any other products ("THE CAPACITY EXPANSION PROGRAM" or the
              "CEP"). OMRIX hereby further represents, that the CEP shall not
              require any additional exterior construction works and/or
              enlarging the area of the Plant in any way.

       15A.2  OMRIX estimates that the investment required in order to implement
              the CEP shall be in excess of $5,000,000 US.

              Based on the aforesaid representations, and subject to the terms
              set forth hereunder, MDA hereby agrees to the implementation of
              the CEP, and MDA further agrees to participate in the investments
              necessary with regard to said implementation.

       15A.3  It is acknowledged that OMRIX has already begun implementation of
              the first stage of the CEP, the cost of which is estimated by
              OMRIX to be US$ 1.5 million, and has carried out the works set
              forth in SCHEDULE "G" attached hereto.

<PAGE>
                                     - 31 -


       15A.4  Prior to the implementation of any investment other than the one
              referred to in sub-Section 15A.3 above, including the ordering of
              equipment and/or materials and/or carrying out any works within
              the CEP, OMRIX shall submit to MDA a time schedule as well as a
              list of any further plans and/or equipment ("THE SCHEDULE" and
              "THE LIST", respectively) required for the implementation of the
              CEP. MDA shall provide OMRIX with its comments pertaining to the
              Schedule and/or the List, within 14 days of their submission by
              OMRIX. In case of Failure by MDA to provide such comments within
              said period, the Schedule and/or the List (as the case may be)
              shall be deemed approved. Not later than 120 days after completion
              of the CEP, OMRIX shall provide MDA with "as made" plans of the
              CEP.

              Should MDA provide OMRIX with comments as aforesaid, OMRIX shall
              give said comments its due consideration, but shall not be
              required to adopt any recommendations included therein provided,
              however, that if MDA raises issues pertaining to the adverse
              affect which any such works may have with regard to the Plant
              and/or the Systems and/or the Building - the parties shall refer
              such comments for review by the Consultant Engineer. In the event
              the remarks and/or recommendations or instructions of the
              Consultant Engineer shall not be acceptable to either party, and
              the parties will not be able to sort out such differences in an
              amicable way, such dispute shall be referred to the legal counsels
              of the parties, whose decision shall be final and binding upon the
              parties.

              During the works required for the implementation of the CEP, OMRIX
              shall submit to MDA once every 90 days, a progress report,
              detailing the works undertaken during the period of the report and
              the equipment installed during such period.

       15A.5  MDA's share in the investment required within the CEP, shall be
              deducted by OMRIX from the Annual Bonus to which MDA may be
              entitled pursuant to section 7.4 of this Agreement. For the
              avoidance of doubt, it is hereby agreed that MDA shall have no
              obligation to participate in the investments in the framework of
              the CEP in any given year in respect of which MDA shall not be
              entitled to the Annual Bonus.

       15A.6. Subject to the aforesaid in section 15A.5, MDA shall bear 50% of
              the investments required within the implementation of the CEP up
              to investments totaling US$ 4,000,000. It is agreed, however,
              that MDA's participation shall in no case exceed the total amount
              of $2,000,000 US. MDA's participation in the CEP investments shall
              be made only by and shall be limited to means of set off only
              against the Annual Bonuses to which MDA shall become entitled.

      15A.6.1 In the event that MDA shall not become entitled to the Annual
              Bonus or in the event the Total Bonus to which MDA shall be
              entitled, falls short of US$ 2 million (except in the event of a
              breach by MDA which has caused the delay of the FDA Approval), MDA
              shall be deemed to have fully fulfilled its payment obligations in
              respect of investment in the CEP, by allowing OMRIX to offset the
              Annual Bonuses against MDA's share in the CEP investment,

<PAGE>
                                     - 32 -


       15A6.2 Should OMRIX exercise its right of early termination as stipulated
              in section 5.2 above, then in such case the investments made by
              MDA within the CEP shall be MDA's property only. All investments
              made by OMRIX within the CEP, shall be considered as Discretionary
              Investments to which, in addition to the provisions of section 15
              above, the following shall apply:

              (1)    In the event that MDA did not invest any amount on account
                     of its share in the implementation of the CEP, by way of
                     offset or otherwise, the entire investments made by OMRIX
                     for the implementation of the CEP shall be deemed
                     Discretionary Investments.

              (2)    In the event that by January 1st, 2007, MDA invested on
                     account of its share in the implementation of the CEP, 25%
                     or more of the total cost of the implementation of the CEP
                     - MDA shall have the option to acquire OMRIX's share in the
                     CEP, in accordance with the provisions of section 15 above,
                     i.e. - applying the price determination mechanisms
                     described therein with regard to equipment which can be
                     easily dismantled/removed from the Plant, as well as those
                     with regard to equipment which has become an
                     integral/inseparable part of the Plant.

              (3)    In the event that by January 1st, 2007, MDA invested on
                     account of its share in the implementation of the CEP, less
                     than 25% of the total cost of the implementation of the
                     CEP - OMRIX shall have the option either to purchase MDA's
                     share in the CEP or to offer MDA to purchase OMRIX's share
                     in the CEP, in accordance with the provisions of section 15
                     above, i.e. - applying the price determination mechanisms
                     described therein with regard to equipment which can be
                     easily dismantled/removed from the Plant, as well as those
                     with regard to equipment which has become an
                     integral/inseparable part of the Plant. In case neither
                     party shall be prepared to purchase the other party's share
                     in the CEP, all of the items of equipment, installation
                     etc. shall be removed from the Plant and sold to the
                     highest bidder, and the proceeds thereof shall be divided
                     between the parties according to the relative share of
                     their actual investments in the CEP.

       15A.7  In the event that OMRIX does not exercise its rights of early
              termination as per sections 5.1 and 5.2 above, and therefore
              continues leasing and operating the Plant until the end of the
              Term - all items of equipment etc. acquired and/or installed
              and/or built within the framework of the CEP shall become the
              property of MDA without any further payment on the part of MDA by
              the end of the Term.

       15A.8 The terms of this section 15.4 shall apply in addition to the
             terms of section 15 above, provided that in any case of
             contradiction between the terms of this section 15A and the terms
             of section 15 - the terms of this section 15A shall prevail.

16.    STATE OF THE PLANT AT THE END OF THE AGREEMENT

<PAGE>
                                     - 33 -


       16.1   Upon the expiration or termination of the Agreement OMRIX shall
              return the Plant to MDA, properly maintained and in a good
              operational condition, subject to reasonable wear and tear.

       16.2   OMRIX shall leave in the Plant the Equipment, as well as any other
              items of equipment, systems etc., which were installed by OMRIX
              during the course of the Agreement, and which were acquired by MDA
              and/or became the property of MDA in accordance with the
              provisions of this Agreement. For the avoidance of doubt, the
              obligation of OMRIX under subsection 16.1 above, shall apply also
              in the event that OMRIX is entitled under the terms of this
              Agreement to remove items of equipment owned by it due to the CEP,
              Compulsory Investments and/or Discretionary Investments.

       16.3   In the event MDA shall not be required, under the circumstances,
              to spent the entire amount of US $4.5 million as provided for in
              sections 14.6.1 and 14.6.2, MDA shall pay OMRIX, upon the
              expiration of this agreement on January 1st 2015, a Grant
              amounting to the part of the unused budget of US$4.5 million as
              provided for in sections 14.6.1 and 14.6.2, provided however that
              such a Grant shall not exceed the amount of $2 million.

              The right of OMRIX to the Grant is conditioned upon its
              fulfillment of its obligations in the course of termination or
              expiration of this agreement and the smooth handing over of the
              Plant with the 'Know How' related thereto, including the training
              of the MDA personnel provided for in section 18.1.

17.    LICENSE AND KNOW-HOW TRANSFER

       17.1   In case OMRIX does not exercise its rights pursuant to sections
              5.1 and 5.2 of this Agreement, then as of the end of the Term, MDA
              shall have a royalty free, non transferable license to
              manufacture, in the Plant, all of the Licensed Products, based on
              the OCTAPHARMA Know How, as well as any New Products, and to
              market and sell same in Israel, for The Israel market. Such
              License granted to MDA shall not be limited in time.

       17.2   In case OMRIX exercises its right pursuant to section 5.2 of this
              Agreement, then as of December 31st, 2006, MDA shall have a
              royalty free, non transferable license to manufacture, in the
              Plant, all of the Licensed Products, based on OCTAPHARMA Know How
              and to market and sell same in Israel, for the Israeli market.
              Additionally, MDA shall have a nontransferable license to
              manufacture, market and sell in Israel, for the Israel market, all
              of the New Products (including the Biological Glue) all the rights
              to which are owned by OMRIX, against payment of royalties to
              OMRIX, as follows:

              With regard to Factor VIII, IVIG, IMIG - royalties at the rate of
              *** of net sales to an unaffiliated party;

              With regard to Biological Glue - royalties at the rate of *** of
              net sales to an unaffiliated party:

<PAGE>
                                     - 34 -

              With regard to Aibumin - royalties at the rate of *** of net sales
              to an unaffiliated party.

              It is understood that no right is being granted by OMRIX in this
              Agreement that permits MDA to contract manufacture products for
              other parties using OMRIX know-how or New Products technologies.

              MDA shall pay OMRIX the royalties on a quarterly basis, within 45
              days as of the end of each calendar quarter in respect of which
              the royalties are being paid. Within 180 days as of the end of
              each calendar quarter, MDA shall submit to OMRIX an annual sales
              report detailing the sales of each of the products in respect of
              which royalties are payable. Such annual sales reports shall be
              certified by MDA's external auditors. OMRIX shall have the right
              to appoint its own CPA who shall check the accuracy of such annual
              sales reports.

              Said Licenses granted to MDA shall not be limited in time.

              It is hereby clarified, that OMRIX does not grant MDA any right or
              authorization to manufacture the above products while using OMRIX
              know how or New Product technologies, for the manufacture of the
              products as a subcontractor for a third party.

              MDA shall be entitled to the licenses as set forth in this section
              17.2, also in any case of premature termination of this Agreement
              by OMRIX, at any time after December 31st, 2006, for any reason
              which is not under the control of MDA. In such event, the above
              licenses shall come into effect as of the date of such
              termination.

              In this section - "LICENSED PRODUCTS BASED ON OCTAPHARMA KNOW HOW"
              shall include any improvement thereon made by OCTAPHARMA until the
              date of assignment (i.e. September 5, 1995), and any improvement
              thereon made by OMRIX thereafter, which does not amount to a New
              Product.

              "NEW PRODUCT" - shall mean a product based on OMRIX know how which
              may be registered either as a new patent or as a new
              pharmaceutical product with the Registrar of Medical Preparations
              in the Israeli Ministry of Health, provided such new registration
              is not in respect of a product which has the same formulation and
              is produced while using the same manufacturing technology as the
              currently registered Licensed Products based on OCTAPHARMA Know
              How.

       17.3   Upon the expiration or termination of this Agreement, provided
              such termination or expiration is after December 31st 2006, and
              should MDA so desire, OMRIX shall favorably consider granting MDA
              a License to manufacture and sell to end users in the Israel
              market only, any additional products that were manufactured by
              OMRIX at the Plant and in respect of which OMRIX will have the
              full rights to License MDA. The parties shall negotiate in good
              faith the terms of any such possible License.

<PAGE>
                                     - 35 -


       17.4   Upon the expiration or termination of this Agreement, provided
              such termination or expiration is not before November 30, 2010,
              and should MDA so desire, OMRIX shall favorably consider granting
              MDA a License to manufacture any product(s) that were manufactured
              by OMRIX at the Plant in respect of which OMRIX will be entitled
              and free to license MDA for sale in country(ies) in which OMRIX
              doesn't market same or where OMRIX did not enter into exclusive
              marketing / distribution agreements. The parties shall negotiate
              in good faith the terms of any such possible License.

       17.5   Without derogating from the aforesaid in sections 17.1 - 17.4,
              upon expiration of this Agreement (whether on December 31st 2006
              or December 31st 2014) or upon its termination for any reason
              other than its material breach by MDA, which was not rectified by
              MDA in spite of a 30 day written demand by OMRIX to do so, MDA
              shall be fully entitled to continue operating the Plant, and
              producing the Licensed Products therein, and to obtain all
              manufacturing licenses from OMRIX for the Licensed Products as
              provided for in sub-section 17.1 above, by itself and/or through
              its subsidiaries.

              In order to enable MDA to take over the production at the Plant
              as aforesaid, and in order to ensure such transfer, the following
              shall apply:

              17.5.1 Within 30 days from the date of this Agreement, OMRIX shall
                     present to MDA's Director of Blood Services ("THE
                     DIRECTOR"), a full and updated set of documents, in hard
                     copy or in electronic form, pertaining to the production in
                     the Plant of the Licensed Products ("THE DOCUMENTATION").
                     The Director shall be permitted to appoint an expert on its
                     behalf in order to examine the Documentation so as to
                     assure that the manufacturing of the Licensed Products can
                     be completed when relying on the Know-How contained in
                     the Documentation, provided that no copies of the
                     Documentation shall be made by MDA, whether by electronic
                     media, photocopy etc.

                     The aforementioned expert shall be required to execute a
                     confidentiality agreement satisfactory to OMRIX, prior to
                     reviewing the Documentation. OMRIX shall have the right to
                     object to the appointment of any expert who, in the
                     reasonable opinion of OMRIX, may potentially disclose its
                     secrets or in any other way endanger the interests of
                     OMRIX.

                     If OMRIX shall give MDA an affidavit signed by Mr. Robert
                     Taub accompanying the Documentation, stating that the
                     documents contained in the Documentation which relate to
                     the production of the Licensed Products are the full
                     manufacturing file of the Licensed Products, then in such
                     case the Director shall not refer the matter to examination
                     by an expert as aforesaid.

              17.5.2 The Documentation shall be such, that will cover all
                     aspects involved with the production of each of the
                     Licensed Products,

<PAGE>
                                     - 36 -


                     including, without limitation, the necessary diagrams - if
                     and to the extent available, quantities, safety
                     precautions, complete manufacturing files and all of the
                     Standard Operating Procedures (Hereinafter: "S.O.P.'S")
                     with regard to all production procedures at the Plant, of
                     the Licensed Products.

                     In addition to the Documentation, it is hereby agreed that
                     upon termination of this Agreement, OMRIX shall hand over
                     to MDA all documents in the possession of OMRIX which
                     relate to the operation of the Plant and the manufacturing
                     in the Plant of the Licensed Products including, without
                     limitation, all the results of quality control tests as
                     well as all repair and maintenance reports etc., whether
                     documented on paper and/or on computer discs and/or on
                     microfilm and/or using any method of recording.
                     Additionally at such time that MDA shall have the right to
                     manufacture the Biological Glue in accordance with the
                     terms of this Agreement, such documentation shall also
                     include information relating to the Biological Glue.

                     MDA agrees to maintain and store all such Documentation
                     received by it upon termination as aforesaid, in accordance
                     with applicable pharmaceutical regulations, and shall make
                     such documentation available to OMRIX upon OMRIX's written
                     request.

              17.5.3 Following the review of the Documentation by The Director
                     or as otherwise provided for in section 17.5.1, the
                     Documentation shall be deposited in escrow with a Trust
                     Company of one of the major Israeli banks, at MDA's
                     discretion (Hereinafter: "THE TRUST COMPANY").

              17.5.4 Once every year, OMRIX shall submit to the Director or as
                     otherwise provided for in section 17.5.1., a set of updated
                     documents of whichever of the documents contained in the
                     Documentation which have been updated in the previous year
                     (Hereinafter: "THE ANNUAL UPDATING DOCUMENTS").

                     Following the review of the Annual Updating Documents by
                     the Director and/or as otherwise provided for in section
                     17.5.1 above, OMRIX shall deposit the Annual Updating
                     Documents with the Trust Company.

              17.5.5 Together with the Documentation, OMRIX shall deposit with
                     the Trust Company a letter in respect of each of its
                     employees working in the Plant, in the form attached hereto
                     as SCHEDULE "H", stating that upon the expiration of this
                     Agreement or the termination thereof for any reason, other
                     than reasons caused by MDA, OMRIX waives all of its rights
                     arising from such employees' employment agreement, with
                     regard to secrecy clauses and/or non competition clauses,
                     only as far as MDA is concerned, and only insofar as the
                     production of the Licensed Products and the Biological Glue
                     are concerned, in accordance

<PAGE>
                                     - 37 -


                     with the licenses granted to MDA pursuant to the terms of
                     this section 17.

                     Such letters shall further provide, that OMRIX has no
                     objection whatsoever, that the employees shall be employed
                     at the Plant by MDA, as of the termination of the
                     Agreement.

                     OMRIX hereby undertakes, that should it hire and employ,
                     during the Term, new employees at the Plant, whether
                     instead or in addition to its current employees, it shall
                     deposit with the Trust Company a letter as aforesaid, with
                     regard to any such new employee at the Plant, immediately
                     upon hiring such employee.

              17.5.6 Along with the Documentation and the aforesaid letters,
                     OMRIX shall submit with the Trust Company an irrevocable
                     letter of instructions, in the form attached to this
                     agreement as SCHEDULE "I", instructing the Trust Company as
                     to the circumstances upon which it shall, be required to
                     transfer the Documentation, along with all Annual Updating
                     Documents and the letters, to MDA.

              17.5.7 In addition to the aforesaid, OMRIX hereby undertakes to
                     take all necessary actions and sign all necessary
                     documents, required for enabling MDA to realize its rights
                     hereunder upon termination of this Agreement.

                     A list of such documents is attached hereto as SCHEDULE
                     "J".

18.    TRAINING OF MDA'S EMPLOYEES

       18.1   Without derogating from the provisions of section 17 above, it is
              hereby agreed that during the last year of operation of the Plant
              by OMRIX, as might be required under the circumstances, OMRIX
              shall train, at MDA's cost, and for a period to be agreed between
              the parties, a few of MDA'S key personnel in the operation of the
              Plant, in order to allow MDA to continue operating the Plant
              immediately after the vacation thereof by OMRIX.

              It is hereby clarified that such MDA's employees shall only be
              trained to manufacture the Licensed Products as well as the
              Biological Glue (subject to the provisions of sub-Section 17.2
              above) and they shall be required to execute a Confidentiality
              Agreement in favor of OMRIX in a form to OMRIX's satisfaction in
              respect of the technology, formulae etc., pertaining to other
              Products manufactured by OMRIX in the Plant.

              Should the parties reach an agreement as to the manufacture by MDA
              of any additional Products at the Plant upon the termination of
              this Agreement, OMRIX shall train MDA's employees to also
              manufacture any such additional Products.

       18.2   In addition to the aforesaid and in case of early termination of
              this agreement as a result of a breach of this agreement by OMRIX,
              OMRIX, hereby undertakes an obligation to train, at MDA's cost, a
              suitable

<PAGE>
                                     - 38 -


              substitute plant manager on behalf of MDA, whose identity shall
              be chosen by MDA (Hereinafter: "THE SUBSTITUTE MANAGER").

              The training of the Substitute Manager shall commence, if
              possible, at least three months before the date of termination (in
              case of an unexpected termination for any reason whatsoever).

              The Substitute Manager shall be trained by OMRIX intensively, for
              a period of no less than three consecutive months, covering all
              aspects related with the management and operation of the Plant.
              OMRIX undertakes to employ in the training of the Substitute
              Manager the General Manager of the Plant and the Scientific Person
              in charge of production and/or QC.

19.    REPAYMENT BY MDA OF THE ADVANCE

       DELETED

20.    ACQUISITION OF GOODS IN PROCESS

       DELETED

21.    ACCOUNTING BETWEEN THE PARTIES

       The parties have accounted between them in the framework of an
       agreement dated April 12th, 1998, a copy of which is attached hereto as
       SCHEDULE "K".

22.    NAME OF MDA ON THE PACKAGES

       To the extent it will be legally and politically possible and as long as
       it will not adversely affect the marketing efforts of OMRIX and/or its
       relations with various third parties worldwide, OMRIX shall endeavor to
       indicate MDA as the owner of the Plant on the packages of the Products
       manufactured by OMRIX at the Plant.

23.    OMRIX SIGNS

       OMRIX shall be entitled to place, in co-ordination with the management of
       the Tel Hashomer Hospital, its directional signs at the various
       intersections within the Tel Hashomer perimeter.

       OMRIX shall not be entitled to put its signs on the outer side of the
       Building, but will be entitled to do so, in coordination with MDA inside
       the Building, including at the entrance to the Plant.

24.    INSPECTION OF THE PLANT AND THE PREMISES

       24.1   MDA's Manager of Blood Services shall be entitled to reasonably
              visit the Plant during working hours for the sole purpose of
              verifying the compliance of OMRIX with the provisions of this
              Agreement, after giving OMRIX 2 hours notice ahead of time of
              his/hers intention to do

<PAGE>
                                     - 39 -


              so. It is agreed, however, that OMRIX will be entitled to deny
              access during periods of secret R&D or manufacturing processes.
              The Manager of MDA`s Blood Services shall be allowed access to the
              Plant only subject to exercising a Confidentiality Agreement
              satisfactory to OMRIX. Two (2) other representatives of MDA shall
              be also entitled to visit the Plant during working hours in order
              to verify the compliance of OMRIX with the provisions of this
              Agreement, after giving OMRIX 48 hours notice ahead of time of
              their intention to do so provided, however, that such visits shall
              not be more frequent than four (4) times in each calendar year,
              and provided such representatives shall also be required to
              execute a confidentiality agreement satisfactory to OMRIX in favor
              of OMRIX prior to visiting the Plant.

       24.2   OMRIX hereby declares, that it shall allow delegations of MDA's
              friends and/or donors to visit the Plant, provided that such
              visits shall be coordinated in advance with OMRIX's authorized
              representatives, and provided that such delegations shall not
              include visitors who may represent and/or have commercial contacts
              with OMRIX's competitors, whereby such visitors are involved with
              the manufacture and/or sale and/or engineering of blood derived
              products.

25.    EXCHANGE RATE

       Any amount indicated or referred to in this Agreement and quoted in US
       Dollars shall be payable in NIS according to the representative exchange
       rate of the US Dollars to the NIS on actual date of payment.

26.    SECURITIES

       In order to assure the fulfillment by OMRIX of its obligations pursuant
       to this agreement, OMRIX shall provide MDA the following securities:

       26.1   OMRIX shall provide MDA within thirty (30) days as of the
              execution of this agreement with an autonomous unconditional Bank
              Guarantee satisfactory to MDA, in the amount in NIS equivalent to
              US DOLLARS 250,000 linked to the exchange rate of the US Dollar,
              in order to secure the payment by OMRIX of the amounts that shall
              be due to MDA from time to time for the supply of plasma and/or as
              Rent and Lease Fee. Such Bank Guarantee shall be in force for
              consecutive 12 month periods until a date being 6 (six) months
              after the evacuation of the Plant by OMRIX. Each such extension
              of the Bank Guarantee will be made by OMRIX not later than 4
              (four) months before the relevant expiration date of any such Bank
              Guarantee.

              The above guarantee shall be deposited in trust with MDA's
              attorney - Advocate AMI OSNAT, who shall be entitled to hand over
              the Bank Guarantee to MDA upon the following conditions:

              (i). He gives OMRIX a fifteen (15) days written notice about his
              intention to do so; and

<PAGE>
                                     - 40 -


              (ii) He attaches a Sworn Affidavit by MDA'S Director General or
              Treasurer specifying the amounts due to MDA from OMRIX which were
              not paid on time in spite of a written demand to do so.

       26.2   The parent Company of OMRIX, OMRIX BIOPHARMCEUTICALS S.A. of
              200 Chausse de Waterloo B- 1640 Rhode St. Genese, Belgium (Fax:
              003223599149), hereby guarantees the undertakings of OMRIX as
              stipulated in Section 16, and shall place its signature at the
              bottom of this agreement in order to give effect to said
              guarantee.

       26.3   In addition to the aforesaid in this section 26, OMRIX shall
              provide MDA with a first degree floating charge over all of
              OMRIX's inventory of uncompleted products (including the Licensed
              Products and the Biological Glue), as well as all of OMRIX's
              inventory of raw materials, including plasma. In order to give
              effect to said floating charge, the parties shall sign, upon the
              execution of this agreement, a debenture in the form attached
              hereto as SCHEDULE "L"; The parties shall sign any additional
              documents required in order to give effect to said floating
              charge, and shall take any actions necessary in order to register
              the floating charge with the Israeli Registrar of Companies.

              Said floating charge shall secure, inter alia, OMRIX's
              obligations to pay the Deferred Rent and Lease Fee as per section
              7.3.2 of this Agreement, as well as any outstanding liability
              pertaining to the supply of plasma to OMRIX by MDA, as well as any
              future payments due from OMRIX to MDA which are not settled by
              OMRIX in a timely manner.

27.    RESPONSIBILITY AND LIABILITY

       27.1   In its capacity as the owner of the Building, including the
              adjacent areas and surfaces as well as the Plant, MDA shall be
              fully responsible and liable for any damage caused at and/or by
              and/or to the Building and/or the Systems, all of which are
              maintained by MDA or anybody on its behalf.

       27.2   In its capacity as the Lessee of the Premises and the Plant
              (excluding external walls), OMRIX shall be fully responsible and
              liable for any damage caused at and/or by and/or to the premises
              or the Plant including the Equipment installed therein, all of
              which are maintained by OMRlX or anybody on its behalf, with the
              exception of any damage caused due to structural deficiency or
              mistakes and/or poor workmanship of MDA's contractors in the
              process of the erection of the Premises or the Plant.

       27.3   MDA shall be fully responsible and liable for any damage caused by
              any of its employees, sub-contractors or any third party acting on
              its behalf.

       27.4   OMRIX shall be fully responsible and liable for any damage caused
              by any of its employees, sub-contractors or any third party acting
              on its behalf in the Premises.


<PAGE>
                                     - 41 -


       27.5   OMRIX shall be fully responsible and liable for any damage caused
              by any of the Products manufactured by OMRIX. MDA shall be fully
              responsible and liable for any damage caused by the Plasma
              supplied by it to OMRIX.

       27.6   In the event legal proceedings shall be initiated by any third
              party ("Third Party") against one of the parties hereto (the
              "Defendant"), for deeds or misdeeds which are the liability of the
              other party hereto (the "Liable Party"), the Defendant shall
              immediately inform the Liable Party of any such proceedings and
              will allow the Attorneys of the Insurance Company of the Liable
              Party to participate in the defense in such proceedings or, at the
              discretion of the Defendant, to take over the entire defense in
              such proceedings. The Liable party shall, within 15 (fifteen) days
              of the request by the Defendant to do so, fully indemnify the
              Defendant for any expense, damage or payment incurred by the
              Defendant as a result of the deeds or misdeeds of the Liable
              Party.

28.    LAW AND JURISDICTION

       This Agreement shall be governed by the Laws of the State of Israel. With
       the exception of the matters specifically referred herein to arbitration,
       the competent Courts in Tel Aviv / Jaffa shall have the sole jurisdiction
       in any matters arising hereunder.

29.    ACTS OF GOD AND FORCE MAJEURE

       Neither party shall be liable for any failure or delay in the performance
       of its obligations under this Agreement whereby such failure or delay is
       caused by an act of God, Force Majeure, riot or civil commotion, strike,
       lockout or other labor disturbances, fire, act and/or any other order of
       government, flood, war, peril of sea, or any other cause or peril whether
       of the same and/or of another nature beyond reasonable control.

30.    COMMERCIAL TRANSACTION

       MDA states and confirms the transaction contemplated in this Agreement is
       made by it as a transaction of a purely commercial nature and not in
       the framework of MIA's statuary activities.

31.    ASSIGNMENT OF RIGHTS

       31.1   MDA confirms that it has been informed by OMRIX that OMRIX may
              wish to introduce certain changes in this Agreement, as provided
              below, in order to enjoy certain benefits to which it might be
              entitled by law. Toward this end OMRIX may wish to split the Lease
              and Rent hereof between OMRIX and an additional company being an
              affiliate of OMRIX so that the duties and the rights of OMRIX, as
              per this Agreement, shall be split between OMRIX and such other
              affiliate company of OMRIX. MDA shall not object to such
              amendment of the


<PAGE>
                                     - 42 -


              Agreement provided it shall guarantee the performance of any
              undertakings of such affiliate company towards MDA.

       31.2   Subject to the provisions of section 31.1 above; any other
              assignment by OMRIX of its rights or duties, shall require the
              prior written consent of MDA, which shall not be unreasonably
              withheld.

       31.3   OMRIX shall give MDA 14 days prior written notice about any
              contemplated transaction as a result of which Mr. Taub's
              shareholdings in OMRIX Biopharmaceuticals S.A. and/or his voting
              rights and/or his rights to appoint directors shall drop below 20%
              and/or whereby the shareholdings/voting rights in OMRIX
              Biopharmaceuticals S.A. of any other single shareholder (and/or
              group of shareholders who are parties to any shareholders/voting
              agreements), whether directly or indirectly, will become larger
              than those of Mr. Taub.

32.    MISCELLANEOUS

       With regard to any works which shall be carried out by OMRIX in the Plant
       and/or the Premises and/or outside thereof, in accordance with the
       terms of this agreement, whether as Discretionary Investments and/or
       Compulsory Investments and/or otherwise (e.g. as stipulated in section
       2.13 above), MDA shall be entitled to employ and consult an engineer on
       its behalf, who shall be authorized to supervise all such works and
       approve the execution of any such works (as set forth in this agreement).
       It is acknowledged that such engineer, at the time of the execution of
       this agreement, is Mr. Doron who will be required to execute a
       confidentiality agreement satisfactory to OMRIX. Any future appointment
       of such an engineer will be made by mutual agreement of the Parties.

33.    NOTICES

       The addresses of the parties for the purposes of this Agreement, subject
       to any change of address, notice of which was given by one party to the
       other, are as first hereinabove written and any notice hereunder shall be
       deemed properly served when delivered by personal delivery and if posted
       - five (5) days after the notice, properly addressed as above and duly
       stamped is posted by registered mail from a Post Office in Israel.

34.    WAIVERS

       The waiver by either party of any breach or alleged breach of any
       provision hereunder shall not be construed to be a waiver of any
       concurrent, prior or succeeding breach of same provision or any other
       provision herein.

35.    AMENDMENTS IN WRITING

       Any amendment of this Agreement must be in writing and signed by all the
       parties hereto.


<PAGE>
                                     - 43 -


36.    APPROVAL OF THE AGREEMENT

       This Agreement was duly approved by the Board of Directors of OMRIX and
       any other competent organ of OMRIX on the one hand, and by the Executive
       Committee and any other competent organ of MDA on the other hand, and
       upon, execution thereof it shall be fully binding upon the parties
       hereto.

IS WITNESS WHEREOF, THIS AGREEMENT IS HEREBY SIGNED BY THE PARTIES HERETO AS OF
THE DAY AND YEAR FIRST ABOVE WRITTEN.

(OMRIX Biopharmaceuticals Stamp)


/s/ Robert Taub           /s/ Nissim Mashiach
-------------------------------------------------------
OMRIX BIOPHARMACEUTICALS LTD.
by Mr. Robert Taub - Chairman of the Board
and by Mr. Nissim Mashiach - General Manager

(Stamp)


/s/ Yohanan Gur           /s/ Avi Zohar
-------------------------------------------------------
MAGEN DAVID ADOM
By Mr. Yohanan Gur - Chairman of the Executive Committee
and by Mr. Avi Zohar - Director General


We, the undersigned, OMRIX BIOPHARMACEUTICALS S.A., of 200, Chausee de
Waterloo B-1640 Rhode-St-Genese, Belgium, being the parent company of OMRIX
BIOPHARMACEUTICALS Ltd. ("OMRIX"), do hereby guarantee the full performance by
OMRIX of OMRIX's obligations pursuant to section 16 of the above Agreement. Our
undertaking as aforesaid shall be jointly and severally with that of OMRIX.


/s/ Robert Taub           /s/ Nissim Mashiach
-------------------------------------------------------
OMRIX BIOPHARMACEUTICALS S.A.
by Robert Taub - Chairman of the Board