<PAGE>

                                                                   Exhibit 10.20


["****" indicates material omitted and filed separately with the Securities and
Exchange Commission Pursuant to a request for confidential treatment.]

                                    October 1, 1999
American Red Cross

John Barr, President
VITEX
155 Duryea Road
Melville, NY  11747

Dear John:

Below is an offer following our 9/20/99 meeting and my meeting with Jim Ross on
9/22/99.

      1.  INCENTIVE PROGRAM ($**** Credit Against Future Purchase)

          In consideration for ARC's commitment to move toward full conversion
          to Plas+SD, from **** to ****, VITEX will reimburse ARC **** per unit
          shipped to non-Red Cross facilities during each of the following
          quarters, should ARC meet the quarterly targets set froth below:

                    ****:                       **** units
                    ****:                       **** units
                    ****:                       **** units
                    ****:                       **** units

          Alternatively, should ARC not meet the target in any such quarter,
          VITEX will reimburse ARC the lesser of **** per unit or **** of the
          difference between **** and **** for all Plas+SD that ARC distributes.
          This reimbursement will be separately calculated for each month in
          that quarter.

          Under either formula, the reimbursement will take the form of a credit
          applied to the amount due VITEX for all ARC purchases in the calendar
          quarter in which that month falls.  The **** shall be calculated using
          the same formula as applied under Section 5.1(a) of the current
          agreement, except to the extent agreed upon by VITEX and ARC.  The
          maximum reimbursement under the Rebate/Shared Discount program will be
          ****.  VITEX will be entitled to audit ARC books to the extent
          necessary to verify ARC's calculation of ASP.

      2.  SALES INCENTIVE CREDIT AGAINST FUTURE PURCHASES

          VITEX and ARC Plasma Services will jointly sponsor a program designed
          to encourage ARC Blood Services Regions ("BSRs") to devote additional
          resources to encouraging the appropriate utilization of Plas+SD.  Each
          BSR that meets the following quarterly targets will be entitled to a
          payment of ****, with VITEX paying the first ****, due each quarter
          and ARC Plasma Services responsible for all amounts above that.  The
          targets, calculated as the relative proportion
<PAGE>

["****" indicates material omitted and filed separately with the Securities and
Exchange Commission Pursuant to a request for confidential treatment.]


          Plas+SD to all plasma for transfusion (FFP and Plas+SD) distributed to
          a BSR's hospital customers during a calendar quarter, and are as
          follows:

                    ****:                       ****
                    ****:                       ****
                    ****:                       ****
                    ****:                       ****

          Sales Incentive Credits will be applied by the ARC to the amount due
          VITEX for future payments, with ARC responsible for ensuring payments
          to BSRs.

     3.   EXPANSION FEE REPAYMENT

          In consideration for the VITEX's agreement to commit substantial
          resources to the programs outlined above, ARC will agree to a one-year
          deferral of the payment currently due on the second anniversary of the
          approval of the Plas+SD PLA.

     4.   MANUFACTURING SCHEDULE

          ARC will provide sufficient input to VITEX to manufacture the
          following Plas+SD units:

                    ****:                       **** units
                    ****:                       **** units
                    ****:                       **** units
                    ****:                       **** units

          ARC agrees that during the period ****, VITEX will deliver to, and
          invoice ARC for the above quantity of Plas+SD, and that a portion of
          the quarterly delivery may consist of units of Plas +SD that are still
          awaiting final FDA clearance.  VITEX will transfer no product with
          less than seven (7) months of dating, unless any shorter dating is
          attributable to a delay caused by ARC.  VITEX agrees that it will
          exchange, at no cost to ARC, any such uncleared lots that fail FDA
          review.

          ARC and VITEX agree that ARC shall not be obligated to provide
          additional plasma for the shortfall incurred prior to ****.

     5.   HIGH-TITER PLASMA

          ARC and VITEX agree that ARC shall review Phase IV data relating to
          lots of Plas+SD not distributed due to high titers of parvovirus and
          that, based upon that review, ARC shall , at its sole discretion, make
          a determination regarding the potential sale of those lots.  Should
          ARC determine that those lots cannot be sold, VITEX agrees to provide
          ARC with a credit against future payments equivalent to **** of the
          plasma and manufacturing costs associated with those lots.



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<PAGE>

["****" indicates material omitted and filed separately with the Securities and
Exchange Commission Pursuant to a request for confidential treatment.]


     6.   PAYMENT TERMS

          VITEX agrees that, if at September 30, 1999 or the end of any other
          quarter until and including September 30, 2000 (except December 31,
          1999), ARC has an inventory of unsold units of greater than four
          months of sales, based upon sales in the month then concluded, VITEX
          will permit ARC to defer payments for such excess inventory for 90
          days.  For the quarter ending at December 31, 1999 if ARC has an
          inventory of unsold units of greater than four months of sales, based
          upon actual sales in the month of November, VITEX will permit ARC to
          defer **** of payment for such excess inventory for 90 days.

     7.   EXIT OPTION

          With 30 days notice, either party has an option to exit the agreement
          on June 30, 2000 if sales in the month ending March 31, 2000 are less
          than ****.  IF ARC exits the agreement ARC agrees to pay VITEX in full
          for all FDA released product within 30 days (****).

If these terms are acceptable to VITEX, please indicate the fact that you are
accepting this offer by signing the enclose copy of this letter and returning it
to me.

                                    Sincerely,

                                    /s/ Christopher C. Lamb
                                    Christopher C. Lamb
                                    Chief Operating Officer
                                    Plasma Services
                                    American Red Cross



Accepted:



 /s/ John Barr
-----------------------------
John Barr
President
V.I. Technologies, Inc.




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