Exhibit
10.1


PRODUCT
SUPPLY AGREEMENT


THIS
PRODUCT SUPPLY AGREEMENT (this “Agreement”) is between GE OSMONICS, INC., a Minnesota corporation (“Seller”),
and MAR COR PURIFICATION, INC., a
Pennsylvania corporation (“Buyer”), with an effective date of March 30,
2007 (the “Effective Date”). 
Seller and Buyer are sometimes referred to herein as a “Party” or
collectively as the “Parties.”


BACKGROUND


A.   Prior
to the Effective Date, Seller sold Buyer certain cartridge filters, membrane
elements, membrane housings and pumps (the “Current Mar Cor/Biolab Products”);


B.   On
the Effective Date,  Seller is selling
substantially all of the assets relating to its product line of reverse osmosis
systems, consumables and related products for medical dialysis applications (the
“Product Line”) to Buyer  pursuant
to an Asset Purchase Agreement of even date herewith (the “Asset Purchase
Agreement”);


C.   On
and after the Effective Date, Seller will continue to sell Buyer the Current
Mar Cor/Biolab Products and will begin to sell Buyer certain cartridge filters,
membrane elements, membrane housings and pumps relating to the Product Line
(the “Acquired Dialysis Business Products”); and


D.   The
Current Mar Cor/Biolab Products and the Acquired Dialysis Business Products are
sometimes referred to herein collectively as the “Products.”


NOW THEREFORE, in
consideration of the above recitals and the mutual covenants contained herein
and for other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the Parties agree as follows:


1.   Sale
and Purchase of Products.


a.     Seller
agrees to sell, and Buyer agrees to purchase, the Products, pursuant to the
terms and conditions set forth in Exhibit A attached hereto (the “Terms and Conditions”). 
Buyer intends to use its reasonable commercial efforts, subject to
price, quality, availability, service and other factors, to purchase all of the
products which constitute the Products from Seller, but in no event is Buyer
obligated to purchase any of the Products from Seller unless a purchase order
has been issued by Buyer and accepted by Seller.  During the term of this Agreement, Seller
shall be obligated to fill all of Buyer’s purchase orders that are ordered in
the ordinary course of Buyer’s business for the Acquired Dialysis Business
Products or any subsequent equivalent products, it being understood and agreed
that Seller’s agreement to meet Buyer’s requirements in the ordinary course for
such Products was a material inducement to Buyer to enter into the Asset
Purchase Agreement.  In the event that
Seller discontinues selling a particular Product, Seller shall provide Buyer
with at least 6 months’ prior notice of such discontinuation and with
sufficient specifications and documentation that would enable Buyer or a third
party to manufacture such discontinued product.


b.   Unless otherwise agreed
in writing by Seller, the purchase and sale of all Products to Buyer shall be
subject to the Terms and Conditions and the provisions of Section 2 













below.  Any additional or
different terms proposed by Buyer, whether in its purchase order, order
acknowledgment, acceptance or any other manner in the purchase and sale of the
Products shall be deemed null and void and shall not be binding upon the
Parties, unless specifically and expressly agreed to by Seller in writing.  Seller warrants the Products pursuant to
the Terms and Conditions.


c.   Buyer agrees that it
shall submit to Seller separate purchase orders for: (i)  the Current Mar Cor/Biolab Products; and (ii)
the Acquired Dialysis Business Products.


d.   Notwithstanding anything
to the contrary contained herein, Seller and Buyer acknowledge and agree that
each of their respective rights and obligations to sell and purchase products
hereunder are non-exclusive, that Buyer is not obligated to purchase any
minimum quantities of Products, and that Buyer may purchase any or all of its
requirements for one or more of the Products from vendors other than Seller.


e.   Notwithstanding
anything to the contrary contained herein and for a period of two years from
the Closing Date, the limitations of liability set forth in Section 12 of the
Terms and Conditions  shall not apply to
any breach of Seller’s obligations relating to the sale of Acquired Dialysis
Business Products under Section 1 of this Agreement.  Upon expiration of the aforementioned two
year period, the limitations of liability set forth in Section 12 of the Terms
and Conditions shall resume and be in full force and effect.


2.   Prices.


a.   Seller shall sell the
Current Mar Cor/Biolab Products to Buyer at 
its list prices for such products in effect at the time of shipment,
less the discount set forth in Exhibit B attached hereto.     Subject to the Terms and Conditions,
Seller may increase the list prices for the Current Mar Cor/Biolab Products at
any time by providing Buyer with at least 30 days’ prior written notice.


b.   Seller
shall sell the Acquired Dialysis Business Products to Buyer at Seller’s “standard
cost” in effect at the time of shipment multiplied by the “Multiplier” set
forth on Exhibit C attached hereto. 
The current standard costs for the Acquired Dialysis Business Products
has been made available to Purchaser and shall remain in effect through
December 31, 2007.  Subject to the Terms
and Conditions and the immediately preceding sentence, Seller may increase the
standard costs for the Acquired Dialysis Business Products once per year.  Seller will provide Buyer with a notice in
January of each year which sets forth the standard cost increase for that year,
and such standard cost increase shall become effective on March 1st of each year. 
For the calendar year 2008, Seller shall not increase its price for the
Acquired Dialysis Business Products by the greater of 3% or the most recent
annual percentage change in the average of the Producer Price Index reported by
the United States Department of Labor for (i) plastics materials and resins
manufacturing (Series ID: PCU325211325211) and (ii) all other industrial
machinery manufacturing (Series ID: PCU3332983332987).


3.   Duties of Buyer.  Buyer agrees to: (i) report to Seller  promptly
matters concerning the quality and performance of the Products that result in
or are likely to result in a medical device report (MDR); (ii) comply with all
applicable laws, regulations, and registration requirements for the importation
and sale of the Products in all material respects; (iii) promptly report to
Seller any major changes in the ownership of Buyer; and (iv) not alter or in any way change the composition or 



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configuration of the
Products.


4.   Duties of Buyer and Seller.  The business designees of Seller and Buyer
shall collaborate with each other as may be necessary or appropriate to
implement the mechanics and carry out the purpose and intent of this Agreement.  The initial business designee of Seller shall
be Andrew Zaske and the initial business designee of Buyer shall be Curt
Weitnauer.  The business designees of
either Party may be changed by written notice to the other Party.


5.   Term and Termination.


a.   Term.   This Agreement
shall be effective as of the Effective Date and shall expire on December 31,
2010, subject to earlier termination under Section 5(b) of this Agreement.


b.   Termination. In
addition to the termination and cancellation provisions contained in the Terms
and Conditions, the Parties may terminate this Agreement by written notice
prior to its expiration as follows:


(i)   by Seller upon not less than 30 days’ prior
written notice to Buyer in the event of Buyer’s breach of any of the covenants
contained in Sections 3(ii) (provided such breach has a material adverse impact
on Seller) or (iv) of this Agreement, unless Buyer cures such breach during the
30 day period or, where applicable, undertakes commercially reasonable efforts
to ensure that such breach will not recur;


(ii)   by Seller upon written notice to Buyer in the event of
an assignment of this Agreement in whole or in part by Buyer without the prior
written consent of Seller, which consent will not be unreasonably withheld,
conditioned or delayed ;


(iii)   by Seller upon written notice to Buyer in the
event that there is a change of control of Buyer either by merger or a sale of
stock to other persons without the prior written consent of Seller, which
consent will not be unreasonably withheld, conditioned or delayed; or


(iv)   by either Party, but only with respect to
Current Mar Cor/Biolab Products only, at will, with or without cause, upon not
less than 60 days’ written notice to the other Party.


6.   Amendment.  No provision of this Agreement may be
modified, amended, or altered unless the Parties agree in writing.


7.   Notices.  Whenever this Agreement requires or permits
any notice, request, or demand from one Party to another, the notice, request,
or demand must be in writing to be effective and shall be deemed to be
delivered and received (i) if personally delivered or if delivered by telex,
telegram, facsimile, e-mail or courier service, when actually received by the
Party to whom notice is sent or (ii) if delivered by mail (whether actually
received or not), at the close of business on the third business day next
following the day when placed in the mail, postage prepaid, certified or
registered, addressed to the appropriate Party or Parties, at the address of
such Party set forth below (or at such other address as such Party may
designate by written notice to all other parties in accordance herewith):



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  If to Seller to:

  	
  Mr. Andrew Zaske

  
	
   

  	
  GE Osmonics, Inc.

  
	
   

  	
  4636 Somerton Road

  
	
   

  	
  Trevose, PA 19053

  
	
   

  	
  Fax No.: (678) 844-7518

  
	
   

  	
   

  
	
  If to Buyer:

  	
  Mar Cor Purification, Inc.

  
	
   

  	
  4450 Township Line Road

  
	
   

  	
  Skippack, PA 19474-1429

  
	
   

  	
  Attn: Curtis Weitnauer, President

  
	
   

  	
  Fax No.: (484) 991-0230

  



 


8.   Counterparts.  This Agreement may be
executed in one or more counterparts, each of which will be deemed to be an
original but all of which together will constitute one and the same
instrument.  Execution of this agreement
via facsimile will be effective, and signatures received via facsimile will be
binding upon the Parties and effective as originals.  The Parties expressly acknowledge that,
notwithstanding any statutory or decisional law to the contrary, the printed
product of a facsimile transmittal will be deemed to be “written” and a “writing”
for all purposes of this agreement.


[Signature Page Follows]



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IN WITNESS WHEREOF,
the parties hereto execute this Product Supply Agreement by their duly
authorized representatives on the date set forth above.


	
  SELLER:

  	
  BUYER:

  
	
   

  	
   

  
	
  GE OSMONICS, INC.

  	
  MAR COR PURIFICATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ YUVBIR
  SINGH

  	
   

  	
  By:

  	
  /s/ CURTIS
  D. WEITNAUER

  	
   

  
	
  Name: Yuvbir Singh

  	
  Name: Curtis D. Weitnauer

  
	
  Title: Vice President

  	
  Title: President