DIRECTOR AGREEMENT

<PAGE>
                                                                   EXHIBIT 10.26


                               DIRECTOR AGREEMENT

THIS DIRECTOR AGREEMENT (the "Agreement") is made as of this 13th day of
January, 2006 between Omrix Biopharmaceuticals, Inc., a Delaware corporation,
(the "Company") and Fredric Price (the "Director") with respect to services to
be performed for the Company by the Director. The parties' respective addresses
are as set forth below their signature lines. In consideration of the mutual
terms, conditions and covenants set forth herein, the Company and the Director
hereby agree as follows:

1.    Purpose

      The Director wishes to be engaged, or to continue to be engaged, as a
      director by the Company and is willing to provide certain skills and
      abilities to the Company (the "Engagement"). Accordingly, this Agreement
      will define the terms upon which the Company will engage the Director.

2.    Duties and Services

      The Director will act as the Chairman of the Board of Directors of the
      Company ("Board") and will serve on Board Committees as voted on by the
      Board and the Committees, as the case may be. Initially, the Director will
      the Chairman of the Audit Committee of the Board, the Chairman of the
      Governance and Nominating Committee of the Board, a member of the
      Compensation Committee of the Board and advisor to the Company. The
      Director shall be subject to Internal Revenue Code 1099 tax reporting.
      Among the Director's duties will be presiding over meetings of the
      stockholders and meetings of the Board, calling special meetings of the
      Board, receiving Board and officer resignations, receiving accountings of
      transactions and of the financial condition of the Company and such other
      specific duties that are normal and customary to such position and as may
      reasonably be assigned to Director from time to time by the Board,
      including but not limited to assisting the Company in financings, such as
      an initial public offering ("IPO"), in strategic decision-making regarding
      partnerships, and in providing general guidance to management and the
      Board. The Director will report to the Board and coordinate his activities
      with the Board and the Company.

3.    Compensation and Stock Incentive Grant

      3.1   In addition to Thirty Thousand Dollars ($30,000) per year in his
            capacity as a director, the Director will be paid Ninety Thousand
            Dollars ($90,000) per year for service as Chairman of the Board,
            paid together in equal monthly installments of Ten Thousand Dollars
            ($10,000) (the "Monthly Payment") on the first business day of each
            month in arrears for services rendered to the Company, plus
            Reimbursable Expenses, as defined in Section 3.2 below. The Director
            shall spend as much time as is necessary to perform his Duties and
            Services as per Section 2 above on Company affairs commencing on the
            date hereof, and shall retain adequate records of same, which shall
            be made available to the Company upon request. The

<PAGE>

            Director agrees not to assume more than two additional Chairman of
            the Board director positions such as this one.

      3.2   Reimbursable Expenses shall include travel and out-of-pocket
            expenses necessary in order to perform services under this
            Agreement, including but not limited to parking, tolls, mileage at
            the rate of 37.5 cents per mile, business class airfare, necessary
            hotel accommodations and other expenses resulting from the
            Director's performance of services under this Agreement, provided
            that the Director shall have submitted to the Company written
            expense statements and other supporting documentation in a form that
            is reasonably satisfactory to the Company. For international travel,
            the Director will use the Company's services to obtain and issue the
            most economical electronic business class air tickets, whenever
            practical. The Company and the Director will equally share the cost
            of a Tandberg 1000 video conferencing system or Webex system (or one
            of similar performance at lower cost), which will facilitate the
            Director's interactions with members of Omrix's management and the
            Board.

      3.3   The Director shall be entitled to participate in Omrix's 2004 Equity
            Incentive Plan and has received a grant of non-qualified stock
            options exercisable for 300,000 shares at a strike price of $2.25,
            vesting over a four (4) year period with 25% of the shares vesting
            on January 13, 2006 and the balance in thirty six (36) approximately
            equal monthly installments.

4.    Nature of Relationship

      4.1   This Agreement is not an employment agreement. With the exception of
            the stock grant referenced in paragraph 3.3 above and any and all
            benefit plans from time to time in effect for members of the Board
            generally, the Director is not entitled to any of the benefits that
            the Company provides to its employees.

      4.2   The Director shall be solely responsible for taxes and other wage
            deductions incurred as a result of performing services under this
            Agreement. The Company will not pay or withhold federal, state or
            foreign government payroll taxes of any kind, including but not
            limited to FICA, FUTA and MUTA, with respect to its payments to the
            Director.

5.    Non-Disclosure, Inventions and Non-Competition Agreement

      The Director has executed and will be bound by the Non-Disclosure,
      Inventions, and Non-Competition Agreement between the Company and the
      Director, dated January 13, 2005, the terms of which are expressly
      incorporated into this Agreement.


                                       2
<PAGE>

6.    Term and Termination

      6.1   Unless earlier terminated pursuant to this Section 6.1, the term of
            service as the Chairman of the Board shall be governed by the
            organizational documents of the Company and shall expire at the
            annual meeting of stockholders of the Company held in 2008. If (i)
            the Director is terminated for Cause, as defined in Exhibit A, or
            (ii) the Director resigns without Good Reason, as defined in Exhibit
            A, the Director shall retain such portion of the Director's options
            under Section 3.3, which have vested as of the termination date and
            the Director shall have 30 days from the termination date to
            exercise such vested options, all as provided in the option grant.
            If (i) the Director is terminated without Cause, as defined in
            Exhibit A, or (ii) the Director resigns for Good Reason, as defined
            in Exhibit A, the Director shall retain such portion of Director's
            options under Section 3.3 that vest within two years of the
            termination date, such vesting shall accelerate to the termination
            date, and the Director shall have 365 days from the termination date
            to exercise such vested options, all as provided in the option grant
            and, in addition, the Director shall receive twelve (12) Monthly
            Payments as specified in Section 3.1.

      6.2   Upon termination of this Agreement for any reason, or at any time
            upon request of the Company, the Director will immediately return to
            the Company all property belonging to the Company, including without