Exhibit 10.11
 
STOCK PURCHASE AGREEMENT
 
THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into
on  June 16, 2011, between ENTEROLOGICS, INC., a Nevada corporation
(“Purchaser”), and NEW YORK HEALTH CARE, INC., a  New York corporation (the
“Seller”).

WITNESSETH:

WHEREAS, the Seller owns all the issued and outstanding capital stock (the
“Shares”) of the The BioBalance Corp., a Delaware corporation (the “Company”);
 
WHEREAS, the Company owns a 66-2/3% interest in BioBalance LLC, a Delaware
limited liability company (“the LLC”);
 
WHEREAS, the Purchaser desires to purchase from the Seller, and the Seller
desires to sell to the Purchaser, the Shares upon the terms and conditions set
forth herein.
 
           NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the parties agree as follows:

ARTICLE I
DEFINITIONS

Section 1.1  Certain Definitions. As used in this Agreement and the Disclosure
Schedule  hereto, the following terms have the respective meanings set forth
below.

 “Action” means any administrative, regulatory, judicial or other proceeding by
or before any Governmental Authority or arbitrator.

 “Affiliate” means, with respect to any Person, any other Person that, directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such Person. The term “control” means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, including the ability
to elect the members of the board of directors or other governing body of a
Person, and the terms “controlled” and “controlling” have correlative meanings.

 “Business Day” means a day on which banks are open for business in New York,
New York.

 “Claims” means any and all claims, demands or causes of action, relating to or
resulting from an Action.
 
 “Contract” means any contract, agreement, indenture, deed of trust, license,
note, bond, mortgage, lease, guarantee and any similar understanding or
arrangement, whether written or oral.
 
 
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“Disclosure Schedule” means the disclosure schedule to this Agreement delivered
by the parties hereto.
 
 “Employees” means individuals employed by  the Company or the Purchaser, as the
case may be, as of the date hereof, other than any such individuals who cease
such employment prior to the Closing, but including any such individuals hired
after the date hereof and prior to the Closing.
 
 “Employee Benefit Plan” means any employee benefit plan, program, policy,
practices, or other arrangement providing benefits to any Employee or Former
Employee, officer or director of the Company or the Purchaser or any beneficiary
or dependent thereof that is sponsored or maintained by the Company or the
Purchaser or contribute or are obligated to contribute, whether or not written,
including without limitation any employee welfare benefit plan and any bonus,
incentive, deferred compensation, vacation, stock purchase, stock option,
severance, employment, change of control or fringe benefit plan, program or
policy.
 
 “Employment Agreement” means a written Contract with or addressed to any
Employee or Former Employee pursuant to which the Company or the Purchaser
shall, directly or indirectly, have any actual or contingent liability or
obligation to provide compensation and/or benefits in consideration for past,
present or future services.
 
 “Encumbrances” means security interests, liens, Claims, charges, title defects,
deficiencies or exceptions pledges, easements, encroachments, restrictions on
use, rights of-way, rights of first refusal, conditional sales or other title
retention agreements, covenants, conditions or other similar restrictions
(including restrictions on transfer) or other encumbrances of any nature
whatsoever.

 “Former Employee” means an individual who, prior to the Closing, was employed
by the Company or the Purchaser, as the case may be.

 “GAAP” means United States generally accepted accounting principles.
 
 “Governmental Authority” means any supranational, national, federal, state or
local government, foreign or domestic, or the government of any political
subdivision of any of the foregoing, or any entity, authority, agency, ministry
or other similar body exercising executive, legislative, judicial, regulatory or
administrative authority or functions of or pertaining to government, including
any authority or other quasi-governmental entity established by a Governmental
Authority to perform any of such functions.
 
“Indebtedness” of any Person means, without duplication, (i) all obligations of
such Person for money borrowed; (ii) all obligations of such Person evidenced by
notes, debentures, bonds or other similar instruments for the payment of which
such Person is responsible or liable; (iii) all obligations of such Person
issued or assumed for deferred purchase price payments associated with
acquisitions, divestments or other transactions; (iv) all obligations of such
Person under leases required to be capitalized in accordance with GAAP, as
consistently applied by such Person, and (v) all obligations of such Person for
the reimbursement of any obligor on any letter of credit, banker's acceptance,
guarantees or similar credit transaction, excluding in all cases in clauses (i)
through (v) current accounts payable, trade payables and accrued liabilities
incurred in the ordinary course of business.
 
 
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 “IRS” means the Internal Revenue Service of the United States of America.

 “Laws” means all United States federal, state or local or foreign laws,
constitutions, statutes, codes, rules, regulations, ordinances, executive
orders, decrees or edicts by a Governmental Authority having the force of law.
 
 “Liabilities” means any and all debts, liabilities, commitments and
obligations, whether or not fixed, contingent or absolute, matured or unmatured,
direct or indirect, liquidated or unliquidated, accrued or unaccrued, known or
unknown, required by GAAP to be reflected in financial statements or disclosed
in the notes thereto.
 
 “Material Adverse Effect” means, with respect to a Person, any change, effect,
event, occurrence or state of facts which would reasonably be expected to be
materially adverse to the business, operations or financial condition of such
Person and its Subsidiaries, taken as a whole, or on the ability of such Person
to consummate the transactions contemplated by this Agreement, other than any
change, effect, event, occurrence or state of facts (1) that is generally
applicable in the economy of the United States, (2) that is generally applicable
in the United States securities markets, (3) generally affecting the industry in
which the Person operates, (4) arising from or related to an act of
international terrorism, or (5) relating to the announcement or disclosure of
this Agreement and the transactions contemplated hereby.
 
 “Person” means an individual, partnership, corporation, limited liability
company, joint stock company, unincorporated organization or association, trust,
joint venture or Governmental Authority.

 “Purchaser Common Stock” has the meaning set forth in Section 2.2 hereof.
 
 “Required Consents” means, collectively, (1) each consent with respect to any
material Contract to which the Seller or the Company is a party or by which any
of its assets are bound required to be obtained from the other parties thereto
by virtue of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby in order to avoid the invalidity of the
transfer of such Contract, the termination or acceleration thereof, giving rise
to any obligation to make a payment thereunder or to any increased, additional
or guaranteed rights of any person thereunder, a breach or default thereunder or
any other change or modification to the terms thereof, and (2) each
registration, filing, application, notice, transfer, consent, approval, order,
qualification and waiver required from any third party or Governmental Authority
by virtue of the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.

 “SEC” means the Securities and Exchange Commission.
 
 
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 “SEC Reports” has the meaning set forth in Section 4.14 hereof.

 “Securities Act” means the Securities Act of 1933, as amended.

 “Shareholder Approval” has the meaning set forth in Section 5.2 hereof.

 “Shareholder Derivative Litigation” means a shareholder derivative action in
the      Court of Chancery of the State of Delaware (the “Delaware Chancery
Court”), styled Hamilton Partners, L.P. v. Englard, et. al., C.A. No. 4476-VCL
(Del. Ch. 2009).

 “Subsidiaries” of any entity means, at any date, any Person (a) the accounts of
which would be consolidated with those of the applicable entity in such entity's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, or (b) of which securities or other
ownership interests representing more than fifty percent (50%) of the equity or
more than fifty percent (50%) of the ordinary voting power or, in the case of a
partnership, more than fifty percent (50%) of the general partnership interests
or more than fifty percent (50%) of the profits or losses of which are, as of
such date, owned, controlled or held by the applicable entity or one or more
subsidiaries of such entity.

 “Tax” means any federal, state, local or foreign taxes, including but not
limited to any income, gross receipts, payroll, employment, excise, severance,
stamp, business, premium, windfall profits, environmental, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, sales, use, service, service use,
lease, lease use, transfer, registration, value added tax, or similar tax, any
alternative or add-on minimum tax, and any estimated tax, in each case,
including any interest, penalty, or addition thereto, whether disputed or not.

 “Tax Returns” means all returns, declarations, reports, estimates, information
returns and statements required to be filed in respect of Taxes.

 “Taxing Authority” means any Governmental Authority having jurisdiction over
the assessment, determination, collection or other imposition of Taxes.

Section 1.2  References and Title. All references in this Agreement to articles,
sections, subsections and other subdivisions refer to the articles, sections,
subsections and other subdivisions of this Agreement unless expressly provided
otherwise. Titles appearing at the beginning of any section or subdivision are
for convenience only and do not constitute any part of such subdivisions and
shall be disregarded in construing the language contained in such
subdivisions.  The words “this Agreement,” “this instrument,” “herein,”
“hereof,” “hereby,” “hereunder” and words of similar import refer to this
Agreement as a whole and not to any particular subdivision unless expressly so
limited.  The phrases “this Section” and “this subsection” and similar phrases
refer only to the sections or subsections hereof in which such phrases
occur.  Pronouns in masculine, feminine and neutral genders shall be construed
to include any other gender, and words in the singular form shall be construed
to include the plural and vice versa, unless the context otherwise requires.
 
 
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ARTICLE II
PURCHASE AND SALE OF SHARES
 
Section 2.1  Purchase and Sale of Shares.  Upon the terms and subject to the
conditions set forth herein, and on the basis of the representations and
warranties contained herein, at the Closing, the Seller shall sell, convey,
transfer, assign and deliver to the Purchaser, and the Purchaser shall purchase,
acquire and accept from the Seller, all of the Seller’s right, title and
interest in and to the Shares, free and clear of any Encumbrance, such Shares
constituting one hundred percent (100%) of the Company’s outstanding capital
stock.
 
Section 2.2  Purchase Price.  The purchase price for the Shares (the “Purchase
Price”) shall be the following:

(i)  Three Hundred Thousand Dollars ($300,000);

(ii)           The number of shares (the “Consideration Shares”) of common
stock, par value 0.0001 per share, of Purchaser (“Purchaser Common
Stock”),  with an aggregate Market Price (as defined below) of One Hundred Fifty
Thousand Dollars ($150,000), provided that the number of Consideration Shares
shall in no event be less than Three Hundred Thousand (300,000) shares, subject
to Purchaser’s Cash Payment Option described below;

(iii)           a three-year promissory note in the original principal amount of
One Hundred Thousand Dollars ($100,000) issued by the Purchaser to the Seller in
the form attached hereto as Exhibit A (the “Note”), bearing interest on the
outstanding principal balance thereof at the annual rate of 5%, payable
semi-annually, with the principal amount payable in three equal annual
installments of $33,333.33, commencing on the first anniversary of the date of
issuance; and

(iv)           the assumption of  $25,000 of liabilities of the Company and/or
the LLC, which liabilities shall be designated by the Seller at Closing..

Section 2.3  Calculation of Consideration Shares.
 
(a)  For purposes of this Section 2.3:
 
“Market Price” means the arithmetic average of the daily VWAPs of the Purchaser
Common Stock for each of the ten (10) Trading Days immediately preceding the
Closing Date.
 
“VWAP” of the Purchaser Common Stock on any Trading Day means the dollar
volume-weighted average price for the Purchaser Common Stock on the Principal
Market as reported by Bloomberg Financial, L.P., based on a Trading Day from
9:30 a.m., Eastern Time, to 4:00 p.m., Eastern Time, for such Trading Day; or,
if no dollar volume-weighted average price is reported for the Purchaser Common
Stock by Bloomberg Financial, L.P.  (or equivalent reporting service) for such
hours, the average of the highest closing bid price and the lowest closing ask
price of any of the market makers for the Purchaser Common Stock as reported in
the “pink sheets” by OTC Markets Group Inc. (formerly known as Pink OTC Markets
Inc.) All such determinations shall be appropriately adjusted for any stock
dividend, stock split, stock combination, capital reorganizations or other
similar transaction relating to the Purchaser Common Stock.
 
 
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“Trading Day” means a day on which the Principal Market is open for general
trading of securities.
 
“Principal Market” means the OTC Bulletin Board or such other securities market
that then constitutes the principal securities market for the Purchaser Common
Stock.
 
Section 2.4  Closing.  The closing (the “Closing”) of the acquisition of the
Shares by the Purchaser in consideration for the Purchase Price (the
“Transaction”)  shall occur at the offices of  David Lubin & Associates, PLLC,
counsel for the Purchaser, or such other location mutually agreeable to the
parties, within two (2) Business Days after the date on which all of the
conditions and obligations of the parties as set forth in Articles 7 and 8 of
this Agreement shall have been satisfied in all material respects or otherwise
duly waived, or on such other date and at such other place and date as the
Purchaser and the Seller may hereafter agree upon in writing (such date and time
of the Closing being referred to herein as the “Closing Date”).
 
Section 2.5  Deliveries by the Purchaser.  At or prior to the Closing, the
Purchaser shall deliver to the Seller or a duly appointed representative of the
Seller:

(a)  
Three Hundred Thousand Dollars ($300,000) in immediately available funds;

(b)  
Stock certificates representing the Consideration Shares, or an irrevocable
instruction letter executed by the Purchaser instructing the transfer agent for
the Purchaser to issue the Consideration Shares to the Seller in form and
substance satisfactory to Seller and confirmed by the transfer agent, unless the
Purchaser exercises the Purchaser’s Cash Payment Option described below;

(c)  
The Note;

(d)  
The certificates described in Sections 8.1(a) and 8.1(b);

(e)  
A good standing certificate of the Purchaser, dated not more than five (5)
Business Days prior to the Closing Date; and

(f)  
Such other documents and instruments as reasonably requested by the Seller.

 
 
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Section 2.6  Deliveries by the Seller.  At or prior to the Closing, the Seller
shall deliver to the Purchaser the following:

(a)  
Stock certificates representing the Shares, duly endorsed in blank or
accompanied by stock powers duly executed in blank, or other instruments of
transfer in form and substance reasonably satisfactory to the Purchaser;

(b)  
The Required Consents indicated in Section 6.3 of the Disclosure Schedule;

(c)  
The certificates described in Sections 8.2(a) and 8.2(b);

(d)  
 Good standing certificates of each of the Seller, the LLC and the Company,
dated not more than five (5) Business Days prior to the Closing Date; and

(e)  
Such other documents and instruments as reasonably requested by the Purchaser.

Section 2.7  Purchaser Cash Payment Option.  Notwithstanding the foregoing, at
the Purchaser’s option, the Purchaser may elect to deliver to the Seller at
Closing, in lieu of the Consideration Shares, One Hundred Thousand Dollars
($100,000) in immediately available funds (“Purchaser’s Cash Payment Option”).

Section 2.8  Further Assurances.  From time to time from and after the Effective
Time, as and when reasonably requested by a party, the other parties shall
execute and deliver all such other instruments and shall take further actions as
the party reasonably may deem necessary or desirable in order to confirm or
record or otherwise effectuate the purchase and sale of the Shares and the
Consideration Shares.
 
ARTICLE III
THE CONSIDERATION SHARES

Section 3.1  Consideration Shares.  Unless the Purchaser’s Cash Payment Option
is exercised, the aggregate amount of Consideration Shares to be issued to the
Seller shall be Three Hundred Thousand (300,000) shares of Purchaser Common
Stock, as adjusted pursuant to Article II hereof.

Section 3.2  Registration Exemption.  It is intended that the Consideration
Shares to be issued pursuant to this Agreement will be issued pursuant to
Section 4(2) of the Securities Act and therefore shall not require registration
under the Securities Act or any relevant state Law.

Section 3.3  Restrictive Legends.  Certificates evidencing the Consideration
Shares pursuant to this Agreement may bear one or more legends, including
without limitation, any legend required by the laws of any jurisdiction in which
a holder of Consideration Shares resides, and any legend required by applicable
securities law.

Section 3.4  Subsidiary of the Purchaser.  Effective as of the Closing, the
Company shall be a wholly-owned subsidiary of the Purchaser.
 
 
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
 
As an inducement to the Seller to enter into this Agreement and to consummate
the transactions contemplated herein, the Purchaser represents and warrants to
the Seller, as follows, which representations and warranties shall be true as of
the Closing Date:

Section 4.1  Organization.  The Purchaser is a corporation duly organized,
validly existing, and in good standing under the laws of the State of Nevada.
Purchaser has all requisite power to own, operate and lease its business and
assets and carry on its business as the same is now being conducted.
 
 
Section  4.2  Capital Structure.  As of the Closing, Purchaser’s authorized
capital will consist of (a) 150,000,000 shares  of  common  stock, $0.0001 par
value per share, of which no less than 35,200,000 shares will be issued and
outstanding,  (i) with each holder thereof being entitled to cast one vote for
each share held on all matters properly submitted to the shareholders for their
vote; and (ii) there being no cumulative voting; and (b) 5,000,000 shares of
preferred stock, $0.0001 par value per share, of which no shares will be issued
and outstanding.  The Consideration Shares have been duly reserved for issuance.
The Purchaser has no shares reserved for issuance pursuant to a stock option
plan or pursuant to securities exercisable for, or convertible into or
exchangeable for shares of common stock.  All of the issued and outstanding
shares of capital stock of the Purchaser are duly authorized, validly issued,
fully paid and nonassessable.  No shares of capital stock of the Purchaser are
subject to preemptive rights or any other similar rights.  There are, and as of
the Closing there will be, (i) no outstanding options, warrants, scrip, rights
to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Purchaser or arrangements by which the
Purchaser is or may become bound to issue additional shares of capital stock of
the Purchaser, other than as described in the SEC Documents, (ii) no agreements
or arrangements under which the Purchaser is obligated to register the sale of
any of its securities under the Securities Act, other than the Registration
Statement (333-171758) declared effective on February 1, 2011 and (iii) no
anti-dilution or price adjustment provisions contained in any security issued by
the Purchaser (or any agreement providing any such rights).

Section 4.3  Corporate Power and Authority. The Purchaser has all requisite
power and authority to enter into and deliver this Agreement and the other
agreements, documents and instruments to be executed and delivered by the
Purchaser in connection with this Agreement (collectively, the “Purchaser
Transaction Documents”) and to consummate the transactions contemplated hereby
and thereby.  The execution, delivery, and performance of this Agreement and the
Purchaser Transaction Documents by the Purchaser and the consummation by it of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary action on the part of the Purchaser and no other action or
corporate proceeding on the part of the Purchaser is necessary to authorize the
execution, delivery, and performance by the Purchaser of this Agreement and the
Purchaser Transaction Documents, the issuance of the Consideration Shares and
the Note and the consummation of the transactions contemplated hereby and
thereby.  This Agreement and each of the Purchaser Transaction Documents have
been duly executed and delivered by the Purchaser and constitute the legal,
valid and binding obligation of the Purchaser, enforceable against the Purchaser
in accordance with their respective terms.
 
 
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Section  4.4  Conflicts; Consents and Approvals.  Neither the execution and
delivery by the Purchaser of this Agreement and the Purchaser Transaction
Documents to be executed and delivered by it in connection with this Agreement
or the Purchaser Transaction Documents, nor the consummation of the transactions
contemplated hereby and thereby, will:

(a)           conflict with, or result in a breach of any provision of, the
organizational documents of the Purchaser;
 
(b)           violate, or conflict with, or result in a breach of any provision
of, or constitute a default (or an event that, with the giving of notice, the
passage of time or otherwise, would constitute a default) under, or entitle any
Person (with the giving of notice, the passage of time or otherwise) to
terminate, accelerate, modify or call a default under, or give rise to any
obligation to make a payment under, or to any increased, additional or
guaranteed rights of any Person under, or result in the creation of any
Encumbrance upon any of the properties or assets of the Purchaser or the
Consideration Shares under any of the terms, conditions or provisions of (1) the
organizational documents of the Purchaser, (2) any Contract to which the
Purchaser is a party or to which any of its properties or assets may be bound,
or (3) any permit, registration, approval, license or other authorization or
filing to which the Purchaser is subject or to which any of its properties or
assets may be subject;

(c)           require any action, consent or approval of any non-governmental
third party, other than the consent of the Purchaser’s Board of Directors;

(d)           violate any order, writ, or injunction, or any material decree, or
material Law applicable to the Purchaser or any of its, business, properties, or
assets; or
 
(e)           require any action, consent or approval of, or review by, or
registration or filing by the Purchaser with any Governmental Authority other
than the filing of a Current Report on Form 8-K regarding the consummation of
the transactions contemplated hereby pursuant to the Securities Exchange Act of
1934, as amended (the “Exchange Act”).

Section 4.5  Consideration Shares.  As of the Closing, all of the Consideration
Shares shall be duly authorized, validly issued, fully paid and nonassessable,
and shall not have been issued in violation of any preemptive or similar
rights.  Upon delivery to the Seller of the certificates representing the
Consideration Shares, the Seller will acquire good and valid title to such
Consideration Shares, free and clear of any Encumbrances, other than
restrictions under applicable securities laws.

Section 4.6  [RESERVED]
 
 
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Section 4.7  No Material Adverse Effect.  As of the date of this Agreement, (a)
the Purchaser has (1) maintained its books and records in accordance with GAAP
and consistent with past accounting practice, and (2) used all reasonable
commercial efforts to preserve intact the assets and the business organization
and operations of the Purchaser, to keep available the services of its employees
and to preserve its relationships with customers, suppliers, licensors,
licensees, contractors and other persons with whom the Purchaser have business
relations, (b) no Material Adverse Effect on the Purchaser has occurred, and (c)
there has been no event, occurrence or development that has had, or would
reasonably be expected to have, a Material Adverse Effect on the Purchaser or
the Purchaser’s ability to timely consummate the transactions contemplated
hereby.

Section 4.8  Compliance with Law.  The Purchaser and each of its
officers,  directors, employees and agents has complied in all respects with all
Laws applicable to the Purchaser and its operations.  Neither the Purchaser nor
any of its officers, directors or agents has received any notice from any
Governmental Authority that the Purchaser has been or is being conducted in
violation of any applicable Law or that an investigation or inquiry into any
noncompliance with any applicable Law is ongoing, pending or threatened.

Section 4.9  Litigation. There is no Action pending or threatened against the
Purchaser or any of its officers or directors in each case that (a) relates to
the Purchaser, its assets or its business or (b) as of the date hereof, seeks,
or could reasonably be expected, to prohibit or restrain the ability of the
Purchaser to enter into this Agreement or to timely consummate any of the
transactions contemplated hereby, and there is no reasonable basis for any such
Action.  There are no judgments, decrees, agreements, memoranda of understanding
or orders of any Governmental Authority outstanding against the Purchaser.

Section 4.10  Contracts. The Purchaser is not a party to, or bound by, any
material Contract  other than as disclosed in the Purchaser’s SEC Reports.

Section 4.11  Labor and Employment Matters. The Purchaser does not have any
Employees, Former Employees or Employee Benefit Plans.
 
Section 4.12  Permits; Compliance.  The Purchaser is in possession of all
franchises, grants, authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary to own, lease
and operate its properties and assets and to carry on its business as it is now
being conducted and as it will be conducted through to the Closing
(collectively, the “Purchaser Permits”). There is no Action pending, or
threatened, regarding any of the Purchaser Permits and each such Permit is in
full force and effect.  The Purchaser is not in conflict with, or in material
default (or would be in default with the giving of notice, the passage of time,
or both) with, or in violation of, any of the Purchaser Permits.

Section 4.13  Debts and Guaranties.  As of the Closing, the Purchaser will have
no debts, liabilities, obligations, direct, indirect, absolute or contingent,
whether accrued, vested or otherwise, whether known or unknown, other than as
disclosed in the SEC Reports..  In addition, the Purchaser is not directly or
indirectly (a) liable, by guarantee or otherwise, upon or with respect to, or
(b) obligated to provide funds with respect to, or to guarantee or assume, any
Indebtedness or other obligation of any Person.
 
 
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Section 4.14  SEC Reports; Financial Statements.  The Purchaser has filed all
reports, schedules, forms, statements and other documents required to be filed
by it under the Securities Act and the Exchange Act (the foregoing materials,
including the exhibits thereto and documents incorporated by reference therein,
being collectively referred to herein as the “SEC Reports”).  As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act and the Exchange Act, as applicable, and none
of the SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.  The financial
statements of the Purchaser included in the SEC Reports comply in all material
respects with applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of filing.  Such
financial statements have been prepared in accordance with GAAP, except as may
be otherwise specified in such financial statements or the notes thereto and
except that unaudited financial statements may not contain all footnotes
required by GAAP, and fairly present in all material respects the financial
position of the Purchaser as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, immaterial, year-end audit adjustments.

Section 4.15  Material Changes.  Since the date of the latest audited financial
statements included within the SEC Reports, except as specifically disclosed in
Section 4.15 of the Disclosure Schedule annexed hereto, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect with respect to Purchaser, (ii)
the Purchaser has not incurred any liabilities (contingent or otherwise) other
than (A) trade payables and accrued expenses incurred in the ordinary course of
business consistent with past practice which in the aggregate will not exceed
$10,000 as of the Closing Date and (B) liabilities not required to be reflected
in the Purchaser’s financial statements pursuant to GAAP or disclosed in filings
made with the SEC, (iii) the Purchaser has not altered its method of accounting,
(iv) the Purchaser has not declared or made any dividend or distribution of cash
or other property to its stockholders or purchased, or made any agreements to
purchase, any shares of its capital stock and (v) the Purchaser has not issued
any equity securities to any officer, director or Affiliate. The Purchaser does
not have pending before the SEC any request for confidential treatment of
information.  Except for the issuance of the Consideration Shares contemplated
by this Agreement, no event, liability or development has occurred or exists
with respect to the Purchaser or its business, properties, operations or
financial condition, that would be required to be disclosed by the Purchaser
under applicable securities laws at the time this representation is made that
has not been publicly disclosed at least one (1) Business Day prior to the date
that this representation is made.

Section 4.16  No Brokers or Finders.  The Purchaser has not, nor have any of its
Affiliates, employed any broker or finder or incurred any Liability for any
brokerage or finder's fee or commissions or similar payment in connection with
the transactions contemplated herein, and no Person has or will have any right,
interest or valid claim against or upon the Purchaser, the Seller, the Company
or its or their Affiliates for any such fee or commission.
 
 
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Section 4.17  Tax Matters.

(a)           The Purchaser has filed or caused to be filed on a timely basis
all Tax Returns that are or were required to be filed by it, pursuant to the
Laws or administrative requirements of each Governmental Body with taxing power
over it or its assets.  As of the time of filing, all such Tax Returns correctly
reflected the facts regarding the income, business, assets, operations,
activities, status, and other matters of the Purchaser and any other information
required to be shown thereon.  An extension of time within which to file any
such Tax Return that has not been filed has not been requested or
granted.  There is no audit, Action, Claim or any investigation or inquiry,
whether formal or informal, public or private, now pending or threatened against
or with respect to the Purchaser in respect of any Tax.
 
(b)           With respect to all amounts in respect of Taxes imposed on the
Purchaser or for which it is or could be reasonably liable, whether to
Governmental Authorities (as, for example, under Law) or to other Persons (as,
for example, under tax allocation agreements), with respect to all taxable
periods or portions of periods since its inception through the Closing, (i) all
applicable tax laws and agreements have been complied with in all material
respects, (ii) all such amounts required to be paid by the Purchaser to
Governmental Authorities or others on or before the date hereof have been paid,
and (iii) reserves have been established for the payment of all Taxes not yet
due and payable, which reserves are reflected in the Purchaser’s SEC Reports and
are adequate and in accordance with the past custom and practice of the
Purchaser.
 
(c)           As of the date hereof, the Purchaser has not requested, executed
or filed with the IRS or any other Governmental Authority any agreement or other
document extending or having the effect of extending the period for assessment
or collection of any Taxes for which the Purchaser could be liable and which
still is in effect. There exists no tax assessment, proposed or otherwise,
against the Purchaser nor any Encumbrance for Taxes against any assets or
property of the Purchaser.
 
(d)           All Taxes that the Purchaser is or was required by Law to withhold
or collect have been duly withheld or collected and, to the extent required,
have been paid to the proper Governmental Authorities or other Person.
 
(e)           The Purchaser is not a party to, bound by or subject to any
obligation under any tax sharing, tax indemnity, tax allocation or similar
agreement.
 
(f)           There is no Claim, audit, Action, proceeding, or investigation
with respect to Taxes due or claimed to be due from the Purchaser or of any Tax
Return filed or required to be filed by the Purchaser pending or threatened
against or with respect to the Purchaser.
 

Section 4.18  Securities Representations.

           (a)           Investment Purposes.  The Purchaser is acquiring the
Shares for its own account as principal, not as a nominee or agent, for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalization thereof in whole or in part in any transactions that would
be in violation of the Securities Act or any state securities or "blue-sky"
laws.  No other Person has a direct or indirect beneficial interest in, and
the  Purchaser does not have any contract, undertaking, agreement or arrangement
with any Person to sell, transfer or grant participations to such Person or to
any third party, with respect to, the Shares or any part thereof that would be
in violation of the Securities Act or any state securities or "blue-sky" laws or
other applicable Law.
 
 
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(b)           No General Solicitation.  The Purchaser is not receiving the
Shares as a result of or subsequent to any advertisement, article, notice or
other communication published in any newspaper, magazine or similar media or
broadcast over television or radio; or presented at any seminar or similar
gathering; or any solicitation of a subscription by a Person, other than Seller
personnel, previously known to the Purchaser.

(c)           No Obligation to Register Shares.  The Purchaser understands that
the Shares must be held indefinitely unless the sale thereof is subsequently
registered under the Securities Act and applicable state securities laws or
exemptions from such registration are available.  All certificates evidencing
the Shares will bear a legend stating that the Shares have not been registered
under the Securities Act or state securities laws and they may not be resold
unless they are registered under the Securities Act and applicable state
securities laws or exempt therefrom.
 
 
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE SELLER

As an inducement to the Purchaser to enter into this Agreement and to consummate
the transactions contemplated herein, the Seller represents and warrants to the
Purchaser as follows:

Section 5.1  Organization.  The Seller is duly organized and validly existing
under the laws of its state of formation and has all requisite power to own,
operate and lease its business and assets and carry on its business as the same
is now being conducted.

Section 5.2  Power and Authority. The Seller has all requisite power and
authority, corporate or otherwise, to enter into and deliver this Agreement and
the other agreements, documents and instruments to be executed and delivered by
the Seller in connection with this Agreement (collectively, the “Seller
Transaction Documents”) and to consummate the transactions contemplated hereby
and thereby.  The execution, delivery and performance of this Agreement and the
Seller Transaction Documents by the Seller and the consummation of the
transactions contemplated hereby and thereby, have been duly authorized by all
necessary action, and, other than the approval of the transactions contemplated
hereby by the shareholders of Seller (“Shareholder Approval”), no other action
or proceeding on the part of the Seller is necessary to authorize the execution,
delivery and performance by the Seller of this Agreement and the Seller
Transaction Documents and the consummation by the Seller of the transactions
contemplated hereby and thereby.  This Agreement and each of the Seller
Transaction Documents have been duly executed and delivered by the Seller and
constitute the legal, valid and binding obligation of the Seller, enforceable
against it in accordance with their respective terms.

Section 5.3  Conflicts; Consents and Approvals.  Neither the execution and
delivery by the Seller of this Agreement and the Seller Transaction Documents to
be executed and delivered by it in connection with this Agreement and the Seller
Transaction Documents, nor the consummation of the transactions contemplated
hereby and thereby, will:
 
 
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(a)           conflict with, or result in a breach of any provision of, the
organizational documents of the Seller;
 
(b)           violate, or conflict with, or result in a breach of any provision
of, or constitute a default (or an event that, with the giving of notice, the
passage of time or otherwise, would constitute a default) under, or entitle any
Person (with the giving of notice, the passage of time or otherwise) to
terminate, accelerate, modify or call a default under, or give rise to any
obligation to make a payment under, or to any increased, additional or
guaranteed rights of any Person under, or result in the creation of any
Encumbrance upon any of the properties or assets of the Company under any of the
terms, conditions or provisions of (1) the organizational documents of the
Company, (2) any Contract to which the Seller is a party or to which any of its
properties or assets may be bound which, if so affected, would either have a
Material Adverse Effect on Seller or be reasonably likely to prevent the
consummation of the transactions contemplated herein, or (3) any permit,
registration, approval, license or other authorization or filing to which the
Seller is subject or to which any of its properties or assets may be subject;

(c)           require any action, consent or approval of any Governmental
Authority or non-governmental third party;  or

(d)           violate any order, writ or injunction, or any material decree, or
material Law applicable to the Seller or any of its businesses, properties or
assets.

Section  5.4  Title to Shares.  The Seller is the sole record and beneficial
owner of the Shares and has good and marketable title to the Shares, free and
clear of all Encumbrances, other than pursuant to applicable securities laws.
Upon Closing, the Purchaser shall be the lawful record and beneficial owner of
the Shares, free and clear of all Encumbrances, other than pursuant to
applicable securities laws.  All of the issued and outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and
nonassessable and owned by the Seller.  The Shares constitute 100% of the issued
and outstanding capital stock of the Company on a fully-diluted basis, and, upon
the Closing, the Purchaser will own 100% of the issued and outstanding capital
stock of the Company, free and clear of any Encumbrance other than pursuant to
applicable securities laws. No Shares are subject to preemptive rights or any
other similar rights.  There are (i) no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal, agreements,
understandings, proxies, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any shares of capital stock of the Company or arrangements by which the
Company is or may become bound to issue additional shares of capital stock of
the Company, (ii) no agreements or arrangements under which the Company is
obligated to register the sale of any of its securities under the Securities Act
or any other Law, and (iii) no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or any agreement providing any
such rights).
 
 
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Section 5.5  Securities Representations.

(a)           Investment Purposes.  The Seller is acquiring the Consideration
Shares for its own account as principal, not as a nominee or agent, for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalization thereof in whole or in part in any transactions that would
be in violation of the Securities Act or any state securities or "blue-sky"
laws.  No other Person has a direct or indirect beneficial interest in, and the
Seller does not have any contract, undertaking, agreement or arrangement with
any Person to sell, transfer or grant participations to such Person or to any
third party, with respect to, the Consideration Shares or any part thereof that
would be in violation of the Securities Act or any state securities or
"blue-sky" laws or other applicable Law.

(b)           No General Solicitation.  The Seller is not receiving the
Consideration Shares as a result of or subsequent to any advertisement, article,
notice or other communication published in any newspaper, magazine or similar
media or broadcast over television or radio; or presented at any seminar or
similar gathering; or any solicitation of a subscription by a Person, other than
Purchaser personnel, previously known to the Seller.

(c)           No Obligation to Register Shares.  The Seller understands that the
Purchaser is under no obligation to register the Consideration Shares under the
Securities Act, or to assist the Seller in complying with the Securities Act or
the securities laws of any state of the United States or of any foreign
jurisdiction.  The Seller understands that the Consideration Shares must be held
indefinitely unless the sale thereof is subsequently registered under the
Securities Act and applicable state securities laws or exemptions from such
registration are available.  All certificates evidencing the Consideration
Shares will bear a legend stating that the Consideration Shares have not been
registered under the Securities Act or state securities laws and they may not be
resold unless they are registered under the Securities Act and applicable state
securities laws or exempt therefrom.
 
 (e)           Exemption from Registration.  The Seller acknowledges its
understanding that the issuance of the Consideration Shares is intended to be
exempt from registration under the Securities Act.  In furtherance thereof, in
addition to the other representations and warranties of the Seller made herein,
the Seller further represents and warrants to and agrees with the Purchaser as
follows:

(i)           Accredited Investor.  The Seller is an “Accredited Investor” as
that term is defined in Rule 501(a) of Regulation D promulgated under the
Securities Act.

(ii)           No Reliance.  Other than as set forth herein, the Seller is not
relying upon any other information, representation or warranty by the Purchaser
or any officer, director, stockholder, agent or representative of the Purchaser
in determining to invest in the Consideration Shares.  The Seller has consulted,
to the extent deemed appropriate by the Seller, with its own advisers as to the
financial, tax, legal and related matters concerning an investment in the
Consideration Shares and on that basis believes that its investment in the
Consideration Shares is suitable and appropriate.

(iii)          No Governmental Review.  The Seller is aware that no federal or
state agency has (1) made any finding or determination as to the fairness of
Seller’s investment in the Consideration Shares, (2) made any recommendation or
endorsement of the Consideration Shares or the Purchaser, or (3) guaranteed or
insured any investment in the Consideration Shares or any investment made by the
Purchaser.
 
 
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE SELLER RELATING TO THE COMPANY

As an inducement to the Purchaser to enter into this Agreement and to consummate
the transactions contemplated herein, the Seller represents and warrants to the
Purchaser as follows:

Section 6.1  Organization.  The Company is a corporation duly organized and
validly existing under the laws of the State of Delaware.  The Company has all
requisite power to own, operate and lease its business and assets and carry on
its business as the same is now being conducted.  The LLC is a limited liability
company duly formed and validly existing under the laws of the State of
Delaware.  The Company and the LLC each have all requisite power to own, operate
and lease  their respective businesses and assets and carry on their respective
businesses as the same are now being conducted.

Section 6.2  Corporate Power and Authority. No corporate action or corporate
proceeding on the part of the Company other than execution and delivery of the
Membership Interest Purchase Agreement is necessary for the consummation by the
Seller of the transactions contemplated hereby and thereby.

Section 6.3  Conflicts; Consents and Approvals.   The consummation of the
transactions contemplated hereby and thereby, will not:

(a)           conflict with, or result in a breach of any provision of, the
organizational documents of the Company or the LLC;
 
(b)           violate, or conflict with, or result in a breach of any provision
of, or constitute a default (or an event that, with the giving of notice, the
passage of time or otherwise, would constitute a default) under, or entitle any
Person (with the giving of notice, the passage of time or otherwise) to
terminate, accelerate, modify or call a default under, or give rise to any
obligation to make a payment under, or to any increased, additional or
guaranteed rights of any Person under, or result in the creation of any
Encumbrance upon any of the properties or assets of the Company or the LLC, as
the case may be, under any of the terms, conditions or provisions of (1) the
organizational documents of the Company or the LLC, (2) any Contract to which
the Company or the LLC is a party or to which any of its respective properties
or assets may be bound which, if so affected, would either have a Material
Adverse Effect or be reasonably likely to prevent the consummation of the
transactions contemplated herein, or (3) any permit, registration, approval,
license or other authorization or filing to which the Company or the LLC is
subject or to which any of its respective properties or assets may be subject;
 
 
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(c)           require any action, consent or approval of any non-governmental
third party, other than as may be provided pursuant to the Contracts listed  in
Section 6.3 of the Disclosure Schedule;
 
(d)           violate any order, writ, or injunction, or any material decree, or
material Law applicable to the Company or the LLC or any of its respective
business, properties, or assets; or
 
(e)           require any action, consent or approval of, or review by, or
registration or filing by the Company or the LLC with any Governmental
Authority, other than as may be indicated  in Section 6.3 of the Disclosure
Schedule.
 
Section 6.4 Capital Structure. The Company’s authorized capital consists of (a)
750,000,000 shares of common stock, $ 0.0001 par value per share, and (b)
5,000,000 shares of preferred stock, $.0001 par value per share, of which no
shares of preferred stock are issued and outstanding, (i) with each holder of
common stock being entitled to cast one vote for each Share held on all matters
properly submitted to the shareholders for their vote, and (ii) there being no
pre-preemptive rights and no cumulative voting. The Company has no shares
reserved for issuance pursuant to a stock option plan or pursuant to securities
exercisable for, or convertible into or exchangeable for, shares of common
stock. All of the issued and outstanding shares are duly authorized, validly
issued, fully paid and nonassessable and owned by the Seller. The Shares
constitute one hundred percent (100%) of the issued and outstanding capital
stock of the Company on a fully-diluted basis, and, upon the Closing, the
Purchaser will own one hundred percent (100%) of the issued and outstanding
capital stock of the Company, free and clear of any Encumbrances, other than
pursuant to applicable securities laws.
 
No shares of capital stock of the Company are subject to preemptive rights or
any other similar rights.  There are (i) no outstanding options, warrants,
scrip, rights to subscribe for, puts, calls, rights of first refusal,
agreements, proxies, understandings, claims or other commitments or rights of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for any shares of capital stock of the Company or arrangements
by which the Company is or may become bound to issue additional shares of
capital stock of the Company, (ii) no agreements or arrangements under which the
Company is obligated to register the sale of any of its securities under the
Securities Act or any other Law, and (iii) no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or any agreement
providing any such rights).
 
 
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The ownership of membership interests of the LLC on the date hereof is as
follows: 66 2/3% by the Company and 33 1/3% by Yitz Grossman. It is the parties’
intention that, prior to the Closing Date, the Company shall acquire Yitz
Grossman’s 33 1/3 interest in the LLC pursuant to the Membership Interest
Purchase Agreement annexed hereto as Exhibit B (“Membership Interest Purchase
Agreement”). Attached as Section 6.4 of the Disclosure Schedule is the operating
agreement of the LLC. The LLC has no equity interests reserved for issuance
pursuant to a stock option plan or pursuant to securities exercisable for, or
convertible into or exchangeable for, equity interests.  All of the issued and
outstanding membership interests are duly authorized and validly issued and
owned by the Company and Mr. Grossman.  The membership interests owned by the
Company and Mr. Grossman constitute one hundred percent (100%) of the issued and
outstanding equity interests of the LLC on a fully-diluted basis. No equity
interests of the LLC are subject to preemptive rights or any other similar
rights.  There are (i) no outstanding options, warrants, scrip, rights to
subscribe for, puts, calls, rights of first refusal, agreements, proxies,
understandings, claims or other commitments or rights of any character
whatsoever relating to, or securities or rights convertible into or exchangeable
for any equity interests of the LLC or arrangements by which the LLC or any
other Person is or may become bound to issue additional equity of the LLC, (ii)
no agreements or arrangements under which the LLC is obligated to register the
sale of any of its securities under the Securities Act or any other Law, and
(iii) no anti-dilution or price adjustment provisions contained in any security
issued by the LLC (or any agreement providing any such rights).
 
Section 6.5  Intellectual Property.

(a)       For the purposes of this Agreement, the following terms have the
following definitions:

“Intellectual Property” shall mean any or all of the following and all rights
in, arising out of, or associated therewith: (i) all patents and applications
therefor throughout the world, and all reissues, divisions, renewals,
extensions, provisionals, continuations and continuations-in-part thereof; (ii)
all inventions (whether patentable or not), invention disclosures, improvements,
trade secrets, proprietary information, know how, technology, technical data and
customer lists, and all documentation relating to any of the foregoing; (iii)
all copyrights, copyrights registrations and applications therefor, and all
other rights corresponding thereto throughout the world; (iv) all industrial
designs and any registrations and applications therefor throughout the world,
(v) all trade names, logos, URLs, common law trademarks and service marks,
trademark and service mark registrations and applications therefor throughout
the world; (vi) all databases and data collections and all rights therein
throughout the world; (vii) all moral and economic rights of authors and
inventors, however denominated, throughout the world, and (viii) any similar or
equivalent rights to any of the foregoing anywhere in the world.

“Registered Intellectual Property” means all: (i) registered patents and
applications for patent registration (including provisional applications); (ii)
registered trademarks, applications to register trademarks, intent-to-use
applications, or other registrations or applications related to trademarks;
(iii) registered copyrights and applications for copyright registration; and
(iv) any other Intellectual Property that is the subject of an application,
certificate, filing, registration or other document issued, filed with, or
recorded by any state, government or other public legal authority.

“LLC Intellectual Property” shall mean any Intellectual Property or Registered
Intellectual Property that is owned by, or licensed to, the LLC.
 
 
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(b)   To the knowledge of the Seller, no LLC Intellectual Property or product or
service of the Company is subject to any Action or written Claim. There is no
written stipulation restricting in any manner the use, transfer, or licensing
thereof by the Company, or which may affect the validity, use or enforceability
of such LLC Intellectual Property.

(c)           Section 6.5(c) of the Disclosure Schedule  is a complete and
accurate list of all the  Registered Intellectual Property and specifies, where
applicable, the jurisdictions in which each such item of the Registered
Intellectual Property has been issued or registered or in which an application
for such issuance and registration have been filed, including the respective
registration or application numbers.

(d)           The LLC owns and has good and exclusive title to, or has license
(sufficient for the conduct of its business as currently conducted) to, each
item of the Registered Intellectual Property free and clear of any Encumbrances
(excluding licenses and related restrictions).

(e)            Section 6.5(e) of the Disclosure Schedule lists all material
Contracts to which the LLC is a party (i) with respect to the LLC Intellectual
Property licensed or transferred to any Person or (ii) pursuant to which a
Person has licensed or transferred any Intellectual Property to the Company.
 
(f)            The Contracts relating to the LLC Intellectual Property listed in
Section 6.5(e) of the Disclosure Schedule are in full force and effect.  The
consummation of the transactions contemplated by this Agreement will neither
violate nor result in the breach, modification, cancellation, termination or
suspension of such Contracts.  To the knowledge of the Seller, the LLC is in
compliance with, and has not breached any material term of such Contracts and,
to the knowledge of the Seller, all other parties to such Contracts are in
compliance with, and have not breached any term of, such Contracts.  Following
the Closing, the LLC will be permitted to exercise all the rights under such
Contracts to the same extent the LLC would have been able to had the
transactions contemplated by this Agreement not occurred and without the payment
of any additional amounts or consideration other than ongoing fees, royalties or
payments.
 
(g)           The LLC has not received written notice from any third party that
the operation of its business, or any act, product or service of the LLC,
infringes or misappropriates the Intellectual Property of any third party or
constitutes unfair competition or trade practices under the laws of any
jurisdiction.

Section 6.6  Tax Matters.
 
(a)           The Company has filed or caused to be filed on a timely basis all
Tax Returns that are or were required to be filed by it, pursuant to the Laws or
administrative requirements of each Governmental Body with taxing power over it
or its assets.  As of the time of filing, all such Tax Returns correctly
reflected the facts regarding the income, business, assets, operations,
activities, status, and other matters of the Company and any other information
required to be shown thereon.  An extension of time within which to file any
such Tax Return that has not been filed has not been requested or
granted.  Section 6.6 of the Disclosure Schedule lists all state, local and
foreign jurisdictions in which the Company has previously filed or currently
files Tax Returns, which are all of the state, local or foreign taxing
jurisdictions in which the Company has been or is required to file Tax
Returns.  There is no audit, Action, Claim or any investigation or inquiry,
whether formal or informal, public or private, now pending or threatened against
or with respect to the Company in respect of any Tax.
 
 
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(b)           With respect to all amounts in respect of Taxes imposed on the
Company or for which they are or could be reasonably liable, whether to
Governmental Authorities (as, for example, under Law) or to other Persons (as,
for example, under tax allocation agreements), with respect to all taxable
periods or portions of periods since its inception through the Closing, (i) all
applicable tax laws and agreements have been complied with in all material
respects, (ii) all such amounts required to be paid by the Company to
Governmental Authorities or others on or before the date hereof have been paid
and (iii) reserves have been established for the payment of all Taxes not yet
due and payable, which reserves are reflected in the Company Balance Sheet
(described below) and are adequate and in accordance with the past custom and
practice of the Company.
 
(c)           As of the date hereof, the Company has not requested, executed or
filed with  any Governmental Authority any agreement or other document extending
or having the effect of extending the period for assessment or collection of any
Taxes for which the Company could be liable and which still is in effect.  There
exists no tax assessment, proposed or otherwise, against the Company nor any
Encumbrance for Taxes against any assets or property of the Company.
 
(d)           All Taxes that the Company is or was required by Law to withhold
or collect have been duly withheld or collected and, to the extent required,
have been paid to the proper Governmental Authorities or other Person.
 
(e)           The Company is not a party to, bound by or subject to any
obligation under any tax sharing, tax indemnity, tax allocation or similar
agreement.
 
(f)           There is no Claim, audit, Action, proceeding or investigation with
respect to Taxes due or claimed to be due from the Company or of any Tax Return
filed or required to be filed by the Company pending or threatened against or
with respect to the Company.
 
Section 6.7   Company Balance Sheet.
 
Other than as set forth on the balance sheet of the Company dated as of December
31, 2010, a copy of which is annexed hereto Section 6.7 of the Disclosure
Schedule (the “Company Balance Sheet”), the Company does not have any
liabilities or obligations (whether absolute, accrued, contingent or otherwise)
that were not fully reflected or reserved against as of December 31, 2010.
 
Section 6.8  Properties and Assets.  The sole asset of the Company is its 66-
2/3% membership interest in the LLC. Section 6.8 of the Disclosure Schedule
lists all properties and assets of the LLC that are material to the LLC’s
business.  The Company has good and marketable title to all of its properties
and assets, real and personal, free and clear of any Encumbrances.  The LLC has
good and marketable title to all of its properties and assets that are material
to the LLC’s business, free and clear of any Encumbrances.
 
 
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Section 6.9  Compliance with Law.  The Company and the LLC have complied in all
material respects with all Laws applicable to the Company and the LLC and their
respective operations.  Neither the Company, the LLC has received, nor, to the
knowledge of the Seller, has any of the respective officers, managers, members,
directors, Affiliates, employees, or agents of the Company or the LLC received,
any written notice from any Governmental Authority that the Company or the LLC
has been or is being conducted in violation of any applicable Law or that an
investigation or inquiry into any noncompliance with any applicable Law is
ongoing, pending or threatened.

Section 6.10  Litigation. Other than the Shareholder Derivative Litigation,
there is no Action pending against the Company, the LLC or the Seller in each
case that (a) relates to the Company or the LLC , its assets or its business, or
(b) as of the date hereof, seeks to prohibit or restrain the ability of the
Company to enter into this Agreement or to timely consummate any of the
transactions contemplated hereby, and there is no reasonable basis for any such
Action.  There are no judgments, decrees, agreements, memoranda of understanding
or orders of any Governmental Authority outstanding restricting the activities
of the Company or the LLC.

Section 6.11  Contracts.  Section 6.11 of the Disclosure Schedule contains a
complete list, as of the date hereof, of all material Contracts to which the
Company and the LLC is, or will be at Closing, a party or bound, or that
otherwise relate to its business or assets.  The Seller has caused the Company
and the LLC to make available to the Purchaser or its representatives correct
and complete copies of all such Contracts with all amendments thereof. Each such
Contract is, and will at Closing be, valid, binding, and enforceable against the
Company, the LLC and the other parties thereto in accordance with its terms, and
is, and will at Closing be, in full force and effect. The Company or the LLC is
not in default under or in breach of or is, or as of the Closing will be,
otherwise delinquent in performance under any such Contract, and no event has
occurred, or will as of the Closing occur, that, with notice or lapse of time,
or both, would constitute such a default.]  To the knowledge of the Seller, each
of the other parties thereto has performed in all respects all of the
obligations required to be performed by it under, and is not in default under,
any such Contract and no event has occurred that, with notice or lapse of time,
or both, would constitute such a default.  There are no disputes pending or
threatened in writing with respect to any such Contracts.  Neither the Company,
the LLC, nor any other party to any such Contract has exercised any option
granted to it to terminate or shorten or extend the term of such Contract, and
the Company or the LLC has not given notice or received written notice to such
effect.  All of such Contracts will continue to be valid, binding, enforceable
and in full force and effect on substantially identical terms immediately
following the consummation of the transactions contemplated hereby.

Section 6.12  Labor and Employment Matters.
 
(a)           There are no collective bargaining agreements, union contracts or
similar agreements or arrangements in effect that cover any Employee or Former
Employee (each, a "Collective Bargaining Agreement"). With respect to any
Employee, (i) there is no labor strike, dispute, slowdown, lockout or stoppage
pending or threatened against the Company or the LLC with respect to any
Employees, and the Company or the LLC has not experienced any labor strike,
dispute, slowdown, lockout or stoppage;  and (ii) there is no grievance or
arbitration arising out of any Collective Bargaining Agreement or other
grievance procedure.
 
 
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(b)           The Company and the LLC  are in compliance in all material
respects with all Laws, regulations and orders relating to the employment of
labor, including all such Laws, regulations and orders relating to wages, hours,
and any similar state or local "mass layoff" or "plant closing" Law, collective
bargaining, discrimination, civil rights, safety and health, workers'
compensation and the collection and payment of withholding and/or social
security taxes and any similar tax.
 
Section 6.13  Permits; Compliance.   Other than with respect to registrations of
Intellectual Property, the Company and the LLC are in possession of
all  governmental permits necessary to own, lease and operate its properties and
assets and to carry on its business as it is now being conducted and as it will
be conducted through to the Closing (collectively, the “Permits”).  All such
Permits are listed in Section 6.13 of the Disclosure Schedule.  There is no
Action pending or, to the knowledge of the Seller, threatened regarding any of
the Permits, and each such Permit is in full force and effect.  The Company and
the LLC are not in conflict with, or in material default (or would be in default
with the giving of notice, the passage of time, or both) with, or in violation
of, any of the Permits.
 
Section 6.14  Environmental Matters. There are no past or present violations of
Environmental Laws (as defined below) by the LLC, releases of any material into
the environment by the LLC, actions, activities, circumstances, conditions,
events, incidents, or contractual obligations of the LLC which may give rise to
any liability of the Company or the LLC,  and neither the Company nor the LLC
has received any written notice with respect to any of the foregoing, nor is any
action pending or threatened in writing in connection with any of the
foregoing.  The term “Environmental Laws” means all laws relating to pollution
or protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into the
environment, or otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous Materials,
as well as all authorizations, codes, decrees, demands or demand letters,
injunctions, judgments, licenses, notices or notice letters, orders, permits,
plans or regulations issued, entered, promulgated or approved thereunder.  Other
than those that are or were stored, used or disposed of in compliance with
applicable Law, no Hazardous Materials are contained by the LLC on or about any
real property currently owned, leased or used by the LLC, and no Hazardous
Materials were released by the LLC on or about any real property previously
owned, leased or used by the LLC. There are no underground storage tanks on or
under any real property owned, leased or used by the LLC.
 
Section 6.15  Affiliated Transactions.  Other than as reflected in the Company
Balance Sheet or set forth in Section 6.15 of the Disclosure Schedule, no
Affiliate other than the Seller has directly or indirectly (i) borrowed or been
advanced funds from or loaned funds to the Company or the LLC, (ii) is a party
to a Contract with the Company or the LLC or (iii) engaged in any transaction
with the Company or the LLC.
 
 
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Section 6.18  No Brokers or Finders.  The Company has not, nor have any of its
Affiliates, employed any broker or finder or incurred any Liability for any
brokerage or finder's fee or commissions or similar payment in connection with
the Transaction contemplated herein, and no Person has or will have any right,
interest or valid claim against or upon the Company or its Affiliates for any
such fee or commission.
 
ARTICLE VII
ADDITIONAL AGREEMENTS AND COVENANTS

Section 7.1  Access and Information.  Prior to the Closing, the Purchaser, on
one hand, and the Seller, on the other hand, shall permit representatives of the
other to have reasonable access during normal business hours and upon reasonable
notice to all premises, properties, personnel, books, records, LLC Intellectual
Property, technology, technical support, Contracts, commitments, reports of
examination and documents of or pertaining to, as may be necessary to permit the
other to, at its sole expense, make, or cause to be made, such investigations
thereof as the other reasonably deems necessary or advisable in connection with
the consummation of the transactions contemplated by this Agreement, and the
Purchaser and the Seller shall reasonably cooperate with any such
investigations.  No investigation by a party or its representatives or advisors
prior to or after the date of this Agreement (including any information obtained
by a party pursuant to this Section 7.1) shall diminish, obviate or cure any
breach of any representation, warranty, covenant or agreement contained in this
Agreement nor shall the conduct or completion of any such investigation be a
condition to any of such party's obligations under this Agreement.

Section 7.2  Confidentiality.  Each of the parties shall, and shall use
reasonable efforts to cause their respective Affiliates, officers, directors,
employees, auditors, attorneys, consultants, advisors and agents to, treat as
confidential and hold in strict confidence, unless compelled to disclose by
judicial or administrative process or, in the opinion of its counsel, by other
requirements of Law, and after prior written notice to the other parties, all
confidential information of the Purchaser, the Seller, the LLC or the Company,
as the case may be, that is made available in connection with this Agreement,
and will not release or disclose such confidential information to any other
Person, except to their respective auditors, attorneys, financial advisors and
other consultants, agents, and advisors in connection with this Agreement.  If
the Closing does not occur, (a) such confidence shall be maintained by the
Parties, and each Party shall use reasonable efforts to cause its officers,
directors, Affiliates and such other Persons to maintain such confidence, except
to the extent such information comes into the public domain (other than as a
result of an action by such Party, its officers, directors or such other Persons
in contravention of this Agreement), and (b) upon the request of any Party, the
other Party shall promptly return to the requesting Party or destroy any written
materials remaining in its possession, which materials it has received from the
requesting Party or its representatives, together with any analyses or other
written materials based upon the materials provided.

Section 7.3  Conduct of Business.  From and after the date hereof until the
Closing, except as otherwise expressly contemplated by this Agreement, or as
consented to in writing by the Purchaser, Seller shall ensure that the Company
and the LLC shall:
 
 
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(a)           use reasonable commercial efforts to preserve  the Company’s and
the LLC’s business, operations, physical facilities, working conditions
and  their business relationships with customers, suppliers, licensors,
licensees, contractors and other persons with whom  has significant business
relations;

(b)           not take any action that would cause a breach of the
representations and warranties contained herein;

(c)           not amend its Articles of Incorporation or Bylaws (or other
similar governing instrument);

(d)           not split, combine or reclassify any of its shares, declare, set
aside or pay any dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its equity interests, make
any other actual or constructive distribution in respect of its interests or
otherwise make any payments to holders in their capacity as such, or redeem or
otherwise acquire any of its securities or any other securities;

(e)           not adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other reorganization
or otherwise permit its corporate existence to be suspended, lapsed or revoked;

(f)            not create or form any Subsidiary;
 
(g)           other than in the ordinary course of its business, not (1) incur
or assume any Liability in excess of $10,000; (2) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, contingently or
otherwise) for the obligations of any other Person; (3) make any loans, advances
or capital contributions to or investments in any other Person; nor (4) pledge
or otherwise Encumber its shares or membership interests of the Company and the
LLC, respectively;
 
(h)           not acquire, sell, lease, license, transfer or otherwise dispose
of any assets in any single transaction or series of related transactions having
a fair market value in excess of $10,000 in the aggregate or that are otherwise
material to it other than in the ordinary course of business;
 
(i)            not (1) acquire (by merger, consolidation or acquisition of stock
or assets) any corporation, partnership or other entity or division thereof or
any equity interest therein; (2) amend, modify, waive or terminate any right
under any material contract in any material way; nor (3) authorize any new
capital expenditure or expenditures that individually is in excess of $5,000 or
in the aggregate are in excess of $10,000;

(j)            not enter into any Contract other than in the ordinary course of
its business;

(k)           issue, promise or contract to issue any securities or instruments
convertible into securities of such Person; or
 
 
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(l)            other than in the ordinary course of its business, not make any
change with respect to the compensation or benefits of any officer, director or
Employee or Former Employee.

Section 7.4  Efforts to Consummate.  Subject to the terms and conditions of this
Agreement, each party hereto shall use all reasonable commercial efforts to
take, or to cause to be taken, all actions and to do, or to cause to be done,
all things necessary, proper or advisable as promptly as practicable to satisfy
the conditions set forth in Article VIII, including, without limitation,
obtaining any shareholder and director consents and completing all filings
required by the SEC and to consummate the transactions contemplated hereby.

Section 7.5  No-Shop. From the date hereof until the earlier of the Closing Date
or the termination of this Agreement in accordance with the terms hereof, the
Seller shall ensure that neither the Company, the LLC, the Seller nor its or
their respective officers, directors, employees, agents, representatives and
Affiliates, shall, directly or indirectly, make, solicit, initiate or encourage
submission of proposals or offers from any Persons relating to an Acquisition
Proposal (as defined below).  As used herein, “Acquisition Proposal” means any
proposal or offer involving a liquidation, dissolution, re-capitalization,
merger, consolidation or acquisition or purchase of all or substantially all of
the assets of, or equity interest in, the Company or the LLC or any other
similar transaction or business combination involving the same.  The Seller, on
its behalf and on behalf of the Company or the LLC, as applicable, shall
immediately cease and cause to be terminated all discussions or negotiations
with third parties with respect to any Acquisition Proposal, if any, existing on
the date hereof.

Section 7.6  Notification by the Parties. Each party hereto shall use its
reasonable commercial efforts to as promptly as practicable inform the other
parties hereto in writing if, prior to the consummation of the Closing, it
obtains knowledge that any of the representations and warranties made by such
party in this Agreement ceases to be accurate and complete in any material
respect (except for any representation and warranty that is qualified hereunder
as to materiality or Material Adverse Effect, as to which such notification
shall be given if the notifying party obtains knowledge that such representation
and warranty ceases to be accurate and complete in any respect).  Each party
hereto shall also use its reasonable commercial efforts to promptly inform the
other parties hereto in writing if, prior to the consummation of the Closing, it
becomes aware of any fact or condition that constitutes, in its reasonable
judgment, a breach of any covenant of such party as of the date of this
Agreement or that would reasonably be expected to cause any of its covenants to
be breached as of the Closing Date.  Any such notification shall not be deemed
to have cured any breach of any representation, warranty, covenant or agreement
made in this Agreement for any purposes of this Agreement.

Section 7.7  Cooperation with Respect to Financial Reporting. Prior to the
Closing, the Seller shall cause the Company to reasonably cooperate with
Purchaser in connection with Purchaser’s preparation of financial statements and
other information as required for Purchaser’s filings under the Exchange Act.
 
 
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ARTICLE VIII
CONDITIONS TO CLOSING

Section 8.1  Conditions to the Seller’s Obligations to Close.  All obligations
of the Seller to consummate the transactions contemplated hereunder are subject
to the fulfillment or waiver prior to or at the Closing of each of the following
conditions:
 
(a)           All representations and warranties of the Purchaser contained in
this Agreement and the Purchaser Transaction Documents shall be true and correct
in all respects when made and shall be deemed to have been made again at and as
of the Closing and shall then be true and correct in all respects (except that
representations and warranties made as of a specified date, shall be true and
correct only as of such specified date), and the Purchaser shall have delivered
to the Seller a certificate, signed by it, to such effect in form and substance
satisfactory to the Seller;
 
(b)           The Purchaser shall have performed in all material respects each
obligation and agreement to be performed by it, and shall have complied in all
material respects with each covenant required by this Agreement to be performed
or complied with by it at or prior to the Closing, and the Purchaser shall have
delivered to the Seller a certificate, signed by it, to such effect in form and
substance satisfactory to the Seller;

(c)           There shall not be in effect or threatened any injunction, order
or decree of a Governmental Authority that prohibits or delays, or seeks to
prohibit or delay, consummation of any part of the transactions contemplated by
this Agreement;
 
(d)           Prior to or at the Closing, the Purchaser shall have delivered to
the Seller the items to be delivered pursuant to Section 2.4;
 
(e)           The Purchaser, with the assistance of the Seller, shall have
prepared the Current Report on Form 8-K required as a result of the consummation
of the transactions contemplated hereby; and

(f)            The Seller shall have obtained Shareholder Approval.

Section 8.2  Conditions to the Purchaser’s Obligations to Close.  All
obligations of the Purchaser to consummate the transactions contemplated
hereunder are subject to the fulfillment or waiver prior to or at the Closing of
each of the following conditions:
 
(a)           All representations and warranties of the Seller contained in this
Agreement and the Seller Transaction Documents shall be true and correct in all
respects when made and shall be deemed to have been made again at and as of the
Closing and shall then be true and correct in all respects (except that
representations and warranties made as of a specified date, shall be true and
correct only as of such specified date), and the Seller shall have delivered to
the Purchaser a certificate, signed by them, to such effect in form and
substance satisfactory to the Purchaser;
 
 
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 (b)         The Seller shall have performed in all respects each obligation and
agreement to be performed by it, and shall have complied in all respects with
each covenant required by this Agreement to be performed or complied with by it
at or prior to the Closing, and the Seller shall have delivered to the Purchaser
a certificate, signed by the Seller, to such effect in form and substance
satisfactory to the Purchaser;

(c)           There shall not be in effect or threatened any injunction, order
or decree of a Governmental Authority that prohibits or delays, or seeks to
prohibit or delay, consummation of any part of the transactions contemplated by
this Agreement;
 
(d)           Prior to or at the Closing, the Seller shall have delivered to the
Purchaser the items to be delivered pursuant to Section 2.5;

(e)            the Seller shall have obtained Shareholder Approval;

(f)            The Company shall own 100% of the LLC by consummation of the
Membership Interest Purchase Agreement; and
 
(g)           The Seller shall have provided to the Purchaser with the Company’s
financial statements and other information required under the rules of the SEC
for purposes of inclusion in the Purchaser’s filing of a Current Report on Form
8-K disclosing the consummation of the Transaction.
 
ARTICLE IX
TERMINATION

Section 9.1                      Termination. This Agreement may be terminated
at any time prior to the consummation of the Closing under the following
circumstances:

(a)           by mutual written consent of the Purchaser and the Seller;

(b)           by the Purchaser, if the Seller has breached this Agreement in any
respect and such breach is not cured within ten (10) days after written notice
from the Purchaser to the Seller;

(c)           by the Seller, if the Purchaser has breached this Agreement in any
respect and such breach is not cured within ten (10) days after written notice
from the Seller to the Purchaser;

(d)           by either party, if there shall be in effect a final,
non-appealable order of a court or government administrative agency of competent
jurisdiction permanently prohibiting the consummation of the transactions
contemplated hereby;

(e)            by the Seller if Shareholder Approval is not obtained by
September 30. 2011; or

(f)            by either  party if the Closing has not occurred (other than
through the failure of the party seeking to terminate this Agreement to comply
fully with its obligations under this Agreement) on or before September 30. 2011
or such later date as the parties shall mutually agree.
 
 
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Section 9.2  Termination Procedure.  Written notice of any termination
(“Termination Notice”) pursuant to this Article IX shall be given by the party
electing termination of this Agreement (“Terminating Party”) to the other party
(collectively, the “Terminated Party”), and such notice shall state the reason
for termination.

Section 9.3  Effect of Termination.  Upon termination of this Agreement prior to
the consummation of the Closing and in accordance with the terms hereof, this
Agreement shall become void and of no effect, and none of the parties shall have
any liability to the other party other than for an intentional and willful
breach by the Terminated Party.

Section 9.4  Expenses.  The parties shall each bear their own respective
expenses incurred in connection with this Agreement and the contemplated
Transaction.
 
ARTICLE X
INDEMNIFICATION; SURVIVAL

Section 10.1  Indemnification by the Purchaser. Subject to and conditioned upon
the Closing, the Purchaser shall indemnify and hold harmless the Seller and its
Affiliates, officers, directors, stockholders, employees and agents and the
successors and assigns of all of them (the “Seller Indemnified Parties”), and
shall reimburse the Seller Indemnified Parties for, any loss, liability, claim,
damage, expense (including, but not limited to, costs of investigation and
defense and attorneys’ fees) (collectively, “Damages”), arising from or in
connection with (a) any inaccuracy or breach of any of the representations and
warranties of the Purchaser in this Agreement or in any certificate or document
delivered by or on behalf of the Purchaser pursuant to this Agreement, or any
actions, omissions or statements of fact inconsistent with in any respect any
such representation or warranty, or (b) any failure by the Purchaser to perform
or comply with any agreement, covenant or obligation in this Agreement or in any
certificate or document delivered by or on behalf of the Purchaser pursuant to
this Agreement to be performed by or complied with by or on behalf of the
Purchaser.

Section 10.2  Indemnification by the Seller. Subject to and conditioned upon the
Closing, the Seller shall indemnify and hold harmless the Purchaser, and its
Affiliates, officers, directors, shareholders, employees and agents and the
successors and assigns of all of them (the “Purchaser Indemnified Parties”), and
shall reimburse the Purchaser Indemnified Parties for, any Damages arising from
or in connection with (a) any inaccuracy or breach of any of the representations
and warranties of the Seller in Article V of this Agreement or in any
certificate or document delivered by or on behalf of the Seller pursuant to this
Agreement, or any actions, omissions or statements of fact inconsistent with in
any respect any such representation or warranty, or (b) any failure by the
Seller to perform or comply with any agreement, covenant or obligation in this
Agreement or in any certificate or document delivered by or on behalf of the
Seller pursuant to this Agreement to be performed by or complied with by or on
behalf of the Seller.
 
 
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Section 10.3  Survival; Limitations.  Except as set forth herein, all
representations, warranties, covenants and agreements of the parties contained
herein shall survive the Closing until  the first anniversary of the Closing
Date. Notwithstanding anything herein to the contrary, the representations and
warranties contained in Section 6.5 (Intellectual Property), 6.11 (Contracts)
and 6.13 (Permits) shall not survive the Closing.

Furthermore, notwithstanding anything herein to the contrary, the Seller shall
have no liability (for indemnification or otherwise) for any Damages until the
aggregate of all Damages with respect to the matters covered by Article V hereof
exceeds $25,000 (the "Liability Threshold"), and then after the Liability
Threshold has been exceeded the Seller shall be responsible only for Damages in
excess of the Liability Threshold.  Anything to the contrary notwithstanding,
the Seller shall have no liability under this Agreement (for indemnification or
otherwise) to the extent that the aggregate amount of all Damages with respect
to such matters exceeds $300,000.

ARTICLE XI
MISCELLANEOUS

Section 11.1  Notices.  All notices or other communications required or
permitted hereunder shall be in writing.  Any notice, request, demand, claim or
other communication hereunder shall be deemed duly given (a) if by personal
delivery, when so delivered, (b) if mailed, three (3) Business Days after having
been sent by registered or certified mail, return receipt requested, postage
prepaid and addressed to the intended recipient as set forth below, or (c) if
sent through an overnight delivery service in circumstances to which such
service guarantees next day delivery, the day following being so sent:

(1)           If to Purchaser:

Enterologics, Inc.
1264 University Avenue West
Suite 404
St. Paul, Minnesota 55104
Attn: Robert A. Hoerr, MD, PhD

with a copy to:

David Lubin & Associates, PLLC
10 Union Avenue
Suite 5
Lynbrook, New York 11563
Attn: David Lubin, Esq.

(2)           If to the Seller:

New York Health Care, Inc.
20 East Sunrise Highway
Valley Stream, New York 11581
Attn: Mr. Murry Englard

with a copy to:

Cohen Tauber Spievack & Wagner P.C.
420 Lexington Avenue, Suite 2400
New York, New York 10170
Attn:  Adam Stein, Esq.
 
 
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Any party may change the address to which notices and other communications
hereunder are to be delivered by giving the other parties notice in the manner
herein set forth.

Section 11.2  Choice of Law.  This Agreement shall be governed, construed and
enforced in accordance with the laws of New York, without giving effect to
principles of conflicts of law.

            Section 11.3  Jurisdiction.  The parties hereby irrevocably consent
to the in personam jurisdiction of the competent courts in the State of New
York, in connection with any action or proceeding arising out of or relating to
this Agreement or the transactions and the relationships established
thereunder.  The parties hereby agree that such courts shall be the venue and
exclusive and proper forum in which to adjudicate such matters and that they
will not contest or challenge the jurisdiction or venue of these courts. If any
party shall commence a proceeding to enforce any provisions of this Agreement,
then the prevailing party in such proceeding shall be reimbursed by the other
party for its reasonable attorney’s fees and other reasonable costs and expenses
incurred with the investigation, preparation and prosecution of such proceeding.

Section 11.4  Entire Agreement.  This Agreement,  the Purchaser Transaction
Documents and the Seller Transaction Documents set forth the entire agreement
and understanding of the parties in respect of the transactions contemplated
hereby and supersedes all prior agreements, arrangements and understandings of
the parties relating to the subject matter hereof.  No representation, promise,
inducement, waiver of rights, agreement or statement of intention has been made
by any of the parties which is not expressly embodied in this Agreement, such
other agreements, notes or instruments related to this transaction executed
simultaneously herewith, or the written statements, certificates, schedules or
other documents delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby.

Section 11.5  Assignment. Each party's rights and obligations under this
Agreement shall not be assigned or delegated, by operation of law or otherwise,
without the other party's prior consent, and any such assignment or attempted
assignment shall be void, of no force or effect, and shall constitute a material
default by such party.

Section 11.6  Amendments.  Except as otherwise set forth in the termination
provisions hereof, this Agreement may be amended, modified, superseded or
cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by all
the parties.
 
 
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Section 11.7  Waivers.  The failure of any party at any time or times to require
performance of any provision hereof shall in no manner affect the right at a
later time to enforce the same.  No waiver by any party of any condition, or the
breach of any term, covenant, representation or warranty contained in this
Agreement, whether by conduct or otherwise, in any one or more instances shall
be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other term, covenant, representation or
warranty of this Agreement.

Section 11.8  Counterparts.  This Agreement may be executed simultaneously in
two or more counterparts and by facsimile, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

Section 11.9  Severability.  If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any party.  Upon such
determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
 
Section 11.10  Interpretation.  The parties agree that this Agreement shall be
deemed to have been jointly and equally drafted by them and that the provisions
of this Agreement therefore shall not be construed against a party or parties on
the ground that such party or parties drafted or was more responsible for the
drafting of any such provision(s).  The parties further agree that they have
each carefully read the terms and conditions of this Agreement, that they know
and understand the contents and effect of this Agreement and that the legal
effect of this Agreement has been fully explained to its satisfaction by counsel
of its own choosing.
 

 
[Remainder of page intentionally left blank; Signature pages to follow]
 
 
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IN WITNESS WHEREOF, the parties have duly executed this Stock Purchase Agreement
as of the date first above written.

ENTEROLOGICS, INC.
 
 
By:  /s/Robert A. Hoerr         
Name:  Robert A. Hoerr, M.D., PhD.
Title:    President
 
NEW YORK HEALTH CARE, INC.
 
 
By: /s/ Murry Englard         
Name:  Murry Englard
Title:    Chief Executive Officer
     

 
 
 
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