Document:

EXHIBIT 10.2

                                    AGREEMENT
                                    ---------

                  THIS AGREEMENT, effective as of October 4, 2001, is executed
by and between SPENCER J. VOLK ("Volk"), and CELSION CORPORATION, a Delaware
corporation (the "Company").

                              PRELIMINARY STATEMENT
                              ---------------------

                  1. Volk has served as President, Chief Executive Officer, and
a Director, of the Company, pursuant to an Amended and Restated Executive
Employment Agreement with the Company dated effective as of January 1, 2000 (the
"Employment Agreement").

                  2. Volk desires to retire, and consequently resign from his
positions as President, Chief Executive Officer, and as a Director, of the
Company, and the Company desires to accept such retirement and consequent
resignation from said positions, in accordance with the terms and conditions set
forth in this Agreement.

                  NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:

                  1. RECITALS. The foregoing recitals are hereby incorporated by
reference and made a part of this Agreement.

                  2. SALARY. In lieu of all amounts payable as salary or cash
bonus pursuant to the Employment Agreement, the Company agrees to pay Volk an
annual salary in the amount of Two Hundred Fifty Two Thousand Dollars ($252,000)
through December 31, 2002, less such amounts as are required to be withheld
pursuant to applicable law, payable in equal monthly or semi-monthly
installments pursuant to the Company's standard payroll policies applicable to
its senior executives.

                  3. STOCK OPTIONS.
                     --------------

                     3.1 Option Grant and Vesting. In lieu of all grants of
stock options set forth in the Employment Agreement (including all option grants
previously made to Volk pursuant to the Employment Agreement) the Company hereby
grants to Volk, non-qualified stock options which in the aggregate entitle Volk
to acquire One Million Eight Hundred Fifty Thousand (1,850,000) fully paid and
non-assessable shares of common stock of the Company, par value $0.01 per share,
all of which shall automatically vest as of the date of this Agreement. Any
stock options previously granted to Volk pursuant to the Employment Agreement,
whether vested or unvested, shall be null and void and superceded by the options
granted pursuant to this Agreement.

<PAGE>

                     3.2 Exercise.
                         ---------

                         (i) General. Volk may exercise the stock options at any
time prior to 5:00 p.m. on October 4, 2006 (the "Expiration Date") upon written
notice to the Company at its principal office at 10220-1 Old Columbia Road,
Columbia, Maryland 21046-1705, Attention: Augustine Y. Cheung, after which time
all unexercised options shall expire and be of no further legal force or effect.
The notice shall be executed and delivered with the Purchase Form attached
hereto as Exhibit A duly completed and signed and, except as provided in Section
3.2(ii) below, shall be accompanied by payment in cash or cashier's check of the
aggregate purchase price for the number of shares which Volk is acquiring
pursuant to the provisions hereof.

                         (ii) Cashless Exercise. If the common stock of the
Company is, at the time of exercise of a stock option, registered under Section
12(b) or 12(g) of the Securities and Exchange Act of 1934, Volk may pay the
exercise price, in whole or in part, by delivery of a properly executed Purchase
Form, together with (a) irrevocable instructions to a brokerage firm designated
by the Company at the request of Volk to deliver promptly to the Company the
amount of proceeds necessary to pay the aggregate purchase price or portion
thereof and any withholding tax obligations that may arise in connection with
the exercise, (b) payment in cash or cashier's check of that portion of the
aggregate purchase price, in any, not covered by the instructions to the
brokerage firm and (c) instruction to the Company to deliver directly to the
designated brokerage firm the certificates for the purchased shares the proceeds
of which are designated to pay the purchase price.

                     3.3 Exercise Price. The exercise price for each stock
option to acquire one share of common stock shall be as follows:

               # of Stock Options                  Exercise Price
               ------------------                  --------------
                    400,000                            $  .75
                    250,000                            $ 1.22
                    300,000                            $ 1.00
                    100,000                            $ 1.22
                    100,000                            $ 1.22
                    700,000                            $ 1.17
                  ---------
                  1,850,000

                     3.4 Sale of Shares; Potential Registration.
                         ---------------------------------------

                         (i) Restrictions on Transfer. Shares received upon
exercise of the stock options may not be sold or offered for sale in the absence
of effective registration under federal and applicable state securities laws, or
an opinion of counsel satisfactory to the Company that such registration is not
required. Shares

                                       2
<PAGE>

received upon exercise of the stock options may be sold by Volk in transactions
permitted by the provisions of Rule 144 of the Securities Act of 1933.

                         (ii) Possible Registration. The Company will consider
registering all or any portion of the shares of common stock underlying the
options for resale pursuant to the Act at the request of Volk. However, the
parties acknowledge and agree that the Company is not, and shall not be, under
any legal obligation to effect such a registration at any time or at all.

                     3.5 Anti-Dilution Provisions.
                         -------------------------

                         (i) Adjustment of Number of Incentive Shares.
Notwithstanding anything in this Section 3.5 to the contrary, in case the
Company shall at any time issue common stock by way of dividend or other
distribution on any stock of the Company or subdivide or combine the outstanding
shares of common stock, the exercise price of the stock options granted
hereunder shall be proportionately decreased in the case of such issuance (on
the day following the date fixed for determining shareholders entitled to
receive such dividend or other distribution) or decreased in the case of such
subdivision or increased in the case of such combination (on the date that such
subdivision or combination shall become effective).

                         (ii) No Adjustment for Small Amounts. Anything in this
Section 3.5 to the contrary notwithstanding, the Company shall not be required
to give effect to any adjustment in the exercise price of the stock options
unless and until the net effect of one or more adjustments, determined as above
provided, shall have required a change of the exercise price by at least one
cent, but when the cumulative net effect of more than one adjustment so
determined shall be to change the actual exercise price by at least one cent,
such change in the exercise price shall thereupon be given effect.

                     3.6 Adjustments in the Event of a Recapitalization or
Similar Transaction. In the event of a reclassification, recapitalization, stock
split, reverse stock split, stock dividend or combination of shares, or other
similar event, the number and class of shares issuable to Volk upon exercise of
the option to acquire common stock shall be adjusted proportionately to reflect
such event.

                  4. FRINGE BENEFITS.
                     ----------------

                     4.1 Automobile Allowance. The Company shall continue to
provide Volk with the use of an automobile (or at Volk's option, a cash
allowance in the amount of $450.00 per month in lieu thereof) through December
31, 2002, along with fuel, fluids and maintenance, upon such terms and
conditions as are approved by the Company.

                     4.2 Disability Insurance. Through December 31, 2002, the
Company shall continue to reimburse Volk for the expense of maintaining the
disability insurance policy currently in effect.

                                       3
<PAGE>

                     4.3 Participation in Employee Benefit Programs. Subject to
Volk's meeting the respective eligibility requirements of each plan, until
December 31, 2002 Volk shall be entitled to participate in, and be covered by,
each pension, life insurance, accident insurance, health insurance and
hospitalization plan of the Company, as the case may be, made available to its
senior executives generally from and after the date hereof.

                  5. NON-COMPETITION AND NON-SOLICITATION.
                  ----------------------------------------

                     5.1 Non-Competition. During such time as this Agreement
shall be in effect and for a one-year period following December 31, 2002, Volk
shall not do anything in any way inconsistent with his duties to, or adverse to
the interests of, the Company, nor shall Volk, directly or indirectly, himself
or by or through a family member or otherwise, alone or as a member of a
partnership or joint venture, or as a principal, officer, director, consultant,
employee or stockholder of any other entity, compete with the Company or be
engaged in or connected with any other business competitive with that of the
Company or any of its affiliates, except that Volk may own, as a passive
investment, not more than five percent (5%) of the total voting power of any
company with a class of securities registered pursuant to the Securities
Exchange Act of 1934 that may engage in such a business competitive with that of
the Company or any of its affiliates.

                     5.2 Confidentiality. In view of the fact that Volk has been
brought into close contact with all or substantially all of the confidential
affairs of the Company and its affiliates, information with respect to which is
not readily available to the public, Volk agrees during the term of this
Agreement and thereafter:

                     (a) to keep secret and retain in the strictest confidence
             all non-public information about (i) research and development, test
             results, suppliers, venture or strategic partners, licenses and
             patents or patent applications, planned or existing products,
             know-how, financial condition and other financial affairs (such as
             costs, pricing, profits and plans for future development, methods
             of operation and marketing concepts) of the Company and its
             affiliates; (ii) the employment policies and plans of the Company
             and its affiliates; and (iii) any other proprietary information
             relating to the Company and its affiliates, their operations,
             businesses, financial condition and financial affairs
             (collectively, the "Confidential Information") and, for such time
             as the Company or any of its affiliates is operating, Volk shall
             not disclose the Confidential Information to anyone not then an
             officer, director or authorized employee or agent of the Company or
             its affiliates, either during or after the term of this Agreement,
             except with the Company's express written consent or except to the
             extent that such Confidential Information can be shown to have been
             in the public domain through no fault, recklessness or negligence
             of Volk; and

                                       4
<PAGE>

                     (b) to deliver to the Company at any time(s) the Company
             may so request, all memoranda, notes, records, reports and other
             documents relating to the Company or its affiliates, or their
             respective businesses, financial affairs or operations and all
             property associated therewith, which he may then possess or have
             under his control.

                     5.3 Non-Solicitation of Employees. Volk shall not at any
time during the three-year period following December 31, 2002, (i) employ any
individual who was employed by the Company or any of its affiliates at any time
commencing January 1, 2001 through and including December 31, 2005, or (ii) in
any way cause, influence or participate in the employment of any such individual
by anyone else in any business that is competitive with any of the businesses
engaged in by the Company or any of its affiliates.

                     5.4 Non-Solicitation of Customers. Volk shall not at any
time during the three-year period following December 31, 2002, directly or
indirectly, either (i) persuade or attempt to persuade any customer or client of
the Company or of any of its affiliates to cease doing business with the Company
or with any affiliate, or to reduce the amount of business it does with the
Company or with any of its affiliates, or (ii) solicit for himself or any person
other than the Company or any of its affiliates, the business of any individual
or business which was a customer or client of the Company or any of its
affiliates at any time during the eighteen month period immediately preceding
December 31, 2002.

                     5.5 Remedies. Volk acknowledges that his agreement to the
limitations set forth in this Section 5 is an essential inducement to the
Company to enter into this Agreement, and that the Company would not have
entered into this Agreement but for such agreement. Volk further acknowledges
that his services are unique and that any breach or threatened breach by Volk of
any of the foregoing provisions of this Section 5 cannot be remedied solely by
damages. In the event of a breach or a threatened breach by Volk of any of the
provisions of this Section 5, the Company shall be entitled to injunctive relief
restraining Volk and any business, firm, partnership, individual, corporation or
other entity participating in such breach or attempted breach. Nothing herein,
however, shall be construed as prohibiting the Company from pursuing any other
remedies available at law or in equity for such breach or threatened breach,
including the recovery of damages and the immediate termination of the
employment of Volk hereunder.

                     5.6 Enforceability. Notwithstanding the provisions of
Section 11.2 hereof, if any of the provisions of, or promises contained in, this
Section 5 are hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the provisions or the
enforceability thereof in any other jurisdiction, which shall be given full
effect, without regard to the invalid portions or the unenforceability in such
other jurisdiction. If any provisions contained in this Section 5 are held to be
unenforceable in any jurisdiction because of the duration or scope thereof, the
parties hereto agree that the court making such determination shall have the
power to

                                       5
<PAGE>

reduce the duration and/or scope (if such provision, in its reduced form, shall
be enforceable); provided, however, that the determination of such court shall
not affect the enforceability, duration or scope of this Section 5 in any other
jurisdiction.

                  6. MUTUAL RELEASE. The parties shall execute a Mutual Release
in the form attached hereto as Exhibit B simultaneously with the execution of
this Agreement.

                  7. EMPLOYMENT AGREEMENT OF NO FURTHER FORCE OR EFFECT. This
Agreement supercedes all prior agreements between the parties including all
provisions of the Employment Agreement, which is terminated in its entirety and
is of no further legal force or effect effective as of the date of this
Agreement.

                  8. POSSIBLE CONSULTING ARRANGEMENT. The Company agrees to
consider retaining Volk as a consultant after December 31, 2002, if the parties
can reach mutually agreeable terms for any such arrangement at that time,
provided however, that any such future engagement of Volk by the Company shall
be in the sole and absolute discretion of the Board of Directors of the Company.

                  9. NOTICES.
                     --------

                     All notices and communications hereunder shall be in
writing and delivered by hand or sent by registered or certified mail, postage
and registration or certification fees prepaid, return receipt requested, or by
overnight delivery such as Federal Express, and shall be deemed given when hand
delivered or three (3) business days after the date when mailed, or upon one (1)
business day after delivery to an agent for overnight delivery, if sent in such
manner, as follows:

                  If to the Company:   Celsion Corporation
                                       10220-1 Old Columbia Road,
                                       Columbia, Maryland 21046-1705
                                       Attention: Augustine Y. Cheung, President

                  With a copy to:      Venable, Baetjer and Howard, LLP
                                       Mercantile Bank and Trust Building
                                       2 Hopkins Plaza, Suite 1800
                                       Attn: Greg Cross

                  If to Volk:          Spencer J. Volk

                                       ----------------------------

                                       ----------------------------

                                       ----------------------------

The foregoing addresses may be changed by either party from time to time by
notice given in the manner set forth in this Section 9.

                                       6
<PAGE>

                  10. JURISDICTION. Any suit involving any dispute or matter
arising under this Agreement may only be brought in any United States federal
district court located in the State of Maryland or in any state court located in
Howard County, Maryland. Each of the parties hereto consents to the venue and
the exercise of personal jurisdiction by such court with respect to all such
proceedings.

                  11. MISCELLANEOUS.
                      --------------

                      11.1 Entire Agreement; Amendment; Waiver. This Agreement
contains the entire understanding of the parties hereto with respect to the
subject matter hereof, and the provisions hereof may not be altered, amended,
waived, terminated or discharged in any way whatsoever except by subsequent
written agreement executed by the party charged therewith. This Agreement
supersedes all prior employment agreements, understandings and arrangements
between Volk and the Company pertaining to the terms of the employment of Volk.
A waiver by either of the parties of any of the terms or conditions of this
Agreement, or of any breach hereof, shall not be deemed a waiver of such terms
or conditions for the future or of any other term or condition hereof, or of any
subsequent breach hereof.

                      11.2 Severability. Subject to the provisions of Section
5.6 as they affect the provisions of Section 5 hereof, the provisions of this
Agreement are severable, and if any provision of this Agreement is invalid,
void, inoperative or unenforceable, the balance of the Agreement shall remain in
effect, and if any provision is inapplicable to any circumstance, it shall
nevertheless remain applicable to all other circumstances.

                      11.3 Governing Law. This Agreement shall be construed and
interpreted under the laws of the State of Maryland applicable to contracts
executed and to be performed entirely therein.

                      11.4 Headings. The captions and section headings in this
Agreement are not part of the provisions hereof, are merely for the purpose of
reference and shall have no force or effect for any purpose whatsoever,
including the construction of the provisions of this Agreement.

                      11.5 Binding Nature. This Agreement shall be binding upon
and inure to the benefit of Volk and his personal representatives, executors and
administrators and to the successors or assigns of the Company.

                  IN WITNESS WHEREOF, the parties hereto have executed this
Agreement effective as of the date first above written.

WITNESS/ATTEST:                     CELSION CORPORATION

                                    By: /s/ Augustine Y. Cheung (SEAL)
--------------------------------        -----------------------
                                        Augustine Y. Cheung, President

                                       /s/ SPENCER J. VOLK (SEAL)
---------------------------------      -------------------
                                       Spencer Volk

                                       7
<PAGE>

                                    EXHIBIT A
                                    ---------

                              OPTION EXERCISE FORM
                              --------------------

Celsion Corporation
10220-1 Old Columbia Road
Columbia, MD 21046-1705

Gentlemen:

         1. Exercise of Stock Option. I hereby exercise the [Insert Type]
______________Stock Option (the "Stock Option") granted to me on
____________________, 2001, by Celsion Corporation (the "Corporation"), subject
to all the terms and provisions thereof and of the Celsion Corporation 2001
Stock Option Plan (the "Plan"), and notify you of my desire to purchase
____________ shares (the "Shares") of Common Stock of the Corporation at a price
of $___________ per share pursuant to the exercise of said Stock Option.

         2. Information about the Corporation. I am aware of the Corporation's
business affairs and financial condition and have acquired sufficient
information about the Corporation to reach an informed and knowledgeable
decision to acquire the Shares.

         3. Tax Consequences. I am not relying upon the Corporation for any tax
advice in connection with this option exercise, but rather am relying on my own
personal tax advisors in connection with the exercise of the Stock Option and
any subsequent disposition of the Shares.

         4. Tax Withholding. I understand that, in the case of a nonqualified
stock option, I must submit upon demand from the Corporation an amount in cash
or cash equivalents sufficient to satisfy any federal, state or local tax
withholding applicable to this Stock Option exercise, in addition to the
purchase price enclosed, or make such other arrangements for such tax
withholding that are satisfactory to the Corporation, in its sole discretion, in
order for this exercise to be effective.

         5. Unregistered Shares. The following shall apply in the event the
Shares purchased herein are not registered under the Securities Act of 1933, as
amended:

                  (a) I am acquiring the Shares for my own account for
investment with no present intention of dividing my interest with others or of
reselling or otherwise disposing of any of the Shares.

<PAGE>

                  (b) The Shares are being issued without registration under the
Securities Act of 1933, as amended (the "Act"), in reliance upon the exemption
provided by Section 3(b) of the Act for employee benefit plans, contained in
Rule 701 promulgated thereunder, or in lieu thereof upon the private offering
exemption contained in Section 4(2) of the Act, and such reliance is based in
part on the above representation.

                  (c) Since the Shares have not been registered under the Act,
they must be held indefinitely until an exemption from the registration
requirements of the Act is available or they are subsequently registered, in
which event the representation in Paragraph (a) hereof shall terminate. As a
condition to any transfer of the Shares, I understand that the Corporation will
require an opinion of counsel satisfactory to the Corporation to the effect that
such transfer does not require registration under the Act or any state
securities law.

                  (d) The issuer is not obligated to comply with the
registration requirements of the Act, with the requirements for an exemption
under Regulation A under the Act, or with the public information requirements
necessary for reliance on Rule 144 under the Act, for my benefit.

                  (e) The certificates for the shares to be issued to me shall
contain appropriate legends to reflect the restrictions on transferability
imposed by the Act.

Total Amount Enclosed:  $__________

Date:________________________               ____________________________________
                                            (Optionee)

                                            Received by Celsion Corporation

                                            On:_________________________, 200__

                                            By:_________________________________

<PAGE>

                                    EXHIBIT B
                                    ---------

                                 MUTUAL RELEASE
                                 --------------

1. CELSION CORPORATION, a Delaware corporation (the "Corporation"), for and in
consideration of the execution by SPENCER J. VOLK ("Volk") of the Agreement
executed by and between the parties simultaneously herewith (the "Agreement"),
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, for itself and its directors, officers, employees,
stockholders, agents, successors, assigns, attorneys and trustees (collectively
the "Celsion Releasors"), does hereby irrevocably and unconditionally remise,
release, acquit, exonerate and forever discharge Volk, and his heirs, personal
representatives, executors, administrators, successors and assigns, of and from
any or all actions, causes of action, suits, debts, dues, sums of money,
accounts, claims, demands, covenants, contracts, controversies, promises,
agreements, damages, attorneys' fees, costs and expenses of suit, obligations,
liabilities and judgments, of whatever kind or nature, known or unknown, now
existing or which may develop in the future, in law or in equity, which any of
the Celsion Releasors ever had against Volk, now has or which any of the Celsion
Releasors hereafter can, shall or may have, upon or by reason of any act,
omission, matter, cause or thing whatsoever, from the beginning of time through
the date of this Release, except for those arising under or with respect to the
Agreement.

                  2. SPENCER J. VOLK ("Volk") for and in consideration of the
execution by the Corporation of the Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, for
himself and his heirs, personal representatives, executors, administrators,
successors and assigns (collectively the "Volk Releasors"), does hereby
irrevocably and unconditionally remise, release, acquit, exonerate and forever
discharge the Corporation and its directors, officers, employees, stockholders,
agents, attorneys and trustees, of and from any or all actions, causes of
action, suits, debts, dues, sums of money, accounts, claims, demands, covenants,
contracts, controversies, promises, agreements, damages, attorneys' fees, costs
and expenses of suit, obligations, liabilities and judgments, of whatever kind
or nature, known or unknown, now existing or which may develop in the future, in
law or in equity, which any of the Volk Releasors ever had against the
Corporation, now has or which any of the Volk Releasors hereafter can, shall or
may have, upon or by reason of any act, omission, matter, cause or thing
whatsoever, from the beginning of time through the date of this Release, except
for those arising under or with respect to the Agreement.

<PAGE>

                  IN WITNESS WHEREOF, the parties have hereunto set their
respective hands and seals as of the date and year set forth below.

ATTEST/WITNESS:                     CELSION CORPORATION

                                    By: /s/ Augustine Y. Cheung (SEAL)
------------------------------          -----------------------
                                    Title: President & CEO

                                    October _____, 2001

                                     /s/Spencer J. Volk (SEAL)
------------------------------       ------------------
                                     Spencer J. Volk

                                     October 15, 2001

<PAGE>

STATE OF MARYLAND

COUNTY OF BALTIMORE, to wit:

                  I hereby certify that on this _____ day of
___________________, 2001, before me the subscriber, a Notary Public of the
State of Maryland, in and for the County aforesaid, personally appeared
______________________, in his capacity as ______________________ of Celsion
Corporation, and he acknowledged that he executed the foregoing Release for the
purposes therein contained.

                  IN WITNESS WHEREOF, I hereto set my hand and official seal.

                                           ------------------------------------
                                           Notary Public

                                           My Commission Expires: ______________

STATE OF MARYLAND

COUNTY OF MONTGOMERY, to wit:

                  I hereby certify that on this 15th day of October, 2001,
before me the subscriber, a Notary Public of the State of Maryland, in and for
Montgomery County, personally appeared Spencer J. Volk, and he acknowledged that
he executed the foregoing Release for the purposes therein contained.

                  IN WITNESS WHEREOF, I hereto set my hand and official seal.

                                           /s/ Maureen Conahan Diaz
                                           ---------------------------
                                           Notary Public

                                           My Commission Expires: July 6, 2004EXHIBIT 10.53

                            ASSET PURCHASE AGREEMENT

                                     BETWEEN

                              NEXGEN BACTERIUM INC.

                              A PANAMANIAN COMPANY

                                   ("Seller")

                                       and

                             THE BIO BALANCE CORP.,

                             a Delaware corporation

                                   ("Buyer"),

                          a wholly owned subsidiary of
                       New York Health Care, Inc. ("NYHC")

                           Dated as of August 11, 2003

          =============================================================
<TABLE>
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                                     TABLE OF CONTENTS

<S>                                                                                 <C>
Recital                                                                               5

Article 1.   SALE OF ASSETS; . . . . . . . . . . . . . . . . . . . . . . . . . . .    5

        1.1   Purchase and Sale. . . . . . . . . . . . . . . . . . . . . . . . . .    5

        1.2   Complete Transfer  . . . . . . . . . . . . . . . . . . . . . . . . .    5

        1.3.   No Assumption of Liabilities  . . . . . . . . . . . . . . . . . . .    6

Article 2.   PAYMENT AND BUYBACK RIGHT . . . . . . . . . . . . . . . . . . . . . .    6

        2.1   Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . .    6

        2.2   Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6

Article 3.   CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6

        3.1   Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . .    6

Article 4.   REPRESENTATIONS AND WARRANTIES OF SELLER. . . . . . . . . . . . . . .    6

        4.1   Organization and Standing  . . . . . . . . . . . . . . . . . . . . .    6

        4.2   Power and Authorization  . . . . . . . . . . . . . . . . . . . . . .    6

        4.3    Title to Assets; Intellectual Property  . . . . . . . . . . . . . .    6

<PAGE>
        4.4    Conflicting Agreements  . . . . . . . . . . . . . . . . . . . . . .    8

        4.5    Shareholdings . . . . . . . . . . . . . . . . . . . . . . . . . . .    8

        4.6    Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8

        4.7    Governmental Authorizations and Regulations . . . . . . . . . . . .    8

        4.8    Manufacturing and Technology Rights . . . . . . . . . . . . . . . .    8

        4.9   Taxes  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    8

        4.10   Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    9

        4.11   Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . .    9

Article 5.   REPRESENTATIONS AND WARRANTIES OF BUYER . . . . . . . . . . . . . . .    9

        5.1    Organization and Standing . . . . . . . . . . . . . . . . . . . . .    9

        5.2    Power; Authorization  . . . . . . . . . . . . . . . . . . . . . . .    9

        5.3    Capitalization  . . . . . . . . . . . . . . . . . . . . . . . . . .    9

        5.4    Shares Validly Issued . . . . . . . . . . . . . . . . . . . . . . .    9

        5.5    Conflicting Agreements  . . . . . . . . . . . . . . . . . . . . . .    9

        5.6    Litigation  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

        5.7    Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

        5.8    Financial Statements  . . . . . . . . . . . . . . . . . . . . . . .   10

Article 6.   CLOSING CONDITIONS OF SELLER  . . . . . . . . . . . . . . . . . . . .   10

        6.1    Material Adverse Change . . . . . . . . . . . . . . . . . . . . . .   10

        6.2    Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   10

        6.3     License Agreement  . . . . . . . . . . . . . . . . . . . . . . . .   10

Article 7.   CLOSING CONDITIONS OF BUYER . . . . . . . . . . . . . . . . . . . . .   10

<PAGE>
        7.1    Satisfactory Due Diligence; Material Adverse Change . . . . . . . .   10

        7.2    Consents, Approvals and Waivers . . . . . . . . . . . . . . . . . .   11

        7.3    Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

        7.4    Proceedings and Documents . . . . . . . . . . . . . . . . . . . . .   11

Article 8    INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . .   11

        8.1    Seller Indemnity  . . . . . . . . . . . . . . . . . . . . . . . . .   11

        8.2    Buyer Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . .   11

        8.3    Indemnification Claims  . . . . . . . . . . . . . . . . . . . . . .   12

        8.4    Defense of Third Party Actions  . . . . . . . . . . . . . . . . . .   12

        8.5    Survival of Representations and Warranties  . . . . . . . . . . . .   13

        8.6    Threshold . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

Article 9.   POST-CLOSING COVENANTS AND RESTRICTIONS   . . . . . . . . . . . . . .   13

        9.1    Further Assurances  . . . . . . . . . . . . . . . . . . . . . . . .   13

        9.2    Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . .   13

        9.3  Noncompetition  . . . . . . . . . . . . . . . . . . . . . . . . . . .   13

        9.4   Lock-Up Agreement  . . . . . . . . . . . . . . . . . . . . . . . . .   14

        9.5   Legend on Stock Certificate  . . . . . . . . . . . . . . . . . . . .   14

Article 10.  MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

        10.1   Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . .   14

        10.2   Waivers; Cumulative Remedies  . . . . . . . . . . . . . . . . . . .   15

        10.3   Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15

        10.4   Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15

        10.5   Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . . . .   15

<PAGE>
        10.6   Expenses  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   15

        10.7   Severability  . . . . . . . . . . . . . . . . . . . . . . . . . . .   15

        10.8   Title and Headings  . . . . . . . . . . . . . . . . . . . . . . . .   16

        10.9   Successor and Assigns . . . . . . . . . . . . . . . . . . . . . . .   16

        10.10   Rights of Third Parties  . . . . . . . . . . . . . . . . . . . . .   16

        10.11   Publicity  . . . . . . . . . . . . . . . . . . . . . . . . . . . .   16

        10.12   Entire Agreement; Amendment  . . . . . . . . . . . . . . . . . . .   16

        10.13   Disclosure of Information  . . . . . . . . . . . . . . . . . . . .   16
..
EXHIBITS . . . . . . . . . . . . . . . . . .

        Exhibit A   Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . .   18

        Exhibit B   Confidentiality Agreements . . . . . . . . . . . . . . . . . .   19

        Exhibit C   Legal Opinions of Counsel to Seller  . . . . . . . . . . . . .   20
</TABLE>

                            ASSET PURCHASE AGREEMENT

This  ASSET  PURCHASE  AGREEMENT  is made and entered into as of August 11, 2003
(the  "Effective  Date")  by  and  between  NexGen  Bacterium Inc., a Panamanian
company  ("Seller"); and The Bio Balance Corp., a Delaware corporation ("Buyer")
which  is  a  wholly-owned  subsidiary  of  New York Health Care, Inc. ("NYHC").
RECITALS

A.   The  Seller  is engaged in the research and/or development and/or promotion
     and/or marketing and/or sale of (i) probiotic bacteria; (ii) live microbial
     food supplements ("Supplement") and/or the technology for their manufacture
     and/or  preservation;  (iii)  novel probiotic bacterial strains of Bacillus
     subtilis  HE  and  Bacillus  licheniformis,  including, in particular, ATCC
     deposited  strains  PTA-5310 and PTA-5311, which exhibit superior probiotic
     activity  as  compared to Biosporin, pharmaceutical compositions, foodstuff
     and  feedstuff containing same and use thereof in the treatment of diseases
     and  disorders  which  may  benefit from probiotic treatment as well as use
     thereof  as  pharmaceutical  carriers;  ((i)-(iii)  collectively,  the
     "Technology").

B.   The  Seller  claims  and represents that the Supplement benefits the health
     and  wellbeing of humans by restoring and/or improving intestinal microbial
     balance.

<PAGE>
C.   The  Supplement is not currently being manufactured for commercial purposes
     but  is  available  in  limited  quantities  for testing and other research
     purposes  by  the  Seller  under  the  laboratory  name  "BSL  Plus".

D.   The  Seller  has  entered  into  this Agreement with the Buyer, pursuant to
     which  all rights and interest in and/or related to the Technology, as well
     as  all other associated, ancillary and derivative rights shall be sold and
     transferred to Buyer, subject to the terms and conditions herein contained.

                                    AGREEMENT

     NOW THEREFORE the parties to this Agreement, hereby agree as follows:

ARTICLE 1.   SALE OF ASSETS

1.1     PURCHASE AND SALE. Subject to the terms and conditions contained herein,
Buyer  agrees  to  buy  and  Seller  agrees  to  sell those certain tangible and
intangible  assets,  contracts,  rights  and  properties,  including  without
limitation,  the Technology and related Intellectual Property Rights (as defined
in  section  4.3.1  below),  all  as  described  in  Exhibit A to this Agreement
(collectively,  the  "Assets").

1.2     COMPLETE  TRANSFER.  Seller expressly agrees that the sale of the Assets
under this Agreement constitutes a complete transfer of all of its rights, title
and
interest  with  respect  to  the  Assets,  and that Seller reserves no rights to
license,  manufacture,  market  or  otherwise  transfer  the  Assets.

1.3     NO  ASSUMPTION  OF  LIABILITIES. This Agreement does not transfer, Buyer
does
not assume, and Buyer expressly disclaims any and all liabilities, costs, debts,
claims  and  obligations  of  Seller  relating to the Assets or otherwise. Buyer
shall have no obligation with respect to any obligations of Seller, whether such
obligations  arose  prior  or  subsequent  to  the  Closing  Date.

ARTICLE 2.   PAYMENT  AND  BUYBACK  RIGHT.

2.1     PURCHASE  PRICE.  Upon  the  terms  and subject to the conditions herein
contained,  in
reliance  upon  the  representations, warranties and agreements of the Seller as
herein  contained,  and  in  consideration of the sale, assignment, transfer and
delivery  to  the  Buyer  of the Assets, the Buyer will, upon the closing as set
forth  in  Article  3,  deliver  to  Seller  stock  certificates representing an
aggregate  of  1,000,000  shares  of  unregistered  common  stock  of  NYHC (the
"Shares") as well as the sum of $250,000  (collectively, the "Purchase Price" or
the  "Consideration").

2.2     TAXES.  Seller  shall  be  responsible  for  any  and all sales or other
transaction
taxes, sales, income, capital gains, duties and other similar charges payable in
connection  with  the  sale  of  the  Assets  or  the  transactions and payments
contemplated  hereby.

<PAGE>
ARTICLE 3.   CLOSING.

3.1     CLOSING  DATE.  Subject  to the fulfillment of the closing conditions as
set  forth  in
articles 6 and 7 below, the closing of the transactions contemplated herein (the
"Closing")  shall be held at the offices of Buyer's attorney on August 11, 2003.

ARTICLE 4.   REPRESENTATIONS  AND  WARRANTIES  OF  SELLER.

Seller  represents  and  warrants  to  Buyer  as  follows:

4.1     ORGANIZATION  AND  STANDING.  Seller  represents  that  it  is  a
corporation  organized,  validly existing and in good standing under the laws of
Panama.

4.2     POWER  AND  AUTHORIZATION.  Seller  has  all  requisite  legal power and
authority to enter into and perform this Agreement in accordance with its terms.
The  execution  and delivery of this Agreement and the transactions contemplated
hereby  have  been validly and duly authorized by all necessary corporate action
and no further authorization or approval, whether from directors or shareholders
of  any  corporate  parties  of  Seller, or governmental bodies or otherwise, is
necessary  to  enable  Seller  to  enter  into  and  perform  the same; and this
Agreement,  when  executed and delivered, shall constitute the legal and binding
obligation  of  Seller, enforceable against Seller in accordance with its terms.

4.3     TITLE  TO  ASSETS;  INTELLECTUAL  PROPERTY.

4.3.1   GOOD  TITLE.  Seller  has good and marketable title in and to all of the
Assets  including  any patents, patent applications, service marks, trade names,
trademarks,  trademark  applications,  copyrights, copyright applications, trade
secrets,  know-how,  data  or  other proprietary or intellectual property rights
included  in  the  Assets  (collectively,  "Intellectual  Property Rights"). The
Intellectual  Property  Rights  are  not  subject to any mortgage, pledge, lien,
lease,  claim,  encumbrance,  charge,  security  interest, royalty obligation or
other  interest  or  claim of any kind or nature whatsoever, and Seller does not
license  any  component  thereof  from  a  third  party.  There  are no material
agreements  or  arrangements  between  Seller  and  any  third  party  which are
reasonably  likely  to  have  a material effect upon Seller's title to and other
rights  respecting  the  Assets.  Seller has the sole right to bring actions for
infringement  of any of the Intellectual Property Rights included in the Assets.
To  the  best  of  Seller's  knowledge,  there  has  been  no  unauthorized use,
infringement  or  misappropriation  of  any of the Intellectual Property Rights.

4.3.2   EMPLOYEES.
The  Assets  do  not  include  any  inventions  of  any of Seller's employees or
consultants made or owned prior to their appointment by Seller.   All current or
former employees and consultants have assigned in writing all of their rights in
the  Intellectual  Property Rights related to the Assets to Seller.   No current
or  former  employee  or consultant of Seller owns or has claimed an interest in
any  Intellectual  Property  Rights  related  to  the  Assets or, to the best of
Seller's  knowledge,  any  other  Intellectual  Property  Rights  directly  or
indirectly  competitive  with  those  related  to  the  Assets.

<PAGE>
4.3.3   PROTECTION  OF  OWNERSHIP INTEREST.  Seller  has taken and will take all
reasonable  security  measures to protect the secrecy, confidentiality and value
of  all  Intellectual  Property  Rights  transferred  in  accordance  with  this
Agreement.  Seller has not taken any action or, to its knowledge, failed to take
an  action  that  directly  or  indirectly  caused  the  proprietary information
contained  in  the  Assets to enter the public domain or in any way affected its
value  or  Seller's  absolute  and  unconditional ownership thereof. None of the
Intellectual  Property  Rights  is subject to escrow and none of such rights has
been  disclosed  to  any  third  party.

4.3.4   NO  LIMITATIONS  ON  ASSETS.  With  respect to the transfer of rights in
and  to  the  Assets  under  this  Agreement,  Buyer  shall  be  subject  to  no
limitations,  obligations  or  restrictions  with  regard  to the sale, license,
distribution  or  other  transfer  or exploitation of the Assets, whether in the
form  transferred  to Buyer or after modification. All rights to any tangible or
intangible  property  material  (including, but not limited to, all Intellectual
Property  Rights  in  the Assets) to the Assets and used in Seller's business as
presently conducted or currently planned by Seller, or as conducted by any prior
owner of any portion of the Assets, have been validly transferred to Seller free
of  any  adverse  claims by any such predecessor entity, or any partner, limited
partner, security holder or creditor of any such predecessor entity, and no such
property  rights remain in any such entity. Seller is under no obligation to pay
any  other  party  any royalties or other fixed or contingent amounts based upon
the  sale,  license,  distribution  or  other use or exploitation of the Assets.

4.3.5   NO  VIOLATION  OF  THIRD  PARTY  RIGHTS.  The  use of the Assets and the
Intellectual  Property  Rights in the Assets in the conduct of Seller's business
have  not  and  do  not infringe or conflict with the rights of others under any
Intellectual  Property  Rights  in  any  jurisdiction  in  the  world.

4.3.6   NO  INDEMNITY  OBLIGATIONS. Seller has not agreed to indemnify any third
party  for  or  against  any  infringement  of any Intellectual Property Rights.

4.3.7   NON  DISCLOSURE  AGREEMENTS. Seller has taken reasonable steps including
without  limitation,  entering into non-disclosure agreements with all officers,
directors, shareholders, employees and consultants involved in Seller's business
as  it  relates to the Assets to maintain the secrecy and confidentiality of and
proprietary  rights  in  the  Intellectual  Property  Rights.  Exhibit E, hereto
annexed, lists the persons who have entered into such non-disclosure agreements.
Seller  will  prior  to  the Closing Date have delivered to Buyer a true copy of
each  such  executed  agreement.

4.4     CONFLICTING AGREEMENTS.  Neither the execution nor delivery by seller of
this  Agreement  nor  compliance  by Seller with the terms and provisions hereof
will  (a)  conflict  with,  or  result  in  a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, the
bylaws  or  articles of incorporation of the Seller, any award of any Arbitrator
or  any  other  agreement,  any  regulation, law, judgment, order or the like to
which  Seller  is  subject or any Contract, or (b) result in the creation of any
lien  upon  all  or  any  of the Assets.  Seller is not a party to, or otherwise
subject to any provision contained in, any instrument evidencing indebtness, any
agreement relating thereto or any other contract or agreement which restricts or
otherwise  limits  the  transfer  of  the  Assets.

<PAGE>
4.5     SHAREHOLDINGS.  The Shares will be received for Seller's own account and
the  Seller  will  not  receive  Shares  as  an agent or nominee.  The Seller is
obtaining  the  Shares for investment purposes only and not with a view to their
further  distribution. The Seller agrees to execute and deliver to the Buyer the
usual  and  customary  investment  representation  letter  confirming  these
representations.  The  aforementioned  notwithstanding the Seller may distribute
the  its  Shares  to  its own shareholders, and may also direct a portion of the
shares  to  its  officers,  employees,  consultants  and  advisors.

4.6     LITIGATION.  No  action, suit, proceeding or investigation is pending or
threatened against Seller: (a) which questions the validity of this Agreement or
the  right of Seller to enter into this Agreement or seeks to prevent any of the
transactions  contemplated  under this Agreement, (b) which is reasonably likely
to  have  a  material  adverse  effect  on  the Assets, (c) which challenges the
ownership  or  use,  in  any respect, of the Assets, or (d) which challenges the
rights  of  Seller  under  or  the  validity of any of the Intellectual Property
Rights.  There  is  no judgment, decree, injunction, rule or order of any court,
governmental  department,  commission  agency,  instrumentality or Arbitrator or
other  similar  ruling outstanding against Seller relating to the Assets or this
transaction.  No  action,  suit,  proceeding  or  investigation  is  pending  or
threatened  by  Seller  against  any  third  party  relating  to  the  Assets.

4.7     GOVERNMENTAL  AUTHORIZATIONS AND REGULATIONS. Seller is not in violation
of  any  laws,  material  governmental  orders,  rules  or  regulations, whether
federal,  state,  local  or  foreign, to which Seller or the Assets are subject.
Seller will prior to the Closing Date have delivered to Buyer a true and correct
list  of all licenses, franchises, permits and other governmental authorizations
held by Seller that are material in connection with Seller's business related to
the  ownership  and  use  of  the  Assets.

4.8     MANUFACTURING  AND  TECHNOLOGY  RIGHTS. Seller has not granted rights to
manufacture,  publish,  produce,  assemble,  license  or  sell  the Intellectual
Property  Rights  or any of its technology to any person and is not bound by any
agreement  which  affects  Seller's  exclusive  right  to  manufacture, publish,
produce, assemble, license, distribute or sell the Intellectual Property Rights.

4.9     TAXES.  There  are no tax liens against the Assets and there is no basis
for  any  such
lien.

4.10    BROKERAGE.  There  are  no  claims  for  brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this  Agreement  based  on  any arrangement or agreement made by or on behalf of
Seller.

4.11    FULL  DISCLOSURE.  This  Agreement,  the  Exhibits hereto, and all other
documents  delivered  by  Seller  to  Buyer  or  their  attorneys  or  agents in
connection herewith or therewith or with the transactions contemplated hereby or
thereby,  when  taken  as  a  whole,  do  not  contain  any

<PAGE>
untrue  statement of a material fact nor, to Seller's knowledge, omit to state a
material  fact  necessary  in  order  to make the statements contained herein or
therein  not  misleading.

ARTICLE 5.   REPRESENTATIONS  AND  WARRANTIES  OF  BUYER.

Buyer  represents  and  warrants  to  Seller  as  follows:

5.1     ORGANIZATION  AND  STANDING.  Buyer  is  a  corporation  duly organized,
validly  existing  and  in good standing under the laws of Delaware.  Buyer is a
wholly-owned  subsidiary  of  NYHC.

5.2     POWER;  AUTHORIZATION. The terms and conditions hereof, and particularly
as they relate to the Shares and the registration thereof, require acceptance by
the  Board  of  Directors  of  NYHC.  Upon  said  acceptance:

5.2.1   Buyer  shall  have all requisite legal power and authority to enter into
and  perform  this
Agreement  in  accordance  with  its  terms.

5.2.2   The  execution  and  delivery  of  this  Agreement  and the transactions
contemplated hereby shall have been validly and duly authorized by all necessary
corporate  action on the part of Buyer and no further authorization or approval,
whether  from  directors  or  shareholders  of  Buyer  or governmental bodies or
otherwise,  shall  be  necessary  to  enable Buyer to enter into and perform the
same.

5.2.3   This  Agreement,  when  executed  and  delivered,  shall  constitute the
legal  and  binding obligation of Buyer, enforceable against Buyer in accordance
with  its  terms.

5.3     CAPITALIZATION.  As  of March 31, 2003, NYHC's  authorized capital stock
     consisted  of 100,000,000 shares of common stock, par value $.01 per share,
     of which 23,943,821 shares are issued and outstanding, and 5,000,000 shares
     of  convertible preferred stock, $.01 par value per share, of which 590,375
     preferred  shares  are  issued  and  outstanding.

5.4     SHARES  VALIDLY ISSUED. When issued in compliance with the provisions of
this Agreement, the Shares will be validly issued, fully paid and nonassessable,
and  will  be  free  of  any  liens or encumbrances; provided, however, that the
Shares  may  be  subject  to  restrictions  on transfer as provided by the terms
herein  contained and/or under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is proposed.

5.5     CONFLICTING  AGREEMENTS.  Neither the execution nor delivery by Buyer of
this Agreement nor compliance by Buyer with the terms and provisions hereof will
conflict  with, or result in a breach of (a) the terms, conditions or provisions
of,  or constitute a default under, or result in any violation of, the bylaws or
articles  of  incorporation of Buyer or any agreement to which Buyer is a party,
which  would  prevent any of the transactions contemplated under this Agreement,
or  (b)  any  regulation,  law,  judgment,  order  or the like to which Buyer is
subject,  the

<PAGE>
default or violation of which would prevent any of the transactions contemplated
under  this  Agreement.

5.6     LITIGATION.  No  action, suit, proceeding or investigation is pending or
threatened  against  Buyer which questions the validity of this Agreement or the
right  of  Buyer  to  enter  into  this Agreement or seeks to prevent any of the
transactions  contemplated  under  this  Agreement.

5.7     BROKERAGE.  There are no claims for brokerage commissions, finders' fees
or similar compensation in connection with the transactions contemplated by this
Agreement  based  on any arrangement or agreement made by or on behalf of Buyer.

5.8     FINANCIAL  STATEMENTS.  Buyer  has  delivered to Seller copies of NYHC's
Form  10-Q report (unaudited balance sheet and unaudited statement of income and
cash  flows for the three-month periods ending March 31, 2003 and June 30, 2003)
and its Form 10-K report for the year ended December 31, 2002 (collectively, the
"Financial  Statements").  The  Financial  Statements,  together  with any notes
thereto,  have  been  prepared  in accordance with generally accepted accounting
principles  applied  on  a  consistent  basis  throughout the periods indicated,
except  as  disclosed  therein,  and  present fairly the financial condition and
position  of  Buyer  as  at December 31, 2002, March 31, 2003 and June 30, 2003;
provided, however, that the unaudited financial statements are subject to normal
recurring  year  end  audit adjustments (which are not expected to be material),
and  do  not  contain all footnotes required under generally accepted accounting
principles.

ARTICLE 6. CLOSING CONDITIONS OF SELLER. Seller's obligations to sell the Assets
are  subject  to the fulfillment by Buyer on or prior to the Closing Date of all
of  the  conditions  set  forth in this Section 6. Buyer acknowledges and agrees
that Seller shall not owe Buyer any amount for a failure of the closing to occur
as  a  result  of a failure by Buyer to fulfill any closing condition of Seller.

6.1     MATERIAL  ADVERSE  CHANGE.  The  representations  and warranties made by
Buyer  in  Section  5  above  shall  be true and correct as of the Closing Date.

6.2     COVENANTS.  All  covenants,  agreements and conditions contained in this
Agreement  to  be  performed by Buyer on or prior to the Closing Date shall have
been  performed  or  complied  with  in  all  respects.

6.3     LICENSE  AGREEMENT.  Buyer  shall have executed the License Agreement in
the  form  hereto  appended  as  Exhibit  D.

ARTICLE 7.   CLOSING  CONDITIONS  OF  BUYER. Buyer's obligations to purchase the
Assets  are subject to the fulfillment by Seller on or prior to the Closing Date
of  all  of  the conditions set forth in this Section 7, and Buyer shall not owe
Seller any amount for a failure of the closing to occur as a result of a failure
by  Seller  to  fulfill  any  closing  condition  of  Buyer.

7.1     SATISFACTORY  DUE  DILIGENCE;  MATERIAL  ADVERSE  CHANGE.

<PAGE>
Buyer  shall  be  satisfied in its sole discretion: (a) that the representations
and  warranties made by Seller in Section 4 above are true and correct as of the
Closing  Date;  (b)  that  any  matters which Buyer deems to be unacceptable and
which  have  been  specified  in writing to Seller have been remedied to Buyer's
satisfaction;  and  (c)  with  the results of its business, technical, legal and
financial review of the books, records, agreements and other legal documents and
business  organization  of  Seller.

7.2     CONSENTS, APPROVALS AND WAIVERS. Seller shall have obtained, in a manner
satisfactory  to Buyer and its counsel, any and all approvals, consents, permits
and  waivers  and  made  all  filings  necessary or appropriate for the sale and
transfer  of  the  Assets  under  this  Agreement.

7.3     COVENANTS.  All  covenants,  agreements and conditions contained in this
Agreement  to  be performed by Seller on or prior to the Closing Date shall have
been  performed  or  complied  with  in  all  respects.

7.4     PROCEEDINGS  AND  DOCUMENTS.  All  corporate  and  other  proceedings in
connection  with  the  transactions  contemplated  hereby  and all documents and
instruments incident to such transactions shall be satisfactory in substance and
form to Buyer and its counsel, and Buyer and its counsel shall have received all
such  counterpart  originals  or certified or other copies of such documents and
instruments  as  they  may  reasonably  request.

ARTICLE 8.   INDEMNIFICATION.

8.1     SELLER  INDEMNITY.  Seller  agrees  to  indemnify  Buyer,  NYHC,  their
respective  affiliates, subsidiaries, and successors and hold them harmless from
and  against  any  and  all  liabilities,  losses,  damages,  costs  or expenses
(including  without  limitation  reasonable legal and expert witnesses' fees and
expenses)  incurred  by  any of them, directly or indirectly, to the extent that
such  liabilities, losses, damages, costs or expenses ("Damages") are occasioned
by,  caused  by  or  arise  out  of:

8.1.1   Any  breach  by Seller  of  any of the representations or warranties, or
failure  to perform any of the covenants, made by such Seller in this Agreement,
or  any certificate, exhibit, instrument or other document delivered pursuant to
this  Agreement.

8.1.2   Any debts,  claims,  liabilities, or obligations of Seller not expressly
assumed  by  Buyer  pursuant  to  this  Agreement.

Seller  understands  and  agrees  that  Buyer's  remedies,  as  stated above for
breaches described in subsections 8.1.1 and 8.1.2 will be inadequate and that in
the  event  of  any such breach, and without prejudice to or derogating from any
other rights or remedies due Buyer hereunder or at law, Seller shall forfeit the
Consideration  and  return  it  to  Buyer.

8.2     BUYER  INDEMNITY.  Buyer agrees to indemnify Seller and hold it harmless

<PAGE>
from  and  against  any  and all liabilities, losses, damages, costs or expenses
(including  without  limitation  reasonable legal and expert witnesses' fees and
expenses)  incurred by the Seller to the extent that such Damages are occasioned
by,  caused  by  or  arise  out  of  any breach of any of the representations or
warranties  or  failure  to  perform any of the covenants made by Buyers in this
Agreement.

8.3     INDEMNIFICATION CLAIMS. If either party hereto (the"Claimant") wishes to
assert  an  indemnification  claim  against the other party hereto, the Claimant
shall  deliver  to  the  other  party  a  written  notice  setting  forth:

8.3.1   the  specific  representation  and  warranty or covenant alleged to have
been  breached  by  such  other  party;

8.3.2   a  detailed  description  of  the facts and circumstances giving rise to
the  alleged  breach  of  such  representation  and  warranty;  and

8.3.3   a  detailed  description  of,  and  a  reasonable  estimate of the total
amount  of,  the  Damages  actually  incurred  or expected to be incurred by the
Claimant  as  a  direct  result  of  such  alleged  breach.

8.4     DEFENSE OF THIRD PARTY ACTIONS. If either party hereto (the "Indemnified
Party")  receives  notice  or otherwise obtains knowledge of the commencement or
threat  of  any  claim,  demand,  dispute,  action,  suit,  examination,  audit,
proceeding, investigation, inquiry or other similar matter that may give rise to
an  indemnification  claim  against  the  other  party hereto (the "Indemnifying
Party"),  then  the Indemnified Party shall promptly deliver to the Indemnifying
Party  a  written  notice  describing such complaint or the commencement of such
action  or  proceeding;  provided,  however,  that  the failure to so notify the
Indemnifying  Party  shall  relieve  the Indemnifying Party from liability under
this  Agreement with respect to such claim only if, and only to the extent that,
such  failure  to notify the Indemnifying Party results in the forfeiture by the
Indemnifying  Party  of  rights  and  defenses  otherwise  available  to  the
Indemnifying  Party  with  respect to such claim or the opportunity to defend or
participate  in the defense of said claim. The Indemnifying Party shall have the
right,  upon  written  notice  delivered to the Indemnified Party within 20 days
after  receipt of the notice to assume the defense of such action or proceeding,
including  the  employment of counsel reasonably satisfactory to the Indemnified
Party  and  the  payment  of  the fees and disbursements of such counsel. In the
event,  however,  that  the  Indemnifying  Party declines or fails to assume the
defense of the action or proceeding or to employ counsel reasonably satisfactory
to  the  Indemnified  Party, in either case within such 20 day period, then such
Indemnified  Party may employ counsel, reasonably acceptable to the Indemnifying
Party,  to  represent  or  defend  it  in  any such action or proceeding and the
Indemnifying  Party  shall  pay  the  reasonable  fees and disbursements of such
counsel as incurred; provided, however, that the Indemnifying Party shall not be
required  to  pay  the  fees  and disbursements of more than one counsel for all
Indemnified  Parties  in any jurisdiction in any single action or proceeding. In
any  action  or proceeding with respect to which indemnification is being sought
hereunder,  the  Indemnified  Party  or the Indemnifying Party, whichever is not
assuming the defense of such action, shall have the right to participate in such
litigation  and  to

<PAGE>
retain  its  own  counsel at such party's own expense. The Indemnifying Party or
the  Indemnified  Party,  as  the  case  may  be,  shall  at  all  times use all
commercially  reasonable  efforts  to  keep  the  Indemnifying  Party  or  the
Indemnified  Party, as the case may be, reasonably apprised of the status of the
defense  of  any  action,  the  defense  of  which  they are maintaining, and to
cooperate  in good faith with each other with respect to the defense of any such
action.  No  Indemnified Party may settle or compromise any claim, or consent to
the  entry of any judgment with respect to which indemnification is being sought
hereunder,  without  the  prior written consent of the Indemnifying Party, which
shall  not be unreasonably withheld. The Indemnifying Party shall not settle any
claim  or  assertion,  unless  the Indemnified Party consents in writing to such
settlement,  which  consent  shall  not  be  unreasonably  withheld.

8.5     SURVIVAL  OF REPRESENTATIONS AND WARRANTIES. All of the representations,
warranties  and  indemnities  provided  under, or set forth in this Agreement or
other  document or instrument delivered pursuant to this Agreement shall survive
the  Closing  Date,  and  shall  remain  in  force  or  effect  for  a period of
forty-eight  (48)  months,  after  which  all liability of Seller and Buyer with
respect  to such representations and warranties shall thereupon be extinguished;
provided,  however,  that  if,  within  such  forty eight month period, Claimant
delivers  a  written  notice  to  the  other  party  hereto  then  the  specific
representation, warranty or indemnification claim set forth in such notice shall
survive  such  expiration date (and shall not be extinguished thereby) until the
final  disposition  of  such  specific  claim.

8.6     THRESHOLD.  Neither  the  Seller nor the Buyer shall be required to make
any  indemnification payment pursuant to Section 8.1 or 8.2, respectively, until
such  time  as  the  total  amount  of  all  Damages  that have been directly or
indirectly  suffered  or  incurred  by  an  Indemnified  Party,  or  to which an
Indemnified  Party  has  or otherwise becomes subject to, exceeds $10,000 in the
aggregate.  At  such time as the total amount of such Damages exceeds $10,000 in
the aggregate, the Indemnified Party shall be entitled to be indemnified against
the  full  amount  of  such  Damages (and not merely the portion of such Damages
exceeding  $10,000).

ARTICLE 9.   POST-CLOSING  COVENANTS.

9.1     FURTHER ASSURANCES. Seller shall not voluntarily undertake any course of
action, which interferes in any way with the rights, obtained by Buyer hereunder
or  is  otherwise  inconsistent  with  the  satisfaction  of  its obligations or
agreements  set  forth  in  this  Agreement. Seller hereby agrees not to contest
Buyer's  ownership  of  the Intellectual Property Rights or Buyer's title to the
Assets.  Seller  shall execute, acknowledge and deliver any further assignments,
conveyances  and  other  assurances,  documents  and  instruments  of  transfer,
consistent  with the terms of this Agreement, which are reasonably requested and
prepared  by  Buyer  or its counsel, and shall take any other action, consistent
with  the terms of this Agreement, that may be reasonably requested and prepared
by  Buyer  or  its counsel for the purpose of assigning, transferring, granting,
conveying,  and confirming to Buyer or reducing to its possession, any or all of
the  Assets.

9.2     CONFIDENTIALITY.  From and after the Closing Date, to the maximum extent
permitted  by  applicable  law,  all  technical,  business,  legal  and  other
information  directly  relating  to  the Assets and Intellectual Property Rights
thereto  shall  at  all  times  be  and  remain  the  sole  and

<PAGE>
exclusive  property  of Buyer. At all times after the Closing Date, Seller shall
retain  in  strictest confidence, and shall not disclose to third parties or use
for  its benefit or for the benefit of any third party, all information assigned
to Buyer under this Agreement or in any other way relating to the Assets. Seller
understands  and  agrees  that Buyer's remedies at law for a breach by Seller of
its  obligations  under this Section will be inadequate and that Buyer shall, in
the event of any such breach, be entitled to equitable relief (including without
limitation  injunctive relief and specific performance) in addition to all other
remedies  provided  under  this  Agreement or available to Buyer at law. Without
derogating  from the generality of the aforementioned or from any other right or
remedy  due  Buyer from Seller, Seller agrees that in the event of its breach of
any of its obligations under this Section 9, it shall forfeit the Consideration.

9.3     NONCOMPETITION. Without in any way derogating from Seller's undertakings
and  Buyer's  rights  pursuant  to  Sections 1.1 and 1.2 above, for and during a
period  of  five  years  immediately  following the Closing Date, Seller may not
engage  directly  or  indirectly  in  any activities involving technology and/or
products  similar to the Assets or competitive with the activities of the Buyer,
and  in  general  may not engage in research and/or development and/or promotion
and/or  marketing  and/or sales of (i) any microbial food supplements making use
of  bacillus  based  bacteria,  (ii)  other  prebiotic  or probiotic products or
technology intended to treat human or animal digestive or intestinal diseases or
disorders,  (iii) any other improvements and/or developments and/or applications
of  the  Technology  and/or  the  Intellectual  Property  Rights.

9.4     REGISTRATION  RIGHTS.  Reference  is made to Exhibit D, the Registration
Rights  Agreement,  annexed  hereto,  which  is  deemed  incorporated  herein by
reference  and  made  a  part  hereof.

9.5     DEMAND  REGISTRATION  RIGHTS.  Reference  is  made  to  Exhibit  D,  the
Registration  Rights  Agreement,  annexed  hereto,  which is deemed incorporated
herein  by  reference  and  made  a  part  hereof.

9.6     LOCK-UP  AGREEMENT.  Seller's  registration rights pursuant to the terms
of  Sections  9.4  and  9.5  above  notwithstanding,  Seller  shall  not sell or
otherwise  transfer  or dispose of the Shares for a period of 180 days following
the effective date of a registration statement in respect of the Shares or for a
period of one (1) year following the Closing Date, whichever period ends sooner.
However,  in the event that the common stock of NYHC trades at or above a  price
of  five  ($5.00) dollars per share for ten (10) days within any thirty (30) day
period,  the  said  lock-up  shall  immediately  expire.

9.7     LEGEND  ON  STOCK  CERTIFICATE.  Each  certificate  representing  Shares
issued  pursuant  to this agreement shall be endorsed with the following legend:

        THE  SHARES  EVIDENCED  BY  THIS  CERTIFICATE  ARE  SUBJECT TO AN
        AGREEMENT  BETWEEN  THE  BIO BALANCE CORP., NEW YORK HEALTH CARE,
        INC.  (THE  "COMPANY")  AND  THE HOLDER, HAVE NOT BEEN REGISTERED
        UNDER  THE  SECURITIES  ACT OF 1933, AS AMENDED ("THE "ACT"), AND
        MAY  NOT  BE  SOLD,

<PAGE>
        TRANSFERRED,  ASSIGNED  OR  HYPOTHECATED  UNLESS  THERE  IS  AN
        EFFECTIVE  REGISTRATION  STATEMENT  UNDER  THE  ACT COVERING SUCH
        SECURITIES,  THE  SALE IS MADE IN ACCORDANCE WITH RULE 144 OR ITS
        SUCCESSOR  RULE UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION
        OF  COUNSEL SATISFACTORY TO THE COMPANY THAT EXEMPTIONS FROM SUCH
        REGISTRATION  AND  FROM  THE  PROVISIONS  OF ANY APPLICABLE STATE
        "BLUE  SKY"  LAWS  ARE  AVAILABLE.

ARTICLE  10.     MISCELLANEOUS.

10.1    GOVERNING  LAW.  This  Agreement  shall  be governed by and construed in
accordance  with  the  substantive  laws of the State of New York. Any action or
proceeding  brought  by either party against the other arising out of or related
to  this  Agreement  shall be brought exclusively in a state or federal court in
New  York.

10.2    WAIVERS;  CUMULATIVE  REMEDIES.  Any waiver, consent or the like must be
in  writing.  Any  waiver by either party of any breach of this Agreement by the
other  party  shall not constitute a waiver of any other or subsequent breach of
this  Agreement.  All  remedies,  either  under  this  Agreement  or  by  law or
otherwise,  afforded  to  the  parties  hereunder  shall  be  cumulative and not
alternative.

10.3    NOTICES.  All  notices  and  other  communications required or permitted
hereunder  shall  be in writing and shall be effective upon receipt by facsimile
with  a  confirming  copy  sent by first-class mail, postage prepaid, or fifteen
(15)  days  after  deposit in the postal system by certified or registered mail,
return receipt requested, postage prepaid to the addresses first set forth below
such  other  address  as  a  party  may designate for itself by providing notice
hereunder:

      If to Seller:                        If to Buyer:
      N. Nuzzo,                            Paul Stark, Chief Business Officer
      NexGen Bacterium Inc                 The Bio Balance Corp.
      Arango- Orillac Building             16 East 34 Street Street, 7th floor
      2nd Floor                            New York, NY 10016
      East 54 Street                       Fax: (212) 679 7778
      Panama City, Panama
      Fax:                                 Jerry Braun, President
                                           New York Health Care, Inc.
                                           1850 McDonald Avenue
                                           Brooklyn, NY 11223
                                           Fax: (718) 375-4007

Copies To:
William J. Davis
Scheichet& Davis, P.C.

<PAGE>
800 Third Avenue - 29th Floor
New York, NY 10022
Fax: (212) 371-7634

10.4     AUDIT.  Each  party  shall provide the other with notice of an audit by
any  tax authority of such party's books and records, which is reasonably likely
to  relate  to  the  Assets  or  the  sale  of  the  Assets in this transaction.

10.5     ATTORNEYS'  FEES.  In  any  action  brought to construe or enforce this
Agreement,  the  prevailing party shall receive, in addition to any other remedy
to  which  it  may  be entitled, compensation for all costs incurred in pursuing
such  action,  including,  but  not  limited to, reasonable attorneys and expert
witnesses  fees  and  costs.

10.6     EXPENSES.  Except  as  otherwise  provided for herein, each party shall
bear its own expenses and legal fees incurred on its behalf with respect to this
Agreement  and  the  transaction  contemplated  hereby.

10.7     SEVERABILITY.  In  case  any  provision of this Agreement is held to be
invalid  or  unenforceable, such provision shall be deemed amended to the extent
required  to  make  it  valid and enforceable and such amended provision and the
remaining  provisions  of  this  Agreement will remain in full force and effect.

10.8     TITLE  AND  HEADINGS.  The  titles  and  headings  contained  in  this
Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation  of  this  Agreement.

10.9     SUCCESSOR AND ASSIGNS. The provisions hereof shall inure to the benefit
of  and  be  binding  upon  the  successors  and  assigns of the parties hereto.

10.10    RIGHTS  OF THIRD  PARTIES. Nothing contained in this Agreement, express
or  implied,  shall be deemed to confer any rights or remedies upon, or obligate
any  of  the  parties  hereto,  to  any  person  or  entity.

10.11    PUBLICITY. The terms of this Agreement shall be considered confidential
information  of  Parties.  All parties agree that the specific provisions hereof
shall  not  be  revealed or disclosed by it without the prior written consent of
the  other except to the extent such disclosure is required by applicable law or
regulation.

10.12    ENTIRE AGREEMENT;  COUNTERPARTS AMENDMENT. This Agreement, the Exhibits
hereto  and  the  other documents delivered pursuant hereto constitute the full,
exclusive,  complete  and entire understanding and agreement between the parties
with regard to the subject matter hereof and thereof, and supersedes and revokes
all  other  previous  discussions,  understanding  and  agreements  between  the
parties, whether oral or written, with regard to the subject matter hereof. This
Agreement  may  be  executed in two or more counterparts and all counterparts so
executed  shall  constitute  one  and  the same agreement binding on all parties

<PAGE>
hereto.  Any  term  of  this  Agreement may be amended and the observance of any
term  of  this  Agreement  may  be  waived  (either generally or in a particular
instance  and  either  retroactively  or  prospectively),  only with the written
consent  of  the  affected  party.

10.13    DISCLOSURE  OF  INFORMATION.  Seller  declares that it has received all
the  information  necessary  or  appropriate for deciding whether to receive the
Shares  as  consideration  for  the  Assets.  Seller further represents that its
officers and agents have had an opportunity to ask questions and receive answers
from  Buyer  regarding the terms and conditions pertaining to the Shares and the
business,  properties,  prospects  and financial conditions of Buyer. Seller has
arrived  at  an  independent view concerning the value of Buyer, recognizes that
the  transactions  in  which  Seller  is acquiring the Shares is occurring in an
arms'  length  transaction and is not relying upon any statements by Buyer as to
the  value  of Buyer or the Shares. Seller agrees to execute and deliver to NYHC
the  usual  and  customary  stock  subscription  agreement.

     The parties to this Agreement have caused this Agreement to be executed and
delivered  as  of  August  11,  2003

                                            /s/ Paul Stark
                                            --------------
                                            The BioBalance Corp.

                                            Printed Name:  Paul Stark
                                            Title:  Chief Business Officer
                                                   -----------------------

                                            /s/  Jerry Braun
                                            ----------------
                                            New York Health Care, Inc.

                                            Printed Name:  Jerry Braun
                                            Title:  President and Chief
                                                    -------------------
                                            Executive Officer
                                            -----------------

/s/ Michel Marechal    Norma Nuezo
--------------------------------------------------------------------------------
NexGen Bacterium Inc.

Printed Name: Michel Marechal    Norma Nuezo

Title:  General Attorneys
        -----------------

                                    EXHIBIT A

                                     ASSETS

The following assets are the subject of this Purchase Agreement:

<PAGE>
1.     All know-how possessed by the Seller in connection with novel probiotic
bacterial strains of Bacillus subtilis HE and Bacillus licheniformis, including,
in particular, ATCC deposited strains PTA-5310 and PTA-5311, which exhibit
superior probiotic activity as compared to Biosporin, pharmaceutical
compositions, foodstuff and feedstuff containing same and use thereof in the
treatment of diseases and disorders which may benefit from probiotic treatment
as well as use thereof as pharmaceutical carriers.

2.     Patent Application as attached.
3.     Any  additional patents or patent applications that may be filed relating
to the Assets.

                                    EXHIBIT B

                           Confidentiality Agreements

The following persons, natural and corporate, have entered into confidentiality
agreements, pursuant to which each such person has undertaken to maintain the
secrecy and confidentiality of and proprietary rights in the Assets and the
related Intellectual Property Rights:

Mark Olshenitsky
Dr Iryna Osipova
Dr. Iryna Sorokulova

                                    EXHIBIT C

                       Legal Opinion of Counsel to Seller
                  (to be submitted under counsel's letterhead)

I, the undersigned  _____________ , an advocate licensed to practice in
_________ hereby declare and confirm that

a.   __________________  Inc.  is  registered,  and  in  good  standing  in  the
     jurisdiction  of  __________;

b.   The  Asset Purchase Agreement (the "Agreement") dated as of August 11, 2003
     by  and  among NexGen Bacterium Inc. and The Bio Balance Corp. was executed
     by  ___________  on behalf of _________ pursuant to a resolution adopted by
     the  Board  of  Directors of ________ in accordance with the memorandum and
     by-laws  _________.  A  true  copy of such Board resolution authorizing and
     instructing  ________  to  execute  the  above-mentioned  Asset  Purchase
     Agreement  on  behalf  of  ______  is  hereto  annexed.

Respectfully,

________________

<PAGE>

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