Document:

elgo_ex1014.htm

EXHIBIT 10.14

 

 

PROMISSORY NOTE

 

	$100,000.00 	September 6, 2011

 

FOR VALUE RECEIVED, the undersigned, ENTEROLOGICS, INC., a Nevada corporation (the “Maker”), with offices at 1264 University Avenue West, Suite 404, St. Paul. Minnesota 55104, hereby promises to pay to the order of NEW YORK HEALTH CARE, INC., a New York corporation with offices at 20 East Sunrise Highway, Valley Stream, New York 11581 (the “Payee”), the principal sum of One Hundred Thousand Dollars ($100,000.00) (the “Note Amount”).

 

Maker shall pay the Note Amount, together with all accrued and unpaid interest thereon, in three (3) consecutive equal annual installments of $33,333.33 each, commencing on the first anniversary of the date of this Note, with all amounts due hereunder due and payable no later than September 1, 2014 (the “Maturity Date”), subject to acceleration as set forth herein.  Interest on the unpaid principal balance hereof shall accrue at a rate equal to Five Percent (5%) per annum and shall be payable semi-annually, in arrears, together with each installment of principal, on each six-month  anniversary of the date of this Note,
commencing March 2, 2012.  Maker shall make all payments hereunder to Payee at Payee’s address set forth above or to such other address as Payee shall direct in writing.

Maker may prepay the principal amount outstanding in whole or in part at any time without premium or penalty, provided, however, that Maker pays all accrued interest on such prepayment therewith.  If any payment hereunder shall be specified to be made on a Saturday, Sunday or other day on which banks in the State of New York are authorized not to open for business, it shall be made on the next succeeding day which is a business day.

 

Upon the failure by Maker to comply with any of its obligations under this Note, or if Maker shall be in breach of any of its representations hereunder (such failure or breach constituting an “Event of Default”), the outstanding Note Amount, together with all accrued but unpaid interest, shall immediately become due and payable at the option of Payee upon written notice to Maker. Upon the occurrence and during the continuation of an Event of Default, Payee shall have all rights and remedies provided in this Note or applicable law, all of which rights and remedies may be exercised without prior notice to Maker, all such notices being
hereby waived, except such notice as is expressly provided for hereunder or is not waivable under applicable law. All rights and remedies of Payee are cumulative and not exclusive and are enforceable, in Payee's discretion, alternatively, successively, or concurrently on any one or more occasions and in any order Payee may determine. From and during the continuation of an Event of Default, interest on the unpaid principal balance hereof shall accrue at a rate of interest equal to ten (10)  Percent (10%) per annum (the “Default Interest Rate”).  Interest shall continue to accrue at the rate provided herein on the principal balance outstanding from time to time until actually paid.  Payments received hereunder shall first be applied to the payment of any costs and expenses due and
payable to Payee hereunder, then to interest due on this Note, and then to the reduction of the principal sum due. All fees, costs and expenses as provided herein that are not paid when due shall be added to principal and shall thereafter bear interest at the Default Interest Rate.

 

Principal and interest are payable in the lawful currency of the United States of America, without and defense, set-off, counterclaim, rescission, recoupment, or deduction of any kind.

 

  

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All payments under this Note will be made without any deduction or withholding on account of any withholding tax unless deduction or withholding is required by applicable law, in which case Maker shall pay Payee such additional amount as is necessary to ensure that the net amount received by Payee on this Note shall equal the full amount it would have received had no such deduction or withholding been required.

Maker represents, warrants and covenants that (a) it is a corporation duly organized and existing under the laws of the state of Nevada, (b) the execution, issuance and delivery of this Note by Maker are within its powers and have been duly authorized by all necessary corporate action, (c)  this Note is the legal, valid and binding obligation of Maker, and is enforceable against Maker in accordance with its terms, and (d) the performance by Maker of its obligations hereunder does  not and will not result in violation of law or of the terms of Maker’s certificate of incorporation or bylaws, and does not and will not result in the breach of or constitute a default under any other document
or instrument by which Maker or its property may be bound of affected.

Maker waives presentment for payment, demand, notice of non-payment, notice of protest, and protest of this Note, and all other notices in connection with the delivery, acceptance, performance, default, dishonor, or enforcement of the payment of this Note.  All rights and remedies given by this Note are cumulative and not exclusive of any thereof or of any other rights or remedies available to Payee, and no course of dealing between Maker and Payee, or any delay or omission in exercising any right or remedy shall operate as a waiver of any right or remedy, and every right and remedy may be exercised from time to time and as often as shall be deemed appropriate by Payee.

 

Maker shall indemnify and hold Payee harmless from any and all costs, damages, losses, expenses and fees (including, without limitation, attorneys’ fees and expenses) incurred or suffered by Payee in connection with this Note, except for those costs, damages, losses, expenses and fees resulting solely from Payee’s own willful misconduct or gross negligence.

 

Maker agrees to pay all costs of collection or administration of this Note, including, without limitation, attorney's fees, which may be incurred in the collection or administration of this Note or any portion thereof.  In the event of any dispute hereunder, the prevailing party shall be entitled to recover from the non-prevailing party all costs and attorneys' fees incurred by the prevailing party in connection with such dispute.

 

It is intended that the interest rate hereunder shall never exceed the maximum rate, if any, which may be legally charged in the State of New York for loans made for loans of this nature (the “Maximum Rate”).  If the provisions for interest contained in this Note would result in a rate higher than the Maximum Rate, the interest shall nevertheless be limited to the Maximum Rate and any amounts which may be paid toward interest in excess of the Maximum Rate shall be applied to the reduction of principal, or, at the option of Payee, returned to Maker.

 

Payee may without notice transfer or assign this Note or any interest herein and may mortgage, encumber or transfer any of its rights or interest in and to this Note or any part hereof and, without limitation, each assignee, transferee and mortgagee (which may include any affiliate of Payee) shall have the right to transfer or assign its interest. Each such assignee, transferee and mortgagee shall have all the rights of Payee under this Note and shall be subject to the terms thereof. Maker may not transfer or assign its rights or obligations hereunder. This Note shall be binding upon Maker and its successors and shall inure to the benefit of Payee and its successors and assigns.

This Note may not be changed, modified or discharged orally nor may any waiver or consent be given orally hereunder, and every such change, modification, discharge, waiver or consent shall be in writing and signed by the Maker and the Payee.

This Note shall be governed, interpreted, and enforceable in accordance with the laws of the State of New York without regard to conflict of laws principles.  Maker hereby consents to the jurisdiction of the courts of the State of New York in and for the County of New York and the United States District Court for the Southern District of New York in any legal proceeding instituted against Maker to enforce any rights of Payee under this Note. Maker hereby waives any right to a trial by jury in any such legal proceeding and hereby waives any objections based on venue or forum non conveniens with respect thereto.  The undersigned agrees that this Note is, and is intended to be, an
instrument for the payment of money only, as such phrase is used in Section 3213 of the Civil Practice Law and Rules of the State of New York.

 

  

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IN WITNESS WHEREOF, this Note has been duly executed and delivered by Maker on the date first above written.

 

	 	 
ENTEROLOGICS, INC.

	 
	 	 	 	 
	 	
By: 

	/S/ Robert Hoerr	 
	 	 	Name: Robert Hoerr	 
	 	 	Title: President (principal executive officer) and Director	 
	 	 	 	 

 

 

  

3elgo_ex1015.htm

EXHIBIT 10.15

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT (“Agreement”), dated as of September 6th, 2011 (“Closing Date”), is entered into by and between Yitz Grossman, an individual with an address at 5 Dogwood Lane, Lawrence, New York 11559 (“Grossman” or
“Seller”) and The Bio Balance Corp., a Delaware corporation with an address at 20 E. Sunrise Highway Valley Stream NY 11581 (“BioBalance Corp” or “Purchaser”). Seller and Purchaser are collectively referred to as the “parties”.

 

RECITALS

 

A. Grossman is the record and beneficial owner of 33-1/3% of the issued and outstanding membership interests of BioBalance LLC, a Delaware limited liability company (“BBAL LLC”).

B. BioBalance Corp is the record and beneficial owner of 66-2/3% of the issued and outstanding membership interests of BBAL LLC.

C. Seller desires to sell and transfer to Purchaser, and Purchaser desires to purchase and acquire, all of Seller’s right, title and interest in and to all of the membership interests of BBAL LLC owned by Seller (the “Membership Interests”), all on the terms and provisions and subject to the conditions set forth herein.

 

NOW, THEREFORE, the parties agree as follows:

 

ARTICLE I

 

AGREEMENT TO PURCHASE; PURCHASE PRICE

 

1.1 Sale and Purchase of Membership Interests; Consideration.  Effective as of the Closing Date, Purchaser hereby purchases from Seller, and Seller hereby transfers, assigns and sells to Purchaser, all of Seller’s right, title and interest in and to the Membership Interests, free and clear of all liens, claims or encumbrances of any nature, or rights of any third parties other than BioBalance Corp
(“Liens”), in consideration for Purchaser’s undertaking to indemnify Seller for up to Seventy Five Thousand Dollars ($75,000) of Grossman Indemnification Expenses (as defined below). Ownership of the Membership Interests shall vest in Purchaser effective as of the Closing Date.

 

  

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For purposes of this Agreement, “Grossman Indemnification Expenses” shall mean legal fees and related legal expenses paid or incurred by Grossman resulting from Grossman’s prior activities on behalf of BioBalance Corp. in his capacity as an officer of, or consultant to, BioBalance Corp, and not otherwise reimbursed to Grossman out of insurance proceeds or otherwise, as evidenced by documentation reasonably acceptable to Purchaser; provided, however, that in no event shall Purchaser be liable to
reimburse Grossman for more than $75,000 of Grossman Indemnification Expenses in the aggregate.

 

1.2 Obligations of Seller.  On the Closing Date, Seller shall take all actions and do all things necessary to, sell, transfer, assign, convey and deliver the Membership Interests to Purchaser, free and clear of any and all Liens, and to consummate the transactions contemplated hereby, including, without limitation, delivering or causing to be delivered to Purchaser such certificates, documents and instruments as Purchaser may reasonably request.

 

ARTICLE II

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller hereby represents and warrant to Purchaser as follows:

 

2.1 Ownership of Membership Interests; No Liens on Membership Interests. Seller owns, beneficially and of record, 33-1/3% of the membership interests of the BBAL LLC. Seller holds his Membership Interests free and clear of all Liens. None of the Membership Interests will be transferred under this Agreement in violation of any rights of any person or entity. There are no options, warrants, calls, subscriptions, other similar rights, agreements or commitments to acquire from Seller any of the Membership Interests; none of the
Membership Interests are subject to any restrictions on transfer except as set forth in the Operating Agreement of BBAL LLC, dated August 12, 2008 and applicable securities laws; and Seller has the full power and authority to convey, and will convey to Purchaser on the Closing Date, good and marketable title to the Membership Interests, free and clear of all Liens.

 

2.2 Authority; Enforceability.  Seller has the requisite legal capacity to execute, deliver and perform this Agreement.  This Agreement constitutes the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with its terms.

 

2.3 No Conflict. The execution, delivery and performance of this Agreement by Seller and the consummation of the transactions contemplated hereby do not and will not violate any agreement to which Seller is a party or by which Seller may be bound.

 

2.4 Consents.  No notice to or authorization, consent or approval or other action (including, without limitation, the grant of any waiver) of any person or entity is required to be obtained by Seller in connection with (i) the sale to Purchaser of the Membership Interests; and (ii) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby and thereby.

 

  

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ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser hereby represents and warrant to Seller as follows:

 

3.1 Authority; Enforceability.  Purchaser has the requisite limited liability authority to execute, deliver and perform this Agreement.  This Agreement constitutes the legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with its terms.

 

3.2 No Conflict. The execution, delivery and performance of this Agreement by Purchaser and the consummation of the transactions contemplated hereby do not and will not violate any agreement to which Purchaser is a party or by which Purchaser may be bound.

 

3.3 Consents.  No notice to or authorization, consent or approval or other action (including, without limitation, the grant of any waiver) of any person or entity is required to be obtained by Purchaser in connection with (i) the sale to the Purchaser of the Membership Interests; and (ii) the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby and thereby.

 

ARTICLE IV

 

SURVIVAL

 

4.1 Survival of Representations and Warranties.  All representations, warranties, covenants and agreements of the parties contained in this Agreement shall survive the closing of the transactions contemplated hereby.

 

ARTICLE V

 

MISCELLANEOUS

 

5.1 Amendment.  This Agreement may not be modified, amended, altered or supplemented, except by a written agreement executed by each of the parties hereto.

 

5.2 Entire Agreement.  This Agreement, and the instruments and other documents delivered pursuant to this Agreement, contain the entire understanding and agreement of the parties relating to the subject matter hereof and supersede all prior and/or contemporaneous understandings and agreements of any kind and nature (whether written or oral) among the parties with respect to such subject matter, all of which are merged herein.

 

5.3 Notices.  All notices, demands, consents, requests, instructions and other communications to be given in connection with the transactions contemplated hereby shall be in writing and shall be delivered to the parties at their respective addresses set forth in the introductory paragraph of this Agreement.

 

5.4 Governing Law.

 

THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THAT STATE, WITHOUT REGARD TO ANY OF ITS PRINCIPLES OF CONFLICTS OF LAWS OR OTHER LAWS WHICH WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.  THIS AGREEMENT SHALL BE CONSTRUED AND INTERPRETED WITHOUT REGARD TO ANY PRESUMPTION AGAINST THE PARTY CAUSING THIS AGREEMENT TO BE DRAFTED.

 

  

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5.5 Severability.  The parties agree that should any provision of this Agreement be held to be invalid, illegal or unenforceable in any jurisdiction, that holding shall be effective only to the extent of such invalidity, illegally or unenforceability without invalidating or rendering illegal or unenforceable the remaining provisions hereof, and any such invalidity, illegally or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.  It is
the intent of the parties that this Agreement be fully enforced to the fullest extent permitted by applicable law.

 

5.6 Binding Effect.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors, assigns, heirs, estate and legal representatives.

 

5.7 Counterparts.  This Agreement may be executed by fax or other electronic signatures and in counterparts, each of which when executed shall be deemed to be an original, and all of which, when taken together, shall constitute one and the same document.  This Agreement shall become effective when one or more counterparts, taken together, shall have been executed and delivered by all of the parties.

 

5.8 Further Assurances.  After the Closing, each of the parties hereto shall execute such documents and other instruments and perform such further acts as may be required or reasonably requested by any other party hereto to carry out the provisions hereof and the transactions contemplated hereby.

 

  

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IN WITNESS WHEREOF, the parties hereto have executed this Membership Interest Purchase Agreement on the date first above written.

 

	 	 
SELLER:

	 
	 	 	 	 
	
 

	
By: 

	 
/S/ Yitz Grossman

	 
	 	 	Yitz Grossman	 
	 	 	 	 
	 	PURCHASER:	 
	 	THE BIO BALANCE CORP.	 
	 	 	 	 
	 	By:	/S/ Murry Englard	 
	 	 	Name: Murry Englard	 
	 	 	Title: President	 
	 	 	 	 

[SIGNATURE PAGE – MEMBERSHIP INTEREST PURCHASE AGREEMENT]

 

  

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