Asset Purchase Agreement

Asset Purchase Agreement

by Liberty Group Holdings Inc
December 2nd, 1999








                            ASSET PURCHASE AGREEMENT

                                  by any among

                             LIBERTY FOOD GROUP, LLC
                                    as Buyer

                                       and

                             FERRO FOODS CORPORATION
                                    as Seller

                                FRANK FERRO, SR.

                                       and

                                  FRANK GAMBINO



                                November 23, 1999




                                 TABLE OF CONTENTS


     ARTICLE I
     SALE OF ASSETS . . . . . . . . . . . . . . . . . . . . . . 1
                    Section 1.1  Assets to be Sold. . . . . . . 1
                    Section 1.2  Excluded Assets. . . . . . . . 3
                    Section 1.3  Reorganization . . . . . . . . 3

     ARTICLE II
     EXCLUSION OF LIABILITIES . . . . . . . . . . . . . . . . . 3
                    Section 2.1  Liabilities Not Assumed by the
            Buyer . . . . . . . . . . . . . . . . . . . . . . . 3

     ARTICLE III
     CLOSING; PURCHASE PRICE AND PAYMENT. . . . . . . . . . . . 4
                    Section 3.1  Closing. . . . . . . . . . . . 4
                    Section 3.2  Purchase Price . . . . . . . . 4
                    Section 3.3  Payment of Purchase Price. . . 5
                    Section 3.4  Deliveries . . . . . . . . . . 5

     ARTICLE IV
     REPRESENTATIONS AND WARRANTIES OF THE SELLER . . . . . . . 7
                    Section 4.1  Due Incorporation and
            Qualification . . . . . . . . . . . . . . . . . . . 7
                    Section 4.2  Subsidiaries . . . . . . . . . 7
                    Section 4.3  Authority to Execute and
            Perform Agreements. . . . . . . . . . . . . . . . . 7
                    Section 4.4  Compliance . . . . . . . . . . 8
                    Section 4.5  Tax Matters. . . . . . . . . . 8
                    Section 4.6  No Loan Agreements . . . . . . 8
                    Section 4.7  Litigation . . . . . . . . . . 8
                    Section 4.8  Agreements . . . . . . . . . . 8
                    Section 4.9  Environmental and Other
            Permits and Licenses. . . . . . . . . . . . . . . . 9
                    Section 4.10  Purchased Assets. . . . . . . 9
                    Section 4.11  Liens . . . . . . . . . . . .10
                        Section 4.12 Inventory; Accounts
                         Receivable; Equipment; Records;
                           Intellectual Property. . . . . . . .10
                    Section 4.13  Employee Matters. . . . . . .10
                    Section 4.14  Employee Benefit Plans. . . .10
                    Section 4.15  Bulk Transfer . . . . . . . .11
                    Section 4.16  Full Disclosure . . . . . . .11
                    Section 4.17  No Broker . . . . . . . . . .11
                    Section 4.18  Investment Intent . . . . . .12

     ARTICLE V
     REPRESENTATIONS AND WARRANTIES OF THE BUYER. . . . . . . .13
                          Section 5.1 Incorporation and
                                 Qualification13
                    Section 5.2  Authority to Execute and
            Perform Agreements. . . . . . . . . . . . . . . . .13
                    Section 5.3 The Shares. . . . . . . . . . .13
                    Section 5.4  No Broker. . . . . . . . . . .13

     ARTICLE VI
     COVENANTS AND AGREEMENTS . . . . . . . . . . . . . . . . .14
                    Section 6.1  Expenses of Sale . . . . . . .14
                    Section 6.2  Taxes. . . . . . . . . . . . .14
                    Section 6.3  Telephone Numbers. . . . . . .14
                    Section 6.4  Change of Name . . . . . . . .14

     ARTICLE VII
     BUYER'S CONDITIONS TO CLOSING. . . . . . . . . . . . . . .14
                    Section 7.1 Representations and Warranties.14
                    Section 7.2  Covenants. . . . . . . . . . .15
                    Section 7.3  Bulk Transfer. . . . . . . . .15
                    Section 7.4  Consents . . . . . . . . . . .15

     ARTICLE VIII
     RESTRICTIVE COVENANTS. . . . . . . . . . . . . . . . . . .15
                    Section 8.1  Confidential Information . . .15
                    Section 8.2  Non-Competition. . . . . . . .15
                    Section 8.3  Rights and Remedies Upon
            Breach16
                    Section 8.4  Severability of Covenants. . .16
                          Section 8.5 Enforceability in
                                 Jurisdictions16

     ARTICLE IX
     SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . .16
                    Section 9.1  Survival of Representations
            and Warranties. . . . . . . . . . . . . . . . . . .16

     ARTICLE X
     INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . .17
                    Section 10.1  Obligation of the Seller to
            Indemnify . . . . . . . . . . . . . . . . . . . . .17
                    Section 10.2  Notice to Indemnifying Party.18

     ARTICLE XI
     MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . .18
                    Section 11.1  Notices . . . . . . . . . . .18
                    Section 11.2  Entire Agreement. . . . . . .19
                    Section 11.3  Waivers and Amendments. . . .19
                    Section 11.4  Governing Law . . . . . . . .19
                    Section 11.5  Consent to Jurisdiction . . .19
                    Section 11.6  Assignment. . . . . . . . . .19
                    Section 11.7  Counterparts and Facsimile. .20
                    Section 11.8 Severability of Provisions . .20
                    Section 11.9  Exhibits and Schedules. . . .20
                    Section 11.10  Headings . . . . . . . . . .20

     EXHIBITS

     EXHIBIT A      -      Bill of Sale and Assignment
     EXHIBIT B      -      Release Agreement
     EXHIBIT C      -      Lock-Up Letter
     EXHIBIT D      -      Voting Trust and Proxy Statement
     EXHIBIT E      -      Escrow Agreement
     EXHIBIT F      -      Creditors
     EXHIBIT F-1    -      Bulk Sale Notice


     SCHEDULES

     Schedule 1.1 (i)      -       Accounts Receivable
     Schedule 1.1 (ii)     -       Cash; Marketable Securities
     Schedule 1.1 (iv)     -       Inventory
     Schedule 1.1 (v)      -       Customers and Suppliers
     Schedule 1.1 (vi)     -       Intellectual Property
     Schedule 1.1 (vii)    -       Equipment
     Schedule 1.1 (viii)   -       Vehicles
     Schedule 1.1 (xii)    -       Contracts
     Schedule 1.1          -       Permitted Liens
     Schedule 1.2          -       Excluded Assets
     Schedule 4.9          -       Permits







                            ASSET PURCHASE AGREEMENT

          This ASSET  PURCHASE  AGREEMENT  dated as of  November  23, 1999 (this
"Agreement") by and among LIBERTY FOOD GROUP,  LLC, a Delaware limited liability
company (the "Buyer"), and FERRO FOODS CORPORATION,  a New York corporation (the
"Seller"),  and Frank Ferro, Sr. and Frank Gambino (individually,  a "Principal"
and, together, the "Principals").


                               W I T N E S S E T H

          WHEREAS,  the Seller,  a corporation duly organized and existing under
the laws of the State of New York, is engaged in the business of wholesale  food
distribution (the "Business"); and

          WHEREAS,  the  Seller  desires  to sell to the  Buyer,  and the  Buyer
desires to purchase from the Seller, all right, title and interest of the Seller
in and to substantially  all the assets,  properties and rights of the Seller as
provided  herein,  all upon the terms and  subject to the  conditions  set forth
herein.

          NOW,  THEREFORE,  in  consideration  of the  premises  and the  mutual
agreements and covenants  hereinafter set forth, the Buyer and the Seller hereby
agree as follows:


                                    ARTICLE I
                                 SALE OF ASSETS

          Section 1.1 Assets to be Sold. Except as otherwise provided in Section
1.2 below,  at the  Closing  (as  hereinafter  defined)  the Seller  shall sell,
assign, convey,  transfer and deliver to the Buyer, and the Buyer shall purchase
from the  Seller,  all  right,  title and  interest  of the Seller in and to the
assets,  properties,  rights  and  business  of the  Seller  of  every  type and
description, real, personal and mixed, tangible and intangible, wherever located
and whether or not reflected on the books and records of the Seller  relating to
or used in  connection  the Business  (collectively,  the  "Purchased  Assets"),
including, without limitation:

                    (i)  all   accounts   receivable,   whether   collected   or
uncollected  on the date  hereof,  attributable  to sales made by Seller and its
agents  relating to the period  commencing on the date which is 60 business days
prior  to  the  Closing  Date  (as  hereinafter   defined),   including  without
limitation,  those  which are listed on  Schedule  1.1(i)  attached  hereto (the
"Accounts Receivable");

                    (ii)  all cash and  marketable  securities  held or owned by
Seller on the date  hereof in any bank or  securities  account,  as set forth on
Schedule 1.1(ii) attached hereto;

                    (iii)     the goodwill of the Seller;

                    (iv) all of the Seller's  inventories  on the Closing  Date,
including,    without   limitation,    all   inventories   of   raw   materials,
work-in-progress  and active  shipments and ordered goods whether located on the
premises of the Seller, in transit to or from such premises,  in warehouses,  in
the premises of  manufacturers,  or otherwise,  including,  without  limitation,
those  indicated  on  Schedule  1.1(iv)  attached  hereto   (collectively,   the
"Inventory");

                    (v) all of the Seller's customers and suppliers as set forth
on Schedule 1.1(v) attached hereto;

                    (vi) the name "Ferro Foods  Corporation" and all trademarks,
service marks logos, copyrights and registrations and applications therefor, and
trade  secrets  and  confidential   business   information,   manufacturing  and
production  processes  and  techniques,  research and  development  information,
customer and supplier data, drawings, specifications, designs, plans, proposals,
technical data,  copyrightable  works,  financial,  marketing and business data,
pricing  and  cost   information,   and  business  and   marketing   plans  (the
"Intellectual  Property"),  including,  without  limitation,  those indicated on
Schedule 1.1(vi) attached hereto;

                    (vii) all  furniture,  fixtures,  equipment,  machinery  and
other  tangible  personal  property  used or held for use by the  Seller  at the
locations at which the Business is conducted,  or otherwise owned or held by the
Seller at the Closing Date for use in conduct of the Business, including without
limitation, those listed on Schedule 1.1(vii) attached hereto (the "Equipment");

                    (viii) the vehicles used in the Business,  including without
limitation,   those  indicated  on  Schedule   1.1(viii)  attached  hereto  (the
"Vehicles");

                    (ix)  all  books of  account,  general,  financial,  tax and
personnel records, invoices, shipping records, sales invoices, warranties on all
supplies,  equipment  correspondence and other documents,  records and files and
all computer software and programs and any rights thereto owned, associated with
or employed by the Seller or used in, or relating to, the  Business,  other than
organization  documents,  minutes and stock records books and the corporate seal
of the Seller (collectively the "Records");

                    (x) all claims,  causes of action,  choses in action, rights
of recovery  and rights of set-off of any kind  (including  rights to  insurance
proceeds and rights under and pursuant to all  warranties,  representations  and
guaranties made by suppliers of products,  materials or equipment, or components
thereof),  pertaining  to or arising  out of, the  Business  and  enuring to the
benefit of the Seller;

                    (xi)  all  sales  and   promotional   literature  and  other
sales-related  materials owned, used,  associated with or employed by the Seller
in connection with the Business;

                    (xii) all written or oral contracts, licenses,  sublicenses,
agreements, undertakings, commitments, and sales and purchase orders, quotations
and other executing contracts,  including,  without limitation,  those listed on
Schedule 1.1(xii) attached hereto;

                    (xiii) all municipal, state and federal franchises, permits,
licenses,  agreements,  waivers and authorizations held or used by the Seller in
connection with, or required for, the Business, to the extent transferable; and

                    (xiv) all other assets,  properties,  rights and business of
every kind and nature  owned or held by the Seller  which are used by the Seller
in the Business, or in which the Seller has an interest, known or unknown, fixed
or unfixed,  choate or inchoate,  accrued,  absolute,  contingent  or otherwise,
whether or not specifically referred to in this Agreement.

          In  confirmation  of the foregoing  sale,  assignment,  conveyance and
transfer,  the Seller  shall  execute  and deliver to the Buyer at the Closing a
Bill of Sale and Assignment in the form of Exhibit A attached hereto.

          The Purchased Assets shall be conveyed and delivered to the Buyer free
and clear of all liens, encumbrances,  security interests,  claims, charges, and
other  encumbrances of any kind,  nature or character  (collectively,  "Liens"),
other than the Liens  indicated on Schedule 1.1 attached  hereto (the "Permitted
Liens").

          Section 1.2 Excluded  Assets.  Notwithstanding  the  foregoing,  there
shall be  excluded  from the  assets,  properties,  rights  and  business  to be
transferred to the Buyer hereunder those assets, properties and rights set forth
in Schedule 1.2 (collectively the "Excluded Assets").

          Section 1.3  Reorganization.  (a) It is intended that the  transaction
described herein qualify as a tax-free reorganization under Section 368(a)(1)(C)
of the Internal  Revenue Code of 1986, as amended (the "Code").  As such, and as
more fully described herein, Buyer will acquire  substantially all of the assets
of the Seller solely in exchange for voting securities of Buyer.

               (b) As soon as reasonably practicable, but in no event later than
12 months  following the Closing Date (as hereinafter  defined),  Seller will be
liquidated pursuant to the requirements of Section 368(a)(2)(G) of the Code.


                                   ARTICLE II
                            EXCLUSION OF LIABILITIES

          Section 2.1  Liabilities  Not  Assumed by the Buyer.  Anything in this
Agreement to the contrary notwithstanding, the Buyer shall not assume, or in any
way be liable or responsible for, any liabilities or obligations of the Business
or any  liabilities or obligations of the Seller or the  Principals,  whether or
not such  liabilities  or obligations  are in connection  with or related to the
Business  or the  Purchased  Assets.  Without  limiting  the  generality  of the
foregoing,  the  Seller and the  Principals  shall  retain,  and shall be solely
responsible for paying, performing and discharging when due, and the Buyer shall
not assume or have any responsibility for, each of the following:

                    (i) any liability or obligation of the Seller arising out of
or in connection  with the negotiation and preparation of this Agreement and the
consummation and performance of the transactions contemplated hereby, including,
without limitation, any tax liability so arising;

                    (ii) any liability or obligation  under  contracts and other
agreements  to which the  Seller is a party or by or to which it or its  assets,
properties or rights are bound or subject;

                    (iii) any liability or obligation relating to or arising out
of the Purchased Assets and Excluded Assets;

                    (iv) any  liability or  obligation  pertaining to any of the
employees of the Business;

                    (v) any tax, charge,  duty, levy or other similar assessment
imposed  by  any  federal,  state  local  or  foreign  governmental  department,
commission,  board,  bureau,  agency or instrumentality (a "Taxing  Authority"),
including without limitation,  income, gross receipts,  excise, property, sales,
gain, use, license, capital stock, transfer,  franchise,  payroll,  withholding,
social  security,  unemployment  insurance,  medicaid or other taxes,  including
without limitation any interest or penalties attributable thereto (collectively,
"Taxes"); and

                    (vi) any other  liability or obligation of the Principals or
the Seller, and their respective stockholders,  directors,  officers, employees,
affiliates,  agents or  representatives  and  their  respective  successors  and
assigns arising out of or relating to the Business or otherwise.


                                   ARTICLE III
                 CLOSING; PURCHASE PRICE AND PAYMENT

          Section  3.1  Closing.  Subject  to the terms and  conditions  of this
Agreement,  the sale and purchase of the Purchased  Assets  contemplated by this
Agreement  shall  take  place at a  closing  (the  "Closing")  to be held at the
offices of Herrick,  Feinstein LLP, 2 Park Avenue,  New York, New York 10016, on
November  23,  1999 or at such other  date as the Seller and Buyer may  mutually
agree;  provided,  however,  that the Closing shall not occur prior to the tenth
(10th) day following the mailing of the notice to the creditors of the Seller as
provided in Section 4.15 below. The date upon which the Closing occurs is herein
called the "Closing Date."

          Section 3.2  Purchase  Price.  The  aggregate  purchase  price for the
Purchased  Assets  (the  "Purchase  Price")  shall be two million  five  hundred
thousand  (2,500,000) shares (the "Shares") of common stock, par value $.004 per
share, of Liberty Group Holdings, Inc., formerly known as Bio-Response,  Inc., a
Delaware corporation (the "Issuer").

          Section  3.3  Payment  of  Purchase  Price.  The  Buyer  shall pay the
Purchase Price to the Seller at the Closing by delivery to the Seller of a stock
certificate  representing  the  Shares  issued  in the name of the  Seller.  The
certificate representing the Shares shall bear the following legends:

          "THE SHARES  REPRESENTED BY THIS  CERTIFICATE  MAY NOT BE TRANSFERRED,
          SOLD OR OTHERWISE  DISPOSED OF UNLESS (A) SUCH DISPOSITION IS PURSUANT
          TO AN EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES ACT OF
          1933, AS AMENDED, OR (B) THE HOLDER HEREOF SHALL HAVE DELIVERED TO THE
          COMPANY AN OPINION,  FROM COUNSEL AND IN FORM AND SUBSTANCE REASONABLY
          SATISFACTORY  TO THE COMPANY,  TO THE EFFECT THAT SUCH  DISPOSITION IS
          EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THAT ACT.

          THIS  CERTIFICATE  IS  SUBJECT  TO  AND  IS  TRANSFERABLE   ONLY  UPON
          COMPLIANCE WITH THE PROVISIONS OF (i) THE ESCROW AGREEMENT DATED AS OF
          NOVEMBER  23, 1999  BETWEEN  LIBERTY  FOOD GROUP,  LLC AND FERRO FOODS
          CORPORATION  AND (ii) THE VOTING TRUST AND PROXY AGREEMENT DATED AS OF
          NOVEMBER  23,  1999,  AMONG  LIBERTY  FOOD  GROUP,  LLC,  FERRO  FOODS
          CORPORATION,  FRANK  FERRO,  SR.  AND  FRANK  GAMBINO.  ANY  DIRECT OR
          INDIRECT TRANSFER, GIFT, ASSIGNMENT,  PROXY, PLEDGE, LIEN OR ANY OTHER
          DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IN VIOLATION
          OF SAID AGREEMENTS SHALL BE INVALID."

          Section 3.4  Deliveries.   (a) On or before the Closing
Date the Seller shall have received the following from the Buyer,
all in form and substance satisfactory to the Seller:

               (i)  A stock certificate representing the Shares
          issued in the name of the Seller;

               (ii)  Resolutions  of the Buyer duly  authorizing  the execution,
          delivery  and  performance  of  this  Agreement  and  the  sale of the
          Purchased  Assets to the Buyer  contemplated  hereunder  and the other
          documents executed by the Buyer in connection with this Agreement; and

               (iii) Recent official evidence dated at least three days prior to
          the  Closing  Date  from  appropriate   governmental   authorities  of
          appropriate  domestic  jurisdictions  of the  Buyer as to  constituent
          documents  on file,  good  standing,  payment of  franchise  taxes and
          qualification to do business of the Buyer.

               (b) On or before the Closing Date,  the Buyer shall have received
the following  from the Seller,  all in form and substance  satisfactory  to the
Buyer;

               (i)  the Bill of Sale and Assignment, duly executed
          by the Seller;

               (ii) the Release Agreement  attached hereto as Exhibit B executed
          by each of the Principals;

               (iii)     the Lock-Up Letter attached hereto as
          Exhibit C duly executed by the Seller and each of the
          Principals;

               (iv) the  Voting  Trust and Proxy  Agreement  attached  hereto as
          Exhibit D duly executed by the Seller and each of the Principals;

               (v) the  Escrow  Agreement  attached  hereto  as  Exhibit  E duly
          executed by the Seller;

               (vi) the  consent of each of the  parties  indicated  on Schedule
          1.1(xii) attached hereto;

               (vii)  Resolutions of the board of directors and  stockholders of
          the Seller duly authorizing the execution, delivery and performance of
          this  Agreement  and the sale of the  Purchased  Assets  to the  Buyer
          contemplated  hereunder and the other documents executed by the Seller
          in connection with this Agreement;

               (viii) Recent  official  evidence dated at least three days prior
          to the  Closing  Date from  appropriate  governmental  authorities  of
          appropriate  domestic  jurisdictions  of the Seller as to  constituent
          documents,  on file,  good  standing,  payment of franchise  taxes and
          qualification to do business of the Seller; and

               (ix) Any other  documents or agreements  reasonably  requested by
          the  Buyer or its  counsel  which  are  necessary  or  appropriate  to
          consummate the transactions contemplated hereby.


                                   ARTICLE IV
                  REPRESENTATIONS AND WARRANTIES OF THE SELLER

          As an inducement to the Buyer to enter into this Agreement, the Seller
and the Principals,  jointly and severally,  hereby represent and warrant to the
Buyer as follows:

          Section  4.1 Due  Incorporation  and  Qualification.  The  Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of New York and has the  corporate  power and lawful  authority  to
own,  lease and operate its assets,  properties and business and to carry on its
business as now conducted.  The Seller is qualified to transact  business and is
in good  standing in each  jurisdiction  in which the nature of its  business or
location of its properties requires such qualification, except where the failure
to be so qualified and in good standing  would not result in a material  adverse
effect on the Business, any of the Purchased Assets or the ability of the Seller
to  perform  its  obligations   hereunder  or  to  consummate  the  transactions
contemplated by this Agreement.

          Section 4.2 Subsidiaries. Neither the Seller nor any of the Principals
directly  or  indirectly  owns  or has the  power  to  vote,  or to  exercise  a
controlling influence with respect to the securities of any class of any person,
the holders of which class are  entitled to vote for the  election of  directors
(or persons performing similar functions) of such person, and neither the Seller
nor any of the  Principals  is an  affiliate  of any person  engaged in the same
business as the Seller or any  business  directly or  indirectly  related to the
Business,  including  without  limitation,  any  supplier  or  customer  of  the
Business.

          Section 4.3 Authority to Execute and Perform  Agreements.  Each of the
Seller and the  Principals  has full legal right and power and all authority and
approval  required to enter into,  execute and  deliver  this  Agreement  and to
perform  fully  their  respective  obligations  hereunder,   including,  without
limitation,  the sale and  transfer  of  Purchased  Assets  to the  Buyer.  This
Agreement has been duly executed and  delivered  and  constitutes  the valid and
binding obligation of each of the Seller and the Principals, enforceable against
each of them in  accordance  with its  terms.  No  approval  or  consent  of any
foreign,  federal, state, county, local or other governmental or regulatory body
is required in connection  with the execution and delivery by the Seller and the
Principals of this Agreement and the  consummation and performance by the Seller
and the Principals of the transactions  contemplated  hereby.  The execution and
delivery of this Agreement,  the consummation of the  transactions  contemplated
under this  Agreement,  and the  performance by the Seller and the Principals of
this  Agreement in accordance  with its terms and  conditions  will not conflict
with or result in the breach or violation of any of the terms or conditions  of,
or  constitute  (or with  notice or lapse of time or both  would  constitute)  a
default under,  (i) the Certificate of  Incorporation  or By-Laws of the Seller;
(ii) any  instrument,  contract or other  agreement by or to which the Seller or
the Principals is a party or by or to which it or he, or its or his, as the case
may be,  assets or  properties  are bound or  subject;  (iii) any statute or any
regulation, order, judgment or decree of any court or governmental or regulatory
body;  or (iv) any Permit (as defined in Section 4.9 below).  The  execution and
delivery of this  Agreement by each of the Seller and the  Principals  does not,
and the performance of this Agreement by the Seller and the Principals will not,
require any consent,  approval,  authorization  or permit of or filing with,  or
notification  to any  person or  entity  other  than  those  consents  which are
indicated on Schedule (xii) attached hereto.

          Section 4.4  Compliance.  The Seller and the Principals have conducted
the Business  through the date hereof in accordance  with all  applicable  laws,
ordinances,  statutes,  rules, regulations and governmental orders applicable to
the Business or any of its  properties or assets.  The Seller holds all permits,
licenses,  vacancies, order and appeals necessary in the conduct of its Business
as currently being conducted. Neither the Seller nor any of the Principals is in
conflict  with,  or in default or violation of: (i) any law,  rule,  regulation,
order,  judgment or decree  applicable to the Seller or the  Principals by which
any property or asset of the Seller or Principals is bound or affected;  or (ii)
any note,  bond,  mortgage,  indenture,  contract,  agreement,  lease,  license,
permit,  franchise or other  instrument or obligation to which either the Seller
or  Principals  is a party or by which the Seller or  Principals or any of their
properties or assets are bound or affected.

          Section 4.5 Tax  Matters.  Each of the Seller and the  Principals  has
filed all returns,  reports or information returns required to be filed with any
Taxing  Authority  with respect of Taxes and has paid and  discharged  all Taxes
shown as due  thereon  and have paid all  applicable  Taxes.  Neither the United
States Internal  Revenue Service nor any other Taxing Authority is now asserting
or, to the best  knowledge  of the Seller  and the  Principals,  threatening  to
assert  against  the  Seller  any  deficiency  or claim  for  additional  Taxes,
including  without  limitation,  interest  thereon or  penalties  in  connection
therewith,  other than the current  audit of the Seller's 1995  financials  (the
"Audit").  The Seller has not granted  any waiver of any statute of  limitations
with respect to, or any extension of a period for the assessment of any Tax. The
accruals and reserves for taxes  reflected in the current  balance  sheet of the
Seller are adequate to cover all Taxes  accruable  through such date  (including
interest and  penalties,  if any,  thereon) in  accordance  with U.S.  generally
accepted accounting principles, consistently applied.

          Section  4.6 No  Loan  Agreements.  The  Seller  is not,  directly  or
indirectly,  a party to any contract or other agreement or arrangement  relating
to  borrowed  money or  extending  credit or by or to which it or its  assets or
properties are bound or subject, including without limitation,  loan agreements,
credit  lines,  promissory  notes,  mortgages,  pledges,  guarantees,   security
agreements, factoring agreements, letters of credit, powers of attorney or other
arrangements to loan or borrow money or extend credit.

          Section 4.7  Litigation.  Neither the Seller,  nor the Principals is a
party to, or threatened  with,  any  litigation or judicial,  administrative  or
arbitration  proceeding  other than in  connection  with the Audit.  Neither the
Seller nor the Principals  knows of any dispute with any person which materially
and adversely  affects,  or may materially and adversely  affect,  the Purchased
Assets, or the Business.

          Section 4.8 Agreements.  Schedule  1.1(xii) attached hereto sets forth
all of the  following  contracts  and other  agreements to which the Seller is a
party or by or to which it or its assets or properties are bound or subject: (i)
contracts and other  agreements  with any current or former  officer,  director,
employee,  consultant or  stockholder;  (ii)  agreements with any labor union or
association  representing any employee; (iii) contracts and other agreements for
the sale of materials,  products, supplies, equipment,  merchandise or services;
(iv)  licenses,  royalty  agreements  or  similar  contracts;  (v)  warehousing,
distributorship,   depository,  representative,   management,  marketing,  sales
agency, or advertising  agreements;  (vi) contracts and other agreements for the
sale of any of its assets or  properties  other than in the  ordinary  course of
business or for the grant to any person of any  preferential  rights to purchase
any of its assets or properties;  (vii) joint venture agreements relating to the
assets,  properties or business of the Seller or by or to which it or its assets
or properties are bound or subject;  (viii)  contracts or other agreements under
which it agrees to indemnify any party,  to share the Tax liability of any party
or to refrain from competing with any party; or (ix) any other material contract
or other agreement  whether or not made in the ordinary course of business.  All
of the  contracts  and other  agreements  set  forth on  Schedule  1.1(xii)  and
elsewhere  referred  to in this  Agreement  are in full  force and effect and no
condition  exists  which  with the lapse of time or notice  would  constitute  a
default thereunder.  Except as separately  identified on Schedule 1.1(xii),  the
Seller  is not a party to or  bound by any  contract  or other  agreement  which
either  individually  or in the aggregate  materially and adversely  affects its
assets, properties, business, or condition, financial or otherwise, or which was
entered into other than in the ordinary course of its business.

          Section 4.9  Environmental and Other Permits and Licenses.
 The Seller currently holds all the health and safety and other
permits,  licenses,  authorizations,  certificates,  exemptions and approvals of
governmental authorities,  including, without limitation,  environmental permits
(collectively  "Permits"), a list of which is set forth on Schedule 4.9 attached
hereto,  necessary or proper for the current use,  occupancy or operation of any
asset or  property of the Seller or the  conduct of the  Business,  and all such
Permits are in full force and effect.  There is no existing practice,  action or
activity of the Seller and no existing  condition of the properties or assets of
the  Seller or the  Business  which  will  give  rise to any  civil or  criminal
liability  under,  or  violate  or  prevent   compliance  with,  any  health  or
occupational  safety  or other  applicable  statute,  regulation,  ordinance  or
decree.  The Seller has not received any notice from any governmental  authority
revoking, cancelling,  rescinding, materially modifying or refusing to renew any
Permit or  providing  written  notice  of  violations  under  any law,  statute,
regulation,  ordinance or decree.  The Seller is in all  respects in  compliance
with  the  Permits.  There  has  never  been  any  spill,  discharge,   release,
contamination  or other condition or event involving  "Hazardous  Materials" (as
defined or promulgated  pursuant to applicable federal,  state and local law) at
any real property  owned or leased by the Seller or at any location at which the
Seller now or previously  has conducted  business and none of such  locations or
real property has been used for the  generation,  storage,  or use of "Hazardous
Materials."

          Section 4.10  Purchased  Assets.  The Seller  owns,  leases or has the
legal right to use all the properties and assets, used or intended to be used in
the  conduct of the  Business.  The  Purchased  Assets and the  Excluded  Assets
constitute all the  properties,  assets and rights forming a part of, used, held
or intended to be used in, and all such properties,  assets and rights necessary
in the conduct of, the Business.  The Seller has caused the Purchased  Assets to
be maintained in accordance with good business  practice,  and all the Purchased
Assets are in good  operating  condition  and repair  and are  suitable  for the
purposes for which they are used and  intended.  The Seller has the complete and
unrestricted power and unqualified right to sell, assign,  transfer,  convey and
deliver the  Purchased  Assets to the Buyers free and clear of all Liens  (other
than  the  Permitted  Liens)  without  penalty  or other  adverse  consequences.
Following the consummation of the  transactions  contemplated by this Agreement,
the Buyer will own, with good, valid and marketable title, or lease, under valid
and subsisting  leases,  or otherwise acquire the interests of the Seller in the
Purchased Assets, free and clear of any Lien other than the Permitted Liens, and
without incurring any penalty or other adverse consequence.

          Section  4.11  Liens.  The  Seller  owns  outright  and has  good  and
marketable title to all of the Purchased  Assets, in each case free and clear of
any Lien other than the Permitted Liens.

          Section  4.12  Inventory;  Accounts  Receivable;  Equipment;  Records;
Intellectual  Property.  The Inventory consists of merchantable and usable goods
in the  ordinary  course of the  Business,  the  amount and  character  which is
reasonable under present requirements.  All of the Inventory is merchantable and
is usable in the ordinary  course of business of Seller as presently  conducted.
Seller is not under any  liability or  obligation  with respect to the return of
any  Inventory or  merchandise  in the  possession  of  customers.  The Accounts
Receivable  as set  forth on  Schedule  1.1(i)  is a true and  accurate  list of
receivables  generated by sales of the Seller in the normal  course of business,
and to the best of  Seller's  knowledge  are valid  obligations  of the  debtors
listed  on such  schedule.  Seller  knows  of no  reason  why any  such  Account
Receivable  should  not be  collected.  The  Equipment  is in  good  operational
condition and repair,  ordinary wear and tear excepted. The Records are the true
books  and  records  of the  Business  and  truly  and  accurately  reflect  the
underlying facts and transactions in all material respects.  The Records contain
all of the  documentation  required to operate the Business after the Closing as
presently  operated and no other records or documents  exist which are necessary
to operate the Business.  Seller owns the right to those  Intellectual  Property
free  and  clear  of  all  Liens,  other  than  the  Permitted  Liens,  and  the
Intellectual  Property are all that are required for the conduct of the Business
or  ownership  of the  Purchased  Assets as now  being  conducted  or  presently
proposed to be conducted. There are no assignments, licenses or sublicenses with
respect to any of the  Intellectual  Property.  There are no pending  or, to the
best  knowledge of the  Principals,  threatened,  claims,  or  assertions by any
person or entity to the use of any of the Intellectual Property, and none of the
Intellectual  Property  infringes  on the  rights of any person or entity and no
valid basis exists or with notice or the passage of time will exist for any such
claim.

          Section 4.13  Employee  Matters.  The Seller has paid to date and will
pay on or before the Closing Date all accrued wages, salary, bonus, commissions,
vacation and sick pay due to be paid or compensated on or before such respective
dates for all of its  employees  and sales  representatives,  including  payroll
overheads  (i.e.,  FICA,  Florida state tax, federal tax,  disability,  workers'
compensation and liability,  employee benefit plan  contributions and payments),
and the Seller and  Principals  shall jointly and  severally  indemnify and hold
harmless  the  Buyer,  its   stockholders,   directors,   officers,   employees,
affiliates,  agents, representatives and their respective successors and assigns
from and  against  any  liability  that may be  incurred by reason of the Seller
having failed to make such payments.

          Section 4.14 Employee Benefit Plans. Other than the Ferro Foods 401(k)
and  Profit  Sharing  Plan (the  "Plan"),  the  employees  of the Seller are not
covered by and the Seller does not maintain,  participate in,  contribute to, or
operate any pension, retirement, profit-sharing or other employee benefit plans,
the Seller does not maintain or  contribute to and is not required to contribute
to any employee benefit plan (within the meaning of Section 3(2) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA")), which is intended
to  qualify  under  paragraph  401(a)  of the Code and the  Seller  has not been
required to  contribute to any employee  benefit plan which is a  multi-employer
plan  (within  the  meaning  of  Section  3(37)  of  ERISA)  in the  five  years
immediately  preceding the date hereof. The Seller has no responsibility for and
has not assumed any pension-related liabilities (including,  without limitation,
withdrawal liability) of any predecessor business or person. (i) The Plan is not
a multiemployer  plan with the meaning of ERISA;  (ii) the Plan does not promise
or provide retiree medical or life insurance  benefits to any person;  (iii) the
Plan does not promise or provide severance benefits or benefits  contingent upon
a change in  ownership  or control,  within the  meaning of Section  280G of the
Code;(iv) the Plan has been operated in all material respects in accordance with
its terms and the requirements of applicable law; and (v) if the Plan is subject
to Title IV of ERISA, the aggregate  accumulated benefit obligations of the Plan
(as of the date of the most recent  actuarial  valuation  prepared for the Plan)
does not exceed the fair market  value of the assets of the Plan (as of the date
of such valuation).

          Section  4.15  Bulk  Transfer.  Seller  acknowledges  that the sale of
assets as contemplated hereby constitutes a Bulk Transfer under Article 6 of the
New York Uniform Commercial Code (the "UCC").
 The Seller has  furnished to the Buyer a true,  accurate  and complete  list of
Seller's creditors and the approximate amount of Seller's  indebtedness to each,
which list is attached  hereto as Exhibit F. Seller has  delivered  to each such
creditor a notice of Bulk Transfer,  in the form attached hereto as Exhibit F-1,
on or about  November 12, 1999,  and any required  waiting  period under the UCC
shall have elapsed prior to the Closing Date.

          Section 4.16 Full Disclosure. All documents and other papers delivered
by or on  behalf  of the  Seller  and the  Principals  in  connection  with this
Agreement  and the  transactions  contemplated  hereby  are true,  complete  and
accurate;  and all  contracts  and  other  agreements  or  instruments  included
thereunder  are  valid,  subsisting  and  binding  on  the  parties  thereto  in
accordance with their terms.  The  information  furnished by or on behalf of the
Seller and the Principals to the Buyer in connection with this Agreement and the
transactions  contemplated  hereby does not contain  any untrue  statement  of a
material fact and does not omit to state any material fact necessary to make the
statements made, in the context in which made, not false or misleading. There is
no fact which the Seller or the  Principals has not disclosed to the Buyer which
materially  adversely affects, or so far as the Seller or the Principals can now
foresee will materially  adversely affect, the business or condition  (financial
or other) of the Business or the Purchased Assets,  Seller or the ability of the
Seller or the Principals to perform this Agreement.

          Section  4.17  No  Broker.  No  broker,   finder,   agent  or  similar
intermediary  has  acted for or on behalf  of the  Seller or the  Principals  in
connection with this Agreement or the transactions  contemplated  hereby, and no
broker,  finder,  agent or similar  intermediary  is entitled  to any  broker's,
finder's or similar fee or other commission in connection therewith based on any
agreement, arrangement or understanding with the Seller or the Principals or any
action taken by the Seller or the Principals.

          Section 4.18  Investment Intent.  With respect to the
Shares to be received by the Seller as the Purchase Price:

               (i) The Shares have not been registered  under the Securities Act
of 1933,  as amended (the  "Securities  Act"),  and have not been  registered or
qualified  under the securities  laws of any state of the United States.  Seller
and each of the  Principals  acknowledges  that it has no right to  require  the
Buyer or the  Issuer to  register  the  Shares  under the  Securities  Act or to
register or qualify  the Shares  under the  securities  laws of any state of the
United States;

               (ii) The Seller and each of the  Principals  agrees  that it will
not, directly or indirectly,  offer, transfer,  sell or otherwise dispose of any
of the Shares (or solicit any offers to buy,  purchase or otherwise  acquire any
of the Shares),  except in compliance  with the Securities Act and the rules and
regulations   thereunder.   The  Seller  and  each  of  the  Principals  further
understands, acknowledges and agrees that none of the Shares may be transferred,
sold or  otherwise  disposed  of unless (x) such  disposition  is pursuant to an
effective  registration  statement  under the Securities  Act, or (y) the Seller
shall have  delivered  to the Issuer an  opinion,  from  counsel and in form and
substance  reasonably  satisfactory  to the  Buyer,  to  the  effect  that  such
disposition is exempt from the provisions of Section 5 of the Securities Act;

               (iii) The Seller is acquiring the Shares for its own account, for
investment  purposes only and not with a view to or for sale in connection  with
any distribution thereof;

               (iv)  The  Seller  and  each of the  Principals  and  each of the
Principals  must  continue to bear the economic  risk of the  investment  in the
Shares unless they are  subsequently  registered  under the Securities Act or an
exemption from such registration is available. If any of the Shares are disposed
of in accordance with Rule 144 under the Securities Act, the Seller or each of ,
as  applicable,  the  Principals  shall deliver to the Issuer at or prior to the
time of such  disposition an executed copy of Form 144 (if required by Rule 144)
and such other  documentation as the Issuer may reasonably require in connection
with such disposition;

               (v) The Seller and each of the Principals  acknowledges  that the
market value of the Shares will  fluctuate  from their value on the Closing Date
and, at the time that the Seller disposes of the Shares,  such shares may not be
worth their market value on the Closing Date;

               (vi) The Seller and each of the  Principals  have such  knowledge
and  experience in business  matters to be able to evaluate the merits and risks
of an investment in the Shares and to make an informed  decision with respect to
its acceptance of the Shares as the Purchase  Price.  The Seller and each of the
Principals  have adequate means of providing for their current  financial  needs
and  contingencies,  are  able to bear  the  substantial  economic  risks  of an
investment  in the Shares  for an  indefinite  period of time,  have no need for
liquidity  thereof,  and  could  afford  a  complete  loss of the  value of such
investment;

               (vii)  The  Seller  and  each  of  the  Principals  have  had  an
opportunity to discuss the business,  operations  and conditions  (financial and
otherwise)  of the Buyer and the Issuer with  representatives  of the Buyer.  In
accepting  the Shares on the Closing Date,  no oral  representations  or written
representations  (other than those  specifically  made herein) have been made to
the Seller or the Principals; and

               (viii) The Seller and each of the  Principals  is an  "accredited
investor", as that term is defined in Regulation D under the Securities Act.


                                    ARTICLE V
                   REPRESENTATIONS AND WARRANTIES OF THE BUYER

          As an inducement to the Seller to enter into this Agreement, the Buyer
hereby represents and warrants to the Seller as follows:

          Section 5.1  Incorporation and  Qualification.  The Buyer is a limited
liability  company duly organized,  validly  existing and in good standing under
the laws of the State of Delaware and has the power and lawful authority to own,
lease and operate its assets, property and business and to carry on its business
as now conducted.
 The Buyer is  qualified to transact  business  and is in good  standing in each
jurisdiction  in which the nature of its  business or  location of its  property
requires such qualification,  except where the failure to be so qualified and in
good standing  would not result in a material  adverse  effect on the ability of
the Buyer to consummate the transactions contemplated by this Agreement.

          Section 5.2 Authority to Execute and Perform Agreements. The Buyer has
the full legal right and power and all authority and approval  required to enter
into,  execute and deliver this Agreement,  and to perform fully its obligations
under this Agreement. This Agreement has been duly executed and delivered by the
Buyer,  and  assuming  the due  execution  hereof by each of the  Seller and the
Principals, is the valid and binding obligation of the Buyer enforceable against
it in accordance with its terms.

          Section 5.3 The Shares.  When issued and delivered in accordance  with
this Agreement, the Shares issued to the Seller will be duly authorized, validly
issued and outstanding, fully paid and non-assessable.

          Section  5.4  No  Broker.   No  broker,   finder,   agent  or  similar
intermediary  has acted for or on  behalf of the Buyer in  connection  with this
Agreement or the transactions  contemplated hereby, and no broker, finder, agent
or similar intermediary is entitled to any broker's, finder's, or similar fee or
other commission in connection therewith based on any agreement,  arrangement or
understanding with the Buyers or any action taken by the Buyer.

                                   ARTICLE VI
                            COVENANTS AND AGREEMENTS

          Section 6.1 Expenses of Sale. The Seller and the Buyer agree that each
of them shall bear their own direct and indirect expenses incurred in connection
with the negotiation and preparation of this Agreement and the  consummation and
performance of the transactions contemplated hereby.

          Section 6.2 Taxes. All transfer,  documentary,  gross receipts, sales,
use and gains taxes and similar  liabilities,  if any,  resulting from the sale,
assignment,  transfer and delivery  hereunder of the  Purchased  Assets shall be
paid by the Seller.  In the event that at any time hereafter,  any claim, tax or
assessment of any kind is made by the federal, state or local authorities or any
government  sub-division  against  the  Buyer  or the  Issuer  or  its  members,
managers, directors, officers, employees, stockholders, agents, representatives,
affiliates and their respective successors and assigns (collectively, the "Buyer
Group") by reason of the transfer and sale of the  Purchased  Assets  hereunder,
then and in that event,  the Seller  undertakes to pay the same.  Payment of any
federal,  state or local taxes due from the Seller or its  affiliates and filing
of all tax  returns  required  to be filed  with  respect  to the Seller and its
affiliates  and with  respect to the  business and assets of the Seller shall be
the sole  responsibility  and obligation of the Seller.  Such  obligation of the
Seller to pay such taxes shall be subject to the  indemnification  provisions of
Article X below.

          Section 6.3 Telephone Numbers.  The Seller agrees that the Buyer shall
have all of the  Seller's  right to use,  if the  Buyer  elects,  the  telephone
numbers (which telephone numbers include the Seller's telephone numbers used for
sending  and  receiving  facsimile  transmissions):  (718)  492-0793  and  (800)
___________,  and facsimile number (718) 492-3482,  which numbers have been used
through the date hereof by the Seller.

          Section  6.4  Change of Name.  After the  Closing,  the Seller and the
Principals  agree that it will,  upon the Buyer's or its assigns'  request:  (i)
immediately  discontinue and no longer use the corporate or trade name of "FERRO
FOODS CORPORATION" or any variation or derivation  thereof;  and (ii) deliver to
the Buyer's or its assigns' for filing an executed  Certificate  of Amendment to
the Seller's  Certificate of Incorporation  changing the Seller's corporate name
to another name approved by the Buyer or its assigns.


                                   ARTICLE VII
                          BUYER'S CONDITIONS TO CLOSING

          The following are conditions precedent to the obligations of the Buyer
to consummate the transactions contemplated hereby:

          Section 7.1  Representations  and Warranties.  The representations and
warranties  made by the  Seller  and the  Principals  herein  shall  be true and
correct in all  respects on and as of the  Closing  Date with the same effect as
though  such  representations  and  warranties  have  been made on and as of the
Closing  Date (except  where  specific  representation  or warranty by its terms
applies to an earlier date).

          Section  7.2  Covenants.  The  Seller  and the  Principals  shall have
performed  and  complied in all respects  with all  covenants,  agreements,  and
conditions  set forth herein which are required to be performed or complied with
by them on or prior to the Closing  Date,  including,  without  limitation,  the
execution and delivery of the Bill of Sale and Assignment,  the Lock-Up Letters,
and the Release Agreements.

          Section 7.3 Bulk  Transfer.  The notices  referred to in Section  4.15
above shall have been  delivered in accordance  with the  provisions of the UCC,
and any waiting period thereunder shall have expired;  and further, no creditor,
or group of  creditors,  shall have filed a claim  against  Seller  attaching or
asserting rights of lien against any of the Purchased Assets.

          Section  7.4  Consents.  The  required  consent  of  any  party  to an
agreement  set forth on Schedule 1.1 (xii) shall have been received by the Buyer
on or prior to the Closing Date.


                                  ARTICLE VIII
                              RESTRICTIVE COVENANTS

          Section 8.1  Confidential  Information.  The Seller and the Principals
hereby  agree on behalf of itself  and  himself,  as the case may be,  and their
respective officers, directors, employees, stockholders, agents, representatives
and affiliates and their respective  successors and assigns  (collectively,  the
"Seller  Group")  that from and after the date  hereof each member of the Seller
Group shall keep secret and retain in the  strictest  confidence,  and shall not
use for their  benefit or the benefit of others  except in  connection  with the
business and affairs of the Buyer and its affiliates,  all confidential  matters
relating  to  the  Business,  the  Purchased  Assets  and  the  Seller  and  its
affiliates,  including,  without limitation, trade "know-how," secrets, customer
lists,  supplier  lists,  details of contracts,  pricing  policies,  operational
methods,  marketing  plans or  strategies,  methods  of  manufacture,  technical
processes and other business  affairs relating to the Business and to the Seller
Group learned by any member of the Seller Group  heretofore  or  hereafter,  and
shall not disclose them to anyone outside of the Buyer Group, except as required
in the course of performing its duties to the Buyer or with the Buyer's  express
written consent.

          Section  8.2  Non-Competition.  Each of the Seller and the  Principals
agree that until the third  anniversary of the Closing Date,  neither the Seller
nor the Principals  will engage,  directly or  indirectly,  either as principal,
agent,  consultant,  proprietor,  creditor,  stockholder,  director,  officer or
employee,  or participate in the  ownership,  management,  operation or control,
directly or indirectly,  of any business  engaged in the Business.  This Section
shall not apply to the  ownership  of less than one percent  (1%) of the capital
stock of a  company  having a class of  capital  stock  which is  traded  on any
national stock exchange or on the  over-the-counter  market.  Each of the Seller
and the Principals  agrees that it or he will not,  directly or indirectly,  (i)
hire,  solicit,  divert or recruit or  encourage  any of the  employees,  or any
person who was an  employee  of the  Seller,  to leave the  employ of Buyer,  or
terminate or alter their contractual relationship in any way that is adverse, to
the Buyer's interests,  (ii) solicit or divert business from the Buyer or assist
any person or entity in doing so or  attempting  to do so or (iii) cause or seek
to cause any person or entity to refrain from dealing or doing business with the
Buyer or assist any person or entity in doing so or attempting to do so.

          Section  8.3 Rights and  Remedies  Upon  Breach.  If any member of the
Seller Group breaches, or threatens to commit a breach of, any of the provisions
of Sections 8.1 or 8.2 (collectively, the "Restrictive Covenants"), the Buyer or
its assigns shall have the following  rights and remedies,  each of which rights
and remedies shall be independent  of the other and severally  enforceable,  and
all of which  rights and  remedies  shall be in addition to, and not in lieu of,
any other rights and remedies available to the Buyer or its assigns under law or
in equity:

               (i)  Specific  Performance.  The  right  and  remedy  to have the
Restrictive   Covenants   specifically  enforced  by  any  court  having  equity
jurisdiction,  it  being  acknowledged  and  agreed  that  any  such  breach  or
threatened breach will cause irreparable  injury to the Buyer or its assigns and
that money damages will not provide adequate remedy to the Buyer or its assigns.

               (ii)  Accounting.  The right and remedy to require the applicable
member  of the  Seller  Group to  account  for and pay over to the  Buyer or its
assigns  all  compensation,  profits,  monies,  accruals,  increments  or  other
benefits  (collectively,  "Benefits")  derived or received by such member of the
Seller Group as the result of any  transactions  constituting a breach of any of
the Restrictive  Covenants,  and the applicable member of the Seller Group shall
account for and pay over such Benefits to the Buyer or its assigns.

          Section 8.4  Severability of Covenants.  If any court  determines that
any  of  the  Restrictive  Covenants,   or  any  part  thereof,  is  invalid  or
unenforceable,  the remainder of the Restrictive  Covenants shall not thereby be
affected and shall be given full effect, without regard to the invalid portions.

          Section 8.5 Enforceability in Jurisdictions.  The Buyer and the Seller
and the  Principals  intend to and hereby  confer  jurisdiction  to enforce  the
Restrictive   Covenants  upon  the  courts  of  any   jurisdiction   within  the
geographical  scope of such Restrictive  Covenants.  If the courts of any one or
more of such jurisdictions hold the Restrictive  Covenants wholly  unenforceable
by reason of the breadth of such scope or otherwise,  it is the intention of the
Buyer and the Seller and the Principals  that such  determination  not bar or in
any way affect the Buyer's right to the relief  provided  above in the courts of
any  other  jurisdiction  within  the  geographical  scope  of such  Restrictive
Covenants.


                                   ARTICLE IX
                   SURVIVAL OF REPRESENTATIONS AND WARRANTIES

          Section   9.1   Survival   of    Representations    and    Warranties.
Notwithstanding  any right of the Buyer to investigate the affairs of the Seller
and  notwithstanding  any knowledge of facts  determined or  determinable by the
Buyer pursuant to such  investigation or right of  investigation,  the Buyer has
the right to rely  fully upon the  representations,  warranties,  covenants  and
agreements of the Seller and the  Principals  contained in this  Agreement or in
any document  delivered to the Buyer by the Seller and the  Principals or any of
its  representatives,  in connection with the transactions  contemplated by this
Agreement. All such representations,  warranties, covenants and agreements shall
survive the execution and delivery hereof and the Closing hereunder.


                                    ARTICLE X
                                 INDEMNIFICATION

          Section 10.1 Obligation of the Seller and the Principals to Indemnify.
The Seller and the  Principals and each member of the Seller Group shall jointly
and severally indemnify, defend and hold harmless each member of the Buyer Group
from and against any losses,  liabilities,  damages, claims, costs and expenses,
interest,   awards,   judgements  and  penalties,   or  deficiencies  (including
reasonable attorneys' and consultants' fees and disbursements  actually suffered
or incurred by them) ("Losses") arising out of or due to:

               (i)  a  breach  of  any  representation,  warranty,  covenant  or
agreement of the Seller or the Principals  contained in this Agreement or in any
document or other writing delivered pursuant hereto;

               (ii) any  liabilities  or  obligations  not  assumed by the Buyer
pursuant to Section 2.1, including,  without limitation,  any liability to which
the Buyer Group may become  subject under any Bulk  Transfers Act within the UCC
or any  similar  statute as enacted in any  jurisdiction,  domestic  or foreign,
notwithstanding Seller's attempt to comply therewith;

               (iii) any liabilities or obligations relating to or in connection
with the Business or arising out of or in connection  with the Purchased  Assets
sold hereunder for periods ending prior to or on the Closing Date;

               (iv) any  liabilities or  obligations  of the Seller,  any of the
Principals or their  respective  affiliates  and successors and assigns to their
creditors, including, without limitation, vendors, suppliers, customers, lending
institutions, governmental authorities or agencies, or otherwise;

               (v) any  liabilities  or  obligations  of the Seller,  any of the
Principals or their  respective  affiliates  and  successors and assigns for any
Taxes;

               (vi) any liabilities or obligations for wages,  salary,  bonuses,
commissions,  fees,  vacation  or sick  pay and  payroll  overheads  which  were
required  to have been  paid by the  Seller  or its  affiliates  and that may be
asserted against any member of the Buyer Group;

               (vii) any claims under any laws or regulations  affecting health,
safety, the environment or the regulation of Hazardous Materials; or

               (viii) any liability or obligation  relating to, or in connection
with, any liabilities, obligations of the Seller or its affiliates that have not
been specifically assumed by the Buyer pursuant to this Agreement.

          Section 10.2 Notice to Indemnifying  Party. If any member of the Buyer
Group (in such capacity, the "Indemnitee") receives notice of any claim or other
commencement  of any action or proceeding  with respect to which any other party
(or parties) is  obligated to provide  indemnification  (in such  capacity,  the
"Indemnifying  Party")  pursuant to Section 10.1, the Indemnitee  shall promptly
give  the  Indemnifying  Party  notice  thereof.   The  Indemnifying  Party  may
compromise  or defend,  at such  Indemnifying  Party's  own  expense and by such
Indemnifying  Party's  own  counsel,  any such  matter  involving  the  asserted
liability of the  Indemnitee.  In any event,  the Indemnitee,  the  Indemnifying
Party and the Indemnifying Party's counsel shall cooperate in the compromise of,
or defense  against,  any such asserted  liability.  Both the Indemnitee and the
Indemnifying Party may participate in the defense of such asserted liability and
neither may settle or compromise  any claim over the objection of the other.  If
the  Indemnifying  Party chooses to defend any claim,  the Indemnitee shall make
available to the Indemnifying Party any books, records or other documents within
its  control  that  are  necessary  or  appropriate  for  such  defense.  If the
Indemnifying  Party shall fail to defend, or if, after commencing or undertaking
any such defense,  such party fails to prosecute or withdraws from such defense,
the  Indemnitee  shall have the right to  undertake  the  defense or  settlement
thereof,  at the  Indemnifying  Party's sole expense.  In the event of a dispute
over the obligation to provide indemnification  hereunder,  the prevailing party
in such  dispute  shall be  entitled  to its  reasonable  attorney's  costs  and
expenses thereof.


                                   ARTICLE XI
                                  MISCELLANEOUS

        Section  11.1  Notices.  Any notice or other  communication  required or
which  may be  given  hereunder  shall be in  writing  and  shall  be  delivered
personally,  by  facsimile  transmission  or sent by  certified,  registered  or
express  mail,  postage  prepaid,  and shall be deemed  given when so  delivered
personally,  by facsimile transmission or if mailed, two (2) days after the date
of mailing, as follows:

                   (i) if to the Buyer:

                       c/o Liberty Food Group, LLC
                       11 52nd Street
                       Brooklyn, New York 11232
                       Attention: Barry Hawk
                       Facsimile: (718) 492-5517

                  (ii) if to the Seller to:

                       Ferro Foods Corporation
                       25 53rd Street
                       Brooklyn, New York 11232
                       Attention: President
                       Facsimile: (718) 492-3482

        Section 11.2 Entire  Agreement.  This Agreement  (including the Exhibits
and  Schedules  hereto)  contains  the entire  agreement  among the parties with
respect to the purchase of the  Purchased  Assets and related  transactions  and
supersedes all prior agreements, written or oral, with respect thereto.

        Section  11.3 Waivers and  Amendments.  This  Agreement  may be amended,
modified,   superseded  cancelled,  renewed  or  extended,  and  the  terms  and
conditions  hereof  may be  waived  only by a written  instrument  signed by the
parties or, in the case of a waiver, the party waiving  compliance.  No delay on
the part of any party in  exercising  any right,  power or  privilege  hereunder
shall operate as a waiver thereof, nor shall any waiver on the part of any party
of any right, power or privilege  hereunder,  nor any single or partial exercise
of any  right,  power or  privilege  hereunder,  preclude  any other or  further
exercise  thereof  or the  exercise  of any  other  right,  power  or  privilege
hereunder.  The rights and remedies  herein  provided are cumulative and are not
exclusive of any rights or remedies which any party may otherwise have at law or
in equity.  The rights and remedies of any party  arising out of or otherwise in
respect of any inaccuracy in or breach of any representation, warranty, covenant
or agreement  contained in this Agreement shall in no way be limited by the fact
that the act, omission,  occurrence or other state of facts upon which any claim
of any such  inaccuracy or breach is based may also be the subject matter of any
other  representation,   warranty,  covenant  or  agreement  contained  in  this
Agreement (or in any other  agreement  between the parties) as to which there is
no inaccuracy or breach.

        Section  11.4  Governing  Law.  This  Agreement  shall be  governed  and
construed in  accordance  with the laws of the State of New York  applicable  to
agreements  made  and  to  be  performed  entirely  therein  without  regard  to
principles of conflict of laws.

        Section 11.5 Consent to Jurisdiction.  All suits, actions or proceedings
arising  out of, or in  connection  with,  this  Agreement  or the  transactions
contemplated by this Agreement shall be brought in any federal or state court of
competent subject matter  jurisdiction  sitting in New York County.  Each of the
parties  hereto by  execution  and  delivery of this  Agreement,  expressly  and
irrevocably  (i) consents and submits to the personal  jurisdiction  of any such
courts in any such  action or  proceeding;  (ii)  consents to the service of any
complaint,  summons,  notice or other  process  relating  to any such  action or
proceeding  by  delivery  thereof  to such  party as set forth in  Section  11.1
hereof;  and (iii) waives any claim or defense in any such action or  proceeding
based on any alleged lack of personal  jurisdiction,  improper venue,  forum non
conveniens or any similar basis.

        Section 11.6  Assignment.  Neither the Seller nor the Principals may not
assign this  Agreement or any rights and  obligations  hereunder.  The Buyer may
assign  this  Agreement  and any  rights,  remedies,  benefits  and  obligations
hereunder.  This  Agreement  shall be binding  upon the  parties  hereto and any
permitted  successor  and assign,  and with  respect to each of the  Principals,
their respective heirs and legal representatives.

        Section 11.7 Counterparts and Facsimile.  This Agreement may be executed
in two or more  counterparts,  each of which shall be deemed an original but all
of which together shall constitute one and the same  instrument.  This Agreement
may be signed and  delivered  by any party by facsimile  transmission,  and such
transmission shall be deemed a valid signature.

        Section 11.8  Severability of Provisions.  Any portion of this Agreement
which is prohibited  or  unenforceable  in any  jurisdiction  shall,  as to such
jurisdiction   be   ineffective   to  the   extent   of  such   prohibition   or
unenforceability   without  invalidating  the  remaining  provisions  hereof  or
affecting  the  validity  or  enforceability  of  such  provision  in any  other
jurisdiction.

        Section 11.9 Exhibits and Schedules.  The Exhibits and Schedules to this
Agreement  are  hereby  made a part of this  Agreement  as if set  forth in full
herein.

        Section  11.10  Headings.  The  Article  and  Section  headings  in this
Agreement are intended solely for convenience of reference and shall be given no
effect in the interpretation of this Agreement.

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

                                              BUYER:

                                              LIBERTY FOOD GROUP, LLC

                                              By: Liberty Group Holdings, Inc.,
                                                  f/k/a Bio-Response, Inc.,
                                                  its sole member


                                                  By:
                                                     --------------------------
                                                      Name: Sally A. Fonner
                                                      Title: President


                                              SELLER:


                                              FERRO FOODS CORPORATION



                                                  By:
                                                     --------------------------
                                                      Name: Frank Ferro, Sr.
                                                      Title:


                                                  By:
                                                     --------------------------
                                                      Name: Frank Gambino
                                                      Title:


                                              PRINCIPALS:




                                                  ------------------------------
                                                  Frank Ferro, Sr., Individually



                                                  ------------------------------
                                                  Frank Gambino, Individually