ASSET PURCHASE AGREEMENT

ASSET PURCHASE AGREEMENT

      THIS ASSET PURCHASE AGREEMENT (the “Agreement”) dated March 15, 2007 (the “Effective Date”), is by and among Uroplasty, Inc., a Minnesota corporation (“Uroplasty”), and CystoMedix, Inc., a Minnesota corporation (“CystoMedix”).

R E C I T A L S :

      WHEREAS , Uroplasty is a medical device company that develops, manufactures and markets innovative, proprietary products for the treatment of voiding dysfunctions;

      WHEREAS , CystoMedix is a medical device company that developed products for patients in the urogynecology and gynecology markets, including neurostimulation devices marketed under the brand names and trademarks (collectively, the “Trademarks”) URGENT(R), “URGENT-PC™” and “URGENT-SQ™” (collectively as now existing or hereafter improved, modified or enhanced, and with any other CystoMedix products, being referred to hereafter as the “Products”);

      WHEREAS , pursuant to an Exclusive Manufacturing and Distribution Agreement dated April 18, 2005 (the “License Agreement”), Uroplasty has been acting as the exclusive manufacturer and distributor of the Products in particular territories named therein; and

      WHEREAS , although Uroplasty has an option pursuant to the License Agreement to acquire all of CystoMedix’s assets, Uroplasty desires to acquire only select intellectual property assets of CystoMedix on the terms and conditions contained in this Agreement;

      NOW, THEREFORE, IT IS AGREED AS FOLLOWS :

      SECTION 1. DEFINITIONS

     Unless otherwise defined elsewhere in this Agreement, as used in this Agreement and any exhibits or schedules hereto, the following words and phrases shall have the meanings set forth below:

     “Act” shall mean the Securities Act of 1933, as amended.

     “Authorization” and “Authorizations” shall have the meanings ascribed to them in Section 5.13 below.

     “Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day on which banking institutions located in Minneapolis, Minnesota are permitted or required by law, executive order or governmental decree to remain closed.

     “Closing” shall mean the consummation of the transactions contemplated herein as described in Section 4.1 below.

     “Closing Date” shall be the date of the Closing as described in Section 4.1 below.

     “Code” shall mean the Internal Revenue Code of 1986, as amended and interpreted by treasury regulations.

     “Uroplasty Common Stock” shall mean the Common Stock of Uroplasty, par value $.01 per share.

     “Environmental Law” shall mean any environmental or health and safety-related law, regulation, rule, ordinance, or by-law at the federal, foreign, state, or local level, whether existing as of the date hereof, previously enforced or subsequently enacted.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Fraud” shall require a showing of an intent to deceive and, with respect to a claim of misrepresentation, that the party to be charged had Knowledge of the falsity of the representation (or acted recklessly in making the representation); and with respect to an omission, that the party to be charged Knowingly failed to disclose (or acted recklessly in failing to disclose).

     “Hazardous Materials” shall mean and include any hazardous waste, hazardous material, hazardous substance, petroleum product, oil toxic substance or pollutant as defined in or pursuant to the Resource Conservation and Recovery Act, as amended, the Comprehensive Environmental Response, Compensation and Liability Act, as amended, the Hazardous Materials Transportation Act or any other foreign, federal, state or local law, regulation, ordinance, rule or by-law, whether existing as of the date hereof, previously enforced or subsequently enacted pertaining to environmental or health and safety matters.

     “Intellectual Property” shall have the meaning ascribed to it in Section 5.4(a) below.

     “Knowledge” shall mean actual knowledge after reasonable investigation by the individual or the entity referred to.

     “Person” shall mean an individual, a partnership, a corporation, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a governmental entity (or any department, agency or political subdivision thereof).

     “Purchase Consideration” shall have the meaning ascribed to it in Section 3.1 below.

     “SEC” shall mean the U.S. Securities and Exchange Commission.

     “Taxes” shall mean any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, value-added, alternative or add-on minimum, estimated or other tax of any kind whatsoever, including any interest, penalty or addition thereto, whether disputed or not.

     “Tax Return” shall mean any return, declaration, report, claim for refund or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

      SECTION 2. SALE OF ASSETS

     2.1 Sale of Intellectual Property Assets by CystoMedix . Subject to the terms and conditions set forth in this Agreement, at the Closing, CystoMedix will sell, convey, transfer, assign and deliver to Uroplasty (or to a subsidiary of Uroplasty, if so designated by Uroplasty, referred to hereafter as the “Acquisition Subsidiary”), and Uroplasty (or its Acquisition Subsidiary) will purchase from CystoMedix, the exclusive right, title and interest, free and clear of all liens, security interests and encumbrances, in and to the following intellectual property assets of CystoMedix (collectively, the “IP Assets”):

     (a)  Patents and Patent Rights . All patents applied for, issued to or owned in whole or in part by CystoMedix, or under which CystoMedix is licensed, which relate to the Products, all inventions and discoveries described or contained therein, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses, all rights to sue for past, present or future infringement thereof, all rights arising therefrom and pertaining thereto and all reissues, divisions, continuations, renewals, extensions and continuations-in-part thereof. Without limitation, the IP Assets include U.S. Patent Nos. 6,493,588 and 5,711,314, U.S. Patent Application Serial Nos. 10/195,197, 10/492,578 and 10/905,501 (and any patents that may issue with respect thereto) and any other U.S. or foreign patent or patent applications owned or controlled by CystoMedix (all together, the “Patent Rights”).

     (b)  Trademarks and Tradenames . All state (including common law), federal and foreign trademarks, service marks and trade names, URLs and domain names, and applications for registration of such trademarks, service marks and trade names, URLs and domain names, which related to the Products, all licenses relating to any of the foregoing and all income and royalties with respect to any licenses, whether registered or unregistered and wherever registered, all rights to sue for past, present or future infringement or unconsented use thereof, all rights arising therefrom and pertaining thereto and all reissues, extensions and renewals thereof. Without limitation, the IP Assets include the Trademarks, the tradename “CystoMedix” and the domain name “cystomedix.com” (all together, the “Trademark Rights”).

     (c)  Copyrights . All state, federal and foreign copyrights, copyright registrations, and applications for copyright registrations, including, without limitation, derivative works, which relate to the Products, all licenses relating to any of the foregoing, all income and royalties with respect to any licenses, all rights to sue for past, present or future infringement or unconsented use thereof, and all extensions and renewals thereof and all documents, writings, logos, artwork, tapes, disks, storage media, computer programs, computer databases, computer program flow diagrams, source codes, object codes and all tangible property embodying or incorporating the Copyrights (all together, the “Copyrights”).

     (d)  Regulatory Assets . CystoMedix’s FDA 510(k) and foreign marketing clearances or registrations for the Products (and the related rights, if any, that CystoMedix could claim to own in any amended, modified or enhanced Products as developed and marketed by Uroplasty since entering into the License Agreement), including, without limitation, all technical and design files related to preclinical testing, design, clinical, manufacturing, marketing, distribution, labeling, advertising, clinical adverse event experience (including investigational notes) and other regulatory matters, and any and all worldwide regulatory agency/Notified Body/consultant correspondence.

     (e)  Product Design and Manufacturing Specifications . All product design and manufacturing specifications, as amended, modified or enhanced from time to time, for the manufacture of the Products (the “Products Design and Manufacturing Specifications”).

     2.2 The Retained Assets . All other assets of CystoMedix which are not specifically listed as an IP Asset shall remain an asset of and owned by CystoMedix including but not limited to the following (all together, the “Retained Assets”):

     (a)  Cash and Accounts Receivable . Any and all cash and bank accounts and all investments, investment accounts or other similar holdings, all accounts receivable and all credit balances, reimbursements or rebates and any payments made or to be made by Uroplasty to CystoMedix pursuant to the License Agreement through the Closing Date hereunder.

     (b)  Tangible Assets . All of CystoMedix’s physical assets utilized by or useful to it including, but not limited to, furniture, fixtures, equipment, machinery, hardware, office equipment, tools, supplies, inventories and any other tangible personal property or assets owned by CystoMedix.

     (c)  Contracts and Agreements . All contracts and agreements of CystoMedix except license agreements related to the IP Assets pursuant to Section 2.1(a) above.

     (d)  Intangible Assets other than the IP Assets . All business plans, rights, governmental permits, approvals or authorizations, CystoMedix’s telephone numbers and other intangible property rights and interests applied for, issued to or owned in whole or in part by CystoMedix, or under which CystoMedix is licensed, which is not an IP Asset.

     (e)  Goodwill . CystoMedix as a going concern and all of its goodwill, if any.

     (f)  Customers . Any and all of CystoMedix’s past and present customer lists, prospect and prospect lists and relationships with customers and suppliers.

     (g)  Business Records . All files, logs, records, books of account, financial records, supplier files and lists, including telephone numbers, payroll and personnel records, marketing data and reports, marketing information, brochures, photographs, advertising materials, consultants’ reports, and other similar or related materials; provided the foregoing do not contain a Trademark or Copyright or otherwise comprise the IP Assets.

     2.3 Assumption of Liabilities . Uroplasty (and its Acquisition Subsidiary, if applicable) shall not assume and Uroplasty (and its Acquisition Subsidiary, if applicable) shall not be liable for any of the obligations or liabilities of CystoMedix or for obligations related to the IP Assets of any kind or nature other than obligations or liabilities arising under or related to any of the IP Assets after the Closing Date which Uroplasty agrees to specifically assume at Closing. All other obligations or liabilities of CystoMedix shall be the responsibility of CystoMedix specifically including that certain loan in excess of $1,400,000 payable to Mr. J. Stephen Schmidt, Chairman of CystoMedix or his affiliates (“Schmidt”), incurred by CystoMedix prior to the date of the License Agreement (the “Bridge Loan”).

     2.4 Right of Inspection . From the date hereof and until Closing, CystoMedix will make available at reasonable times CystoMedix’s books, records and other information as are requested by Uroplasty for examination, and for the examination by its advisors and such other information relating to the IP Assets as Uroplasty may reasonably request.

     2.5 Termination of License Agreement . Effective as of the Closing, all rights and obligations of CystoMedix and Uroplasty under the License Agreement shall terminate in all respects. As of the Closing Date, Uroplasty shall no longer be required to pay CystoMedix royalties on sales of Products by Uroplasty as of and after the Closing Date and CystoMedix shall have no rights to manufacture, sell, license or otherwise exploit the Products in any territory. Accordingly, effective as of the Closing, CystoMedix and Uroplasty each release the other and its respective officers, directors, stockholders, employees and agents from any claim, cause of action, liability, damages or expenses, including attorneys’ fees, arising out of or with respect to the License Agreement, whether known or unknown, matured or unmatured or fixed or contingent (it being intended that this is a complete release as to the License Agreement by each of CystoMedix and Uroplasty).

SECTION 3. PURCHASE CONSIDERATION

     3.1 Purchase Consideration; Manner of Payment .

     (a) As full payment for the transfer of the IP Assets under Section 2.1 by CystoMedix to Uroplasty, Uroplasty agrees to pay CystoMedix the sum $4,900,000 plus 20,000 shares of Uroplasty Common Stock (all together, the “Purchase Consideration”).

     (b) The $4,900,000 of Purchase Consideration shall also be payable in shares of Uroplasty Common Stock. On the Closing Date, Uroplasty will issue to CystoMedix that number of shares of Uroplasty’s Common Stock equal to $4,900,000 divided by the Share Price. The term “Share Price” means the greater of (i) $3.00 per share or (ii) 15% in excess of the average of the closing price of Uroplasty’s Common Stock, as quoted on the American Stock Exchange during the 20 trading days prior to the Closing Date. For example, if the average 20 day trading closing price is $3.50, the Share Price would be $3.50 x 1.15 or $4.025; and, if the average 20 day trading closing price is $2.50, the Share Price would be $3.00 because $2.50 x 1.15 is $2.875, which is less than the $3.00 per share minimum. All share computations shall be rounded to the nearest whole share.

     (c)  Sales and Use Taxes . CystoMedix shall pay any sales, use or other similar taxes payable on account of the sale of the IP Assets to Uroplasty hereunder.

     3.2 Allocation of Purchase Consideration . The Purchase Consideration (also referred to in this Agreement as the “Shares”) shall be allocated among the IP Assets in such manner as Uroplasty shall reasonably specify in writing at Closing.

SECTION 4. CLOSING

     4.1 Closing . The closing (the “Closing”) of the transactions contemplated by this Agreement shall take place at the offices of Messerli & Kramer P.A. at 10:00 a.m., local time, on March 27, 2007 or at such other time and place and on such other date as Uroplasty and CystoMedix shall agree (the “Closing Date”).

     4.2 Deliverables at Closing . The parties shall deliver the following instruments, documents and property at the Closing to one another:

     (a)  By Uroplasty . Uroplasty shall deliver an instruction letter to its stock transfer agent, authorizing the issuances of the Shares and, no later than five Business Days after Closing, Uroplasty shall deliver the stock certificate representing the Shares.

     (b)  By CystoMedix and Schmidt . CystoMedix and Schmidt shall deliver the following instruments, documents and property to Uroplasty at the Closing:

     (c)  Additional Matters . Each party agrees to execute and deliver such additional instruments, documents and property, and to take such additional action, as may reasonably be requested by another party hereto, or his, her or its counsel, in order to effectuate the transactions contemplated by this Agreement. CystoMedix further agrees that it will cooperate with and assist Uroplasty in acquiring the signatures of Jeffrey Williams and Hans van den Biggelaar, prior to and after Closing, on any and all documents or instruments to effect the assignment of the IP Assets.

     4.3 Conditions to Closing . The obligations of the parties to close hereunder are subject to the satisfaction of the following conditions on or before the Closing Date (each of which the applicable party agrees to timely perform and satisfy):

     (a)  CystoMedix’s Obligation . The obligation of CystoMedix to consummate the transactions contemplated by this Agreement is subject to satisfaction of the following contingencies on or before the Closing Date:

     (b)  Uroplasty’s Obligation . The obligation of Uroplasty to consummate the transactions contemplated by this Agreement is subject to satisfaction of the following contingencies on or before the Closing Date:

     4.4 No Shop . Until Closing or termination of this Agreement as provided below, CystoMedix and Schmidt agree not to solicit, negotiate with or provide any information to any person, firm or entity other than Uroplasty and its employees, accountants, attorneys and representatives regarding any acquisition of the IP Assets whether by merger, stock sale or other business combination.

     4.5 Termination Date . Notwithstanding any other provision of this Agreement, this Agreement shall terminate and be of no effect (and each party hereto shall bear its own expenses of any kind) if the Closing does not take place on or before April 20, 2007. Despite the foregoing, if the Closing does not take place because a party hereto (the “Defaulting Party”) has not delivered a required item under Section 4.2 to the other party (the “Non-Defaulting Party”) for the Closing or satisfied a contingency to Closing under Section 4.3 (which is not waived in writing by the Non-Defaulting Party), then, at the election in writing of the Non-Defaulting Party, the Closing shall be postponed (but not beyond July 20, 2007) so that the Defaulting Party may remedy its default. The Defaulting Party agrees that the Non-Defaulting Party may obtain an order directing the Defaulting Party to comply with its obligations and to proceed with a Closing as contemplated hereby.

SECTION 5. REPRESENTATIONS AND WARRANTIES OF SELLER

     As a material inducement to Uroplasty to enter into this Agreement and to consummate the transactions contemplated hereby, CystoMedix hereby makes to Uroplasty each of the representations and warranties set forth in this Section 5.

     5.1 Organization and Qualification; No Operations . CystoMedix is a corporation duly organized, validly existing and in good standing under the laws of the State of Minnesota and has full power and authority to own or lease its properties and to conduct its business in the manner and in the places where such properties are owned or leased or as such business is currently conducted. Except as described on the Schedule of Other Activities (Schedule 5.1), CystoMedix is not and has not been since the date of the License Agreement engaged in the manufacture, sale or distribution of the Products other than collecting royalties from Uroplasty under the License Agreement. As of the Closing Date, CystoMedix’s business activities will consist solely of holding the Shares and the Retained Assets.

     5.2 Authority . CystoMedix has full right, power and authority to enter into this Agreement and each agreement, document and instrument to be executed and delivered by CystoMedix pursuant to this Agreement and to carry out the transactions contemplated hereby and thereby. The execution, delivery and performance of this Agreement and each such other agreement, document and instrument by CystoMedix has been duly and validly authorized and approved by all necessary action on the part of CystoMedix and no other action on the part of CystoMedix or its stockholders is required in connection therewith. This Agreement and each agreement, document and instrument to be executed and delivered by CystoMedix and Schmidt pursuant to this Agreement constitutes, or when executed and delivered will constitute, the legal, valid and binding obligation of CystoMedix and Schmidt, each enforceable in accordance with their respective terms, except to the extent that enforcement is limited by bankruptcy, insolvency, moratorium, conservatorship, receivership or similar laws of general application affecting creditors’ rights or by the application by a court of equity principles. The execution, delivery and performance by CystoMedix of this Agreement and each such agreement, document and instrument:

     (a) does not and will not violate any foreign, federal, state, local or other laws, regulations or ordinances applicable to CystoMedix;

     (b) does not or will not violate any term or provision of the Articles or Bylaws of CystoMedix; and

     (c) does not and will not result in a breach of, constitute or result in a default under, accelerate any obligation under or give rise to a right of termination of, any indenture or loan or credit agreement or any other agreement, contract, instrument, mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction, decree, determination or arbitration award to which CystoMedix is a party or by which the IP Assets are bound or affected, or result in the creation or imposition of any mortgage, pledge, lien, security interest or other charge or encumbrance on any of the IP Assets.

     Except as obtained by CystoMedix prior to the Closing, no consent or waiver by, approval of, or designation, declaration or filing with, any Person is required in connection with the execution, delivery and performance by CystoMedix of this Agreement and each agreement, document and instrument to be executed and delivered by CystoMedix pursuant to this Agreement.

     5.3 Title to IP Assets; Liens . CystoMedix has good and marketable title to the IP Assets and none of the IP Assets is subject to any mortgage, pledge, lien, conditional sales agreement, security interest, encumbrance or other charge except as specifically reflected in the Schedule of Liens (Schedule 5.3). The IP Assets are the only assets used in or otherwise necessary to the manufacture, sale, and distribution of the Products as currently manufactured and distributed by Uroplasty under the License Agreement.

     5.4 Intellectual Property .

     (a) All Patent Rights, Trademarks and Copyrights (collectively, the “Intellectual Property”) are listed in the Schedule of Intellectual Property (Schedule 5.4) attached hereto, which Schedule indicates, with respect to each, the nature of CystoMedix’s interest therein and the expiration date thereof or the date on which CystoMedix’s interest therein terminates. Except as set forth on the Schedule of Intellectual Property , the Intellectual Property have been duly registered in, filed in or issued by, as the case may be, the United States Patent and Trademark Office, the United States Register of Copyrights or the corresponding offices of other countries identified on said Schedule, and have been properly maintained and renewed in accordance with all applicable provisions of law and administrative regulations in the United States and each such country.

     (b) Except as set forth on the Schedule of Intellectual Property , the Intellectual Property is owned exclusively by CystoMedix, free and clear of any attachments, liens, encumbrances or adverse claims.

     (c) Except as set forth on the Schedule of Intellectual Property , there are no claims or demands of any other person pertaining to the Intellectual Property and no proceedings have been instituted, are pending or, to