ASSET PURCHASE AGREEMENT

EXHIBIT 2.1 ASSET PURCHASE AGREEMENT AMONG IVIVI TECHNOLOGIES, INC. (AS THE COMPANY) IVIVI TECHNOLOGIES, LLC (AS BUYER) AND AJAX CAPITAL LLC ONLY FOR PURPOSES OF SECTION 10.16 (AS GUARANTOR) SEPTEMBER 24, 2009

iii ASSET PURCHASE AGREEMENT, dated September 24, 2009 (this "AGREEMENT"), by and among Ivivi Technologies, Inc., a New Jersey corporation (the "COMPANY"), Ivivi Technologies LLC, a Delaware limited liability company (the "BUYER") and, only for purposes of SECTION 10.16, Ajax Capital LLC, a Delaware limited liability company ("AJAX"). Certain other capitalized terms used herein are defined in SECTION 10.17 and throughout this Agreement. RECITALS WHEREAS, the Company is currently engaged in the business of designing, developing and commercializing certain proprietary early-stage medical electrotherapeutic technologies and engaged in sponsored research involving electrotherapeutic technologies (the "BUSINESS"); WHEREAS, the Company wishes to sell, convey, assign and otherwise transfer to the Buyer, and the Buyer wishes to purchase and obtain the assignment from the Company, substantially all of the assets of the Company relating to the Business, and the Buyer wishes to assume certain liabilities of the Company relating to the Business, in each case as set forth in this Agreement and on the terms and subject to the conditions of this Agreement (the "TRANSACTION"); WHEREAS, the Board of Directors of the Company (the "BOARD"), acting upon the unanimous recommendation of a Special Committee of the Board (the "SPECIAL COMMITTEE"), has unanimously (with the Chairman of the Board abstaining) (i) approved the execution, delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby, including the Transaction, and (ii) resolved to recommend approval of this Agreement by the shareholders of the Company; WHEREAS, concurrently with the execution of this Agreement, as a condition and inducement to the Buyer's willingness to enter into this Agreement, the Buyer, the Company and certain shareholders of the Company are entering into a voting agreement of even date herewith (the "VOTING AGREEMENT"), pursuant to which such shareholders have agreed, subject to the terms thereof, to vote their respective shares of common stock, no par value, of the Company (the "COMPANY COMMON STOCK") in favor of approval of this Agreement and the transactions contemplated by this Agreement; WHEREAS, concurrently with the execution of this Agreement, as a condition and inducement to the Buyer's willingness to enter into this Agreement, the Company and Emigrant Capital Corp. ("EMIGRANT") are entering into an Amended and Restated Forbearance Agreement, of even date herewith (the "FORBEARANCE AGREEMENT"), pursuant to which Emigrant is providing the Company with an extension to allow for the repayment of the Company's indebtedness owed to Emigrant concurrently with the Closing; and 1 WHEREAS, the Company and the Buyer desire to make certain representations, warranties, covenants and agreements in connection with the Transaction and the other transactions contemplated by this Agreement and also to prescribe certain conditions to the Transaction as specified herein. NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, the Company and the Buyer hereby agree as follows: ARTICLE I SALE AND PURCHASE AND ASSUMPTION Section 1.1. SALE AND PURCHASE OF ACQUIRED ASSETS. At the Closing, upon the terms and subject to the conditions of this Agreement, the Company will sell, transfer, convey and assign to the Buyer, and the Buyer will purchase and accept, free and clear of all Liens (except for Liens created by the Buyer), all of the right, title, benefit and interest of the Company in, to and under all of the assets relating to the Business, including all of the following assets, but excluding the Excluded Assets (collectively, the "ACQUIRED ASSETS"): (a) FIXED ASSETS. Those assets of the Company set forth on SCHEDULE 1.1(a); (b) INVENTORY. All inventory of the Company relating to the Business as of the Closing; (c) ACCOUNTS RECEIVABLE. All accounts receivable of the Company as of the Closing; (d) INTELLECTUAL PROPERTY. All Intellectual Property owned by the Company that is registered, issued or the subject of a pending application as set forth on SCHEDULE 1.1(d); (e) ASSUMED CONTRACTS. All Contracts listed and limited to those set forth on SCHEDULE 1.1(e) (the "ASSUMED CONTRACTS"); (f) REGULATORY APPROVALS. All Regulatory Approvals, including all Regulatory Approvals from the United States Food and Drug Administration, of the Company set forth on SCHEDULE 1.1(f) to the extent such Regulatory Approvals are assignable under applicable Law; (g) RIGHTS UNDER THE COMPANY'S INSURANCE POLICIES. All rights, claims and credits of the Company arising under any of the Company's insurance policies (whether received prior to or following the Closing) solely in respect of any asset damaged, lost or condemned after the date hereof and which, if not so damaged, lost or condemned, would have been an Acquired Asset; and (h) OTHER ASSETS. All other property and equipment of the Company relating to the Business as set forth on SCHEDULE 1.1(h). 2 At the Closing, the sale, transfer, conveyance, assignment and delivery of the Acquired Assets will be effected pursuant to the Bill of Sale and Assignment substantially in the form of EXHIBIT A and the Intellectual Property Assignment substantially in the form of EXHIBIT B and shall be transferred and conveyed to the Buyer at Closing free and clear of all Liens. Notwithstanding anything to the contrary contained in this Agreement, the transfer of the Acquired Assets will not include the assumption of any liability related to the Acquired Assets unless the Buyer expressly assumes that liability pursuant to SECTION 1.3 of this Agreement. Section 1.2. EXCLUDED ASSETS. The Buyer shall not acquire any right, title, benefit or interest in, to or under the following (the "EXCLUDED ASSETS"): (a) CASH AND CASH EQUIVALENTS. All cash and cash equivalents of the Company as of the Closing; (b) COMPANY'S ORGANIZATIONAL ASSETS. The Company's amended certificate of incorporation and by-laws, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, tax returns, seals, minute books, stock transfer books and similar documents of the Company relating to the organization, maintenance and existence of the Company as a corporation; (c) LEASE AGREEMENT. The lease agreement between the Company and Mack-Cali East Lakemont LLC, dated June 18, 2007 (the "LEASE AGREEMENT"); (d) OTHER CREDITS. Any rights to payments or payments (whenever received) from the surrender of net operating loss carryovers, tax credits, or similar tax benefits by the Company, including pursuant to the corporation business tax benefit certificate transfer program established by the New Jersey Economic Development Authority within the New Jersey Emerging Technology and Biotechnology Financial Assistance Program (N.J. Rev. Stat. Sec. 34:1B-7.42a); (e) RIGHTS, CLAIMS AND CREDITS. All rights, claims and credits of the Company to the extent relating to any other Excluded Asset or any Excluded Liability (as defined in SECTION 1.4), including any such rights, claims and credits arising under insurance policies and all guarantees, warranties, indemnities and similar rights in favor of the Company in respect of any other Excluded Asset or any Excluded Liability; (f) INSURANCE POLICIES. All insurance policies to which the Company is a party (for avoidance of doubt, any rights, claims and credits arising under any of the Company's insurance policies as contemplated under SECTION 1.1(g), shall be deemed Acquired Assets); and (g) OTHER ASSETS. Those assets of the Company set forth on SCHEDULE 1.2(g). 3 Section 1.3. ASSUMED LIABILITIES. Upon the terms and subject to the conditions of this Agreement, at the Closing, the Buyer will, effective as of the Closing, and from and after the Closing, assume and agree to pay, perform and discharge when due, all liabilities, obligations and commitments of the Company under the Assumed Contracts from and after the Closing in accordance with their terms (the "ASSUMED LIABILITIES"); PROVIDED, however, that the Buyer shall not assume or agree to pay, discharge, satisfy and perform any liabilities arising (i) out of the Company's breach of or default under any of its obligations in relation to any of the Assumed Contracts occurring prior to the Closing or (ii) before the Closing. The assumption of the Assumed Liabilities by the Buyer will be effected pursuant to the Assumption Agreement substantially in the form of EXHIBIT C. Section 1.4. EXCLUDED LIABILITIES. Except for the Assumed Liabilities, the Buyer will not assume, be bound by or be deemed to have assumed, agreed to pay, perform, fulfill or discharge, and the Company will remain responsible for, any other duties, responsibilities, obligations or liabilities of the Company (whether or not related to the Business), whether known or unknown, fixed or contingent (the "EXCLUDED LIABILITIES"). For the avoidance of doubt, the Excluded Liabilities shall include, but shall not be limited to: (a) all liabilities relating to product liability or similar claims arising out of (i) the production or manufacture of any products of the Business prior to the Closing Date and (ii) the sale, marketing or use of such products assuming that the manufacture of such products occurred prior to the Closing; (b) all liabilities relating to the Excluded Assets (whether arising before, on or after the Closing); (c) all liabilities relating to any existing or future obligations of the Company under the Lease Agreement; (d) all liabilities relating to any of the Company's indebtedness owed to Emigrant; (e) all liabilities relating to the Assumed Contracts arising prior to the Closing; (f) all liabilities relating to any Hazardous Substance and any Environmental Law, as applicable to the Company; (g) all liabilities relating to any Tax and Tax Returns applicable to the Company (whether arising prior to, on or after the Closing); (h) all liabilities arising prior to the Closing relating to the use or ownership of any Intellectual Property included in the Acquired Assets; 4 (i) any liabilities or expenses relating to or arising out of any (i) Company Benefit Plan, whether or not such liabilities arise prior to or after the Closing or (ii) other liabilities related to the employment or termination of employment of any Person arising from or related to the operation of the Business by the Company (whether arising before, on or after the Closing) or the transactions contemplated by this Agreement (including, without limitation, liabilities related to the SMG Agreements (as defined in SECTION 6.15) or the Clubb Term Sheet (as defined in SECTION 6.15)); (j) any liabilities relating to or arising out of the employment practices of the Company or Affiliate occurring prior to the Closing; (k) any liabilities relating to workers' compensation claims and occupational health claims against the Company for exposure, accidents or injuries occurring prior to the Closing; and (l) any liabilities relating to or arising out of the issued and outstanding Warrants (as defined in SECTION 4.15). Section 1.5. COMPANY'S DELIVERABLES. At the Closing, in addition to any other deliverables specified in this Agreement, the Company shall deliver, or cause to be delivered, to the Buyer: (a) a Bill of Sale and Assignment substantially in the form of EXHIBIT A duly executed by the Company; (b) an Intellectual Property Assignment substantially in the form of EXHIBIT B duly executed by the Company; (c) an Assumption Agreement substantially in the form of EXHIBIT C duly executed by the Company; (d) a duly executed payoff letter with respect to all of the Company's indebtedness owed to Emigrant (which letter shall include, among others, the release of all Liens in favor of Emigrant and the termination of all of the issued and outstanding Warrants held by Emigrant) in form and substance reasonably satisfactory to the Buyer; (e) a copy of (i) the Company's amended certificate of incorporation and by-laws, (ii) all required resolutions of the Company, authorizing the execution, delivery and performance by the Company of this Agreement and the transactions contemplated hereby, including the Transaction, (iii) all required resolutions of the Company removing the obstacles under the New Jersey Shareholders' Protection Act with respect to the Buyer, and (iv) the incumbency of each person executing this Agreement and any other agreement, document or instrument contemplated hereby, in each case, certified by the Secretary of the Company to be true, correct, complete, unchanged and in full force and effect as of the Closing Date; and (f) each other certificate, instruments and documents as the Buyer may reasonably request in connection with Transaction. 5 Section 1.6. BUYER'S DELIVERABLES. At the Closing, in addition to any other deliverables specified in this Agreement, the Buyer shall deliver, or cause to be delivered, to the Company: (a) the Purchase Price in accordance with SECTION 2.1 below; (b) an Assumption Agreement substantially in the form of EXHIBIT C duly executed by the Buyer; (c) a copy of (i) all required resolutions of the Buyer, authorizing the execution, delivery and performance by the Buyer of this Agreement and the transactions contemplated hereby, including the Transaction, and (ii) the incumbency of each person executing this Agreement and any other agreement, document or instrument contemplated hereby, in each case, certified by the managing member or proper officer of the Buyer to be true, correct, complete, unchanged and in full force and effect as of the Closing Date; and (d) each other certificate, instruments and documents as the Company may reasonably request in connection with Transaction. Section 1.7. NONASSIGNABLE ASSETS. Nothing in this Agreement nor the consummation of the Transaction or the other transactions contemplated hereby shall be construed as an attempt or agreement to assign or transfer any Acquired Asset to the Buyer which by its terms or by Law is not assignable or transferable without a consent or satisfaction of any other condition or is cancelable by a third party in the event of an assignment or transfer (a "NONASSIGNABLE ASSET"), unless and until such consent shall have been obtained or condition satisfied. The Company shall use commercially reasonable efforts to obtain as expeditiously as possible any consent that may be required and to satisfy any condition necessary to the assignment or transfer of a Nonassignable Asset to the Buyer. The cost of obtaining any such consent or satisfying any such condition shall be borne by the Company. Unless and until any such consent that may be required is obtained or condition satisfied, to the extent permitted by applicable Laws and by the terms of the applicable Nonassignable Asset, the Company and the Buyer will cooperate and use commercially reasonable efforts to establish an arrangement reasonably satisfactory to the Company and the Buyer under which the Buyer would obtain the claims, rights and benefits and assume the corresponding liabilities and obligations (to the extent such obligations would not constitute Excluded Liabilities) under such Nonassignable Asset (including by means of any subcontracting, sublicensing or subleasing arrangement) or under which the Company would enforce for the benefit of the Buyer, with the Buyer assuming and agreeing to pay the Company's obligations (to the extent such obligations would not constitute Excluded Liabilities), any and all claims, rights and benefits of the Company against a third party thereto. With respect to any Nonassignable Assets for which such an arrangement has been established, the Company shall promptly pay over to the Buyer the amount of all payments received by the Company in respect of such Nonassignable Assets. 6 ARTICLE II PURCHASE PRICE; ALLOCATION OF PURCHASE PRICE Section 2.1. PAYMENT OF PURCHASE PRICE. Subject to that certain Closing Agreement, of even date herewith, by and among the Company, the Buyer, Steven M. Gluckstern ("SMG"), Kathryn Clubb ("CLUBB"), Emigrant and Emigrant Mortgage Company, Inc. ("EMC") (the "CLOSING AGREEMENT"), at the Closing, upon the terms and subject to the conditions of this Agreement, the Buyer shall pay the Company, by wire transfer of immediately available funds, an aggregate amount equal to the sum of (i) the amount necessary to pay in full the principal of, and accrued interest on, the Company's indebtedness owed to Emigrant plus (ii) $475,000; PROVIDED, HOWEVER, that the sum of the amounts specified in clauses (i) and (ii) shall in no event exceed THREE MILLION ONE HUNDRED AND FIFTY THOUSAND DOLLARS ($3,150,000) (the "PURCHASE PRICE"). Section 2.2. ALLOCATION OF PURCHASE PRICE. The Company and the Buyer agree that the Purchase Price shall be allocated among the Acquired Assets for all purposes (including Tax and financial accounting purposes) as jointly agreed in good faith by the Company and the Buyer prior to Closing. The Company and the Buyer agree (a) to report as required the federal, state, local and foreign income and other Tax consequences of the Transaction, (b) to jointly prepare forms, as may be required, in a manner consistent with such allocation, and (c) without the consent of the other party, not to take any position inconsistent therewith upon examination of any Tax Return, in any refund claim, in any litigation, investigation or otherwise. The Company and the Buyer agree that each will furnish the other a copy of any such required forms that are filed with any Governmental Entity with respect to Taxes by such party or any affiliate relating to the Transaction within ten Business Days prior to the filing of such form. ARTICLE III CLOSING; CLOSING DATE Section 3.1. CLOSING; CLOSING DATE. Upon the terms and subject to the conditions of this Agreement, the closing of the transactions contemplated by this Agreement (the "CLOSING") will take place at 10:00 a.m., local time, as soon as practicable (and, in any event, within three Business Days) following the receipt by the Company of the Company Shareholder Approval, unless this Agreement has been terminated pursuant to its terms; PROVIDED, HOWEVER, that the Closing shall occur simultaneously with the closing of, and funding under, the Closing Agreement. The Closing shall be held at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York 10019-6064, or by facsimile or other exchange of executed documents, or such other location as the Buyer and the Company may mutually agree. The time and date upon which the Closing occurs is herein referred to as the "CLOSING DATE." 7 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except as disclosed in the disclosure letter delivered by the Company to the Buyer immediately prior to the execution of this Agreement (the "COMPANY DISCLOSURE LETTER," it being agreed that disclosure of any item in any section of the Company Disclosure Letter shall also be deemed disclosure with respect to any other section of this Agreement to which the relevance of such item is reasonably apparent on its face), the Company represents and warrants to the Buyer that the following statements contained in this ARTICLE IV are true and correct: Section 4.1. QUALIFICATION, ORGANIZATION, ETC. (a) The Company is a legal entity duly organized, validly existing and in good standing under the Laws of the State of New Jersey. The Company has all requisite corporate power and authority to own, lease and operate its properties and assets (including the Acquired Assets) and to carry on its Business as presently conducted. (b) The Company is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets (including Acquired Assets) or properties or conduct of its Business requires such qualification, except where the failure to be so qualified and in good standing would not, individually or in the aggregate, result in any Company Material Adverse Effect. The organizational documents of the Company, as previously made available to the Buyer, are in full force and effect. The Company is not in violation of its organizational documents. Section 4.2. SUBSIDIARIES. The Company has no Subsidiaries and does not own or control, directly or indirectly, any shares of capital stock or other equity interest of any other corporation or limited liability company or any interest in any partnership, joint venture or other non-corporate business enterprise. Section 4.3. CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT; NO VIOLATION. (a) The Company has the requisite corporate power and authority to enter into this Agreement and, subject to receipt of the Company Shareholder Approval (as defined in SECTION 4.5), to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board, acting upon the unanimous recommendation of the Special Committee, and, except for the Company Shareholder Approval, no other corporate proceedings on the part of the Company are necessary to authorize the consummation of the transactions contemplated hereby. As of the date hereof, each member of the Board (with the Chairman of the Board abstaining) and the Special Committee of the Board has unanimously resolved to recommend that the Company's shareholders approve this Agreement and the transactions contemplated hereby (including the Special Committee's recommendation, the "RECOMMENDATION"). 8 This Agreement has been duly and validly executed and delivered by the Company and, assuming this Agreement constitutes the valid and binding agreement of the Buyer, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and any implied covenant of good faith and fair dealing. (b) Other than in connection with or in compliance with (i) the Securities Exchange Act of 1934 (the "EXCHANGE ACT"), (ii) filing to record the termination of security interest held by Emigrant in the Acquired Assets required under the Uniform Commercial Code and (iii) the Regulatory Approvals set forth on SECTION 4.3(b) of the Company Disclosure Letter, no authorization, consent or approval of, or filing with, any United States or foreign governmental or regulatory agency, commission, court, body, entity or authority (each, a "GOVERNMENTAL ENTITY") is necessary, under applicable Law, for the consummation by the Company of the transactions contemplated hereby. (c) The execution and delivery by the Company of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof by the Company will not (i) result in any violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under any material loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, Company Permit, concession, franchise, right or license binding upon the Company or result in the creation of any liens, claims, mortgages, encumbrances, pledges, security interests, equities or charges of any kind (each, a "LIEN") upon any of the properties of the Company (including the Acquired Assets), (ii) conflict with or result in any violation of any provision of the certificate of incorporation or by-laws, in each case as amended, of the Company or (iii) assuming that the consents and approvals referred to in SECTION 4.3(b) are duly obtained, conflict with or violate any applicable Laws, except in the case of clauses (i) and (iii), for any such violations, defaults or conflicts which would not be materially adverse to the Company. Section 4.4. OPINION OF FINANCIAL ADVISOR. The Board and the Special Committee have received the opinion of Foundation Ventures LLC to the effect that, as of the date hereof, the Purchase Price is fair to the Company from a financial point of view. Section 4.5. REQUIRED VOTE OF THE COMPANY SHAREHOLDERS. The affirmative vote of the holders of outstanding shares of Company Common Stock, voting together as a single class, representing a majority of all the votes cast by the holders of shares of Company Common Stock entitled to vote at a meeting of shareholders, is the only vote of holders of securities of the Company which is required to approve this Agreement, the Transaction and the other transactions contemplated hereby (the "COMPANY SHAREHOLDER APPROVAL"). 9 Section 4.6. STATE TAKEOVER STATUTES. No state anti-takeover statute or regulation (including the New Jersey Shareholders' Protection Act), nor any takeover-related provision in the Company's amended certificate of incorporation or by-laws, as amended, would (a) prohibit or restrict the ability of the Company to perform its obligations under this Agreement or any related agreement or the Company's ability to consummate the Transaction or the other transactions contemplated hereby and thereby, (b) have the effect of invalidating or voiding this Agreement or any provision hereof, or (c) subject the Buyer to any impediment or condition in connection with the exercise of any of its rights under this Agreement. The Board has taken all necessary actions, including the approval of the Transaction and the other transactions contemplated by this Agreement, to remove any obstacle under the New Jersey Shareholders' Protection Act to consummate the Transaction and the other transactions contemplated by this Agreement such that the New Jersey Shareholders' Protection Act no longer applies to the execution, delivery and performance of this Agreement, including the consummation of the Transaction and the other transactions contemplated by this Agreement. Section 4.7. REPORTS AND FINANCIAL STATEMENTS. The financial statements (including all related notes and schedules) of the Company (such financial statements being consolidated to the extent applicable) included in the Company SEC Documents fairly present in all material respects the financial position of the Company, as at the respective dates thereof, and the results of its operations and its cash flows for the respective periods then ended (subject, in the case of the unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including the notes thereto) in conformity with GAAP (except, in the case of the unaudited statements, as permitted by the Securities and Exchange Commission (the "SEC")) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto); PROVIDED, however, that the representations and warranties contained in this SECTION 4.7 with respect to any unaudited statements included in the Company SEC Documents shall be qualified by the Company's Knowledge. Section 4.8. NO UNDISCLOSED LIABILITIES. Except (i) as reflected or reserved against in the Company's audited consolidated balance sheet as of December 31, 2008, (ii) for transactions contemplated by this Agreement, (iii) for liabilities and obligations incurred in the ordinary course of business which are similar in nature and amount to the liabilities which arose during the comparable period of time in the immediately preceding fiscal period and (iv) for liabilities or obligations which have been discharged or paid in full in the ordinary course of business (after taking into consideration the current financial condition of the Company), the Company does not have any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, whether known or unknown and whether due or to become due. 10 Section 4.9. MATERIAL CONTRACTS. (a) Except for this Agreement, the Company Benefit Plans, the Assumed Contracts or as set forth in SECTION 4.9(a) of the Company Disclosure Letter, the Company is not a party to or bound by, as of the date hereof, any Contract (whether written or oral) (i) which is a "material contract" (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to the Company; (ii) which constitutes a contract or commitment relating to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in excess of $10,000; (iii) which contains any provision that prior to or following the Closing Date would materially restrict or alter the conduct of business of, or purport to materially restrict or alter the conduct of business of, whether or not binding on, the Buyer or any Affiliate of the Buyer; or (iv) pursuant to which any rights in any material Company Intellectual Property are granted to the Company by a third party or granted to a third party by the Company (all contracts of the type described in this SECTION 4.9(a) being referred to herein as "COMPANY MATERIAL CONTRACTS"). To the Company's Knowledge, the Company is not a party to any Contract (other than any Contracts to which the Buyer or any Affiliate of the Buyer is a party) that purports to be binding on, or imputes any obligations on, the Buyer or any Affiliate of the Buyer. (b) (i) Each Company Material Contract is valid and binding on the Company and in full force and effect, (ii) the Company has in all material respects performed all obligations required to be performed by it to date under each Company Material Contract, and (iii) the Company has not received written notice of, or to the Company's Knowledge, knows of, the existence of any event or condition which constitutes, or, after notice or lapse of time or both, will constitute, a material default on the part of the Company under any such Company Material Contract. Section 4.10. COMPLIANCE WITH LAW. The Company is, and since December 31, 2006 has been, in compliance in all material respects with and is not in material default under or in violation of any Law. Section 4.11. PROXY STATEMENT; OTHER INFORMATION. The Proxy Statement will not at the time of the mailing of the Proxy Statement to the shareholders of the Company, at the time of the Company Meeting, and at the time of any amendments thereof or supplements thereto, and the information supplied or to be supplied by the Company for inclusion or incorporation by reference in the Schedule 13E-3 to be filed with the SEC concurrently with the filing of the Proxy Statement, will not, at the time of its filing with the SEC, and at the time of any amendments thereof or supplements thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, that no representation is made by the Company with respect to information supplied by or related to the Buyer. The Proxy Statement and the Schedule 13E-3 will comply as to form in all material respects with the Exchange Act, except that no representation is made by the Company with respect to information supplied by or related to the Buyer. 11 Section 4.12. INTELLECTUAL PROPERTY. The Company owns, or is licensed or otherwise possesses adequate rights to use, all material Intellectual Property used or held for use in its Business as currently conducted (collectively, the "COMPANY INTELLECTUAL PROPERTY"). SECTION 4.12 of the Company Disclosure Letter sets forth a true, correct and complete list of all Company Intellectual Property owned by the Company that is registered, issued or the subject of a pending application. To the Company's Knowledge, the conduct of the Business of the Company does not infringe any Intellectual Property of any person and no claim is pending or threatened in writing alleging any Intellectual Property infringement by the Company. To the Company's Knowledge, the Company has not made any claim of a violation or infringement by others of its rights to or in connection with the Intellectual Property of the Company. To the Company's Knowledge, no person is infringing any Company Intellectual Property owned by the Company. To the Company's Knowledge, all software material to the Business (i) performs in material conformance with its documentation, (ii) is free from any material software defect, and (iii) does not contain any virus, software routine or hardware component designed to permit unauthorized access or to disable or otherwise harm any computer, systems or software, or any software routine designed to disable a computer program automatically with the passage of time or under the positive control of a person other than an authorized licensee or owner of the software. Section 4.13. INSURANCE. The Company maintains, or is entitled to the benefits of, insurance covering its properties (including the Acquired Assets), operations, personnel and Business in the amounts set forth in SECTION 4.13 of the Company Disclosure Letter. To the Company's Knowledge, the Company has not received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force. Section 4.14. FINDERS OR BROKERS. Except for Foundation Ventures LLC, the Company has not engaged any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Transaction or the other transactions contemplated hereby. Section 4.15. WARRANTS. SECTION 4.15 of the Company Disclosure Letter sets forth a true, complete and correct list of all of the issued and outstanding warrants to purchase shares of Company Common Stock (each, a "WARRANT") as of the date hereof, which list shall include the identity of the warrantholders, the number of shares of Company Common Stock which are subject to issuance pursuant to each Warrant, the exercise price of each Warrant and the expiration date of each Warrant. The Company has provided to the Buyer correct and complete copies of all of the Contracts evidencing all of the issued and outstanding Warrants. Section 4.16. INVENTORY. SECTION 4.16 of the Company Disclosure Letter sets forth a true, complete and correct list of all of the Company's inventory relating to the Business (including raw materials, work in process and finished goods) as of the date hereof. All of the inventory of the Company, which consists of raw materials, work in process and finished goods, is, in all material respects, merchantable and usable or saleable in the ordinary course of business. 12 ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER Except as disclosed in the disclosure letter delivered by the Buyer to the Company immediately prior to the execution of this Agreement (the "BUYER DISCLOSURE LETTER," it being agreed that disclosure of any item in any section of the Buyer Disclosure Letter shall also be deemed disclosure with respect to any other section of this Agreement to which the relevance of such item is reasonably apparent on its face), the Buyer represents and warrants to the Company that the following statements contained in this ARTICLE V are true and correct: Section 5.1. QUALIFICATION; ORGANIZATION. (a) The Buyer is a legal entity duly organized, validly existing and in good standing under the Laws of the State of Delaware. The Buyer has all requisite limited liability company power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted. (b) The Buyer is qualified to do business and is in good standing as a limited liability company in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified and in good standing would not, individually or in the aggregate, result in any Buyer Material Adverse Effect. The organizational or governing documents of the Buyer, as previously made available to the Company, are in full force and effect. The Buyer is not in violation of its organizational or governing documents. Section 5.2. CORPORATE AUTHORITY RELATIVE TO THIS AGREEMENT; NO VIOLATION. (a) The Buyer has all requisite limited liability company power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the managing member of the Buyer and no other corporate proceedings on the part of the Buyer are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Buyer and, assuming this Agreement constitutes the valid and binding agreement of the Company, this Agreement constitutes the valid and binding agreement of the Buyer, enforceable against the Buyer in accordance with its terms, subject to the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, general equitable principles (whether considered in a proceeding in equity or at law) and any implied covenant of good faith and fair dealing. 13 (b) Other than in connection with or in compliance with the Regulatory Approvals set forth on SECTION 5.2(b) of the Buyer Disclosure Letter, no authorization, consent or approval of, or filing with, any Governmental Entity is necessary for the consummation by the Buyer of the transactions contemplated by this Agreement. (c) The execution and delivery by the Buyer of this Agreement does not, and the consummation of the transactions contemplated hereby and compliance with the provisions hereof will not (i) result in any violation of, or default (with or without notice or lapse of time, or both) under, require consent under, or give rise to a right of termination, cancellation or acceleration of any obligation or to the loss of any benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon the Buyer or any of its Subsidiaries or result in the creation of any Lien upon any of the properties or assets of the Buyer or any of its Subsidiaries, (ii) conflict with or result in any violation of any provision of the certificate of incorporation or by-laws or other equivalent organizational document, in each case as amended, of the Buyer or any of its Subsidiaries or (iii) conflict with or violate any applicable Laws. Section 5.3. PROXY STATEMENT; OTHER INFORMATION. None of the information supplied or to be supplied by the Buyer in writing for inclusion or incorporation by reference in the Proxy Statement will at the time of the mailing of the Proxy Statement to the shareholders of the Company, at the time of the Company Meeting, and at the time of any amendments thereof or supplements thereto, and none of the information supplied or to be supplied by the Buyer and contained in the SCHEDULE 13E-3 to be filed with the SEC concurrently with the filing of the Proxy Statement, will, at the time of its filing with the SEC, and at the time of any amendments thereof or supplements thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Section 5.4. FINANCING. The Buyer will have sufficient funds to ensure timely payment in full of the Purchase Price in accordance with the terms of this Agreement. Section 5.5. FINDERS OR BROKERS. The Buyer has not engaged any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Transaction or the other transactions contemplated hereby. Section 5.6. CERTAIN ARRANGEMENTS. Other than the Voting Agreement and the Contracts filed or incorporated by reference as an Exhibit to a Company SEC Document filed prior to the date hereof, there are no Contracts between the Buyer, on the one hand, and any member of the Company's management or directors, on the other hand, as of the date hereof that relate in any way to the Company or the transactions contemplated by this Agreement. The Buyer has provided the Special Committee with true, correct and complete copy of the Voting Agreement. 14 Section 5.7. INVESTIGATIONS; LITIGATION. There are no suits, claims, actions, proceedings, arbitrations, mediations or investigations pending or, to the Knowledge of the Buyer, threatened against the Buyer or any of its Subsidiaries. As of the date hereof, the Buyer is not subject to any order, writ, judgment, injunction, decree or award. Section 5.8. DISCLAIMER. The Buyer acknowledges and agrees that it has not relied on any representation and warranty or other statement of any Person on behalf of the Company other than the representations and warranties of the Company expressly set forth in ARTICLE IV. The Buyer acknowledges and agrees that no Representative of the Company shall have any responsibility or liability related to or with respect to the representations and warranties set forth in ARTICLE IV. ARTICLE VI COVENANTS AND AGREEMENTS Section 6.1. CONDUCT OF BUSINESS BY THE COMPANY. (a) From and after the date hereof and prior to the Closing Date or the date, if any, on which this Agreement is earlier terminated pursuant to SECTION 8.1 (the "TERMINATION DATE"), and except (i) as may be required by applicable Law, (ii) with the prior written consent of the Buyer, or (iii) as expressly contemplated or permitted by this Agreement, the Company shall (A) conduct its Business in all material respects in the ordinary course consistent with past practices (after taking into consideration the current financial condition of the Company), (B) use commercially reasonable efforts to maintain and preserve intact its Business, the Acquired Assets and its advantageous business relationships and (C) use commercially reasonable efforts to obtain any necessary approvals (including the Regulatory Approvals) of any regulatory agency or other Governmental Entity required for the transactions contemplated hereby, performing its covenants and agreements under this Agreement or consummating the transactions contemplated hereby or otherwise materially delay or prohibit consummation of the Transaction or other transactions contemplated hereby; PROVIDED, HOWEVER, that no action by the Company with respect to matters specifically addressed by any other provision of this SECTION 6.1 shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision. (b) The Company agrees with the Buyer that between the date hereof and the Closing Date, except as expressly contemplated or expressly permitted by this Agreement, the Company shall not, without the prior written consent of the Buyer: (i) grant any person any right to acquire any shares of its capital stock; (ii) issue any additional shares of capital stock except pursuant to the exercise of stock options or other awards issued under the Company Stock Plans or pursuant to any other convertible securities issued and outstanding as of the date hereof and in accordance with the terms of such instruments; 15 (iii) purchase, sell, transfer, mortgage, encumber or otherwise dispose of any of the Acquired Assets; (iv) make any capital expenditure; (v) incur, assume, guarantee, or become obligated with respect to any debt; (vi) make any investment in excess of $10,000 in the aggregate; (vii) (i) create or acquire any Subsidiary, (ii) purchase or otherwise acquire any shares of capital stock or other equity interest of any other corporation or limited liability company or any interest in any partnership, joint venture or other non-corporate business enterprise or (ii) make any equity or debt investment in any Person; (viii) (A) amend, in any manner adverse to the Company, the loan agreement between the Company and Emigrant, dated April 7, 2009, and any other agreements, notes, security agreements and other instruments executed and delivered in connection with such loan agreement; PROVIDED, HOWEVER, that the Company shall be permitted (without the consent of the Buyer) to enter into any additional forbearance agreements with Emigrant to extend the forbearance period under the Forbearance Agreement; PROVIDED, HOWEVER, that any such additional forbearance agreements shall not obligate the Company to incur additional costs (whether monetary or otherwise) in connection thereunder other than such additional costs resulting from the increase in the interest rate payable on the loan from Emigrant to be the lesser of (x) 18% per annum and (y) the maximum rate permitted by law, as contemplated by the Forbearance Agreement (for avoidance of doubt, the Company shall not be permitted to amend the loan agreement in any other manner except as contemplated in the immediately preceding sentence), and (B) except in the ordinary course of business consistent with past practice, enter into, renew, extend, materially amend or terminate (x) any Company Material Contract or Contract which if entered into prior to the date hereof would be a Company Material Contract (other than terminating the Lease Agreement effective on or after the Closing), or (y) any Contracts not in the ordinary course, involving the commitment or transfer of value in excess of $10,000 in the aggregate; PROVIDED, HOWEVER, that notwithstanding any of the foregoing, the Company shall be permitted (after receipt of the Buyer's consent, which consent shall not be unreasonably withheld, delayed or conditioned) to terminate or reduce the salary of any employee of the Company; 16 (ix) waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages not in excess of $10,000 in the aggregate (excluding amounts to be paid under existing insurance policies) or otherwise pay, discharge or satisfy any claims, liabilities or obligations in excess of such amount, in each case, other than in the ordinary course consistent with past practice; (x) amend or waive any provision of its certificate of incorporation or its by-laws, partnership agreement, operating agreement or other equivalent organizational documents or, in the case of the Company, enter into any agreement with any of its shareholders in their capacity as such (other than the Voting Agreement); (xi) take or omit to take any action that is intended or would reasonably be expected to, individually or in the aggregate, result in any of the conditions to the Transaction set forth in ARTICLE VII not being satisfied or satisfaction of those conditions being materially delayed in violation of any provision of this Agreement; (xii) enter into any "non-compete" or similar agreement that following the Closing would in any way restrict the businesses of the Buyer or its Affiliates or take any action that may impose new or additional material regulatory requirements on any Affiliate; (xiii) implement or adopt any material change in its Tax or financial accounting