Document:

<PAGE>

                           MEMORANDUM OF UNDERSTANDING

         WHEREAS, on September 24, 2009, Ivivi Technologies, Inc. ("Ivivi")
announced that it had entered into an agreement (the "Asset Purchase
Agreement"), dated September 24, 2009, with Ivivi Technologies, LLC ("Ivivi
LLC"), in which Ivivi agreed to sell substantially all of its assets to Ivivi
LLC, an entity majority owned and controlled by an irrevocable family trust
created by Mr. Steven M. Gluckstern ("Gluckstern"), Ivivi's Chairman, President,
Chief Executive Officer, and Chief Financial Officer as settlor, in a
transaction that would be expected to provide no consideration to Ivivi's
shareholders (the "Transaction");

         WHEREAS, as part of the Transaction, Ivivi announced that Ivivi LLC had
entered into a voting agreement (the "Voting Agreement") with (i) ADM Tronics
Unlimited, Inc., (the company that spun Ivivi off in an October 2006 IPO, and
whose shares of Ivivi are controlled by defendant Andre DiMino); (ii) Ivivi
directors Andre DiMino, and David Saloff, and Kenneth S. Abramowitz & Co. (an
entity controlled by Ivivi's director, Kenneth S. Abramowitz); (iii) Arthur
Pilla and Berish Strauch, (both of whom serve on the Company's Medical and
Scientific Advisory Board); (iv) Sean Hagberg, (employed by the Company as its
Senior Vice President Chief Science Officer); and (v) Ed Hammel (employed by the
Company as its Senior Vice President and Chief Administrative Officers),whereby
each of the foregoing had granted Ivivi LLC the irrevocable proxy to vote their
shares in favor of the Transaction, such that Ivivi LLC controlled the vote of a
majority of Ivivi's outstanding shares in connection with the shareholder vote
on the Transaction;

         WHEREAS, on October 30, 2009, an action styled as Lehmann v.
Gluckstern, et al., No. C-343-09 (the "Action"), was filed in the Superior Court
of Bergen County, New Jersey, Chancery Division (the "Court"), by Aaron Lehmann,
("Plaintiff") an Ivivi shareholder on behalf of himself and as a class action on
behalf of other Ivivi shareholders, against Gluckstern, Andre A. Dimino, David
Saloff, Kenneth S. Abramowitz, Pamela J. Newman, Jeffrey A. Tischler (the
"Individual Defendants"), Ivivi LLC and Ajax Capital LLC ("Ajax,") (Ajax, the
Individual Defendants, Ivivi, Ivivi LLC, are referred to as the "Defendants");

         WHEREAS, the Action sought injunctive and other relief and alleged that
(i) the Transaction was unfair; (ii) that the directors of Ivivi (the Individual
Defendants), aided and abetted by Ivivi LLC and Ajax (an entity controlled by
Gluckstern that provided certain financial guarantees in connection with the
Transaction) were breaching their fiduciary duties to Ivivi shareholders in
approving the Asset Purchase Agreement; and (iii) that the Voting Agreement
disenfranchised Ivivi shareholders;

         WHEREAS, on October 15, 2009, Ivivi filed a Preliminary Proxy Statement
on Schedule 14A with the SEC in connection with the Transaction, which Ivivi
amended on November 20, 2009 and again on December 7, 2009 (the "Preliminary
Proxy Materials");

         WHEREAS, on or about November 18, 2009, Plaintiff filed a motion for
expedited proceedings, requesting that the Court direct Defendants to provide
document and deposition discovery on an expedited schedule;

<PAGE>

         WHEREAS, this motion for expedited proceedings was opposed by the
Defendants and Defendants denied the allegations contained within said motion;

         WHEREAS, counsel for the parties in the Action engaged in arm's-length
negotiations regarding a potential settlement of the claims raised in the
Action;

         WHEREAS, on or about December 10, 2009, as a result of the
negotiations, the parties agreed to certain voluntary discovery prior to the
filing by the Company of a definitive proxy statement with respect to a
shareholder vote on the Transaction;

         WHEREAS, Ivivi produced internal, non-public documents to Plaintiff's
counsel beginning on or about December 14, 2009;

         WHEREAS, as part of a potential settlement of the Action, Defendants
have provided Plaintiff's counsel with certain internal non-public documents and
made additional disclosures in the Proxy;

         WHEREAS, Plaintiff's counsel, in order to confirm the reasonableness of
the potential settlement shall take the depositions of Gluckstern, Abramowitz (a
director of Ivivi and member of a special committee of Ivivi's board of
directors formed in connection with the Transaction); Andre A. DiMino (Ivivi's
Vice Chairman and Chief Technology Officer); and Philip Taub of Foundation
Ventures, LLC (Ivivi's financial advisor in the Transaction) to occur no later
than January 20, 2010;

         WHEREAS, the parties to the Action have held discussions at various
times with respect to the claims asserted in the Action and Plaintiff's demands
with respect to the disclosures set forth in the Preliminary Proxy Materials,
and in an effort to resolve the Action;

         WHEREAS, the parties to the Action wish to settle and resolve the
claims asserted in the Action and have reached an agreement in principle set
forth in this Memorandum of Understanding ("MOU") providing for the settlement
of the Action on the terms and conditions set forth below (the "Settlement"),
and the parties believing the Settlement is in the best interests of the parties
and Ivivi's shareholders;

         NOW, THEREFORE, IT IS HEREBY AGREED IN PRINCIPLE AS FOLLOWS:

         1. As a result of discussions between and among the parties to the
Action, through their counsel:

                  a. Ivivi LLC agrees to terminate the Voting Agreement, such
that Ivivi LLC no longer has voting control over the Transaction and upon the
execution hereof shall immediately inform the signatories to the Voting
Agreement that it has been terminated;

                  b. The Individual Defendants agree to waive any and all board
fees or other compensation presently outstanding or that may be claimed in the
future from their service on Ivivi's board of directors or any committee thereof
or as a result of any employment agreements with Ivivi; and

<PAGE>

                  c. Ivivi agrees that the definitive proxy statement to be
filed in connection with the shareholder vote on the Transaction shall include
the disclosures set forth in Exhibit A hereto.

         2. The parties to the MOU will attempt in good faith to agree upon and
execute within 30 days from the date hereof, an appropriate stipulation of
settlement (the "Stipulation") and such other documentation as may be required
in order to obtain final Court approval of the settlement and the dismissal of
the Action upon the terms set forth in this MOU (collectively, the "Settlement
Documents"). The Stipulation shall, among other thing, expressly provide for the
following:

                  a. certification of a class under New Jersey Court Rule 4:32-1
consisting of all holders of Ivivi common stock, excluding Defendants and any
person, firm, trust, corporation or other entity related to or affiliated with
any Defendant as the term "affiliate" is defined in the Securities and Exchange
Act of 1934 and SEC Rule 12b-2 promulgated thereunder) (the "Class");

                  b. entry of a judgment of dismissal with prejudice of the
Action;

                  c. the release of all claims, rights, demands, suits, matters,
issues or causes of action, whether known or unknown, of Plaintiff, and of all
members of the Class, against all Defendants and any of their present or former
officers, directors, employees, agents, attorneys, advisors, insurers,
accountants, trustees, financial advisors, commercial bank lenders, persons who
provided fairness opinions, investment bankers, associates, representatives,
affiliates, parents, subsidiaries (including the directors and officers of such
affiliates, parents, and subsidiaries), general partners, limited partners,
partnerships, heirs, executors, personal representatives, estates,
administrators, successors and assigns, whether under state or federal law,
including but not limited to the federal securities laws, (except for the rights
conferred by this Settlement), and whether directly, derivatively,
representatively or arising in any other capacity, in connection with, or that
arise out of the Action, or that arise now or hereafter out of, or that relate
to the acts, facts or the events alleged in the Action (collectively, the
"Settled Claims"); provided that the Settled Claims will not include any claims
for appraisal and dissenters' rights under Sections 14A:11-1 through 14A:11-11
of the New Jersey Business Corporation Act or claims to enforce the Settlement;

                  d. that Defendants completely, voluntarily, knowingly,
unconditionally and forever, shall release Plaintiff and the Class and
Plaintiff's counsel from all claims relating to the institution, prosecution,
assertion, settlement or resolution of the Action or the Settled Claims; and

                  e. a statement that Defendants deny any wrongdoing in
connection with the Transaction and are settling the Action solely to avoid the
burden, expense and uncertainty of further litigation.

         3. The Stipulation of Settlement and the Settlement generally shall be
subject to (i) Plaintiff's determination, following completion of discovery as
set forth herein, that the proposed Settlement is fair and reasonable; (ii)
approval by the Court and any appeals that may be taken; and (iii) closing of
the Transaction.

<PAGE>

         4. Plaintiff's counsel in this action shall apply to the Court for the
award of costs and fees not to exceed $140,000, and Defendants shall not oppose
this application. Ivivi or its insurer, The Hartford, on behalf of all
Defendants, shall pay Plaintiff's counsel no more than the Court should approve
up to and including $140,000 in fees and expenses in the aggregate. Such cost
and fees shall be paid to Plaintiff's counsel within seven (7) calendar days
after the Effective Date of the Settlement. The Effective Date of the Settlement
shall be the date after the Court enters the Final Order and Judgment approving
the Settlement where the Settlement is no longer subject to further appeal or
reargument, either because the time for appeal or reargument has been taken but
has been dismissed with no further right of appeal or reargument, or the Final
Order and Judgment approving the settlement has been finally affirmed with no
further right of appeal or reargument, or the Final Order and Judgment approving
the settlement has otherwise become final.

         5. The Hartford, and/or Ivivi LLC shall pay the costs and expenses
related to providing notice of the Settlement to the Class, as well as any costs
and expenses related to the administration of the Settlement.

         6. Plaintiff and his counsel represent that none of Plaintiff's claims
or causes of action referred to in this MOU or that could have been alleged in
the Action have been assigned, encumbered or in any manner transferred in whole
or in part.

         7. This MOU may be executed in counterparts by facsimile or original
signature by any of the signatories hereto and as so executed shall constitute
one agreement.

         8. In the event that the Settlement is not executed or consummated,
neither the existence of the Memorandum of Understanding or its contents shall
be admissible in evidence or referred to for any purpose in this litigation or
in any other litigation or proceeding except to enforce the terms herein.

         9. This MOU and the Settlement contemplated by it shall be governed by
and construed in accordance with the laws of the state of New Jersey, without
regard to conflict of laws principles.

         10. Each of the attorneys executing this MOU has been duly empowered
and authorized by his/her respective client(s) to do so.

<PAGE>

Dated:  January 5_, 2010

LAW OFFICES OF JAMES V. BASHIAN, P.C.          LOWENSTEN SANDLER, P.C.

By:/s/ James V. Bashian                      By:/s/ Steven M. Skolnick
   --------------------                         ----------------------
   James V. Bashian                               Steven M. Skolnick
70 Adams Street, 4th Floor                        Matthew M. Oliver
Hoboken, New Jersey 07030                         Kevin M. Brennan
Tel.: 973-227-6330                             65 Livingston Avenue
Fax.: 201-488-3330                             Roseland, New Jersey 07068
                                               Tel.: 973-597-2500
                                               Fax.: 973-597-2300

                                               Attorneys for Defendants Andre A.
                                               Dimino, David Saloff, Kenneth S.
                                               Abramowitz, Pamela  J. Newman,
                                               Jeffrey A. Tischler, and Ivivi
                                               Technologies, Inc.

                                               ---------------------------------
                                               FERRO LABELLA & ZUCKER L.L.C.
GARDY & NOTIS, LLP

By:/s/ James S. Notis                        By: /s/ Christopher L Weiss
   ------------------                            -----------------------
   James S. Notis                                 Christopher L Weiss
560 Sylvan Avenue                              27 Warren Street
Englewood Cliffs, New Jersey 07632             Hackensack, New Jersey 07601
Tel: 201-567-7377                              Tel.: 201-489-9110
Fax: 201-567-7337                              Fax.: 201-489-5653

Attorneys for Plaintiff                        Attorneys for Steven Gluckstern,
                                               Ajax Capital LLC, and
                                               Ivivi Technologies, LLC

<PAGE>

                            Ivivi Technologies, Inc.

                            Proxy Statement Excerpts

                        (Marked against Amendment No. 2*)

2010), plus (ii) $475,000; provided, however, that the sum of the amounts in
clauses (i) and (ii) shall in no event exceed $3,150,000, minus (B) the amount
of any advances of the purchase price made by Buyer to the Company prior to the
closing as contemplated by amendment No. 1 to the Asset Purchase Agreement. As
of DECEMBER 29, 2009, THE COMPANY RECEIVED $250,000 IN ADVANCES FROM THE BUYER
TO FUND ITS OPERATIONS AND EXPENSES.

WHEN THE SALE OF THE BUSINESS IS EXPECTED TO BE COMPLETED (PAGE [__])

If the Proposal to Sell the Business is approved by our shareholders at the
special meeting, we expect to complete the sale of the Business as soon as
practicable (and in any event within three business days) following the special
meeting, assuming all of the conditions in the Asset Purchase Agreement have
been satisfied or waived. We and Buyer are working toward satisfying the
conditions to closing and completing the sale of the Business as soon as
reasonably practicable. However, the sale of the Business might not be completed
soon or at all.

VOTE REQUIRED FOR APPROVAL PROPOSAL NOS. 1, 2, 3 AND 4 AT THE SPECIAL MEETING
(PAGE [__])

Proposal Nos. 1, 2, 3 and 4 must be approved by the affirmative vote of holders
of a majority of the votes cast in person or by proxy and entitled to vote at
the special meeting. Abstentions and broker non-votes will not affect the
results.

IN CONNECTION WITH THE SIGNING OF THE ASSET PURCHASE AGREEMENT, BUYER, THE
COMPANY AND CERTAIN SHAREHOLDERS OF THE COMPANY WHO HAVE THE POWER TO VOTE
APPROXIMATELY 39.6% (AND TOGETHER WITH THE COMPANY'S COMMON STOCK HELD BY STEVEN
M. GLUCKSTERN, APPROXIMATELY 51.3%) OF THE COMPANY'S COMMON STOCK, ENTERED INTO
A VOTING AGREEMENT, DATED SEPTEMBER 24, 2009 (REFERRED TO IN THIS PROXY
STATEMENT AS THE "VOTING AGREEMENT"). PURSUANT TO THE VOTING AGREEMENT, THE
SIGNATORY SHAREHOLDERS AGREED TO VOTE THEIR SHARES OF THE COMPANY'S COMMON STOCK
IN FAVOR OF THE TRANSACTIONS CONTEMPLATED BY THE ASSET PURCHASE AGREEMENT. AS
PART OF THE COMPANY'S SETTLEMENT OF THE LITIGATION DESCRIBED IN THIS PROXY
STATEMENT, THE VOTING AGREEMENT WAS TERMINATED. HOWEVER, AS OF THE DATE OF THIS
PROXY STATEMENT, THE COMPANY BELIEVES THAT THE SHAREHOLDERS WHO WERE PARTIES TO
THE VOTING AGREEMENT INTEND TO VOTE THEIR SHARES IN FAVOR OF EACH OF THE
PROPOSALS.

REASONS FOR THE SALE OF THE BUSINESS (PAGE [__]); RECOMMENDATION OF OUR BOARD OF
DIRECTORS (PAGE [__])

In reaching its determination to enter into the Asset Purchase Agreement and
approve the sale of the Business, our board of directors formed a special
committee of the board comprised of two of our independent directors. The
special committee and the board of directors consulted with our management and
our legal and financial advisors and considered a number of factors. After
careful evaluation of the potential benefits, negative factors and other
material considerations relating to the sale of the Business and the Asset
Purchase Agreement (including the consideration to be paid by Buyer for the
Business), our board of directors (with Mr. Gluckstern, the Company's Chairman,
President, Chief Executive Officer and Chief Financial Offer, taking no part in
the deliberations or vote), following a unanimous recommendation by the special
committee of the board of directors, unanimously approved and recommended that
our shareholders approve Proposal Nos. 1, 2, 3 and 4.

INTERESTS OF CERTAIN PERSONS IN THE SALE OF THE BUSINESS (PAGE [__])

In considering the recommendation of the Company's board of directors with
respect to the Asset Purchase Agreement, the Company's shareholders should be
aware that some of the Company's directors and executive officers, particularly
Mr. Gluckstern, our Chairman, President, Chief Executive Officers and Chief
Financial Officer, who is associated with Buyer as described on page ___ of this
proxy statement and controls Ajax, have interests in the sale of the Business
that are different from, or in addition to, the interests of the Company's
shareholders generally. Under the terms of a participation agreement between Mr.
Gluckstern, Kathryn Clubb (who associated with Buyer and Ajax and who first
started as a consultant of the Company on February 1, 2009 and, on August 1,
2009, became an employee of the Company), and Emigrant, which agreement was
entered into simultaneously and in

                                       5

*  PLEASE NOTE THAT THE MARKED TEXT IS INDICATED IN ALL CAPITAL LETTERS.

<PAGE>

Because the Buyer is a newly formed entity and has no substantial assets or
liabilities, other than those incidental to its formation and those incurred in
connection with the transactions contemplated by the Asset Purchase Agreement,
Ajax became a party to the Asset Purchase Agreement only for the limited purpose
of providing to the Company an unconditional and irrevocable guaranty of the
Buyer's payment obligations of the purchase price under the Asset Purchase
Agreement.

The principal executive offices of Buyer and Ajax are located at 460 Park
Avenue, 21st Floor, New York, New York 10022.

BACKGROUND OF THE SALE OF THE BUSINESS

During the fiscal year 2008, our management and board of directors agreed that
by the first quarter of fiscal 2009, we would need to secure additional capital
for our ongoing operations and that we should pursue opportunities to raise
additional capital. In connection with such efforts, in June 2007, we engaged
Jefferies & Company, Inc. ("Jefferies") to act as our investment bank and to
seek opportunities for us to obtain additional capital for our business.

Although Jefferies attempted to raise capital for us from June 2007 to August
2008, we were not successful, in part, we believe due to the U.S. Food and Drug
Administration's ("FDA") determination on MARCH 18, 2008 that our products were
Not Substantially Equivalent (NSE) to other devices cleared for marketing
through the 510(k) process or otherwise legally marketed prior to May 28, 1976.
IN ADDITION TO OUR INABILITY TO RAISE CAPITAL AND THE ELECTION BY JEFFERIES TO
TERMINATE ITS ENGAGEMENT WITH US IN AUGUST 2008, ALLERGAN USA, INC.
("ALLERGAN"), A GLOBAL HEALTHCARE COMPANY THAT WE ENGAGED TO DISTRIBUTE OUR
PRODUCTS IN THE AESTHETIC OR BARIATRIC MARKETS, ELECTED TO CEASE TO DISTRIBUTE
OUR PRODUCTS AND, IN NOVEMBER 2008, WE AND ALLERGAN DECIDED TO MUTUALLY
TERMINATE OUR EXCLUSIVE DISTRIBUTION AGREEMENT. AS PART OF SUCH TERMINATION,
ALLERGAN REQUIRED US TO REPURCHASE OUR PRODUCTS HELD BY THEM IN INVENTORY AND
FOR 180 DAYS FOLLOWING THE SIGNING OF THE TERMINATION AGREEMENT WITH ALLERGAN,
WE WERE NOT ALLOWED TO ENTER INTO A DISTRIBUTION AGREEMENT WITH ANY THIRD-PARTY
DISTRIBUTOR FOR THE DISTRIBUTION OF OUR PRODUCT IN THE AESTHETIC AND BARIATRIC
FIELDS IN THE UNITED STATES. FOLLOWING THE REPURCHASE OF SUCH INVENTORY, WE
RESOLD SOME OF THE RETURNED PRODUCTS, PROVIDED SOME OF THE RETURNED PRODUCTS AS
SAMPLES TO POTENTIAL CUSTOMERS AND SOME OF THE RETURNED PRODUCTS REMAIN IN OUR
INVENTORY AND WILL BE RESOLD AS PART OF THE ASSET PURCHASE AGREEMENT. WE ALSO
BELIEVE THAT THE FDA'S NSE LETTER AFFECTED OUR ABILITY TO SECURE OTHER
DISTRIBUTORS IN OTHER FIELDS IN WHICH OUR PRODUCTS COULD BE UTILIZED. IN
DECEMBER 2008, THE FDA REVERSED ITS POSITION AND INFORMED US THAT OUR PRODUCTS
WERE "SUBSTANTIALLY EQUIVALENT." FOLLOWING RECEIPT OF THE FDA LETTER, WE
ATTEMPTED TO RE-ENGAGE ALLERGAN AS A DISTRIBUTOR, BUT ALLERGAN INFORMED US THAT
THEY WERE NO LONGER INTERESTED IN OUR PRODUCT.

ON JUNE 30, 2008, WE ANNOUNCED THE RESULTS OF A DOUBLE-BLIND, RANDOMIZED,
PLACEBO-CONTROLLED AND PROSPECTIVE TRIAL COMPLETED AT THE CLEVELAND CLINIC USING
OUR TECHNOLOGY. IN THE STUDY OF THIRTY PATIENTS WITH CARDIOMYOPATHIES AND NO
OTHER TREATMENT OPTIONS, THE PATIENTS IN THE ACTIVE ARM DEMONSTRATED SIGNIFICANT
REDUCTIONS IN ANGINAL PAIN AND FREQUENCY WITH AN ACCOMPANYING REDUCTION IN
NITROGLYCERINE USE. ALTHOUGH THE RESULTS OF THE TRIAL WERE PROMISING, WE
DISCLOSED THAT FUTURE STUDIES WOULD BE REQUIRED BEFORE WE WOULD BE ABLE TO
SECURE APPROVAL BY THE FDA TO MARKET OUR PRODUCTS AND GENERATE REVENUE IN THE
CARDIOVASCULAR MARKET. IN ADDITION, IN ORDER FOR US TO COMPLETE SUCH STUDIES, WE
NEEDED TO OBTAIN ADDITIONAL CAPITAL WHICH UNFORTUNATELY WE WERE NOT ABLE TO DO.

In August 2008, our board of directors made several management changes,
including the appointment of Steven M. Gluckstern, the then Chairman of the
Company to the positions of Chairman, President and Chief Executive Officer of
the Company. In addition, Andre A. DiMino, the then Co-Chief Executive Officer,
was appointed to the position of Executive Vice President, Chief Technical
Officer and David Saloff was named Executive Vice President, Chief Business
Development Officer.

During this period, our management continued to pursue opportunities to raise
additional capital for our business.

                                       24
<PAGE>

In December 2008, we engaged Foundation Ventures LLC ("Foundation") and another
advisor to act as our investment bankers and to seek opportunities for us to
obtain additional capital for our business. In late December 2008, we determined
to terminate the engagement of the other advisor.

From December 2008 through April 2009, our management, together with Foundation,
met with more than 200 potential institutional investors. Although several
investors indicated an interest in providing financing to us and commenced due
diligence, we did not receive any formal proposals from any such investors.

On January 6, 2009, the board of directors and management held a telephonic
meeting during which a member of the bankruptcy department of our legal counsel
provided the board with an overview of bankruptcy and solvency procedures and
related matters.

From January 2009 through April 2009, our board of directors held a number
telephonic and in person board meetings where the board continued to discuss our
financial position and cash flows needed for additional capital, ways to
preserve capital and our capital raising activities, including the process
undertaken by Foundation and management in seeking additional capital. In
addition, during such period, the board discussed "going dark" and the process
of deregistering the Company's common stock under the Securities Exchange Act of
1934, as amended (THE "EXCHANGE ACT"). As a result of our inability to secure
other financing, on April 7, 2009, we entered into the Loan Agreement with
Emigrant under which we borrowed an aggregate of $2.5 million from Emigrant
between April 2009 and July 2009. The terms of the promissory note issued in
connection with the loan provided for the right to convert into our common stock
if we were able to complete a financing meeting the criteria set forth in the
loan documents. The maturity date under the loan was initially July 31, 2009.
However, under the terms of the loan, we extended the maturity date under the
loan until August 30, 2009. In connection with the loan, Mr. Gluckstern and a
consultant of ours (currently one of our employees and an affiliate of Buyer)
entered into a participation arrangement with Emigrant whereby Mr. Gluckstern
and such consultant invested $425,000 and $100,000, respectively, with Emigrant
and have a right to participate with Emigrant in the note issued in connection
with the loan.

Following the receipt of the loan from Emigrant, we elected to pursue a process
where we and Foundation would seek investments from "high net worth" accredited
investors in addition to seeking capital from institutional investors. From May
2009 through July 2009, we and Foundation met with more than 100 "high net
worth" accredited investors. Although several investors indicated an interest in
providing financing to us, ultimately they informed us that they were unwilling
to do so unless a lead investor with experience in our line of business was
obtained.

At a meeting of the board of directors held on June 8, 2009, our outside legal
counsel made a presentation to the board of directors which outlined the process
of deregistering the Company's common stock under the Exchange Act, and the
board of directors discussed the positives and negatives of such action. At such
meetings, our board of directors elected to postpone taking such action, but
elected to continue evaluating such action at future meetings.

On June 23, 2009, trading of our common stock was suspended on the NASDAQ Stock
Market and our common stock commenced trading on the Pink Sheets. Following such
suspension in July 2009, our common stock commenced trading on the
over-the-counter bulletin board.

During July 2009, our management, counsel and bankers had various conversations
with Emigrant to determine if they were interested in either extending the terms
of the loan or investing additional capital into us. Emigrant informed such
parties that they were not interested in investing more capital into us and
expected that the principal and interest under the loan would be repaid in full
at maturity.

IN JULY 2009, WE FILED A 510(K) SUBMISSION WITH THE FDA FOR MARKETING CLEARANCE
FOR A TENS (TRANSCUTANEOUS ELECTRICAL NERVE STIMULATION) DEVICE KNOWN AS
ISO-TENS WHICH USES OUR TECHNOLOGY. THIS NEW DEVICE IS PROPOSED FOR COMMERCIAL
DISTRIBUTION FOR THE SYMPTOMATIC RELIEF OF CHRONIC INTRACTABLE PAIN; ADJUNCTIVE
TREATMENT OF POST-SURGICAL OR POST TRAUMATIC ACUTE PAIN; AND ADJUNCTIVE THERAPY
IN REDUCING THE LEVEL OF PAIN ASSOCIATED WITH ARTHRITIS. WE BELIEVE THE ISO-TENS
WILL ENABLE PENETRATION INTO VARIOUS CHRONIC PAIN MARKETS IF FDA CLEARANCE IS
OBTAINED. CURRENTLY, WE ARE RESPONDING TO A REQUEST FOR ADDITIONAL INFORMATION.

                                       25
<PAGE>

At a special telephonic meeting of our board of directors held on July 11, 2009,
following an update by Mr. Gluckstern and Foundation that it appeared to be
unlikely that we would be able to obtain financing necessary to repay the
Emigrant loan and increase our working capital in a timely fashion, our board of
directors approved an austerity plan in order to preserve our limited cash
resources. In addition, at the July 11, 2009 meeting of the board of directors,
a member of the bankruptcy department from our legal counsel updated the board
and management on alternatives, including the filing for bankruptcy protection,
and also informed the board and management of their fiduciary duties.

At a special telephonic meeting of our board of directors held on July 20, 2009,
following an update by Mr. Gluckstern and Alan Gallantar, our then Chief
Financial Officer, regarding our financial condition, Mr. Gluckstern provided
the board and management with an update of the previously approved austerity
plan. Mr. Gluckstern then provided the board with an update of discussions with
Emigrant regarding extensions of the maturity date of the Emigrant loan and,
although no formal response was received, Mr. Gluckstern believed that Emigrant
would be willing to provide a forbearance to the Company.

At a telephonic meeting of our board of directors held on July 31, 2009, the
board approved the extension of the Emigrant loan until August 30, 2009. In
addition, at the board meeting, Mr. Gluckstern informed the board that he was
considering the possibility of making an investment into the Company. Following
such approval, Mr. Gluckstern excused himself from the meeting and legal counsel
for the Company advised the board of directors of their fiduciary
responsibilities and the need to form a special committee of the board in the
event Mr. Gluckstern did deliver a proposal to the Company.

On August 3, 2009, the board of directors (absent Mr. Gluckstern) held a special
telephonic meeting at which it appointed a special committee of the board of
directors comprised of Kenneth Abramowitz and Jeffrey Tischler, two of our
independent directors, to review and analyze an offer, if any, received by us
from Mr. Gluckstern. The special committee was authorized to recommend to the
full board of directors whether to accept or reject and to negotiate any such
proposed transaction with Mr. Gluckstern. In making its determinations, the
special committee was authorized to establish such procedures, review such
information and engage such financial advisors and legal counsel as it deemed
reasonable and necessary. As a result of its familiarity with the Company and
the financing process and its ability to provide a fairness opinion, the special
committee elected to engage Foundation as its financial advisor to assist in the
negotiation of the terms of any potential transaction and to complete a market
check to determine if there were any interested buyers or investors for the
business and to seek strategic alternatives. In addition, legal counsel to us
advised the special committee as to the special committee's fiduciary
responsibilities and the legal principles applicable to, and the legal
consequences of, actions taken by the special committee with respect to an offer
made by Mr. Gluckstern.

On August 19, 2009, we received a non-binding proposal from Ajax, an entity
controlled by Mr. Gluckstern, pursuant to which Ajax proposed to purchase
substantially all of our assets and assume certain of our specified ordinary
course liabilities for a purchase price payable to us equal to the aggregate of
(i) the principal and interest outstanding, as of closing, under our loan with
Emigrant and (ii) approximately $225,000 as additional consideration to meet the
obligations of our creditors (which amount was based on a formula equal to $0.02
multiplied by the number of shares of our common stock outstanding as of such
date ); provided, that the aggregate purchase price specified in clauses (i) and
(ii) would not be in excess of $2.9 million. The non-binding proposal indicated
that the closing of any transaction would be subject to certain conditions,
including, among others, the negotiation of a definitive asset purchase
agreement and an extension of the August 30, 2009 maturity date under our loan
with Emigrant.

On August 20, 2009, the board of directors (absent Mr. Gluckstern) and the
special committee held a joint telephonic meeting to discuss the general terms
of the Ajax proposal and to further discuss the process to be undertaken by the
special committee. At the meeting, Foundation discussed the status of the market
check and the process to be undertaken going forward. Foundation also requested
that the directors and management of the Company provide them with the names of
any additional potential buyers that the directors and management may be aware
of. Foundation also discussed the process to be undertaken by them in connection
with the delivery of a fairness opinion. At the meeting, the board of directors
(absent Mr. Gluckstern) and the special committee discussed alternatives to the
Ajax proposal, including the filing for bankruptcy protection, and legal counsel
for the Company reminded the directors and the special committee of their
fiduciary responsibilities. In addition, the board of directors and the special
committee discussed structural changes to the Ajax proposal, including a sale of
equity to Ajax in lieu of an asset sale.

On August 21, 2009, counsel for Buyer delivered a draft of an asset purchase
agreement to counsel for the Company.

On August 24, 2009, the special committee held a telephonic meeting with
Foundation and legal counsel to discuss the terms of the draft asset purchase
agreement and requested that legal counsel attempt to negotiate changes in the
draft asset purchase agreement to change the structure of the proposed
transaction or potentially provide us with additional cash proceeds or reduced
liabilities so that we might have enough cash to not only repay our outstanding
liabilities but also to provide a benefit to our shareholders following the sale
of our assets.. Foundation discussed the process and the work necessary to
provide a fairness opinion to us and updated the committee on Foundation's
market check to date and one potentially interested party. Foundation informed
the committee that all other potential candidates indicated that they were not
interested in pursuing a transaction with us. The committee, legal counsel for
Foundation and the Company also discussed the ability and the terms under which
Emigrant might be willing to extend the maturity date under the loan.

From August 24, 2009 through August 31, 2009, counsel for the Company and
counsel for Buyer negotiated the terms of the transaction and exchanged revised
drafts of the asset purchase agreement, the voting agreement and other ancillary
documents. The negotiations were primarily focused on the structure of the
proposed transaction, including discussions regarding a sale of equity in lieu
of an asset sale, as well as the terms of our ability to shop the company after
the execution of the asset purchase, the purchase price to be paid by Buyer and
the amount of the termination fee that would be payable by us in certain
situations. During this period, Buyer determined that it was not interested in
changing the structure of the transaction from an asset purchase to a purchase
of our equity or a merger involving us as a result of (i) our outstanding
liabilities, (ii) the large number of outstanding options and warrants and (iii)
the requirements of continuing as a public company. In addition, during such
period, the special committee held various calls during which Foundation and
legal counsel to us updated the committee on the terms of the transaction, the
status of Foundation's market check, as well as the draft fairness opinion, and
the discussions with Emigrant. Representatives of Foundation also informed the
special committee that one potential buyer had indicated interest and that such
party was reviewing the Company's publicly available information.

On August 30, 2009, members of the special committee, a representative from
Emigrant, legal counsel to us and representatives from Foundation had a call to
discuss the terms of the draft forbearance agreement received from Emigrant and
discussed the timing of the execution of such forbearance.

On August 31, 2009, each of the special committee and the board of directors,
together with counsel, held telephonic meetings to discuss and approve the
forbearance agreement with Emigrant. In addition, at the board meeting, the
board discussed, after Mr. Gluckstern left the call, the status of the
negotiation of the draft asset purchase agreement and the financial condition of
the Company.

On August 31, 2009, we entered into a forbearance agreement with Emigrant under
which Emigrant agreed to forbear from requiring us to repay the loan through
September 9, 2009 in order to negotiate the transaction with Ajax and allow us
to continue our market check to seek alternatives proposals.

From August 31, 2009 through September 16, 2009, counsel for the Company and
counsel for Buyer continued to negotiate the terms of the transaction and
exchanged revised drafts of the asset purchase agreement, the voting agreement
and other ancillary documents. The negotiations were primarily focused on the
structure of the proposed transaction, including discussions regarding a sale of
equity in lieu of an asset sale, the net operation losses available, as well as
the terms of our ability to shop the company after the execution of the asset
purchase, the purchase price to be paid by Buyer, the amount of the termination
fee that would be payable by us in certain situations and certain releases to be

                                       27
<PAGE>

provided to us by Mr. Gluckstern and Ms. Clubb at the closing of the
transaction, which would include the termination of their employment agreements
and release from amounts owed to each of them through September 15, 2009. In
addition, during such negotiations, we were able to increase the purchase price
payable to the Company in connection with the transaction by up to an additional
$250,000 in cash.

On September 8, 2009, following a call between Buyer's counsel and our counsel,
a telephonic meeting of the special committee was held to discuss the status of
the negotiations between the parties. In addition, Foundation provided the
special committee with an update of the status of its fairness opinion, as well
as discussions the bankers had with a couple of parties that had indicated
interest in us, one of which parties discussed above signed a non-disclosure
agreement with us to move forward on due diligence.

On each of September 9, 2009, September 14, 2009 and September 16, 2009,
Emigrant and the Company executed amendments to the forbearance agreement to
provide us with additional time to complete our negotiations with Buyer and
allow us to continue our market check to seek alternative proposals.

On each of September 11, 2009 and September 16, 2009, the special committee,
together with its legal counsel and representatives of Foundation, held a
telephonic meeting to discuss the proposed transaction. During the meeting,
legal counsel provided the committee with a detailed summary of the asset
purchase agreement, the voting agreement and the other ancillary documents. In
addition, representatives of Foundation informed the special committee that the
party that had signed the non-disclosure agreement continued in its due
diligence process but had not delivered any term sheet or proposal with respect
to a transaction with us. Also during the meeting on September 16, 2009,
Foundation delivered a presentation to the special committee of its findings and
gave its oral opinion that the consideration in the proposed transaction to be
received by us was fair to our shareholders and creditors from a financial point
of view.

At the conclusion of the September 16, 2009 special committee meeting, the
special committee determined that the transaction as reflected in the draft form
of the asset purchase agreement presented to the committee was fair and in the
best interests of the Company. The special committee adopted a resolution
recommending to the full board of directors that the board approve the
transaction and complete and execute the asset purchase agreement and the
ancillary documents. The special committee's recommendation was conditioned on
the final form of the asset purchase agreement not containing any changes that
were materially adverse to us and on the finalization of the forbearance terms
with Emigrant.

Immediately following the special committee meeting on September 16, 2009, the
full board of directors (absent Mr. Gluckstern) held a telephonic meeting to
receive the report of the special committee. At this meeting, the special
committee unanimously recommended to our board of the directors that the board
approve the transaction and complete and execute the asset purchase agreement,
subject to the final form of the asset purchase agreement not containing any
changes that were materially adverse to us and on the finalization of the
forbearance terms with Emigrant. At the board meeting, Foundation also
summarized its presentation given to the special committee on September 16, 2009
for the full board of directors and confirmed its fairness opinion. Further,
Foundation informed the special committee that the party that had signed the
non-disclosure agreement continued in its due diligence process but still had
not delivered any term sheet or proposal with respect to a transaction with us.

After hearing the recommendations of the special committee, the board of
directors unanimously determined (absent Mr. Gluckstern), that the transaction,
the asset purchase agreement, the voting agreement and the transactions
contemplated thereby were advisable, fair and in the best interests of the
Company and authorized management to execute the asset purchase agreement
reflecting the terms of the transaction, subject to the final form of the asset
purchase agreement not containing any changes that were materially adverse to us
and on the finalization of the forbearance terms with Emigrant.

From September 16, 2009 through September 24, 2009, our counsel, counsel for
Buyer and counsel for Emigrant negotiated the terms of an amended and restated
forbearance agreement and other ancillary documents and finalized the asset
purchase agreement and related documents.

                                       28
<PAGE>

On September 22, 2009, the special committee and the board of directors held a
joint telephonic meeting to review the proposed revisions to the form of the
asset purchase agreement and the related documents, as well as the form of
amended and restated forbearance agreement with Emigrant. The committee and
legal counsel reviewed the proposed revisions and the terms of the amended and
restated forbearance agreement. In addition, Foundation again orally confirmed
its fairness opinion and provided an update with respect to the other interested
party, but confirmed that no term sheet or proposal had been delivered by such
party. Subsequently, Foundation provided us with a written opinion to that
effect. This opinion is set forth as ANNEX B to this proxy statement. In
addition, the special committee confirmed it earlier recommendation and the
board of directors approved the transactions.

On September 24, 2009, the Asset Purchase Agreement was executed by us, Buyer
and Ajax (as Guarantor). In addition, the ancillary documents, including the
Voting Agreement and the amended and restated forbearance agreement were
executed.

On September 24, 2009, we issued a press release announcing our agreement to
sell substantially all of our assets to Buyer.

During the period from the execution of the Asset Purchase Agreement through the
filing of this proxy statement, one interested party continued its due diligence
process, but ultimately determined not to continue discussions with us regarding
a potential transaction.

On November 17, 2009, we entered into Amendment No. 1 to the Asset Purchase
Agreement. The amendment gives us the right to request advances from Buyer
during the period prior to the closing up to a maximum of $300,000; provided,
that any advances under the agreement will be deducted from the purchase price
payable by Buyer at the closing. As consideration for Buyer's agreement to
advance funds to us until the closing of the transactions contemplated by the
Asset Purchase Agreement, we have agreed to pay up to $0.50 for each $1.00 we
receive as an advance under the Asset Purchase Agreement for the Buyer's legal
expenses; provided that such reimbursement of Buyer's legal expenses shall not
exceed $150,000; provided, further that such expenses shall be pari passu with
our payment obligations to our other creditors. The Company has also agreed to
pay up to $20,000 of Buyer's and Ajax's costs and expenses (including legal fees
and expenses) incurred by Buyer and Ajax in connection with Amendment No. 1. In
the event the Asset Purchase Agreement is terminated prior to the closing, the
Company shall repay the advances as soon as practicable following the date of
such termination with interest at the rate of 8% per annum for each day until
the advances are repaid; provided that any advances that remain unpaid as of the
due date (30 days after the date of such termination) will accrue an interest
rate of 12% per annum for each day until repaid. Our indebtedness pursuant to
the advance payments is unsecured and subordinated in right of payment to
Emigrant pursuant to a Subordination Agreement, dated November 17, 2009, among
us, Emigrant and Buyer (the "Subordination Agreement"). AS OF DECEMBER 29, 2009,
THE COMPANY RECEIVED $250,000 IN ADVANCES FROM THE BUYER TO FUND ITS OPERATIONS
AND EXPENSES.

NEW JERSEY TAX CREDIT PROGRAM

THE NEW JERSEY ECONOMIC DEVELOPMENT AUTHORITY (THE "EDA") HAS A PROGRAM UNDER
WHICH NEW JERSEY TECHNOLOGY COMPANIES MEETING CERTAIN REQUIREMENTS ARE ENTITLED
TO SUBMIT AN APPLICATION FOR APPROVAL TO SELL THEIR TAX BENEFITS GENERATED FROM
NET OPERATING LOSSES. AS WE DID IN 2008, WE SUBMITTED AN APPLICATION WITH THE
EDA AND, ON DECEMBER 17, 2009, WE RECEIVED A LETTER FROM THE EDA NOTIFYING US
THAT WE MIGHT BE ABLE TO SELL UP TO APPROXIMATELY $770,000 OF TAX BENEFITS UNDER
THE NEW JERSEY TAX CREDIT TRANSFER PROGRAM (THE "PROGRAM") GENERATED FROM OUR
NET OPERATING LOSSES AS OF MARCH 31, 2009 (THE END OF OUR FISCAL YEAR). IN
ADDITION, WE MAY BE ABLE TO USE FUTURE OPERATING LOSSES TO RECEIVE TAX CREDITS
FOR FUTURE PERIODS ASSUMING WE CONTINUE TO OPERATE A BUSINESS THAT SATISFIES THE
PROGRAM (AS DESCRIBED BELOW) AND THAT THE EDA CONTINUES THE PROGRAM FOR FUTURE
PERIODS.

                                       29
<PAGE>

    o    the requirement that we pay Buyer a termination fee of $90,000 if the
         Asset Purchase Agreement is terminated under certain circumstances; and

    o    if the transaction is not completed, we will not be able to meet our
         obligations under the loan and Emigrant will have the right to
         foreclose under the loan, which is secured by all of our assets.

The board and the special committee did from time to time, prior to the Ajax
proposal and during its review and analysis of the Ajax proposal, review and
analyze our assets, both the value and types of assets held by us, as well as
our outstanding liabilities, based on management's determination of such values.
However, the board and the special committee did not consider the liquidation
value as part of its analysis of the Ajax proposal for the following reasons:
(i) substantially all of our assets are intellectual property and other
intangible assets, which we believe are extremely difficult to value, (ii) based
on our market check and other activities, which occurred over a period of more
than 12 months, we were unable to locate a buyer interested in purchasing all or
a portion of our assets and, as a result, neither the board, the special
committee nor Foundation believed that there was a market for individual assets
of the company and they did not believe that we would be able to obtain a better
purchase price for our assets if we had elected to liquidate and (iii) the
market check also did not result in the creation of a market value for our
business or assets. As a result of our dire financial condition and limited cash
resources, as well as the reasons set forth above, we did not believe that the
benefits of such a valuation report would outweigh the costs of retaining a firm
to provide such valuation.

After taking into account all of the factors set forth above, as well as other
factors, our special committee and board of directors agreed that the benefits
of the proposed sale outweigh the risks and that the Asset Purchase Agreement
and the proposed sale of our assets are advisable, fair to, and in the best
interests of, us, our creditors and our shareholders. Our special committee and
the board of directors did not assign relative weights to the above factors or
other factors it considered. In addition, our special committee and board of
directors did not reach any specific conclusion on each factor considered, but
conducted an overall analysis of such factors. Individual members of the special
committee and the board of directors might have given different weights to
different factors.

OPINION OF THE COMPANY'S FINANCIAL ADVISOR

On September 16, 2009, at a meeting of the special committee and at a meeting of
the board of directors of the Company, each held to evaluate the transaction,
Foundation delivered to the special committee and the board of directors an oral
opinion, which was reconfirmed by Foundation at a joint meeting of the special
committee and the board of directors on September 22, 2009 and confirmed by
delivery of a written opinion, dated September 22, 2009, to the effect that,
based upon and subject to the limitations and qualifications set forth in the
opinion, as of the date of the opinion, the total value to be received by the
Company in the transaction with Buyer was fair to the shareholders and creditors
of the Company from a financial point of view.

The  full  text  of the  Foundation  opinion  describes  the  assumptions  made,
procedures followed, matters considered and limitations on the review undertaken
by Foundation. The opinion is attached as ANNEX B to this proxy statement and is
incorporated into this proxy statement by reference.  THE COMPANY'S SHAREHOLDERS
ARE  ENCOURAGED TO READ THIS OPINION  CAREFULLY IN ITS ENTIRETY.  THE SUMMARY OF
THE OPINION  BELOW IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF
THE OPINION.

Foundation's opinion does not address the Company's underlying business decision
to effect the sale of the assets to Buyer or the relative merits of the
transaction as compared to any alternative business strategies or transactions
that might be available to the Company and does not constitute a recommendation
to any shareholder of the Company as to how such shareholder should vote with
respect to the transaction or any other matter. In rendering its opinion,
Foundation assumed, with the consent of the Company's special committee, that
the final executed form of the Asset Purchase Agreement did not differ in any
material respect from the draft that it examined, and that Buyer, Ajax and the
Company will comply with all the material terms of the Asset Purchase Agreement.
The final executed agreement did not differ in any material respect from the
draft that Foundation examined in connection with rendering its opinion.

Foundation, in arriving at its opinion, has, among other things:

                                       32
<PAGE>

    o    reviewed certain publicly available business and financial information
         relating to the Company that it deemed relevant;

    o    reviewed certain internal information furnished by the Company relating
         to the business, including cash flow, assets, liabilities and prospects
         of the business, furnished by the Company and the ability of the
         Company to operate if the transaction is not consummated;

    o    conducted discussions with members of senior management and
         representatives of the Company concerning the matters described above;

    o    reviewed publicly available financial and stock market data for the
         Company and certain other companies in lines of business that it deemed
         relevant and compared them with the business of the Company;

    o    compared the financial performance of the Company with that of certain
         other publicly-traded companies that it deemed relevant;

    o    reviewed the financial terms, to the extent publicly available, of
         certain business combination transactions that it deemed relevant;

    o    reviewed the premiums paid, to the extent publicly available, of
         certain business combination transactions that it deemed relevant;

    o    reviewed and analyzed the financial terms of a draft of the asset
         purchase agreement dated September 21, 2009;

    o    contacted other potential investors regarding an investment in the
         Company, as well as potential buyers for the business of the Company;
         and

    o    conducted such other financial studies and analyses and took into
         account such other information as it deemed appropriate.

In connection with its review, Foundation did not assume any responsibility for
independent verification of any of the information supplied to, discussed with,
or reviewed by it for the purpose of its opinion and, with the consent of the
Company's special committee, relied on such information being complete and
accurate in all material respects. In addition, at the special committee's
direction, Foundation has not made any independent evaluation or appraisal of
any of the assets or liabilities of the Company, nor has Foundation been
furnished with any such evaluation or appraisal.

Foundation's opinion is necessarily based on economic, monetary, market and
other conditions as in effect on, and the information made available to it as
of, the date of the opinion. Foundation has assumed, with the consent of the
special committee, that all governmental, regulatory or other consents and
approvals necessary for the consummation of the transaction will be obtained
without the imposition of any delay, limitation, restriction, divestiture or
condition that would have an adverse effect on the Company or Buyer or on the
expected benefits of the transaction.

The opinion was for the use and benefit of the special committee and the board
of directors of the Company in their evaluation of the transaction. In addition,
Foundation did not express any opinion as to the fairness of the amount or
nature of any compensation to be received by any of the Company's officers,
directors or employees, or any class of such persons, relative to the
transaction value.

FINANCIAL ANALYSES

The following is a summary of the financial analyses presented to the Company's
special committee and board of directors at its meetings held on September 16,
2009 and September 22, 2009, in connection with the delivery of its oral opinion
at those meetings and its subsequent written opinion.

                                       33
<PAGE>

Foundation highlighted the following facts for the special committee and the
board of directors:

    o    over a period of more than 12 months, the Company approached more than
         200 institutional investors and approximately 100 high net worth
         individuals;

    o    Foundation reached out to 13 potential fINANCIAL AND STRATEGIC
         acquirors of the business COMMENCING IN JULY 2009;

    o    to date, the Company's attempts at obtaining financing and/or strategic
         opportunities, other than the Ajax offer, have been unsuccessful;

    o    the Company lacks a robust pipeline of product candidates;

    o    the recent delisting of the Company's securities from the NASDAQ Stock
         Market had negatively impacted the Company's stock price and trading
         prospects;

    o    the Company is operating with a severely reduced staff and full-scale
         operations with respect to the technology will require the Company to
         rebuild its workforce; and

    o    absent a significant investment providing the Company with the ability
         to repay its loan from Emigrant and o to operate its business, the
         Company's options would have been limited to bankruptcy or liquidation
         of its assets.

In its evaluation of the proposed transaction, Foundation analyzed the
historical financial performance and prospects of the Company's business and
considered several valuation methodologies discussed below. AS A RESULT OF THE
COMPANY'S EARLY STAGE AND PRE-REVENUE STATUS, AS WELL AS THE FACT THAT THE
COMPANY HAD LIMITED CASH RESOURCES TO OPERATE ITS BUSINESS, THE COMPANY WAS NOT
ABLE TO PROVIDE FOUNDATION WITH RELIABLE CURRENT PROJECTIONS FOR THE COMPANY.
THEREFORE, FOUNDATION'S EVALUATION OF THE TRANSACTION DID NOT INCLUDE AN
ANALYSIS OF PROJECTED FINANCIAL PERFORMANCE.

The summary set forth below does not purport to be a complete description of the
analyses performed by Foundation in arriving at its opinion. The fact that any
specific analysis has been referred to in the summary below or in this proxy
statement is not meant to indicate that such analysis was given more weight than
any other analysis. The preparation of a fairness opinion is a complex process
involving various determinations as to the most appropriate and relevant methods
of financial analysis and the application of those methods to the particular
circumstances; therefore, such an opinion is not readily susceptible to partial
analysis or summary description. No company, business or transaction used in
such analyses as a comparison is identical to the Company, its business or the
proposed sale of the assets, nor is an evaluation of such analyses entirely
mathematical. In arriving at its opinion, except as set forth below, Foundation
did not attribute any particular weight to any analysis or factor considered by
it, but rather made qualitative judgments as to the significance and relevance
of each analysis and factor. Accordingly, Foundation believes that its analyses
must be considered as a whole and that selecting portions of its analyses and of
the factors considered by it, without considering all factors and analyses,
would, in the view of Foundation, create an incomplete and misleading view of
the analyses underlying Foundation's opinion.

The analyses do not purport to be appraisals or to reflect the prices at which
the Company's shares might trade at any time after announcement of the proposed
sale of the assets of the Company. Because the analyses are inherently subject
to uncertainty, being based upon numerous factors and events, including, without
limitation, factors relating to general economic and competitive conditions
beyond the control of the parties or their respective advisors, future results
or actual values may be materially different from those contemplated herein.

Foundation compiled data for comparable public companies in similar business
lines as the Company and looked at the financial performance and valuations of
such companies. Foundation selected the companies based on a number of criteria,
including the nature of the companies' operations, size and target markets.
Although none of the selected companies are directly comparable to the Company's
business, the companies selected included:

                                       34
<PAGE>

    o    Bioeletronics, Corp.;

    o    Diapulse Corp. of America.;

    o    Dynatronics Corporation;

    o    Empi AD;

    o    Regenesis Group; AND

    o    KINETIC CONCEPTS, INC.

Foundation looked at the following metrics of companies:

                                            GUIDELINE COMPANY ANALYSIS
<TABLE>
<S>            <C>
----------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
  COMPANY NAME        TICKER        STOCK PRICE        SHARES         MARKET CAP          DEBT         ENTERPRISE
                                                     OUTSTANDING                                          VALUE
----------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
 BIOELECTRONICS        BIEL            0.0920          894.26M           82.2M            1.6M             N/A
----------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
    DIAPULSE          DIAC.PK          0.2480            N/A              N/A             N/A              N/A
----------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
  DYNATRONICS          DYNT             0.73           13.68M            9.98M            8.8M           18.54M
----------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
      EMPI            OEBM.L            2.50             N/A              N/A             N/A              N/A
----------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
KINETIC CONCEPTS        KCI            36.51           71.06M            2.59B           1.40B            3.74B
----------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
   REGENESIS           RGN.L            0.15             N/A            108.4K            N/A              N/A
----------------- ---------------- --------------- ---------------- ---------------- --------------- ----------------
</TABLE>

FOUNDATION IDENTIFIED THE ABOVE COMPANIES, WHICH IN THEIR JUDGMENT, PROVIDED A
REASONABLE BASIS FOR COMPARISON TO THE RELEVANT INVESTMENT CHARACTERISTICS OF
THE COMPANY. HOOVER'S ONLINE DATABASE, THE COMPANY'S 10-K AND OTHER ONLINE
SEARCHES WERE UTILIZED TO IDENTIFY POTENTIAL COMPARABLES. PRIMARY SEARCH
CRITERIA WERE PUBLIC COMPANIES CLASSIFIED UNDER THE PRIMARY SIC CODE 3845 AND
COMPANIES IDENTIFIED BY HOOVER'S AS BEING POTENTIAL COMPETITORS. FOUNDATION
ELIMINATED COMPANIES WITH A MATERIAL REVENUE STREAM FROM COMMERCIALIZED PRODUCTS
(OTHER THAN KCI, WHICH WAS INCLUDED BECAUSE ITS PRODUCT DIRECTLY COMPETES WITH
THE COMPANY'S PRODUCT). AFTER IDENTIFYING COMPARABLE PUBLIC COMPANIES,
COMPARISON TO RELATIVE FINANCIAL DATA IS PERFORMED IN ORDER TO EXAMINE THE
COMPANY'S MARKET VALUE RELATIVE TO THE SELECTED COMPANIES. TYPICALLY, IN A
GUIDELINE PUBLIC COMPANY METHOD, VALUATION MULTIPLES ARE DERIVED FROM THE
GUIDELINE COMPANIES FINANCIAL DATA. MULTIPLES ARE THEN ADJUSTED FOR FACTORS
SPECIFIC TO THE SUBJECT COMPANY AND APPLIED TO THE SUBJECT COMPANY'S RELEVANT
BASIS. Given the lack of significant revenue, earnings and other meaningful
basis for comparative valuation analysis, Foundation did not rely upon this
methodology as a principal source of valuation data.

Foundation also looked at the trading prices of the capital stock of such
companies but did not find it to be a meaningful comparison since it was likely
that as a result of the Company's financial condition and substantial debt that
the value realized by the Company's shareholders was likely to be zero.
Foundation next looked at the decline in the Company's stock price throughout
the past 12 months. Since September 2008, the adjusted weekly closing price had
declined from $0.45 to approximately $0.04 per share and during the month prior
to the delivery of the fairness presentation, the stock price ranged from $0.13
to $0.04 and the trading volume ranged from approximately 0 to 69,800 shares per
day. For purposes of their analysis, Foundation focused on the 50 day moving
average price of $0.10, although they pointed out that there was potential for
significant volatility in the Company's share price due to the low volume and
the probability that the ultimate value realized for the Company's common stock
may be 0.

                                       35
<PAGE>

In addition, Foundation looked at comparative data relating to the sale or
purchase of companies (TRANSACTION/M&A METHOD). THE FOLLOWING TABLE CONTAINS THE
TRANSACTIONS REVIEWED BY FOUNDATION:

                                           MERGER & ACQUISITION ANALYSIS
<TABLE>
<S>            <C>
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
                                                                         TARGET
                                                                         REVENUE     PRICE TO   30 DAY      TOTAL
  ANNOUNCED       CLOSED         SELLER                BUYER            LTM ($MM)    REVENUE    PREMIUM     ASSETS
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
9-SEP-09                     CANDELA CORP.    SYNERON MEDICAL LTD.          124.20       0.52    162.53%      113.61
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
6-JUL-09       6-JUL-09      HAWAII MEDICAL   NATUS MEDICAL, INC.
                             LLC
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
2-JUN-09       25-JUN-09     TECHNITROL,      ALTOR EQUITY PARTNERS          23.72       8.52
                             INC.             AB
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
23-FEB-09      9-APR-09      COREVALVE, INC.  MEDTRONIC, INC.
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
20-FEB-09      5-MAY-09      ALSIUS CORP.     ZOLL MEDICAL CORP.
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
16-DEC-08      18-DEC-08     SHARED P.E.T.    ALLIANCE IMAGING INC.
                             IMAGING LLC
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
12-AUG-08      12-AUG-08     SPECTRUM SAN     ORSCIENCES HOLDINGS
                             DIEGO INC.       LTD.
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
6-AUG-08       6-AUG-08      PLANAR           NDS SURGINAL IMAGING           28.47       1.20                  15.08
                             SYSTEMS, INC.    LLC
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
10-JUL-08      29-AUG-08     EXCEL            GSI GROUP, INC.               158.59       2.19     25.74%      180.39
                             TECHNOLOGY,
                             INC.
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
7-JUL-08       23-DEC-08     RELIANT          THERMAGE, INC.                 70.50       1.24
                             TECHNOLOGIES,
                             INC.
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
11-MAR-08      15-MAY-08     DATASCOPE CORP.  MINDRAY MEDICAL               156.50       1.29
                                              INTERNATIONAL LTD.
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
31-JAN-08      16-JUNE-08    ISIS             ABBOTT LABORATORIES
                             PHARMACEUTICALS,
                             INC.
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
17-DEC-07      9-JAN-08      BRISTOL-MYERS    AVISTA CAPITAL
                             SQUIBB CO.       HOLDINGS LP
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
29-NOV-07      29-NOV-07     RENAL            FRESENUS MEDICAL CARE
                             SOLUTIONS, INC.  AG & CO. KGAA
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
30-OCT-07      1-APR-08      E-Z-EM, INC.     BRACCO SPA                    137.37       1.69     40.47%      138.56
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
2-OCT-07       2-OCT-07      APOLLO LIGHT     RESPIRONICS, INC.
                             SYSTEMS, INC.
-------------- ------------- ---------------- ------------------------ ------------ ---------- ---------- -----------
</TABLE>

CERTAIN OF THE TRANSACTIONS SET FORTH ABOVE WERE EITHER PRIVATE TRANSACTIONS OR
PUBLICLY DISCLOSED TRANSACTIONS WHERE THE OMITTED INFORMATION WAS NOT PUBLICLY
AVAILABLE. THE TRANSACTION/M&A METHOD IS BASED UPON THE PRICES PAID FOR
COMPARABLE PROPERTY IN MERGERS AND ACQUISITIONS. SOURCES OF DATA WERE
TRANSACTION ROSTERS PRESENTED IN MERGERSTAT REVIEW 2009, PUBLISHED BY FACTSET
MERGERSTAT LLC. FOUNDATION OBSERVED TRANSACTIONS POSTED BY MERGERSTAT UNDER THE
INDUSTRY CLASSIFICATION ELECTROMEDICAL AND ELECTROTHERAPEUTIC APPARATUS.
FOUNDATION ELIMINATED TRANSACTIONS INVOLVING TARGETS NOT IN THE
BIOTECHNOLOGY/MEDICAL DEVICE SPACE AS WELL AS TARGETS WITH A MATERIAL REVENUE
STREAM. THE RESULTS OF THE STUDY IMPLIED A MEDIAN DEAL VALUE OF $201,885,000
WITH A MEDIAN IMPLIED PREMIUM (OVER THE MARKET PRICE OF THE SELLER'S STOCK FIVE
DAYS PRIOR TO THE SALE) OF 40.74%. MERGED AND ACQUIRED COMPANY DATA ARE FROM
CONTROLLING INTEREST TRANSACTIONS AND GENERALLY REFLECT A PREMIUM FOR CONTROL
AND A PREMIUM FOR BUYER-SPECIFIC SYNERGIES (ACQUISITION PREMIUM) WHICH ARE
DIFFICULT TO QUANTIFY AND MAY NOT BE APPLICABLE TO THE UNIVERSE OF POTENTIAL
BUYERS. FOUNDATION NOTED THAT IT ULTIMATELY DID NOT RELY ON SUCH METHODOLOGY AS
A PRINCIPAL SOURCE OF VALUATION DATA SINCE THE COMPANY HAD ATTEMPTED FOR MORE
THAN 12 MONTHS TO SOLICIT OFFERS FOR AN INVESTMENT IN THE COMPANY AND SEVERAL
MONTHS FOR A MERGER, ACQUISITION OR OTHER BUSINESS COMBINATION BUT WAS UNABLE TO
GENERATE ANY INTEREST THAT LED TO A PROPOSAL OTHER THAN THE PROPOSAL FROM AJAX.

                                       36
<PAGE>

Foundation then looked at an asset approach. Foundation indicated that the book
value of the Company was approximately $1.0 million at the time of their
analysis and noted that even though book value may provide a good indicator of
what was invested in the Company, it may not be a useful measure of what
shareholders may be able to realize in the form of investment returns. In
addition, since the Company has a technology portfolio which could have
intangible value that is not accounted for on the balance sheet, the value of
these assets would not be reflected in an asset-based approach and therefore,
Foundation did not rely on this valuation methodology as a principal source of
valuation data. Foundation also looked at an income approach but again found
such methodology to be of little value due to the Company's financial condition,
ITS INABILITY TO ATTRACT ADDITIONAL CAPITAL AND ITS INABILITY TO PRODUCE
FINANCIAL PROJECTIONS BEYOND A 12-MONTH TIME HORIZON. Foundation also stated in
its report that although the enterprise value of the Company was approximately
$3.6 million, which included approximately $450,000 of cash in the Company
(which is an excluded asset under the Asset Purchase Agreement), it was their
judgment that the liquidation value of the Company was significantly below the
indicated range.

Although, Foundation did consider different methodologies in assessing the value
indications for the Company, Foundation determined that the Company's inability
to attract an investor or buyer, after approaching more than 200 institutional
investors and approximately 100 high net worth individuals over a period of more
than 12 months, as well as seeking 13 potential FINANCIAL AND STRATEGIC
acquirors of the business COMMENCING IN JULY 2009, was the factor most relevant
in determining an indication of the Company's value. In addition, Foundation
also considered the fact that the amount offered by the Buyer would allow us to
not only repay Emigrant, our senior lender, in full, but would also provide us
with some cash proceeds to repay a portion of our other outstanding liabilities.

OTHER INFORMATION

The total value of the transaction was determined through negotiation between
the Company and Buyer and the decision by the Company's special committee and
board of directors to enter into the Asset Purchase Agreement was solely that of
the Company's special committee and board of directors. The Foundation opinion
and financial analyses were only one of many factors considered by the Company's
special committee and board of directors in its evaluation of the transaction
and should not be viewed as determinative of the views of the Company's special
committee, board of directors or management with respect to the transaction or
the consideration. The Company's special committee retained Foundation based
upon Foundation's prior experience, particularly the work it had already
completed on behalf of the Company, and its expertise. Foundation has consented
to the inclusion of its written opinion delivered to the special committee and
the board of directors, dated September 22, 2009, in this proxy statement.

Under the terms of the engagement letter, as amended, between Foundation and the
Company, Foundation agreed to provide an opinion as to the fairness, from a
financial point of view, to the shareholders and creditors of the Company of the
consideration to be received by the Company in the transaction. The Company has
paid Foundation $280,000 for services provided to the Company, including fees in
connection with our loan with Emigrant and the delivery of the fairness opinion
and $16,041.66 for expense reimbursements. The Company will pay Foundation an
additional fee of $111,250 based on the maximum purchase price for a total fee
of 7.5% of the purchase price in connection with the proposed transaction. Such
remaining amount is contingent on the closing of the transaction. In addition,
the Company has agreed to indemnify Foundation and its affiliates (and their
respective directors, officers, agents, employees and controlling persons)
against certain liabilities and expenses, including liabilities under the
federal securities laws, related to or arising out of Foundation's engagement.

GOVERNMENTAL AND REGULATORY APPROVALS

                                       37<PAGE>

                            IVIVI TECHNOLOGIES, INC.
                               224 PEGASUS AVENUE
                               NORTHVALE, NJ 07647

                                                                January 12, 2010

Ivivi Technologies LLC
460 Park Avenue
21st Floor
New York, New York 10022

Dear Mr. Gluckstern:

         Re:      Master Services Agreement in connection with New Jersey Tax
                  Credit Program

         This letter Agreement (the "Agreement") is entered into by Ivivi
Technologies, Inc. (the "Company") and Ivivi Technologies LLC (the "Customer")
in connection with the Company's potential tax benefit under the New Jersey Tax
Credit Transfer Program (the "Program") offered by the New Jersey Economic
Development Authority (the "EDA"). Under the Program, the Company may be
entitled to approximately $770,000 in tax benefits generated from the Company's
net operating losses as of March 31, 2009 and may be entitled to further tax
credits for future operating losses if the Company continues to operate its
business in compliance with the Program.

         The parties hereto acknowledge and agree that in the event the Company
receives at least $770,000 in tax credits under the Program, the Company and the
Customer will enter into a Master Services Agreement in the form attached hereto
as Exhibit A pursuant to which the Company will provide engineering, regulatory
and technology services to the Customer for a flat monthly service fee of
$26,000.

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

         For the convenience of the parties, any number of counterparts of this
Agreement may be executed by the parties hereto and may be executed via
facsimile. Each such counterpart shall be deemed an original instrument, and all
such counterparts taken together shall constitute one and the same Agreement.

                             [Signature Page Follow]

<PAGE>

         Please indicate your acknowledgement of this Agreement and acceptance
of the promises and covenants as stated herein.

                                                Very truly yours,

                                                Ivivi Technologies, Inc.

                                                By: /s/ Andre' A. DiMino
                                                   --------------------------
                                                     Andre' A. DiMino
                                                     Executive Vice President

Acknowledged and Accepted:

Ivivi Technologies LLC

By: /s/ Steven M. Gluckstern
-----------------------------
Name:  Steven M. Gluckstern
Title:    Managing Member

<PAGE>

                                    Exhibit A

                                                                    CONFIDENTIAL

                        FORM OF MASTER SERVICES AGREEMENT
                                 By and Between
                          IVIVI TECHNOLOGIES, INC. and
                             IVIVI TECHNOLOGIES LLC

This Master Services Agreement (this "Agreement") is entered into and effective
as of January ___, 2010 ("Effective Date") by and between IVIVI TECHNOLOGIES,
INC. ("Contractor") and IVIVI TECHNOLOGIES LLC ("Customer").

In consideration of the mutual promises set forth below, the parties hereby
agree as follows:

1.       Definitions.

"Confidential Information" means all confidential and proprietary information of
a party ("Disclosing Party") disclosed to the other party ("Receiving Party"),
whether orally or in writing, that is designated as confidential or that
reasonably should be understood to be confidential given the nature of the
information and the circumstances of disclosure, including the terms and
conditions of this Agreement (including pricing and other terms), business and
marketing plans, technology and technical information, product designs, and
business processes. Confidential Information shall not include any information
that: (i) is or becomes generally known to the public without breach of any
obligation owed to the Disclosing Party; (ii) was known to the Receiving Party
prior to its disclosure by the Disclosing Party without breach of any obligation
owed to the Disclosing Party; (iii) was independently developed by the Receiving
Party without breach of any obligation owed to the Disclosing Party; or (iv) is
received from a third party without breach of any obligation owed to the
Disclosing Party.

"Deliverables" means all works of authorship, whether in hard copy or electronic
form, including but not limited to designs, models, analyses, reports,
documentation, summaries, manuals, supporting materials, test results,
recommendations and drawings, which are provided by Contractor to Customer.

"Invention" shall mean any idea, design, concept, technique, invention,
discovery, or improvement, regardless of patentability, made solely or jointly
by Contractor and/or Contractor's employees, or jointly by Contractor and/or
Contractor's employees with one or more employees of Customer, during the term
of this Agreement and in performance of any work under any SOW under this
Agreement, provided that either the conception or reduction to practice thereof
occurs during the term of this Agreement and in the performance of work under an
SOW issued under this Agreement.

"Services" means the services provided by Contractor and its subcontractors as
defined in an SOW issued under this Agreement.

"Statement of Work" or "SOW" means the document(s) agreed upon in writing and
executed by Contractor and Customer which defines the Services to be performed
under this Agreement, and the Deliverables to be provided. The terms of each SOW
is incorporated herein by reference, and, to the extent that an SOW contains
additional terms or terms that conflict with any terms of this Agreement, the
SOW shall control.

2. Services and Statement of Work. Contractor will make available and manage the
Services as described in the SOW(s) attached hereto as Exhibit A. The Services
may be provided by Contractor's employees or, with the prior written approval of
customer, individuals or organizations under contract with Contractor. A
separate SOW will be required for each project, assignment or task requested by
Customer. Each SOW will become part of this Agreement by this reference when
signed by Contractor and Customer and shall include: (a) a detailed description
of Contractor's and Customer's respective responsibilities; (b) an estimated
performance schedule including milestones, if applicable; (c) pricing and
payment terms; and (d) identification of Contractor and Customer contacts. A SOW
may only be amended or modified by a written document signed by authorized
representatives of Contractor and Customer.

3.       Confidentiality.

3.1 Confidentiality. The Receiving Party shall not disclose or use any
Confidential Information of the Disclosing Party for any purpose outside the
scope of this Agreement, except with the Disclosing Party's prior written
permission.

3.2 Protection. Each party agrees to protect the confidentiality of the
Confidential Information of the other party in the same manner that it protects
the confidentiality of its own proprietary and confidential information of like
kind, but in no event shall either party exercise less than reasonable care in
protecting such Confidential Information.

3.3 Compelled Disclosure. If the Receiving Party is compelled by law to disclose
Confidential Information of the Disclosing Party, it shall provide the
Disclosing Party with prior notice of such compelled disclosure (to the extent
legally permitted) and reasonable assistance, at Disclosing Party's cost, if the
Disclosing Party wishes to contest the disclosure.

3.4 Remedies. If the Receiving Party discloses or uses (or threatens to disclose
or use) any Confidential Information of the Disclosing Party in breach of this
Section 3, the Disclosing Party shall have the right, in addition to any other
remedies available to it, to seek injunctive relief to enjoin such acts, it
being specifically acknowledged by the parties that any other available remedies
are inadequate.

<PAGE>

4.       Ownership.

4.1 All Deliverables shall be owned by Customer and shall be considered works
made for hire by Contractor for Customer. Furthermore, Customer shall own all
United States and international copyrights in the Deliverables.

4.2 Contractor hereby assigns to Customer (including its successors and
assigns), all Inventions (as defined below) conceived, created or reduced to
practice by Contractor or Contractor's employees, agents or subcontractors in
the course of the performance of this Agreement, together with the right to seek
protection by obtaining patent rights therefor and to claim all rights
thereunder, and the same shall become and remain Customer's property regardless
of whether such protection is sought. Contractor shall execute (and shall cause
its employees, agents and subcontractors to execute) such documents, render such
assistance, and take such other actions as Customer may reasonably request, at
Customer's expense, to apply for, register, perfect, confirm and protect
Customer's rights in any intellectual property hereunder.

4.3 Contractor shall promptly make a complete written disclosure to Customer of
each Invention not otherwise clearly disclosed to Customer in the pertinent
Deliverables. Contractor shall, upon Customer's request and at Customer's
expense, cause patent applications to be filed thereon and shall sign all such
applications over to Customer. Contractor shall give Customer and its solicitors
all reasonable assistance in connection with the preparation and prosecution of
any such patent applications and shall cause to be executed all such assignments
or other instruments or documents as Customer may consider necessary or
appropriate to carry out the intent of this Agreement.

5.       Fees and Payments.

5.1 Fees. Customer shall pay Contractor for the Services in accordance with the
fees, rates and payment terms set forth in the applicable SOW.

5.2 Expenses. Unless expressly contemplated in an SOW, Customer shall not be
required to reimburse Contractor for travel and other out-of-pocket expenses
incurred by Contractor in connection with performance of the Services.

6.       Warranty and Disclaimer.

6.1 CONTRACTOR WARRANTS THAT ALL SERVICES RENDERED PURSUANT TO THIS AGREEMENT
WILL BE PERFORMED IN PROFESSIONAL MANNER CONSISTENT WITH INDUSTRY PRACTICES AND
ALL SERVICES PROVIDED HEREUNDER SHALL SUBSTANTIALLY CONFORM TO THE APPLICABLE
SOW.

7. Consequential Damages Waiver. IN NO EVENT SHALL EITHER PARTY BE LIABLE UNDER
THIS AGREEMENT FOR (A) ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES, LOST PROFITS,
LOST DATA, OR ANY OTHER INDIRECT DAMAGES EVEN IF SUCH PARTY HAS BEEN INFORMED OF
THE POSSIBILITY THEREOF, OR (B) ANY COSTS OR EXPENSES FOR THE PROCUREMENT OF
SUBSTITUTE EQUIPMENT OR SERVICES

8. Injunctive Relief. Unauthorized use of Confidential Information or
Deliverables, or any information contained therein will diminish the value to
each party of its trade secrets or proprietary information. Therefore, if either
party breaches any of its confidentiality or other obligations hereunder, the
other party shall be entitled such equitable relief as may be determined
appropriate under the circumstances by a court or tribunal of competent
jurisdiction to protect such party's interests therein, including but not
limited to injunctive relief, in addition to any monetary damages to which it
may be entitled.

9.       Term and Termination.

9.1 The term of this Agreement shall commence on the Effective Date and shall
continue in full force for a period of one year thereafter, unless terminated
earlier under the provisions of this Section 9. This Agreement shall
automatically renew for additional one-year periods, unless either party
notifies the other party in writing of its intent to terminate this Agreement at
least 30 days prior to the end of the then-current term. Notwithstanding the
foregoing, either party may terminate this Agreement at any time and for any
reason upon 180 days prior written notice to the other party.

9.2 Failure by either party to comply with any material term or condition under
this Agreement or a SOW issued hereunder shall entitle the other party to give
the party in default written notice requiring it to cure such default. If the
party in default has not cured such default within 30 days of receipt of notice,
the notifying party shall be entitled, in addition to any other rights it may
have, to terminate this Agreement (and all SOWs issued hereunder) and/or the
individual SOW by giving notice effective immediately. Notwithstanding the
foregoing, this Agreement and/or any SOW hereunder may be terminated immediately
by Customer in the event of Contractor's breach of Sections 3 or 4.

9.3 This Agreement or individual SOW may be terminated immediately by either
party through written notice in the event that the other party makes an
assignment for the benefit of creditors, or if there are instituted by or
against the other party party proceedings in bankruptcy or under any insolvency
or similar law or for reorganization, receivership or dissolution.

<PAGE>

9.4 The right of either party to terminate this Agreement and/or a SOW shall not
be affected in any way by its waiver of or failure to take action with respect
to any previous default.

9.5 Upon termination of this Agreement and/or any SOWs, Customer shall pay
Contractor for all work performed under the affected SOW(s) up to the effective
date of termination at the agreed upon prices, fees and expense reimbursement
rates set forth in the relevant SOW(s). In addition Contractor agrees, within 10
days after termination, to deliver to Customer the original and all copies of
the Deliverables and related materials in connection with the terminated work
for which Contractor has been paid in the course of performance.

9.6 The rights and remedies of each party provided in this Section 9 shall not
be exclusive and are in addition to all other rights and remedies provided at
law, in equity or otherwise under this Agreement or SOWs hereunder.

9.7 Sections 3, 4, 6, 7, 8, 9 and 10 of this Agreement and any accrued rights to
payment shall survive termination, regardless of the reason for termination.

10.      General Provisions.

10.1 Relationship of the Parties. This Agreement does not create a partnership,
franchise, joint venture, agency, fiduciary or employment relationship between
the parties.

10.2 No Third-Party Beneficiaries. There are no third-party beneficiaries to
this Agreement.

10.3 Notices. Any notice required or permitted by this Agreement shall be in
writing and shall be deemed sufficient upon receipt, when delivered personally
or by courier, overnight delivery service or confirmed facsimile, or 48 hours
after being deposited in the regular mail as certified or registered mail with
postage prepaid, if such notice is addressed to the party to be notified at such
party's address or facsimile number as set forth below, or as subsequently
modified by written notice.

10.4 Delays. Neither party shall be responsible for failure to fulfill its
obligations under this Agreement (except for payment of money) due to causes
beyond its reasonable control, including without limitation, acts of God,
strikes, transportation delays, fires, floods, riots, political uprisings or
revolutions, labor disputes, freight embargoes, shortage of labor, inability to
secure fuel or power at reasonable prices or on account of shortages thereof, or
laws or acts of any Federal, state or local government affecting the conduct of
the parties, including export licensing restrictions or other export
restrictions.

10.5 Waiver and Cumulative Remedies. No failure or delay by either party in
exercising any right under this Agreement shall constitute a waiver of that
right. Other than as expressly stated herein, the remedies provided herein are
in addition to, and not exclusive of, any other remedies of a party at law or in
equity.

10.6 Severability. If any provision of this Agreement is held by a court of
competent jurisdiction to be contrary to law, the provision shall be modified by
the court and interpreted so as best to accomplish the objectives of the
original provision to the fullest extent permitted by law, and the remaining
provisions of this Agreement shall remain in effect.

10.7 Assignment. Neither party may assign any of its rights or obligations
hereunder, whether by operation of law or otherwise, without the prior express
written consent of the other party. Notwithstanding the foregoing, Customer may
assign this Agreement together with all rights and obligations hereunder,
without consent of Contractor, in connection with a merger, acquisition,
corporate reorganization, or sale of all or substantially all of its assets. Any
attempt by a party to assign its rights or obligations under this Agreement in
breach of this section shall be void and of no effect. Subject to the foregoing,
this Agreement shall bind and inure to the benefit of the parties, their
respective successors and permitted assigns.

10.8 Governing Law. This Agreement shall be governed exclusively by the internal
laws of the State of New Jersey, without regard to its conflicts of laws rules.

10.9 Export Control Laws. Each party shall comply with all United States and
foreign export control laws or regulations applicable to its performance under
this Agreement.

10.10 Entire Agreement. This Agreement, including all exhibits and addenda
hereto, constitutes the entire agreement between the parties, and supersedes all
prior and contemporaneous agreements, proposals or representations, written or
oral, concerning its subject matter. No modification, amendment, or waiver of
any provision of this Agreement shall be effective unless in writing and signed
by the party against whom the modification, amendment or waiver is to be
asserted. Notwithstanding any language to the contrary therein, no terms or
conditions stated in a Customer purchase order or in any other Customer order
documentation shall be incorporated into or form any part of this Agreement, and
all such terms or conditions shall be null and void.

10.11 Counterparts. This Agreement may be executed in counterparts, which taken
together shall form one legal instrument

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the later date set forth below:

IVIVI TECHNOLOGIES, INC.                       IVIVI TECHNOLOGIES LLC

By:____________________________________        By:______________________________
Name:__________________________________        Name:____________________________
Title:_________________________________        Title:___________________________
Date:__________________________________        Date:____________________________

<PAGE>

                                    EXHIBIT A

                             STATEMENT OF WORK (SOW)

                           Dated ______________, 2010

Description of Services

         Contractor will perform the services described in Appendix A hereto.

Staffing

         Contractor will employ no fewer than four qualified full-time engineers
         or, with the prior written consent of Customer, contract with a third
         party that will provide an equivalent level of services.

Performance Standards; Termination

         In the event that Customer is dissatisfied with the performance of the
         Services hereunder for any reason, in addition to any remedies set
         forth in the Agreement, Customer may notify Contractor in writing,
         specifying in reasonable detail the deficiencies in the Services
         provided by Contractor. If such deficiencies are not cured by
         Contractor to Customer's satisfaction within 30 days following such
         notice, Customer may terminate this SOW and/or the Agreement
         immediately or mutually agree with Contractor to reduce the Monthly
         Service Fee.

Monthly Service Fee; Payment Terms.

         Customer shall pay to Contractor a flat monthly service fee of $26,000,
         payable in advance at the beginning of each calendar month. In the
         event that the initial month or final month of the term of this SOW or
         the Agreement is not a full calendar month, the payment for such month
         shall be appropriately pro rated.

<PAGE>

                                   APPENDIX A

        Description of Services (Statement of Work dated ________, 2010)

                      Services to be provided by Contractor
       Engineering (including QA and QC), Regulatory Compliance and Other

Engineering Services

Electronic, Mechanical, Software & QA-QC Disciplines
Project management and reporting
Engineering support for basic and applied R&D
Bread-board proof-of-concept prototyping
Documentation and CAD Drawing support for patent submissions and other needs
Conceptual to commercial engineering
Conceptual prototyping and Pre-production modeling
Clinical Trial Technical Support
Production design - Circuit design, schematics, mechanicals, documentation,
   testing
Interface for potential partners and due diligence on engineering, design and
   production
Liaison for outsourced design and/or production
Engineering support for FDA, CE, ETL, ISO filings
Certification control of test and lab equipment

QA-QC creation, implementation and maintenance

Regulatory Compliance System

FDA               On-site Inspections
                  GMP Documentation and Process
                  SOP Maintenance and Updating pursuant to revised standards
                  Document Change Notice system
                  DMR, DHF, Design Review, Design Verification
                  Complaint processing and MDR Reporting
                  CAPA System and Implementation
CE                Applicable provisions of above, plus:
                  On-site Inspections
                  Technical File Control and Revision
                  International Standards Maintenance
13485             Applicable provisions of above, plus:
                  On-site Audit and Inspection
                  Documentation control
                  Standards file (14907)
ETL               Applicable provisions of above, plus:
                  Quarterly on-site inspections
                  Standards control (60601, etc.)
CMDCAS            Applicable provisions of above, plus:
                  On-site and telephonic audits
                  Registered US site for service
                  Submission of Change Notices

Operations Services
Fulfillment including warehousing, shipping and related paperwork

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