MSTI
      Holdings, Inc.

    259-263
      Goffle Road

    Hawthorne,
      New Jersey 07506

    


    May
      23,
      2008

    


    


    To
      the
      MSTI Holdings, Inc. Debenture Holders:

     

    Reference
      is hereby made to that certain Securities Purchase Agreement, dated as of May
      25, 2007 (the “Purchase
      Agreement”),
      by
      and among MSTI Holdings, Inc., a Delaware corporation (the “Company”),
      and
      each entity identified on the signature pages thereto (each, including its
      successors and assigns, a “Purchaser”
and,
      collectively, the “Purchasers”).
      Capitalized terms used in this letter agreement (this “Agreement”)
      and
      not otherwise defined shall have the meanings ascribed to them in the Purchase
      Agreement.

    


    1.
       Additional
      Indebtedness.
      Section
      7(a) of the Debentures states that so long as any portion of the Debentures
      remains outstanding, unless the holders of at least 85% in principal amount
      of
      the then outstanding Debentures shall have otherwise given prior written
      consent, the Company shall not, directly or indirectly, other than Permitted
      Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist
      any indebtedness for borrowed money of any kind.

    


    The
      Purchasers hereby consent solely to the issuance of the Additional Debentures
      (as defined below).

     

    2. Additional
      Debentures; Other Financing.
      

     

    (a)
       Each
      of
      the Purchasers hereby agrees to purchase from the Company, and the Company
      hereby agrees to sell to the Purchasers, additional Debentures in the aggregate
      principal amount of $75,000 (the “Additional
      Debentures”),
      in
      the denominations set forth on Schedule
      I
      hereto.
      Upon receipt by the Company of the funds, the Company shall promptly deliver
      newly issued Debentures to the Purchasers as set forth on said Schedule
      I.

     

    (b) The
      rights and obligations of each Purchaser (severally and not jointly with the
      rights of the other Purchasers) and of the Company with respect to the
      Additional Debentures and the shares of Common Stock issuable under the
      Additional Debentures (the “Additional
      Underlying Shares”)
      shall
      be identical in all respects to the rights and obligations of such Purchaser
      and
      of the Company with respect to the Debentures and the Underlying Shares. The
      Purchase Agreement is hereby amended so that the term “Debentures” includes the
      Additional Debentures and the term “Underlying Shares” includes the Additional
      Underlying Shares. The Registration Rights Agreement entered into in connection
      with the Purchase Agreement is hereby amended so that the term “Registrable
      Securities” includes in the calculation thereof the Additional Underlying
      Shares. The parties confirm and ratify that the term “Obligations” in the
      Security Agreement and Subsidiary Guarantee includes the Additional
      Debentures.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3. Representations
      and Warranties of the Company.
      The
      Company hereby makes to the Purchasers the following representations and
      warranties:

    


    (a) Authorization;
      Enforcement.
      The
      Company has the requisite corporate power and authority to enter into and to
      consummate the transactions contemplated by this Agreement and otherwise to
      carry out its obligations hereunder. The execution and delivery of this
      Agreement by the Company and the consummation by the Company of the transactions
      contemplated hereby have been duly authorized by all necessary action on the
      part of the Company and no further action is required by the Company, its board
      of directors or its stockholders in connection therewith other than in
      connection with the Required Approvals. This Agreement has been duly executed
      by
      the Company and, when delivered in accordance with the terms hereof, will
      constitute the valid and binding obligation of the Company enforceable against
      the Company in accordance with its terms, except (i) as limited by general
      equitable principles and applicable bankruptcy, insolvency, reorganization,
      moratorium and other laws of general application affecting enforcement of
      creditors’ rights generally, (ii) as limited by laws relating to the
      availability of specific performance, injunctive relief or other equitable
      remedies and (iii) insofar as indemnification and contribution provisions may
      be
      limited by applicable law.

     

    (b) No
      Conflicts.
      The
      execution, delivery and performance of this Agreement by the Company and the
      consummation by the Company of the transactions contemplated hereby do not
      and
      will not: (i) conflict with or violate any provision of the Company’s
      certificate or articles of incorporation, bylaws or other organizational or
      charter documents; or (ii) conflict with, or constitute a default (or an event
      that with notice or lapse of time or both would become a default) under, result
      in the creation of any Lien (except as contemplated by the Security Documents)
      upon any of the properties or assets of the Company in connection with, or
      give
      to others any rights of termination, amendment, acceleration or cancellation
      (with or without notice, lapse of time or both) of, any material agreement,
      credit facility, debt or other material instrument (evidencing Company debt
      or
      otherwise) or other material understanding to which such Company is a party
      or
      by which any property or asset of the Company is bound or affected; or (iii)
      conflict with or result in a violation of any law, rule, regulation, order,
      judgment, injunction, decree or other restriction of any court or governmental
      authority to which the Company is subject (including federal and state
      securities laws and regulations), or by which any property or asset of the
      Company is bound or affected, except, in the case of each of clauses (ii) and
      (iii), such as could not have or reasonably be expected to result in a Material
      Adverse Effect.

     

    (c) Issuance
      of the Additional Debentures.
      The
      Additional Debentures are duly authorized and, upon the execution of this
      Agreement by a Purchaser, will be duly and validly issued, fully paid and
      nonassessable, free and clear of all Liens imposed by the Company other than
      restrictions on transfer provided for in the Transaction Documents. The
      Additional Underlying Shares, when issued in accordance with the terms of the
      Additional Debentures, will be validly issued, fully paid and nonassessable,
      free and clear of all Liens imposed by the Company. The Company has reserved
      from its duly authorized capital stock a number of shares of Common Stock
      sufficient for issuance of the Additional Underlying Shares.

     

    (d) Equal
      Consideration.
      Except
      as set forth in this Agreement, no consideration has been offered or paid to
      any
      person to amend or consent to a waiver, modification, forbearance or otherwise
      of any provision of any of the Transaction Documents that is not proportional
      to
      such Purchaser’s holding of Debentures.

     

    (e) Affirmation
      of Prior Representations and Warranties.
      The
      Company’s representations and warranties listed in Section 3.1 of the Purchase
      Agreement are true and correct as of the date hereof, provided that the
      Company’s representations and warranties are qualified by any SEC Filings made
      prior to the date hereof.

     

    
      
        
        

      

      
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    4. Representations
      and Warranties of the Purchasers.
      Each
      Purchaser hereby represents and warrants as of the date hereof to the Company
      as
      follows:

    


    (a) Authority.
      The
      execution and delivery of this Agreement and performance by such Purchaser
      of
      the transactions contemplated by this Agreement have been duly authorized by
      all
      necessary corporate or similar action on the part of such Purchaser. This
      Agreement has been duly executed by such Purchaser and, when delivered by such
      Purchaser in accordance with the terms hereof, will constitute the valid and
      legally binding obligation of such Purchaser, enforceable against it in
      accordance with its terms, except (i) as limited by general equitable principles
      and applicable bankruptcy, insolvency, reorganization, moratorium and other
      laws
      of general application affecting enforcement of creditors’ rights generally,
      (ii) as limited by laws relating to the availability of specific performance,
      injunctive relief or other equitable remedies and (iii) insofar as
      indemnification and contribution provisions may be limited by applicable
      law.

     

    (b) Own
      Account.
      Such
      Purchaser (i) understands that the Additional Debentures and the Additional
      Underlying Shares (the “Securities”)
      are
“restricted securities” and have not been registered under the Securities Act or
      any applicable state securities law, (ii) is acquiring the Securities as
      principal for its own account and not with a view to or for distributing or
      reselling such Securities or any part thereof in violation of the Securities
      Act
      or any applicable state securities law, (iii) has no present intention of
      distributing any of such Securities in violation of the Securities Act or any
      applicable state securities law and (iv) has no arrangement or understanding
      with any other persons regarding the distribution of such Securities (this
      representation and warranty not limiting such Purchaser’s right to sell the
      Additional Underlying Shares pursuant to the Registration Statement or otherwise
      in compliance with applicable federal and state securities laws) in violation
      of
      the Securities Act or any applicable state securities law. Such Purchaser is
      acquiring the Securities hereunder in the ordinary course of its business.
      Such
      Purchaser does not have any agreement or understanding, directly or indirectly,
      with any Person to distribute any of the Securities.

     

    (c) Purchaser
      Status.
      Such
      Purchaser is an “accredited investor” as defined in Rule 501(a)(1), (a)(2),
      (a)(3), (a)(7) or (a)(8) under the Securities Act. Such Purchaser is not
      required to be registered as a broker-dealer under Section 15 of the Exchange
      Act.

     

    (d) Experience
      of Such Purchaser.
      Such
      Purchaser, either alone or together with its representatives, has such
      knowledge, sophistication and experience in business and financial matters
      so as
      to be capable of evaluating the merits and risks of the prospective investment
      in the Securities, and has so evaluated the merits and risks of such investment.
      Such Purchaser is able to bear the economic risk of an investment in the
      Securities and, at the present time, is able to afford a complete loss of such
      investment.

     

    (e) General
      Solicitation.
      Such
      Purchaser is not purchasing the Securities as a result of any advertisement,
      article, notice or other communication regarding the Securities published in
      any
      newspaper, magazine or similar media or broadcast over television or radio
      or
      presented at any seminar or any other general solicitation or general
      advertisement.

     

    5. Public
      Disclosure.
      The
      Company shall, as soon as practical, issue a Current Report on Form 8-K,
      disclosing the material terms of the transactions contemplated hereby and
      attaching this Agreement as an exhibit thereto, but in any event within 5
      business days of the full execution hereof. The Company shall consult with
      the
      Purchasers in issuing any press releases with respect to the transactions
      contemplated hereby.

     

    
      
        
        

      

      
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    6. Independent
      Nature of Purchasers' Obligations and Rights.
      The
      Company has elected to provide all Purchasers with the same terms and Agreement
      for the convenience of the Company and not because it was required or requested
      to do so by the Purchasers. The obligations of each Purchaser under this
      Agreement, and any Transaction Document, are several and not joint with the
      obligations of any other Purchaser, and no Purchaser shall be responsible in
      any
      way for the performance or non-performance of the obligations of any other
      Purchaser under this Agreement or any Transaction Document. Nothing contained
      herein or in any Transaction Document, and no action taken by any Purchaser
      pursuant thereto, shall be deemed to constitute the Purchasers as a partnership,
      an association, a joint venture or any other kind of entity, or create a
      presumption that the Purchasers are in any way acting in concert or as a group
      with respect to such obligations or the transactions contemplated by this
      Agreement or the Transaction Documents. Each Purchaser shall be entitled to
      independently protect and enforce its rights, including, without limitation,
      the
      rights arising out of this Agreement or out of the other Transaction Documents,
      and it shall not be necessary for any other Purchaser to be jointed as an
      additional party in any proceeding for such purpose. Each Purchaser has been
      represented by its own separate legal counsel in their review and negotiation
      of
      this Agreement and the Transaction Documents.

     

    7. Miscellaneous.
      Subject
      to the waivers and agreements provided herein, the Transactions Documents shall
      remain in full force and effect. Except as expressly set forth herein, this
      Agreement shall not be deemed to be a waiver, amendment or modification of
      any
      provisions of the Transaction Documents or of any right, power or remedy of
      the
      Purchasers, or constitute a waiver of any provision of the Transaction Documents
      (except to the extent herein set forth), or any other document, instrument
      and/or agreement executed or delivered in connection therewith, in each case
      whether arising before or after the date hereof or as a result of performance
      hereunder or thereunder. The Purchasers reserve all rights, remedies, powers or
      privileges available under the Transaction Documents, at law or otherwise,
      subject to the terms of this Agreement. This Agreement shall not constitute
      a
      novation or satisfaction and accord of the Transaction Documents or any other
      document, instrument and/or agreement executed or delivered in connection
      therewith. This Agreement shall be governed by and construed in accordance
      with
      the laws of the State of New York.

     

    Please
      indicate your acknowledgment of and agreement to the foregoing by signing a
      copy
      of this letter and returning an executed original to the Company.
This
      Agreement may be executed by the parties hereto in counterparts, and execution
      may be evidenced by facsimile or other electronic transmission of a signed
      signature page by any party hereto, and all of such counterparts together shall
      constitute one and the same instrument.

     

     

    
      	 	Sincerely,
	 	 
	 	/s/ Frank
              Matarazzo         
              
	 	
              Frank
                Matarazzo

              Chief
                Executive Officer

            


    

     

    
      
        
        

      

      
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    [DEBENTURE
      HOLDER SIGNATURE PAGE]

    


    


    ACCEPTED
      AND AGREED:

    


    DKR
      SOUNDSHORE OASIS HOLDING FUND LTD.

    

      
        	
                By:
                  DKR Oasis Management Company L.P., its investment manager

              	 	 
	
                By:
                  /s/ Barabara
                  Burger                         
                  

              	 	
                Dated:
                  May 27, 2008

              
	
                Name:
                  Barabara Burger

              	 	 
	
                Title: 
                  Authorized Signatory

              	 	 
	 	 	 
	 	 	 
	
                ALPHA
                  CAPITAL ANSTALT

              	 	 
	 	 	 
	
                By:
                  /s/ Konrad
                  Ackerman                    
                  

              	 	
                
                  Dated:
                    May 27, 2008

                

              
	
                Name:
                  Konrad Ackerman

              	 	 
	
                Title:
                  Director

              	 	 
	 	 	 
	 	 	 
	
                GEMINI
                  MASTER FUND, LTD.

              	 	 
	 	 	 
	
                By:
                  /s/ Steven W.
                  Winters                  
                  

              	 	
                Dated:
                  May 27, 2008

              
	
                Name:
                  Steven W. Winters 

              	 	 
	
                Title:
                  President

              	 	 
	 	 	 
	 	 	 
	
                WHALEHAVEN
                  CAPITAL FUND LIMITED

              	 	 
	 	 	 
	
                By:
                  /s/ Brian
                  Mazzella                         
                  

              	 	
                
                  Dated:
                    May 27, 2008

                

              
	
                Name:
                  Brian Mazzella

              	 	 
	
                Title:
                  Chief Financial Officer

              	 	 
	 	 	 
	 	 	 
	
                CMS
                  CAPITAL

              	 	 
	 	 	 
	
                By:
                  /s/ Howard
                  Weiss                         
                  

              	 	
                
                  Dated:
                    May 27, 2008

                

              
	
                Name:
                  Howard Weiss

              	 	 
	
                Title:
                  Director

              	 	 
	 	 	 
	 	 	 
	
                BRIO
                  CAPITAL L.P.

              	 	 
	 	 	 
	
                By:
                  /s/ Shaye
                  Hirsch                          
                  

              	 	
                
                  Dated:
                    May 27, 2008

                

              
	
                Name:
                  Shaye Hirsch

              	 	 
	
                Title:
                  Manager of General Manager

              	 	 


      



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    SCHEDULE
      I

    

      
        	
                Name
                  of Purchaser

              	
                Purchase
                  Price

              	
                Amount

                of
                  Debenture

              
	
                DKR
                  Soundshore Oasis Holding Fund Ltd.

              	
                $55,785

              	
              	
                $60,636

              	
              
	
                Alpha
                  Capital Anstalt

              	
                6,198

              	
              	
                6,737

              	
              
	
                Gemini
                  Master Fund, Ltd.

              	
                6,198

              	
              	
                6,737

              	
              
	
                Whalehaven
                  Capital Fund Limited

              	
                3,719

              	
              	
                4,042

              	
              
	
                CMS
                  Capital

              	
                1,860

              	
              	
                2,022

              	
              
	
                Brio
                  Capital L.P.

              	
                             
                  1,240

              	
              	
                  
                          1,348

              	
              
	
                    TOTAL

              	
                $75,000

              	
              	
                $81,522

              	
              


      

    

     

    


    
      
        
        

      

      
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