EXHIBIT
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    DEBT
CONVERSION AGREEMENT

     

    THIS DEBT
CONVERSION AGREEMENT (the “Agreement”) is made and entered into effective as of
the 15th day of December, 2008, by and between ANTHONY M. FRANK, an individual
(hereinafter referred to as “Buyer”) and MICRO IMAGING TECHNOLOGY, INC., a
California corporation (hereinafter referred to as “MIT” or the
“Company”).

     

    R E C I T A L
S

     

    WHEREAS,
Buyer loaned the Company One Hundred Fifty Thousand Dollars ($150,000) all
pursuant to an 8% Convertible Term Note dated October 29, 2008 (the “Term
Note”).

     

    WHEREAS,
as of December 15, 2008, a total of $1,380.82 in interest accrued on the above
loan is due and payable to Buyer by the Company.

     

    WHEREAS,
Buyer wishes to forgive all of the interest accrued on the Term Note through the
date hereof and to convert all of the principal into shares of Micro Imaging
Technology, Inc. Common Stock and the Company wishes to issue such shares to
extinguish the debt owed Buyer in its entirety.

     

    NOW,
THEREFORE, in consideration of the foregoing and of the mutual obligations
herein contained, it is agreed as follows:

     

    1.         FORGIVENESS
OF DEBT AND CONVERSION

     

    (a)             On
the date set forth above, Buyer hereby:

     

    
      	
               
      

            	
              (i)

            	
              Waives
      and forgives all interest accrued on the Term Note through the date hereof
      in the sum of $1,380.82; and

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Converts
      all of the principal due on the Term Note in the sum of $150,000 into
      Shares of Micro Imaging Technology, Inc. Common Stock, $0.01 par value, at
      an effective conversion rate of $0.04554 per share, in the names and
      amounts indicated in the table below, for an aggregate of 3,024,329 Shares
      (the “Conversion Shares”).

            


    

    


    (b)          The
Conversion Shares shall have the rights, preferences, privileges, restrictions
and other terms set forth in the By-laws of the Company.

     

    (c)          Upon
conversion, Buyer acknowledges that all principal and interest accrued and due
through the date hereof pursuant to the terms of the Term Note referenced above
has been satisfied in full by the Company.  Buyer also acknowledges that
pursuant to this Debt Conversion Agreement any default by MIT for failure to pay
interest due on the Term Note through the date hereof has been
cured.

     

                2.         REPRESENTATIONS
AND WARRANTIES OF BUYER       Buyer
represents and warrants to the Company:

     

    
      
         

      

      
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                           (a)        The
Conversion Shares are being acquired by Buyer for investment for an indefinite
period, for Buyer’s own account, not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, and the Buyer has no present
intention of selling, granting participations in, or otherwise distributing the
same except as may be permitted by the Securities Act of 1933, as amended (the
“Act”).

     

    (b)        Buyer
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer, or grant participation to such person or to any third
person, with respect to the Conversion Shares.

     

    (c)        That
Buyer understands that the Conversion Shares have not been registered under the
Securities Act of 1933, as amended (the “Act”), in reliance upon the exemptions
from the registration provisions of the Act contained in Section 4 (2) thereof,
and any continued reliance on such exemption is predicated on the
representations of the Buyer set forth herein.

     

    (d)        Buyer
understands that the Conversion Shares must be held indefinitely unless the sale
or other transfer thereof is subsequently registered under the Act, as amended,
or an exemption from such registration is available.  Buyer further
understands that the Company is under no obligation to register the Securities
on its behalf or to assist him in complying with any exemption from registration
except as otherwise provided herein.

     

    (e)       
Buyer (i) has adequate means of providing for his current needs and possible
contingencies, (ii) has no need for liquidity in this investment, (iii) is able
to bear the substantial economic risks of an investment in the Conversion Shares
for an indefinite period, (iv) at the present time, can afford a complete loss
of such investment, and (v) does not have an overall commitment to investments
which are not readily marketable that is disproportionate to Buyer’s net worth,
and Buyer’s investment in the Conversion Shares will not cause such overall
commitment to become excessive.

     

    (f)       
Buyer is an “accredited investor” (as defined in Regulation D promulgated under
the Act) and
the undersigned’s total investment in the Conversion Shares does not exceed 10%
of the Buyer’s net worth.

     

    (g)        Buyer
recognizes that the Company has had only limited revenues to date and that the
Conversion Shares as an investment involve significant risks.

     

    (h)       
Buyer will not transfer the Conversion Shares without registering them under
applicable federal and state securities laws unless the transfer is exempt from
registration.  Buyer realizes that the Company may not allow a transfer of
Conversion Shares unless the transferee is also an “accredited investor”. 
Buyer understands that legends will be placed on certificates representing the
Conversion Shares, with respect to the above restrictions on resale or other
disposition of the Conversion Shares and that stop transfer instructions have or
will be placed with respect to the Conversion Shares so as to restrict the
assignment, resale or other disposition thereof.

     

    (i)           
The Company will direct its transfer agent to, or will itself, place such a stop
transfer order in its books respecting transfer of the Conversion Shares, and
the certificate or certificates representing the Conversion Shares will bear the
following legend or a legend substantially similar thereto:

     

    
      
         

      

      
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    “THESE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.  THEY MAY
NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF:  (1) AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT, OR (2) AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.”

     

    (j)           
That Buyer understands that Rule 144, promulgated by the Securities and Exchange
Commission under the Act, may not be currently available for sale of the
Conversion Shares, and there is no assurance that it will be available at any
particular time in the future.  If and when Rule 144 is available for sale
of the Common Stock underlying the Conversion Shares, such sales in reliance
upon Rule 144 may only be (i) in limited quantities after the Conversion Shares
have been held for six (6) months after being sold by the Company, or (ii) in
unlimited quantities by non-affiliates after the Conversion Shares have been
held for one (1) year after being sold by the Company, in each case in
accordance with the conditions of the Rule, all of which must be met (including
the requirement, if applicable, that adequate information concerning the Company
is then available to the public).  The Company and Buyer acknowledge that
the Company has no obligation to
supply the information required for sales under Rule 144.

     

    (k)          
The Purchase Price to be paid by Buyer to Company for the Conversion Shares has
been determined by Buyer as fair and appropriate based solely upon Buyer’s
independent investigation and due diligence of the Company, and neither Buyer
nor the Company nor any of their agents, including, without limitation, any of
their officers, directors, employees, accountants and attorneys, has made any
representations or warranties whatsoever in connection with the sale of the
Conversion Shares by the Company to Buyer.  Buyer has had sufficient
opportunity in connection with the sale of the Conversion Shares to review the
Company’s business and affairs (including, without limitation, the Company’s
financial statements and other information).  The Buyer has had answered to
his satisfaction any questions with respect to the Company’s business and
affairs.  Buyer further has had the opportunity to obtain independent
financial, legal, accounting, business, tax and other appropriate advice with
respect to the transactions contemplated by this Agreement, and is not relying
upon the Company or any of its agents in any manner in connection with
same.

     

    3.            
REPRESENTATIONS AND WARRANTIES OF MIT

     

    (a)          
MIT is a corporation duly organized and validly existing under the laws of the
State of California without limit as to duration of its existence, and is
authorized and in good standing to do business in no other state; MIT has the
corporate power and adequate authority, rights and franchise to own its property
and to carry on its business as now conducted; and, subject to ratification by
its Board of Directors, MIT has the corporate power and adequate authority to
enter into this Agreement.

     

    (b)          
The execution and delivery of this Agreement and subject to (1) ratification by
the Board of Directors of the Company and (2) filing the Certificate with the
California Secretary of State, the performance of the provisions of this
Agreement are not in contravention of or in conflict with any law or regulation
or any term or provision of MIT’s Articles of Incorporation or By-Laws and are
duly authorized and do not require the consent or approval of any governmental
body or other regulatory authority; and this Agreement is a valid, binding and
legal obligation of MIT, enforceable in accordance with the terms
herein.

     

    
      
         

      

      
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    4.            
ENTIRE AGREEMENT       This Agreement
embodies the entire agreement and understanding between the parties hereto with
respect to the subject matter hereof and supersedes all prior and
contemporaneous agreements and understandings relating to such subject
matter.

     

    5.            
AMENDMENT       This Agreement may not be
amended except by written document executed by the parties.

     

    6.            
SUBJECT HEADINGS       Subject headings are
included for convenience only and shall not be deemed part of this
Agreement.

     

    7.            
SEVERABILITY       If any provision of this
Agreement shall be held unenforceable as applied to any circumstance, the
remainder of this Agreement and the application of such provision to other
circumstances shall be interpreted so as best to effect the intent of the
parties.  The parties further agree to replace any such unenforceable
provision with an enforceable provision (and to take such other action) which
will achieve, to the extent possible, the purposes of the unenforceable
provision.

     

    8.            
GOVERNING LAW       This Agreement shall be
governed by and construed under the laws of the State of California in force
from time to time.

     

    9.            
PARTIES BOUND       This Agreement is binding
on and shall inure to the benefit of the parties and their respective
successors, assign, heirs, and legal representatives.

     

    10.     
     SURVIVAL       The
representations, warranties, covenants, and agreements contained in this
Agreement shall survive the consummation of the transactions contemplated
hereby.

     

    11.         
COUNTERPARTS       This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
but all of which together shall constitute one and the same
instrument.

     

    IN
WITNESS WHEREOF, the parties have executed this Agreement effective as of the
date first above written.

     

     

    
      	
              COMPANY:

            	 
      	
              BUYER:

            
	 
      	 
      	 
      
	
              MICRO
      IMAGING TECHNOLOGY, INC.

            	 
      	
              ANTHONY
      M. FRANK KEOGH PLAN

              UTA
      CHARLES SCHWAB & CO., INC.

            
	 
      	 
      	 
      
	
                /s/
      Catherine Patterson

            	 
      	
                /s/
      Anthony M. Frank

            	 
      
	
              Catherine
      Patterson, CFO

            	 
      	
              Anthony
      M. Frank, Trustee

            
	
              23456
      South Pointe Drive

            	 
      	
              1
      Maritime Place, Suite 825

            
	
              Laguna
      Hills, CA 92653-1512

            	 
      	
              San
      Francisco, CA  94111

            
	 
      	 
      	 
      	 
      	 
      


    

     

    


    
      
         

      

      
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