Document:

EMPLOYMENT
      AGREEMENT

     

    THIS
      EMPLOYMENT AGREEMENT (“Agreement”) executed as of the ___ day of __________,
      2006, by and between Science Dynamics Corporation, a Delaware corporation
      (“Employer”) and Michael Ricciardi (“Employee”) an individual resident of
      Virginia.

    

    WITNESSETH:

    

    WHEREAS,
      the Employee will be the Chief Operating Officer of the Employer and the
      Employer and the Employee shall each benefit in a significant way if the
      Employer retains or continues to retain the services of the Employee for the
      future and accordingly the parties hereto have determined it to be in their
      mutual best interest to enter into this Employment Agreement; and

    

    NOW,
      THEREFORE, in consideration of the covenants and conditions hereinafter stated,
      and intending to be legally bound, the parties hereto agree as
      follows:

    

    1. Employment:
      The
      Employer hereby employs the Employee and the Employee hereby accepts employment
      upon the terms and conditions set forth herein.

    

    2. Term:
      Subject
      to the provisions for termination as hereinafter provided, the term of this
      Agreement shall begin on the date set forth above and shall continue for a
      period of three (3) year unless sooner terminated as herein provided.
      Thereafter, this Agreement shall automatically renew from year to year unless
      terminated as provided herein.

    

    3. Compensation:

    

    a. Base
      Salary:
      For
      services rendered by the Employee under this Agreement, the Employer shall
      pay
      to the Employee a base salary at the rate of $165,000.00 per year, payable
      in
      bi-monthly installments or more frequently according to the policies of the
      Employer. Said salary is subject to annual upward
      adjustments
      as approved by the Board of Directors or the President of Employer.
      Such
      salary, as increased from time to time, shall be referred to herein as the
      "Base
      Salary")

    

    b. Bonuses: Employee
      will be
      eligible to receive an annual bonus, in an amount not less than thirty percent
      (30%) of the then current Base Salary, if established revenue and personal
      goals
      set by Employer's Board of Directors or President prior to the commencement
      of
      each fiscal year, are achieved by the Employee and Employer during the
      applicable fiscal year. If earned in full, or if Employer fails to establish
      such goals, not due to the fault of the Employee, prior to the commencement
      of
      the fiscal year, Employer shall pay Employee the bonus in full within thirty
      (30) days of the end of the applicable fiscal year. Such bonus shall be pro
      rated for any partial Employer fiscal year this Agreement is in
      effect.

    

    c. Expenses:
      In
      addition to Base
      Salary
      and
      bonuses, the Employer shall reimburse the Employee for all necessary
      business expenses incurred by him
      in the
      performance of his duties
      in
      accordance with the Employer's expense reimbursement policies. As required
      by
      Employer's expense reimbursement policies, the
      Employee
      shall submit to the Employer written itemized expense accountings and such
      additional substantiation and justification as the Employer may reasonably
      request.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    d. Other
      Employee Benefits.
      The
      Employee shall be provided with such other benefits as are made available to
      other Employees of the Employer, including but not limited to, medical and
      permanent disability insurance.

    

    e. Equity
      Compensation.
      Employee shall be granted an incentive stock option (the "Option")
      to
      purchase one million, two hundred fifty thousand (1,250,000) shares of Employer
      Common Stock at a price of six cents ($0.06) per share, pursuant to Employer's
      Equity Incentive Plan (the "Plan").
      The
      Options will have a ten (10) year term. The shares governed by the Option shall
      vest annually in one third (1/3)
      increments over a three-year period; provided that vesting shall accelerate
      if
      (i) the Employee is terminated without Cause (as defined in Section 10(a) below)
      or without Good Reason (as defined in Section 10(b) below) or (ii) upon a Change
      of Control of Employer or Ricciardi Technologies, Inc. (“RTI”). 

    

    For
      purposes of this Agreement, "Change of Control" of Employer or RTI means:
      (1) the
      closing of a sale or other conveyance of all or substantially all of the assets
      of RTI or Employer; or (2) the closing of a sale or other conveyance of all
      or
      substantially all of the outstanding securities of RTI or Employer (including
      by
      merger, share exchange, consolidation, or other business combination involving
      the RTI or Employer, as the case may be). 

    

    4. Duties:
      Extent of Services:
      The
      Employee is engaged the
      position of
      Chief
      Operating Officer
      and
      shall perform such duties as are customarily associated with such title,
      consistent with the Bylaws of Employer and as required by the Employer's Board
      of Directors and President. The Employee shall report to the
      President of Employer. The Employee shall devote substantially
      all of his business time and attention (except for vacation periods as set
      forth
      herein and reasonable periods of illness and other incapacities as permitted
      by
      Employer's general employment policies),
      and
      best efforts, to the performance of the duties described hereunder. The Employee
      acknowledges that the discharge of the duties of the Employee may require the
      Employee to work, from time to time, at reasonable hours on weekends or evenings
      and accordingly the Employee agrees not to undertake any part time work
      responsibilities without the prior written approval of the Employer and the
      Employee agrees that this is a reasonable restriction.

    

    5. Working
      Facilities:
      The
      Employee shall be furnished with appropriate working facilities and tools
      necessary for the proper performance of his
      duties.

    

    6. Special
      Covenants Regarding Work Product and Intellectual Property. 

     

    In
      consideration of the salary or wages received
      by the Employee and as a condition upon, and part of the consideration for,
      the
      employment or continued employment of the Employee, but without limitation
      upon
      the Employer’s right to terminate the Employee’s employment, the Employee hereby
      assigns and transfers to the Employer, and agrees that the Employer shall be
      the
      owner of all inventions, discoveries, drawings, computer software, algorithms,
      improvements and devices heretofore or hereafter conceived, including
      intellectual property rights such as patents and copyrights (hereinafter
      referred to as ‘"work
      product”) developed or made by the Employee, either alone or with others, in
      whole or in part during the Employee’s employment by the Employer, which are
      useful in, or related
      to the Employer’s business or which relate to, or are conceived, developed or
      made in the course of, the Employee’s employment or which are developed or made
      from
      such
      employment. The Employer shall have the right to use work product as described
      hereinabove, whether original or derivative, in any manner whatsoever, and
      the
      Employee acknowledges that all work product described hereinabove shall be
      considered as ‘"work
      made
      for hire” belonging to the Employer.

    

    
      
        
        

      

      
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    b. The
      Employee hereby agrees to disclose promptly and in writing to any officers
      or
      representatives designated by the Employer all work product heretofore or
      hereafter conceived or made by the Employee alone or with others during the
      Employee’s employment to which the Employer is entitled as above provided and
      agrees not to disclose such work product except as required by his
      employment, without the express consent of the Employer.
      The
      Employee
      further agrees that during his
      employment by the Employer and at any time thereafter, he
      will,
      upon the reasonable
      request
      of the Employer, execute proper assignments to the Employer of any and all
      such
      work product to which the Employer is entitled as above provided, and will
      execute all papers and perform all other lawful acts which the Employer may
      deem
      necessary or advisable for the preparation, prosecution, procurement and
      maintenance of trademark, copyright and/or patent applications and trademarks,
      copyrights and/or patents of the United States of America and foreign countries
      for such work product to which the Employer is entitled as above provided,
      and
      will execute any and all proper documents as shall be required or necessary
      to
      vest title in the Employer to such work product and all trademark, copyright,
      and patent applications and trademarks, copyrights and patents pertaining
      thereto. It is understood that all expenses in connection with such trademarks,
      copyrights, and patents and all applications related thereto shall be borne
      by
      the Employer, but the Employer shall he under no obligation to protect by
      trademark, copyright, patent, or otherwise any such work product except at
      its
      own discretion and to such extent as the Employer shall deem
      desirable.

    

    c. Notwithstanding
      the foregoing, the provisions of this Agreement
      do not
      apply to an invention for which no equipment, supplies, facility, or trade
      secret information of the Employer was used and which was developed entirely
      on
      the Employee’s own time, unless (a) the invention is useful in, or relates
      to (i)
      the Employer’s business or relates to, or is conceived, developed or made in the
      course of, the Employee’s employment,
      or (ii)
      to the Employer’s actual or demonstrably anticipated research or development, or
      (b) the invention or rendering results from any work performed by the Employee
      for the Employer.

     

    7.
      Restrictive
      Covenants/Protection of Propriety
      Information:

    

    a. The
      parties hereto recognize that the Employee’s knowledge and skill are a material
      factor in inducing the Employer to enter into this Agreement. Further, in the
      course of his
      employment, and because of the nature of his
      responsibilities, the Employee will acquire valuable and confidential
      information and trade secrets with regard to the Employer’s business operation,
      including, but
      not
      limited to, the Employer’s existing and contemplated services and products,
      documentation, technical data, business and financial methods’ and practices,
      plans, pricing, lists of the Employer’s customers and prospective customers,
      methods of obtaining customers, financial and operational data of the Employer’s
      present and prospective customers, and the particular business requirements
      of
      the Employer’s present and prospective customers. In addition, the Employee may
      develop on behalf of the Employer, a personal acquaintance with some of the
      Employer’s customers and prospective customers. As a consequence, the Employee
      will occupy a position of trust and confidence with respect to the Employer’s
      affairs and its services. In view of the foregoing, and in consideration of
      the
      remuneration paid and to be paid to the Employee, the Employee agrees that
      it is
      reasonable and necessary for the protection of the good will and business of
      the
      Employer that the Employee make the covenants contained in subparagraphs b.,
      c.,
      and d. below regarding the conduct of the Employee during and after
      his
      employment relationship with the Employer, and that the Employer will suffer
      irreparable injury if Employee engages in conduct prohibited
      thereby.

    

    
      
        
        

      

      
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    b. The
      Employee covenants and agrees that during
      the
      period of the Employee’s employment with the Employer, and
      upon
      termination of Employee's employment by Employee voluntarily and without Good
      Reason or by Employer with Cause, continuing
      two (2)
      years from the date
      of
      such termination
      (the
“Non-Compete Period’), he
      will not
      directly or indirectly, as principal, agent, owner, joint venture, investor,
      employee, or consultant, engage in any business activity which is (i) in
      competition with the Employer, (ii) in the same market as the products or
      services of the Employer, (iii) involving the same types of products or services
      as the Employer anywhere in the United States of America (the “Non-Compete
      Zone”). The Employee agrees that the above restriction is reasonable and will
      not prohibit the Employee from obtaining employment at the date of termination
      of this Agreement.

    

    c. The
      Employee further covenants and agrees that during the Non-Compete Period,
      he/she
      shall
      not, directly or indirectly, (i) induce or attempt to induce, or aid others
      in
      inducing, an employee of the Employer or its wholly-owned
      subsidiaries
      to leave
      the employ of the Employer or its wholly-owned
      subsidiaries,
      or in
      any way interfere with the relationship between the Employer or its wholly-owned
      subsidiaries
      and an
      employee thereof, or (ii) in any way interfere with the relationship between
      the
      Employer or its wholly-owned
      subsidiaries
      and any
      customer, supplier, licensee or other business relation of the Employer or
      its
wholly-owned
      subsidiaries.

    

    d. The
      Employee agrees that any and all of the Employer’s confidential and proprietary
      information shall be and shall remain the sole and exclusive property of the
      Employer. While in the employ of the Employer, or at any time thereafter, the
      Employee will not, without the express written consent of the Employer, directly
      or indirectly, communicate or
      divulge to or use for the benefit of himself
      or any
      other person, firm, association or corporation, any of the Employer’s trade
      secrets or confidential information, including, by way of illustration and
      not
      by way of exclusion, the matters contained in subparagraph (a) above, or which
      were communicated to or otherwise learned of or acquired by the Employee in
      the
      course of his or her employment with the Employer, except that Employee may
      disclose such matters to the extent that (i) the information is or becomes
      generally publicly known, by means other than through unauthorized disclosure
      by
      the Employee; (ii) the information was approved for release by written
      authorization by Employer; or (iii) the information is required to be disclosed
      by a judicial or governmental authority or agency, provided the Employee first
      gives Employer not less than ten (10) days prior written notice of such
      anticipated disclosure.

    

    
      
        
        

      

      
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    8. Vacation:
      Employee
      shall be entitled to receive up to 3
      weeks
      of paid
      vacation and ten
      (10)
      sick days in addition to paid holidays
      during
      each year of this Agreement while employed full time. The vacation shall be
      taken at such time or times as will not unreasonably hinder or interfere with
      the Employee’s representation of the Employer’s customers or the business or
      operations of the Employer. If Employee does not choose to use of all their
      accrued time-off during a given year, up to 2
      weeks
      of
      vacation
(e.g.,
      80
      hours)
      can be
      rolled into the next year.

    9. Disability:
      The
      Employee’s disability and/or sick leave shall be covered by the usual and
      customary policies and procedures of the Employer.

    

    10. Termination:

    

    a. With
      Cause
      or without Good Reason:
      The
      Employer may, at any time, terminate this Agreement with Cause.
      The Employee may voluntarily terminate this Agreement with two weeks prior
      notice to Employer, without Good Reason (as defined in Section 10(a) below)
      and,
      in
      such
      event, the Employee, if requested by the Employer, shall continue to render
      his
      services
      and shall be paid his Base Salary.

    

    For
      purposes of this Agreement, "Cause" means the occurrence of any of the following
      events with respect to the Employee:

    

    i.  conviction
      of, or plea or
      nolo
      contendere to, a felony or other
      crime involving
      moral turpitude; 

    ii.  fraud
      on
      or misappropriation of any funds or property of Employer or any of its
      wholly-owned subsidiary, customer or vendor of Employer or any of its
      wholly-owned subsidiary;

    

    iii.  personal
      dishonesty, willful misconduct, or breach of fiduciary duty against Employer
      or
      any of its wholly-owned subsidiary which involves personal profit;

    

    iv.  material
      breach of any provision of this Agreement, as determined by Employer's Board
      of
      Directors; or

    

    v.  refusal
      to substantially perform the Employee's written and known duties (excluding
      death and disability of the Employee); provided, however, that

    

    vi.  in
      the
      case of clauses (iv) and (v), it shall not constitute Cause unless Employer,
      shall have provided Employee with written notice of its alleged actions
      constituting Cause (which notice shall specify in reasonable detail the
      particulars of such Cause) and Employee has not cured any such alleged Cause
      or
      substantially commenced its effort to cure such breach within thirty (30) days
      of Employee's receipt of such written notice.

    

    
      
        
        

      

      
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    If
      the
      Employee’s employment
      is terminated with Cause by Employer or without Good Reason by the Employee,
      Employer shall promptly pay to Employee all accrued Base Salary through the
      date
      of termination and any other amounts payable to Employee through the date of
      termination pursuant to any other compensation plans, programs, or this
      Agreement.

    

    b. With
      Good Reason or Without Cause.
      The
      Employee may terminate this Agreement with Good Reason or the Employer may
      terminate this Agreement without Cause and the Employer shall (A) pay to
      Employee all accrued Base Salary though such employment termination date and
      any
      other amounts payable to Employee through the date of termination pursuant
      to
      any other compensation plans, programs, or this Agreement; (B) continue to
      pay
      the full Base Salary in effect on such termination date for the remaining
      portion of the three-year term of this Agreement with such Base Salary to be
      paid in the same manner as set forth in Section 3(a) above; (B)
      continue for the remaining portion of such three-year term, any benefits to
      which Employee is entitled, subject to the terms of any such benefit plan,
      policy or program in effect on the date of such termination (or pay the Employee
      the equivalent monetary value of such benefits to the extent such plans cannot
      be continued). 

     

    For
      the
      purposes of this Agreement, "Good Reason" means any one of the following: (a)
      the Employer's material breach of any provision of this Agreement; (b) any
      material adverse change in the Employee's position (including status, offices,
      titles and reporting requirements), authority, duties or responsibilities,
      or
      any other action by Employer made without the Employee's permission (other
      than
      a change due to the Employee's permanent disability or as an accommodation
      under
      the Americans With Disabilities Act) or (c) Employer requiring relocation of
      Employee more than twenty-five (25) miles from Manassas, Virginia without
      Employee's consent; provided,
      however,
      that it
      shall not constitute Good Reason unless the Employee shall have provided the
      Employer with written notice of its alleged actions constituting Good Reason
      (which notice shall specify in reasonable detail the particulars of such Good
      Reason) and the Employer or Purchaser, as the case may be, has not cured any
      such alleged Good Reason or substantially commenced its effort to cure such
      breach within thirty (30) days of the Employer's receipt of such written
      notice.

     

    11. Warranties
      of Employee:
      As a
      material consideration in the employment of the Employee, the Employee hereby
      confirms representations previously made to the Employer that he is
      free
      to enter into this employment arrangement with the Employer and hereby warrants
      that the obligations contained herein do not conflict with any other
Agreement
      with any
      previous employer or independent contracting party.

    

    12. Remedies:

    

    (a) In
      the
      event of a breach or threatened breach of this Agreement by the Employee, the
      Employer shall be entitled, in addition to all other remedies otherwise
      available to the Employer, to an injunction, enjoining and restraining such
      breach or threatened or intended breach, and the Employee hereby consents to
      the
      issuance thereof forthwith in any court of competent jurisdiction without proof
      of specific damages.

    

    
      
        
        

      

      
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    (b) In
      the
      event that either party shall enforce any part of this Agreement through legal
      proceedings and the other shall have been in default hereof, such defaulting
      party agrees to pay to no defaulting party any costs and attorneys fees
      reasonably incurred in connection therewith.

    

    13. Indemnification:
      

    

    (a) Employer
      shall indemnify Employee to the fullest extent permitted by law, notwithstanding
      if such indemnification is not specifically authorized in Employer's Certificate
      of Incorporation and/or Bylaws, as applicable, if Employee was or is or becomes
      a party to or witness or other participant in, or is threatened to be made
      a
      party to or witness or other participant in, any threatened, pending or
      completed action, suit, proceeding or alternative dispute resolution mechanism,
      or any hearing, inquiry or investigation that Employee in good faith believes
      might lead to the institution of any such action, suit, proceeding or
      alternative dispute resolution mechanism, whether civil, criminal,
      administrative, investigative or other (hereinafter a “Claim”) by reason of (or
      arising in part out of) any event or occurrence related to the fact that
      Employee is or was a director, officer, employee, agent or fiduciary of
      Employer, or any subsidiary of Employer, or is or was serving at the request
      of
      Employer as a director, officer, employee, agent or fiduciary of another
      corporation, partnership, joint venture, trust or other enterprise, or by reason
      of any action or inaction on the part of Employee while serving in such capacity
      (hereinafter an “Indemnifiable Event”) against any and all reasonable expenses
      (including attorneys’ fees and all other costs, expenses and obligations
      incurred in connection with investigating, defending, being a witness in or
      participating in (including on appeal), or preparing to defend, be a witness
      in
      or participate in, any such action, suit, proceeding, alternative dispute
      resolution mechanism, hearing, inquiry or investigation), judgments, fines,
      penalties and amounts paid in settlement (if such settlement is approved in
      advance by Employer, which approval shall not be unreasonably withheld) of
      such
      Claim and any federal, state, local or foreign taxes imposed on Employee as
      a
      result of the actual or deemed receipt of any payments under this Section 13
      (collectively, hereinafter “Expenses”), including all interest, assessments and
      other charges paid or payable in connection with or in respect of such Expenses.
      Employer shall advance all Expenses incurred by Employee. Such payment of
      Expenses shall be made by Employer as soon as practicable but in any event
      no
      later than thirty days after written demand by Employee (setting forth in
      reasonable detail expense incurred) therefor is presented to
      Employer.

    

    (b) While
      Employee is employed by Employer and for four (4) years thereafter, Employer's
      Certificate of Incorporation and/or Bylaws, as applicable, shall provide that
      the liability of the Employer's officers for monetary damages shall be
      eliminated to the fullest extent under applicable law.

     

    (c) While
      Employee is employed by Employer and for four (4) years thereafter, Employer
      shall maintain director and officer liability insurance with coverage (1) in
      respect of all periods when Employee was employed by Employer and (2) in amount
      and scope customary for companies similarly situated to Employer.

     

    14. Cumulative
      Rights:
      All of
      the rights and remedies of the parties hereto shall be cumulative with, and
      in
      addition to, any other rights, remedies or causes of action allowed by law
      and
      shall not exclude any other rights or remedies available to either of the
      parties hereto.

    

    
      
        
        

      

      
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    15. Notices:
      Any
      notice required or permitted to be given under this Agreement shall be
      sufficient if in writing, and if sent by certified mail, return receipt
      requested, to his
      residence in the case of the Employee, or to the principal office in the case
      of
      the Employer.

    

    16. Waiver
      of Breach:
      The
      waiver by either party of a breach of any provision of this Agreement by the
      other party shall not operate or be construed as a waiver of any subsequent
      breach by such party.

    

    17. Governing
      Law:
      The
      validity of this
      Agreement, the construction and enforcement of its terms, and the interpretation
      of the rights and duties of the parties shall be governed by the laws of the
      Commonwealth
      of Virginia (without regard to the conflicts of law principles
      thereof).

    

    18. Severability:
      In the
      event any one or more of the provisions of this Agreement shall for any reason
      be held to be invalid, illegal or unenforceable, the remaining provisions of
      this Agreement shall be unimpaired, and shall continue in full force and
      effect.

    

    19.  Assignment:
      The
      rights and obligations of the Employee under this Agreement are not assignable.
      The rights and obligations of the Employer under this Agreement inure to the
      benefit and shall be binding upon the successors and assigns of the Employer.
      

    20. Survival
      Provisions:
      The
      provisions of this Agreement set forth in paragraphs 6, 7,
      11
and
      13
hereof,
      and the Employee’s representations and warranties contained herein, shall
      survive termination of employment.

    

    21. Entire
      Agreement:
      This
      instrument contains the entire agreement of the parties with respect to
      employment of the Employee. It may not be changed orally, but only by agreement
      in writing, signed by the party against whom enforcement of any such waiver,
      change, modification, extension or discharge is sought.

    

    22. Advice
      of Counsel and Construction.
      The
      parties acknowledge that this Agreement was drafted by counsel to the Employer
      who represented its interests and not the Employee. All parties to this
      Agreement have been represented by counsel or have had the opportunity to be
      so
      represented. Accordingly the rule of construction of contract language against
      the drafting party is hereby waived by all parties.

     

    {Signature
      page follows.}

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties have executed this Agreement
      on the
      day and year first above written.

    
      	 	 	 
	 	
              EMPLOYER:

              SCIENCE
                DYNAMICS CORPORATION

              a
                Delaware Corporation 

            
	 
 	 
 	 
 
	 	 	 
	 	
              
Paul
              Burgess, President
	 	 

    

    
      	 	 	 
	 	EMPLOYEE:
	 
 	 
 	 
 
	 	  	 
	 	
              
Michael
              Ricciardi
	 	 

    

     

    
      {Signature
        page to Employment Agreement}OMNIBUS
      AMENDMENT AND WAIVER

     

    This
      OMNIBUS AMENDMENT AND WAIVER (this “Amendment”),
      dated
      as of September 18, 2006, is entered into by and between SCIENCE DYNAMICS
      CORPORATION, a Delaware corporation (the “Company”), and
      LAURUS MASTER FUND, LTD., a Cayman Islands company (“Laurus”),
      for
      the purpose of amending and amending and restating and waiving certain terms
      of
      (i) the Amended and Restated Secured Convertible Term Note, issued as of
      February 11, 2005 and amended and restated as of July 21, 2006 (as amended
      and
      restated, amended, modified and supplemented from time to time,
      the “Term
      Note”)
      by the
      Company to Laurus, (ii) the Securities Purchase Agreement, dated as of February
      11, 2005 (as amended, modified or supplemented from time to time, the
“Purchase
      Agreement”)
      by and
      between the Company and Laurus, (iii) the Common Stock Purchase Warrant, issued
      as of February 11, 2005 by the Company to Laurus (as amended and restated,
      amended, modified and supplemented from time to time, the “Initial
      Warrant”),
      (iv)
      the Common Stock Purchase Warrant, issued as of November 18, 2005 by the Company
      to Laurus (as amended and restated, amended, modified and supplemented from
      time
      to time, the “Additional
      Warrant”)
      and
      (v) the Forbearance Agreement, dated as of July 21, 2006 between the Company
      and
      Laurus (as amended, modified or supplemented from time to time, the
“Forbearance
      Agreement”
and,
      together with the Term Note, the Purchase Agreement, the Initial Warrant, the
      Additional Warrant and each other Related Agreement as defined in the Purchase
      Agreement, collectively, the “Documents”
and
      each, a “Document”
).
      Capitalized terms used herein without definition shall have the meanings
      ascribed to such terms in the applicable Term Note and Purchase Agreement as
      applicable,

     

    WHEREAS,
      the Company has failed to pay to Laurus when due certain payments and principal
      in respect of the Term Note as otherwise set forth in the Forbearance Agreement;
      and

     

    WHEREAS,
      Laurus has agreed to waive on the terms and conditions set forth herein, the
      Events of Default that may have occurred and are continuing as a result of
      the
      failure by the Company to pay to Laurus when due accrued interest and principal
      in respect of the Term Note and, in consideration therefore and in consideration
      of the other agreements set forth herein;

    

    WHEREAS,
      the Company and Laurus have agreed to make certain changes to the Term Note,
      the
      Initial Warrant, the Additional Warrant and the Purchase Agreement as set forth
      herein;

     

    WHEREAS,
      the Company and Laurus have agreed that the Company shall redeem $500,000 in
      principal amount of the Term Note; and

     

    WHEREAS,
      the
      Company wishes to issue to Laurus a warrant in the form of Exhibit B hereto
      (as
      amended, modified and/or supplemented from time to time, the “September
      2006 Warrant”)
      in
      exchange for $750,000 in principal amount of the Term Note, which warrant is
      exercisable for up to 14,583,333 shares of the Company’s Common Stock (subject
      to adjustment as set forth therein) upon the cashless exercise by the holder
      thereof for an imputed exercise price of $0.01 per share in connection with
      this
      Amendment;

    

    NOW,
      THEREFORE, in consideration of the above, and for other good and valuable
      consideration, the receipt and sufficiency of which is hereby acknowledged,
      the
      parties hereto agree as follows:

    
      
        
        

      

      
        2

        
          

        

      

       

    

    

    WAIVER. 

     

    1. Upon
      the
      occurrence of the Amendment Effective Date (as defined below), Laurus
      hereby waives each Event of Default that may have arisen under Section 4.1
      of
      the Term Note and Section 3 of the Forbearance Agreement solely as a result
      of
      the failure by the Company to pay Laurus the full amount of the August Repayment
      (as defined in the Forebearance Agreement) on August 1, 2006.

     

    PARTIAL
      REDEMPTION OF THE TERM NOTE; EXCHANGE.
       

     

    2. Pursuant
      to the terms and conditions set forth in this Agreement, on the Amendment
      Effective Date, (i) the Company shall redeem $500,000 in principal amount
      of the Term Note (the “Redemption”)
      by
      remitting to Laurus via
      wire
      transfer in immediately available funds to an account designated in writing
      by
      Laurus, and (ii) Laurus
      shall surrender to the Company, without any further consideration, the Term
      Note
      for cancellation of the $1,000,000 in principal amount outstanding thereunder
      after giving effect to the Redemption in exchange for (the “Exchange”)
      issuance by the Company of (x) the Second Amended and Restated Term Note in
      the form attached hereto as Exhibit B in the principal amount of $250,000 and
      (y) the September 2006 Warrant in the form attached hereto as Exhibit A
      exercisable for up to 14,583,333 shares of Common Stock of the Company (subject
      to adjustment as set forth therein), upon the cashless exercise by the holder
      thereof for an imputed exercise price of $0.01 per share.

     

    AMENDMENTS

     

    3. Purchase
      Agreement.
      Upon
      the occurrence of the Amendment Effective Date, the Purchase Agreement is hereby
      amended as follows:

     

    (i) Section
      2(a) of the Purchase Agreement is hereby amended by inserting the following
      sentence at the end thereof:

     

    “The
      Warrants issued by the Company to Laurus as of (i) November 18, 2005 exercisable
      into 3,000,000 shares of Common Stock (as amended and restated, amended,
      modified and supplemented from time to time, the “November 2005 Warrant”) and
      (ii) September 18, 2006 exercisable into 14,583,333 shares of Common Stock
      (as
      amended and restated, amended, modified and supplemented from time to time,
      the
“September 2006 Warrant”), shall each be deemed to be, together with the Warrant
      issued on the Closing Date, a “Warrant” as otherwise defined herein and shall be
      afforded all protections afforded a Warrant or Warrants as are set forth herein
      and in the Related Agreements with respect to representations, warranties and
      covenants of the Company.”

     

    (ii) All
      references in the Purchase Agreement to “Convertible Note” and “Convertible Term
      Note” are hereby revised and replaced with the term “Term Note.”

     

    (iii) All
      references in the Purchase Agreement to the Note or the Term Note being
      convertible into Common Stock of the Company, references to Common Stock
      issuable upon conversion of the Note or the Term Note and similar references
      are
      hereby deleted.

    
      
        
        

      

      
        3

        
          

        

      

       

    

     

    (iv) References
      in Section 5.8(a) of the Purchase Agreement to “Common Stock” are hereby
      deleted.

    

    (v) 
      All
      references in the Purchase Agreement to “Note Shares” are hereby
      deleted.

    

    (vi) Section
      9
      of the Purchase Agreement is hereby deleted in its entirety and replaced with
      the following: “9. Reserved.”

     

    MISCELLANEOUS

    

    4. Amendment
      Effective Date.
      Each
      amendment and waiver set forth herein shall be effective (the “Amendment
      Effective Date”)
      on the
      first date upon which (i) each of the Company and Laurus shall have executed
      and
      the Company shall have delivered to Laurus its respective counterpart to this
      Amendment, (ii) the Company shall have repaid (without prepayment penalty)
      to
      Laurus $500,000 of the outstanding Principal Amount under the Term Note to
      effect the Redemption, (iii) the Company shall have executed before a witness,
      witnessed and delivered to Laurus the Second Amended and Restated Term Note,
      (iv) the Company shall have executed before a witness, witnessed and delivered
      to Laurus the Amended and Restated Initial Warrant (as defined in, and attached
      as an exhibit to, the Forebearance Agreement), (v) the Company shall have
      executed before a witness, witnessed and delivered to Laurus the Amended and
      Restated Additional Warrant (as defined in, and attached as an exhibit to,
      the
      Forebearance Agreement), (vi) the Company shall have executed before a witness,
      witnessed and delivered to Laurus the September 2006 Warrant, (vii) Laurus
      shall
      have delivered to the Company the Term Note for cancellation in exchange for
      the
      Second Amended and Restated Term Note and the September 2006 Warrant, and (viii)
      Laurus shall have delivered to the Company a proxy granting the Company the
      voting rights in respect of the Common Stock issuable upon exercise of the
      September 2006 Warrant in the form attached hereto as Exhibit
      C.

     

    5. Acknowledgement
      of Outstanding Indebtedness.
      Upon
      consummation of the transactions contemplated under this Amendment, including,
      without limitation, the Redemption and the Exchange, Laurus hereby acknowledges
      and agrees that, as of such date after giving effect to such transactions,
      the
      outstanding principal amount of the Term Note shall equal $250,000 and the
      outstanding accrued and unpaid interest in respect of the Term Note as of the
      date hereof shall equal $41,093.75. Except as set forth in the preceding
      sentence, Laurus acknowledges and agrees that there is no other outstanding
      indebtedness due to Laurus or any affiliate of Laurus from the
      Company.

     

    6. Representations,
      Warranties and Covenants.
      The
      Company hereby represents and warrants to Laurus that after giving effect to
      this Amendment: (i) on the date hereof, all representations, warranties and
      covenants made by the Company in connection with the Documents (including,
      without limitation, in respect of the Amended and Restated Initial Warrant
      (as
      defined in the Forebearance Agreement), the Amended and Restated Additional
      Warrant (as defined in the Forebearance Agreement) and the September 2006
      Warrant) are true, correct and complete; and (ii) on the date hereof, all of
      the
      Company’s covenant requirements set forth in the Documents have been
      met.

    
      
        
        

      

      
        4

        
          

        

      

       

    

    

    7. No
      Waiver of Other Defaults.
      Upon
      the occurrence and during the continuance of any further Events of Default
      that
      may occur after date of this Agreement, Laurus may, at its election, exercise
      any rights and remedies authorized by the Documents and/or applicable law.
      Laurus’ rights and remedies under the Documents shall be cumulative. Laurus
      shall have all other rights and remedies not inconsistent herewith or therewith
      as provided by law or in equity. No exercise by Laurus of one right or remedy
      shall be deemed an election, and no waiver by Laurus of any Event of Default
      on
      the part of the Company shall be deemed a continuing waiver. No delay by Laurus
      shall constitute a waiver, election, or acquiescence by it. 

    

    8. Further
      Assurances.
      The
      Company will take such other actions as Laurus may reasonably request from
      time
      to time to accomplish the objectives of this Agreement.

    

    9. Registration
      Rights.
      If at
      any time after the date hereof there is not an effective registration statement
      covering the shares of Common Stock of the Company issuable upon exercise of
      the
      Amended and Restated Initial Warrant (as defined in the Forebearance Agreement),
      the Amended and Restated Additional Warrant (as defined in the Forebearance
      Agreement) or the September 2006 Warrant (collectively, the “Shares”)
      and
      the Company shall determine to prepare and file with the Securities and Exchange
      Commission a registration statement relating to an offering for its own account
      or the account of others under the Securities Act of 1933, as amended (the
      “Securities
      Act”),
      of
      any of its equity securities, other than on Form S-4 or Form S-8 (each as
      promulgated under the Securities Act) or their then equivalents relating to
      equity securities to be issued solely in connection with any acquisition of
      any
      entity or business or equity securities issuable in connection with a stock
      option or other employee benefit plans, then the Company shall include in such
      registration statement all of such Shares to the extent the Company may do
      so
      without violating registration rights of others which exist as of the date
      of
      this Agreement, subject to customary underwriter cutbacks applicable to all
      holders of registration rights.
      The
      Company’s registration obligations pursuant to this paragraph shall continue
      until the earlier of: (a) the date when all of the Shares have been sold
      publicly by Laurus pursuant to an effective registration statement; or (b)
      the
      date when all of the Shares may be sold without restriction pursuant to Rule
      144(k) under the Securities Act.

    

    10. No
      Other Changes.
      Except
      as specifically set forth in this Amendment, there are no other amendments,
      modifications or waivers to the Term Notes, Purchase Agreements or Reg. Rights
      Agreements, and all of the other forms, terms and provisions of the Term Notes
      and the Purchase Agreements remain in full force and effect.

    

    11. Limited
      References.
      From
      and after the Amendment Effective Date, all references to the Term
      Note, the
      Purchase Agreement, the Initial Warrant and the Additional Warrant shall be
      deemed to be references to the Term Note, the Purchase Agreement, the Initial
      Warrant and the Additional Warrant as modified hereby.

    
      
        
        

      

      
        5

        
          

        

      

       

    

    

    12. Governing
      Law; Assignments; Counterparts.
      This
      Amendment shall be binding upon the parties hereto and their respective
      successors and permitted assigns and shall inure to the benefit of and be
      enforceable by each of the parties hereto and their respective successors and
      permitted assigns. THIS
      AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY
      THE
      LAW OF THE STATE OF NEW YORK.
      This
      Amendment may be executed in any number of counterparts, each of which shall
      be
      an original, but all of which shall constitute one instrument. 

     

    [THE
      REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

    
      
        
        

      

      
        6

        
          

        

      

       

    

    IN
      WITNESS WHEREOF,
      each of
      the Company and Laurus has caused this Amendment to be signed in its name
      effective as of this 18th
      day of
      September 2006.

     

    
      	 	 	 
	 	SCIENCE
              DYNAMICS CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	 	Name: 	
              
                

              

               

            
	 	Title: 	 

    

     

    
      	 	 	 
	 	LAURUS
              MASTER FUND, LTD.
	 
 	 
 	 
 
	 	By:  	 
	 	Name:	
              

            
	 	Title:	 

    

     

    
      
        
        

      

      
        7

        
          

        

      

       

    

    EXHIBIT
      A

     

    SEPTEMBER
      2006 WARRANT

    
      
        
        

      

      
        8

        
          

        

      

       

    

    EXHIBIT
      B

     

    AMENDED
      AND RESTATED TERM NOTE

    
      
        
        

      

      
        9

        
          

        

      

       

    

    EXHIBIT
      C

     

    IRREVOCABLE
      PROXY

    
      
        
        

      

      
        10

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