Document:

Optical
      Coherence Tomography (OCT) Optical Engine Development Program and Supply
      Agreement 

    

    THIS
      AGREEMENT is entered into between AXSUN
      TECHNOLOGIES, INC. (hereafter “AXSUN”) having its principal offices at 1,
      Fortune Drive, Billerica, MA 01821 and Lantis Laser, Inc. (hereafter “Lantis”)
      with its principal offices at 11 Stonebridge Court, Denville, NJ 07834
(each
      individually a “Party” and, collectively, the “Parties”).

    

    The
      purpose of the Agreement is to establish the terms under which AXSUN will
      develop and sell to Lantis an Optical Coherence Tomography Optical Engine
      (hereafter “ OCT Optical Engines”) according to the specification and
      development program laid out in Appendix A. (hereafter ”the
      Program”).

    

    Upon
      completion of the Program, AXSUN will manufacture and supply the Optical Engine
      to Lantis on the terms contained in this Agreement. 

    

    
      	
            	1	
              Development
                Program and Initiation:  The
                Program will commence immediately upon receipt by AXSUN of Purchase
                Order(s) (hereafter “PO(s)”) for:

            

    

    

    
      	
              MILESTONE

            	 	
              DESCRIPTION

            	 	
              SCHED.
                COMPL. DATE

            	 	
              NRE CHARGES

            	 
	
              PO#1

            	 	 	
              Materials

            	 	 	
              May
                5, 2008

            	 	
              $

            	
              37,500

            	 
	
              PO#2

            	 	 	
              Beta
                1 – 3 Fiber Systems

            	 	 	
              July
                7, 2008

            	 	
              $

            	
              37,500

            	 
	
              PO#3

            	 	 	
              Critical
                Design Review

            	 	 	
              August
                15, 2008

            	 	
              $

            	
              25,000

            	 
	
              PO#4

            	 	 	
              Availability Final Electronics

            	 	 	
              August
                30, 2008

            	 	
              $

            	
              37,500

            	 
	
              PO#5

            	 	 	
              Beta
                2 – 5 Systems

            	 	 	
              October
                8, 2008

            	 	
              $

            	
              37,500

            	 
	
              PO#6

            	 	 	
              1000
                Optical Engines

            	 	 	
              Delivery
                per Schedule in Appendix C

            	 	 	 	 

    

    

    
      	
            	A.	
              The
                Purchase Order (PO#6) for 1000 Optical Engines at $5,000 each is
                non-cancelable with delivery scheduled from Q1/2009 through Q2/2010
                according to the estimated quarterly release schedules and terms
                thereof-as shown in Appendix C. 

            

    

    
      	
            	B.	
              The
                payment of $37,500 for the PO#1 shall be received by AXSUN within
                10
                business days of the effective date of this
                Agreement.

            

    

    
      	
            	C.	
              NRE
                payments thereafter shall be received by AXSUN within 10 days of
                completion of the previous phase and commencement of the next phase.
                

            

    

    

    
      	
            	2	
              Pricing:
                Upon
                the successful completion of the Phase III Optical Engine as set
                forth in
                the Proposal, the first 1000 Optical Engines will be supplied by
                AXSUN as
                specified in PO#6 on the projected schedule in Appendix C.
                

            

    

    

    
      	
            	A.	
              If
                Lantis takes delivery up to the end of Q2/2010 in excess of the 1000
                Optical Engines as specified in PO #6, then the total amount ordered
                will
                be priced according to the volume/Price Schedule below.
                

            

    

    
      	
            	B.	
              Lantis
                must take delivery of at least 600 Optical Engines, at a rate of
                100
                Optical Engines per calendar quarter, beginning within 45 days of
                FDA
                clearance being received to market its OCT dental system.
                

            

    

    
      
        
        

      

      
        Page
          1

        
          

        

      

      
        
        

      

    

    

    If
      by the
      end of the 18 months there is a delivered shortfall on the order as per PO#6
      then Lantis can take delivery of these systems within the next 6 months at
      a
      price of $6250. 

    

    Exclusivity
      will continue as per terms in Section 4 below if Lantis takes delivery of an
      additional 100 OCT Optical Engines by the end of the 8 quarter period following
      FDA approval of the Lantis system. These additional OCT Optical Engines would
      be
      priced at $6250.

    

    
      	
            	C.	
              After
                the initial purchase orders have been received, the pricing schedule
                as
                set out below will become effective for purchases over the following
                12
                month period from when the initial PO for Optical Engines is satisfied
                but
                not before Q2/2010. This schedule is independent of exclusivity
                requirements set forth in Section 4,
                below:

            

    

     

    
      	Volume
              / Price Schedule	 	 	 	 	 
	
              Volume
                (units)

            	 	
              Maximum Delivery Time

            	 	
              Unit Pricing

            	 
	
              250-499

            	 	12
              Month	 	
              $

            	
              7,400

            	 
	
              500-999

            	 	12
              Months	 	
              $

            	
              6,750

            	 
	
              1000-2499

            	 	18
              months	 	
              $

            	
              5,000

            	 
	
              2500-4,999

            	 	18
              Months	 	
              $

            	
              4,875

            	 
	
              5,000+

            	 	18
              months	 	
              $

            	
              4,700

            	 

    

    

    
      	
            	D.	
              Delivery
                from AXSUN will be six to eight (6-8) weeks from receipt of Lantis’
                written purchase orders for which signed confirmation shall be given.
                

            

    

    
      	
            	E.	
              Lantis
                must take delivery of the quantities as specified in the Volume/Price
                Schedule, above, within the stated maximum delivery time. Delivery
                from
                AXSUN will be agreed upon in each PO and AXSUN will provide Lantis
                with a
                weekly schedule of future deliveries for each PO.
                

            

    

    
      	
            	F.	
              AXSUN
                will not be held responsible for substantiated supplier delays, and
                such
                delays will be added to the Maximum Delivery Time.
                

            

    

    
      	
            	G.	
              In
                the event that Lantis no longer has an exclusive license under Section
                4
                then AXSUN shall grant a nonexclusive license to the use and sale
                of the
                OCT Optical Engine for the field of use defined as Human and Animal
                Dentistry on a worldwide basis on payment terms that are no greater
                than
                the lowest payment terms for a license for the use and sale of the
                OCT
                Optical Engine for the field of use defined as Human and Animal Dentistry
                that AXSUN grants to any nonexclusive third party licensee of such
                license.

            

    

    
      	 	 	 

      	
            	3	
              Optical
                Engine Specifications: The
                Preliminary Target Specifications are set forth in Table 2 of the
                Proposal
                in Appendix A. These may be modified or amended by mutual agreement
                of the
                Parties during the Program. If the Preliminary Target Specifications
                are
                modified or amended, AXSUN has the option to make reasonable changes
                to
                the Program's schedule and the preceding pricing, subject to Lantis’
                reasonable review and approval.

            

    

    
      	 	 	 

      	
            	4	
              Exclusivity
                and Renewal: Subject
                to the terms of this Agreement, Lantis is hereby granted exclusivity
                for
                the use and sale of the OCT Optical Engine for the field of use defined
                as
                Human and Animal Dentistry and without limitation as to territory
                (The
                Exclusive Field of Use). 

            

    

     

    
      
        
        

      

      
        Page
          2

        
          

        

      

      
        
        

      

    

     

    
      
        	
              	A.	
                In
                  order for Lantis to maintain its exclusivity, it must take delivery
                  of a
                  minimum of 300 OCT Optical Engines in 2009, 500 OCT Optical Engines
                  in
                  2010 (a minimum of 100 engines per quarter), and 750 OCT Optical
                  Engines
                  in 2011. 

              

      

    

    
      	
            	B.	
              After
                2011, Exclusivity can be maintained provided that Lantis maintains
                Minimum
                Purchase Volumes that correspond to 40% of the forecast annual worldwide
                frequency domain Optical Coherence Tomography system placements (by
                all
                companies) within the Exclusive Field of Use. The procedure for
                determining the market size is:

            

    

    
      	 	
              (1)

            	
              No
                later than 90 days prior to the end of the prior calendar year, Lantis
                will provide AXSUN its data generated in good faith as to the forecast
                annual worldwide Optical Coherence Tomography system
                placements.

            

    

    
      	 	
              (2)

            	
              AXSUN
                and Lantis will mutually agree in writing as to the quarterly Minimum
                Purchase Volume for the next calendar
                year.

            

    

    
      	 	
              (3)

            	
              In
                the event AXSUN and Lantis do not mutually agree in writing, then
                the
                annual minimum purchase volume will be determined by arbitration
                pursuant
                to the Commercial Rules of the American Arbitration Association.
                The
                arbitration will be held before a single arbitrator in Massachusetts.
                The
                arbitrator will have authority only to establish Minimum Purchase
                Volumes
                and will have no authority with respect to any other matters under
                this
                Agreement. 

            

    

    
      	
            	C.	
              Additionally,
                Lantis will purchase a minimum of eighty five percent (85%) of its
                Optical
                Engine requirements for frequency domain Optical Coherence Tomography
                system placements within the Exclusive Field of Use from
                AXSUN.

            

    

    

    
      	
            	5	
              Intellectual
                Property and Royalty: AXSUN
                shall own the intellectual property to the Optical Engine. Lantis
                is
                granted license to use and sell this intellectual property, only
                in its
                products incorporating the OCT Optical Engine, that are purchased
                by
                Lantis from AXSUN and delivered to its customers or for its internal
                use.
                No other rights exist or are implied. In the case where both parties
                shall
                jointly develop intellectual property, both parties will share the
                ownership of the intellectual property. AXSUN agrees to pay Lantis
                a
                royalty equal to 2% of the selling price it receives for products
                sold to
                other customers that use the technology developed utilizing Lantis
                NRE
                funding for this Program. AXSUN will cap such royalty payments to
                Lantis
                at $175,000, or the amount of current and future additional development
                costs or the total milestone payments, actually received by
                AXSUN. 

            

    

    
      	 	 	 

      	
            	6	
              Termination: Lantis
                has the option to terminate this Program at the end of each of the
                last 4
                Milestones (PO #2 to PO #5), as outlined in Section 1 above, without
                further obligation to AXSUN, provided that Lantis makes the then-due
                payment to AXSUN, including additional NRE as shown in Appendix E
                (pursuant to the Termination without Cause language below) as a result
                of
                order cancellation. Any non-exclusive licenses to Lantis, Lantisʼ
                exclusivity, and royalty rights under Sections 2, 4 and 5, respectively,
                above, will be forfeited. In addition, the Purchase Order for 1000
                Optical
                Engine units shall immediately be deemed cancelled.  In the event of
                Termination by Lantis, without cause, then the parties agree to the
                revised NRE payment schedule by milestone in Appendix E. However,
                if
                Lantis terminates due to cause or failure to meet the project goals
                and
                specifications, then the NRE payment schedule by milestone in Section
                1
                will apply.   

            

    

    

    AXSUN
      may
      only terminate the Program at the time of the Critical Design Review, (PO #3),
      if AXSUN reasonably determines that the design goals of Phase III cannot be
      met.
      However, prior to any such termination, Lantis and AXSUN will review whether
      continuation of the Program can be effected with a modified set of design goals,
      criteria and schedules. The parties will use best efforts to reach a mutual
      accommodation.

    

    
      
        
        

      

      
        Page
          3

        
          

        

      

      
        
        

      

    

     

    AXSUN
      has
      the right to terminate this Program if Lantis fails to make any payment set
      forth in the Proposal, within 30 days of the payment due date.

     

    
      	
            	7	
              Warranty:
                AXSUN
                warrants all OCT Optical Engines sold to Lantis will be of merchantable
                quality, and free from defects in material, workmanship and design
                for a
                period of one (1) year from the date of delivery to Lantis. Repaired
                or
                replacement OCT Optical Engines provided under warranty are similarly
                warranted for a period of six (6) months from the date of delivery
                to
                Lantis or the remainder of the original warranty term, whichever
                is
                longer. The warranty on OCT Optical Engines provided in Calendar
                year 2008
                is six (6) months. 

            

    

    

    EXCEPT
      AS
      EXPRESSLY PROVIDED HEREINABOVE, AXSUN MAKES NO REPRESENTATIONS OR WARRANTIES
      WITH RESPECT TO OPTICAL ENGINES. AXSUN DISCLAIMS ALL OTHER WARRANTIES, EXPRESS
      OR IMPLIED, INCLUDING BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF
      MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE. 

     

    
      	
            	8	
              Indemnification:
                AXSUN
                shall hold Lantis harmless against any expense, loss, or damages,
                and
                defend any suit or proceeding brought against Lantis insofar as it
                is
                based on a claim that the OCT Optical Engines, or any part thereof,
                furnished under this contract, infringe any patent or other intellectual
                property of any third party, if notified promptly in writing and
                given
                authority, information, and assistance (at AXSUN's expense) for the
                defense of same. 

            

    

     

    Lantis
      has not provided any design specifications or instructions for the development
      of the OCT Optical Engine under this Program. 

    

    Lantis
      shall hold AXSUN harmless against any expense, loss, or damages resulting from
      intellectual property infringement arising from the use of the AXSUN OCT Optical
      Engine in its Dental imaging system, if notified promptly in writing and given
      authority, information, and assistance (at Lantis’ expense) for the defense of
      same.

    

    
      	
            	9	
              Binding
                Effect:
                This Agreement shall be binding upon and inure to the benefit of
                the
                parties hereto, their successors and
                assigns.

            

    

    

    
      	
            	10	
              Payment
                Terms: Optical
                Engines delivered to Lantis are priced FCA Factory, Billerica, MA.
                Payment
                is due Net 45 days from date of
                invoice.

            

    

    

    
      	
            	11	
              Continuation
                of Supply: AXSUN
                and Lantis agree to the continuation of supply agreement in Appendix
                D. 

            

    

    

    
      	
            	12	
              Term:
                This
                Agreement will commence on the Effective Date and continue in full
                force
                and effect for a period of four (4) years, unless terminated earlier
                pursuant to Section 6. Thereafter, this Agreement may be renewed
                annually
                subject to the mutual written agreement of the parties prior to expiration
                of the then in effect term.

            

    

    

    
      	
            	13	
              Confidentiality.
                At
                all times during the Term and thereafter, each party shall keep
                confidential and not disclose, directly or indirectly, and shall
                not use
                for the benefit of itself or any other individual or entity any
                Confidential Information of the other party and shall take reasonable
                measures to safeguard such information. “Confidential Information” means
                any trade secrets or confidential or proprietary information whether
                written, digital, oral or other form which is unique, confidential
                or
                proprietary to the disclosing party, including, but not limited to,
                the
                terms and conditions of the Agreement, and any other materials or
                information related to the business or activities of the disclosing
                party
                which are not generally known to others engaged in similar businesses
                or
                activities. Each party shall return to the disclosing party any of
                the
                disclosing party’s Confidential Information upon request and/or upon
                termination of this Agreement.

            

    

    
      
        
        

      

      
        Page
          4

        
          

        

      

      
        
        

      

    

     

    
      	
            	14	
              Press
                Releases. Neither
                party shall issue a press release regarding this relationship without
                the
                other party’s prior written approval. Notwithstanding the foregoing, the
                parties shall issue a joint press release announcing this OCT Optical
                Engines development and supply arrangement within thirty (30) days
                of
                entering into this Agreement.

            

    

    

    
      	
            	15	
              Limitation
                of Liability.
                IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY INDIRECT, INCIDENTAL,
                SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION
                WITH THIS
                AGREEMENT WHETHER OR NOT THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY
                OF
                OR IS OTHERWISE ON NOTICE OF SUCH POSSIBILITY UNLESS THE PARTY IN
                DEFAULT
                HAS ACTED FRAUDULENTLY OR WITH WILLFUL MISCONDUCT OR GROSS
                NEGLIGENCE.

            

    

    

    
      	
            	16	
              Assignment.
                The Parties agree not to assign any of their rights or obligations
                under
                this Agreement to any other third party without first obtaining the
                written approval of the other Party, provided, however, that either
                Party
                may assign this Agreement to a purchaser of all or substantially
                all of
                the assets or stock of such Party or of a business of such Party
                to which
                this Agreement pertains, or in connection with any merger or change
                of
                control transaction of such Party, without the prior written consent
                of
                the other Party.  Nevertheless,
                the terms and conditions of this Agreement shall inure to the benefit
                of
                and be binding upon the respective permitted successors and assigns
                of the
                Parties. Nothing in this Agreement, express or implied, is intended
                to
                confer upon any Party other than the Parties hereto or their respective
                successors and assigns any rights, remedies, obligations, or liabilities
                under or by reason of this Agreement, except as expressly provided
                in this
                Agreement. 

            

    

    

    
      	
            	17	
              Severability.
                If
                one or more provisions of this Agreement are held to be unenforceable
                under applicable law, the Parties agree to renegotiate such provision
                in
                good faith, in order to maintain the economic position enjoyed by
                each
                Party as close as possible to that under the provision rendered
                unenforceable. In the event that the Parties cannot reach a mutually
                agreeable and enforceable replacement for such provision, then (i)
                such
                provision shall be excluded from this Agreement, (ii) the balance
                of the
                Agreement shall be interpreted as if such provision were so excluded
                and
                (iii) the balance of the Agreement shall be enforceable in accordance
                with
                its terms.

            

    

    

    
      	
            	18	
              Amendments
                and Waivers.
                Any agreement to change the terms of this Agreement in any way shall
                be
                valid only if the change is made in writing and approved by mutual
                agreement of authorized representatives of the Parties hereto. No
                waiver
                of any right, power or remedy following a breach of this contract
                is valid
                unless it is made in writing.

            

    

    

    
      	
            	19	
              Entire
                Agreement.
                Lantis acknowledges having read and executed this Agreement and agreed
                to
                be bound by its terms. This Agreement is the product of both of the
                Parties hereto, and constitutes the entire agreement between such
                Parties
                pertaining to the subject matter hereof, and merges all prior negotiations
                and drafts of the Parties with regard to the transactions contemplated
                herein. Any and all other written or oral agreements existing between
                the
                Parties hereto regarding such transactions are expressly canceled
                and
                superceded.

            

    

    
      
        
        

      

      
        Page
          5

        
          

        

      

      
        
        

      

    

    

    
      	
            	20	
              Recitals.
                The recitals hereof shall form an integral part of this
                Agreement.

            

    

    

    
      	
            	21	
              Governing
                Law. This
                Agreement shall be governed and construed in all respects by the
                laws of
                the State of New York,
                without regard to principles of conflict of
                laws.

            

    

    

    
      	
            	22	
              Notice. All
                notices hereunder must be in writing and mailed by certified mail,
                return
                receipt requested, or by prepaid courier service, or by telecopier
                with
                receipt confirmed by telephone, to each party’s address first set forth
                above.

            

    

    

    [Signature
      Page Follows]

    
      
        
        

      

      
        Page
          6

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
      duly authorized representatives as of May 15, 2008.

    

    
      	
              AXSUN
                TECHNOLOGIES INC

            	 	
              LANTIS
                LASER, INC.

            
	 	 	 
	
              By:
                /s/                                                                         

            	 	
              By:
                /s/                                                                         

            
	
              Name:
                Dale C. Flanders

            	 	
              Name:
                Stanley B Baron

            
	
              Title:
                CEO

            	 	
              Title:
                President & CEO

            
	 	 	 
	
              Date
                Signed: May 13,
                2008                                      
                

            	 	
              Date
                Singed:May 13,
                2008                                      
                

            

    

     

    [Signature
      Page to Optical Engine Development Program and Supply
      Agreement]

    
      
        
        

      

      
        Page
          7

        
          

        

      

      
        
        

      

    

    

    APPENDIX
      A

    

    Proposal
      for Development of a 1300nm Frequency Domain OCT Optical
      Engine

    

    Prior
      work has been carried out in a “Phase I” program between Axsun and Lantis Laser
      to validate and confirm technical capability and feasibility of a frequency
      domain, swept source OCT Optical Engine for use in the field of Dental imaging.
      This proposal addresses a continuation of that work effort and involves
      additional design and development of technology, process methodology and
      manufacturing capabilities specifically for the final sub-system component
      that
      is a swept source frequency domain, OCT Optical Engine, (the “Optical Engine”),
      to be incorporated into a product to be manufactured by Lantis Laser in the
      Dental industry. 

    

    Project
      Timeframe:  May
      2008
– October 2008

    

    Project
      Objective: 

    The
      objective of this program is to develop a swept laser source, frequency domain,
      Optical Engine as a sub-system, designed for manufacturing and integration
      with
      digital control electronics and software provided by Lantis Laser for inclusion
      and assembly into a Dental imaging application product. 

    

    Project:
      Phase II/III Optical Coherence Tomography (OCT) Optical Engine for Dental
      Imaging Application

    Continuation
      of the Optical Engine development program will be carried out in two additional
      phases. Phase II will address the design and development of an interim Beta
      Optical Engine, (Beta design-1). Phase III will migrate the knowledge and
      technical capabilities learned from earlier work into the design of an
      integrated Optical Engine module, (Beta design-2), utilizing the AXSUN
      integration platform, specifically addressing manufacturing issues to lower
      product cost and improve product reliability.

    

    Project
      Scope:

    Phase
      II - 

    Phase
      II
      of the project encompasses the design and assembly of an interim all fiber,
      Optical Engine to be identified as Beta design-1. The purpose of the Beta
      design-1 Optical Engine will be to verify higher system performance
      specifications over the Phase 1, (alpha), system. Improvements include: 1)
      develop new enhanced optical receiver electronics, 2) adding a fixed optical
      delay line to more accurately model the final integrated Optical Engine.
      Additionally, the enhanced system will serve as a test platform for verification
      of overall system integration issues involving Lantis’ optical interfaces,
      digital electronic controls and software control. Phase II includes developing
      an all fused fiber based Optical Engine with, where possible, off the shelf
      components (couplers, Photodiodes etc). 

    

    Also
      in
      Phase II is the design of custom optics and electronics that will be implemented
      in the follow-on program Phase. The conclusion of Phase II will be final
      documentation of performance testing and system designs expected as verification
      of enhancements to the Optical Engine design allowing the project to carry
      forward, into the final development Phase.

    

    Phase
      III -

    Upon
      successful completion of Phase II, Phase III project activities will be focused
      on “design for manufacturing”. The primary focus is to develop an Optical Engine
      that replaces the all fiber coupled system design with an integrated optical
      module utilizing the AXSUN integration platform to reduce or eliminate fiber
      junctions and take advantage of free space optics for significant cost and
      size
      reduction. Additionally, effort will be undertaken to improve on overall system
      performance, increase product reliability and address any optical or operational
      issues that were identified in earlier project work. 

    

      Appendix
        A, Page - 8 -

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    AXSUN
      may
      fabricate critical source parts. All assembly and test of the Optical Engine
      will be performed at AXSUN’s facility in Billerica, MA

    

    Phase
      II, Goals:

    Time
      Line: May
      7th – July 7th, 2008

    

    The
      principal goals of Phase II are:

    

    
      	 	
              1.

            	
              Design
                and fabrication of custom optical receivers to replace the purchased
                Thor
                Labs receivers used in Phase I,

            

    

    
      	 	
              2.

            	
              Design
                micro-optic components for the Optical Interface module (taps, beam
                splitters, etc)

            

    

    
      	 	
              3.

            	
              Design
                the Optical interface module utilizing AXSUN’s integration platform
                incorporating the pointing laser chip for the optimal level of functional
                integration.

            

    

    
      	 	
              4.

            	
              Build
                3 fused fiber Beta design-1 OCT Systems for Lantis to perform clinical
                studies. Systems to incorporate Lantis digital electronics and be
                controlled by Lantis Dental Imaging System software application.
                A block
                diagram of the Optical Engine is shown in Figure 1 and the Drawing
                in
                Figure 2 shows the layout of the Optical Engine in the Lantis Chassis.
                Axsun will provide Lantis with all necessary software and hardware
                interface documentation to facilitate incorporation into Lantis’s overall
                system design. 

            

    

    
      	 	
              5.

            	
              Perform
                test and characterization of the components both as a sub-system
                and with
                the MEMS based probe as a full system and document results. (A
                detailed test protocol, test method and test report format needs
                to be
                agreed upon between AXSUN and Lantis.)

            

    

    
      	 	
              6.

            	
              Design
                custom electronics board(s) for the integrated OCT system to be delivered
                in Phase III.

            

    

     

    AXSUN
      Deliverables (July 7, 2008):

    

    
      	 	
              1.

            	
              Deliver
                (3) integrated fiber-based OCT systems, meeting operational
                specifications, to Lantis Laser for Dental Imaging Application
                testing.

            

    

    
      	 	
              2.

            	
              Detailed
                Beta design-1, system Performance Specification Report from fiber
                coupled
                prototypes and lessons learned report detailing design improvements
                and
                specifications leading into the Phase III development program.
                

            

    

    
      	 	
              3.

            	
              Detailed
                design documentation of micro-optic components and Optical interface
                module for review and acceptance by Lantis.

            

    

    

    Lantis
      Laser Deliverables:

    
      	 	
              1.

            	
              (3)
                digital boards for system
                integration.

            

    

    
      	 	
              2.

            	
              (3)
                Chassis for system integration

            

    

    
      	 	
              3.

            	
              (3)
                Linear Power Supplies for system
                integration

            

    

    
      	 	
              4.

            	
              (3)
                Tested MEMS probes

            

    

    
      	 	
              5.

            	
              Detailed
                documentation of the digital electronic control interfaces required
                for
                Phase III Optical Engine
                integration.

            

    

     

    
      Appendix
        A, Page - 2 -

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    
      

         

        Figure
          1;
          Beta design-1, OCT Optical Engine in All Fiber
          Implementation

      

    

    

    

     

    Figure
      2;
      Beta design-1, Physical Layout of Fiber Based OCT Optical
      Engine

    

      Appendix
        A, Page - 3 -

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Goals
      for Phase III (Completion by October 8, 2008)

    

    The
      principal goals of Phase III are:

    

    
      	 	
              1.

            	
              Deliver
                (5) integrated Beta design-2, OCT Systems meeting design specifications,
                suitable for Dental imaging.

            

    

    
      	 	
              a.

            	
              OCT
                Optical Engine consisting of:

            

    

    
      	 	
              i.

            	
              OCT
                Tunable Laser

            

    

    
      	 	
              ii.

            	
              Micro
                optics, OCT Optical Interface Module with integrated Red pointing
                laser,
                

            

    

    
      	 	
              iii.

            	
              Electronics
                including: 

            

    

    
      	 	
              1.

            	
              Tunable
                Laser HV amplifier circuit

            

    

    
      	 	
              2.

            	
              Interferometer
                Clock pulse detector and pulse doubling
                circuit

            

    

    
      	 	
              3.

            	
              High
                SNR optical receivers with anti-aliasing
                filters

            

    

    
      	 	
              iv.

            	
              OCT
                Optical Engine Mechanical Mount chassis

            

    

    (Assumes
      that Lantis provides the external chassis and switching power supply See figure
      4 for a functional block diagram of the OCT Optical Engine and figure 5 for
      a
      physical layout)

    

    
      	 	
              2.

            	
              Evaluate
                integrated Beta design-2 OCT systems against the Beta design-1 all
                fiber
                OCT System and document the system level specifications and
                performance.

            

    

    
      	 	
              3.

            	
              Documentation
                of work efforts and testing results including creation of specific
                reports
                for product performance, failure analysis, design specifications
                and
                handoff to manufacturing.

            

    

    
      	 	
              4.

            	
              Creation
                of manuals and documents to allow Lantis to continue to use the product
                in
                a manufacturing environment and support of on-going regulatory approval
                processes. 

            

    

    

    AXSUN’s
      Statement of Work to address the above goals is:

    

    
      	 	
              1.

            	
              Build
                and evaluate optical interface modules (See figure
                3)

            

    

    
      	 	
              a.

            	
              Design
                refinement/procurement of custom micro-optic
                devices

            

    

    
      	 	
              b.

            	
              Optical
                bench design refinement and
                procurement

            

    

    
      	 	
              c.

            	
              Optimization
                of manufacturing processes and alignment
                algorithms

            

    

    
      	 	
              d.

            	
              Test
                and characterization of modules

            

    

    
      	 	
              e.

            	
              Integration
                of module with control electronics

            

    

    
      	 	
              2.

            	
              Fabrication
                of custom single board OCT Optical Receiver Analog
                Controller

            

    

    
      	 	
              a.

            	
              Procurement
                of components

            

    

    
      	 	
              b.

            	
              Fabrication
                of PCB(s) including tooling charges for
                manufacturer

            

    

    
      	 	
              c.

            	
              Test
                and debug PCBs and modify if needed

            

    

    
      	 	
              d.

            	
              Integrate
                with Probe and Lantis Electronics

            

    

    
      	 	
              e.

            	
              Respin
                PCB’s as necessary

            

    

    
      	 	
              3.

            	
              System
                integration and integration of probe with Optical
                Engine.

            

    

    
      	 	
              a)

            	
              Integration
                of optical modules with new PCB controller, system hardware and firmware
                debug and characterization.

            

    

    
      	 	
              b)

            	
              Integration
                of probe with Optical Engine and system characterization and test.
                

            

    

    
      	 	
              4.

            	
              Create
                Software Interface Manual and example source
                code

            

    

    
      	 	
              5.

            	
              Create
                Electronics interface manual with specifications and testing
                procedures.

            

    

    
      	 	
              6.

            	
              Create
                Product Test program including design documentation and performance
                specifications for product testing
                purposes.

            

    

     

    
      Appendix
        A, Page - 4 -

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

     

    Figure
      3
      Layout of Integrated Optical Interface
      Module

     

     

    

    AXSUN
      Deliverables (October 8th, 2008):

    

    
      	 	
              1.

            	
              Deliver
                (5) OCT Optical Engines performing to specification, integrated into
                Lantis Lasers OCT system.

            

    

    
      	 	
              2.

            	
              Performance
                Comparison to fiber coupled prototypes and design specifications.
                

            

    

    
      	 	
              3.

            	
              Reports
                detailing a technical design and specification update for integrated
                OCT
                system.

            

    

    
      	 	
              4.

            	
              Lessons
                learned report stating any known system performance issues, suggestions
                for performance improvements and further cost reductions. A segment
                of
                this report should also address a path to the next generation of
                the
                product design.

            

    

    

    Lantis
      Laser Deliverables:

    

    
      	 	
              1.

            	
              (5)
                digital boards for system
                integration.

            

    

    
      	 	
              2.

            	
              (5)
                tested MEMS probes for integration

            

    

    
      	 	
              3.

            	
              Power
                supplies and chassis for system
                integration

            

    

     

    
      Appendix
        A, Page - 5 -

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    
      
         

        Figure
          4
          OCT System with Free Space Integrated Optical Interface
          Module

         

      

    

    

    
       

      Figure
        5
        Integrated OCT System with Heatsink and Fiber
        Management

    

    

      Appendix
        A, Page - 6 -

       

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Appendix
      B

    

    OCT
      Optical Engine Specifications

    

    Functional
      Description: 1300
      nm
      AXSUN Tunable OCT Optical Engine 

    

    This
      device is intended for use in the Lantis OCT Imaging System.

    

    To
      meet
      product requirements, Lantis requires a clean visible image data window to
      be
      suitable for Dental imaging applications. Displayable Optical window must be
      free from optical or electrical artifacts that may be generated by the OCT
      Optics Engine or subsequent control electronics.

    

    OCT
      Optical Engine Specification:

    

    
      	
              Parameter

            	 	
              Symbol

            	 	
              Min

            	 	
              Typ

            	 	
              Max

            	 	
              Unit

            	 	
              Conditions

            
	
              Repetition
                rate

              (Master
                Clock)

            	 	 	 	
              9

            	 	
              10

            	 	
              11

            	 	
              KHz

            	 	 
	
              Imaging
                Range

            	 	 	 	 	 	
              10

            	 	 	 	
              mm

            	 	
              Measured
                in air

            
	
              Imaging
                Resolution

            	 	 	 	 	 	
              45

            	 	
              60

            	 	
              um

            	 	
              Lantis
                Probe Spec.

            
	
              SNR

            	 	 	 	 	 	
              100

            	 	 	 	
              dB

            	 	
              Measured
                at Optical receiver output

            
	
              #
                of Usable Clock Pulses

            	 	 	 	
              2150

            	 	
              2200

            	 	 	 	 	 	 
	
              Allowable
                Clock Jitter

            	 	 	 	 	 	
              7

            	 	
              10

            	 	
              %

            	 	 
	
              Wavelength
                Range

            	 	
              λc

            	 	
              1250-1260

            	 	 	 	
              1350-1360

            	 	
              nm

            	 	
              Measured
                dynamically at 10KHz 

            
	
              3dB
                Emission Bandwidth

            	 	
              λBW

            	 	
              65

            	 	
              75

            	 	 	 	
              nm

            	 	 
	
              Output
                power

            	 	
              Po

            	 	
              18

            	 	
              20

            	 	 	 	
              mW

            	 	
              Modulated
                sinusoidally at 10KHz measured with a calibrated power
                meter

            
	
              Power
                Consumtion

            	 	 	 	 	 	
              15

            	 	 	 	
              W

            	 	
              Over
                15 to 35 degC

            

    

    
       

      
        Table
          1
          OCT Optical Engine Specifications

      

      

        Appendix
          B, Page - 1 -

      

      

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    Appendix
      C

    

    Projected
      Quarterly Purchase Order Amounts for OCT Optical Engines

    

    Quarterly
      projected shipments against PO#6 for 2009/2010 (Assumes FDA approval by the
      end
      of calendar 2008): 

     

    

      
        	 	 	
                Q1'2009

              	 	
                Q2'2009

              	 	
                Q3'2009

              	 	
                Q4'2009

              	 	
                Q1'2010

              	 	
                Q2'2010

              	 
	
                Units
                  Delivered

              	 	 	
                100

              	 	 	
                150

              	 	 	
                150

              	 	 	
                200

              	 	 	
                200

              	 	 	
                200

              	 

      

    

     

    
      Appendix
        C, Page - 1 -

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    APPENDIX
      D

    Continuation
      of Supply Agreement

    

    This
      Continuation of Supply Agreement is applicable to production OCT Optical Engines
      only, and not to development prototype units.

    

    AXSUN
      shall offer for sale to Lantis, during the term of the Agreement and for at
      least two (2) years after the expiration of the Agreement OCT Optical Engines
      conforming to the specifications in Appendix A of the Agreement, or to such
      other specifications as authorized officials of the parties may from time to
      time mutually agree in writing. 

    

    In
      the
      event AXSUN fails to supply the OCT Optical Engine substantially in accordance
      with the release schedules provided by Lantis under open purchase orders, then
      AXSUN shall, without obligation of or charge to Lantis, provide Lantis with
      the
      technical information or any other rights required so that Lantis can
      manufacture, have manufactured or obtain such OCT Optical Engines from other
      sources for Lantis’ products only and only within the exclusive field of use.
      The technical information includes, by example; and not by way of limitation:
      (a) manufacturing drawings and specifications of raw materials and components
      comprising such Material or Parts, (b) manufacturing drawings and specifications
      covering special tooling and the operation thereof, (c) a detailed list of
      all
      commercially available Material or Parts and components purchased by Supplier
      on
      the open market disclosing the Material or Part number, name and location of
      the
      Supplier and price lists for the purchase thereof. If Lantis' use of the
      technical information involves use or copying of copyrighted material or the
      practice of any invention covered by a patent, AXSUN shall not assert the
      copyright or patent against Lantis, its vendors, distributors, customers, and
      their respective affiliates, subsidiaries and assigns. AXSUN’s obligation to
      supply the technical information is subject to Lantis written agreement to
      maintain the confidentiality of any technical information and ensure the
      protection of AXSUN's trade secrets and confidential information.

     

    
      Appendix
        D, Page - 1 -

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    APPENDIX
      E 

    Revised
      Schedule of NRE Payments

    

    In
      the
      event that Lantis terminates the agreement without cause as stated in section
      6,
      Lantis and Axsun agree to the following revised NRE payments and milestones.
      

    
      
        

          
            	 	 	 	 	 	 	
                    NRE
                      Payment 

                  	 
	
                    Milestone
                      

                  	 	
                    Description
                      

                  	 	
                    Scheduled
                      Date 

                  	 	
                    Due

                  	 
	
                    Program
                      Kickoff 

                  	 	
                    Prepayment
                      for Materials

                  	 	April
                    29th, 2008 	 	
                    $

                  	
                    50,000

                  	 
	
                    Fiber
                      System Delivery 

                  	 	
                    Delivery
                      of 3 Fiber Based Systems

                  	 	June
                    30th, 2008 	 	
                    $

                  	
                    100,000

                  	 
	
                    Critical
                      Design Review 

                  	 	Review
                    of Electronics and Optical interface module designs forIntegrated
                    OCT
                    System	 	August
                    15, 2008 	 	
                    $

                  	
                    100,000

                  	 
	
                    Electronics
                      Delivery 

                  	 	Availability
                    of Final Electronics PCBs 	 	August
                    30, 2008 	 	
                    $

                  	
                    100,000

                  	 
	
                    Integrated
                      System Delivery 

                  	 	Delivery
                    of 5 Integrated OCT Systems 	 	September
                    30, 2008 	 	
                    $

                  	
                    100,000

                  	 

          

        

      

    

    
       

      
        Appendix
          E, Page - 1 -AGREEMENT
      ON DISPOSITION OF CONVERTIBLE DEBENTURES 

    

    This
      Agreement on Disposition of Convertible Debentures (this “Agreement”)
      is
      entered into as of September 9, 2008, by and among Solution Technology
      International, Inc. (the “Company”),
      with
      its principal place of business at Garrett Information Enterprise Center, 685
      Mosser Road, Suite 11, McHenry, Maryland 21541, Resurgence Partners, LLC
      (“Resurgence
      Partners”),
      a
      Virginia limited liability company, with its principal place of business at
      205
      South Whiting Street, Suite 311, Alexandria, VA 22304, and YA Global
      Investments, L.P. (“YA
      Global”)
      (f/k/a
      Cornell Capital Partners, LP), a Cayman Islands limited partnership, with its
      principal place of business at 101 Hudson Street, Suite 3700, Jersey City,
      New
      Jersey 07302.

     

    WHEREAS,
      the
      Company has issued convertible debentures to YA Global in the principal amount
      of $2,875,000 in connection with secured loans made by YA Global to the Company
      (the “Debentures”),
      a
      list of which is attached hereto and incorporated herein as Schedule
      1,
      and has
      issued warrants to purchase shares of its common stock, par value $.01 per
      share
      (“Common
      Stock”)
      to YA
      Global (the Warrants”);
      and

    

    WHEREAS,
      YA
      Global has entered into an Intercreditor Agreement with Crosshill Georgetown
      Capital, L.P. (“Crosshill”)
      to
      arrange for a division of the blanket lien against the Company’s assets under
      UCC-1 financing statements on file in the State of Delaware (the “YA/Crosshill
      Intercreditor Agreement”);
      and

    

    WHEREAS,
      the
      Company requires additional financing to achieve its business plan;
      and

     

    WHEREAS,
      the
      Company has entered into discussions with a Resurgence Partners to invest not
      less than $2,500,000 (the “Financing”)
      assuming that (i) the Company has eliminated existing secured debt from its
      balance sheet, (ii) it effects a reverse split of its shares of common stock
      to
      provide the financing group with 92.5% ownership of the Company’s issued and
      outstanding shares of common stock, par value $.01 per share (the “Common
      Stock”)
      and
      the existing shareholders 7.5% of the Company’s issued and outstanding shares of
      Common Stock post reverse split (the “Reverse
      Split”)
      and
      (iii) it eliminates all liens against its assets; and 

    

    WHEREAS,
      the
      Company, as a precondition to receipt of the Financing, must enter into an
      agreement with YA Global to terminate the Debentures or allow Resurgence
      Partners to purchase the Debentures, terminate the YA/Crosshill Intercreditor
      Agreement and terminate all liens against the Company and any outstanding
      warrants; and

    

    WHEREAS,
      YA
      Global is willing to terminate or sell to Resurgence Partners the Debentures
      and
      to terminate the YA/Crosshill Intercreditor Agreement, its lien against the
      Company’s assets and the Warrants in return for receipt of $700,000 cash and a
      deferred payment of $150,000.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

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

    

    Section
      1. Cash
      Payment by the Company; Closing.
      Upon YA
      Global’s execution of this Agreement and compliance with sections 4, 5 and 6
      below (the “Closing”),
      the
      Company shall pay to YA Global $700,000 by wire transfer in immediately
      available funds (the “Cash Payment”).

    

    Section
      2. Deferred
      Payment.
      At
      the
      Closing, Resurgence Partners shall purchase all but $150,000 of the Debentures
      (the “Assigned
      Debentures”) from
      YA
      Global, by executing the Non-Recourse Assignment attached hereto as Schedule
      2.
      (The
      debentures that YA Global retains shall be referred to herein as the
“YA
      Global Debentures”).
      The
      security interest held by YA Global in the Company’s assets shall be
      subordinated to the security interest in all of its now owned or hereafter
      acquired personal property of the Company, including the Company’s software (the
“Collateral”)
      held
      by Resurgence Partners following its purchase of the Debentures, as set forth
      in
      the Intercreditor Agreement of even date herewith in the form attached hereto
      as
Schedule
      3
      pursuant
      to which Resurgence Partners will have the authority to make all decisions
      regarding the security on behalf of itself and YA Global. In the event that
      the
      Company files for protection under Chapter 11 of the U.S. Bankruptcy Code,
      Resurgence Partners shall, within three (3) days of entry of a final plan of
      reorganization, or other final disposition of the bankruptcy action execute
      a
      note in the form attached hereto as Schedule
      4,
      (the
“Note”)
      whose
      principal amount shall be $150,000, and which shall bear interest at 10% per
      annum, such interest to accrue and be paid annually, and shall have a maturity
      date two years from the date of this Agreement. The Note shall be secured by
      a
      pledge of shares equal to five and one half percent (5.5%) of the number of
      shares in the Company (or in any successor entity or entities of the Company)
      received by Resurgence in the final plan of reorganization, or other final
      disposition of the bankruptcy action. The pledge shall be implemented by
      execution of the Pledge Agreement attached hereto as Schedule
      5.

    

    Section
      3. Exercise
      of Conversion Rights.
      Immediately prior to the Closing, YA Global intends to issue a notice of
      conversion (the “Conversion
      Notice”) to
      obtain
      shares of the Company’s Common Stock under the terms of its outstanding
      Convertible Debentures that will allow YA Global to own up to 9.99% of the
      outstanding shares of the Company’s Common Stock pre-Reverse Split. The Company
      agrees to honor the notice of conversion and issue the number of shares of
      Common Stock set forth in the conversion notice. The Company agrees further
      that, upon execution of this Agreement, all limitations on share ownership
      contained in the YA Global Debentures shall be amended to be 9.99% of the
      outstanding shares of Common Stock of the Company. 

    

    Section
      4. Termination
      of the YA/Crosshill Intercreditor Agreement. YA
      Global
      hereby agrees that the YA/Crosshill Intercreditor Agreement shall be terminated
      at Closing. YA Global acknowledges that concurrently with the execution and
      delivery of this Agreement, Crosshill is terminating its agreements with the
      Company and releasing its lien on the assets of the Company, in exchange for
      a
      cash payment (the “Cash Payment”). Crosshill’s agreement to accept the Cash
      Payment is being made in reliance upon YA Global’s express termination of the
      YA/Crosshill Intercreditor Agreement and YA Global’s Agreement to waive any and
      all interest in the Cash Payment. YA Global hereby waives any and all interest
      in the Cash Payment and agrees that Crosshill may rely on this Agreement in
      terminating its agreements and releasing the collateral pledged to
      Crosshill.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    Section
      5. Sale
      of the Debentures.
      At
      Closing YA Global shall sell, and Resurgence Partners will purchase, the
      Assigned Debentures. The terms of such sale shall be as set forth in the
      Non-Recourse Assignment between Resurgence Partners and YA Global of even date
      herewith, which shall provide for the ownership of the Assigned Debentures
      by
      Resurgence Partners contemporaneously with the Closing. YA Global shall have
      three (3) days from the date of the Closing to physically deliver the assigned
      debentures to Resurgence Partners. In the event that such assigned debentures
      are not delivered in accordance with this section 5 YA Global authorizes the
      Company to cancel the Assigned Debentures and reissue replacement debentures
      that are consistent with this Agreement.

    

    Section
      6. Cancellation
      of Outstanding Warrants.
      At
      Closing, the Warrants, shall be immediately cancelled on the books of the
      Company with no additional action by YA Global or Resurgence Partners necessary
      to effectuate such cancellation. YA Global shall physically deliver the Warrants
      to the Company within five (5) days of the Closing.

    

    Section
      7. Mutual
      Release.
      In
      consideration of the covenants and agreements contained in this Agreement,
      the
      Company and YA Global do hereby RELEASE AND FOREVER DISCHARGE the other party
      and its subsidiaries and its respective affiliates, parents, joint ventures,
      officers, directors, shareholders, interest holders, members, managers,
      employees, consultants, representatives, successors and assigns, heirs,
      executors and administrators from all causes of action, suits, debts, claims
      and
      demands whatsoever known or unknown, at law, in equity or otherwise, which
      either party had, now has, or hereafter may have, arising from or relating
      in
      any way to the Company’s status as a debtor of YA Global on or prior to the date
      hereof, any agreement between the Company and YA Global entered into prior
      to
      the date hereof, any claims for reasonable attorneys’ fees and costs, and
      including, without limitation, any claims relating to fees, penalties,
      liquidated damages, and indemnification for losses, liabilities and
      expenses.  This release is effective without regard to the legal nature of
      the claims raised and without regard to whether any such claims are based upon
      tort, equity, or implied or express contract.  It is expressly understood
      and agreed that this release shall operate as a clear and unequivocal waiver
      by
      both the Company and YA Global of any such claim whatsoever. The terms of this
      mutual release shall not, however, preclude an action seeking
      to enforce the parties’ rights and obligations under this Agreement, or any
      action by YA Global to enforce its rights and remedies under the
      Note.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    Section
      8.  Company
      Representations and Warranties.

     

    (a).
      Organization,
      Good Standing and Qualification.
      The
      Company has been duly incorporated and organized, and is validly existing in
      good standing under the laws of the State of Delaware. The Company has the
      corporate power and authority to own and operate its properties and assets
      and
      to carry on its business as currently conducted and as presently proposed to
      be
      conducted.

     

    (b).
      Due
      Authorization.
      All
      corporate action on the part of the Company’s directors and shareholders
      necessary for the authorization, execution, delivery of, and the performance
      of
      all obligations of the Company under this Agreement have been taken or will
      be
      taken prior to the Closing of the Financing, and this Agreement when executed
      and delivered, will constitute, a valid and legally binding obligation of the
      Company, enforceable in accordance with its terms, except as may be limited
      by
      (i) applicable bankruptcy, insolvency, reorganization or other laws of
      general application relating to or affecting the enforcement of creditor’s
      rights generally and (ii) the effect of rules of law governing the
      availability of equitable remedies.

     

    (c).
      Corporate
      Power.
      The
      Company has the corporate power and authority to execute and deliver this
      Agreement and to carry out and perform all its obligations under this
      Agreement.

     

    (d).
      SEC
      Reports. The
      Company has filed all forms, reports, schedules, registration statements, proxy
      statements, and other documents (including any document required to be filed
      as
      an exhibit thereto) required to be filed by the Company with the Securities
      and
      Exchange Commission (“SEC”)
      from
      September 30, 2005 to September 30, 2008. All such required forms, reports,
      schedules, registration statements, proxy statements and other documents
      (including those that the Company may file subsequent to the date hereof) are
      referred to herein as the “SEC
      Reports.”
As
      of
      their respective dates, the SEC Reports (including any financial statements
      or
      schedules included or incorporated by reference therein) (i) were prepared
      in
      all material respects in accordance with the requirements of the 1933 Act or
      the
      Securities Exchange Act of 1934, as amended (the “Exchange
      Act”),
      as
      the case may be, and the rules and regulations of the SEC thereunder applicable
      to such SEC Reports and (ii) did not at the time they were filed (or if amended
      or superseded by a filing prior to the date of this Agreement, then on the
      date
      of such filing) contain any untrue statement of a material fact or omit to
      state
      a material fact required to be stated therein or necessary in order to make
      the
      statements therein, in light of the circumstances under which they were made,
      not misleading. As of the date hereof, there has not been any material adverse
      change with respect to the Company that would require disclosure under the
      Securities Act.

     

    Section
      9. Covenants
      of the Company.
      The
      Company hereby covenants and agrees that it shall remain a public company so
      long as YA Global remains a stockholder in the Company (or in any successor
      entity to the Company that emerges from any bankruptcy or reorganization case
      or
      action). This covenant shall be binding on any successor entity to the Company
      that emerges from any bankruptcy or reorganization case or action involving
      the
      Company.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    Section
      10. Covenants
      of Resurgence Partners.
      Resurgence Partners hereby covenants and agrees that should the Company file
      to
      seek protection under Chapter 11 of the U.S. Bankruptcy Code (i) it will
      transfer to YA Global from the shares of the Company that it owns that number
      of
      Company shares (or shares in the successor entity or entities that emerge from
      the Chapter 11 case) necessary to ensure that, consistent with section 3, YA
      Global owns 1% of the shares of the Company (or in the successor entity or
      entities that emerge from the Chapter 11 case) after the Company emerges from
      the Chapter 11 case and (ii) it shall not sell any shares of Common Stock that
      it holds should it exercise any of the Debentures until the Company emerges
      from
      Chapter 11. In the event that the Company does not file for protection under
      Chapter 11 Resurgence Partners covenants and agrees not to sell any of the
      shares that it holds should it exercise any of the Debentures for not less
      than
      one year from the date of this Agreement.

     

    Section
      11. Representations
      and Warranties by YA Global.
      YA
      Global
      hereby represents and warrants to, and agrees with, the Company,
      that
      this
      Agreement constitutes YA Global’s valid and legally binding obligation,
      enforceable in accordance with its terms except as may be limited by
      (i) applicable bankruptcy, insolvency, reorganization or other laws of
      general application relating to or affecting the enforcement of creditors’
rights generally and (ii) the effect of rules of law governing the
      availability of equitable remedies. YA Global represents that it has full power
      and authority to enter into this Agreement.

     

    Section
      12. Support
      of Reverse Split.
      YA
      Global agrees to vote its shares of Common Stock in favor of the Reverse Split
      and authorizes the Company to count the shares of Common Stock that it owns
      as a
      vote in favor of the Reverse Split for purposes of computing the shareholder
      approval needed to issue an information statement under SEC Form 14C rather
      than
      having to file SEC Form 14A and providing for a meeting of shareholders to
      approve the Reverse Split. YA Global further agrees to provide the Company
      with
      the exact number of shares of Common Stock that it owns directly and indirectly
      at the Company’s request in connection with the Company’s effort to obtain
      shareholder approval of the Reverse Split.

    

    Section
      13. Governing Law.
      This
      Amendment shall be governed by and construed under the laws of the State of
      Delaware.  

    

    Section
      14. Titles and Subtitles.
      The
      titles of the sections and subtitles of this Amendment are for convenience
      of
      reference only and are not to be considered in construing this
      Amendment.

    

    Section
      15. Counterparts.
      This
      Amendment may be executed in counterparts, each of which shall be deemed an
      original, and all of which shall constitute one and the same
      instrument.

     

    Section
      16. Binding
      Effect, Assignment.
      This
      Agreement shall be binding upon and shall insure to the benefit of the Company
      and YA Global and to their successors and assigns. Nothing in this Agreement
      shall be construed to permit the assignment by the Company or YA Global of
      any
      of their rights or obligations hereunder, and such assignment is expressly
      prohibited without the prior written consent of the other party.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    Section
      17.  Amendment
      and Non-Waiver.
      No
      amendment or modification of this Agreement shall be valid unless in writing
      and
      signed by the parties. No waiver of any of the provisions of this Agreement
      shall be valid unless the same is in writing and signed by the party against
      whom it is sought to be enforced. Any waiver of any breach of this Agreement
      shall not be considered to be a continuing waiver or consent to any subsequent
      breach on the part of either party.

     

    Section
      18. Severability.
      All
      provisions of this Agreement are severable, and if any of them is determined
      to
      be invalid or unenforceable for any reason, the remaining provisions and
      portions of this Agreement shall be unaffected thereby and shall remain in
      full
      force to the fullest extent permitted by law.

     

    Section
      19. Entire
      Agreement.
      This
      Agreement contains the entire understanding of the Company and YA Global with
      respect to the subject matter hereof and supersedes any and all prior
      understandings, written or oral.

     

    Section
      20. Recitals.
      The
      parties acknowledge the accuracy of the Recitals and incorporate
      the
      Recitals
      into and
      make them a part of this Agreement.

     

    

    [Signature
      Page to Agreement on Disposition of Convertible Debentures Next]

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed
      as
      of the date first set forth above.

     

    
      	 	 	 
	 	SOLUTION
              TECHNOLOGY INTERNATIONAL, INC.
	 
 	 
 	 
 
	 	By:  	/s/
              Dan
              Jonson
	 	
              
Name:
              Dan Jonson
	 	Title:
              President and CEO

    

     

    
      	 	 	 
	 	YA
              GLOBAL
              INVESTMENTS, L.P.
	 
 	 
 	 
 
	 	By:  	/s/
              Troy
              Rillo
	 	
              
Name:
              Troy Rillo
	 	Its:
              Senior Managing Director

    

     

    
      	 	 	 
	 	RESURGENCE
              PARTNERS, LLC
	 
 	 
 	 
 
	 	By:  	/s/
              Joel
              Bernstein
	 	
              
Name:
              Joel Bernstein
	 	Title:
              Manager

    

    

     

    [Signature
      Page to Agreement on Disposition of Convertible Debentures] 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    Schedule
      1

     

    LIST
      OF CONVERTIBLE DEBENTURES

     

    As
      of March 12, 2008

     

     

    
      	
              Original
                Name:

            	
              Issued
                or Restated To:

            	
              Date:

            	
              Original
                Principal

            	
              Aggregate
                Conversions:

            	
              Outstanding
                

              Net
                Amount

            
	 	 	 	 	 	 
	
              Cornell
                Capital Partners

            	
              NetWorth
                Technologies, Inc. (STI)

            	
              4/4/2006

            	
              $1,000,000

            	
              $0

            	
              $1,000,000

            
	 	 	 	 	 	 
	
              Montgomery
                Equity Partners

            	
              NetWorth
                Technologies, Inc. (STI)

            	
              4/4/2006

            	
              $256,757

            	
              $207,200

            	
              $49,557

            
	 	 	 	 	 	 
	
              Cornell
                Capital Partners

            	
              NetWorth
                Technologies, Inc. (STI)

            	
              4/4/2006

            	
              $642,041

            	
              $628,241

            	
              $13,800

            
	 	 	 	 	 	 
	
              Cornell
                Capital Partners

            	
              NetWorth
                Technologies, Inc. (STI)

            	
              4/4/2006

            	
              $400,000

            	
              $0

            	
              $400,000

            
	 	 	 	 	 	 
	
              Advantage
                Capital Development Corp., Knightsbridge Capital, Montgomery Equity
                Partners, et al.

            	
              Colmena
                Corp.
                (NetWorth Technologies & NetWorth Systems)

            	
              11/24/20041/24/2005

            	
              $625,000

            	
              $52,500

            	
              $572,500

            
	 	 	 	 	 	 
	
              TOTAL

            	 	
              $2,923,798

            	
              $887,941

            	
              $2,035,857

            

    

     

    
      
        
        

      

      
        8

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