EXHIBIT 10.6

 

FUNDS ESCROW AGREEMENT

 

This Funds Escrow Agreement (this “Agreement”) is dated as of July 31, 2008
among MICRO COMPONENT TECHNOLOGY, INC., a Minnesota corporation (the “Company”),
Valens U.S. SPV I, LLC and Valens Offshore SPV I, Ltd. (the “Purchasers”), and
Loeb & Loeb LLP (the “Escrow Agent”).

 

W I T N E S S E T H:

 

WHEREAS, LV Administrative Services, Inc., as administrative and collateral
agent for the Purchasers (the “Agent”), has advised the Escrow Agent that
(a) the Company, the Agent and the Purchasers have entered into a Securities
Purchase Agreement (the “Purchase Agreement”) for the sale by the Company to the
Purchasers of secured term notes (the “Term Notes”), and (b) the Company has
issued to the Purchasers common stock purchase warrants (the “Warrants”) in
connection with the issuance of the Term Notes;

 

WHEREAS, the Company and the Purchasers wish to deliver to the Escrow Agent
copies of the Documents (as hereafter defined) and, following the satisfaction
of all closing conditions relating to the Documents, the Purchasers to deliver
the Escrowed Payment (as hereafter defined), in each case, to be held and
released by Escrow Agent in accordance with the terms and conditions of this
Agreement; and

 

WHEREAS, the Escrow Agent is willing to serve as escrow agent pursuant to the
terms and conditions of this Agreement;

 

NOW THEREFORE, the parties agree as follows:

 

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INTERPRETATION

 

DEFINITIONS.  WHENEVER USED IN THIS AGREEMENT, THE FOLLOWING TERMS SHALL HAVE
THE MEANINGS SET FORTH BELOW.

 

“AGREEMENT” MEANS THIS AGREEMENT, AS AMENDED, MODIFIED AND/OR SUPPLEMENTED FROM
TIME TO TIME BY WRITTEN AGREEMENT AMONG THE PARTIES HERETO.

 

“CLOSING PAYMENT” MEANS (A) A NON-REFUNDABLE PAYMENT TO VALENS CAPITAL
MANAGEMENT, LLC, THE INVESTMENT MANAGER OF THE PURCHASERS (“VCM”) IN AN AMOUNT
EQUAL TO $70,000.00; (II) A NON-REFUNDABLE PAYMENT TO THE PURCHASERS IN AN
AMOUNT EQUAL TO $35,000.00; (III) AN ADVANCE PREPAYMENT DISCOUNT DEPOSIT TO THE
PURCHASERS IN AN AMOUNT EQUAL TO $35,000.00; AND (IV) A NON-REFUNDABLE
STRUCTURING PAYMENT TO VCM IN AN AMOUNT EQUAL TO $30,000.00.

 

“CREDITOR PARTIES” MEANS COLLECTIVELY, THE AGENT AND THE PURCHASERS.

 

“DISBURSEMENT LETTER” MEANS THAT CERTAIN LETTER DELIVERED TO THE ESCROW AGENT BY
THE COMPANY, ACCEPTABLE IN FORM AND SUBSTANCE TO THE AGENT, SETTING FORTH WIRE
INSTRUCTIONS AND AMOUNTS TO BE FUNDED AT THE CLOSING.

 

“DOCUMENTS” MEANS COPIES OF THE DISBURSEMENT LETTER, THE PURCHASE AGREEMENT, THE
TERM NOTES AND THE WARRANTS.

 

“ESCROWED PAYMENT” MEANS $3,500,000.

 

ENTIRE AGREEMENT.  THIS AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT AMONG THE
PARTIES HERETO WITH RESPECT TO THE ARRANGEMENT WITH THE ESCROW AGENT AND
SUPERSEDES ALL PRIOR AGREEMENTS, UNDERSTANDINGS, NEGOTIATIONS AND DISCUSSIONS OF
THE PARTIES, WHETHER ORAL OR WRITTEN WITH RESPECT TO THE ARRANGEMENT WITH THE
ESCROW AGENT.  THERE ARE NO WARRANTIES, REPRESENTATIONS AND OTHER AGREEMENTS
MADE BY THE PARTIES IN CONNECTION WITH THE ARRANGEMENT WITH THE ESCROW AGENT
EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT.

 

EXTENDED MEANINGS.  IN THIS AGREEMENT WORDS IMPORTING THE SINGULAR NUMBER
INCLUDE THE PLURAL AND VICE VERSA; WORDS IMPORTING THE MASCULINE GENDER INCLUDE
THE FEMININE AND NEUTER GENDERS.  THE WORD “PERSON” INCLUDES AN INDIVIDUAL, BODY
CORPORATE, PARTNERSHIP, TRUSTEE OR TRUST OR UNINCORPORATED ASSOCIATION,
EXECUTOR, ADMINISTRATOR OR LEGAL REPRESENTATIVE.

 

WAIVERS AND AMENDMENTS.  THIS AGREEMENT MAY BE AMENDED, MODIFIED, SUPERSEDED,
CANCELLED, RENEWED OR EXTENDED, AND THE TERMS AND CONDITIONS HEREOF MAY BE
WAIVED, IN EACH CASE ONLY BY A WRITTEN INSTRUMENT SIGNED BY ALL PARTIES HERETO,
OR, IN THE CASE OF A WAIVER, BY THE PARTY WAIVING COMPLIANCE.  EXCEPT AS
EXPRESSLY STATED HEREIN, NO DELAY ON THE PART OF ANY PARTY IN EXERCISING ANY
RIGHT, POWER OR PRIVILEGE HEREUNDER SHALL OPERATE AS A WAIVER THEREOF, NOR SHALL
ANY WAIVER ON THE PART OF ANY PARTY OF ANY RIGHT, POWER OR PRIVILEGE HEREUNDER
PRECLUDE ANY OTHER OR FUTURE EXERCISE OF ANY OTHER RIGHT, POWER OR PRIVILEGE
HEREUNDER.

 

HEADINGS.  THE DIVISION OF THIS AGREEMENT INTO ARTICLES, SECTIONS, SUBSECTIONS
AND PARAGRAPHS AND THE INSERTION OF HEADINGS ARE FOR CONVENIENCE OF REFERENCE
ONLY AND SHALL NOT AFFECT THE CONSTRUCTION OR INTERPRETATION OF THIS AGREEMENT.

 

LAW GOVERNING THIS AGREEMENT; CONSENT TO JURISDICTION.  THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  WITH RESPECT TO ANY SUIT,
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR TO THE TRANSACTIONS
CONTEMPLATED HEREBY (“PROCEEDINGS”), EACH PARTY HERETO IRREVOCABLY SUBMITS TO
THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE COUNTY OF NEW YORK, STATE OF NEW
YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE COUNTY OF NEW YORK IN
THE STATE OF NEW YORK.  EACH PARTY HERETO

 

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HEREBY IRREVOCABLY AND UNCONDITIONALLY (A) WAIVES TRIAL BY JURY IN ANY
PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY RELATED COUNTERCLAIM AND
(B) WAIVES ANY OBJECTION WHICH IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF
ANY PROCEEDING BROUGHT IN ANY SUCH COURT, WAIVES ANY CLAIM THAT SUCH PROCEEDINGS
HAVE BEEN BROUGHT IN AN INCONVENIENT FORUM AND FURTHER WAIVES THE RIGHT TO
OBJECT, WITH RESPECT TO SUCH PROCEEDINGS, THAT SUCH COURT DOES NOT HAVE
JURISDICTION OVER SUCH PARTY.  AS BETWEEN THE COMPANY AND THE PURCHASERS, THE
PREVAILING PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ITS
REASONABLE ATTORNEYS’ FEES AND COSTS.  IN THE EVENT THAT ANY PROVISION OF THIS
AGREEMENT IS DETERMINED BY A COURT OF COMPETENT JURISDICTION TO BE INVALID OR
UNENFORCEABLE, THEN THE REMAINDER OF THIS AGREEMENT SHALL NOT BE AFFECTED AND
SHALL REMAIN IN FULL FORCE AND EFFECT.

 

CONSTRUCTION.  EACH PARTY ACKNOWLEDGES THAT ITS LEGAL COUNSEL PARTICIPATED IN
THE PREPARATION OF THIS AGREEMENT AND, THEREFORE, STIPULATES THAT THE RULE OF
CONSTRUCTION THAT AMBIGUITIES ARE TO BE RESOLVED AGAINST THE DRAFTING PARTY
SHALL NOT BE APPLIED IN THE INTERPRETATION OF THIS AGREEMENT TO FAVOR ANY PARTY
AGAINST THE OTHER.

 

APPOINTMENT OF AND DELIVERIES TO THE ESCROW AGENT

 

APPOINTMENT.  THE COMPANY AND THE PURCHASERS HEREBY IRREVOCABLY DESIGNATE AND
APPOINT THE ESCROW AGENT AS THEIR ESCROW AGENT FOR THE PURPOSES SET FORTH
HEREIN, AND THE ESCROW AGENT BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT
HEREBY ACCEPTS SUCH APPOINTMENT UNDER THE TERMS AND CONDITIONS SET FORTH HEREIN.

 

COPIES OF DOCUMENTS TO ESCROW AGENT.  ON OR ABOUT THE DATE HEREOF, THE CREDITOR
PARTIES AND THE COMPANY SHALL DELIVER TO THE ESCROW AGENT COPIES OF THE
DOCUMENTS EXECUTED BY SUCH PARTIES.

 

DELIVERY OF ESCROWED PAYMENT TO ESCROW AGENT.  FOLLOWING THE SATISFACTION OF ALL
CLOSING CONDITIONS RELATING TO THE DOCUMENTS (OTHER THAN THE FUNDING OF THE
ESCROWED PAYMENT), THE PURCHASERS SHALL DELIVER TO THE ESCROW AGENT THE ESCROWED
PAYMENT.  AT SUCH TIME, THE ESCROW AGENT SHALL HOLD THE ESCROWED PAYMENT AS
AGENT FOR THE COMPANY, SUBJECT TO THE TERMS AND CONDITIONS OF THIS AGREEMENT.

 

INTENTION TO CREATE ESCROW OVER THE ESCROWED PAYMENT.  THE PURCHASERS AND THE
COMPANY INTEND THAT THE ESCROWED PAYMENT SHALL BE HELD IN ESCROW BY THE ESCROW
AGENT AND RELEASED FROM ESCROW BY THE ESCROW AGENT ONLY IN ACCORDANCE WITH THE
TERMS AND CONDITIONS OF THIS AGREEMENT.

 

RELEASE OF ESCROW

 

RELEASE OF ESCROW.  SUBJECT TO THE PROVISIONS OF SECTION 4.2, THE ESCROW AGENT
SHALL RELEASE THE ESCROWED PAYMENT FROM ESCROW AS FOLLOWS:

 

UPON RECEIPT BY THE ESCROW AGENT OF (I) ORAL INSTRUCTIONS FROM DAVID GRIN AND/OR
EUGENE GRIN (EACH OF WHOM IS A PRINCIPAL OF THE PURCHASERS) CONSENTING TO THE
RELEASE OF THE ESCROWED PAYMENT FROM ESCROW IN ACCORDANCE WITH THE DISBURSEMENT
LETTER FOLLOWING THE ESCROW AGENT’S RECEIPT OF THE ESCROWED PAYMENT, (II) THE
DISBURSEMENT LETTER, AND (III) THE ESCROWED PAYMENT, THE ESCROWED PAYMENT SHALL
PROMPTLY BE DISBURSED IN ACCORDANCE WITH THE DISBURSEMENT LETTER.  THE
DISBURSEMENT LETTER SHALL INCLUDE, WITHOUT LIMITATION, ESCROW AGENT’S
AUTHORIZATION TO RETAIN FROM THE ESCROWED PAYMENT ESCROW AGENT’S FEE FOR

 

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ACTING AS ESCROW AGENT HEREUNDER AND THE CLOSING PAYMENT FOR DELIVERY TO VALENS
CAPITAL MANAGEMENT, LLC IN ACCORDANCE WITH THE DISBURSEMENT LETTER.

 

UPON RECEIPT BY THE ESCROW AGENT OF A FINAL AND NON-APPEALABLE JUDGMENT, ORDER,
DECREE OR AWARD OF A COURT OF COMPETENT JURISDICTION (A “COURT ORDER”) RELATING
TO THE ESCROWED PAYMENT, THE ESCROW AGENT SHALL REMIT THE ESCROWED PAYMENT IN
ACCORDANCE WITH THE COURT ORDER.  ANY COURT ORDER SHALL BE ACCOMPANIED BY AN
OPINION OF COUNSEL FOR THE PARTY PRESENTING THE COURT ORDER TO THE ESCROW AGENT
(WHICH OPINION SHALL BE SATISFACTORY TO THE ESCROW AGENT) TO THE EFFECT THAT THE
COURT ISSUING THE COURT ORDER IS A COURT OF COMPETENT JURISDICTION AND THAT THE
COURT ORDER IS FINAL AND NON-APPEALABLE.

 

ACKNOWLEDGEMENT OF COMPANY AND PURCHASERS; DISPUTES.  THE COMPANY AND THE
PURCHASERS ACKNOWLEDGE THAT THE ONLY TERMS AND CONDITIONS UPON WHICH THE
ESCROWED PAYMENT ARE TO BE RELEASED FROM ESCROW ARE AS SET FORTH IN SECTIONS 3
AND 4 OF THIS AGREEMENT.  THE COMPANY AND THE PURCHASERS REAFFIRM THEIR
AGREEMENT TO ABIDE BY THE TERMS AND CONDITIONS OF THIS AGREEMENT WITH RESPECT TO
THE RELEASE OF THE ESCROWED PAYMENT.  ANY DISPUTE WITH RESPECT TO THE RELEASE OF
THE ESCROWED PAYMENT SHALL BE RESOLVED PURSUANT TO SECTION 4.2 OR BY WRITTEN
AGREEMENT BETWEEN THE COMPANY AND THE PURCHASERS.

 

CONCERNING THE ESCROW AGENT

 

DUTIES AND RESPONSIBILITIES OF THE ESCROW AGENT.  THE ESCROW AGENT’S DUTIES AND
RESPONSIBILITIES SHALL BE SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:

 

THE PURCHASERS AND THE COMPANY ACKNOWLEDGE AND AGREE THAT THE ESCROW AGENT
(I) SHALL NOT BE REQUIRED TO INQUIRE INTO WHETHER THE CREDITOR PARTIES, THE
COMPANY OR ANY OTHER PARTY IS ENTITLED TO RECEIPT OF ANY DOCUMENT OR ALL OR ANY
PORTION OF THE ESCROWED PAYMENT; (II) SHALL NOT BE CALLED UPON TO CONSTRUE OR
REVIEW ANY DOCUMENT OR ANY OTHER DOCUMENT, INSTRUMENT OR AGREEMENT ENTERED INTO
IN CONNECTION THEREWITH; (III) SHALL BE OBLIGATED ONLY FOR THE PERFORMANCE OF
SUCH DUTIES AS ARE SPECIFICALLY ASSUMED BY THE ESCROW AGENT PURSUANT TO THIS
AGREEMENT; (IV) MAY RELY ON AND SHALL BE PROTECTED IN ACTING OR REFRAINING FROM
ACTING UPON ANY WRITTEN NOTICE, INSTRUCTION, INSTRUMENT, STATEMENT, REQUEST OR
DOCUMENT FURNISHED TO IT HEREUNDER AND BELIEVED BY THE ESCROW AGENT IN GOOD
FAITH TO BE GENUINE AND TO HAVE BEEN SIGNED OR PRESENTED BY THE PROPER PERSON OR
PARTY, WITHOUT BEING REQUIRED TO DETERMINE THE AUTHENTICITY OR CORRECTNESS OF
ANY FACT STATED THEREIN OR THE PROPRIETY OR VALIDITY OR THE SERVICE THEREOF;
(V) MAY ASSUME THAT ANY PERSON PURPORTING TO GIVE NOTICE OR MAKE ANY STATEMENT
OR EXECUTE ANY DOCUMENT IN CONNECTION WITH THE PROVISIONS HEREOF HAS BEEN DULY
AUTHORIZED TO DO SO; (VI) SHALL NOT BE RESPONSIBLE FOR THE IDENTITY, AUTHORITY
OR RIGHTS OF ANY PERSON, FIRM OR COMPANY EXECUTING OR DELIVERING OR PURPORTING
TO EXECUTE OR DELIVER THIS AGREEMENT OR ANY DOCUMENT OR ANY FUNDS DEPOSITED
HEREUNDER OR ANY ENDORSEMENT THEREON OR ASSIGNMENT THEREOF; (VII) SHALL NOT BE
UNDER ANY DUTY TO GIVE THE PROPERTY HELD BY ESCROW AGENT HEREUNDER ANY GREATER
DEGREE OF CARE THAN ESCROW AGENT GIVES ITS OWN SIMILAR PROPERTY; AND (VIII) MAY
CONSULT COUNSEL SATISFACTORY TO ESCROW AGENT (INCLUDING, WITHOUT LIMITATION,
LOEB & LOEB LLP OR SUCH OTHER COUNSEL OF ESCROW AGENT’S CHOOSING), THE OPINION
OF SUCH COUNSEL TO BE FULL AND COMPLETE AUTHORIZATION AND PROTECTION IN RESPECT
OF ANY ACTION TAKEN, SUFFERED OR OMITTED BY ESCROW AGENT HEREUNDER IN GOOD FAITH
AND IN ACCORDANCE WITH THE OPINION OF SUCH COUNSEL.

 

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THE PURCHASERS AND THE COMPANY ACKNOWLEDGE THAT THE ESCROW AGENT IS ACTING
SOLELY AS A STAKEHOLDER AT THEIR REQUEST AND THAT THE ESCROW AGENT SHALL NOT BE
LIABLE FOR ANY ACTION TAKEN BY ESCROW AGENT IN GOOD FAITH AND BELIEVED BY ESCROW
AGENT TO BE AUTHORIZED OR WITHIN THE RIGHTS OR POWERS CONFERRED UPON ESCROW
AGENT BY THIS AGREEMENT.  THE PURCHASERS AND THE COMPANY HEREBY, JOINTLY AND
SEVERALLY, INDEMNIFY AND HOLD HARMLESS THE ESCROW AGENT AND ANY OF ESCROW
AGENT’S PARTNERS, EMPLOYEES, AGENTS AND REPRESENTATIVES FROM AND AGAINST ANY AND
ALL ACTIONS TAKEN OR OMITTED TO BE TAKEN BY ESCROW AGENT OR ANY OF THEM
HEREUNDER AND ANY AND ALL CLAIMS, LOSSES, LIABILITIES, COSTS, DAMAGES AND
EXPENSES SUFFERED AND/OR INCURRED BY THE ESCROW AGENT ARISING IN ANY MANNER
WHATSOEVER OUT OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR ANY
TRANSACTION RELATED IN ANY WAY HERETO, INCLUDING THE FEES OF OUTSIDE COUNSEL AND
OTHER COSTS AND EXPENSES OF DEFENDING ITSELF AGAINST ANY CLAIMS, LOSSES,
LIABILITIES, COSTS, DAMAGES AND EXPENSES ARISING IN ANY MANNER WHATSOEVER OUT
THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT AND/OR ANY TRANSACTION RELATED
IN ANY WAY HERETO, EXCEPT FOR SUCH CLAIMS, LOSSES, LIABILITIES, COSTS, DAMAGES
AND EXPENSES INCURRED BY REASON OF THE ESCROW AGENT’S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.  THE ESCROW AGENT SHALL OWE A DUTY ONLY TO THE PURCHASERS
AND THE COMPANY UNDER THIS AGREEMENT AND TO NO OTHER PERSON.

 

THE PURCHASERS AND THE COMPANY SHALL JOINTLY AND SEVERALLY REIMBURSE THE ESCROW
AGENT FOR ITS REASONABLE OUT-OF-POCKET EXPENSES (INCLUDING COUNSEL FEES (WHICH
COUNSEL MAY BE LOEB & LOEB LLP OR SUCH OTHER COUNSEL OF THE ESCROW AGENT’S
CHOOSING) INCURRED IN CONNECTION WITH THE PERFORMANCE OF ITS DUTIES AND
RESPONSIBILITIES HEREUNDER, WHICH SHALL NOT (SUBJECT TO SECTION 4.1(B)) EXCEED
$1,500.

 

THE ESCROW AGENT MAY AT ANY TIME RESIGN AS ESCROW AGENT HEREUNDER BY GIVING FIVE
(5) BUSINESS DAYS PRIOR WRITTEN NOTICE OF RESIGNATION TO THE PURCHASERS AND THE
COMPANY.  PRIOR TO THE EFFECTIVE DATE OF RESIGNATION AS SPECIFIED IN SUCH
NOTICE, THE PURCHASERS AND COMPANY WILL ISSUE TO THE ESCROW AGENT A JOINT
INSTRUCTION AUTHORIZING DELIVERY OF THE DOCUMENTS AND THE ESCROWED PAYMENT TO A
SUBSTITUTE ESCROW AGENT SELECTED BY THE PURCHASERS AND THE COMPANY.  IF NO
SUCCESSOR ESCROW AGENT IS NAMED BY THE PURCHASERS AND THE COMPANY, THE ESCROW
AGENT MAY APPLY TO A COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK
FOR APPOINTMENT OF A SUCCESSOR ESCROW AGENT, AND DEPOSIT THE DOCUMENTS AND THE
ESCROWED PAYMENT WITH THE CLERK OF ANY SUCH COURT, AND/OR OTHERWISE COMMENCE AN
INTERPLEADER OR SIMILAR ACTION FOR A DETERMINATION OF WHERE TO DEPOSIT THE SAME.

 

THE ESCROW AGENT DOES NOT HAVE AND WILL NOT HAVE ANY INTEREST IN THE DOCUMENTS
AND THE ESCROWED PAYMENT, BUT IS SERVING ONLY AS ESCROW AGENT, HAVING ONLY
POSSESSION THEREOF.

 

THE ESCROW AGENT SHALL NOT BE LIABLE FOR ANY ACTION TAKEN OR OMITTED BY IT IN
GOOD FAITH AND REASONABLY BELIEVED BY IT TO BE AUTHORIZED HEREBY OR WITHIN THE
RIGHTS OR POWERS CONFERRED UPON IT HEREUNDER, NOR FOR ACTION TAKEN OR OMITTED BY
IT IN GOOD FAITH, AND IN ACCORDANCE WITH ADVICE OF COUNSEL (WHICH COUNSEL MAY BE
LOEB & LOEB LLP OR SUCH OTHER COUNSEL OF THE ESCROW AGENT’S CHOOSING), AND SHALL
NOT BE LIABLE FOR ANY MISTAKE OF FACT OR ERROR OF JUDGMENT OR FOR ANY ACTS OR
OMISSIONS OF ANY KIND EXCEPT TO THE EXTENT ANY SUCH LIABILITY AROSE FROM ITS OWN
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE.

 

THIS AGREEMENT SETS FORTH EXCLUSIVELY THE DUTIES OF THE ESCROW AGENT WITH
RESPECT TO ANY AND ALL MATTERS PERTINENT THERETO AND NO IMPLIED DUTIES OR
OBLIGATIONS SHALL BE READ INTO THIS AGREEMENT.

 

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THE ESCROW AGENT SHALL BE PERMITTED TO ACT AS COUNSEL FOR THE CREDITOR PARTIES
OR THE COMPANY, AS THE CASE MAY BE, IN ANY DISPUTE AS TO THE DISPOSITION OF THE
DOCUMENTS AND THE ESCROWED PAYMENT, IN ANY OTHER DISPUTE BETWEEN THE CREDITOR
PARTIES AND THE COMPANY, WHETHER OR NOT THE ESCROW AGENT IS THEN HOLDING THE
DOCUMENTS AND/OR THE ESCROWED PAYMENT AND CONTINUES TO ACT AS THE ESCROW AGENT
HEREUNDER.

 

THE PROVISIONS OF THIS SECTION 4.1 SHALL SURVIVE THE RESIGNATION OF THE ESCROW
AGENT OR THE TERMINATION OF THIS AGREEMENT.

 

DISPUTE RESOLUTION; JUDGMENTS.  RESOLUTION OF DISPUTES ARISING UNDER THIS
AGREEMENT SHALL BE SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS:

 

IF ANY DISPUTE SHALL ARISE WITH RESPECT TO THE DELIVERY, OWNERSHIP, RIGHT OF
POSSESSION OR DISPOSITION OF THE DOCUMENTS AND/OR THE ESCROWED PAYMENT, OR IF
THE ESCROW AGENT SHALL IN GOOD FAITH BE UNCERTAIN AS TO ITS DUTIES OR RIGHTS
HEREUNDER, THE ESCROW AGENT SHALL BE AUTHORIZED, WITHOUT LIABILITY TO ANYONE, TO
(I) REFRAIN FROM TAKING ANY ACTION OTHER THAN TO CONTINUE TO HOLD THE DOCUMENTS
AND THE ESCROWED PAYMENT PENDING RECEIPT OF A JOINT INSTRUCTION FROM THE
PURCHASERS AND THE COMPANY, (II) COMMENCE AN INTERPLEADER OR SIMILAR ACTION,
SUIT OR PROCEEDING FOR THE RESOLUTION OF ANY SUCH DISPUTE; AND/OR (III) DEPOSIT
THE DOCUMENTS AND THE ESCROWED PAYMENT WITH ANY COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEW YORK, IN WHICH EVENT THE ESCROW AGENT SHALL GIVE WRITTEN
NOTICE THEREOF TO THE PURCHASERS AND THE COMPANY AND SHALL THEREUPON BE RELIEVED
AND DISCHARGED FROM ALL FURTHER OBLIGATIONS PURSUANT TO THIS AGREEMENT.  THE
ESCROW AGENT MAY, BUT SHALL BE UNDER NO DUTY TO, INSTITUTE OR DEFEND ANY LEGAL
PROCEEDINGS WHICH RELATE TO THE DOCUMENTS AND THE ESCROWED PAYMENT.  THE ESCROW
AGENT SHALL HAVE THE RIGHT TO RETAIN COUNSEL IF IT BECOMES INVOLVED IN ANY
DISAGREEMENT, DISPUTE OR LITIGATION ON ACCOUNT OF THIS AGREEMENT OR OTHERWISE
DETERMINES THAT IT IS NECESSARY TO CONSULT COUNSEL WHICH SUCH COUNSEL MAY BE
LOEB & LOEB LLP OR SUCH OTHER COUNSEL OF THE ESCROW AGENT’S CHOOSING.

 

THE ESCROW AGENT IS HEREBY EXPRESSLY AUTHORIZED TO COMPLY WITH AND OBEY ANY
COURT ORDER.  IN CASE THE ESCROW AGENT OBEYS OR COMPLIES WITH A COURT ORDER, THE
ESCROW AGENT SHALL NOT BE LIABLE TO THE CREDITOR PARTIES, THE COMPANY OR ANY
OTHER PERSON, FIRM, COMPANY OR ENTITY BY REASON OF SUCH COMPLIANCE.

 

GENERAL MATTERS

 

TERMINATION.  THIS ESCROW SHALL TERMINATE UPON DISBURSEMENT OF THE ESCROWED
PAYMENT IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT OR EARLIER UPON THE
AGREEMENT IN WRITING OF THE PURCHASERS AND THE COMPANY OR RESIGNATION OF THE
ESCROW AGENT IN ACCORDANCE WITH THE TERMS HEREOF.

 

NOTICES.  ALL NOTICES, REQUESTS, DEMANDS AND OTHER COMMUNICATIONS REQUIRED OR
PERMITTED HEREUNDER SHALL BE IN WRITING AND SHALL BE DEEMED TO HAVE BEEN DULY
GIVEN ONE (1) DAY AFTER BEING SENT BY TELECOPY (WITH COPY DELIVERED BY OVERNIGHT
COURIER, REGULAR OR CERTIFIED MAIL):

 

If to the Company, to:

 

Micro Component Technology, Inc.

 

 

2340 West County Road C

 

 

St. Paul, Minnesota 55113-2528

 

 

Attention:Chief Financial Officer

 

 

Fax: (651) 697-4200

 

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With a copy to:

 

Best & Flanagan, LLP

 

 

225 South Sixth St., Suite 4000,

 

 

Minneapolis, Minnesota 55402

 

 

Attention: James C. Diracles, Esq.

 

 

Fax: (612) 339-5897

 

 

 

If to the Purchasers, to:

 

c/o Valens Capital Management LLC

 

 

335 Madison Avenue, 10th Floor

 

 

New York, New York 10017

 

 

Attention: Portfolio Services

 

 

Fax: 212-581-5037

 

 

 

If to the Escrow Agent, to:

 

Loeb & Loeb LLP

 

 

345 Park Avenue

 

 

New York, New York 10154

 

 

Attention: Scott J. Giordano, Esq.

 

 

Fax: (212) 407-4990

 

or to such other address as any of them shall give to the others by notice made
pursuant to this Section 5.2.

 

INTEREST.  THE ESCROWED PAYMENT SHALL NOT BE HELD IN AN INTEREST BEARING ACCOUNT
NOR WILL INTEREST BE PAYABLE IN CONNECTION THEREWITH.

 

ASSIGNMENT; BINDING AGREEMENT.  NEITHER THIS AGREEMENT NOR ANY RIGHT OR
OBLIGATION HEREUNDER SHALL BE ASSIGNABLE BY ANY PARTY WITHOUT THE PRIOR WRITTEN
CONSENT OF THE OTHER PARTIES HERETO.  THIS AGREEMENT SHALL INURE TO THE BENEFIT
OF AND BE BINDING UPON THE PARTIES HERETO AND THEIR RESPECTIVE LEGAL
REPRESENTATIVES, SUCCESSORS AND ASSIGNS.

 

INVALIDITY.  IN THE EVENT THAT ANY ONE OR MORE OF THE PROVISIONS CONTAINED
HEREIN, OR THE APPLICATION THEREOF IN ANY CIRCUMSTANCE, IS HELD INVALID,
ILLEGAL, OR UNENFORCEABLE IN ANY RESPECT FOR ANY REASON, THE VALIDITY, LEGALITY
AND ENFORCEABILITY OF ANY SUCH PROVISION IN EVERY OTHER RESPECT AND OF THE
REMAINING PROVISIONS CONTAINED HEREIN SHALL NOT BE IN ANY WAY IMPAIRED THEREBY,
IT BEING INTENDED THAT ALL OF THE RIGHTS AND PRIVILEGES OF THE PARTIES HERETO
SHALL BE ENFORCEABLE TO THE FULLEST EXTENT PERMITTED BY LAW.

 

COUNTERPARTS/EXECUTION.  THIS AGREEMENT MAY BE EXECUTED IN ANY NUMBER OF
COUNTERPARTS AND BY DIFFERENT SIGNATORIES HERETO ON SEPARATE COUNTERPARTS, EACH
OF WHICH, WHEN SO EXECUTED, SHALL BE DEEMED AN ORIGINAL, BUT ALL SUCH
COUNTERPARTS SHALL CONSTITUTE BUT ONE AND THE SAME AGREEMENT.  THIS AGREEMENT
MAY BE EXECUTED BY FACSIMILE OR ELECTRONIC TRANSMISSION.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Funds Escrow Agreement
as of the date and year first above written.

 

 

 

COMPANY:

 

 

 

 

 

 

 

 

MICRO COMPONENT TECHNOLOGY, INC.

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

Roger E. Gower

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

 

 

PURCHASERS:

 

 

 

 

 

 

 

 

 

VALENS U.S. SPV I, LLC

 

 

 

 

 

 

 

 

 

By:

Valens Capital Management,

 

 

its investment manager

 

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

VALENS OFFSHORE SPV I, LTD.

 

 

 

 

 

 

 

 

 

By:

Valens Capital Management,

 

 

its investment manager

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

ESCROW AGENT:

 

 

 

 

 

 

 

 

 

LOEB & LOEB LLP

 

BY:

 

 

 

NAME:

 

 

TITLE:

 

 

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