**EXHIBIT 10AA**

** **

**EXECUTION VERSION**

** **

**MICRO COMPONENT TECHNOLOGY, INC.**

** **

**SECURITIES PURCHASE AGREEMENT**

** **

**March 9,2004**

** **

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**TABLE OF CONTENTS**

** **
| 1.     | Agreement to Sell and  Purchase                  |                                           |
|--------|--------------------------------------------------|------------------------------------------------|
| 2.     | Fees                                             |                                           |
| 3.     | Closing, Delivery and Payment.                   |                                           |
|   | 3.1                                              | Closing                                        |   |
|   | 3.2                                              | Delivery                                       |   |
| 4.     | Representations and  Warranties of the Company   |                                           |
|   | 4.1                                              | Organization, Good Standing and  Qualification |   |
|   | 4.2                                              | Subsidiaries                                   |   |
|   | 4.3                                              | Capitalization; Voting Rights                  |   |
|   | 4.4                                              | Authorization;  Binding Obligations            |   |
|   | 4.5                                              | Liabilities                                    |   |
|   | 4.6                                              | Agreements;  Action                            |   |
|   | 4.7                                              | Obligations  to Related Parties                |   |
|   | 4.8                                              | Changes                                        |   |
|   | 4.9                                              | Title to Properties and  Assets; Liens, Etc.   |   |
|   | 4.10                                             | Intellectual  Property                         |   |
|   | 4.11                                             | Compliance  with Other Instruments             |   |
|   | 4.12                                             | Litigation                                     |   |
|   | 4.13                                             | Tax  Returns and Payments                      |   |
|   | 4.14                                             | Employees                                      |   |
|   | 4.15                                             | Registration Rights and  Voting Rights         |   |
|   | 4.16                                             | Compliance  with Laws; Permits                 |   |
|   | 4.17                                             | Environmental and Safety  Laws                 |   |
|   | 4.18                                             | Valid Offering                                 |   |
|   | 4.19                                             | Full Disclosure                                |   |
|   | 4.20                                             | Insurance                                      |   |
|   | 4.21                                             | SEC Reports                                    |   |
|   | 4.22                                             | Listing                                        |   |
|   | 4.23                                             | No  Integrated Offering                        |   |
|   | 4.24                                             | Stop Transfer                                  |   |
|   | 4.25                                             | Dilution.                                      |   |
|   | 4.26                                             | Patriot Act.                                   |   |
| 5.     | Representations  and Warranties of the Purchaser |                                           |
|   | 5.1                                              | No Shorting                                    |   |
|   | 5.2                                              | Requisite Power and  Authority                 |   |
|   | 5.3                                              | Investment Representations                     |   |
|   | 5.4                                              | Purchaser  Bears Economic Risk                 |   |
|   | 5.5                                              | Acquisition  for Own Account                   |   |
|   | 5.6                                              | Purchaser Can Protect Its  Interest            |   |
|   | 5.7                                              | Accredited  Investor                           |   |
|   | 5.8                                              | Legends                                        |   |
| 6.     | Covenants  of the Company                        |                                           |
|   | 6.1                                              | Stop-Orders                                    |   |
|   | 6.2                                              | Listing                                        |   |
|   | 6.3                                              | Market  Regulations                            |   |
|   | 6.4                                              | Reporting  Requirements                        |   |
|   | 6.5                                              | Use of Funds                                   |   |
|   | 6.6                                              | Access  to Facilities                          |   |
|   | 6.7                                              | Taxes                                          |   |
|        |                                                  |                                                |  |  |  |  |

 

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|   | 6.8                                    | Insurance                                                         |   |
|--------|----------------------------------------|-------------------------------------------------------------------|--------|
|   | 6.9                                    | Intellectual Property                                             |   |
|   | 6.10                                   | Properties                                                        |   |
|   | 6.11                                   | Confidentiality                                                   |   |
|   | 6.12                                   | Required Approvals                                                |   |
|   | 6.13                                   | Reissuance of Securities                                          |   |
|   | 6.14                                   | Opinion                                                           |   |
| 7.     | Covenants of the Purchaser             |                                                              |
|   | 7.1                                    | Confidentiality                                                   |   |
|   | 7.2                                    | Non-Public  Information                                           |   |
| 8.     |                                   | Covenants of  the Company and Purchaser Regarding Indemnification |   |
|   | 8.1                                    | Company  Indemnification                                          |   |
|   | 8.2                                    | Purchaser’s Indemnification                                  |   |
|   | 8.3                                    | Procedures                                                        |   |
| 9.     | Conversion of Convertible  Note.       |                                                              |
| 10.    | Registration  Rights, Indemnification. |                                                              |
|   | 10.1                                   | Registration Rights Granted                                       |   |
|   | 10.2                                   | Indemnification                                                   |   |
|   | 10.3                                   | Offering  Restrictions                                            |   |
| 11.    | Miscellaneous                          |                                                              |
|   | 11.1                                   | Governing Law                                                     |   |
|   | 11.2                                   | Survival                                                          |   |
|   | 11.3                                   | Successors                                                        |   |
|   | 11.4                                   | Entire Agreement                                                  |   |
|   | 11.5                                   | Severability                                                      |   |
|   | 11.6                                   | Amendment and Waiver                                              |   |
|   | 11.7                                   | Delays or  Omissions                                              |   |
|   | 11.8                                   | Notices                                                           |   |
|   | 11.9                                   | Attorneys’ Fees                                              |   |
|   | 11.10                                  | Titles and Subtitles                                              |   |
|   | 11.11                                  | Facsimile  Signatures; Counterparts                               |   |
|   | 11.12                                  | Broker’s Fees                                                |   |
|   | 11.13                                  | Construction                                                      |   |
|        |                                        |                                                                   |        |  |

 
| LIST OF EXHIBITS              |
|-------------------------------|
| Form of Convertible Term Note | Exhibit A |
| Form of Opinion               | Exhibit B |
| Form of Escrow Agreement      | Exhibit C |

 

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**SECURITIES PURCHASE AGREEMENT**

** **

THIS SECURITIES PURCHASE AGREEMENT (this“Agreement”) is made and entered into as of March 9, 2004, by and betweenMICRO COMPONENT TECHNOLOGY, INC., a Minnesota corporation (the “Company”), andLaurus Master Fund, Ltd., a Cayman Islands company (the “Purchaser”).

 

**RECITALS**

** **

WHEREAS, the Company has authorized the sale to thePurchaser of Convertible Term Note in the aggregate principal amount of TwoMillion Dollars $2,000,000.00 (the “Note”), which Note is convertible intoshares of the Company’s common stock, $0.01 par value per share (the “CommonStock”) at a fixed conversion price of$[             ]per share of Common Stock (“Fixed Conversion Price”);

 

WHEREAS, Purchaser desires to purchase the Note onthe terms and conditions set forth herein; and

 

WHEREAS, the Company desires to issue and sell theNote to Purchaser on the terms and conditions set forth herein.

 

**AGREEMENT**

** **

NOW, THEREFORE, in consideration of the foregoingrecitals and the mutual promises, representations, warranties and covenantshereinafter set forth and for other good and valuable consideration, thereceipt and sufficiency of which are hereby acknowledged, the parties heretoagree as follows:

 

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Agreement to Sell and Purchase.  Pursuant to the terms and conditions set forth in this Agreement,on the Closing Date (as defined in Section 3), the Company agrees to sellto the Purchaser, and the Purchaser hereby agrees to purchase from the Company,a Note in the aggregate amount of $2,000,000 convertible in accordance with theterms thereof into shares of the Company’s Common Stock in accordance with theterms of the Note and this Agreement. The Note purchased on the Closing Dateshall be known as the “Offering.” A form of the Note is annexed hereto asExhibit A. The Note will have a Maturity Date thirty six (36) months from thedate hereof. Collectively, the Note and Common Stock issuable upon conversionof the Note are referred to as the “Securities.”

 

Fees.  On the Closing Date:

 

### **Subject to the terms ofSection 2(d) below, the Company shall pay to Laurus Capital Management,LLC, manager of Purchaser a closing payment in an amount equal to three andone-half percent (3.50%) of $2,000,000 or $70,000. The foregoing fee isreferred to herein as the “Closing Payment.”**

### ** **

### **The Company shall reimburse thePurchaser for its reasonable legal fees for services rendered to the Purchaserin preparation of this Agreement and the Related Agreements (as hereinafterdefined), and expenses in connection with the Purchaser’s due diligence reviewof the Company and relevant matters. Legal expenses shall be $25,250.  Amounts required to be paid hereunder willbe paid at the Closing.**

### ** **

### **The Closing Payment, legal fees anddue diligence fees (net of deposits previously paid by the Company shall bepaid at closing out of funds held pursuant to a Funds Escrow Agreement of evendate herewith among the Company, Purchaser, and an Escrow Agent (the “FundsEscrow Agreement”) and a disbursement letter (the “Disbursement Letter”).**

### ** **

# **Closing**, Delivery and Payment.

 

Closing.  Subject to the terms and conditions herein, the closing of thetransactions contemplated hereby (the “Closing”), shall take place on the datehereof, at such time or place as the Company and Purchaser may mutually agree(such date is hereinafter referred to as the “Closing Date”).

 

Delivery.  Pursuant to the Funds Escrow Agreement in the form attachedhereto as Exhibit C, at the Closing on the Closing Date, the Company willdeliver to the Purchaser, among other things, a Note in the form attached asExhibit A representing the principal amount of $2,000,000 and the Purchaserwill deliver to the Company, among other things, the amounts set forth in theDisbursement Letter by certified funds or wire transfer.

 

Representations and Warranties of the Company.  TheCompany hereby represents and warrants to the Purchaser as of the date of thisAgreement as set forth below which disclosures are supplemented by, and subjectto the Company’s filings under the Securities Exchange Act of 1934(collectively, the “Exchange Act Filings”), copies of which have been providedto the Purchaser.

 

Organization, Good Standing and Qualification.  The Company is a corporation duly organized,validly existing and in good standing under the laws of the State of Minnesota.The Company has the corporate power and authority to own and operate itsproperties and assets, to execute and deliver this Agreement, and the Note tobe issued in connection with this Agreement, the

 

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Security Agreement relating to the Note datedas of March 9, 2004 between the Company and the Purchaser, theRegistration Rights Agreement relating to the Securities dated as ofMarch 9, 2004 between the Company and the Purchaser and all otheragreements referred to herein (collectively, the “Related Agreements”), toissue and sell the Note and the shares of Common Stock issuable upon conversionof the Note (the “Note Shares”), and to carry out the provisions of this Agreementand the Related Agreements and to carry on its business as presentlyconducted.  The Company is dulyqualified and is authorized to do business and is in good standing as a foreigncorporation in all jurisdictions in which the nature of its activities and ofits properties (both owned and leased) makes such qualification necessary,except for those jurisdictions in which failure to do so would not have a materialadverse effect on the Company or its business.

 

Subsidiaries.  TheCompany owns a majority of the issued and outstanding capital stock of all itssubsidiaries as listed in Schedule 4.2 hereof.  The Company does not own or control any equity security or otherinterest of any other corporation, limited partnership or other business entity.

 

Capitalization; Voting Rights.

 

### **The authorized capital stock of theCompany, as of the date hereof consists of 41,000,000 shares, of which40,000,000 are shares of Common Stock, par value $0.01 per share, 24,784,776shares of which are issued and outstanding as of March 5, 2004, and1,000,000 are shares of preferred stock, par value $0.01 per of share, none ofwhich are issued and outstanding.**

### ** **

### **Except as disclosed onSchedule 4.3 and other than: (i)  2,578,555 and 120,000 sharesof Common Stock reserved for issuance upon exercise of opition granted or to begranted, respectively, under the Company’s stock option plans; (ii) 283,350shares of Common Stock issuable upon exercise of warrants issued by theCompany; and (iii) the shares which may be granted pursuant to this Agreementand the Related Agreements, there are no other outstanding options, warrants,rights (including conversion or preemptive rights and rights of first refusal),proxy or stockholder agreements, or arrangements or agreements of any kind for thepurchase or acquisition from the Company of any of its securities. Except asdisclosed on Schedule 4.3, neither the offer, issuance or sale of any ofthe Note, or the issuance of any of the Note Shares, nor the consummation ofany transaction contemplated hereby will result in a change in the price ornumber of any securities of the Company outstanding, under anti-dilution orother similar provisions contained in or affecting any such securities.**

### ** **

### **All issued and outstanding sharesof the Company’s Common Stock:  (i) havebeen duly authorized and validly issued and are fully paid and nonassessable;and (ii) were issued in compliance with all applicable state and federal lawsconcerning the issuance of securities.**

### ** **

### **The rights, preferences, privilegesand restrictions of the shares of the Common Stock are as stated in theCompany’s Certificate of Incorporation (the “Charter”).  The Note Shares have been duly and validlyreserved for issuance. When issued in compliance with the provisions of thisAgreement and the Company’s Charter, the Securities will be validly issued,fully paid and nonassessable, and will be free of any liens or encumbrances;provided, however, that the Securities may be subject to restrictions ontransfer under state and/or federal securities laws as set forth herein or asotherwise required by such laws at the time a transfer is proposed.**

### ** **

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Authorization; Binding Obligations.  All corporate action on the part of the Company, its officers anddirectors necessary for the authorization of this Agreement and the RelatedAgreements, the performance of all obligations of the Company hereunder at theClosing and, the authorization, sale, issuance and delivery of the Note havebeen taken or will be taken prior to the Closing. The Agreement and the RelatedAgreements, when executed and delivered and to the extent it is a partythereto, will be valid and binding obligations of the Company enforceable inaccordance with their terms, except:

 

### **as limited by applicablebankruptcy, insolvency, reorganization, moratorium or other laws of generalapplication affecting enforcement of creditors’ rights; and**

### **general principles of equity thatrestrict the availability of equitable or legal remedies.**

 

The sale of the Note and the subsequent conversion of the Note intoNote Shares are not and will not be subject to any preemptive rights or rightsof first refusal that have not been properly waived or complied with.

 

Liabilities.  TheCompany, to the best of its knowledge, has no material contingent liabilities,except current liabilities incurred in the ordinary course of business andliabilities disclosed in any Exchange Act Filings.

 

Agreements; Action.  Except as set forth on Schedule 4.6 or as disclosed in anyExchange Act Filings:

 

### **There are no agreements,understandings, instruments, contracts, proposed transactions, judgments,orders, writs or decrees to which the Company is a party or to its knowledge bywhich it is bound which may involve: (i) obligations (contingent or otherwise)of, or payments to, the Company in excess of $50,000 (other than obligationsof, or payments to, the Company arising from purchase or sale agreementsentered into in the ordinary course of business); or (ii) the transfer or licenseof any patent, copyright, trade secret or other proprietary right to or fromthe Company (other than licenses arising from the purchase of “off the shelf”or other standard products); or (iii) provisions restricting the development,manufacture or distribution of the Company’s products or services; or (iv)indemnification by the Company with respect to infringements of proprietaryrights.**

### ** **

### **Since September 27, 2003, theCompany has not:  (i) declared or paidany dividends, or authorized or made any distribution upon or with respect toany class or series of its capital stock; (ii) incurred any indebtedness formoney borrowed or any other liabilities (other than ordinary courseobligations) individually in excess of $50,000 or, in the case of indebtedness and/orliabilities individually less than $50,000, in excess of $100,000 in theaggregate; (iii) made any loans or advances to any person not in excess,individually or in the aggregate, of $100,000, other than ordinary advances fortravel expenses; or (iv) sold, exchanged or otherwise disposed of any of itsassets or rights, other than the sale of its inventory in the ordinary courseof business.**

### ** **

### **For the purposes of subsections (a)and (b) above, all indebtedness, liabilities, agreements, understandings, instruments,contracts and proposed transactions involving the same person or entity(including persons or entities the Company has reason to believe are affiliatedtherewith)**

### ** **

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### **shall be aggregated for the purposeof meeting the individual minimum dollar amounts of such subsections.**

### ** **

Obligations toRelatedParties.  Except as set forth onSchedule 4.7, there are no obligations of the Company to officers,directors, stockholders or employees of the Company other than:

 

### **for payment of salary for servicesrendered and for bonus payments;**

### **reimbursement for reasonableexpenses incurred on behalf of the Company;**

### **for other standard employeebenefits made generally available to all employees (including stock optionagreements outstanding under any stock option plan approved by the Board ofDirectors of the Company); and**

### **obligations listed in the Company’sfinancial statements or disclosed in any of its Exchange Act Filings.**

### ** **

Except as described above or set forth on Schedule 4.7, none ofthe officers, directors or, to the best of the Company’s knowledge, keyemployees or stockholders of the Company or any members of their immediatefamilies, are indebted to the Company, individually or in the aggregate, inexcess of $50,000 or have any direct or indirect ownership interest in any firmor corporation with which the Company is affiliated or with which the Companyhas a business relationship, or any firm or corporation which competes with theCompany, other than passive investments in publicly traded companies(representing less than one percent (1%) of such company) which may competewith the Company. Except as described above, no officer, director orstockholder, or any member of their immediate families, is, directly orindirectly, interested in any material contract with the Company and noagreements, understandings or proposed transactions are contemplated betweenthe Company and any such person.  Exceptas set forth on Schedule 4.7, the Company is not a guarantor or indemnitorof any indebtedness of any other person, firm or corporation.

 

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Changes.  SinceSeptember 27, 2003, except as disclosed in any Exchange Act Filing or inany Schedule to this Agreement or to any of the Related Agreements, therehas not been:

 

### **Any change in the assets,liabilities, financial condition, prospects or operations of the Company, otherthan changes in the ordinary course of business, none of which individually orin the aggregate has had or is reasonably expected to have a material adverseeffect on such assets, liabilities, financial condition, prospects oroperations of the Company;**

### ** **

### **Any resignation or termination ofany officer, key employee or group of employees of the Company;**

### **Any material change, except in theordinary course of business, in the contingent obligations of the Company byway of guaranty, endorsement, indemnity, warranty or otherwise;**

### **Any damage, destruction or loss,whether or not covered by insurance, materially and adversely affecting theproperties, business or prospects or financial condition of the Company;**

### **Any waiver by the Company of avaluable right or of a material debt owed to it;**

### **Any direct or indirect materialloans made by the Company to any stockholder, employee, officer or director ofthe Company, other than advances made in the ordinary course of business;**

### **Any material change in anycompensation arrangement or agreement with any employee, officer, director orstockholder;**

### **Any declaration or payment of anydividend or other distribution of the assets of the Company;**

### **Any labor organization activityrelated to the Company;**

### **Any debt, obligation or liabilityincurred, assumed or guaranteed by the Company, except those for immaterialamounts and for current liabilities incurred in the ordinary course ofbusiness;**

### **Any sale, assignment or transfer ofany patents, trademarks, copyrights, trade secrets or other intangible assets;**

### **Any change in any materialagreement to which the Company is a party or by which it is bound which maymaterially and adversely affect the business, assets, liabilities, financialcondition, operations or prospects of the Company;**

### **Any other event or condition of anycharacter that, either individually or cumulatively, has or may materially andadversely affect the business, assets, liabilities, financial condition,prospects or operations of the Company; or**

### **Any arrangement or commitment bythe Company to do any of the acts described in subsection (a) through (m)above.**

 

Title to Propertiesand Assets;Liens, Etc.  Except as set forth on Schedule 4.9,the Company has good and marketable title to its properties and assets, andgood title to its leasehold estates, in each case subject to no mortgage,pledge, lien, lease, encumbrance or charge, other than:

 

### **those resulting from taxes whichhave not yet become delinquent;**

### **minor liens and encumbrances whichdo not materially detract from the value of the property subject thereto ormaterially impair the operations of the Company; and**

### **those that have otherwise arisen inthe ordinary course of business.**

 

All facilities, machinery, equipment, fixtures, vehicles and otherproperties owned, leased or used by the Company are in good operating conditionand repair and are reasonably fit and usable for the purposes for which theyare being used.  Except as set forth onSchedule 4.9, the Company is in compliance with all material terms of eachlease to which it is a party or is otherwise bound.

 

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IntellectualProperty.

 

### **The Company owns or possessessufficient legal rights to all patents, trademarks, service marks, trade names,copyrights, trade secrets, licenses, information and other proprietary rightsand processes necessary for its business as now conducted and to the Company’sknowledge as presently proposed to be conducted (the “Intellectual Property”),without any known infringement of the rights of others.  There are no outstanding options, licenses oragreements of any kind relating to the foregoing proprietary rights, nor is theCompany bound by or a party to any options, licenses or agreements of any kindwith respect to the patents, trademarks, service marks, trade names,copyrights, trade secrets, licenses, information and other proprietary rightsand processes of any other person or entity other than such licenses oragreements arising from the purchase of “off the shelf” or standard products.**

### ** **

### **The Company has not received anycommunications alleging that the Company has violated any of the patents,trademarks, service marks, trade names, copyrights or trade secrets or otherproprietary rights of any other person or entity, nor is the Company aware ofany basis therefor.**

### ** **

### **The Company does not believe it isor will be necessary to utilize any inventions, trade secrets or proprietaryinformation of any of its employees made prior to their employment by theCompany, except for inventions, trade secrets or proprietary information thathave been rightfully assigned to the Company.**

### ** **

Compliance with Other Instruments.  Except as set forth on Schedule 4.11, the Company is not inviolation or default of any term of its Charter or Bylaws, or of any materialprovision of any mortgage, indenture, contract, agreement, instrument orcontract to which it is party or by which it is bound or of any judgment,decree, order or writ.  The execution,delivery and performance of and compliance with this Agreement and the RelatedAgreements to which it is a party, and the issuance and sale of the Note by theCompany and the other Securities by the Company each pursuant hereto, will not,with or without the passage of time or giving of notice, result in any suchmaterial violation, or be in conflict with or constitute a default under anysuch term or provision, or result in the creation of any mortgage, pledge,lien, encumbrance or charge upon any of the properties or assets of the Companyor the suspension, revocation, impairment, forfeiture or nonrenewal of anypermit, license, authorization or approval applicable to the Company, itsbusiness or operations or any of its assets or properties.

 

Litigation. Except as set forth on Schedule 4.12 hereto, there is no action,suit, proceeding or investigation pending or, to the Company’s knowledge,currently threatened against the Company that prevents the Company to enterinto this Agreement or the Related Agreements, or to consummate thetransactions contemplated hereby or thereby, or which might result, eitherindividually or in the aggregate, in any material adverse change in the assets,condition, affairs or prospects of the Company, financially or otherwise, orany change in the current equity ownership of the Company, nor is the Companyaware that there is any basis for any of the foregoing. The Company is not aparty or subject to the provisions of any order, writ, injunction, judgment ordecree of any court or government agency or instrumentality.  There is no action, suit, proceeding orinvestigation by the Company currently pending or which the Company intends toinitiate.

 

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Tax Returns andPayments.  The Company has timely filed all tax returns(federal, state and local) required to be filed by it.  All taxes shown to be due and payable onsuch returns, any assessments imposed, and to the Company’s knowledge all othertaxes due and payable by the Company on or before the Closing, have been paidor will be paid prior to the time they become delinquent.  Except as set forth on Schedule 4.13,the Company has not been advised:

 

### **that any of its returns, federal,state or other, have been or are being audited as of the date hereof; or**

### **of any deficiency in assessment orproposed judgment to its federal, state or other taxes.**

 

The Company has no knowledge of any liability of any tax to be imposedupon its properties or assets as of the date of this Agreement that is notadequately provided for.

 

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Employees.  Except asset forth on Schedule 4.14, the Company has no collective bargainingagreements with any of its employees. There is no labor union organizing activity pending or, to the Company’sknowledge, threatened with respect to the Company.  Except as disclosed in the Exchange Act Filings or onSchedule 4.14, the Company is not a party to or bound by any currentlyeffective employment contract, deferred compensation arrangement, bonus plan,incentive plan, profit sharing plan, retirement agreement or other employeecompensation plan or agreement.  To theCompany’s knowledge, no employee of the Company, nor any consultant with whomthe Company has contracted, is in violation of any term of any employmentcontract, proprietary information agreement or any other agreement relating tothe right of any such individual to be employed by, or to contract with, theCompany because of the nature of the business to be conducted by the Company;and to the Company’s knowledge the continued employment by the Company of itspresent employees, and the performance of the Company’s contracts with itsindependent contractors, will not result in any such violation.  The Company is not aware that any of itsemployees is obligated under any contract (including licenses, covenants orcommitments of any nature) or other agreement, or subject to any judgment,decree or order of any court or administrative agency, that would interferewith their duties to the Company.  TheCompany has not received any notice alleging that any such violation has occurred.  Except for employees who have a currenteffective employment agreement with the Company, no employee of the Company hasbeen granted the right to continued employment by the Company or to any materialcompensation following termination of employment with the Company.  Except as set forth on Schedule 4.14,the Company is not aware that any officer, key employee or group of employeesintends to terminate his, her or their employment with the Company, nor doesthe Company have a present intention to terminate the employment of any officer,key employee or group of employees.

 

RegistrationRights and Voting Rights.  Except asset forth on Schedule 4.15 and except as disclosed in Exchange ActFilings, the Company is presently not under any obligation, and has not grantedany rights, to register any of the Company’s presently outstanding securitiesor any of its securities that may hereafter be issued.  Except as set forth on Schedule 4.15and except as disclosed in Exchange Act Filings, to the Company’s knowledge, nostockholder of the Company has entered into any agreement with respect to thevoting of equity securities of the Company.

 

Compliance withLaws; Permits.  Except as set forth on Schedule 4.16,to its knowledge, the Company is not in violation in any material respect ofany applicable statute, rule, regulation, order or restriction of any domesticor foreign government or any instrumentality or agency thereof in respect ofthe conduct of its business or the ownership of its properties which violationwould materially and adversely affect the business, assets, liabilities,financial condition, operations or prospects of the Company.  No governmental orders, permissions,consents, approvals or authorizations are required to be obtained and noregistrations or declarations are required to be filed in connection with theexecution and delivery of this Agreement and the issuance of any of theSecurities, except such as has been duly and validly obtained or filed, or withrespect to any filings that must be made after the Closing, as will be filed ina timely manner.  The Company has allmaterial franchises, permits, licenses and any similar authority necessary forthe conduct of its business as now being conducted by it, the lack of whichwould

 

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materially and adversely affect the business,properties, prospects or financial condition of the Company.

 

Environmental andSafety Laws.  The Company is not in violation of anyapplicable statute, law or regulation relating to the environment or occupationalhealth and safety, and to its knowledge, no material expenditures are or willbe required in order to comply with any such existing statute, law orregulation. Except as set forth on Schedule 4.17, no Hazardous Materials(as defined below) are used or have been used, stored, or disposed of by theCompany or, to the Company’s knowledge, by any other person or entity on anyproperty owned, leased or used by the Company. For the purposes of thepreceding sentence, “Hazardous Materials” shall mean:

 

### **materials which are listed orotherwise defined as “hazardous” or “toxic” under any applicable local, state,federal and/or foreign laws and regulations that govern the existence and/orremedy of contamination on property, the protection of the environment fromcontamination, the control of hazardous wastes, or other activities involvinghazardous substances, including building materials; or**

### **any petroleum products or nuclearmaterials.**

### ** **

Valid Offering. Assuming the accuracy of the representations and warranties of thePurchaser contained in this Agreement, the offer, sale and issuance of the Securitieswill be exempt from the registration requirements of the Securities Act of1933, as amended (the “Securities Act”), and will have been registered orqualified (or are exempt from registration and qualification) under theregistration, permit or qualification requirements of all applicable statesecurities laws.

 

Full Disclosure.  The Company has provided the Purchaser with all informationrequested by the Purchaser in connection with its decision to purchase theNote, including all information the Company believes is reasonably necessary tomake such investment decision.  Neitherthis Agreement, the exhibits and schedules hereto, the Related Agreements norany other document delivered by the Company to Purchaser or its attorneys oragents in connection herewith or therewith or with the transactionscontemplated hereby or thereby, contain any untrue statement of a material factnor omit to state a material fact necessary in order to make the statementscontained herein or therein, in light of the circumstances in which they aremade, not misleading.  Any financialprojections and other estimates provided to the Purchaser by the Company werebased on the Company’s experience in the industry and on assumptions of factand opinion as to future events which the Company, at the date of the issuanceof such projections or estimates, believed to be reasonable.

 

Insurance.  TheCompany has general commercial, product liability, fire and casualty insurancepolicies with coverages which the Company believes are customary for companiessimilarly situated to the Company in the same or similar business.

 

SEC Reports. Except as set forth on Schedule 4.21, the Company has filed allproxy statements, reports and other documents required to be filed by it underthe Exchange Act.  The Company hasfurnished the Purchaser with copies of: (i) its Annual Report on Form 10-K for the fiscal year endedDecember 31, 2002; and (ii) its Quarterly Reports on Form 10-Q for thefiscal quarters ended March 29, 2003, June 28, 2003 andSeptember 27, 2003, and the Form 8-K filings

 

10AA-13

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which it has made during 2003 to date(collectively, the “SEC Reports”). Except as set forth on Schedule 4.21,each SEC Report was, at the time of its filing, in substantial compliance withthe requirements of its respective form and none of the SEC Reports, nor thefinancial statements (and the notes thereto) included in the SEC Reports, as oftheir respective filing dates, contained any untrue statement of a materialfact or omitted to state a material fact required to be stated therein ornecessary to make the statements therein, in light of the circumstances underwhich they were made, not misleading.

 

Listing.  TheCompany’s Common Stock is listed for trading on the National Associationof  Securities Dealers,  Inc. Over the Counter Bulletin Board (“NASDOTCBB”) and satisfies all requirements for the continuation of suchlistings.  The Company has not receivedany notice that its Common Stock will be delisted from NASD OTCBB or that itdoes not meet all requirements for listing.

 

No IntegratedOffering.  Neither the Company, nor any of itsaffiliates, nor any person acting on its or their behalf, has directly orindirectly made any offers  or sales ofany security or solicited any offers to buy any security under circumstancesthat would cause the offering of the Securities pursuant to this Agreement tobe integrated with prior offerings by the Company for purposes of theSecurities Act which would prevent the Company from selling the Securitiespursuant to Rule 506 under the Securities Act, or any applicableexchange-related stockholder approval provisions, nor will the Company or anyof its affiliates or subsidiaries take any action or steps that would cause theoffering of the Securities to be integrated with other offerings.

 

Stop Transfer.  TheSecurities are restricted securities as of the date of this Agreement.  The Company will not issue any stop transferorder or other order impeding the sale and delivery of any of the Securities atsuch time as the Securities are registered for public sale or an exemption fromregistration is available, except as required by state and federal securitieslaws.

 

## ***Dilution***. The Company specifically acknowledges that its obligation to issue theshares of Common Stock upon conversion of the Note is binding upon the Companyand enforceable regardless of the dilution such issuance may have on theownership interests of other shareholders of the Company.

## *** ***

## ***Patriot Act***. If the Company is a corporation, trust, partnership, limited liabilityPurchaser or other organization, the Company certifies that, to the best ofCompany’s knowledge, the Company has not been designated, and is not owned orcontrolled, by a “suspected terrorist” as defined in Executive Order13224.  The Company hereby acknowledgesthat the Purchaser seeks to comply with all applicable laws concerning moneylaundering and related activities.  Infurtherance of those efforts, the Company hereby represents, warrants andagrees that:  (i) none of the cash orproperty that the Company will pay or will contribute to the Purchaser has beenor shall be derived from, or related to, any activity that is deemed criminalunder United States law; and (ii) no contribution or payment by the Company tothe Purchaser, to the extent that they are within the Company’s control shallcause the Purchaser to be in violation of the United States Bank Secrecy Act,the United States International Money Laundering Control Act of 1986 or theUnited States International Money Laundering Abatement and Anti-TerroristFinancing Act of 2001.  The Companyshall promptly notify the Purchaser if any of these representations ceases tobe true and accurate regarding the Company. The Company agrees to provide the Purchaser any additional informationregarding the Company that the Purchaser deems necessary or convenient toensure compliance with all applicable laws concerning money laundering andsimilar activities.  The Company

## *** ***

10AA-14

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## ***understands andagrees that if at any time it is discovered that any of the foregoingrepresentations are incorrect, or if otherwise required by applicable law orregulation related to money laundering similar activities, the Purchaser mayundertake appropriate actions to ensure compliance with applicable law orregulation, including but not limited to segregation and/or redemption of theCompany’s investment in the Purchaser. The Company further understands that the Purchaser may releaseconfidential information about the Company and, if applicable, any underlyingbeneficial owners, to proper authorities if the Purchaser, in its solediscretion, determines that it is in the best interests of the Purchaser inlight of relevant rules and regulations under the laws set forth insubsection (ii) above.***

## *** ***

Representationsand Warranties of the Purchaser.  The Purchaser hereby represents and warrants to the Company asfollows (such representations and warranties do not lessen or obviate therepresentations and warranties of the Company set forth in this Agreement)

 

No Shorting.  ThePurchaser or any of its affiliates and investment partners has not, will notand will not cause any person or entity, directly or indirectly, to engage in“short sales” of the Company’s Traded Securities or any other hedgingstrategies as long as the Note shall be outstanding.

 

Requisite Powerand Authority.  Purchaser has all necessary power andauthority under all applicable provisions of law to execute and deliver thisAgreement and the Related Agreements and to carry out their provisions. Allcorporate action on Purchaser’s part required for the lawful execution anddelivery of this Agreement and the Related Agreements have been or will beeffectively taken prior to the Closing. Upon their execution and delivery, thisAgreement and the Related Agreements will be valid and binding obligations ofPurchaser, enforceable in accordance with their terms, except:

 

### **as limited by applicablebankruptcy, insolvency, reorganization, moratorium or other laws of generalapplication affecting enforcement of creditors’ rights; and**

### **as limited by general principles ofequity that restrict the availability of equitable and legal remedies.**

### ** **

InvestmentRepresentations.  Purchaser understands that the Securitiesare being offered and sold pursuant to an exemption from registration containedin the Securities Act based in part upon Purchaser’s representations containedin the Agreement, including, without limitation, that the Purchaser is an“accredited investor” within the meaning of Regulation D under the SecuritiesAct of 1933, as amended (the “Securities Act”). The Purchaser confirms that ithas received or has had full access to all the information it considersnecessary or appropriate to make an informed investment decision with respectto the Note to be purchased by it under this Agreement and the Note Sharesacquired by it upon the conversion of the Note. The Purchaser further confirmsthat it has had an opportunity to ask questions and receive answers from theCompany regarding the Company’s business, management and financial affairs andthe terms and conditions of the Offering, the Note and the Securities and toobtain additional information (to the extent the Company possessed suchinformation or could acquire it without unreasonable effort or expense)necessary to verify any information furnished to the Purchaser or to which thePurchaser had access.

 

10AA-15

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Purchaser BearsEconomic Risk.  Purchaser has substantial experience inevaluating and investing in private placement transactions of securities incompanies similar to the Company so that it is capable of evaluating the meritsand risks of its investment in the Company and has the capacity to protect itsown interests. Purchaser must bear the economic risk of this investment untilthe Securities are sold pursuant to: (i) an effective registration statementunder the Securities Act; or (ii) an exemption from registration is availablewith respect to such sale.

 

Acquisition forOwn Account.  Purchaser is acquiring the Note and the NoteShares for Purchaser’s own account for investment only, and not as a nominee oragent and not with a view towards or for resale in connection with theirdistribution.

 

Purchaser CanProtect Its Interest.  Purchaserrepresents that by reason of its, or of its management’s, business andfinancial experience, Purchaser has the capacity to evaluate the merits andrisks of its investment in the Note and the Securities and to protect its owninterests in connection with the transactions contemplated in this Agreement,and the Related Agreements.  Further,Purchaser is aware of no publication of any advertisement in connection withthe transactions contemplated in the Agreement or the Related Agreements.

 

AccreditedInvestor.  Purchaser represents that it is anaccredited investor within the meaning of Regulation D under the SecuritiesAct.

 

Legends.

 

### **The Note shall bear substantiallythe following legend:**

“THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTEHAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANYAPPLICABLE, STATE SECURITIES LAWS. THIS NOTE AND THE COMMON STOCK ISSUABLE UPONCONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED ORHYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THISNOTE OR SUCH SHARES UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS OR ANOPINION OF COUNSEL REASONABLY SATISFACTORY TO MICRO COMPONENT TECHNOLOGY, INC.THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

### **The Note Shares, if not issued byDWAC system (as hereinafter defined), shall bear a legend which shall be insubstantially the following form until such shares are covered by an effectiveregistration statement filed with the SEC:**

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY APPLICABLE, STATESECURITIES LAWS. THESE SHARES MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED ORHYPOTHECATED IN THE ABSENCE OF AN

 

10AA-16

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EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT ANDAPPLICABLE STATE LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO MICROCOMPONENT TECHNOLOGY, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.”

 

10AA-17

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Covenants of theCompany.  The Company covenants and agrees with thePurchaser as follows:

 

Stop-Orders.  TheCompany will advise the Purchaser, promptly after it receives notice ofissuance by the Securities and Exchange Commission (the “SEC”), any statesecurities commission or any other regulatory authority of any stop order or ofany order preventing or suspending any offering of any securities of theCompany, or of the suspension of the qualification of the Common Stock of theCompany for offering or sale in any jurisdiction, or the initiation of any proceedingfor any such purpose.

 

Listing.  The Company shall promptly secure the listing of the shares ofCommon Stock issuable upon conversion of the Note on the NASD OTCBB, NasdaqNational Market or the NASDAQ SmallCap Market (any one, a “Principal Market”)upon which shares of Common Stock are listed (subject to official notice of issuance)and shall maintain such listing so long as any other shares of Common Stockshall be so listed. The Company will maintain the listing of its Common Stockon the Principal Market, and will comply in all material respects with theCompany’s reporting, filing and other obligations under the bylaws or rules ofthe National Association of Securities Dealers (“NASD”) and such exchanges, asapplicable.

 

Market Regulations.  The Company shall notify the SEC, NASD and applicable stateauthorities, in accordance with their requirements, of the transactionscontemplated by this Agreement, and shall take all other necessary action andproceedings as may be required and permitted by applicable law, rule andregulation, for the legal and valid issuance of the Securities to Purchaser andpromptly provide copies thereof to Purchaser.

 

ReportingRequirements.  The Company will timely file with the SECall reports required to be filed pursuant to the Exchange Act and refrain fromterminating its status as an issuer required by the Exchange Act to filereports thereunder even if the Exchange Act or the rules or regulationsthereunder would permit such termination.

 

Use of Funds.  TheCompany agrees that it will use the proceeds of the sale of the Note forworking capital purposes only.

 

Access toFacilities. The Companywill permit any representatives designated by the Purchaser (or any successorof the Purchaser), upon reasonable notice and during normal business hours, atsuch person’s expense and accompanied by a representative of the Company, to:

 

### **visit and inspect any of theproperties of the Company;**

### **examine the corporate and financialrecords of the Company (unless such examination is not permitted by federal,state or local law or by contract) and make copies thereof or extractstherefrom; and**

### **discuss the affairs, finances andaccounts of the Company with the directors, officers and independentaccountants of the Company.**

 

Notwithstanding the foregoing, the Company will not provide anymaterial, non-public information to the Purchaser unless the Purchaser signs aconfidentiality agreement and otherwise complies with Regulation FD, under thefederal securities laws.

 

10AA-18

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Taxes.  TheCompany will promptly pay and discharge, or cause to be paid and discharged,when due and payable, all lawful taxes, assessments and governmental charges orlevies imposed upon the income, profits, property or business of the Company;provided, however, that any such tax, assessment, charge or levy need not bepaid if the validity thereof shall currently be contested in good faith byappropriate proceedings and if the Company shall have set aside on its booksadequate reserves with respect thereto, and provided, further, that the Companywill pay all such taxes, assessments, charges or levies forthwith upon thecommencement of proceedings to foreclose any lien which may have attached assecurity therefor.

 

Insurance.  The Company will keep its assets which are of an insurablecharacter insured by financially sound and reputable insurers against loss ordamage by fire, explosion and other risks customarily insured against by companiesin similar business similarly situated as the Company; and the Company willmaintain, with financially sound and reputable insurers, insurance againstother hazards and risks and liability to persons and property to the extent andin the manner which the Company reasonably believes is customary for companiesin similar business similarly situated as the Company and to the extentavailable on commercially reasonable terms. The Company and each of its subsidiaries set forth inSection 4.2 hereof (the “Subsidiaries”) will jointly and severally bearthe full risk of loss from any loss of any nature whatsoever with respect tothe assets pledged to the Purchaser as security for its obligations hereunderand under the Related Agreements. At the Company’s own cost and expense inamounts and with carriers reasonably acceptable to Purchaser, the Company andeach of the Subsidiaries shall (i) keep all its insurable properties andproperties in which it has an interest insured against the hazards of fire,flood, sprinkler leakage, those hazards covered by extended coverage insuranceand such other hazards, and for such amounts, as is customary in the case ofcompanies engaged in businesses similar to the Company’s or the respectiveSubsidiary’s including business interruption insurance; (ii) maintain a bond insuch amounts as is customary in the case of companies engaged in businessessimilar to the Company’s or the Subsidiaries’ insuring against larceny,embezzlement or other criminal misappropriation of insured’s officers andemployees who may either singly or jointly with others at any time have accessto the assets or funds of the Company either directly or through governmentalauthority to draw upon such funds or to direct generally the disposition ofsuch assets; (iii) maintain public and product liability insurance againstclaims for personal injury, death or property damage suffered by others; (iv)maintain all such worker’s compensation or similar insurance as may be requiredunder the laws of any state or jurisdiction in which the Company or theSubsidiaries are engaged in business; and (v) furnish Purchaser with (x) copiesof all policies and evidence of the maintenance of such policies at leastthirty (30) days before any expiration date, (y) excepting the Company’sworkers’ compensation policy, endorsements to such policies naming Purchaser as“co-insured” or “additional insured” and appropriate loss payable endorsementsin form and substance satisfactory to Purchaser, naming Purchaser as losspayee, and (z) evidence that as to Purchaser the insurance coverage shall notbe impaired or invalidated by any act or neglect of the Company or any of itsSubsidiaries and the insurer will provide Purchaser with at least thirty (30)days notice prior to cancellation.  TheCompany and each of its Subsidiaries shall instruct the insurance carriers thatin the event of any loss thereunder, the carriers shall make payment for suchloss to the Company and/or any of the Subsidiaries and Purchaser jointly.  In the event that as of the date of receiptof

 

10AA-19

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each loss recovery upon any such insurance, the Purchaser has notdeclared an event of default with respect to this Agreement or any of theRelated Agreements, then the Company shall be permitted to direct theapplication of such loss recovery proceeds toward investment in property, plantand equipment that would comprise “Collateral” secured by Purchaser’s securityinterest pursuant to its security agreement, with any surplus funds to beapplied toward payment of the obligations of the Company to Purchaser. In theevent that Purchaser has properly declared an event of default with respect tothis Agreement or any of the Related Agreements, then all loss recoveriesreceived by Purchaser upon any such insurance thereafter may be applied to theobligations of the Company hereunder and under the Related Agreements, in suchorder as the Purchaser may determine. Any surplus (following satisfaction ofall Company obligations to Purchaser) shall be paid by Purchaser to the Companyor applied as may be otherwise required by law.  Any deficiency thereon shall be paid by the Company or any of theSubsidiaries, as applicable, to Purchaser, on demand.

 

Intellectual Property.  The Company shall maintain in full force and effect its corporateexistence, rights and franchises and all licenses and other rights to useIntellectual Property owned or possessed by it and reasonably deemed to benecessary to the conduct of its business.

 

Properties.  The Company will keep its properties in good repair, workingorder and condition, reasonable wear and tear excepted, and from time to timemake all needful and proper repairs, renewals, replacements, additions andimprovements thereto; and the Company will at all times comply with eachprovision of all leases to which it is a party or under which it occupiesproperty if the breach of such provision could reasonably be expected to have amaterial adverse effect.

 

Confidentiality.  The Company agrees that it will not disclose, and will notinclude in any public announcement, the name of the Purchaser, unless expresslyagreed to by the Purchaser or unless and until such disclosure is required bylaw or applicable regulation, and then only to the extent of such requirement.  The Company may disclose Purchaser’sidentity and the terms of this Agreement to its current and prospective debtand equity financing sources.

 

Required Approvals.  For so long as twenty-five percent (25%) of the aggregateprincipal amount of the Note is outstanding, the Company, without the priorwritten consent of the Purchaser, shall not:

 

### **directly or indirectly declare orpay any dividends, other than dividends with respect to its preferred stock;**

### **liquidate, dissolve or effect amaterial reorganization;**

### **become subject to (including,without limitation, by way of amendment to or modification of) any agreement orinstrument which by its terms would (under any circumstances) restrict theCompany’s right to perform the provisions of this Agreement or any of the agreementscontemplated thereby;**

### **materially alter or change thescope of the business of the Company;**

create, incur, assume or suffer to exist any indebtedness (exclusive oftrade debt and debt incurred to finance the purchase of equipment (not inexcess of five percent (5%) per annum of

### ** **

10AA-20

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the Company’s assets) whether secured or unsecured other than theCompany’s indebtedness to Laurus and as set forth on Exhibit 6.12(e) attachedhereto and made a part hereof or any refinancings or replacements thereof orany debt incurred in connection with the purchase of assets or in connectionwith operating lines of credit as necessary to operate such assets, or anyrefinancings or replacements thereof; (ii) cancel any debt owing to it inexcess of $50,000 in the aggregate during any 12 month period; (iii) assume,guarantee, endorse or otherwise become directly or contingently liable inconnection with any obligations of any other Person, except the endorsement ofnegotiable instruments by a Company for deposit or collection or similartransactions in the ordinary course of business or guarantees provided to anyof the lenders set forth in subparagraph (i) immediately above.

### ** **

Reissuance of Securities.  The Company agrees to reissue certificates representing theSecurities without the legends set forth in Section 5.7 above at such timeas:

 

### **the holder thereof is permitted todispose of such Securities pursuant to Rule 144(k) under the Securities Act; or**

### **upon resale subject to an effectiveregistration statement after such Securities are registered under theSecurities Act.**

### ** **

The Company agrees to cooperate with the Purchaser in connection withall resales pursuant to Rule 144(d) and Rule 144(k) and provide legal opinionsnecessary to allow such resales provided the Company and its counsel receivereasonably requested representations from the selling Purchaser and broker, ifany.

 

Opinion.  On the Closing Date, the Company will deliver to the Purchaser anopinion in the form attached hereto as Exhibit B. The Company will provide, atthe Company’s expense, such other legal opinions in the future as arereasonably necessary for the conversion of the Note.

 

Covenants of the Purchaser.  The Purchaser covenants and agrees with the Company as follows:

 

Confidentiality.  The Purchaser agrees that it will not disclose, and will notinclude in any public announcement, the name of the Company, unless expresslyagreed to by the Company or unless and until such disclosure is required by lawor applicable regulation, and then only to the extent of such requirement.

 

Non-PublicInformation.  The Purchaser agrees not to effect any salesin the shares of the Company’s Common Stock while in possession of material,non-public information regarding the Company if such sales would violateapplicable securities law.

 

Covenants of the Company and Purchaser Regarding Indemnification.

 

CompanyIndemnification.  The Company agrees to indemnify, holdharmless, reimburse and defend Purchaser, each of Purchaser’s officers,directors, agents, affiliates, control persons, and principal shareholders,against any claim, cost, expense, liability, obligation, loss or damage(including reasonable legal fees) of any nature, incurred by or imposed uponthe Purchaser which results, arises out of or is based upon: (i) anymisrepresentation by Company or breach of any warranty by Company in thisAgreement or in any exhibits or schedules attached hereto or any

 

10AA-21

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Related Agreement; or (ii) any breach ordefault in performance by Company of any covenant or undertaking to beperformed by Company hereunder, or any other agreement entered into by the Companyand Purchaser relating hereto.

 

Purchaser’sIndemnification.  Purchaser agrees to indemnify, holdharmless, reimburse and defend the Company and each of the Company’s officers,directors, agents, affiliates, control persons and principal shareholders, atall times against any claim, cost, expense, liability, obligation, loss ordamage (including reasonable legal fees) of any nature, incurred by or imposedupon the Company which results, arises out of or is based upon:  (i) any misrepresentation by Purchaser orbreach of any warranty by Purchaser in this Agreement or in any exhibits orschedules attached hereto or any Related Agreement; or (ii) any breach ordefault in performance by Purchaser of any covenant or undertaking to beperformed by Purchaser hereunder, or any other agreement entered into by theCompany and Purchaser relating hereto.

 

Procedures.  Theprocedures and limitations set forth in Section 10.2(c) and (d) shallapply to the indemnifications set forth in Sections 8.1 and 8.2 above.

 

Conversion ofConvertible Note.

 

### **Provided the Purchaser has notifiedthe Company of the Purchaser’s intention to sell the Note Shares and the NoteShares are included in an effective registration statement or are otherwiseexempt from registration when sold:  (i)Upon the conversion of the Note or part thereof, the Company shall, at its owncost and expense, take all necessary action (including the issuance of anopinion of counsel) to assure that the Company’s transfer agent shall issueshares of the Company’s Common Stock in the name of the Purchaser (or itsnominee) or such other persons as designated by the Purchaser in accordancewith Section 9.1(b) hereof and in such denominations to be specifiedrepresenting the number of Note Shares issuable upon such conversion; and(ii)  the Company warrants that noinstructions other than these instructions have been or will be given to thetransfer agent of the Company’s Common Stock and that after the EffectivenessDate (as defined in the Registration Rights Agreement) the Note Shares issuedwill be freely transferable subject to the prospectus delivery requirements ofthe Securities Act and the provisions of this Agreement, and will not contain alegend restricting the resale or transferability of the Note Shares.**

### ** **

### **  The Purchaser shallconvert the Notes into shares of Common Stock pursuant to the provision ofArticle III of the Note.**

### ** **

 

10AA-22

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# **Registration Rights**, Indemnification.

# ** **

Registration Rights Granted.  The Company hereby grants registration rights to the Purchaserpursuant to a Registration Rights Agreement dated as of even date herewithbetween the Company and the Purchaser.

 

Indemnification. The Company shall besubject to the indemnification provisions provided for in Section 5 of theRegistration Rights Agreement.

 

OfferingRestrictions.  Except as previously disclosed in the SECReports or in the Exchange Act Filings, or stock or stock options granted toemployees or directors of the Company; or shares of preferred stock issued topay dividends in respect of the Company’s preferred stock; or equity or debtissued in connection with an acquisition of a business or assets by theCompany; or the issuance by the Company of stock in connection with theestablishment of a joint venture partnership or licensing arrangement (theseexceptions hereinafter referred to as the “Excepted Issuances”), the Companywill not issue any securities with a continuously variable/floating conversionfeature which are or could be (by conversion or registration) free-tradingsecurities (i.e. common stock subject to a registration statement) prior to thefull repayment or conversion of the Note (the “Exclusion Period”).

 

Miscellaneous.

 

Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCEWITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OFCONFLICTS OF LAWS.  ANY ACTION BROUGHTBY EITHER PARTY AGAINST THE OTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BYTHIS AGREEMENT SHALL BE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR IN THEFEDERAL COURTS LOCATED IN THE STATE OF NEW YORK.  BOTH PARTIES AND THE INDIVIDUALS EXECUTING THIS AGREEMENT ANDOTHER AGREEMENTS ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THE JURISDICTIONOF SUCH COURTS AND WAIVE TRIAL BY JURY. IN THE EVENT THAT ANY PROVISION OF THIS AGREEMENT OR ANY OTHER AGREEMENTDELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE UNDER ANYAPPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMEDINOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BE DEEMEDMODIFIED TO CONFORM WITH SUCH STATUTE OR RULE OF LAW.  ANY SUCH PROVISION WHICH MAY PROVE INVALID OR UNENFORCEABLE UNDERANY LAW SHALL NOT AFFECT THE VALIDITY OR ENFORCEABILITY OF ANY OTHER PROVISIONOF ANY AGREEMENT.

 

Survival.  Therepresentations, warranties, covenants and agreements made herein shall surviveany investigation made by the Purchaser and the closing of the transactionscontemplated hereby to the extent provided therein. All statements as tofactual matters contained in any certificate or other instrument delivered byor on behalf of the Company pursuant hereto in connection with the transactionscontemplated hereby shall be deemed to be representations and warranties by theCompany hereunder solely as of the date of such certificate or instrument.

 

10AA-23

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Successors. Except as otherwise expressly provided herein, the provisions hereofshall inure to the benefit of, and be binding upon, the successors, heirs,executors and administrators of the parties hereto and shall inure to thebenefit of and be enforceable by each person who shall be a holder of theSecurities from time to time, other than the holders of Common Stock which hasbeen sold by the Purchaser pursuant to Rule 144 or an effective registrationstatement. Purchaser may not assign its rights hereunder to a competitor of theCompany.

 

Entire Agreement.  This Agreement, the exhibits and schedules hereto, the RelatedAgreements and the other documents delivered pursuant hereto constitute thefull and entire understanding and agreement between the parties with regard tothe subjects hereof and no party shall be liable or bound to any other in anymanner by any representations, warranties, covenants and agreements except asspecifically set forth herein and therein.

 

Severability.  Incase any provision of the Agreement shall be invalid, illegal or unenforceable,the validity, legality and enforceability of the remaining provisions shall notin any way be affected or impaired thereby.

 

Amendment and Waiver.

 

### **This Agreement may be amended ormodified only upon the written consent of the Company and the Purchaser.**

### ** **

### **The obligations of the Company andthe rights of the Purchaser under this Agreement may be waived only with thewritten consent of the Purchaser.**

### ** **

### **The obligations of the Purchaserand the rights of the Company under this Agreement may be waived only with thewritten consent of the Company.**

### ** **

Delays orOmissions.  It is agreed that no delay or omission toexercise any right, power or remedy accruing to any party, upon any breach,default or noncompliance by another party under this Agreement or the RelatedAgreements, shall impair any such right, power or remedy, nor shall it beconstrued to be a waiver of any such breach, default or noncompliance, or anyacquiescence therein, or of or in any similar breach, default or noncompliancethereafter occurring.  All remedies,either under this Agreement, the Note or the Related Agreements, by law orotherwise afforded to any party, shall be cumulative and not alternative.

 

Notices.  All notices required or permitted hereunder shall be in writingand shall be deemed effectively given:

 

### **upon personal delivery to the partyto be notified;**

### **when sent by confirmed facsimile ifsent during normal business hours of the recipient, if not, then on the nextbusiness day;**

### **three (3) business days afterhaving been sent by registered or certified mail, return receipt requested,postage prepaid; or**

### **one (1) day after deposit with anationally recognized overnight courier, specifying next day delivery, withwritten verification of receipt.**

### ** **

10AA-24

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All communications shall be sent as follows:

 
| If to the Company, to:   |   | MICRO COMPONENT  TECHNOLOGY, INC.  2340 West County Road C,  St. Paul, Minnesota 55113-2528  Attention: Chief Financial Officer  Telephone:  (651) 697-4000  Facsimile: (651) 697-4200 |
|--------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                     |   |                                                                                                                                                                                        |
|                     |   | with a copy to:                                                                                                                                                                             |
|                     |   |                                                                                                                                                                                        |
|                     |   | Best & Flanagan, LLP  225 South Sixth St., Suite 4000,  Minneapolis, Minnesota 55402  Attention: James C. Diracles, Esq.  Telephone: (612) 339-7121  Facsimile: (612) 339-5897          |
|                     |   |                                                                                                                                                                                        |
| If to the Purchaser, to: |   | Laurus Master Fund, Ltd.  c/o Ironshore Corporate Services ltd.  P.O. Box 1234 G.T.  Queensgate House, South Church Street  Grand Cayman, Cayman Islands  Facsimile:(345)949-9877           |
|                     |   |                                                                                                                                                                                        |
|                     |   | with a copy to:                                                                                                                                                                             |
|                     |   |                                                                                                                                                                                        |
|                     |   | John E. Tucker, Esq.  825 Third Avenue 14th Floor  New York, NY 10022  Facsimile:(212)541-4434                                                                                              |

 

or at such other address as the Company or the Purchaser may designateby written notice to the other parties hereto given in accordance herewith.

 

10AA-25

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Attorneys’Fees.  In the event that any suit or action isinstituted to enforce any provision in this Agreement, the prevailing party insuch dispute shall be entitled to recover from the losing party all fees, costsand expenses of enforcing any right of such prevailing party under or withrespect to this Agreement, including, without limitation, such reasonable feesand expenses of attorneys and accountants, which shall include, withoutlimitation, all fees, costs and expenses of appeals.

 

Titles and Subtitles.  The titles of the sections and subsections of the Agreement arefor convenience of reference only and are not to be considered in construingthis Agreement.

 

FacsimileSignatures;Counterparts.  ThisAgreement may be executed by facsimile signatures and in any number ofcounterparts, each of which shall be an original, but all of which togethershall constitute one instrument.

 

Broker’s Fees. Except as set forth on Schedule 11.12 hereof, Each party heretorepresents and warrants that no agent, broker, investment banker, person orfirm acting on behalf of or under the authority of such party hereto is or willbe entitled to any broker’s or finder’s fee or any other commission directly orindirectly in connection with the transactions contemplated herein.  Each party hereto further agrees toindemnify each other party for any claims, losses or expenses incurred by suchother party as a result of the representation in this Section 11.12 beinguntrue.

 

Construction. Each party acknowledges that its legal counsel participated in thepreparation of this Agreement and the Related Agreements and, therefore,stipulates that the rule of construction that ambiguities are to be resolvedagainst the drafting party shall not be applied in the interpretation of thisAgreement to favor any party against the other.

 

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**10AA-**26

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IN WITNESS WHEREOF, the parties hereto have executedthe SECURITIES PURCHASE AGREEMENT as of the date set forth in the firstparagraph hereof.

 
| COMPANY:                          | PURCHASER:               |
|-----------------------------------|--------------------------|
|                              |                     |
| MICRO COMPONENT  TECHNOLOGY, INC. | LAURUS MASTER FUND, LTD. |
|                              |                     |   |   |
|                              |                     |   |   |
| By:                               |  /s/ Thomas P. Maun |   | By: |  /s/ Eugene Grin |   |
| Name:                             |                     |   | Name: |   |   |
| Title:                            |   CFO          |   | Title: |   Director |   |

 

10AA-27

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**EXHIBIT A**

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**FORM OF CONVERTIBLE NOTE**

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**10AA-**28

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**EXHIBIT B**

** **

**FORM OF OPINION**

** **

1.                                       The Company isa corporation validly existing and in good standing under the laws of the Stateof Minnesota and has all requisite corporate power and authority to own,operate and lease its properties and to carry on its business as it is nowbeing conducted.

 

2.                                       The Company hasthe requisite corporate power and authority to execute, deliver and perform itsobligations under the Agreement and Related Agreements. All corporate action onthe part of the Company and its officers, directors and stockholders necessaryhas been taken for:  (i) theauthorization of the Agreement and Related Agreements and the performance ofall obligations of the Company thereunder at the Closing; and (ii) theauthorization, sale, issuance and delivery of the Securities pursuant to theAgreement and the Related Agreements. The Note Shares, when issued pursuant to and in accordance with theterms of the Agreement and the Related Documents, upon delivery shall bevalidly issued and shall be fully paid and non assessable.

 

3.                                       The execution,delivery and performance of the Agreement, the Note or the Related Agreementsby the Company and the consummation of the transactions on its partcontemplated by any thereof, will not, with or without the giving of notice orthe passage of time or both:

 

(a)                                  Violate the provisions ofthe Charter or bylaws of the Company; or

 

(b)                                 To the best of suchcounsel’s knowledge, violate any judgment, decree, order or award of any courtbinding upon the Company.

 

4.                                       The Agreementand Related Agreements will constitute, valid and legally binding obligationsof the Company, and are enforceable against the Company in accordance withtheir respective terms, except:

 

(a) as limited by applicable bankruptcy, insolvency,reorganization, moratorium or other laws of general application affectingenforcement of creditors’ rights; and

 

(b)                                 general principles of equitythat restrict the availability of equitable or legal remedies.

 

5.                                       To suchcounsel’s knowledge, the sale of the Note and the subsequent conversion of theNote into Note Shares are not subject to any preemptive rights or rights offirst refusal that have not been properly waived or complied with.

 

6.                                       Assuming theaccuracy of the representations and warranties of the Purchaser contained inthe Agreement, the offer, sale and issuance of the Securities on the ClosingDate

 

10AA-29

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will be exempt from theregistration requirements of the Securities Act.  To such counsel’s knowledge, neither the Company, nor any of itsaffiliates, nor any person acting on its or their behalf, has directly orindirectly made any offers or sales of any security or solicited any offers tobuy and security under circumstances that would cause the offering of theSecurities pursuant to this Agreement to be integrated with prior offerings bythe Company for purposes of the Securities Act which would prevent the Companyfrom selling the Securities pursuant to Rule 506 under the Securities Act, orany applicable exchange-related stockholder approval provisions.

 

7.                                       There is noaction, suit, proceeding or investigation pending or, to such counsel’sknowledge, currently threatened against the Company that prevents the right ofthe Company to enter into this Agreement or any of the Related Agreements, orto consummate the transactions contemplated thereby.  To such counsel’s knowledge, the Company is not a party orsubject to the provisions of any order, writ, injunction, judgment or decree ofany court or government agency or instrumentality; nor is there any action,suit, proceeding or investigation by the Company currently pending or which theCompany intends to initiate.

 

8.                                       TheUCC-1 Financing Statement naming the Company as debtor and Laurus as securedparty is in proper form for filing and assuming that such UCC-1 FinancingStatement has been filed with the Secretary of State of Minnesota, the securityinterest created under the Security Agreement will constitute a perfectedsecurity interest under the Uniform Commercial Code in favor of Laurus.

 

10AA-30

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**EXHIBIT C**

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**FORM OF ESCROW AGREEMENT**

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10AA-31

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