Document:

Exhibit 10.3

 

THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS.  THIS NOTE MAY NOT
BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY
APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO MICRO COMPONENT
TECHNOLOGY, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

 

SECURED
NON-CONVERTIBLE TERM NOTE

 

FOR
VALUE RECEIVED, each of MICRO COMPONENT TECHNOLOGY, INC., a Minnesota
corporation (the “Parent”), and
the other companies listed on Exhibit A attached hereto (such other
companies together with the Parent, each a “Company”
and collectively, the “Companies”),
jointly and severally, promises to pay to LAURUS MASTER FUND, LTD., c/o M&C
Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street,
George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the “Holder”) or its registered assigns or successors in interest,
the sum of Five Million Two Hundred Fifty Thousand Dollars ($5,250,000),
together with any accrued and unpaid interest hereon, on February 17, 2009 (the
“Maturity Date”) if not sooner paid.

 

Capitalized
terms used herein without definition shall have the meanings ascribed to such
terms in the Security and Purchase Agreement among the Companies and the Holder
dated as of the date hereof (as amended, modified and/or supplemented from time
to time, the “Security Agreement”).

 

The following terms shall apply to this Secured
Non-Convertible Term Note (this “Note”):

 

ARTICLE I

CONTRACT
RATE

 

1.1           Contract
Rate.  Subject to Sections 4.2 and
5.10, interest payable on the outstanding principal amount of this Note (the “Principal Amount”) shall accrue at a rate per annum equal to
the “prime rate” published in The Wall Street Journal from time to time
(the “Prime Rate”), plus two and one half
percent (2.5%) (the “Contract Rate”).  The Contract Rate shall be increased or
decreased as the case may be for each increase or decrease in the Prime Rate in
an amount equal to such increase or decrease in the Prime Rate; each change to
be effective as of the day of the change in the Prime Rate.  The Contract Rate shall not at any time be
less than nine percent (9.0%).  Interest
shall be (i) calculated on the basis of a 360 day year, and (ii) payable
monthly, in arrears, commencing on March 1, 2006 on the first business day of
each consecutive calendar month thereafter through and including the Maturity
Date and on the Maturity Date, whether by acceleration or otherwise.

 

1.2           Contract
Rate Payments.  The Contract Rate
shall be calculated on the last business day of each calendar month hereafter
(other than for increases or decreases in the Prime 

 

1

 

Rate which shall be calculated and become effective in accordance with
the terms of Section 1.1) until the Maturity Date (each a “Determination
Date”).

 

1.3           Principal
Payments.  Amortizing payments of the
aggregate principal amount outstanding under this Note at any time (the “Principal Amount”) shall be made by the Company on March 1,
2007 and on the first business day of each succeeding month thereafter through
and including the Maturity Date (each, an “Amortization Date”).  Commencing on the first Amortization Date,
the Company shall make monthly payments to the Holder on each Amortization
Date, each such payment in the amount of $87,500 together with any accrued and
unpaid interest on such portion of the Principal Amount plus any and all other
unpaid amounts which are then owing under this Note, the Security Agreement
and/or any other Ancillary Agreement (collectively, the “Monthly
Amount”).  Any outstanding
Principal Amount together with any accrued and unpaid interest and any and all other
unpaid amounts which are then owing by the Company to the Holder under this
Note, the Security Agreement and/or any other Ancillary Agreement shall be due
and payable on the Maturity Date.

 

ARTICLE II

LOANS;
PAYMENTS UNDER THIS NOTE

 

2.1           Loans.  All Loans evidenced by this Note shall be
made in accordance with the terms and provisions of the Security Agreement.

 

2.2           [Intentionally
Omitted].

 

2.3           Optional
Redemption in Cash.  The Companies
will have the option of prepaying this Note (“Optional
Redemption”) by paying to the Holder a sum of money equal to one
hundred percent (100%) of the principal amount of this Note together with
accrued but unpaid interest thereon and any and all other sums due, accrued or
payable to the Holder arising under this Note, the Security Agreement, or any
other Ancillary Agreement (the “Redemption Amount”)
outstanding on the Redemption Payment Date (as defined below).  The Company shall deliver to the Holder a
written notice of redemption (the “Notice of Redemption”)
specifying the date for such Optional Redemption (the “Redemption
Payment Date”), which date shall be no later than ten (10) days
after the date of the Notice of Redemption (the “Redemption
Period”).  On the Redemption
Payment Date, the Redemption Amount (plus any additional interest and fees
accruing on the Notes during the Redemption Period) must be irrevocably paid in
full in immediately available funds to the Holder.  In the event the Companies fail to pay the
Redemption Amount on the Redemption Payment Date, then such Redemption Notice
shall be null and void.

 

2

 

ARTICLE III

[INTENTIONALLY
OMITTED]

 

ARTICLE IV

EVENTS
OF DEFAULT AND DEFAULT RELATED PROVISIONS

 

4.1           Events
of Default.  The occurrence of an
Event of Default under the Security Agreement shall constitute an event of
default (“Event of Default”) hereunder.

 

4.2           Default
Interest.  Following the occurrence
and during the continuance of an Event of Default, the Companies shall, jointly
and severally, pay additional interest on the outstanding principal balance of
this Note in an amount equal to two percent (2%) per month, and all outstanding
Obligations, including unpaid interest, shall continue to accrue interest at
such additional interest rate from the date of such Event of Default until the
date such Event of Default is cured or waived.

 

4.3           Default
Payment.  Following the occurrence
and during the continuance of an Event of Default, the Holder, at its option,
may elect, in addition to all rights and remedies of the Holder under the
Security Agreement and the other Ancillary Agreements and all obligations and
liabilities of each Company under the Security Agreement and the other
Ancillary Agreements, to require the Companies, jointly and severally, to make a
Default Payment (“Default Payment”).  The Default Payment shall be one hundred
thirty percent (130%) of the outstanding principal amount of the Note, plus
accrued but unpaid interest, all other fees then remaining unpaid, and all
other amounts payable hereunder.  The
Default Payment shall be applied first to any fees due and payable to the
Holder pursuant to the Notes, the Security Agreement and/or the Ancillary
Agreements, then to accrued and unpaid interest due on the Notes, the Security
Agreement and then to the outstanding principal balance of the Notes.  The Default Payment shall be due and payable
immediately on the date that the Holder has exercised its rights pursuant to
this Section 4.3.

 

ARTICLE V

MISCELLANEOUS

 

5.1           Issuance
of New Note.  Upon any partial
payment of this Note, a new Note containing the same date and provisions of
this Note shall, at the request of the Holder, be issued by the Companies to
the Holder for the principal balance of this Note and interest which shall not
have been paid.

 

5.2           Cumulative
Remedies.  The remedies under this
Note shall be cumulative.

 

5.3           Failure
or Indulgence Not Waiver.  No failure
or delay on the part of the Holder hereof in the exercise of any power, right
or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or
further exercise thereof or of any other right, power or privilege.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

 

5.4           Notices.  Any notice herein required or permitted to be
given shall be in writing and shall be deemed effective: (a) upon personal
delivery to the party notified, (b) when sent by confirmed telex or facsimile
if sent during normal business hours of the recipient, if not, then on the next
business day, (c) five days after having been sent by registered or certified
mail, 

 

3

 

return receipt requested, postage prepaid, or (d) one day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. 
All communications shall be sent to the respective Company at the
address provided for such Company in the Security Agreement executed in
connection herewith, and to the Holder at the address provided in the Security
Agreement for such Holder, with a copy to John E. Tucker, Esq., 825 Third
Avenue, 14th Floor, New York, New York 10022, facsimile
number (212) 541-4434, or at such other address as the respective Company or
the Holder may designate by ten days advance written notice to the other
parties hereto.

 

5.5           Amendment
Provision.  The term “Note” and all
references thereto, as used throughout this instrument, shall mean this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented, and any successor instrument as such successor
instrument may be amended or supplemented.

 

5.6           Assignability.  This Note shall be binding upon each Company
and its successors and assigns, and shall inure to the benefit of the Holder
and its successors and assigns, and may be assigned by the Holder in accordance
with the requirements of the Security Agreement.  No Company may assign any of its obligations
under this Note without the prior written consent of the Holder, any such
purported assignment without such consent being null and void.

 

5.7           Cost of
Collection.  In case of any Event of
Default under this Note, the Companies shall, jointly and severally, pay the
Holder’s reasonable costs of collection, including reasonable attorneys’ fees.

 

5.8           Governing
Law, Jurisdiction and Waiver of Jury Trial.

 

(a)           THIS NOTE
SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.

 

(b)           EACH
COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN
THE COUNTY OF NEW YORK, STATE OF NEW YORK SHALL HAVE EXCLUSIVE JURISDICTION TO
HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN ANY COMPANY, ON THE ONE HAND,
AND THE HOLDER, ON THE OTHER HAND, PERTAINING TO THIS NOTE, THE SECURITY
AGREEMENT OR ANY OF THE OTHER ANCILLARY AGREEMENTS OR TO ANY MATTER ARISING OUT
OF OR RELATED TO THIS NOTE, THE SECURITY AGREEMENT OR ANY OF THE OTHER
ANCILLARY AGREEMENTS; PROVIDED, THAT EACH COMPANY ACKNOWLEDGES THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
THE COUNTY OF NEW YORK, STATE OF NEW YORK; AND FURTHER  PROVIDED,
THAT NOTHING IN THIS NOTE SHALL BE DEEMED OR OPERATE TO PRECLUDE THE HOLDER
FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
COLLECT THE OBLIGATIONS, TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE
HOLDER.  EACH 

 

4

 

COMPANY EXPRESSLY
SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT
COMMENCED IN ANY SUCH COURT, AND EACH COMPANY HEREBY WAIVES ANY OBJECTION THAT
IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM
NON CONVENIENS.  EACH COMPANY HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO THE
COMPANY AT THE ADDRESS SET FORTH IN THE SECURITY AGREEMENT AND THAT SERVICE SO
MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF THE COMPANY’S ACTUAL RECEIPT
THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE
PREPAID.

 

(c)           EACH
COMPANY DESIRES THAT ITS DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH
APPLICABLE LAWS.  THEREFORE, TO ACHIEVE
THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION,
EACH COMPANY HERETO WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER ARISING IN CONTRACT, TORT,
OR OTHERWISE BETWEEN THE HOLDER, AND/OR ANY COMPANY ARISING OUT OF, CONNECTED
WITH, RELATED OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS NOTE, THE SECURITY AGREEMENT, ANY OTHER ANCILLARY
AGREEMENT OR THE TRANSACTIONS RELATED HERETO OR THERETO.

 

5.9           Severability.  In the event that any provision of this Note
is invalid or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform with such statute or rule of
law.  Any such provision which may prove
invalid or unenforceable under any law shall not affect the validity or
enforceability of any other provision of this Note.

 

5.10         Maximum
Payments.  Nothing contained herein
shall be deemed to establish or require the payment of a rate of interest or
other charges in excess of the maximum permitted by applicable law.  In the event that the rate of interest
required to be paid or other charges hereunder exceed the maximum rate permitted
by such law, any payments in excess of such maximum rate shall be credited
against amounts owed by the Companies to the Holder and thus refunded to the
Companies.

 

5.11         Security
Interest.  The Holder has been
granted a security interest (i) in certain assets of the Companies as more
fully described in the Security Agreement and (ii) pursuant to certain other
Ancillary Agreements referred to in the Security Agreement.

 

5.12         Construction.  Each party acknowledges that its legal
counsel participated in the preparation of this Note 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 Note to favor
any party against the other.

 

5

 

5.13         Registered
Obligation.  This Note is intended to
be a registered obligation within the meaning of Treasury Regulation Section
1.871-14(c)(1)(i) and the Companies (or their agent) shall register this Note
(and thereafter shall maintain such registration) as to both principal and any
stated interest.  Notwithstanding any
document, instrument or agreement relating to this Note to the contrary,
transfer of this Note (or the right to any payments of principal or stated interest
thereunder) may only be effected by (i) surrender of this Note and either the
reissuance by the Companies of this Note to the new holder or the issuance by
the Company of a new instrument to the new holder, or (ii) transfer through a
book entry system maintained by the Company (or its agent), within the meaning
of Treasury Regulation Section 1.871-14(c)(1)(i)(B).

 

[Balance of page
intentionally left blank; signature page follows]

 

6

 

IN
WITNESS WHEREOF, each Company has caused this Secured
Non-Convertible Term Note to be signed in its name effective as of this 17th
day of February 2006.

 

 

	
  WITNESS:

  	
   

  	
  MICRO COMPONENT
  TECHNOLOGY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  

 

7

 

EXHIBIT
A

 

OTHER COMPANIES

 

None

 

8Exhibit 10.4

 

THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY
STATE SECURITIES LAWS. THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE
OF THIS WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS WARRANT UNDER
SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
REASONABLY SATISFACTORY TO MICRO COMPONENT TECHNOLOGY, INC. THAT SUCH
REGISTRATION IS NOT REQUIRED.

 

Right
to Purchase up to 2,500,000 Shares of Common Stock of Micro Component
Technology, Inc.

(subject to adjustment as provided herein)

 

WARRANT

 

	
  No.
                          

  	
   

  	
  Issue Date: February 17,
  2006

  

 

MICRO
COMPONENT TECHNOLOGY, INC., a corporation organized under the laws of the State
of Minnesota (“Company”), hereby certifies that, for value received, LAURUS
MASTER FUND, LTD., or assigns (the “Holder”), is entitled, subject to the terms
set forth below, to purchase from the Company (as defined herein) from and
after the Issue Date of this Warrant and at any time or from time to time
before 5:00 p.m., New York time, through the close of business February 17,
2016 (the “Expiration Date”), up to 2,500,000 fully paid and nonassessable
shares of Common Stock (as hereinafter defined), $0.01 par value per share, at
the applicable Exercise Price per share (as defined below).  The number and character of such shares of
Common Stock and the applicable Exercise Price per share are subject to
adjustment as provided herein.

 

As
used herein the following terms, unless the context otherwise requires, have
the following respective meanings:

 

(a)           The term “Company” shall include Micro
Component Technology, Inc. and any corporation that shall succeed, or assume
the obligations of, Micro Component Technology, Inc. hereunder.

 

(b)           The term “Common Stock” includes (i) the
Company’s Common Stock, $0.01
par value per share; and (ii) any other securities into which or for which any
of the securities described in (a) may be converted or exchanged pursuant to a
plan of recapitalization, reorganization, merger, sale of assets or otherwise.

 

(c)           The “Exercise Price” applicable under this
Warrant shall be a price of $0.01 per share.

 

 

(d)           The term “Other Securities” refers to any
stock (other than Common Stock) and other securities of the Company or any
other person (corporate or otherwise) which the Holder at any time shall be
entitled to receive, or shall have received, on the exercise of the Warrant, in
lieu of or in addition to Common Stock, or which at any time shall be issuable
or shall have been issued in exchange for or in replacement of Common Stock or
Other Securities pursuant to Section 4 or otherwise.

 

1.             Exercise of Warrant.

 

1.1           (a) Number of Shares Issuable upon Exercise.  From
and after the date hereof through and including the Expiration Date, the Holder
shall be entitled to receive, upon exercise of this Warrant in whole or in
part, by delivery of an original or fax copy of an exercise notice in the form
attached hereto as Exhibit A (the “Exercise Notice”), shares of Common Stock of
the Company, subject to adjustment pursuant to Section 4.  Notwithstanding anything herein to the
contrary, in no event shall the Holder be entitled to exercise any portion of
this Warrant in excess of that portion of this Warrant upon exercise of which
the sum of (1) the number of shares of Common Stock beneficially owned by the
Holder and its Affiliates (other than shares of Common Stock which may be
deemed beneficially owned through the ownership of the unexercised portion of
the Warrant or the unexercised or unconverted portion of any other security of
the Holder subject to a limitation on conversion analogous to the limitations
contained herein) and (2) the number of shares of Common Stock issuable upon
the exercise of the portion of this Warrant with respect to which the
determination of this proviso is being made, would result in beneficial
ownership by the Holder and its Affiliates of any amount greater than 4.99% of
the then outstanding shares of Common Stock (whether or not, at the time of
such exercise, the Holder and its Affiliates beneficially own more than 4.99%
of the then outstanding shares of Common Stock).  For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulations 13D-G thereunder, except as otherwise provided in
clause (1) of such proviso.  The Holder may waive the limitations set
forth herein by sixty-one (61) days written notice to the Company and such
limitations shall automatically become null and void upon an Event of Default
under and as defined in that certain Security and Purchase Agreement, dated as
of the date hereof, by and between the Company and the Holder (as amended,
modified or supplemented from time to time, the “Security Agreement”).  As used herein, the term “Affiliate” means any person or entity
that, directly or indirectly through one or more intermediaries, controls or is
controlled by or is under common control with a person or entity, as such terms
are used in and construed under Rule 144 under the Securities Act.

 

(b)           Restrictions.  Notwithstanding anything to the contrary
contained herein, the Holder hereby agrees that (i) during the period on and
after the Issue Date and prior to the date that is the one year anniversary of
the Issue Date, it shall not sell any Common Stock acquired upon exercise of
this Warrant (such Common Stock, “Exercised Common Stock”) and (ii) at any time
on or after the one year anniversary of the Issue Date, the Holder’s shall not,
on any trading day, be permitted to sell Exercised Common Stock in

 

2

 

excess of twenty percent (20%) of the
aggregate number of shares of the Common Stock traded on such trading day.

 

1.2           Fair Market Value.  For
purposes hereof, the “Fair Market Value” of a share of Common Stock as of a
particular date (the “Determination Date”) shall mean:

 

(a)           If the Company’s Common Stock is traded on
the American Stock Exchange or another national exchange or is quoted on the
National or SmallCap Market of The Nasdaq Stock Market, Inc. (“Nasdaq”), then
the closing or last sale price, respectively, reported for the last business
day immediately preceding the Determination Date.

 

(b)           If the Company’s Common Stock is not traded
on the American Stock Exchange or another national exchange or on the Nasdaq
but is quoted on the NASD Over The Counter Bulletin Board, then the mean of the
average of the closing bid and asked prices reported for the last business day
immediately preceding the Determination Date.

 

(c)           Except as provided in clause (d) below, if
the Company’s Common Stock is not publicly traded, then as the Holder and the
Company agree or in the absence of agreement by arbitration in accordance with
the rules then in effect of the American Arbitration Association, before a
single arbitrator to be chosen from a panel of persons qualified by education
and training to pass on the matter to be decided.

 

(d)           If the Determination Date is the date of a
liquidation, dissolution or winding up, or any event deemed to be a
liquidation, dissolution or winding up pursuant to the Company’s charter, then
all amounts to be payable per share to holders of the Common Stock pursuant to
the charter in the event of such liquidation, dissolution or winding up, plus
all other amounts to be payable per share in respect of the Common Stock in
liquidation under the charter, assuming for the purposes of this clause (d)
that all of the shares of Common Stock then issuable upon exercise of this
Warrant are outstanding at the Determination Date.

 

1.3           Company Acknowledgment.  The
Company will, at the time of the exercise of this Warrant, upon the request of
the Holder hereof acknowledge in writing its continuing obligation to afford to
such Holder any rights to which such Holder shall continue to be entitled after
such exercise in accordance with the provisions of this Warrant.  If the Holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such Holder any such rights.

 

1.4           Trustee for Warrant Holders.  In
the event that a bank or trust company shall have been appointed as trustee for
the Holder of this Warrant pursuant to Subsection 3.2, such bank or trust
company shall have all the powers and duties of a warrant agent (as hereinafter
described) and shall accept, in its own name for the account of the Company or
such successor person as may be entitled thereto, all amounts

 

3

 

otherwise payable to the Company or such successor, as the case may be,
on exercise of this Warrant pursuant to this Section 1.

 

2.             Procedure for Exercise.

 

2.1           Delivery of Stock Certificates, Etc., on
Exercise.  The Company agrees that the shares of Common
Stock purchased upon exercise of this Warrant shall be deemed to be issued to
the Holder as the record owner of such shares as of the close of business on
the date on which this Warrant shall have been surrendered and payment made for
such shares in accordance herewith.  As
soon as practicable after the exercise of this Warrant in full or in part, and
in any event within three (3) business days thereafter, the Company at its
expense (including the payment by it of any applicable issue taxes) will cause
to be issued in the name of and delivered to the Holder, or as such Holder
(upon payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

 

2.2           Exercise.

 

(a)           Subject to subsection (b) below, payment
shall be made in cash or by certified or official bank check payable to the
order of the Company equal to the applicable aggregate Exercise Price for the
number of Common Shares specified in such Exercise Notice (as such exercise
number shall be adjusted to reflect any adjustment in the total number of
shares of Common Stock issuable to the Holder per the terms of this Warrant)
and the Holder shall thereupon be entitled to receive the number of duly
authorized, validly issued, fully-paid and non-assessable shares of Common
Stock (or Other Securities) determined as provided herein.

 

(b)           Notwithstanding any provisions herein to the
contrary, in the event there is no effective registration statement with
respect to the shares issuable upon exercise of this Warrant or an Event of
Default (as such term is defined in the Security Agreement) has occurred and is
continuing, if the Fair Market Value of one share of Common Stock is greater
than the Exercise Price (at the date of calculation as set forth below), in
lieu of exercising this Warrant for cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being exercised) by surrender of this Warrant at the principal office
of the Company together with the properly endorsed Exercise Notice in which
event the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

 

4

 

X=Y         (A-B)

A

 

	
  Where X =

  	
  the number of shares of
  Common Stock to be issued to the Holder

  
	
   

  	
   

  
	
  Y =

  	
  the number of shares of
  Common Stock purchasable under this Warrant or, if only a portion of this
  Warrant is being exercised, the portion of this Warrant being exercised (at
  the date of such calculation)

  
	
   

  	
   

  
	
  A =

  	
  the Fair Market Value of
  one share of the Company’s Common Stock (at the date of such calculation)

  
	
   

  	
   

  
	
  B =

  	
  Exercise Price (as
  adjusted to the date of such calculation)

  

 

5

 

3.             Effect of Reorganization, Etc.; Adjustment of
Exercise Price.

 

3.1           Reorganization, Consolidation, Merger, Etc.  In
case at any time or from time to time, the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other person, or (c)
transfer all or substantially all of its properties or assets to any other
person under any plan or arrangement contemplating the dissolution of the
Company, then, in each such case, as a condition to the consummation of such a
transaction, proper and adequate provision shall be made by the Company whereby
the Holder, on the exercise hereof as provided in Section 1 at any time after
the consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall receive, in lieu
of the Common Stock (or Other Securities) issuable on such exercise prior to
such consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be,
if such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in Section 4.

 

3.2           Dissolution.  In the event of any
dissolution of the Company following the transfer of all or substantially all
of its properties or assets, the Company, concurrently with any distributions
made to holders of its Common Stock, shall at its expense deliver or cause to
be delivered to the Holder the stock and other securities and property
(including cash, where applicable) receivable by the Holder pursuant to Section
3.1, or, if the Holder shall so instruct the Company, to a bank or trust
company specified by the Holder and having its principal office in New York, NY
as trustee for the Holder (the “Trustee”).

 

3.3           Continuation of Terms.  Upon
any reorganization, consolidation, merger or transfer (and any dissolution
following any transfer) referred to in this Section 3, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable to
the shares of stock and other securities and property receivable on the
exercise of this Warrant after the consummation of such reorganization,
consolidation or merger or the effective date of dissolution following any such
transfer, as the case may be, and shall be binding upon the issuer of any such
stock or other securities, including, in the case of any such transfer, the
person acquiring all or substantially all of the properties or assets of the
Company, whether or not such person shall have expressly assumed the terms of
this Warrant as provided in Section 4. 
In the event this Warrant does not continue in full force and effect
after the consummation of the transactions described in this Section 3, then
the Company’s securities and property (including cash, where applicable)
receivable by the Holders will be delivered to Holder or the Trustee as
contemplated by Section 3.2.

 

4.             Extraordinary Events Regarding Common Stock.  In
the event that the Company shall (a) issue additional shares of the Common
Stock as a dividend or other distribution on outstanding Common Stock or any
preferred stock issued by the Company, (b) subdivide its outstanding shares of
Common Stock, or (c) combine its outstanding shares of the Common Stock into a
smaller number of shares of the Common

 

6

 

Stock (each of the preceding clauses (a) through (c), inclusive, an “Event”),
then, in each such event, the number of shares of Common Stock that the Holder shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be increased or decreased to a number determined by multiplying
the number of shares of Common Stock that would, immediately prior to such
Event, be issuable upon the exercise of this Warrant by a fraction of which (a)
the numerator is the number of issued and outstanding shares of Common Stock
immediately after such Event, and (b) the denominator is the number of issued
and outstanding shares of Common Stock immediately prior to such Event.

 

5.             Certificate as to Adjustments.  In
each case of any adjustment or readjustment in the shares of Common Stock (or
Other Securities) issuable on the exercise of this Warrant, the Company at its
expense will promptly cause its Chief Financial Officer or other appropriate
designee to compute such adjustment or readjustment in accordance with the
terms of this Warrant and prepare a certificate setting forth such adjustment
or readjustment and showing in detail the facts upon which such adjustment or
readjustment is based, including a statement of (a) the consideration received
or receivable by the Company for any additional shares of Common Stock (or
Other Securities) issued or sold or deemed to have been issued or sold, (b) the
number of shares of Common Stock (or Other Securities) outstanding or deemed to
be outstanding, and (c) the Exercise Price and the number of shares of Common
Stock to be received upon exercise of this Warrant, in effect immediately prior
to such adjustment or readjustment and as adjusted or readjusted as provided in
this Warrant.  The Company will forthwith
mail a copy of each such certificate to the Holder and any warrant agent of the
Company (appointed pursuant to Section 10 hereof).

 

6.             Reservation of Stock, Etc., Issuable on
Exercise of Warrant.  The
Company will at all times reserve and keep available, solely for issuance and
delivery on the exercise of this Warrant, shares of Common Stock (or Other
Securities) from time to time issuable on the exercise of this Warrant.

 

7.             Assignment; Exchange of Warrant. 
Subject to compliance with applicable securities laws, this Warrant, and
the rights evidenced hereby, may be transferred by any registered holder hereof
(a “Transferor”) in whole or in part.  On
the surrender for exchange of this Warrant, with the Transferor’s endorsement
in the form of Exhibit B attached hereto (the “Transferor Endorsement Form”)
and together with evidence reasonably satisfactory to the Company demonstrating
compliance with applicable securities laws, which shall include, without
limitation, the provision of a legal opinion from the Transferor’s counsel (at
the Company’s expense) that such transfer is exempt from the registration
requirements of applicable securities laws, and with payment by the Transferor
of any applicable transfer taxes) will issue and deliver to or on the order of
the Transferor thereof a new Warrant of like tenor, in the name of the
Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a “Transferee”), calling in the aggregate on the face or faces
thereof for the number of shares of Common Stock called for on the face or
faces of the Warrant so surrendered by the Transferor.

 

7

 

8.             Replacement of Warrant.  On
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant and, in the case of any such loss,
theft or destruction of this Warrant, on delivery of an indemnity agreement or
security reasonably satisfactory in form and amount to the Company or, in the
case of any such mutilation, on surrender and cancellation of this Warrant, the
Company at its expense will execute and deliver, in lieu thereof, a new Warrant
of like tenor.

 

9.             Registration Rights.  The
Holder has been granted certain registration rights by the Company.  These registration rights are set forth in a
Registration Rights Agreement entered into by the Company and Holder dated as
of even date of this Warrant.

 

10.           Warrant Agent.  The
Company may, by written notice to each Holder of this Warrant, appoint an agent
for the purpose of issuing Common Stock (or Other Securities) on the exercise
of this Warrant pursuant to Section 1, exchanging this Warrant pursuant to Section
7, and replacing this Warrant pursuant to Section 8, or any of the foregoing,
and thereafter any such issuance, exchange or replacement, as the case may be,
shall be made at such office by such agent.

 

11.           Transfer on the Company’s Books. 
Until this Warrant is transferred on the books of the Company, the
Company may treat the registered holder hereof as the absolute owner hereof for
all purposes, notwithstanding any notice to the contrary.

 

12.           Notices, Etc.  All
notices and other communications from the Company to the Holder shall be mailed
by first class registered or certified mail, postage prepaid, at such address
as may have been furnished to the Company in writing by such Holder or, until
any such Holder furnishes to the Company an address, then to, and at the
address of, the last Holder who has so furnished an address to the Company.

 

13.           Miscellaneous.  THIS
WARRANT AND ANY TERM HEREOF MAY BE CHANGED, WAIVED, DISCHARGED OR TERMINATED
ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY AGAINST WHICH ENFORCEMENT
OF SUCH CHANGE, WAIVER, DISCHARGE OR TERMINATION IS SOUGHT. THIS WARRANT SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.  Any action brought concerning the
transactions contemplated by this Warrant shall be brought only in the state
courts of New York or in the federal courts located in the state of New York;
provided, however, that the Holder may choose to waive this provision and bring
an action outside the state of New York. 
The individuals executing this Warrant on behalf of the Company agree to
submit to the jurisdiction of such courts and waive trial by jury.  The prevailing party shall be entitled to
recover from the other party its reasonable attorney’s fees and costs.  In the event that any provision of this
Warrant is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law.  Any such provision which
may

 

8

 

prove invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of this Warrant.  The headings in this Warrant are for purposes
of reference only, and shall not limit or otherwise affect any of the terms
hereof.  The invalidity or unenforceability
of any provision hereof shall in no way affect the validity or enforceability
of any other provision hereof.  The
Company acknowledges that legal counsel participated in the preparation of this
Warrant 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 Warrant to favor any party against the other
party.

 

[BALANCE
OF PAGE INTENTIONALLY LEFT BLANK;

SIGNATURE PAGE FOLLOWS.]

 

9

 

IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.

 

 

	
   

  	
  MICRO
  COMPONENT

  TECHNOLOGY, INC.

  
	
   

  	
   

  
	
  WITNESS:

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
					

 

10

 

EXHIBIT
A

 

FORM
OF SUBSCRIPTION

(To
Be Signed Only On Exercise Of Warrants)

 

TO:         MICRO COMPONENT TECHNOLOGY, INC.

 

Attention:              Chief Financial Officer

 

The
undersigned, pursuant to the provisions set forth in the attached Warrant (No.           ),
hereby irrevocably elects to purchase (check applicable box):

 

	
  o

  	
   

  	
                  
  shares of the Common Stock covered by such Warrant; or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  the maximum number of
  shares of Common Stock covered by such Warrant pursuant to the cashless
  exercise procedure set forth in Section 2.

  

 

The
undersigned herewith makes payment of the full Exercise Price for such shares
at the price per share provided for in such Warrant, which is $                .  Such payment takes the form of (check
applicable box or boxes):

 

	
  o

  	
   

  	
  $                in lawful money of the United States; and/or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  the cancellation of such
  portion of the attached Warrant as is exercisable for a total of           
  shares of Common Stock (using a Fair Market Value of $           per share for purposes of this calculation); and/or

  
	
   

  	
   

  	
   

  
	
  o

  	
   

  	
  the cancellation of such
  number of shares of Common Stock as is necessary, in accordance with the
  formula set forth in Section 2.2, to exercise this Warrant with respect to
  the maximum number of shares of Common Stock purchasable pursuant to the
  cashless exercise procedure set forth in Section 2.

  

 

The
undersigned requests that the certificates for such shares be issued in the
name of, and delivered to                                                                                          
whose address is                                                                                         .

 

 

The
undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant
shall be made pursuant to registration of the Common Stock under the Securities
Act of 1933, as amended (the “Securities Act”) or pursuant to an exemption from
registration under the Securities Act.

 

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform to
  name of Holder as

  specified on the face of the Warrant)

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

12

 

EXHIBIT
B

 

FORM
OF TRANSFEROR ENDORSEMENT

(To
Be Signed Only On Transfer Of Warrant)

 

For value received, the undersigned hereby sells,
assigns, and transfers unto the person(s) named below under the heading “Transferees”
the right represented by the within Warrant to purchase the percentage and
number of shares of Common Stock of MICRO COMPONENT TECHNOLOGY, INC. into which
the within Warrant relates specified under the headings “Percentage Transferred”
and “Number Transferred,” respectively, opposite the name(s) of such person(s)
and appoints each such person Attorney to transfer its respective right on the
books of MICRO COMPONENT TECHNOLOGY, INC. with full power of substitution in
the premises.

 

	
  Transferees

  	
   

  	
  Address

  	
   

  	
  Percentage

  Transferred

  	
   

  	
  Number

  Transferred

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

	
  Dated

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Signature must conform to
  name of

  Holder as specified on the face of the

  Warrant)

  
	
   

  	
   

  
	
   

  	
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SIGNED IN THE PRESENCE OF:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Name)

  
	
   

  	
   

  
	
   

  	
   

  
	
  ACCEPTED AND AGREED:

  [TRANSFEREE]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  (Name)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00098-of-00352.parquet"}]]