Document:

EXHIBIT
10DD

 

 

THIS NOTE AND THE COMMON
SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  THIS NOTE AND THE COMMON SHARES ISSUABLE UPON
CONVERSION OF 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 CONVERTIBLE TERM NOTE

 

FOR VALUE RECEIVED, MICRO COMPONENT TECHNOLOGY, INC., a Minnesota
corporation (the “Borrower”), hereby promises to pay 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, Fax: 345-949-9877
(the “Holder”) or its registered assigns or successors in interest, on order,
the sum of TWO MILLION DOLLARS ($2,000,000.00), together with any accrued and
unpaid interest hereon, on March 9, 2007 (the “Maturity Date”) if not
sooner paid.

 

Capitalized terms used herein without definition shall have the
meanings ascribed to such terms in that certain Securities Purchase Agreement
dated as of the date hereof between the Borrower and the Holder (the “Purchase
Agreement”).

 

The following terms shall apply to this Note:

 

ARTICLE I

INTEREST & AMORTIZATION

 

1.1           Interest
Rate and Payment.  (a) Subject to
Sections 4.10 and 5.6 hereof, interest payable on this Note shall accrue at a
rate per annum (the “Interest Rate”) equal to the “prime rate” published in The
Wall Street Journal from time to time, plus one and three-quarters percent
(1.75%).  The prime 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 such rate.  The Interest Rate shall not be less than
five and three-quarters percent (5.75%) unless the Company shall be in
compliance with Section 2.2 hereof. If the Company has satisfied the
requirements of Section 2.2

 

10DD-1

 

hereof, the Interest Rate will be subject to adjustment as set forth in
Section 1.1(b). In no event, however, shall the Interest Rate be less than
zero percent (0.0%).  Interest shall be
payable monthly in arrears commencing on April 1, 2004, on the first day
of each consecutive calendar month thereafter (each, a “Repayment Date”), and
on the Maturity Date, whether by acceleration or otherwise.

 

(b) On the
last business day of each month hereafter until the Maturity Date (each a “Determination
Date”), the Interest Rate shall be adjusted: if (i) the Company shall have
registered the shares of the Company’s common stock underlying the conversion
of the Note and that certain warrant issued to Holder on a registration
statement declared effective by the SEC, and (ii) the volume weighted average
price of the Common Stock as reported by Bloomberg, L.P. on the
principal market for the five (5) 
trading days immediately preceding a Determination Date exceeds the then
applicable Fixed Conversion Price, the
Interest Rate for the succeeding calendar month shall automatically be reduced
by the greater of  (i) 25 basis points
(0.25%) or (ii) one percent (1.0%) if there is an effective Registration
Statement (as defined in the Registration Statement), for each incremental
twenty five percent (25%) increase in the market price of the Common Stock
above the then applicable Fixed Conversion Price.

 

1.2           Minimum Monthly Principal
Payments. Amortizing payments of the aggregate principal amount outstanding
under this Note at any time  (the “Principal
Amount”) shall begin on September 1, 2004 and shall recur on the first calendar
day of each succeeding month thereafter until the Maturity Date (each, an
“Amortization Date”).  Subject to
Section 3 below, beginning on the first Amortization Date, the Borrower
shall make monthly payments to the Holder on each Repayment Date, each in the
amount of $66,667, together with any accrued and unpaid interest to date on
such portion of the Principal Amount plus any and all other amounts which are
then owing under this Note but have not been paid (collectively, the “Monthly
Amount”).

 

ARTICLE II

CONVERSION REPAYMENT OPTION

 

2.1           (a)
Payment of Monthly Amount in Cash or Common Stock.  Each month by the fifth (5th)
business day prior to each Amortization Date (the “Notice Date”), the Holder
shall deliver to Borrower a written notice in the form of Exhibit B attached
hereto electing to convert the Monthly Amount payable on the next Repayment
Date in either cash or Common Stock, or a combination of both (each, a
“Repayment Election Notice”). If a Repayment Election Notice is not delivered
by the Holder on or before the applicable Notice Date for such Repayment Date,
then the Borrower shall pay the Monthly Amount due on such Repayment Date in
cash. Any portion of the Monthly Amount paid in cash on a Repayment Date, shall
be paid to the Holder an amount equal to 101% of the principal portion of the
Monthly Amount due

 

10DD-2

 

and owing to Holder on the Repayment Date. If the Holder converts all
or a portion of the Monthly Amount in shares of Common Stock, the number of
such shares to be issued by the Borrower to the Holder on such Repayment Date
shall be the number determined by dividing (x) the portion of the Monthly
Amount to be paid in shares of Common Stock, by (y) the then applicable Fixed Conversion
Price.  For purposes hereof, the initial
“Fixed Conversion Price” means $1.79.

 

(b)           Monthly Amount
Conversion Guidelines.  Subject to
Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall elect to convert all or
a portion of the Monthly Amount due on each Repayment Date in shares of Common
Stock if the average closing price of the Common Stock as reported by
Bloomberg, L.P. on the Principal Market (as defined in Section 4.7 hereof)
for the three (3) trading days immediately preceding such Repayment Date was
greater than 115% of the Fixed Conversion Price.  Any part of the Monthly Amount due on a Repayment Date that the
Holder has not elected to convert into shares of Common Stock shall be paid by
the Borrower in cash on such Repayment Date. Any part of the Monthly Amount due
on such Repayment Date which the Holder has elected to convert into shares of
Common Stock but which must be paid in cash (as a result of the closing price
of the Common Stock on one or more of the three (3) trading days immediately
preceding the applicable Repayment Date was less than 115% of the Fixed
Conversion Price) shall be paid in cash at the rate of  101% of the Monthly Amount otherwise due on
the Repayment Date within three (3) business days of the applicable Repayment
Date.

 

2.2           No
Effective Registration. 
Notwithstanding anything to the contrary herein,  none of the Borrower’s obligations to the
Holder may be converted into Common Stock unless (a) either (i) an effective
current Registration Statement (as defined in the Registration Rights
Agreement) covering the shares of Common Stock to be issued in connection with
satisfaction of such obligations exists, or (ii) an exemption from registration
of the Common Stock is available to pursuant to Rule 144 of the Securities Act
and (b) no Event of Default hereunder exists and is continuing, unless such
Event of Default is cured within any applicable cure period or is otherwise
waived in writing by the Holder in whole or in part at the Holder’s option.

 

Any amounts converted by the
Holder pursuant to this Section 2.2 shall be deemed to
constitute payments of outstanding principal applying to Monthly Amounts for
the remaining Repayment Dates in chronological order.

 

2.3           Optional
Redemption in Cash.  The Borrower
will have the option of prepaying this Note (“Optional Redemption”) by paying
to the Holder a sum of money equal to (i) one hundred five percent (105%) of
the principal amount of this Note if the closing price of the Common Stock on
one or more of the three (3) trading days immediately preceding the Optional
Redemption date is less than or equal to 75% of the then Fixed Conversion
Price; (ii) one hundred ten percent (110%) of the principal

 

10DD-3

 

amount of this Note if the closing price of the Common Stock on one or
more of the three (3) trading days immediately preceding the Optional Redemption
date is between 76% and 100% of the then Fixed Conversion Price, inclusive; or
(iii) one hundred fifteen percent (115%) of the principal amount of this Note
if the closing price of the Common Stock on one or more of the three (3)
trading days immediately preceding the Optional Redemption date is between 101%
and 107.5% of the then Fixed Conversion Price, inclusive; or (iv) one hundred twenty
percent (120%) of the principal amount of this Note if the closing price of the
Common Stock on one or more of the three (3) trading days immediately preceding
the Optional Redemption Date is greater than 107.5% of the then Fixed
Conversion Price, 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 Ancillary Agreement  (as defined in the Security Agreement) (the “Redemption Amount”) outstanding
on the day written notice of redemption (the “Notice of Redemption”) is given
to the Holder. The Notice of Redemption shall specify the date for such
Optional Redemption (the “Redemption Payment Date”) which date shall be ten
(10) days after the date of the Notice of Redemption (the “Redemption Period”).
A Notice of Redemption shall not be effective with respect to any portion of
this Note for which the Holder has a pending election to convert pursuant to
Section 3.1, or for conversions elected to be made by the Holder pursuant
to Section 3.1 during the Redemption Period.  The Redemption Amount shall be determined as if such Holder’s
conversion elections had been completed immediately prior to the date of the
Notice of Redemption. On the Redemption Payment Date, the Redemption Amount
must be paid in good funds to the Holder. 
In the event the Borrower fails to pay the Redemption Amount on the
Redemption Payment Date, then such Redemption Notice will be null and void.

 

ARTICLE III

CONVERSION RIGHTS

 

3.1.          Holder’s Conversion Rights.  The Holder shall have the right, but not the
obligation, to convert all or any portion of the then aggregate outstanding
principal amount of this Note, together with interest and fees due hereon, into
shares of Common Stock subject to the terms and conditions set forth in this
Article III.  The Holder may
exercise such right by delivery to the Borrower of a written notice of
conversion not less than one (1) day prior to the date upon which such
conversion shall occur.  The date upon
which such conversion shall occur is (the “Conversion Date”).

 

3.2           Conversion
Limitation. 
Notwithstanding anything contained herein to the contrary, the Holder
shall not be entitled to convert pursuant to the terms of this Note an amount
that (a) would be convertible into that number of Conversion Shares that would
exceed the difference between the number of shares of Common Stock beneficially
owned by such Holder or issuable upon exercise of warrants held by such Holder
and 4.99% of the outstanding shares of Common Stock of the Borrower or (b)
exceed twenty five percent (25%)

 

10DD-4

 

of the aggregate
dollar trading volume of the Common Stock for the ten (10) day trading period
immediately preceding delivery of a Notice of Conversion to the Borrower.  For the purposes of the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder.   The Holder may void the Conversion Share
limitation described in this Section 3.2 upon 75 days prior notice to the
Borrower or without any notice requirement upon an Event of Default.

 

3.3           Mechanics
of Holder’s Conversion. (a) In the event that the Holder
elects to convert this Note into Common Stock, the Holder shall give notice of
such election by delivering an executed and completed notice of conversion
(“Notice of Conversion”) to the Borrower and such Notice of Conversion shall
provide a breakdown in reasonable detail of the Principal Amount, accrued
interest and fees being converted.  On
each Conversion Date (as hereinafter defined) and in accordance with its Notice
of Conversion, the Holder shall make the appropriate reduction to the Principal
Amount, accrued interest and fees as entered in its records and shall provide
written notice thereof to the Borrower within two (2) business days after the
Conversion Date.  Each date on which a
Notice of Conversion is delivered or telecopied to the Borrower in accordance
with the provisions hereof shall be deemed a Conversion Date (the “Conversion
Date”). A form of Notice of Conversion to be employed by the Holder is annexed
hereto as Exhibit A.

 

(b) Pursuant to the terms of the Notice of Conversion, the
Borrower will issue instructions to the transfer agent accompanied by an
opinion of counsel within one (1) business day of the date of the delivery to
Borrower of the Notice of Conversion and shall cause the transfer agent to
transmit the certificates representing the Conversion Shares to the Holder by
crediting the account of the Holder’s designated broker with the Depository
Trust Corporation (“DTC”) through its Deposit Withdrawal Agent Commission
(“DWAC”) system within three (3) business days after receipt by the Borrower of
the Notice of Conversion (the “Delivery Date”).  In the case of the exercise of the conversion rights set forth
herein the conversion privilege shall be deemed to have been exercised and the
Conversion Shares issuable upon such conversion shall be deemed to have been
issued upon the date of receipt by the Borrower of the Notice of
Conversion.  The Holder shall be treated
for all purposes as the record holder of such Common Stock, unless the Holder
provides the Borrower written instructions to the contrary.

 

(c) The Borrower understands that a delay in the delivery of
the shares of Common Stock issuable upon conversion of the Note (the “Note
Shares”) in the form required pursuant to this Section 3 beyond the
Delivery Date could result in economic loss to the Holder.  In the event that the Borrower fails to
direct its transfer agent to deliver the Note Shares to the Holder via the DWAC
system within the time frame set forth in Section 3.3(b) above and the
Note Shares are not delivered to the Holder by the Delivery Date, as
compensation to the Holder for such loss, the Borrower agrees to pay late
payments to the Holder for late issuance of the Note Shares in the form
required pursuant to this Section 3 upon conversion of the Note in the
amount equal to the greater of:  (i)
$500 per business day after the Delivery Date; or (ii) the Holder’s actual
damages from such delayed delivery. Notwithstanding the foregoing, the Borrower
will not owe the Holder any late payments if the delay in the delivery of the
Note Shares beyond the Delivery Date is solely out of the control of the
Borrower and the Borrower

 

10DD-5

 

is actively
trying to cure the cause of the delay. 
The Borrower shall pay any payments incurred under this Section 3.3
in immediately available funds upon demand and, in the case of actual damages,
accompanied by reasonable documentation of the amount of such damages.  Such documentation shall show the number of
shares of Common Stock the Holder is forced to purchase (in an open market
transaction) which the Holder anticipated receiving upon such conversion, and
shall be calculated as the amount by which (A) the Holder’s total purchase
price (including customary brokerage commissions, if any) for the shares of Common
Stock so purchased exceeds (B) the aggregate principal and/or interest amount
of the Note, for which such Notice of Notice was not timely honored.

 

Nothing contained herein
or in any document referred to herein or delivered in connection herewith 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 or
dividends required to be paid or other charges hereunder exceed the maximum
amount permitted by such law, any payments in excess of such maximum shall be
credited against amounts owed by the Borrower to the Holder and thus refunded
to the Borrower.

 

3.4           Conversion
Mechanics.

 

(a)           The
number of shares of Common Stock to be issued upon each conversion of this Note
shall be determined by dividing that portion of the principal and interest and
fees to be converted, if any, by the then applicable Fixed Conversion
Price.  In the event of any conversions
of outstanding principal amount under this Note in part pursuant to this
Article III, such conversions shall be deemed to constitute conversions of
outstanding principal amount applying to Monthly Amounts for the remaining
Repayment Dates in chronological order. 
By way of example, if the original principal amount of this Note is
$2,000,000, the Holder converted $100,000 of such original principal amount
prior to the first Repayment Date, then (1) the principal amount of the Monthly
Amount due on the first Repayment Date would equal $0.00, (2) the principal
amount of the Monthly Amount due on the second Repayment Date would equal
$33,334.00 and (3) the principal amount of the Monthly Amount due on the third
Repayment Date would be $66,667.00.

 

(b)           The
Fixed Conversion Price and number and kind of shares or other securities to be
issued upon conversion is subject to adjustment from time to time upon the
occurrence of certain events, as follows:

 

A.            Stock
Splits, Combinations and Dividends. 
If the shares of Common Stock are subdivided or combined into a greater
or smaller number of shares of Common Stock, or if a dividend is paid on the
Common Stock in shares of Common Stock, the Fixed Conversion Price or the
Conversion Price, as the case may be, shall be proportionately reduced in case
of subdivision of shares or stock dividend or proportionately increased in the
case of combination of shares, in each such case by the ratio

 

10DD-6

 

which the total number of shares of Common Stock outstanding immediately
after such event bears to the total number of shares of Common Stock
outstanding immediately prior to such event.

 

B.            During
the period the conversion right exists, the Borrower will reserve from its
authorized and unissued Common Stock a sufficient number of shares to provide
for the issuance of Common Stock upon the full conversion of this Note.  The Borrower represents that upon issuance,
such shares will be duly and validly issued, fully paid and
non-assessable.  The Borrower agrees
that its issuance of this Note shall constitute full authority to its officers,
agents, and transfer agents who are charged with the duty of executing and
issuing stock certificates to execute and issue the necessary certificates for
shares of Common Stock upon the conversion of this Note.

 

C.            Share
Issuances.  Subject to the
provisions of this Section 3.4, if the Borrower shall at any time prior to
the conversion or repayment in full of the Principal Amount issue any shares of
Common Stock to a person other than the Holder (except (i) pursuant to
Subsections A or B above; (ii) pursuant to options, warrants, or other
obligations to issue shares outstanding on the date hereof as disclosed to
Holder in writing; or (iii) pursuant to options that may be issued under any employee
incentive stock option and/or any qualified stock option plan adopted by the
Borrower) for a consideration per share (the “Offer Price”) less than the Fixed
Conversion Price in effect at the time of such issuance, then the Fixed
Conversion Price shall be immediately reset to such lower Offer Price for
purposes hereof, the issuance of any security of the Borrower convertible into
or exercisable or exchangeable for Common Stock shall result in an adjustment
to the Fixed Conversion Price at the time of issuance of such securities.

 

D.            Reclassification, etc.  If the Borrower at any time shall, by
reclassification or otherwise, change the Common Stock into the same or a
different number of securities of any class or classes, this Note, as to the
unpaid Principal Amount and accrued interest thereon, shall thereafter be
deemed to evidence the right to purchase an adjusted number of such securities
and kind of securities as would have been issuable as the result of such change
with respect to the Common Stock immediately prior to such reclassification or
other change.

 

3.5           Issuance
of New Note.  Upon any partial
conversion 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 Borrower to the
Holder for the principal balance of this Note and interest which shall not have
been converted or paid. The Borrower will pay no costs, fees or any other
consideration to the Holder for the production and issuance of a new Note.

 

10DD-7

 

ARTICLE IV

EVENTS OF
DEFAULT

 

Upon the occurrence and continuance of an Event of Default beyond any
applicable grace period, the Holder may make all sums of principal, interest
and other fees then remaining unpaid hereon and all other amounts payable
hereunder due and payable within five (5) days after written notice from Holder
to Borrower (each occurrence being a “Default Notice Period”).  In the event of such an acceleration, the
amount due and owing to the Holder shall be 130% of the outstanding principal
amount of the Note (plus accrued and unpaid interest and fees, if any).  If, with respect to any Event of Default
other than a payment default described in Section 4.1 below, within the
Default Notice Period the Borrower cures the Event of Default, the Event of
Default will be deemed to no longer exist and any rights and remedies of Holder
pertaining to such Event of Default will be of no further force or effect.

 

The occurrence of any of the following events is an “Event of Default”:

 

4.1           Failure
to Pay Principal, Interest or other Fees. 
The Borrower fails to pay when due any installment of principal,
interest or other fees hereon in accordance herewith, or the Borrower fails to
pay when due any amount due under any other promissory note issued by Borrower.

 

4.2           Breach
of Covenant.  The Borrower breaches
any material covenant or other term or condition of this Note or the Purchase
Agreement in any material respect and such breach, if subject to cure,
continues for a period of thirty (30) days after the occurrence thereof.

 

4.3           Breach
of Representations and Warranties. 
Any material representation or warranty of the Borrower made herein, in
the Purchase Agreement, or in any Related Document (as defined in the Purchase
Agreement) shall be materially false or misleading and shall not be cured for a
period of ten (10) days after the occurrence thereof.

 

4.4           Receiver
or Trustee.  The Borrower shall make
an assignment for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial part of its
property or business; or such a receiver or trustee shall otherwise be
appointed.

 

4.5           Judgments.  Any money judgment, writ or similar final
process shall be entered or filed against the Borrower or any of its property
or other assets for more than $250,000, and shall remain unvacated, unbonded or
unstayed for a period of ninety (90) days.

 

10DD-8

 

4.6           Bankruptcy.  Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings or relief under any bankruptcy law
or any law for the relief of debtors shall be instituted by or against the
Borrower.

 

4.7           Stop
Trade.  An SEC stop trade order or
Principal Market trading suspension of the Common Stock shall be in effect for
5 consecutive days or 5 days during a period of 10 consecutive days, excluding
in all cases a suspension of all trading on a Principal Market, provided
that the Borrower shall not have been able to cure such trading suspension
within 30 days of the notice thereof or list the Common Stock on another
Principal Market within 60 days of such notice.  The “Principal Market” for the Common Stock shall include the
NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System,
American Stock Exchange, or New York Stock Exchange (whichever of the foregoing
is at the time the principal trading exchange or market for the Common Stock,
or any securities exchange or other securities market on which the Common Stock
is then being listed or traded.

 

4.8   
Failure to Deliver Common Stock or Replacement Note.  The Borrower’s failure to timely deliver
Common Stock to the Holder pursuant to and in the form required by this Note,
and Section 9 of the Purchase Agreement, if such failure to timely deliver
Common Stock shall not be cured within two (2) days.  If Borrower is required to issue a replacement Note to Holder and
Borrower shall fail to deliver such replacement Note within seven (7) Business
Days.

 

4.9  Default Under Related Agreements.  The occurrence and continuance of any Event
of Default as defined in the Related Agreements.

 

DEFAULT RELATED PROVISIONS

 

4.10         Payment
Grace Period.  The Borrower shall
have a three (3) business day grace period to pay any monetary amounts due
under this Note or the Purchase Agreement or any Related Document, after which
grace period a default interest rate of two percent (2%) per month shall apply
to the monetary amounts due hereunder.

 

4.11         Conversion
Privileges.  The conversion
privileges set forth in Article III shall remain in full force and effect
immediately from the date hereof and until this Note is paid in full.

 

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

 

10DD-9

 

ARTICLE V

MISCELLANEOUS

 

5.1           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.

 

5.2           Notices.  Any notice herein required or permitted to
be given shall be in writing and shall be deemed effectively given:  (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, 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 Borrower at the address provided in the Purchase
Agreement executed in connection herewith, and to the Holder at the address
provided in the Purchase 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
Borrower or the Holder may designate by ten days advance written notice to the
other parties hereto.  A Notice of
Conversion shall be deemed given when made to the Borrower pursuant to the
Purchase Agreement.

 

5.3           Amendment
Provision.  The term “Note” and all
reference 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 issued pursuant to
Section 3.5 hereof, as it may be amended or supplemented.

 

5.4           Assignability.  This Note shall be binding upon the Borrower
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 Purchase Agreement.

 

5.5           Governing
Law.  This Note shall be governed by
and construed in accordance with the laws of the State of New York, without
regard to principles of conflicts of laws. 
Any action brought by either party against the other concerning the transactions
contemplated by this Agreement shall be brought only in the state courts of New
York or in the federal courts located in the state of New York.  Both parties and the individual signing this
Note on behalf of the Borrower agree to submit to the jurisdiction of such
courts.  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 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

 

10DD-10

 

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 unenforceability of any other provision of
this Note. Nothing contained herein shall be deemed or operate to preclude the
Holder from bringing suit or taking other legal action against the Borrower in
any other jurisdiction to collect on the Borrower’s obligations to Holder, to
realize on any collateral or any other security for such obligations, or to
enforce a judgment or other court in favor of the Holder.

 

5.6           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 permitted by
such law, any payments in excess of such maximum shall be credited against
amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

5.7           Security
Interest.  The holder of this Note
has been granted a security interest in certain assets of the Borrower more
fully described in a Security Agreement dated as of
March       , 2004.

 

5.8                           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.

 

5.9                           Cost of Collection.  If default is made in the payment of this
Note, the borrower shall pay to Holder reasonable costs of collection,
including reasonable attorney’s fees.

 

 

IN WITNESS WHEREOF,  Borrower
has caused this Convertible Term Note to be signed in its name effective as of
this 9th day of March, 2004.

 

	
   

  	
  MICRO COMPONENT TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Thomas P. Maun

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
						

 

10DD-11

 

	
  WITNESS:

  
	
   

  
	
   

  
	
  /s/ Lori Faber

  	
   

  

 

10DD-12

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be executed by the Holder in order to convert all or part of the
Note into Common Stock

 

[Name and Address of Holder]

 

 

The Undersigned hereby elects to convert 
$                 
of the principal due on [specify applicable Repayment Date] under the
Convertible Term Note issued by MICRO COMPONENT TECHNOLOGY, INC. dated
March 9, 2004 by delivery of Shares of Common Stock of MICRO COMPONENT
TECHNOLOGY, INC. on and subject to the conditions set forth in Article III
of such Note.

 

1.        Date of Conversion
                                                      

 

2.        Shares To Be Delivered:
                                                      

 

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						

 

10DD-13

 

EXHIBIT B

 

CONVERSION ELECTION NOTICE

 

(To be executed by the Holder in order to convert all or part of a
Monthly Amount into Common Stock)

 

[Name and Address of Holder]

 

 

Holder hereby elects to convert 
$                 
of the Monthly Amount due on [specify applicable Repayment Date] under the
Convertible Term Note issued by MICRO COMPONENT TECHNOLOGY, INC. dated
March 9, 2004 by delivery of Shares of Common Stock of MICRO COMPONENT TECHNOLOGY,
INC. on and subject to the conditions set forth in Article III of such
Note.

 

 

1.             Fixed
Conversion Price:      $                                              

 

2.             Amount
to be paid:              $                                              

 

3.             Shares
To Be Delivered (2 divided by 1):                                                      

 

4.             Cash
payment to be made by Borrower :         $                                              

 

 

	
  Date:

  	
   

  	
   

  	
  LAURUS MASTER FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Tittle:

  	
   

  	
   

  
							

 

10DD-14EXHIBIT 10EE

 

EXECUTION
VERSION

 

MINIMUM BORROWING NOTE 

REGISTRATION RIGHTS AGREEMENT

 

This Minimum
Borrowing Note Registration Rights Agreement (this “Agreement”) is made and
entered into as of March 9, 2004, by and between Micro Component
Technology, Inc., a Minnesota 
corporation (the “Company”), and Laurus Master Fund, Ltd. (the
“Purchaser”).

 

This Agreement is
made pursuant to the Security Agreement, dated as of the date hereof, by and
between the Purchaser and the Company (the “Security Agreement”), and pursuant
to the Notes and the Warrants referred to therein.

 

The Company and
the Purchaser hereby agree as follows:

 

Definitions.  Capitalized terms used and not otherwise
defined herein that are defined in the Security Agreement shall have the
meanings given such terms in the Security Agreement.  As used in this Agreement, the following terms shall have the
following meanings:

 

“Commission” means
the Securities and Exchange Commission.

 

“Common Stock”
means shares of the Company’s common stock, par value $0.01 per share.

 

“Effectiveness
Date” means the 90th day following the applicable Filing Date.

 

“Effectiveness
Period” shall have the meaning set forth in Section 2(a).

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended, and any successor
statute.

 

 “Filing Date” means, with respect to the
Registration Statement which is required to be filed with respect to the Loan
made on the date hereof, the date which is thirty (30)  days after such funding date.

 

“Holder” or
“Holders” means the Purchaser or any of its affiliates or transferees to the
extent any of them hold Registrable Securities.

 

10EE-1

 

“Indemnified
Party” shall have the meaning set forth in Section 5(c).

 

“Indemnifying
Party” shall have the meaning set forth in Section 5(c).

 

“Notes” has the
meaning set forth in the Security Agreement.

 

“Proceeding” means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

 

“Prospectus” means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such Registration
Statement, and all other amendments and supplements to the Prospectus,
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.

 

“Registrable
Securities” means the shares of Common Stock issued upon the conversion of the
each Note and issuable upon exercise of the Warrants.

 

“Registration
Statement” means each registration statement required to be filed hereunder,
including the Prospectus therein, amendments and supplements to such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.

 

“Rule 144” means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

“Rule 415” means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

“Rule 424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

 

10EE-2

 

“Securities Act”
means the Securities Act of 1933, as amended, and any successor statute.

 

“Trading Market”
means any of the NASD OTC Bulletin Board, NASDAQ SmallCap Market, the Nasdaq
National Market, the American Stock Exchange or the New York Stock Exchange.

 

“Warrants” means
the Common Stock purchase warrants issued pursuant to the Security Agreement.

 

Registration.

 

On or prior to
each Filing Date, the Company shall prepare and file with the Commission a
Registration Statement covering the Registrable Securities for an offering to
be made on a continuous basis pursuant to Rule 415.  Each Registration Statement shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate
form in accordance herewith).  The
Company shall cause each Registration Statement to become effective and remain
effective as provided herein.  The Company
shall use its reasonable commercial efforts to cause the first such
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
the Effectiveness Date.  The Company
shall use its reasonable commercial efforts to cause any subsequent such
Registration Statement to be declared effective under the Securities Act as
promptly as possible after the filing thereof, but in any event no later than
sixty (60) days after the filing thereof. 
The Company shall use its reasonable commercial efforts to keep each
Registration Statement continuously effective under the Securities Act until
the date which is the earlier date of when (i) all Registrable Securities
covered by such Registration Statement have been sold or (ii) all Registrable
Securities covered by such Registration Statement may be sold immediately
without registration under the Securities Act and without volume restrictions
pursuant to Rule 144(k), as determined by the counsel to the Company pursuant
to a written opinion letter to such effect, addressed and acceptable to the
Company’s transfer agent and the affected Holders (each, an “Effectiveness
Period”).

 

If: (i) any
Registration Statement is not filed on or prior to the applicable Filing Date
for such Registration Statement; (ii) a Registration Statement filed hereunder
is not declared effective by the Commission by the date required hereby with
respect to such Registration Statement; (iii) after a Registration Statement is
filed with and declared effective by the Commission, such Registration
Statement ceases to be effective (by suspension or otherwise) as to all
Registrable Securities to which it is required to relate at any time prior to
the expiration of the Effectiveness Period applicable to such Registration
Statement (without being succeeded immediately by an additional Registration
Statement filed and declared effective) for a period of time which shall exceed
30 days in the aggregate per year or more than 20 consecutive calendar days
(defined as a period of 365 days commencing on the date such Registration
Statement is declared effective); or (iv) the Common Stock is not listed or
quoted, or is suspended from trading on any Trading Market for a period of three
(3) consecutive Trading Days (provided the Company shall not have been able to
cure such trading suspension within 30 days of the notice thereof or list the
Common Stock on another Trading Market); (any such failure or breach being
referred to as an “Event,” and for purposes of clause (i) or (ii) the date

 

10EE-3

 

on which such
Event occurs, or for purposes of clause (iii) the date which such 30 day or 20
consecutive day period (as the case may be) is exceeded, or for purposes of
clause (iv) the date on which such three (3) Trading Day period is exceeded,
being referred to as “Event Date”), then until the applicable Event is cured,
the Company shall pay to each Holder an amount in cash, as liquidated damages
and not as a penalty, equal to 1.0% for each thirty (30) day period (prorated
for partial periods) on a daily basis of the original principal amount of each
applicable Note.  While such Event
continues, such liquidated damages shall be paid not less often than each
thirty (30) days.  Any unpaid liquidated
damages as of the date when an Event has been cured by the Company shall be
paid within three (3) days following the date on which such Event has been
cured by the Company.

 

Registration Procedures.  If and whenever the Company is required by
the provisions hereof to effect the registration of any Registrable Securities
under the Securities Act, the Company will, as expeditiously as possible:

 

prepare and file
with the Commission a registration statement with respect to such Registrable
Securities, respond as promptly as possible to any comments received from the
Commission, and use its best efforts to cause such Registration Statement to
become and remain effective for the Effectiveness Period with respect thereto,
and promptly provide to the Purchaser copies of all filings and Commission
letters of comment relating thereto;

 

prepare and file
with the Commission such amendments and supplements to such Registration
Statement and the Prospectus used in connection therewith as may be necessary
to comply with the provisions of the Securities Act with respect to the
disposition of all Registrable Securities covered by such Registration
Statement and to keep such Registration Statement effective until the expiration
of the Effectiveness Period applicable to such Registration Statement;

 

furnish to the
Purchaser such number of copies of the Registration Statement and the
Prospectus included therein (including each preliminary Prospectus) as the
Purchaser reasonably may request to facilitate the public sale or disposition
of the Registrable Securities covered by such Registration Statement;

 

use its
commercially reasonable efforts to register or qualify the Purchaser’s
Registrable Securities covered by such Registration Statement under the
securities or “blue sky” laws of such jurisdictions within the United States as
the Purchaser may reasonably request, provided, however, that the
Company shall not for any such purpose be required to qualify generally to
transact business as a foreign corporation in any jurisdiction where it is not
so qualified or to consent to general service of process in any such
jurisdiction;

 

list the
Registrable Securities covered by such Registration Statement with any
securities exchange on which the Common Stock of the Company is then listed;

 

immediately
notify the Purchaser at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event of
which the Company has knowledge as a result of which the Prospectus contained
in such Registration Statement, as then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated
therein or necessary to make the statements therein not misleading in light of
the circumstances then existing; and

 

make available
for inspection by the Purchaser and any attorney, accountant or other agent
retained by the Purchaser, all publicly available, non-confidential financial
and other records, pertinent corporate documents and properties of the Company,
and cause the Company’s

 

10EE-4

 

officers,
directors and employees to supply all publicly available, non-confidential
information reasonably requested by the attorney, accountant or agent of the
Purchaser.

 

Registration Expenses.  All expenses relating to the Company’s
compliance with Sections 2 and 3 hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of
counsel and independent public accountants for the Company, fees and expenses
(including reasonable counsel fees) incurred in connection with complying with
state securities or “blue sky” laws, fees of the NASD, transfer taxes, fees of
transfer agents and registrars, fees of, and disbursements incurred by, one
counsel for the Holders are called “Registration Expenses”. All selling
commissions applicable to the sale of Registrable Securities, including any
fees and disbursements of any special counsel to the Holders beyond those
included in Registration Expenses, are called “Selling Expenses.”  The Company shall only be responsible for
Registration Expenses.

 

Indemnification.

 

In the event of a
registration of any Registrable Securities under the Securities Act pursuant to
this Agreement, the Company will indemnify and hold harmless the Purchaser, and
its officers, directors and each other person, if any, who controls the
Purchaser within the meaning of the Securities Act, against any losses, claims,
damages or liabilities, joint or several, to which the Purchaser, or such
persons may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement under which such
Registrable Securities were registered under the Securities Act pursuant to
this Agreement, any preliminary Prospectus or final Prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Purchaser, and each such person for any reasonable legal
or other expenses incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, that the Company will not be liable in any such case if and to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by or on behalf of
the Purchaser or any such person in writing specifically for use in any such
document.

 

In the event of a
registration of the Registrable Securities under the Securities Act pursuant to
this Agreement, the Purchaser will indemnify and hold harmless the Company, and
its officers, directors and each other person, if any, who controls the Company
within the meaning of the Securities Act, against all losses, claims, damages
or liabilities, joint or several, to which the Company or such persons may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of any material
fact which was furnished in writing by the Purchaser to the Company expressly
for use in (and such information is contained in) the Registration Statement
under which such Registrable Securities were registered under the Securities
Act pursuant to this Agreement, any preliminary Prospectus or final Prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, and will reimburse the Company and each such person for any
reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action, provided,
however, that the Purchaser will be liable in any

 

10EE-5

 

such case if and
only to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission so made in conformity with information furnished in writing to
the Company by or on behalf of the Purchaser specifically for use in any such
document.  Notwithstanding the
provisions of this paragraph, the Purchaser shall not be required to indemnify
any person or entity in excess of the amount of the aggregate net proceeds
received by the Purchaser in respect of Registrable Securities in connection
with any such registration under the Securities Act.

 

Promptly after
receipt by a party entitled to claim indemnification hereunder (an “Indemnified
Party”) of notice of the commencement of any action, such Indemnified Party
shall, if a claim for indemnification in respect thereof is to be made against
a party hereto obligated to indemnify such Indemnified Party (an “Indemnifying
Party”), notify the Indemnifying Party in writing thereof, but the omission so
to notify the Indemnifying Party shall not relieve it from any liability which
it may have to such Indemnified Party other than under this Section 5(c)
and shall only relieve it from any liability which it may have to such
Indemnified Party under this Section 5(c) if and to the extent the
Indemnifying Party is prejudiced by such omission. In case any such action
shall be brought against any Indemnified Party and it shall notify the
Indemnifying Party of the commencement thereof, the Indemnifying Party shall be
entitled to participate in and, to the extent it shall wish, to assume and
undertake the defense thereof with counsel satisfactory to such Indemnified
Party, and, after notice from the Indemnifying Party to such Indemnified Party
of its election so to assume and undertake the defense thereof, the
Indemnifying Party shall not be liable to such Indemnified Party under this
Section 5(c) for any legal expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof; if the Indemnified
Party retains its own counsel, then the Indemnified Party shall pay all fees,
costs and expenses of such counsel, provided, however, that, if the
defendants in any such action include both the indemnified party and the
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be reasonable defenses available to it which are different from
or additional to those available to the Indemnifying Party or if the interests
of the Indemnified Party reasonably may be deemed to conflict with the
interests of the Indemnifying Party, the Indemnified Party shall have the right
to select one separate counsel and to assume such legal defenses and otherwise
to participate in the defense of such action, with the reasonable expenses and
fees of such separate counsel and other expenses related to such participation
to be reimbursed by the Indemnifying Party as incurred.

 

In order to
provide for just and equitable contribution in the event of joint liability
under the Securities Act in any case in which either (i) the Purchaser, or any
officer, director or controlling person of the Purchaser, makes a claim for
indemnification pursuant to this Section 5 but it is judicially determined
(by the entry of a final judgment or decree by a court of competent
jurisdiction and the expiration of time to appeal or the denial of the last
right of appeal) that such indemnification may not be enforced in such case
notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Securities Act may be required on
the part of the Purchaser or such officer, director or controlling person of
the Purchaser in circumstances for which indemnification is provided under this
Section 5; then, and in each such case, the Company and the Purchaser will
contribute to the aggregate losses, claims, damages or liabilities to which
they may be subject (after contribution from others) in such proportion so that
the Purchaser is responsible only for the portion represented by the percentage
that the public offering price of its securities offered

 

10EE-6

 

by the
Registration Statement bears to the public offering price of all securities
offered by such Registration Statement, provided, however, that, in any
such case, (A) the Purchaser will not be required to contribute any amount in
excess of the public offering price of all such securities offered by it
pursuant to such Fegistration Statement; and (B) no person or entity guilty of
fraudulent misrepresentation (within the meaning of Section 10(f) of the
Act) will be entitled to contribution from any person or entity who was not
guilty of such fraudulent misrepresentation.

 

Representations and Warranties.

 

The Common Stock
of the Company is registered pursuant to Section 12(b) or 12(g) of the
Exchange Act and, except with respect to certain matters which the Company has
disclosed to the Purchaser on Exhibit 12(j) to the Security Agreement,
the Company has timely filed all proxy statements, reports, schedules, forms,
statements and other documents required to be filed by it under the Exchange
Act.  The Company has filed (i) its
Annual Report on Form 10-K for the fiscal year ended December 31, 2002;
(ii) its Quarterly Report on Form 10-Q for the fiscal quarters ended
March 31, 2003, June 30, 2003 and September 30, 2003, and (iii)
all Current Reports on Form 8-K which the Company were required to file
(collectively, the “SEC Reports”).  Each
SEC Report was, at the time of its filing, in substantial compliance with the
requirements of its respective form and none of the SEC Reports, nor the
financial statements (and the notes thereto) included in the SEC Reports, as of
their respective filing dates, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. 
The financial statements of the Company included in the SEC Reports
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the Commission or other
applicable rules and regulations with respect thereto.  Such financial statements have been prepared
in accordance with generally accepted accounting principles (“GAAP”) applied on
a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include footnotes
or may be condensed) and fairly present in all material respects the financial
condition, the results of operations and the cash flows of the Company and its
subsidiaries, on a consolidated basis, as of, and for, the periods presented in
each such SEC Report.

 

The Common Stock
is listed for trading on the National Association of Securities Dealers,  Inc. Over the Counter Bulletin Board (“NASD
OTCBB”) and satisfies all requirements for the continuation of such
listing.  The Company has not received
any notice that its Common Stock will be delisted from the NASD OTCBB or that
the Common Stock does not meet all requirements for the continuation of such
listing.

 

Neither the
Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security or
solicited any offers to buy any security under circumstances that would cause
the offering of the Securities pursuant to the Security Agreement to be
integrated with prior offerings by the Company for purposes of the Securities Act
which would prevent the Company from selling the Common Stock pursuant to Rule
506 under the Securities Act, or any applicable exchange-related stockholder
approval provisions, nor will the Company or any of its affiliates or
subsidiaries take any action or steps that would cause the offering of the
Common Stock to be integrated with other offerings (other than such concurrent
offering to the Purchaser).

 

10EE-7

 

The Warrants, the
Notes and the shares of Common Stock which the Purchaser may acquire pursuant
to the Warrants and the Notes are all restricted securities under the
Securities Act as of the date of this Agreement.  The Company will not issue any stop transfer order or other order
impeding the sale and delivery of any of the Registrable Securities at such
time as such Registrable Securities are registered for public sale or an
exemption from registration is available, except as required by federal or
state securities laws.

 

The Company
understands the nature of the Registrable Securities issuable upon the
conversion of each Note and the exercise of each Warrant and recognizes that
the issuance of such Registrable Securities may have a potential dilutive
effect.  The Company specifically
acknowledges that its obligation to issue the Registrable Securities is binding
upon the Company and enforceable regardless of the dilution such issuance may
have on the ownership interests of other shareholders of the Company.

 

Except for
agreements made in the ordinary course of business, there is no agreement that
has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material respect.

 

The Company will at
all times have authorized and reserved a sufficient number of shares of Common
Stock for the full conversion of each Note and exercise of the Warrants.

 

Miscellaneous.

 

Remedies.  In the event of a breach by the Company or
by a Holder, of any of their respective obligations under this Agreement, each
Holder or the Company, as the case may be, in addition to being entitled to
exercise all rights granted by law and under this Agreement, including recovery
of damages, will be entitled to specific performance of its rights under this
Agreement.

 

No Piggyback on
Registrations.  Except as set forth on
Schedule 7(b) hereto, neither the Company nor any of its security holders
(other than the Holders in such capacity pursuant hereto) may include
securities of the Company in any Registration Statement other than the
Registrable Securities, and the Company shall not after the date hereof enter
into any agreement providing any such right for inclusion of shares in the
Registration Statement to any of its security holders. Except as and to the
extent specified in Schedule 7(b) hereto, the Company has not
previously entered into any agreement granting any registration rights with
respect to any of its securities to any Person that have not been fully
satisfied.

 

Compliance.  Each Holder covenants and agrees that it
will comply with the prospectus delivery requirements of the Securities Act as
applicable to it in connection with sales of Registrable Securities pursuant to
any Registration Statement.

 

Discontinued
Disposition.  Each Holder agrees by its
acquisition of such Registrable Securities that, upon receipt of a notice from
the Company of the occurrence of a Discontinuation Event (as defined below),
such Holder will forthwith discontinue disposition of such Registrable
Securities under the applicable Registration Statement until such Holder’s
receipt of the copies of the supplemented Prospectus and/or amended
Registration Statement or until it is advised in writing (the “Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in
either case, has received copies of any additional or supplemental filings that
are incorporated or deemed to be incorporated by reference in such Prospectus
or Registration Statement.  The Company
may provide appropriate stop orders to enforce the provisions of this

 

10EE-8

 

paragraph.  For purposes of this Section 7(d), a
“Discontinuation Event” shall mean (i) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever
the Commission comments in writing on such Registration Statement (the Company
shall provide true and complete copies thereof and all written responses
thereto to each of the Holders); (ii) any request by the Commission or any
other Federal or state governmental authority for amendments or supplements to
such Registration Statement or Prospectus or for additional information; (iii)
the issuance by the Commission of any stop order suspending the effectiveness
of such Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) the
receipt by the Company of any notification with respect to the suspension of
the qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any Proceeding for such purpose; and/or (v) the occurrence of any event or
passage of time that makes the financial statements included in such
Registration Statement ineligible for inclusion therein or any statement made
in such Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference untrue in any material respect or
that requires any revisions to such Registration Statement, Prospectus or other
documents so that, in the case of such Registration Statement or Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading.

 

Piggy-Back
Registrations.  If at any time during
any Effectiveness Period there is not an effective Registration Statement
covering all of the Registrable Securities required to be covered during such
Effectiveness Period and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of
such determination and, if within fifteen (15) days after receipt of such
notice, any such Holder shall so request in writing, the Company shall include
in such registration statement all or any part of such Registrable Securities
such holder requests to be registered, to the extent the Company may do so
without violating registration rights of others which exist as of the date of
this Agreement, subject to customary underwriter cutbacks applicable to all
holders of registration rights and subject to obtaining any required the
consent of any selling stockholder(s) to such inclusion under such registration
statement.

 

Amendments and
Waivers.  The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and the Holders of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart from
the provisions hereof with respect to a matter that relates exclusively to the
rights of certain Holders and that does not directly or indirectly affect the
rights of other Holders may be given by Holders of at least a majority of the
Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.

 

10EE-9

 

Notices.  Any notice or request hereunder may be given
to the Company or the Purchaser at the respective addresses set forth below or
as may hereafter be specified in a notice designated as a change of address
under this Section 7(g).  Any notice
or request hereunder shall be given by registered or certified mail, return
receipt requested, hand delivery, overnight mail or telecopy (confirmed by
mail).  Notices and requests shall be,
in the case of those by hand delivery, deemed to have been given when delivered
to any party to whom it is addressed, in the case of those by mail or overnight
mail, deemed to have been given three (3) business days after the date when
deposited in the mail or with the overnight mail carrier, and, in the case of a
telecopy, when confirmed.  The address
for such notices and communications shall be as follows:

 

	
  If
  to the Company:

  	
   

  	
  Micro
  Component Technology, Inc.

  
	
   

  	
   

  	
  2340
  West County Road C,

  
	
   

  	
   

  	
  St.
  Paul, Minnesota 55113-2528

  
	
   

  	
   

  	
  Attention:      
  Chief Financial Officer

  
	
   

  	
   

  	
  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 a Purchaser:

  	
   

  	
  To
  the address set forth under

  
	
   

  	
   

  	
  such
  Purchaser name on the

  
	
   

  	
   

  	
  signature
  pages hereto.

  
	
   

  	
   

  	
   

  
	
  If
  to any other Person who is then the registered Holder:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  To
  the address of such Holder as it

  
	
   

  	
   

  	
  appears
  in the stock transfer books

  
	
   

  	
   

  	
  of
  the Company

  

 

or such other
address as may be designated in writing hereafter in accordance with this
Section 7(g) by such Person.

 

10EE-10

 

Successors and
Assigns.  This Agreement shall inure to
the benefit of and be binding upon the successors and permitted assigns of each
of the parties and shall inure to the benefit of each Holder. The Company may
not assign its rights or obligations hereunder without the prior written
consent of each Holder. Each Holder may assign their respective rights
hereunder in the manner and to the Persons as permitted under the Notes and the
Securities Purchase Agreement with the prior written consent of the Company,
which consent shall not be unreasonably withheld..

 

Execution and
Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all of
which taken together shall constitute one and the same Agreement. In the event
that any signature is delivered by facsimile transmission, such signature shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

 

Governing Law.
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof. Each party agrees that
all Proceedings concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement shall be commenced exclusively in
the state and federal courts sitting in the City of New York, Borough of
Manhattan. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and
hereby irrevocably waives, and agrees not to assert in any Proceeding, any
claim that it is not personally subject to the jurisdiction of any such court,
that such Proceeding is improper. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
Proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any manner permitted by law. Each party hereto hereby irrevocably
waives, to the fullest extent permitted by applicable law, any and all right to
trial by jury in any legal proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby. If either party shall
commence a Proceeding to enforce any provisions of a Transaction Document, then
the prevailing party in such Proceeding shall be reimbursed by the other party
for its reasonable attorneys fees and other costs and expenses incurred with
the investigation, preparation and prosecution of such Proceeding.

 

Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.

 

Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, illegal, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would

 

10EE-11

 

have executed the
remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void or unenforceable.

 

Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

 

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

 

10EE-12

 

IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.

 

	
   

  	
  MICRO COMPONENT TECHNOLOGY, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Thomas P. Maun

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LAURUS MASTER FUND, LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/Eugene Grin

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Director

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address for Notices:

  
	
   

  	
   

  
	
   

  	
  825 Third Avenue, 14th Floor

  
	
   

  	
  New York, New York 10022

  
	
   

  	
  Attention: 
  Eugene Grin

  
	
   

  	
  Facsimile: 
  212-541-4434

  
					

 

10EE-13

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