EXHIBIT 10.1

 

CONSULTING AGREEMENT

 

This CONSULTING AGREEMENT (this “Agreement”), dated as of May 8, 2008 is between
Micro Component Technology, Inc., a Minnesota corporation (the “Company”), and
LMWH Management Partners LLC, a California limited liability company (the
“Consultant”).

 

W I T N E S S E T H :

 

WHEREAS, the Company desires to obtain the services of the Consultant on the
terms and conditions set forth in this Agreement; and

 

WHEREAS, the Consultant is willing to perform such services on such terms and
conditions.

 

NOW, THEREFORE, in consideration of these premises and the mutual agreements
hereinafter set forth, the parties hereto, intending to be legally bound, hereby
agree as follows:

 

1.  Services.  The Consultant shall, while at all times reporting to the
Chairman of the Board of Directors of the Company (the “Board”), provide such
business consulting and other services as detailed on Exhibit A hereto and as
the Board may, from time to time, designate for the Company and/or its
subsidiaries and other affiliates (collectively, the “Company Group”). The
Consultant’s services shall be provided by John Moon, or other persons approved
by the Company.  The Consultant shall not perform services for Laurus Master
Fund, Ltd. or its affiliates during the period it is performing services for the
Company without prior written approval by the Company’s Board of Directors.  The
Consultant shall devote such time and attention as necessary to properly perform
its duties and responsibilities hereunder.  The Company hereby acknowledges and
recognizes that the Consultant has other business interests and may continue to
have such business interests concurrently with the performance of this
Agreement.

 

2.  Independent Contractor.  It is the intention and agreement of the parties
that the Consultant shall be retained by the Company pursuant to this Agreement,
and shall perform its duties and all services hereunder, as an independent
contractor.  Nothing herein shall be deemed to create a partnership, joint
venture or employment relationship between the Consultant and the Company.

 

3.  Consultant of Company.  The Consultant, in cooperation with the Chairman of
the Board, may serve as an agent for the Company and may execute documents on
behalf of and otherwise bind the Company in connection with the provision of the
consulting services provided by the Consultant.  The Consultant shall not
execute or bind the Company to any material obligation without prior approval by
the Company’s Board of Directors.

 

4.  Expenses of the Company.  During the Term (as defined below), the Company
shall reimburse the Consultant for all reasonable and necessary out-of-pocket
business expenses incurred by the Consultant in connection with the performance
of the Consultant’s services

 

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hereunder.  The Consultant shall submit a quarterly budget of estimated expenses
to the Company for approval prior to the beginning of each quarter.  To be
eligible for reimbursement, expenses must be consistent with the budget and
Company expense policies, or approved in advance by the Company’s Chairman. Such
reimbursement shall be made by the Company monthly, after receipt of an invoice
from the Consultant accompanied by receipts or other satisfactory documentation
of such expenses.

 

5.  Consulting Fee.  The Company shall pay to the Consultant and the Consultant
shall accept, as compensation for the services rendered to the Company
hereunder: (i) a five-year non-qualified option to purchase an aggregate of
3,000,000 shares of Common Stock, of the Company exercisable at a price equal to
the closing sale price of the Common Stock on the date the Option is approved by
the Company’s Compensation Committee (the “Option”), and which shall vest in
accordance with Exhibit A, and (ii) an annual consulting fee (the “Consulting
Fee”) of $180,000 USD for each year, payable in cash, monthly in arrears on the
first business day of each month.  John Moon will allocate 50% of his business
time (the “Allocated Time”) to the Company, and if the Allocated Time becomes
significantly more or less than 50% of his business time, the Company and
Consultant will renegotiate the Consulting Fee accordingly. The Option shall be
documented in a separate Stock Option Agreement.

 

6.  Term.  The term of this Agreement (the “Initial Term”) shall commence on the
date hereof and shall continue in full force and effect until December 31, 2010,
unless extended by mutual agreement of the parties (the Initial Term, as so
extended, is herein referred to as the “Term”).  Notwithstanding the foregoing
provisions of this Section, the Company or the Consultant may terminate the
Consultant’s engagement at any time during the Term in accordance with
Section 8.

 

7.  Termination of Engagement.  The engagement of the Consultant hereunder and
this Agreement may be terminated by either party, with or without cause, at any
time during the Term upon 90 days prior written notice to the other party. 
Except as set forth in Section 0, the termination of the Consultant pursuant to
this Section shall not result in any penalty or fee payable to the Consultant. 
The Option may be exercised for one year after termination to the extent vested
on termination.

 

8.  Action upon Termination.

 

(A)  The Company shall, forthwith upon any termination of this Agreement, pay to
the Consultant all amounts payable to the Consultant hereunder to and including
the day immediately preceding the effective date of termination of this
Agreement.

 

(B) The Consultant shall, forthwith upon any termination of this Agreement,
deliver to the Board and where applicable transfer into the name of the Company
(or such person as the Board may direct in writing) all property, documents,
books and records of the Company in the name of or in the custody of the
Consultant.

 

9.  Confidential Material.  The Consultant shall, during the Term and for a
period of three years thereafter, not disclose confidential material (as defined
below) and shall take all reasonable

 

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measures to maintain the confidentiality of the confidential material, except as
required in the performance of the Consultant’s duties and responsibilities
under this Agreement.  The Consultant agrees that all confidential material,
together with all notes and records of the Consultant relating thereto, and all
copies or facsimiles thereof in the possession or control of the Consultant
(whether made by the foregoing or other means) are the exclusive property of the
Company.  The Consultant shall not in any manner use any confidential material,
or any other property of the Company, in any way which is or could reasonably be
expected to be materially detrimental to the Company.  Promptly upon the request
of the Company, the Consultant shall deliver to the Board, or a person
designated by the Board, or destroy all confidential material in the possession
of the Consultant, provided that the Consultant may retain a file copy thereof.

 

For the purposes hereof, the term “confidential material” shall mean all
information and/or material acquired in the course of the engagement of the
Consultant hereunder concerning the projects, activities, business or affairs
(financial or otherwise) of the Company or any other member of the Company
Group, as the case may be, or any of the customers or suppliers of the Company
or any other member of the Company Group, whether or not provided by or on
behalf of the Company, including, without limitation, information concerning the
past, present or future customers, suppliers, business, proprietary matters,
trade secrets, products or projects, sales and other financial information and
development projects or marketing plans of the Company or any of the other
members of the Company Group; provided, however, that the term “confidential
material” shall not include information which (i) becomes generally available to
the public other than as a result of a disclosure by the Consultant (but only
after it enters the public domain), (ii) was available to the Consultant on a
non confidential basis prior to the engagement of the Consultant hereunder,
(iii) becomes available to the Consultant on a non confidential basis from a
source other than the Company or any other member of the Company Group or any of
their respective agents, customers, suppliers or clients; provided that the
Consultant does not know that such source is bound by a confidentiality
obligation to the Company or any other member of the Company Group or any of
such agents, customers, suppliers or clients, or (iv) information which is
independently developed by the Consultant without use of confidential
information of the Company or any of its affiliates.

 

In the event that the Consultant is required in the context of any civil or
criminal proceeding or regulatory action or investigation, by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand or similar process, to disclose any confidential material,
the Consultant shall provide the Company with prompt notice thereof, including
copies of all relevant documents and information, so that the Company may seek
an appropriate protective order and/or waive compliance by the Consultant with
the provisions hereof; provided, however, that if in the absence of a protective
order or the receipt of such a waiver, the Consultant is compelled to disclose
confidential material not otherwise disclosable hereunder to any legislative,
judicial or regulatory body, agency or authority, or else be exposed to
liability for contempt, fine or penalty or to other censure, such confidential
material may be so disclosed, provided that the Consultant has provided the
Company with prior written notice and copies of all relevant documents.

 

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10.  Miscellaneous.

 

(A)  Amendments.  This Agreement shall not be amended or modified in whole or in
part except by instrument in writing signed by a representative of the
Consultant and by a representative of the Company duly authorized for the
purpose by the Board.

 

(B)  Assignment.  This Agreement or any part thereof may not be assigned by the
Consultant other than to a subsidiary or affiliate of the Consultant.

 

Except as herein provided, this Agreement shall not be assigned by the Company
without the prior consent in writing of the Consultant being first had and
obtained (such consent shall not be unreasonably withheld).  Any attempted
assignment in violation of this Section 0 shall be null and void. 
Notwithstanding the foregoing sentences, the Company may assign this Agreement
to any of its subsidiaries and affiliates and, upon any such assignment, this
Agreement shall be binding upon, and inure to the benefit of, the applicable
assignee and the Consultant or to any successors (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company.  As used in this Section 0, the “Company”
shall mean the Company as hereinbefore defined and any permitted assignee as
aforesaid and any successor to the Company’s business and/or assets as aforesaid
which otherwise becomes bound by all the terms and provisions of this Agreement,
and this Agreement shall be binding upon, and inure to the benefit of, the
Company, as so defined, and the Consultant.

 

(C)  Liability and Indemnity.  The Consultant shall indemnify and save harmless
the Company, its affiliates and subsidiaries and their respective directors,
officers, members, shareholders and employees from and against all claims
whatsoever (including costs, charges and legal and other expenses reasonably
incurred in connection therewith) brought, commenced or prosecuted against any
of them for or in respect of any act, deed, matter or thing whatsoever made,
done, acquiesced in or omitted in or about or in relation to the execution of
the Consultant’s duties hereunder in any circumstance where there has been acts
constituting fraud, willful misconduct, gross negligence, or reckless disregard
of the Consultant’s duties on the part of the Consultant.

 

Except as set out in the next succeeding sentence, none of the Consultant, nor
any direct or indirect shareholder, director, officer, partner, employee, agent,
member, advisor or representative of the Consultant, shall be liable to the
Company or to any stockholder thereof for, and the Company shall indemnify and
save harmless the Consultant and such persons from and against all claims
whatsoever (including costs, charges and legal and other expenses reasonably
incurred in connection therewith) brought by or on behalf of the Company, any of
its stockholders or any third parties in respect of, (i) any act, omission,
negligence or default of any person employed or engaged by the Consultant in the
course of the exercise of its duties and responsibilities hereunder, (ii) any
loss occasioned by any mistake or error in judgment or any act or omission of
the Consultant made in the course of or in connection with the exercise of the
duties of the Consultant hereunder, (iii) any action or inaction arising from
good faith reliance upon the opinion or advice as to legal matters of legal
counsel or as to accounting matters of accountants selected by any of them,
which may include the legal counsel or accountants for the

 

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Company, or (iv) for any other loss, damage or expense which may arise during or
in the course of the performance of the Consultant’s obligations,
responsibilities, powers, discretions or authorities under this Agreement.  The
limitations of liability and indemnification contained in this paragraph shall
not apply to the extent, but only to the extent, that any particular loss,
damage or expense is directly attributable to the fraud, willful misconduct or
gross negligence of or the willful and material violation of applicable laws by
the Consultant and any of its directors, officers, agents, shareholders,
partners or employees.

 

Persons entitled to be indemnified pursuant to this Section 0 are herein
referred to as “Indemnified Parties”.

 

(D)  Notices.  All notices and other communications in connection with this
Agreement and the transactions contemplated hereunder shall be in writing and
shall be either telecopied, delivered personally, delivered by reputable
overnight courier or mailed by certified mail, return receipt requested, postage
pre-paid, to the recipient at such recipient’s address as shall from time to
time be specified by the recipient, and initially as set forth in this
Section 0.  All such notices shall be effective and deemed received upon
delivery, if delivered by hand; three days after deposit in the mail, postage
prepaid, if mailed; or upon receipt, in the case of telecopy or sent by
overnight courier.  Each notice, request, instruction or document shall bear the
date on which it is delivered or mailed.  Notice may be given by attorneys on
behalf of the parties.  Notices and other communications shall be addressed as
follows:

 

To the Company:

 

Micro Component Technology, Inc.
 2340 West County Road C
St. Paul, MN 55113
(651) 697-4111
Fax:  (651) 697-4200
Attn:  Roger E. Gower

 

To the Consultant:

 

LMWH Management Partners LLC

11340 W. Olympic Blvd., Suite 210

Los Angeles, CA 90064

Fax:  310-312-3036

Attn:  John H. Moon, Partner

 

(E)          Enurement.  This Agreement shall enure to the benefit of and be
binding upon the parties hereto, their successors and permitted assigns.

 

(F)          Further Assurances.  The Consultant and the Company shall promptly
do, make, execute or deliver, or cause to be done, made, executed or delivered,
all such further acts, documents and things as the other may reasonably require
from time to time for the

 

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purpose of giving effect to this Agreement, and shall use reasonable efforts and
take all such steps as may be reasonably within their power to implement to the
full extent the provisions of this Agreement.

 

(G)  Entire Agreement.  This Agreement and the Stock Option Agreement constitute
the entire agreement between the parties pertaining to the subject matter of
this Agreement. There are no warranties, understandings, representations or
agreements between the parties hereto in connection with such subject matter
except as specifically set forth or referred to in this Agreement.  This
Agreement supersedes all undertakings and agreements, whether oral or in
writing, if any there be, previously entered into by the parties hereto with
respect thereto.

 

(H)  Severability.  Should any provision of this Agreement be held by a court of
competent jurisdiction to be enforceable only if modified, such holding shall
not affect the validity of the remainder of this Agreement, the balance of which
shall continue to be binding upon the parties hereto with any such modification
to become a part hereof and treated as though originally set forth in this
Agreement.  The parties further agree that any such court is expressly
authorized to modify any such unenforceable provision of this Agreement in lieu
of severing such unenforceable provision from this Agreement in its entirety,
whether by rewriting the offending provision, deleting any or all of the
offending provision, adding additional language to this Agreement, or by making
such other modifications as it deems warranted to carry out the intent and
agreement of the parties as embodied herein to the maximum extent permitted by
law.  The parties expressly agree that this Agreement as so modified by the
court shall be binding upon and enforceable against each of them.  In any event,
should one or more of the provisions of this Agreement be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions hereof, and if such
provision or provisions are not modified as provided above, this Agreement shall
be construed as if such invalid, illegal or unenforceable provisions had never
been set forth herein.

 

(I)  Survival.  The respective rights and obligations of the parties hereunder
shall survive any termination of this Agreement to the extent necessary to
permit the intended preservation of such rights and obligations.  Without
limiting the generality of the foregoing, any provision of this Agreement which
is intended by its plain meaning to continue shall survive the termination of
this Agreement and the Consultant’s engagement hereunder.

 

(J)  Applicable Law.  This Agreement shall be governed by, construed and
enforced in accordance with, the laws of the State of Minnesota, without regard
to any conflict of laws principles of the State of Minnesota which would apply
the laws of any other jurisdiction.  Without limiting the generality of this
Section 0, in the event that a court of any jurisdiction shall hold any of the
provisions of this Agreement to be wholly or partially unenforceable for any
reason, such determination shall not bar or in any way affect either party’s
right to relief as provided for herein in the courts of any other

 

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jurisdiction; such provisions, as they relate to each jurisdiction are, for
these purposes, severable into diverse and independent covenants.

 

(K)  Waiver.  Except as otherwise specifically provided in this Agreement, no
waiver by either party hereto of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a similar or dissimilar provision or condition at
the same or any prior or subsequent time, nor shall the failure of or delay by
either party hereto in exercising any right, power or privilege hereunder
operate as a waiver thereof to preclude any other or further exercise thereof or
the exercise of any other such right, power or privilege.

 

(L)  Headings.  The respective sections and paragraphs of this Agreement are
intended solely for convenience, and no provision of this Agreement is to be
construed by reference to the heading of any section or paragraph.

 

(M) Counterparts.  This Agreement may be executed in counterparts (including
counterparts by facsimile transmission) and each of such counterparts shall
constitute an original document and such counterparts, taken together, shall
constitute one and the same instrument.

 

(N)  No Third Party Beneficiaries.  Nothing in this Agreement shall be deemed to
create or to grant to any persons other than the Consultant, the members of the
Company Group and the Indemnified Parties any third party beneficiary rights,
claims or causes of action of any kind or nature against either the Consultant
or the Company.

 

(O)  Arbitration.  Any dispute, controversy or claim arising out of or in
connection with or relating to this Agreement shall be determined and settled by
arbitration in Minneapolis, Minnesota pursuant to the rules then in effect of
the American Arbitration Association by one arbitrator appointed in accordance
with those rules.  Any award rendered by the arbitrator shall be final and
conclusive upon the parties and judgment thereon may be entered in any court
having jurisdiction.

 

*              *

 

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IN WITNESS WHEREOF the Consultant and the Company have executed this Agreement
on the day and year first above written.

 

 

 

 

Micro Component Technology, Inc.

 

 

 

 

 

 

 

 

By:

 /s/ Roger E. Gower

 

 

 

 Roger E. Gower

 

 

 

 Chairman and CEO

 

 

 

 

 

 

 

 

LMWH Management Partners LLC

 

 

 

 

 

 

 

 

 

By:

 /s/ John Moon

 

 

 

 Its: Partner

 

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EXHIBIT A

 

Description of Services and Option vesting Milestones

 

A.           General business consulting as seen fit by the consultant in
cooperation with the board of directors

 

B.             Formalizing reports

 

C.             Review and assist in negotiating or preparation of:

 

a.               Strategic Alliance agreements (includes joint ventures, mergers
and acquisitions, etc.)

 

b.              Sales agreements (major OEM customer sales agreements)

 

c.               Vendor agreements

 

d.              Business plan writing (preparation of MCT Business Plan for
acceptance by Laurus for 2008 and 2009)

 

e.               Budgets (consistent with Business Plan preparation)

 

f.                 Business presentations

 

g.              Finance agreements (negotiate, with MCT management
participation, a restructuring in present and future Laurus debt agreement)

 

h.              Equity agreements.  (identify opportunities to include equity
infusions from joint ventures and other M&A activity).

 

OPTION VESTING SCHEDULE

 

Milestone

 

Shares Vested

 

 

 

 

 

Execution by the Company of financial restructuring agreement with Laurus

 

1,500,000 Shares

 

 

 

 

 

Execution by the Company of first strategic agreement (e.g., joint venture,
license, joint marketing or joint development) generating possibility of near
term revenues in excess of $3M

 

500,000 Shares

 

 

 

 

 

Execution by the Company of second strategic agreement (e.g., joint venture,
license, joint marketing or joint development) generating possibility of near
term revenues in excess of $3M

 

500,000 Shares

 

 

 

 

 

Execution by the Company of third strategic agreement (e.g., joint venture,
license, joint marketing or joint development) generating possibility of near
term revenues in excess of $3M

 

500,000 Shares

 

 

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