Exhibit
10.1

     

    ADVISORY
SERVICES AGREEMENT

     

    This
ADVISORY SERVICES
AGREEMENT (this “Agreement”) takes effect as
of June 1, 2010, and is entered into by and between LecTec Corporation, a
Minnesota corporation (the “Company”), and Mr. Judd
Berlin (“Advisor”), who
is domiciled in the State of Florida.

     

    WHEREAS, Advisor is the
Chairman of the Board of Directors, and former Chief Executive Officer and Chief
Financial Officer, of the Company; and

     

    WHEREAS, given Advisor’s prior
experience as an officer of the Company and knowledge of the Company’s pending
litigation and hand sanitizing patch initiative, the Company desires to retain
Advisor to render certain advisory services to the Company on the terms and
conditions set forth in this Agreement; and

     

    WHEREAS, Advisor desires to be
retained by the Company on such terms and conditions.

     

    NOW, THEREFORE, in
consideration of the premises, the mutual agreements herein set forth and other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:

     

    1.           Retention of Advisor; Services to be
Performed.  The Company
hereby retains Advisor to render the advisory services set forth on Exhibit A hereto (the “Services”).  Advisor
hereby accepts such engagement and agrees to perform such Services for the
Company upon the terms and conditions set forth in this
Agreement.  During the Term of this Agreement, Advisor shall devote
such portion of his time, attention, skill and energy as may be reasonably
required to perform the Services required by this Agreement.  For the
purposes of the Services provided under this Agreement, Advisor shall coordinate
his efforts under this Agreement with the Company’s Chief Executive
Officer.

     

    In
rendering Services hereunder, Advisor shall not be acting as an employee of the
Company.  Advisor shall be responsible for the payment of all federal,
state or local taxes payable with respect to all amounts paid to Advisor under
this Agreement; provided,
however, that if the Company is determined to be liable for collection
and/or remittance of any such taxes, Advisor shall immediately reimburse the
Company for all such payments made by the Company.

     

    2.           Term.  This Agreement
shall commence as of the date first written above and shall continue for a
continuous period until terminated in accordance with Section 6 (the “Term”).

     

    3.           Compensation.  As compensation
for Advisor’s Services, the Company shall pay to Advisor an annual fee of
$132,000 (the “Advisory
Fee”).  The Advisory Fee shall be payable to Advisor at the end
of each calendar month (or part thereof on a pro rata basis) during the Term,
beginning in June 2010.  In the event that Advisor becomes physically
or mentally disabled such that he is unable to adequately perform the Services,
the Company shall not be obligated for the payment of any further compensation
hereunder until such disability has ceased and Advisor is able to resume his
responsibilities and duties hereunder, even though this Agreement has not been
terminated by the Company pursuant to Section 6(b).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
    

    4.           Expenses.  The Company shall
reimburse Advisor in accordance with the policies and procedures that the
Company establishes from time to time for all reasonable and necessary
out–of–pocket expenses that Advisor incurs in performing the Services hereunder,
including, without limitation, reasonable travel expenses incurred by Advisor.
In addition, if and to the extent that such an allowance is not being provided
to Advisor as Chairman of the Board of the Company, the Company will provide
Advisor with a monthly mobile telephone allowance of $500.

     

    5.           Standards
of Conduct.  Advisor and the
Company acknowledge that Advisor is also concurrently serving as a member of the
Company’s Board of Directors and in such role owes certain duties to the Company
and its shareholders, including, without limitation, duties of care and loyalty,
which will also govern Advisor’s performance of the Services
hereunder.  In the event that Advisor is continuing to perform the
Services under this Agreement after Advisor has ceased to be a member of the
Board of Directors, then the following provisions shall become effective upon
Advisor ceasing to be a director of the Company:

     

    (a)           Ownership of Intellectual
Property

     

    (i)           Notification and
Disclosure.  Advisor shall
promptly notify the Company in writing of the existence and nature of, and shall
promptly and fully disclose to the Company, any and all ideas, designs,
practices, processes, apparatus, improvements and inventions (all of which are
hereinafter referred to as “inventions”) that Advisor has
conceived or first actually reduced to practice and/or may conceive or first
actually reduce to practice during the Term or which Advisor may conceive or
reduce to practice within six (6) months after the Term, if such inventions
relate to a product or process upon which Advisor worked during the
Term.

     

    (ii)           Ownership of
Inventions.  All such
inventions shall be the sole and exclusive property of the Company or its
nominee, and during the Term of this Agreement and thereafter, whenever
requested to do so by the Company, Advisor shall execute and assign any and all
applications, assignments and other instruments that the Company shall deem
necessary or convenient in order to apply for and obtain Letters Patent of the
United States and/or of any foreign countries for such inventions and in order
to assign and convey to the Company or its nominee the sole and exclusive right,
title and interest in and to such inventions.  Advisor will render aid
and assistance to the Company in any interference or litigation pertaining to
such inventions and all expenses reasonably incurred by Advisor at the request
of the Company shall be borne by the Company.  In this connection, if
any such aid or assistance requires any expenditure of Advisor’s time after
termination of this Agreement, Advisor shall be entitled to compensation for the
time requested by the Company at an hourly rate equal to the pro rata hourly
rate at which Advisor was being paid for a normal pay period immediately prior
to the end of the Term of this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
    

    (iii)           Limitation.  The provisions
of this Section 5(a) shall not apply to any invention meeting the following
conditions:

     

    (A)         such
invention was developed entirely on Advisor’s own time;

     

    (B)         such
invention was made without the use of any of the equipment, supplies, facility
or trade secret information of the Company;

     

    (C)         such
invention does not relate (i) directly to the business of the Company or (ii) to
the Company’s actual or demonstrably anticipated research or development;
and

     

    (D)         such
invention does not result from any service performed by Advisor for the
Company.

     

    (iv)           Survival.  This Section
5(a) shall survive the Term.

     

    (b)          Protection of Trade Secrets,
Know–How and/or Other Confidential Information of the Company.

     

    (i)           Confidential
Information.  During the Term
of this Agreement or at any time thereafter Advisor shall not divulge, furnish
or make accessible to anyone or use in any way (other than in the ordinary
course of the business of the Company as contemplated for use by Advisor under
this Agreement) any confidential or secret knowledge or information of the
Company which Advisor has acquired or become acquainted with or will acquire or
become acquainted with prior to the termination of the period of his engagement
by the Company (including engagement by the Company or any affiliated companies
prior to the date of this Agreement), whether developed by himself or by others,
concerning any trade secrets, confidential or secret designs, processes,
formulae, plans, devices or material (whether or not patented or patentable)
directly or indirectly useful in any aspect of the business of the Company, any
customer or supplier lists of the Company, any confidential or secret
development or research work of the Company or any other confidential
information or secret aspects of the business of the Company.  Advisor
acknowledges that the above–described knowledge or information constitutes a
unique and valuable asset of the Company acquired at great time and expense by
the Company and its predecessors and that any disclosure or other use of such
knowledge or information other than for the sole benefit of the Company would be
wrongful and would cause irreparable harm to the Company.  Both during
and after the Term of this Agreement, Advisor will refrain from any acts or
omissions that would reduce the value of such knowledge or information to the
Company.  The foregoing obligations of confidentiality, however, shall
not apply to any knowledge or information which is now published or which
subsequently becomes generally publicly known in the form in which it was
obtained from the Company, other than as a direct or indirect result of the
breach of this agreement by Advisor.

     

    (ii)           Copyrightable
Material.  All
right, title and interest in all copyrightable material which Advisor shall
conceive or originate, either individually or jointly with others, and which
arise out of the performance of this Agreement, will be the property of the
Company and are, by this Agreement, assigned to the Company along with ownership
of any and all copyrights in the copyrightable material.  Advisor
agrees to execute all papers and perform all other acts necessary to assist the
Company to obtain and register copyrights on such materials in any and all
countries.  Where applicable, works of authorship created by Advisor
for the Company in performing his responsibilities under this agreement shall be
considered “works made for hire” as defined in the U.S. Copyright
Act.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (iii)           Know–How and Trade
Secrets.  All know–how and
trade secret information conceived or originated by Advisor which arises out of
the performance of the services hereunder or any related material or information
shall be the property of the Company and all rights therein are hereby assigned
to the Company.

     

    (iv)           Return of Records.  Upon termination
of this Agreement, Advisor shall deliver to the Company all property that is in
his possession and that is the Company’s property or relates to the Company’s
business, including, but not limited to, records, notes, data, memoranda,
software, electronic information, models, equipment and any copies of the
same.  Advisor shall permanently delete all of his electronic data
containing such property.

     

    (c)           Advisor Representations and
Warranties.  Advisor
represents and warrants to the Company as follows:

     

    (i)       
    Compliance with
Laws.  All Services
provided hereunder comply with or will comply with all applicable laws and
regulations; and

     

    (ii)           Competing
Activities.  Advisor has
disclosed to the Company any and all other obligations, arrangements, agreements
or interests of Advisor that may constitute or give rise to a conflict of
interest on the part of Advisor given the nature and terms of this Agreement,
and Advisor is not now under any obligation of a contractual or other nature to
any person, firm, corporation or other entity which is inconsistent or in
conflict with this Agreement, or which would prevent, limit or impair the
execution of this Agreement or the performance by Advisor of Advisor’s
obligations hereunder.

     

    (d)           Indemnification.  Advisor shall
indemnify, defend and hold harmless the Company and its officers, directors,
agents and employees from and against all claims, losses, expenses, fees
(including attorneys’ and expert witnesses’ fees), costs and judgments that may
be asserted against the Company (a) that result from the acts or omissions of
Advisor or (b) that result from or arise in any way out of any such claims by
any third parties which are based upon or are the result of any breach of the
warranties contained in Section 5(c).

     

    6.           Termination.  Notwithstanding
any contrary provision contained elsewhere in this Agreement, this Agreement and
the rights and obligations of the Company and Advisor hereunder (other than the
rights and obligations of the parties under Sections 5, 6 and 7(n) which shall
survive any termination of this Agreement) shall be terminated immediately upon
the occurrence of any of the following events:

     

    (A)          Advisor’s
death;

     

    (B)          Advisor
becomes physically or mentally disabled such that he is unable to adequately
perform the services hereunder for a continuous period of thirty (30)
days;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (C)           Advisor
is convicted of any crime (excluding traffic violations or other minor
offenses), or engages in any activity that constitutes a material violation of
normal standards of business ethics;

     

    (D)          Advisor
willfully refuses to comply with or implement reasonable policies established by
the Company;

     

    (E)           party
is in breach of this Agreement and has failed to cure such breach within fifteen
(15) days of the receipt of written notice of breach from the non–breaching
party; or

     

    (F)           for
any reason by either party upon thirty (30) days’ written notice to the other
party;

     

    provided that, if this
Agreement is terminated by Advisor under Section 6(e) or by the Company under
Section 6(f), and Advisor thereafter provides services to the Company,
including, without limitation, attending, testifying at or otherwise assisting
the Company at any trial in the Company’s medicated patch patent infringement
litigation, then Advisor shall be compensated for such services at the rate of
$250 per hour, subject to maximums of $3,000 per day and $10,000 per
week.

     

    7.           Miscellaneous.

     

    (a)           Entire
Agreement.  This Agreement
(including the exhibits, schedules and other documents referred to herein)
contains the entire understanding between the parties hereto with respect to the
subject matter hereof and supersedes any prior understandings, agreements or
representations, written or oral, relating to the subject matter
hereof.

     

    (b)           Counterparts.  This Agreement
may be executed in separate counterparts, each of which will be an original and
all of which taken together shall constitute one and the same agreement, and any
party hereto may execute this Agreement by signing any such
counterpart.

     

    (c)           Severability.  Whenever
possible, each provision of this Agreement shall be interpreted in such a manner
as to be effective and valid under applicable law but if any provision of this
Agreement is held to be invalid, illegal or unenforceable under any applicable
law or rule, the validity, legality and enforceability of the other provision of
this Agreement will not be affected or impaired thereby.

     

    (d)           Successors and
Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, personal representatives and, to the extent permitted by
subsection (e), successors and assigns.

     

    (e)           Assignment.  This Agreement
and the rights and obligations of the parties hereunder shall not be assignable,
in whole or in part, by either party without the prior written consent of the
other party.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
    

    (f)           Modification, Amendment,
Waiver or Termination.  No provision of
this Agreement may be modified, amended, waived or terminated except by an
instrument in writing signed by the parties to this Agreement.  No
course of dealing between the parties will modify, amend, waive or terminate any
provision of this Agreement or any rights or obligations of any party under or
by reason of this Agreement.

     

    (g)           Notices.  All notices,
consents, requests, instructions, approvals or other communications provided for
herein shall be in writing and delivered by personal delivery, overnight
courier, mail, electronic facsimile or e–mail addressed to the receiving party
at the address set forth below.  All such communications shall be
effective when received.

     

    As
to the Company

     

    LecTec Corporation

    1407
South Kings Highway

    Texarkana,
Texas 75501

    Attention:
Chief Executive Officer

    


    As
to Advisor

    


    Judd A.
Berlin

    9115
Strada Place

    Naples,
Florida 34108

    


    Any party
may change the address set forth above by notice to each other party given as
provided herein.

     

    (h)           Headings.  The headings and
any table of contents contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.

     

    (i)           Governing
Law.  ALL MATTERS RELATING TO THE
INTERPRETATION, CONSTRUCTION, VALIDITY AND ENFORCEMENT OF THIS AGREEMENT SHALL
BE GOVERNED BY THE INTERNAL LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO
ANY CHOICE OF LAW PROVISIONS THEREOF.

     

    (j)           Third–Party
Benefit.  Nothing in this
Agreement, express or implied, is intended to confer upon any other person any
rights, remedies, obligations or liabilities of any nature
whatsoever.

     

    (k)           No Waiver.  No delay on the
part of the Company in exercising any right hereunder shall operate as a waiver
of such right.  No waiver, express or implied, by the Company of any
right or any breach by Advisor shall constitute a waiver of any other right or
breach by Advisor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (l)           Jurisdiction and
Venue.  THIS AGREEMENT MAY BE ENFORCED IN ANY
FEDERAL COURT OR STATE COURT SITTING IN TEXARKANA, TEXAS, AND EACH PARTY
CONSENTS TO THE JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT
THAT VENUE IN SUCH FORUM IS NOT CONVENIENT.  IF ANY PARTY COMMENCES
ANY ACTION UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY OR INDIRECTLY FROM
THE RELATIONSHIP CREATED BY THIS AGREEMENT IN ANOTHER JURISDICTION OR VENUE, ANY
OTHER PARTY TO THIS AGREEMENT SHALL HAVE THE OPTION OF TRANSFERRING THE CASE TO
THE ABOVE–DESCRIBED VENUE OR JURISDICTION OR, IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED, TO HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

     

    (m)           Remedies.  The parties
agree that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may, in its discretion, apply to
any court of law or equity of competent jurisdiction for specific performance
and injunctive relief in order to enforce or prevent any violations this
Agreement, and any party against whom such proceeding is brought hereby waives
the claim or defense that such party has an adequate remedy at law and agrees
not to raise the defense that the other party has an adequate remedy at
law.

     

    (n)           Foreign Earned Income
Exclusion.  The Company will
also reimburse you in the amount of $30,000 if, in the course of performing your
duties as Chairman of the Board of Directors of the Company and/or providing the
Services hereunder (including attending, testifying at or otherwise assisting
the Company at any trial as described in the proviso to Section 6 of this
Agreement), you are required to be physically present in the United States for
more than 30 days within any calendar year after 2010 and, as a result, forfeit
the benefit of the Foreign Earned Income Exclusion under the U.S. Internal
Revenue Code of 1986, as amended (the Reimbursement
Fee”).  For the avoidance of doubt, the obligations of the
Company set forth in this Section 7(n) are in addition to, and do not supersede
or in any way modify, the Company’s current obligation to pay Mr. Berlin the
Reimbursement Fee as a result of Mr. Berlin’s physical presence in the United
States for more than 30 days during the 2010 calendar year in connection with
Mr. Berlin’s performance of his duties as the Company’s then chief executive
officer and chief financial officer.

     

    (Remainder
of page intentionally left blank; signature page follows)

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date set forth in the first
paragraph.


     

    
      
        	 
      	
                COMPANY

              
	 
      	 
      
	 
      	
                LecTec
      Corporation

              
	 
      	 
      
	 
      	
                By:

              	
                /s/ Greg Freitag

              
	 
      	 
      	
                Name:
      Greg Freitag

              
	 
      	 
      	
                Its:
      Chief Executive Officer

              
	 
      	 
      
	 
      	
                ADVISOR

              
	 
      	 
      
	 
      	
                /s/ Judd Berlin

              
	 
      	
                Judd
      Berlin

              


      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    


    EXHIBIT
A

    Services

    


    (1)           Medicated Patch Patent Infringement
Litigation.  At the Company’s direction, Advisor shall provide
advice, guidance and other services with respect to the Company’s patent
infringement litigation against Chattem, Inc. and Prince of Peace Enterprises,
Inc. related to the Company’s medicated patch technology, including, without
limitation, attending, testifying at or otherwise assisting the Company at any
trial held in this litigation.

    


    (2)           Business Opportunities in
Asia.  At the Company’s direction, Advisor shall provide
services with respect to developing the Company’s business in Asia, particularly
with respect to the Company’s hand sanitizing patch technology.