**EXHIBIT10.1**

 

**CONSULTINGAGREEMENT**

** **

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

 

W I T NE S S E T H :

 

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

 

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

 

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

 

1.  Services.  The Consultant shall, while at all times reportingto the Chairman of the Board of Directors of the Company (the “Board”),provide such business consulting and other services as detailed on Exhibit Ahereto and as the Board may, from time to time, designate for the Companyand/or its subsidiaries and other affiliates (collectively, the “CompanyGroup”). The Consultant’s services shall be provided by John Moon, or otherpersons approved by the Company.  TheConsultant shall not perform services for Laurus Master Fund, Ltd. or itsaffiliates during the period it is performing services for the Company withoutprior written approval by the Company’s Board of Directors.  The Consultant shall devote such time andattention as necessary to properly perform its duties and responsibilitieshereunder.  The Company herebyacknowledges and recognizes that the Consultant has other business interestsand may continue to have such business interests concurrently with theperformance of this Agreement.

 

2.  Independent Contractor.  It is the intention and agreement of theparties that the Consultant shall be retained by the Company pursuant to thisAgreement, and shall perform its duties and all services hereunder, as anindependent contractor.  Nothing hereinshall be deemed to create a partnership, joint venture or employmentrelationship between the Consultant and the Company.

 

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

 

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

 

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hereunder.  The Consultant shall submit a quarterlybudget of estimated expenses to the Company for approval prior to the beginningof each quarter.  To be eligible forreimbursement, expenses must be consistent with the budget and Company expensepolicies, or approved in advance by the Company’s Chairman. Such reimbursementshall be made by the Company monthly, after receipt of an invoice from theConsultant accompanied by receipts or other satisfactory documentation of suchexpenses.

 

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

 

6.  Term. The term of this Agreement (the “Initial Term”) shall commence onthe 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, asso extended, is herein referred to as the “Term”).  Notwithstanding the foregoing provisions ofthis Section, the Company or the Consultant may terminate the Consultant’sengagement at any time during the Term in accordance with Section 8.

 

7.  Termination of Engagement.  The engagement of the Consultant hereunderand this Agreement may be terminated by either party, with or without cause, atany time during the Term upon 90 days prior written notice to the otherparty.  Except as set forth in Section 0,the termination of the Consultant pursuant to this Section shall notresult in any penalty or fee payable to the Consultant.  The Option may be exercised for one yearafter termination to the extent vested on termination.

 

8.  Action upon Termination.

 

(A)  The Companyshall, forthwith upon any termination of this Agreement, pay to the Consultantall amounts payable to the Consultant hereunder to and including the dayimmediately preceding the effective date of termination of this Agreement.

 

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

 

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

 

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measures tomaintain the confidentiality of the confidential material, except as requiredin the performance of the Consultant’s duties and responsibilities under thisAgreement.  The Consultant agrees thatall confidential material, together with all notes and records of theConsultant relating thereto, and all copies or facsimiles thereof in thepossession or control of the Consultant (whether made by the foregoing or othermeans) are the exclusive property of the Company.  The Consultant shall not in any manner useany confidential material, or any other property of the Company, in any waywhich is or could reasonably be expected to be materially detrimental to theCompany.  Promptly upon the request ofthe Company, the Consultant shall deliver to the Board, or a person designatedby the Board, or destroy all confidential material in the possession of theConsultant, provided that the Consultant may retain a file copy thereof.

 

For the purposes hereof,the term “confidential material” shall mean all information and/ormaterial acquired in the course of the engagement of the Consultant hereunderconcerning the projects, activities, business or affairs (financial orotherwise) of the Company or any other member of the Company Group, as the casemay be, or any of the customers or suppliers of the Company or any other memberof the Company Group, whether or not provided by or on behalf of the Company,including, without limitation, information concerning the past, present orfuture customers, suppliers, business, proprietary matters, trade secrets,products or projects, sales and other financial information and developmentprojects or marketing plans of the Company or any of the other members of theCompany Group; provided, however, that the term “confidential material” shallnot include information which (i) becomes generally available to thepublic other than as a result of a disclosure by the Consultant (but only afterit enters the public domain), (ii) was available to the Consultant on anon confidential basis prior to the engagement of the Consultant hereunder, (iii) becomesavailable to the Consultant on a non confidential basis from a source otherthan the Company or any other member of the Company Group or any of theirrespective agents, customers, suppliers or clients; provided that theConsultant does not know that such source is bound by a confidentialityobligation to the Company or any other member of the Company Group or any ofsuch agents, customers, suppliers or clients, or (iv) information which isindependently developed by the Consultant without use of confidentialinformation of the Company or any of its affiliates.

 

In the event that theConsultant is required in the context of any civil or criminal proceeding orregulatory action or investigation, by oral questions, interrogatories,requests for information or documents, subpoena, civil investigative demand orsimilar process, to disclose any confidential material, the Consultant shallprovide the Company with prompt notice thereof, including copies of allrelevant documents and information, so that the Company may seek an appropriateprotective order and/or waive compliance by the Consultant with the provisionshereof; provided, however, that if in the absence of a protective order or thereceipt of such a waiver, the Consultant is compelled to disclose confidentialmaterial not otherwise disclosable hereunder to any legislative, judicial orregulatory body, agency or authority, or else be exposed to liability forcontempt, fine or penalty or to other censure, such confidential material maybe so disclosed, provided that the Consultant has provided the Company withprior written notice and copies of all relevant documents.

 

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10.  Miscellaneous.

 

*(A)  Amendments*.  ThisAgreement shall not be amended or modified in whole or in part except byinstrument in writing signed by a representative of the Consultant and by arepresentative 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 Consultantother than to a subsidiary or affiliate of the Consultant.

 

Except as hereinprovided, this Agreement shall not be assigned by the Company without the priorconsent in writing of the Consultant being first had and obtained (such consentshall not be unreasonably withheld).  Anyattempted assignment in violation of this Section 0 shall be null andvoid.  Notwithstanding the foregoingsentences, the Company may assign this Agreement to any of its subsidiaries andaffiliates and, upon any such assignment, this Agreement shall be binding upon,and inure to the benefit of, the applicable assignee and the Consultant or toany successors (whether direct or indirect, by purchase, merger, consolidationor otherwise) to all or substantially all of the business and/or assets of theCompany.  As used in this Section 0,the “Company” shall mean the Company as hereinbefore defined and anypermitted assignee as aforesaid and any successor to the Company’s businessand/or assets as aforesaid which otherwise becomes bound by all the terms andprovisions of this Agreement, and this Agreement shall be binding upon, andinure to the benefit of, the Company, as so defined, and the Consultant.

 

*(C) Liability and Indemnity*.  The Consultant shall indemnifyand save harmless the Company, its affiliates and subsidiaries and theirrespective directors, officers, members, shareholders and employees from andagainst all claims whatsoever (including costs, charges and legal and otherexpenses reasonably incurred in connection therewith) brought, commenced orprosecuted against any of them for or in respect of any act, deed, matter orthing whatsoever made, done, acquiesced in or omitted in or about or in relationto the execution of the Consultant’s duties hereunder in any circumstance wherethere 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 thenext succeeding sentence, none of the Consultant, nor any direct or indirectshareholder, director, officer, partner, employee, agent, member, advisor orrepresentative of the Consultant, shall be liable to the Company or to anystockholder thereof for, and the Company shall indemnify and save harmless theConsultant and such persons from and against all claims whatsoever (includingcosts, charges and legal and other expenses reasonably incurred in connectiontherewith) brought by or on behalf of the Company, any of its stockholders orany third parties in respect of, (i) any act, omission, negligence ordefault of any person employed or engaged by the Consultant in the course ofthe exercise of its duties and responsibilities hereunder, (ii) any lossoccasioned by any mistake or error in judgment or any act or omission of theConsultant made in the course of or in connection with the exercise of theduties of the Consultant hereunder, (iii) any action or inaction arisingfrom good faith reliance upon the opinion or advice as to legal matters oflegal counsel or as to accounting matters of accountants selected by any ofthem, which may include the legal counsel or accountants for the 

 

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

 

Persons entitled to beindemnified pursuant to this Section 0 are herein referred to as “IndemnifiedParties”.

 

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

 

To the Company:

 

Micro Component Technology, Inc.  2340 West County Road CSt. Paul, MN 55113(651) 697-4111Fax:  (651) 697-4200Attn:  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 ofand be binding upon the parties hereto, their successors and permitted assigns.

 

*(F)          Further Assurances*.  The Consultant and the Company shall promptlydo, 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 requirefrom time to time for the 

 

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purposeof giving effect to this Agreement, and shall use reasonable efforts and takeall such steps as may be reasonably within their power to implement to the fullextent the provisions of this Agreement.

 

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

 

*(H)  Severability*. Should any provision of this Agreement be held by a court of competentjurisdiction to be enforceable only if modified, such holding shall not affectthe validity of the remainder of this Agreement, the balance of which shallcontinue to be binding upon the parties hereto with any such modification tobecome a part hereof and treated as though originally set forth in this Agreement.  The parties further agree that any such courtis expressly authorized to modify any such unenforceable provision of thisAgreement in lieu of severing such unenforceable provision from this Agreementin its entirety, whether by rewriting the offending provision, deleting any orall of the offending provision, adding additional language to this Agreement,or by making such other modifications as it deems warranted to carry out theintent and agreement of the parties as embodied herein to the maximum extentpermitted by law.  The parties expresslyagree that this Agreement as so modified by the court shall be binding upon andenforceable against each of them.  In anyevent, should one or more of the provisions of this Agreement be held to beinvalid, illegal or unenforceable in any respect, such invalidity, illegalityor unenforceability shall not affect any other provisions hereof, and if suchprovision or provisions are not modified as provided above, this Agreementshall be construed as if such invalid, illegal or unenforceable provisions hadnever been set forth herein.

 

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

 

*(J)  Applicable Law*. This Agreement shall be governed by, construed and enforced inaccordance with, the laws of the State of Minnesota, without regard to anyconflict of laws principles of the State of Minnesota which would apply thelaws of any other jurisdiction.  Withoutlimiting the generality of this Section 0, in the event that a court ofany jurisdiction shall hold any of the provisions of this Agreement to bewholly or partially unenforceable for any reason, such determination shall notbar or in any way affect either party’s right to relief as provided for hereinin the courts of any other 

 

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jurisdiction; suchprovisions, 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 waiverby either party hereto of any breach by the other party hereto of any conditionor provision of this Agreement to be performed by such other party shall bedeemed a waiver of a similar or dissimilar provision or condition at the sameor any prior or subsequent time, nor shall the failure of or delay by eitherparty hereto in exercising any right, power or privilege hereunder operate as awaiver thereof to preclude any other or further exercise thereof or theexercise of any other such right, power or privilege.

 

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

 

*(M) Counterparts*. This Agreement may be executed in counterparts (including counterpartsby facsimile transmission) and each of such counterparts shall constitute anoriginal document and such counterparts, taken together, shall constitute oneand the same instrument.

 

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

 

*(O)  Arbitration*. Any dispute, controversy or claim arising out of or in connection withor relating to this Agreement shall be determined and settled by arbitration inMinneapolis, Minnesota pursuant to the rules then in effect of theAmerican Arbitration Association by one arbitrator appointed in accordance withthose rules.  Any award rendered by thearbitrator shall be final and conclusive upon the parties and judgment thereonmay be entered in any court having jurisdiction.

 

*              *

 

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INWITNESS WHEREOF the Consultant and the Company have executed this Agreement onthe 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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**EXHIBITA**

** **

**Description of Services andOption vesting Milestones**

** **

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

 

B.             Formalizing reports

 

C.             Review and assist in negotiating or preparation of:

 

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

 

b.              Sales agreements (major OEM customer sales agreements)

 

c.               Vendor agreements

 

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

 

e.               Budgets (consistent with Business Plan preparation)

 

f.                 Business presentations

 

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

 

h.              Equity agreements. (identify opportunities to include equity infusions from joint venturesand 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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