Micromem Technologies, Inc.: Exhibit 4.8 - Filed by newsfilecorp.com







Manufacturing Agreement Number 09–101 




MANUFACTURING 
SUPPLY
AGREEMENT

BETWEEN

Life Medical Technologies Inc. (LMTI) 

AND

Micromem Applied Sensor Technologies Inc. (MASTINC) 


 

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Manufacturing Agreement Number 09–101 




MANUFACTURING SUPPLY AGREEMENT 

Agreement made this day of August 2009, between 

Life Medical Technologies Inc. (“Buyer”) 

with its principal place of business at

140 Prospect Avenue 
PH10 
Hackensack NJ 
07601

AND

Micromem Applied Sensor Technologies Inc.
(“Supplier”)

with its principal place of business at

245 Park Avenue, 24th Floor 
New York, New York

10167

This Agreement sets forth the terms of conditions under which
the Supplier will perform certain production work, and preparatory product
development efforts, on behalf of the Buyer and the terms and conditions of this
Agreement shall apply to all products listed on Appendix A (“Products”).


1.0 

GENERAL 

	 	1.1 	
      LIABILITY

	 	 	 
	 		
      Except as otherwise provided in this Agreement, neither
      party shall be liable for special, indirect, incidental, or consequential
      damages arising out of or in connection with claims brought by third
      parties, or any indemnifications granted by either party in connection
      with this Agreement.

	 	 	 
	 	1.2 	
      SEVERABILITY

	 	 	 
	 		
      If any provision of this Agreement is held to be invalid
      or unenforceable, such invalidity of unenforceability shall not affect the
      enforceability of any other provisions of this Agreement not held to be
      invalid.

	 	 	 
	 	1.3 	
      AMENDMENTS

	 	 	 
	 		
      Modification of this Agreement must be made in writing,
      signed by a duly authorized corporate officer of each party. No Amendment
      shall be deemed effective, until each party receives a duplicate
      original of such Amendment.



	 
	
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	 	1.4 	
      COMPLIANCE WITH THE LAWS, DISPUTE
  RESOLUTION

	 	 	 
	 		
      Both parties agree to comply with all applicable laws,
      rules and regulations with regard to the performance of its obligations
      under the Agreement.

	 	 	 
	 		
      The Buyer and Supplier shall make a reasonable good faith
      effort to resolve any dispute, controversy or claim which may arise
      between them in relation to or in connection with this Agreement by
      amicable negotiation, failing which, the parties shall resolve the dispute
      through arbitration as provided for in this Section 1.4.

	 	 	 
	 		
      Any dispute, controversy or claim arising out of or
      relating to this Agreement, or the breach thereof, that cannot be settled
      between the parties within a reasonable period of time. and in any event
      within [30] days of the date on which one party gives other notice of the
      dispute, controversy or claim, shall be determined by arbitration
      administered by the American Arbitration Association in accordance with
      its commercial arbitration rules. The number of arbitrators shall be
      [one]. The place of arbitration shall be New York, New York. The language
      of the arbitration shall be English. Buyer and Supplier each consent to
      such arbitration and the non–exclusive jurisdiction of the Federal and
      State Courts sitting in New York, NY to enforce arbitration, and any
      arbitration award.

	 	 	 
	 	1.5 	
      WAIVER

	 	 	 
	 		
      A waiver of any default, breach or non–compliance under
      this Agreement shall not be effective unless in writing and signed by the
      party to be bound by the waiver. No waiver shall be inferred from or
      implied by any failure to act or delay in acting by a party in respect of
      any default, breach or non–observance or by anything done or omitted to be
      done by the other party. The waiver by a party of any default, breach or
      non– compliance under this Agreement will not operate as a waiver of that
      party’s rights under this Agreement in respect of any continuing or
      subsequent default, breach or non–observance (whether of the same or any
      other nature).

	 	 	 
	 	1.6 	
      NOTICES

	 	 	 
	 		
      Any notice, direction, certificate, consent,
      determination or other communication required or permitted to be given or
      made under this Agreement shall be in writing and shall be effectively
      given and made if (i) delivered personally, (ii) sent by prepaid courier
      service or mail, or (iii) sent by fax or other similar means of electronic
      communication, in each case to the applicable address set out
  below.




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Manufacturing Agreement Number 09–101



	 	 	 
	 	To: (Supplier) 	TO: (Buyer) 
	 	     Micromem Applied Sensor 	  
	 	Technologies, Inc. 	LMTI 
	 	     245 Park Avenue 	140 Prospect Avenue 
	 	     24th Floor 	PH10 
	 	     New York, NY 	Hackensack, NJ 
	 	     10167 	07601 
	 	     Attn: Steven Van Fleet 	Attn: Carol Fitzgerald 
	 	     svanfleet@micromeminc.com 	Cfitzgerald@lifemt.com 
	 	     FAX: 845 227 805 	FAX: 
	 	With a copy to: 	  
	 	     Micromem Technologies Inc. 	  
	 	     777 Bay Street, Suite 1810 	  
	 	     Toronto, Ontario M5G 2E4 	  
	 	     Attn: Joseph Fuda 	  
	 	     jfuda@micromeminc.com 	  
	 	     FAX: 416.360.4034 	  



	 		
      Any such communication so given or made shall be deemed
      to have been given or made and to have been received on the day of
      delivery if delivered, or on the day of faxing or sending by other means
      of recorded electronic communication, provided that such day in either
      event is a Business Day and the communication is so delivered, faxed or
      sent before 4:30 p.m. on such day. Otherwise, such communication shall be
      deemed to have been given and made and to have been received on the next
      following business day. Any such communication sent by mail shall be
      deemed to have been given and made and to have been received on the fifth
      business day following the mailing thereof; provided however that no such
      communication shall be mailed during any actual or apprehended disruption
      of postal services. Any such communication given or made in any other
      manner shall be deemed to have been given or made and to have been
      received only upon actual receipt. Any party may from time to time change
      its address under this Section by notice to the other party given in the
      manner provided by this Section.

	 	 	 
	 	1.7 	
      FORCE MAJEURE

	 	 	 
	 		
      Neither party will be liable nor deemed to be in default
      for delay or failure in performance or interruption of service hereunder
      resulting directly or indirectly from acts of God, wars, floods, riots,
      labor strikes, worldwide parts shortages, or transportation shortages. The
      time of performance so affected or delayed will be deemed extended for the
      period of such delay. The party claiming excuse for failure to perform due
      to force majeure shall notify the other party in writing within five (5)
      days of the existence of the force majeure cause and its expected
      duration.

	 	 	 
	 	1.8 	
      PROPRIETARY
INFORMATION




	   
                         
                         
                         
                         
                         
                         
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      Each party hereby agrees that all information provided to
      the other party under this Agreement, whether oral or in writing, shall be
      subject to the terms of the Non–Disclosure Agreement previously executed
      between the parties as attached as Schedule C.

	 	 	 
	 	1.9 	
      REPRESENTATIONS AND WARRANTIES

	 	 	 
	 		
      Each of the Buyer and the Supplier warrants to the other
      that: (i) it is a corporation validly existing under the laws of its
      jurisdiction of organization; (ii) it has the right, authority and
      capacity to enter this Agreement and perform its obligations hereunder;
      (iii) it has taken all steps necessary to validly enter into this
      agreement; (iv) it is the owner of or has the right to use all
      intellectual property required in order to fulfill its obligations under
      the terms of this Agreement; (v) it has the right to perform all
      obligations under this Agreement; and (vi) this agreement is enforceable
      against it in accordance with its terms.

	 	 	 
	 		
      The Buyer further represents and warrants to the Supplier
      as follows:




	 	a) 	
      Predicated upon and subject to Seller’s ownership and
      right to utilize the sensor technology and printed electronic substrate
      set forth in Appendix A in the manufacture and sale of the Products, the
      Buyer has the worldwide rights to develop, assemble and sell the Products
      and is not aware of any infringement claims by other parties with respect
      to the Products, and 

	 	b) 	
      The Buyer acknowledges that the working relationship as
      contemplated herein with the Supplier is on an exclusive basis and that
      the Buyer will not engage any other Supplier to provide the Products
      contemplated in this Agreement during the term of the Agreement providing
      that the Supplier is in compliance with the terms of the Agreement.
  

	 	 	
       

	 	
      The Supplier further represents and warrants to the Buyer
      as follows: 

	 	 	
       

	 	a) 	
      The Supplier will provide to the Buyer a mutually agreed
      to initial Product design and will work with Buyer in a commercially
      reasonable manner to develop and produce Product enhancements, Product
      family additions and cost reductions over the term of this Agreement; and
      

	 	b) 	
      The Supplier acknowledges that the working relationship
      as contemplated herein with the Buyer is on an exclusive basis and the
      Supplier will not provide the Product contemplated in this Agreement to
      any other party during the term of the Agreement providing that the Buyer
      is in compliance with the terms of the Agreement. 

	 	c) 	The Supplier is not aware of any infringement
      claims by other parties with respect to its technology.




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	 	1.10 	
      ASSIGNMENT

	 	 	 
	 		
      Neither party may assign this Agreement or otherwise
      transfer any of its rights and obligations hereunder without the prior
      written consent of the other party, provided that either party may assign
      this Agreement to a wholly–owned subsidiary of such party that agrees in
      writing to accept and honor all of the terms of this Agreement, with the
      assigning party remaining responsible for the performance of its
      subsidiary’s obligations.

	 	 	 
	 	1.11 	
      ENTIRE AGREEMENT

	 	 	 
	 		
      This Agreement and the Confidentiality Agreement dated
      the date hereof between the parties constitutes the entire agreement
      between the parties with respect to the subject matter hereof and merges
      all prior discussions and negotiations between them. There are no oral
      representations or inducements pertaining thereto, which are not contained
      herein and in such Confidentiality Agreement; and neither of the parties
      hereto shall be bound by any conditions, warranties, understandings or
      representations with respect to such subject matter other than as
      expressly provided herein and therein.

	 	 	 
	 	1.12 	
      NON-LICENSING

	 	 	 
	 		
      The parties understand that except as expressly stated
      herein, the terms and conditions of the Agreement shall not be considered
      in any way as a grant of any license under either party’s present or
      future intellectual property or other proprietary rights.

	 	 	 
	 	1.13 	
      DEVELOPMENTS AND DESIGN RIGHT

	 	 	 
	 		
      The Design Right/Copyright of all development and design
      undertaken by the Supplier on behalf of the Buyer shall be the property of
      Buyer subject to a reimbursement obligation of Buyer that is deemed
      satisfied and shall terminate upon delivery of the initial purchase order
      issued by Buyer. This includes but is not limited to all developments
      related and not–related to the patents/technology of the Buyer and by its
      nature this obligation and transfer of rights is not limited to any
      duration of the contract and shall survive and be effective following any
      termination of the agreement.

	 	 	 
	 		
      For greater certainty:




	 	a) 	
      Any proprietary rights to technology research and
      development that the Supplier undertakes with respect to its sensor
      technology or with respect to the printed circuit solution that it
      develops shall remain solely the asset of the
Supplier.




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	 	b) 	
      The yet to be named medical product application which
      incorporates the Product sold by the Supplier to the Buyer as contemplated
      in this Agreement and all proprietary rights pertaining thereto (other
      than as specified in Section 1.13 (a) above) shall remain solely the asset
      of the Buyer.




	 	1.14 	
      PUBLIC ANNOUNCEMENTS

	 	 	 
	 		
      Except to the extent otherwise required by applicable law
      or with the prior consent of the other party, neither party shall make any
      public announcement regarding this Agreement or the transactions
      contemplated by this Agreement.

	 	 	 
	 	1.15 	
      TIME OF THE ESSENCE

	 	 	 
	 		
      Time shall be of the essence of this Agreement in all
      respects.

	 	 	 
	 	1.16 	
      GOVERNING LAW

	 	 	 
	 		
      This Agreement shall be governed by and construed in
      accordance with the laws of the State of New York and the laws of
      the United States of America applicable in such State.

	 	 	 
	 	1.17 	
      COUNTERPART SIGNATURES

	 	 	 
	 		
      This Agreement may be executed in counterparts, each of
      which shall be deemed to be an original and both of which taken together
      shall be deemed to constitute one and the same instrument. To evidence its
      execution of an original counterpart of this Agreement, a party may send a
      copy of its original signature on the execution page hereof to the other
      party by facsimile transmission and such transmission shall constitute
      delivery of an executed copy of this Agreement to the receiving
    party.



2.0 

WORK SCOPE 

During the term of this Agreement, the Supplier will use its
commercially reasonable efforts to supply to the Buyer Product that meets the
assembly, test, quality and documentation requirements communicated to the
Supplier by the Buyer from time to time, at the costs quoted by the Supplier to
the Buyer in writing. and in accordance with the delivery schedule contemplated
in the Buyer’s purchase orders delivered in accordance with the terms of this
Agreement. 

Supplier acknowledges that assembly and test, labeling and
production records must meet all applicable regulations and ISO/FDA product
standards. Supplier shall manufacture, sell and deliver products listed on
Appendix A exclusively to Buyer under the terms and conditions of this
Agreement. 

3.0 

AGREEMENT TERMS AND ORDERING 

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	 	3.1 	
      TERM OF AGREEMENT

	 	 	 
	 		
      It is anticipated that the Overall Term of this Agreement
      is intended to be a minimum of 36 months (30) months from the agreement
      date unless terminated earlier as provided in Section 10.0.] The Agreement
      shall have an initial term of 12 months and thereafter, on each
      anniversary of the date hereof, shall renew automatically for a further
      12–month period unless either party provides the other party with written
      notice that to the other party this Agreement shall not automatically
      renew no less than 90 days prior to the renewal date, in which case the
      Agreement shall terminate in accordance with its terms.

	 	 	 
	 	3.2 	
      PURCHASE ORDERS/FORECAST

	 	 	 
	 		
      Upon execution of this Agreement Buyer will commit to the
      issuance of an initial purchase order by August 31, 2009 as contemplated
      in Appendix B. This commitment is subject to the agreement of Buyer and
      Seller as to the design of the Products, and receipt of all necessary FDA
      approvals for the Products no later than 45 days prior thereto. Buyer will
      issue a forecast for an initial term of three months, including specific
      schedules for the first month. Thereafter, Buyer will provide Supplier
      with a rolling three–month forecast, which will include one–month window
      of release schedules.

	 	 	 
	 		
      Buyer’s purchase orders (“Orders”) will be in
      writing and with the following information: (1) identification of the
      Products by quantity, model number, revision and description; (2) shipment
      instructions, including requested shipment date, and (3) price shall
      included in the Order. All scheduled delivery dates included in Orders
      shall be dates for shipment of the applicable Products from the Supplier's
      facilities.

	 	 	 
	 		
      Supplier will use commercially reasonable efforts to
      secure long lead– time components on behalf of the Buyer in quantities and
      timing intended to allow Supplier to meet the production requirements
      identified in the Buyer’s forecasts.

	 	 	 
	 	3.3 	
      RESCHEDULING

	 	 	 
	 		
      Buyer may make changes to Orders as
  follows:




	 	a) 	
      Orders deliverable in the month in which Supplier is
      notified of such proposed change and in the first full month thereafter
      shall not be subject to cancellation or revision; and

	 	 	 
	 	b) 	
      Orders deliverable from the start of the second full
      month following the date on which Supplier is notified of such proposed
      change may be increased or decreased by the
Buyer..




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	 	3.4 	
      RESCHEDULING AND CANCELLATION CHARGES 

	 	 	
       

	 		
      In the case of cancellation, Buyer is responsible for any
      undamaged material, at quoted standard cost, inventoried by Supplier in
      support of Buyer’s cancelled Order that is not reusable by Supplier or
      returnable to the Supplier of such material. Additionally, Buyer is
      responsible for any cancellation charges, restocking charges, or any
      irrevocable commitments incurred by Supplier for such material. 

	 	 	
       

	 		
      Such inventory items will be identified upon the initial
      execution of this Agreement, and as they become otherwise identified
      during the course of this Agreement. 

	 	 	
       

	 	3.5 	
      INCREASE IN FORECASTED REQUIREMENTS 

	 	 	
       

	 		
      If there is an increase in forecasted requirements,
      Supplier shall use commercially reasonable efforts to service the
      increased Order(S) and shall advise Buyer of its ability to service the
      increase Order(S). Buyer and Supplier, together, shall use their
      commercially reasonable efforts to work with the Suppliers of long–lead
      materials to ensure that an adequate supply of such materials will be
      available at all times. 

	 	 	
       

	 	3.6	
      CONTRACT CANCELLATION CHARGES 

	 	 	
       

	 		
      For the convenience of the Buyer, , Buyer may cancel
      Orders, provided that Buyer pays Supplier for:





	 	a) 	
      all goods already shipped;

	 	 	
       

	 	b) 	
      all finished goods and work–in–process in Supplier’s
      inventory;

	 	 	
       

	 	c) 	
      all raw materials in Supplier’s inventory that cannot be
      returned to the Suppliers of such materials for refund or, in the event of
      a partial refund, the difference between Supplier’s cost and the amount of
      such refund;

	 	 	
       

	 	d) 	
      all outstanding orders of raw materials that cannot be
      cancelled or, if cancellable, the costs of such cancellation;
and

	 	 	
       

	 	e) 	
      any handling charges incurred by Supplier in connection
      with such raw materials orders.




	 	3.7 	REGULATORY INDUCED CHANGES 
	 	 	 
	 		
      In the event any that the goods proposed to be produced
      pursuant to this agreement require a governmental or regulatory approval
      in any jurisdiction prior to shipment, or an additional regulatory
      requirement must be met to goods previously shipped, Buyer and Supplier in
      good faith shall cooperate in satisfying any such regulatory requirements
      including changes to products that are necessary or advisable .
  



4.0 

TOOLING, FIXTURES AND PROGRAMS 

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Unless otherwise agreed between the parties in writing, any
equipment, tooling or materials of any kind that is issued to the Supplier by
the Buyer shall remain the property of the Buyer. The Supplier shall be
responsible for maintaining the equipment, tooling and materials in a good and
serviceable condition, reasonable wear and tear accepted. At Buyer’s request and
expense, upon termination of the Agreement, all of such equipment, tooling and
material shall be returned to the Buyer. 

5.0 

QUALITY ASSURANCE 

Prior to the production of any Product, Buyer shall supply
Supplier with detailed specification and accreditation requirements with respect
thereto. If, after receiving such requirements, Supplier believes that it will
not be able to satisfy any of them, it shall promptly notify Buyer and Buyer and
Supplier shall make a reasonable good faith effort to find a solution to the
issues identified by Supplier. Supplier shall not be required to produce any
Product under this Agreement if it reasonably concludes it will not be able to
satisfy the requirements with respect thereto provided by Buyer. Following
Supplier’s written confirmation of acceptance of the requirements provided to it
by Buyer with respect to a Product, Supplier shall ensure that Products supplied
by it to Buyer meet all of such requirements. In the event that Buyer proposes
to amend or alter any requirement previously provided by it to Supplier or add
any further requirements, such amendment, alteration or addition shall (unless
such amendment, alteration or addition is submitted to comply with regulatory
requirements)be subject to Supplier’s written approval and shall apply only with
respect to Products produced following the date on which such amended, altered
or additional requirement is accepted by it in writing, other than as
contemplated by Section 3.7. 

6.0 

WARRANTY 

	 	6.1 	
      WARRANTY PERIOD

	 	 	 
	 		
      The Supplier warrants its Product, for a period of thirty
      six months from the date of shipment to be free from defects in material
      and workmanship.

	 	 	 
	 	6.2 	
      WARRANTY LIMITATION

	 	 	 
	 		
      The warranty is limited to replacement of defective
      Product and does not apply to any Products which have been abused or used
      other than in accordance with the written instructions with respect
      thereto or improperly stored, modified or repaired. Supplier will respond
      to warranty claims in a timely fashion.

	 	 	 
	 	6.3 	
      WARRANTY CLAIMS

	 	 	 
	 		
      Warranty claims by Buyer shall state the specific nature
      of the defect, unit, part number, serial number and date the Product was
      discovered to be defective. The Supplier shall replace Products returned
      to Supplier under warranty. Supplier shall pay one–way transportation cost
for the return of such Products and issue the replacement free of charge. 




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7.0 

ENGINEERING CHANGES 

	 	7.1 	
      Engineering changes (“EC”s) maybe initiated by the Buyer
      under the following terms:




	 	a) 	
      Buyer gives written advance notice to Supplier of any EC
      requested by Buyer.

	 	 	 
	 	b) 	
      Upon receiving such notice, Supplier will respond to
      Buyer on a timely basis and, as soon as reasonably practical, will provide
      to Buyer a written assessment of the anticipated effects of an EC on
      Supplier’s schedule and manufacturing costs (including costs associated
      with scrap and rework, retooling, fixtures, and any changes to the Product
      price).

	 	 	 
	 	c) 	
      Supplier and Buyer shall negotiate in good faith on the
      costs and other details associated with processing and implementing the
      EC, provided that implementation of any EC will be contingent upon
      Supplier’s ability to implement the EC in a commercially reasonable
      manner. All EC implementation schedules will be at the mutual agreement in
      writing of Supplier and Buyer.




	 	7.2 	
      Engineering changes (ECs) maybe initiated by the Supplier
      under the following terms:




	 	a) 	
      For ECs proposed by Supplier, Supplier shall give
      advanced written notice to Buyer, including a written assessment of the
      anticipated effects of an EC on Supplier’s schedule and manufacturing
      costs (including costs associated with scrap and rework, retooling,
      fixtures, and any changes to the Product price). 

	 	b) 	
      Thereafter, Supplier and Buyer shall negotiate in good
      faith on the costs and other details associated with processing and
      implementing the EC, provided that no EC shall be implemented without
      Buyer’s prior written consent, such consent not to be unreasonably
      withheld. 



8.0 

PRICES/TITLE 

8.1  

BASIS FOR PRICE CHANGES
 

	 	a) 	
      Anticipated Unit pricing is as listed in Appendix
    B.

	 	 	 
	 	b) 	
      Except as provided in 8.1e below, pricing cannot be
      changed without the written approval of both parties, which shall not be
      unreasonably withheld.

	 	 	 
	 	c) 	
      All prices are FOB Supplier’s facility. Buyer shall be
      responsible for any pay all shipped costs for Products.

	 	 	 
	 	d) 	
      All taxes will be borne by Buyer. If sales to Buyer are
      exempt from any taxes, Buyer shall furnish to Supplier a certificate of
      exemption from the applicable taxing authority that is satisfactory
      to the Supplier, acting reasonably.




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	 	e) 	
      It is intended that pricing set forth on Appendix B shall
      remain fixed for an initial period of 12 months unless Buyer and Supplier
      mutually agree to revised pricing to reflect new developments that may
      arise from time to time during the year. Thereafter, the parties shall
      agree in writing to the applicable pricing for successive 12–month
      periods.



8.2 

 TITLE 

Title to and risk of loss of the
Products shall be passed to Buyer upon shipment from Supplier. 

9.0 

PAYMENT TERMS 

The standard payment terms are net forty five (45) days from
the date of invoice from Supplier. Interest shall be charged at commercial rates
on overdue balances. 

10.0 

TERMINATION CLAUSE 

	 	10.1 	
      BREACH

	 	 	 
	 		
      If either party breaches a material provision of the
      Agreement and, if capable of being remedied, the breach is not remedied
      within 30 days following receipt of written notice from the other party
      specifying the nature of the breach. If the breach is such that it is not
      capable of being remedied, the party providing notice of the breach shall
      not be required to wait until the expiry of the 30–day cure period before
      terminating this Agreement.

	 	 	 
	 	10.2 	
      OTHER BASES FOR TERMINATION

	 	 	 
	 		
      Either party may terminate this Agreement by written
      notice upon the concurrence of any of the following events, unless such
      event is eliminated or cured within 10 days of notice
  therefore.




	 	a) 	
      The filing by the other party of a petition in bankruptcy
      or insolvency;

	 	 	 
	 	b) 	
      Any adjudication that the other party is bankrupt or
      insolvent;

	 	 	 
	 	c) 	
      The filing by the other party of any petition or answer
      seeking reorganization, readjustment, or rearrangement of the business
      under any law relating to bankruptcy or insolvency;

	 	 	 
	 	d) 	
      The appointment of a receiver for all or substantially
      all the property of other party;

	 	 	 
	 	e) 	
      The making by the other party of any assignment or
      attempted assignment of the benefit of creditors;
or




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	 	 f)	
      The institution of any proceedings for the liquidation or
      winding up of the business or for the termination of the corporate charter
      of the other party. 




	 	10.3 	
      SURVIVAL OF RIGHTS AND OBLIGATIONS

	 	 	 
	 		
      Termination of this Agreement shall not affect the
      survival of any rights or obligations hereunder which by their nature are
      to survive and be effective following termination of the Agreement
      including, without limitation, Sections 1.1, 1.6 and 10.3 and Articles
      4.0, 6.0, 9.0 and 11.0.



11.0 

INDEMNIFICATION 

	 	11.1 	
      The Buyer hereby indemnifies the Supplier and its
      affiliates and the directors, officers, employees, representatives and
      agents of any of them and saves them fully harmless against, and will
      reimburse them for any damages, costs or expenses (including reasonable
      legal expenses arising from, in connection with or related in any manner
      whatsoever to any liability or obligation of such person in connection
      with a claim made by a third party, whether disputed or undisputed, in
      connection with the sale, distribution or use of Products, other than
      claims arising from (i) the infringement by any of the intellectual
      property owned or licensed from a third party by the Supplier and used in
      the supply of Product to the Buyer on any intellectual property rights of
      any third party, or (ii) any defect in any of the materials supplied by
      the Supplier to the Buyer. 

	 	 	  
	 	11.2 	
      The Supplier hereby indemnifies the Buyer and its
      affiliates and the directors, officers, employees, representatives and
      agents of any of them and saves them fully harmless against, and will
      reimburse them for any damages, costs or expenses (including reasonable
      legal expenses arising from, in connection with or related in any manner
      whatsoever to any liability or obligation of such person in connection
      with a claim made by a third party, whether disputed or undisputed, with
      respect to (i) the infringement by any of the intellectual property owned
      or licensed from a third party by the Supplier and used in the supply of
      Product to the Buyer on any intellectual property rights of any third
      party, or (ii) any defect in any of the Products (exclusive of materials
      furnished by Buyer). 

	 	 	  
	 	11.3 	
      If either the Buyer or the Supplier becomes aware of any
      actual or potential third party claim in respect of which it or any of its
      affiliates or the directors, officers, employees, representatives and
      agents of any of them may have a right of indemnification under this
      Agreement, such party (the “Indemnified Party”) shall promptly give
      written notice thereof to the other party (the “Indemnifying Party”). Such
      notice shall specify with reasonable particularity (to the extent that the
      information is available) the factual basis for the claim and the
      amount of the potential damages, costs and expenses arising there from, if
      known. 




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	 	11.4 	
      If, through the fault of the Indemnified Party, the
      Indemnifying Party does not receive notice of a particular claim in time
      effectively to contest the determination of any liability susceptible of
      being contested or to assert a right to recover an amount under applicable
      insurance coverage, then the liability of the Indemnifying Party to the
      Indemnified Party under this Agreement shall be reduced to the extent that
      damages, costs or expenses are incurred by the Indemnifying Party
      resulting from the Indemnified Party’s failure to give such notice on a
      timely basis. 

	 	 	
      

	 	11.5 	
      The Indemnifying Party shall have the right, at its
      expense, to participate in but not control the negotiation, settlement or
      defence of the third party claim, which control shall rest at all times
      with the Indemnified Party, unless the Indemnifying Party: (i) irrevocably
      acknowledges in writing complete responsibility for, and agrees to
      indemnify the Indemnified Party in respect of, the third party claim; and
      (ii) furnishes evidence to the Indemnified Party which is satisfactory to
      the Indemnified Party of its financial ability to fully satisfy the costs
      of indemnifying the Indemnified Party; in which case the Indemnifying
      Party may assume such control at its expense through counsel of its
      choice. 

	 	 	
      

	 	11.6 	
      If the Indemnifying Party elects to assume control as
      contemplated in Section 11.5, the Indemnifying Party shall reimburse the
      Indemnified Party for all of the Indemnified Party’s out–of–pocket
      expenses incurred as a result of such participation or assumption. The
      Indemnified Party shall continue to have the right to participate in the
      negotiation, settlement or defence of such third party claim and to retain
      counsel to act on its behalf, provided that the fees and disbursements of
      such counsel shall be paid by the Indemnified Party unless the
      Indemnifying Party consents to the retention of such counsel at its
      expense or unless the named parties to any action or proceeding include
      both the Indemnifying Party and the Indemnified Party and a representation
      of both the Indemnifying Party and the Indemnified Party by the same
      counsel would be inappropriate due to the actual or potential differing
      interests between them (such as the availability of different defences),
      in which case the fees and disbursements of such counsel shall be paid by
      the Indemnifying Party. The Indemnified Party shall co–operate with the
      Indemnifying Party so as to permit the Indemnifying Party to conduct such
      negotiation, settlement and defence and for this purpose shall preserve
      all relevant documents in relation to the third party claim, allow the
      Indemnifying Party access on reasonable notice to inspect and take copies
      of all such documents and require its personnel to provide such statements as the
      Indemnifying Party may reasonably require and to attend and give evidence
      at any trial or hearing in respect of the third party claim. 




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	 	11.7 	
      If, having elected to assume control of the negotiation,
      settlement or defence of the third party claim, the Indemnifying Party
      thereafter fails to conduct such negotiation, settlement or defence with
      reasonable diligence, then the Indemnified Party shall be entitled to
      assume such control and the Indemnifying Party shall be bound by the
      results obtained by the Indemnified Party with respect to such third party
      claim. 




	 	11.8 	
      If the Indemnifying Party fails to assume control of the
      defence of any third party claim, the Indemnified Party shall have the
      exclusive right to contest, settle or pay the amount claimed and the
      Indemnifying Party shall be bound by the results obtained by the
      Indemnified Party with respect to such third party claim. Whether or not
      the Indemnifying Party assumes control of the negotiation, settlement or
      defence of any third party claim, the Indemnifying Party shall not settle
      any third party claim without the written consent of the Indemnified
      Party, which consent shall not be unreasonably withheld or
  delayed.

	 	 	 
	 	11.9 	
      The Indemnifying Party shall be responsible for all costs
      and expenses (including reasonable legal expenses) incurred by the
      Indemnified Party in acting as contemplated pursuant to Sections 11.7 and
      11.8 above.




	Supplier 	Buyer 
	  	  
	  	  
	  	  
	___________________________________	_______________________________
	Name: Steven Van Fleet 	Name: Carol Fitzgerald 
	Position: President 	Position: CEO 
	Micromem Applied Sensor Technologies Inc 	Life Medical Technologies Inc. 
	  	  
	  	  
	August •, 2009 	August •, 2009 



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APPENDIX A - Products and Variants 

A series of technology enhancements is planned to the yet to be
named medical product form factor. Supplier will incorporate into a form factor
its sensors in the form of a printable electronic substrate.

Supplier will also provide a printable electronics solution
that will incorporate the ability to remotely read the information derived from
the yet to be named medical device and provide a business opportunity for the
Buyer to arrange for a pay per click service over the internet designed to
provide near real time medical review of the sensor readings

Buyer to provide market feedback and input to Supplier on
required form factors. Supplier will submit a series of designs to support the
product enhancements and extension of the product family. Buyer will prioritize
designs to support their current orders in house and support Buyer’s marketing
plan. 

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APPENDIX B - PRICING AND MARKETS 

PRICING 

Final pricing to be jointly agreed upon based upon development
outcomes and solution timing/availability. 

Buyer and Supplier mutually agree that: 

	 	a) 	
      Buyer has a manufacturing strategy and , assuming
      completion of a mutually satisfactory developmental prototype in 2009 and
      obtaining of all necessary FDA approvals for the Products no later than 45
      days prior thereto, expects sales backlog in place to allow products to be
      shipped to clients beginning in 2010. This expectation is subject to the
      agreement of Buyer and Seller as to the design of the Products.

	 	 	 
	 	b) 	
      Supplier in order to grant the Buyer the rights under
      this manufacturing supply agreement including but not limiting to
      exclusivity and intellectual rights, Supplier mandates a 10 million unit
      order from Buyer as described herein this Section b. By August 31, 2009,
      Buyer will commit to issue Supplier a Purchase Order for an initial 10
      million units with delivery, in installments, to coincide with Buyer’s
      schedule for bringing their production line on stream. This commitment is
      subject to the agreement of Buyer and Seller as to the design of the
      Products, and receipt of all necessary FDA approvals for the Products no
      later than 45 days prior thereto. Buyer expects to accept delivery of
      these units beginning in 2010, in accordance with fulfilling their
      expected client orders.

	 	 	 
	 	c) 	
      The cost to Buyer of the initial 10 million units will
      depend upon the final product configurations approved by the Buyer. It is
      anticipated that the initial pricing will be between $1–$3 USD per unit.
      The actual pricing will be established once the Product has been fully
      defined and approved by the Buyer. If the Buyer and Supplier can not agree as to
      the initial pricing, this contract may be cancelled by either upon Thirty
      (30) days prior notice without penalty.

	 	 	 
	 	d) 	
      Buyer and Supplier will issue a Press Release upon
      execution of this Agreement stating that they have entered into a
      manufacturing contract and collaboration to develop medical devices using
      the Supplier’s Sensor technology.

	 	 	 
	 	e) 	
      The Supplier undertakes to work with the Buyer to
      mutually agree upon a continuing cost reduction strategy so as to optimize
      production costs over the course of the term of the Agreement. Buyer and
      Supplier acknowledge that the current targeted average unit cost for the
      balance of the anticipated volume will be dependent on the mix of product
      form factors and functionality and will be highly dependent upon volume.
      Volumes above 100 million units will substantially reduce unit costs.
      Anticipated volumes over the next three years will exceed 117 million
      units.




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	 	f) 	
      Supplier will underwrite all product development costs to
      support Buyer’s business plan.




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