Document:

To:	
                The Investors Listed on the Attached

                Distribution
                  List (collectively, the
“Investors”)

              

      

       

      Ladies
        and Gentlemen:

      

      Reference
        is hereby made to the Subscription Agreements entered into between each of
        the
        Investors and Micromem Technologies Inc. (the “Company”), pursuant to which the
        Investors subscribed for Units (the “Units”) consisting of one common share of
        the Company (a “Common Share”) and one warrant (a “First Warrant”), each such
        First Warrant being exercisable for one Common Share and an additional warrant
        (a “Second Warrant”), and each such Second Warrant being exercisable for one
        Common Share at any time during the period extending 24 months following
        date on
        which the Units were initially issued to each respective Investor. The
        expiration of the First Warrants is scheduled to occur during December 2005
        and
        January 2006, depending upon each Investor's closing date for the purchase
        of
        the Units. 

      

      Pursuant
        to the terms of subscription, the Company has endeavored to have the Units
        registered with the Securities and Exchange Commission. As such registration
        has
        not yet been completed and the First Warrants (and Second Warrants) are
        scheduled to expire within the next 45 days, the Company hereby seeks the
        consent of the Investors to cancel the Second Warrants included in the Units,
        and in lieu thereof to issue new warrants (the “New Warrants”) to the Investors
        on the following terms: the New Warrants issued to each Investor will be
        exercisable at any time from their date of issuance until December 31, 2006,
        without any requirement that the Investor exercise the First Warrant prior
        to
        receiving or exercising the New Warrants. In all other respects each Investor’s
        New Warrants will be substantially identical to such Investor’s Second Warrants,
        including the number of common shares into which the New Warrants are
        exercisable and the exercise price thereof. To the extent the Investors consent
        to the cancellation of the Second Warrants and the issuance of the New Warrants
        in accordance with the foregoing, the First Warrants will be revised by deleting
        all references therein to the Second Warrants and the expiration date of
        the
        First Warrants will be extended until June 30, 2006. 

      

      Subject
        to obtaining the Investors’ consent to the restructuring described herein, the
        Company intends to withdraw its current Registration Statement on Form F-3
        relating to the resale of the Units, and to file a new Registration Statement
        covering the Common Shares included in the Units, and the Common Shares issuable
        on the exercise of the First Warrants (revised as described above) and the
        New
        Warrants. 

      

      With
        respect to those Investors that choose not to consent to the restructuring
        described herein on or before December 22, 2005, such Investors’ Units,
        including the First Warrants and Second Warrants contained therein, will
        not be
        restructured or amended and, as a result, the First Warrants (and Second
        Warrants) will expire in accordance with their original terms.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      If
        you
        are in agreement with the foregoing restructuring terms, please indicate
        your
        approval thereof by signing a copy of this Letter Agreement where indicated
        below.

      

      Please
        be
        advised that this Letter Agreement is subject to the approval of the foregoing
        terms by the Company’s Board of Directors, and the provisions of this Letter
        Agreement shall have no force or effect unless and until such approval is
        obtained. 

      

      To
        be
        effective, your consent is required to be received by the Company's counsel
        on
        or prior to December 22, 2005. Please fax your consent to 646-349-3501 and
        mail
        the original to the following coordinates:

      

      Ziegler,
        Ziegler & Associates LLP

      570
        Lexington Avenue, 44th
        Floor

      New
        York,
        New York 10022

      Attention:
        George E. Boychuk

      

      Very
        truly yours,

      

      MICROMEM
        TECHNOLOGIES INC.

      

      

      By:
        __________________________

            
        Name:

            
        Title:

      

      

      Accepted
        and agreed to as of

      December
        ____, 2005

      

      _____________________________________________

      Name
        of
        Subscriber (Please Print)

      

      _____________________________________________

      Signature
        of Subscriber or Authorized Representative

      

      _____________________________________________

      Official
        Capacity of person signing if other than the Subscriber

      

      _____________________________________________

      Name
        of
        Person Signing if other than the Subscriber (Please Print)CONSULTING
      AGREEMENT

     

         This
      Consulting Agreement (“Agreement”)
      is
      made
      effective and entered into as of January 1, 2006, by and between NuWay Medical,
      Inc. a
      Delaware corporation (the “Company”),
      and
      Kenneth Reay Code (“Consultant’),
      with
      reference to the following facts: 

    

    RECITALS:

     

    
      	 	
              A.

            	
              The
                Company desires to engage the services of Consultant to advise the
                Company
                in research and development and to provide other services and assistance
                to the Company in matters relating to the Company’s business, as they may
                arise from time to time, upon the terms and conditions contained
                herein.
                

            

    

    

    
      	 	
              B.

            	
              Consultant
                desires to provide services to the Company upon the terms and conditions
                contained herein. 

            

    

    

         NOW,
      THEREFORE, the Company and Consultant hereby mutually agree as follows:

    

         Section 1.
      Scope
      of Services to Be Provided. Consultant
      shall provide to the Company substantially all of his commercial business time,
      skill and attention, assistance, advice and support relating to the Company’s
      business, including research, development and technical support, as the Company
      may request from time to time. Without limiting the generality of the foregoing,
      Consultant shall: 

    

    (a) Services.
      Consultant
      shall undertake and perform the tasks assigned to Consultant from time to time
      by the Company’s Chief Executive Officer.

     

    (b) Reports.
      Consultant
      shall assist in the preparation of regular reports to the Company on the efforts
      expended and undertaken on each project assigned to or undertaken by Consultant.
      Consultant shall maintain and make available to the Company upon request
      complete records for purchases, products, prices, analyses, testing and test
      results, contacts, drawings and such other matters as the Company may request
      from time to time. 

    

    (c) Procedures
      for Maintaining Proprietary Information. Consultant
      shall keep and maintain such procedures as may be customary and appropriate
      and
      as may be specified by the Company to protect, maintain and keep confidential
      any proprietary or confidential information of the Company, including without
      limitation all know how and information that may constitute a trade secret
      or
      otherwise confer strategic or competitive advantages to the Company, by use
      of
      passwords, locked cabinets, identification of such information and materials
      as
“Confidential’
      and
      other
      limits on access as may be customary or appropriate or set forth in Company
      policies. 

    

         Section 2.
      Non-Disclosure
      Obligations. Concurrently
      with the parties’ execution of this Agreement, Consultant shall execute and
      deliver to the Company the Non-Disclosure and Confidentiality Agreement attached
      hereto as Annex
      A (the
      “Confidentiality
      Agreement”), the
      provisions of which are incorporated herein by this reference. 

         

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section 3.
      Consultant’s
      Representations and Covenants. Consultant
      represents, warrants and covenants to the Company that: 

             

    (a) Consultant
      shall devote all of his business time, energy, interest, ability, and skill
      to
      the provision of services to the Company hereunder. 

             

    (b) The
      Company may require Consultant to travel at the Company’s expense domestically
      and internationally from time to time as may be reasonably required to fulfill
      Consultant’s assigned duties and responsibilities.

     

            (c) Consultant
      shall not, during the term of this Agreement, directly or indirectly, promote,
      participate, or engage in any business activity that would interfere with the
      performance of Consultant’s duties under this Agreement or which is competitive
      with the Company’s or any Company Affiliate’s business, including, without
      limitation, any involvement as a shareholder, director, officer, employee,
      partner, party to a joint venture, consultant, advisor, individual proprietor,
      lender, or agent of any business, without the prior written consent of the
      Company. The term “Affiliate”
      shall
      mean, with respect to any person or entity, any other person or entity which,
      directly or indirectly through one or more intermediaries, is in control of,
      is
      controlled by or is under common control with, such person or entity.
“Control
      of,” “controlled by” and
      “under
      common control with” mean
      the
      possession, directly or indirectly, of the power to direct or cause the
      direction of the management policies of a person or entity, by contract or
      credit arrangement, as trustee or executor, or otherwise. The term “Affiliate”
includes, but is not limited to, each and every subsidiary of the Company.
      

              

    (d) During
      the term of this Agreement and for a period of one year after the termination
      of
      this Agreement, Consultant shall not solicit, attempt to solicit, or cause
      to be
      solicited any customers of the Company for purposes of promoting or selling
      products or services which are competitive with those of the Company, nor shall
      Consultant solicit, attempt to solicit, or cause to be solicited any employees,
      agents, or other independent contractors of the Company to cease their
      relationship with the Company. 

             

    (e) Consultant
      does not have any agreements with or commitments to any other person or entity
      which conflict with any of Consultant’s obligations to the Company arising under
      this Agreement. 

              

    (f) Consultant
      shall maintain any and all licenses and permits as may be required for
      Consultant to provide the consulting services contemplated hereby. In the event
      Consultant shall utilize the services or shall acquire any products in order
      to
      render the consulting services contemplated hereby, Consultant shall be solely
      responsible for the payment for such services and products, except to the extent
      reimbursable by the Company in accordance with Section 7 below.

              

    (g) Except
      upon. the express written consent of the Company, Consultant shall have no
      authority, and shall not represent, suggest or imply that Consultant has the
      authority, express or implied: (i) to bind the Company to any agreements or
      arrangements, written or oral; (ii) to make an offer or accept an offer on
      behalf of the Company; or (iii) to make representations, warranties,
      guaranties, commitments or covenants on behalf of Company. 

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

         Section 4.
      Ownership. 

              

    (a) The
      compensation payments set forth herein shall be full and complete compensation
      both
      for
      all obligations assumed by Consultant hereunder and for any and all Creations
      (as defined in Section 4(c) below) assigned under this Agreement. 

              

    (b) The
      Company shall retain the exclusive right to use or distribute, at its sole
      discretion, any and all Creations. Consultant shall make no claim on any
      consideration received by the Company for the sale, lease or use of the
      Creations. 

     

    (c) For
      the
      purposes of this Agreement, “Creation” or “Creations” includes,
      without limitation all:

     

    
      	 	
              (i)

            	
              enhancements,
                modifications, additions or other improvements to the intellectual
                property or assets owned, licensed, sold, marketed or used by the
                Company
                or any affiliates of the Company in connection with their respective
                business;

            

    

     

    
      	 	
              (ii)

            	
              patents,
                copyrights, trade-marks, trade names, business names, logos, design
                marks
                and other proprietary marks; and

            

    

     

    
      	 	
              (iii)

            	
              inventions,
                devices, discoveries, concepts, ideas, formulae, know how, processes,
                techniques, systems, methods and any and all improvements, enhancements
                and modifications thereto, whether patented or
                not,

            

    

    

    developed,
      created, generated, contributed to or reduced by practice by Consultant alone
      or
      jointly with others while the Consultant is providing services to the Company
      pursuant to this Agreement.

              

        Section 5.
      Term.
      This
      Agreement shall terminate on January 1, 2007, unless earlier terminated in
      accordance with this Section 5. In addition, this Agreement shall terminate
      automatically upon (i) the death of Consultant, or (ii) the mental or physical
      incapacity of Consultant which persists for a period of 60 consecutive days
      or
      (iii) the mutual agreement of Consultant and the Company. Either party may
      terminate this Agreement upon a material breach of this Agreement by the other
      party; and the Company may terminate this Agreement upon a material breach
      of
      the Confidentiality Agreement by Consultant. 

    

        Section 6.
      Compensation.
      Consultant’s
      compensation for his consulting services hereunder shall be in an amount equal
      to $15,400 per month prorated for partial months.

    

        Section 7.
      Reimbursement
      of Business Expenses. To
      the
      extent Consultant is authorized by the Company’s Chief Executive Officer or its
      Board of Directors to maintain an office remote from the Company’s office, order
      equipment and supplies or make other expenditures to carry out Consultant’s
      duties hereunder, the Company shall reimburse Consultant for the actual costs
      thereof, subject to receipt of such documentation and other information as
      the
      Company may reasonably request or require in accordance with its policies,
      and
      subject further to any limitations on the amount that Consultant may be
      authorized to incur in ordering such equipment and supplies or making other
      expenditures on the Company’s behalf. Reimbursement for each qualifying expense
      shall be made on the last day of the calendar month following the month in
      which
      a receipt for payment by Consultant of such expense item and any and all other
      documentation which the Company may reasonably require regarding the expense
      item was submitted to Company. 

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

        Section 8.
      Independent
      Contractor. Consultant
      shall be retained by the Company only for the purposes and to the extent set
      forth in this Agreement, and his relation to the Company, during the term of
      this Agreement, shall be that of an independent contractor. Consultant shall
      not
      be deemed to be an employee of the Company for any purpose whatsoever.

    

        Section 9.
      Injunctive
      Relief. Remedies
      at law shall be deemed to be inadequate for any breach of any of the covenants
      of this Agreement, and the Company shall be entitled to injunctive relief in
      addition to any other remedies it may have in the event of such breach.

    

        Section 10.
      Indemnification;
      Taxes.
      Consultant shall be solely responsible for any and all income and other taxes
      that may be due to any state, local or federal governmental authorities in
      respect of the compensation to Consultant pursuant to this Agreement. Consultant
      acknowledges that the Company shall not make any withholdings from payments
      to
      Consultant hereunder. Consultant shall indemnify, save and hold the Company
      harmless from and against all loss, cost or expense of any kind or nature in
      connection with Consultant’s discharge of his obligations pursuant to this
      Section 10. 

    

    Section 11.
      Amendments;
      Consents. No
      amendment, modification, supplement, termination, or waiver of any provision
      in
      this Agreement, and no consent to any departure therefrom, shall be effective
      unless in writing and signed by both Consultant and the Company and then only
      in
      the specific instance and for the specific purpose given. 

    

        Section 12.
      Notices.
      Any
      notices required or permitted to be given in writing will be deemed received
      when personally delivered or, if earlier, ten (10) days after mailing by
      registered or certified United States mail, postage prepaid, and return receipt
      requested. Notice to the Company is valid if sent to the Company’s principal
      place of business and notice to Consultant is valid if sent to Consultant at
      Consultant’s address as it appears in the Company’s records. The Company or
      Consultant may change their address only by notice given to the other in the
      manner set forth herein. 

     

    Section 13.
      Counterparts;
      Facsimile Signatures. This
      Agreement may be executed in two or more counterparts, and the counterparts,
      taken together, shall constitute one original. Executed copies of this Agreement
      and any amendments or modifications thereto may be delivered by facsimile
      transmission in lieu of an original. 

    

    Section 14.
      Binding
      Effect; Assignment. This
      Agreement shall be binding upon and inure to the benefit of Consultant and
      the
      Company and their respective permitted successors and assigns. This Agreement,
      including the rights and obligations hereunder, shall not be assigned, delegated
      or transferred by Consultant without the prior written consent of the Company.
      

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    Section 15.
      Integration;
      Construction. This
      Agreement (together with the appendices thereof) shall comprise the complete
      and
      integrated agreement of the Company and Consultant and shall supersede all
      prior
      agreements, written or oral, on the subject matter hereof. Neither party hereto
      shall have a provision construed against it by reason of such party having
      drafted the same. 

    

    Section 16.
      Survival.
      The
      rights and obligations provided in Section 3(c), Section 4,
      Section 9, Section 10, Section 14 and Section 20 hereto
      shall survive termination of this Agreement. 

    

    Section 17.
      Governing
      Law. This
      Agreement shall be governed by, and construed and enforced in accordance with,
      the laws of the State of California, without regard to the body of law known
      as
      conflict of laws. 

    

    Section 18.
      Severability
      of Provisions. Any
      provision in this Agreement that is held to be inoperative, unenforceable,
      or
      invalid in any jurisdiction shall be, as to that jurisdiction only, inoperative,
      unenforceable, or invalid without affecting the remaining provisions in that
      jurisdiction or the operation, enforceability, or validity of those provisions
      in any other jurisdiction, and to this end the provisions of this Agreement
      shall be severable. 

    

        Section 19.
      Headings.
      Headings
      of this Agreement are included for convenience only and shall not be considered
      a part of this Agreement for any other purpose.

     

    Section 20.
      Attorneys’
      Fees. In
      the
      event of any litigation or other dispute arising as a result of or by reason
      of
      this Agreement, the prevailing party in any such litigation or other dispute
      shall be entitled to, in addition to any other damages assessed, its reasonable
      attorneys’ fees, and all other costs and expenses incurred in connection with
      settling or resolving such dispute. The attorneys’ fees which the prevailing
      party is entitled to recover shall include fees for prosecuting or defending
      any
      appeal and shall be awarded for any supplemental proceedings until the final
      judgment is satisfied in full. In addition to the foregoing award of attorneys’
fees to the prevailing party, the prevailing party in any lawsuit on this
      Agreement shall be entitled to its reasonable attorneys’ fees incurred in any
      post judgment proceedings to collect or enforce the judgment This attorneys’
fees provision is separate and several and shall survive the merger of this
      Agreement into any judgment. 

    

        Section 21.
      Waiver;
      Rights and Remedies. Neither
      Consultant’s nor the Company’s failure to exercise any right under this
      Agreement shall constitute a waiver of any other term or condition of this
      Agreement with respect to any other preceding, concurrent, or subsequent breach,
      nor shall
      it
      constitute a waiver by the Company or Consultant of its rights at any time
      thereafter to require exact and strict compliance with any of the terms of
      this
      Agreement. The rights and remedies set forth in this Agreement shall be in
      addition to any other rights or remedies which may be granted by law.

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

        IN
      WITNESS WHEREOF, the parties hereto have executed this Agreement effective
      as of
      the date first set forth above.

    

     

    NUWAY
      MEDICAL, INC.      

     

    
      	
               By:

            	 /s/
              Dennis Calvert	
               6-20-06

            
	 	 	 
	
               Name:

            	 Dennis
              Calvert	 
	 	 	 
	
               Title:

            	 President	 
	 	 	 
	 

              “CONSULTANT”

            	 
	 	 	 
	 /s/
              Kenneth Reay Code	
               6-20-06

            
	 Kenneth Reay Code	 

    

               

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    Annex
      A

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