Document:

Exhibit
4.6

 

MICROMEM
TECHNOLOGIES INC.

 

SUBSCRIPTION AGREEMENT FOR
UNITS

 

TO:                                                  MICROMEM TECHNOLOGIES INC.

 

1.                                      Subscription

 

The undersigned (the “Purchaser”) hereby
irrevocably subscribes for and agrees to purchase (the “Subscription Agreement”),
on and subject to the terms and conditions set forth herein from Micromem
Technologies Inc. (the “Corporation”) such number
of units of the Corporation (a “First Unit”) as set forth in section 24
hereof (collectively the “Purchased Units”) at a price of US$0.60 per First
Unit (the “Subscription Price”).

 

2.                                      Description of First Units

 

Each First Unit shall consist of one common
share of the Corporation (a “Common Share”) and one warrant (a “First Warrant”)
each First Warrant exercisable for one unit (a “Second Unit”) at a price of US$0.60
per Second Unit at any time during the 12 months following the date of issuance
of the First Warrants.  Each Second Unit
shall consist of one Common Share (a “First Warrant Share”) and one warrant (a “Second
Warrant”), each Second Warrant exercisable for one Common Share (a “Second
Warrant Share”) at a price of US$0.60 per Second Warrant Share at any time
during the period extending 24 months following the issuance of the First Unit
to such Purchaser.  Hereinafter a First
Warrant and a Second Warrant may collectively be referred to as a “Warrant” and
a First Warrant Share and a Second Warrant Share may collectively be referred
to as a “Warrant Share”.

 

3.                                      Payment

 

The aggregate amount payable by the
Purchaser in respect of the Purchased Units shall be paid on the Closing Date
and shall be made by certified cheque, wire transfer or bank draft drawn on a
Canadian chartered bank, and payable to the Corporation or payable in such
other manner as may be specified by the Corporation.

 

All dollar amounts referred to herein are
US dollars.

 

4.                                      Conditions of Closing

 

The Purchaser must complete, sign and
return one executed copy of this Subscription Agreement to the Corporation as
soon as possible, and, in any event, no later than 12:00 noon (Toronto time) on
                ,
200   or such other time, date and/or place as the Corporation may
advise.

 

 

As a condition
of Closing (as hereinafter defined), the Corporation must obtain any necessary
approvals from all appropriate regulatory bodies in respect of the issue of the
First Units.  The Purchaser agrees to
promptly execute and deliver all such documents and other instruments as any
such regulatory body may require.

 

In addition, the Purchaser shall agree to
provide all other documentation, if any, required by the securities laws of the
jurisdiction which the Purchaser is resident.

 

If any
regulatory body objects to the subscription by the Purchaser for the Purchased
Units, the Corporation may, in its sole and absolute discretion, terminate this
Subscription Agreement by providing written notice to the Purchaser of the
Corporation’s intention to do so and returning the Purchaser’s subscription
funds, and, upon providing such written notice, the Corporation will be
released from any further obligations hereunder including, without limiting the
generality of this foregoing, the obligation to issue the Purchased Units to
the Purchaser.

 

5.                                      Facsimiled Subscriptions

 

The Corporation will be entitled to rely on
delivery by facsimile of an executed copy of this Subscription Agreement, and
acceptance by the Corporation of such facsimile copy will be legally effective
to create a valid and binding agreement between the Purchaser and the
Corporation in accordance with the terms hereof.

 

6.                                      Closing

 

Delivery and payment for the First Units
will be completed (the “Closing”) at the offices of the Corporation in Toronto,
Ontario at 10:00 a.m. (Toronto time) (the “Closing Time”) on or before                   ,
200   (the “Closing Date”) or such earlier or later dates or times as
the Corporation and the Purchaser may agree. 
This executed Subscription Agreement is open for acceptance in whole or
in part by the Corporation at any time prior to the Closing Time.  Confirmation of acceptance or rejection of a
subscription will be forwarded to the Purchaser by the Corporation promptly
after acceptance or rejection has been made. 
If this subscription is rejected in whole and if the Purchaser has
delivered a certified cheque or bank draft representing the Subscription Price
for the Purchased Units, then such cheque or bank draft will be promptly
returned to the Purchaser without interest. 
If this subscription is accepted only in part and the Purchaser has
delivered a certified cheque or bank draft as aforesaid, a cheque representing
the portion of the Subscription Price for that portion of the Purchaser’s
subscription for First Units which is not accepted will be promptly returned to
the Purchaser without interest.

 

Certificates
for the securities comprising the First Units will be available for delivery
against payment of the aggregate Subscription Price for the First Units by the
Purchaser in freely tradable US funds.

 

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7.                                      Prospectus Exemptions

 

The Purchaser (on his or its own behalf or
on behalf of others for whom he or it is contracting hereunder), acknowledges
and agrees that the sale and delivery of the Purchased Units to the Purchaser
(or to others for whom he or it is contracting hereunder) is conditional upon such
sale being exempt from the requirements under applicable securities legislation
requiring the filing of a prospectus in connection with the distribution of the
First Units or the delivery of an offering memorandum (as defined in the
applicable securities legislation), or upon the issuance of such rulings,
orders, consents or approvals as may be required to permit such sale without
the requirement of filing a prospectus or delivering an offering memorandum.

 

The
Purchaser (on his or its own behalf or on behalf of others for whom he or it is
contracting hereunder) acknowledges and agrees that:

 

(a)                                  the Purchaser (or others for whom he or it is contracting hereunder)
has not received, nor has he or it requested, nor does it have any need to
receive, a prospectus or any offering memorandum, or any other document (other
than financial statements, interim financial statements or any other document,
the content of which is prescribed by statute or regulation) describing the
business and affairs of the Corporation which has been prepared for delivery
to, and reviewed by, prospective purchasers in order to assist he or it in
making an investment decision in respect of the Purchased Units;

 

(b)                                 the Purchaser’s decision to execute this Subscription Agreement and
purchase the Purchased Units (on his or its own behalf or on behalf of others
for whom he or it is contracting hereunder) has not been based upon any verbal
or written representations as to fact or otherwise made by or on behalf of the
Corporation and that its decision (or the decision of others for whom it is
contracting hereunder) is based entirely upon information concerning the
Corporation contained in documents the content of which is prescribed by
statute or regulation;

 

(c)                                  the sale of the Purchased Units was not accompanied by any
advertisement in printed media of general and regular paid circulation, radio,
television, the Internet or any other form of electronic media; and

 

(d)                                 the Purchaser (or others for whom he or it is contracting hereunder)
has been advised to consult its own legal advisors with respect to trading in
the securities comprising the First Units and to resale restrictions imposed by
applicable securities legislation in the jurisdiction in which it resides, that
no representation has been made respecting the applicable hold periods or other
resale restrictions applicable to such securities, that the Purchaser (or
others for whom he or it is contracting hereunder)  is solely responsible (and the Corporation is
not in any way responsible) for compliance with applicable resale restrictions
and that the Purchaser is aware that he or it (or others for whom he or it is
contracting hereunder) may not be able to resell such securities except in

 

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accordance with limited exemptions under
applicable securities legislation and regulatory policy.

 

The Purchaser understands that all
certificates representing the Purchased Units and all certificates issued in
exchange therefor or in substitution or transfer thereof shall bear a legend
respecting restrictions on transfer as required under applicable securities
laws.

 

The Purchaser agrees that the Corporation
may be required by law or otherwise to disclose to regulatory authorities the
identity of the Purchaser and each beneficial purchaser of First Units for whom
the Purchaser may be acting.

 

8.                                      Representations, Warranties and Covenants of the Purchaser

 

The Purchaser hereby represents, warrants
and covenants to the Corporation (on his or its own behalf and, if applicable,
on behalf of those for whom the Purchaser is contracting hereunder) to and with
the Corporation (which representations, warranties and covenants shall survive
Closing), and acknowledges that the Corporation is relying upon such representations,
warranties and covenants in issuing the Purchased Units, that:

 

(a)                                  if the Purchaser is a resident of the Province of Ontario, the
Purchaser:

 

(i)                                     in the case of a purchase by the Purchaser of the Purchased Units as
principal for its own account and not for the benefit of any other person, the
Purchaser is purchasing the Purchased Units as principal for its own account,
and not for the benefit of any other person or company, for investment purposes
only and not with a view to the resale or distribution of all or any of the
Purchased Units, and this Subscription Agreement has been authorized, executed
and delivered by, and constitutes a legal, valid and binding agreement of the
undersigned, and:

 

(A)                              the Purchaser qualifies and is purchasing as an “accredited investor”,
as such term is defined in Ontario Securities Commission Rule 45-501 (if
subject to the securities legislation of the province of Ontario);

 

(ii)                                  in the case of the purchase by the Purchaser of the Purchased Units
as agent for a disclosed principal, each beneficial purchaser of the Purchased
Units for whom the Purchaser is acting is purchasing as principal for its own
account and not for the benefit of any other person; the Purchaser is an agent
with due and proper authority to execute this Subscription Agreement and all
other documentation in connection with the purchase of the Purchased Units on
behalf of the beneficial purchaser; and this Subscription Agreement has been
duly authorized, executed and delivered by or on behalf of, and constitutes the
legal, valid and binding agreement of, the disclosed principal; and the
beneficial purchaser:

 

(A)                              is an “accredited investor”, as such term is defined in Ontario
Securities

 

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Commission Rule 45-501 (if subject to
the securities legislation of the province of Ontario);

 

(iii)          in
the case of the purchase by the Purchaser of the Purchased Units as trustee or
as agent or as portfolio manager or portfolio advisor (as such terms are
defined under applicable securities laws) for a principal which is undisclosed
or identified by account number only, this Subscription Agreement has been duly
authorized, executed and delivered by, and constitutes a legal, valid and
binding agreement of, the undersigned acting in such capacity, and:

 

(A)          the
beneficial purchaser of the Purchased Units for whom the Purchaser is acting is
an individual or corporation and is purchasing as principal for its own
account, and not for the benefit of any other person, and

 

(I)            is
an “accredited investor”, as such term is defined in Ontario Securities
Commission Rule 45-501 (if subject to the securities legislation of the
province of Ontario), or as such term is defined in Multilateral
Instrument  45-103 (if subject to the
securities legislation of the Province of Alberta);

 

and the Purchaser is a trustee or agent
with due and proper authority to execute this agreement and all other
documentation in connection with the subscription and purchase of the Purchased
Units on behalf of the beneficial purchaser;

 

(b)           if
the Purchaser is resident of the Province of Ontario, the Purchaser has duly
completed and signed the Certificate of Ontario Accredited Investor in the form
attached hereto as Schedule I (if subject to the securities legislation of
the province of Ontario) and the contents of the applicable questionnaire are
true and correct as of the date hereof and will be true and correct as of the
date of the issue and sale of the Purchased Units.

 

(c)           the Purchaser has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of an investment in the First Units and that he or it is able to bear the
economic risk of such investment for an indefinite period of time.  The Purchaser is purchasing the Purchased
Units for the Purchaser’s own account, for investment purposes only and not
with a view to any resale or distribution thereof and the Purchaser does not
have any contracts, understandings, agreements or arrangements with any person
or entity to sell, transfer or grant a participation interest with respect to
any of the Purchased Units;

 

(d)           if
the Purchaser is a resident of a jurisdiction other than Canada, the Purchaser
hereby represents and warrants to the Corporation as follows, such
representations and warranties to survive the Purchaser’s purchase of the
Purchased Units:

 

(1)           If a natural person, the Purchaser is: a bona fide resident of the
state set

 

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forth on the signature page of this
Subscription Agreement as the home address of such Purchaser; over 21 years of
age; and legally competent to execute this Subscription Agreement and to carry
out his obligations hereunder and thereunder in accordance with the terms and
provisions hereof and thereof.  If an
entity, the Purchaser has full power and authority to execute and deliver this
Subscription Agreement and to carry out its obligations hereunder and
thereunder in accordance with the terms and provisions hereof and thereof; and
the execution, delivery and performance of this Subscription Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all requisite corporate or other necessary action on the part of
the Purchaser.

 

(2)           This Subscription Agreement constitutes a valid and legally binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization and other similar laws now or hereafter in effect
relating to creditors’ rights generally.

 

(3)           The execution, delivery and performance by the Purchaser of this
Subscription Agreement and the transactions contemplated hereby will not
constitute a breach of any term or provision of, or a default under, (i) any
outstanding indenture, mortgage, loan agreement or other similar contract or
agreement to which the Purchaser or any of the Purchaser’s affiliates is a
party or by which the Purchaser or any such affiliate or its or their property
is bound, (ii) if the Purchaser is a corporation or other legal entity,
its certificate or articles of incorporation or by-laws or other constituent
documents, (iii) any law, rule or regulation, or (iv) any order,
writ, judgment or decree having applicability to it.

 

(4)           No consent, license, approval or authorization of any governmental
body, authority, bureau or agency is required on the part of the Purchaser or
any of the Purchaser’s affiliates in connection with the execution, delivery and
performance of this Subscription Agreement or the consummation of the
transactions contemplated hereby.

 

(5)           The Purchaser has received all other materials relating to the Corporation,
the terms and conditions of the offering and any other matters relating to the
offering which the Purchaser has requested. 
The Purchaser has had the opportunity to ask questions of
representatives of the Corporation concerning the finances, operations,
business and prospects of the Corporation, and the Corporation has answered all
inquiries that the Purchaser or his or her representatives have put to it
relating to such matters and the offering.

 

(6)           The Purchaser has such knowledge and experience in finance,
securities, investments and other business matters so as to be able to protect
his interests in connection with this transaction, and his investment in the

 

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Corporation is not material when compared
to his total financial capacity.

 

(7)           The Purchaser understands the various risks of an investment in the Corporation
and can afford to bear such risks, including, but not limited to, the risks of
losing his entire investment. The Purchaser is aware that the purchase of the Purchased
Units is a speculative investment involving a high degree of risk and that
there is no guarantee that the Purchaser will realize any gain from this
investment, and that the Purchaser could lose the total amount of the
Subscriber’s investment.

 

(8)           The Purchaser has no need for liquidity of his investment in the Corporation
and can afford to hold the Purchased Units(s) for which he has subscribed for a
substantial period of time.

 

(9)           The Purchaser is fully aware that an investment in the Corporation
involves significant risks which he may have to bear for an indefinite period
of time because the Purchased Units have not been registered under the
Securities Act of 1933 (the “33 Act”) or under the securities laws of any state
and, therefore, cannot be resold unless they are subsequently so registered or
an exemption from such registration is available and he is acquiring the Purchased
Units for investment and not with a view to resale or distribution thereof.

 

(10)         The Purchaser qualifies as an “Accredited Investor” as that term is
defined in Section 501(a) of Regulation D promulgated under the 33
Act.  The Purchaser acknowledges that it
has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of making an investment in the Corporation.

 

(11)         The Purchaser understands that the Purchased Units are being offered
and sold under an exemption from registration provided for in Regulation D
promulgated under Section 4(2) of the 33 Act and under similar
exemption under certain state securities laws, and that this transaction has
not been reviewed by, passed on or submitted to any federal or state agency or
self-regulatory organization where an exemption is being relied upon.

 

 (12)        The First Units hereby
subscribed for will be acquired by the Purchaser for his own account (or, if
the Purchaser is a natural person, for the account of such natural person and
his spouse either in joint tenancy, tenancy by the entirety or tenancy in
common), for investment and not with a view to the distribution thereof.

 

(13)         the Purchaser (A) will not sell or otherwise dispose of the
Purchased Units or the Warrant Shares, except in accordance with applicable
Canadian and US securities laws; and (B) if the Purchaser sells or
otherwise disposes of the Purchased Units or the Warrant Shares to a person
other than a resident of

 

7

 

Canada during the period referred to
herein, such person covenants to obtain from such purchaser a covenant as
provided for herein and the Corporation shall have no obligation to register
any purported sale or disposition in violation of this Subscription Agreement
and any such sale or disposition shall be null and void and of no further force
and effect;

 

(f)            as the Purchased Units are
subject to resale restrictions under applicable Canadian provincial and US
securities legislation and may be subject to the securities legislation of any
other jurisdiction in which the Purchaser resides, the Purchaser shall comply
with all relevant securities legislation concerning any resale of the Purchased
Units (and the Corporation is not in any way responsible for such compliance)
and shall consult with his or its own legal advisors with respect to such
compliance.  The Purchaser understands and agrees that the
certificates evidencing the Purchased Units will bear an appropriate legend
evidencing the restricted nature of the First Units;

 

(g)           the Purchaser will execute
and deliver within the applicable time periods all documentation as may be
required by applicable Canadian and US securities legislation, regulations, rules and
policies to permit the purchase of the Purchased Units on the terms herein set
forth;

 

(h)           if required by applicable
securities legislation, policy or order of a securities regulatory authority,
stock exchange or other regulatory authority, the Purchaser will execute,
deliver, file and otherwise assist the Corporation in filing such reports,
undertakings and other documents with respect to the issuance of the Purchased
Units as may be required;

 

(i)            the Purchaser is not a “control
person” of the Corporation as defined in the Securities
Act (Ontario) and the corresponding provision of the applicable
securities legislation of the other provinces of Canada and will not become a “control
person” of the Corporation by virtue of the acquisition of the Purchased Units
subscribed for pursuant to this agreement and does not intend to act in concert
with any other person to form a control group;

 

(j)            the Purchaser is capable
of assessing the proposed investment as a result of the Purchaser’s financial
or investment experience or as a result of advice received from a registered
person other than the Corporation or an affiliate thereof, and is able to bear
the economic loss of its investment;

 

(k)           the Purchaser acknowledges
that the investment in the securities of the Corporation may have tax
consequences to the Purchaser under applicable law, which the Purchaser is
solely responsible for determining.  The
Purchaser acknowledges and agrees that the Purchaser is responsible for
obtaining his or its own legal and tax advice;

 

(l)            no person has made any
written or oral representation to the Purchaser:

 

8

 

(i)            that any person will
resell or repurchase the Purchased Units;

 

(ii)           that any person will refund
the purchase price of the Purchased Units other than as provided in this
Subscription Agreement;

 

(iii)          relating to the future price
or value of the Purchased Units; or

 

(iv)          that the Common Shares will
be listed and posted for trading on a stock exchange or that application has
been made to list and post the Common Shares for trading on a stock exchange.

 

9.             Representations and Warranties of the Corporation

 

The Corporation hereby represents and
warrants and covenants to the Corporation, and acknowledges that the Purchaser
is relying on such representations and warranties in agreeing to purchase the
Purchased Units, that:

 

(a)           the Corporation has been
duly incorporated and organized and validly subsists under the laws of the
jurisdiction of its incorporation, and has all requisite power and authority,
as the case may be, to, and is qualified to, carry on its business as now
conducted and to own or lease its properties and assets in all jurisdictions in
which it currently carries on business and/or owns or leases its properties and
assets and the Corporation has all requisite power and authority to execute and
deliver the Subscription Agreement, the Registration Rights Agreement and to
perform its obligations hereunder and thereunder;

 

(b)           the Corporation has
conducted and is conducting its business in compliance in all material
respects, with all applicable laws, statutes, by-laws, rules and
regulations of each jurisdiction in which its business is carried on and holds
all material licenses, registrations, permits, consents or qualifications
required in order to enable its business to be carried on as now conducted, and
all such licenses, registrations, permits, consents and qualifications are
valid and subsisting and in good standing in all respects;

 

(c)           the Corporation has not
committed an act of bankruptcy or is insolvent, has proposed a compromise or
arrangement to its creditors generally, has had a petition for a receiving
order in bankruptcy filed against it, has made a voluntary assignment in
bankruptcy, has taken any proceedings with respect to a compromise or
arrangement, has taken any proceedings to have itself declared bankrupt,
wound-up or dissolved, has taken any proceedings to have a receiver appointed
to any of its property or has had any execution or distress become enforceable
or become levied upon any of its properties;

 

(d)           the authorized capital of
the Corporation consists of an unlimited number of Common Shares and, as at the
date of the hereof the number of shares of

 

9

 

Common Stock reflected in the Corporation’s
most recent SEC filings reflects the number of shares of Common Stock currently
issued and outstanding as fully paid and non-assessable;

 

(e)           there is not any other
instrument or document to which the Corporation is a party or by which it is
bound, and which imposes restriction upon, or impediment to, the declaration or
payment of dividends by the Corporation;

 

(f)            the execution and delivery
of this Subscription Agreement and the Registration Rights Agreement and the
performance of the transaction contemplated hereunder and thereunder, the
issuance of the First Units at the Closing Time, and compliance by the
Corporation with the other provisions of this Subscription Agreement to be
complied with by it, will not at the Closing Time:

 

(i)            create a state of facts
which, after notice or lapse of time or both, will result in a breach of or
default under, and will not conflict with:

 

(A)          any of the terms, conditions
or provisions of the articles, by-laws or resolutions of the shareholders,
directors or any committee of directors of the Corporation or any indenture,
agreement or instrument to which the Corporation is a party or by which it or
they are contractually bound; or

 

(B)           any statute, rule,
regulation, by-law or law applicable to the Corporation , including, without
limitation, Canadian Securities Laws, or any judgment, order or decree of any
governmental body, agency or court having jurisdiction over the Corporation ;
or

 

(ii)           give rise to any lien,
charge or claim in or with respect to the properties or assets now owned or
hereafter acquired by the Corporation or the acceleration of or the maturity of
any debt or other obligation under any indenture, mortgage, lease, agreement or
instrument binding or affecting any of them or any of their properties;

 

(g)           Each of this Subscription
Agreement and the Registration Rights Agreement has been or will be upon the
execution thereof, duly authorized, executed and delivered by the Corporation
and constitutes or will constitute when executed, a legal, valid and binding
obligation of the Corporation enforceable against it in accordance with its
respective terms, except that: (i) the enforcement thereof may be limited
by bankruptcy, insolvency and other laws affecting the enforcement of creditors’
rights generally; (ii) rights of indemnity, contribution and waiver of
contribution thereunder may be limited under applicable law; and (iii) equitable
remedies, including, without limitation, specific performance and injunctive
relief, may be granted only in the discretion of a court of competent

jurisdiction;

 

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(h)           upon completion of all of
the transactions contemplated in this Agreement: (i) the Common Shares and
Warrants comprising the First Units, and the Warrant Shares upon exercise of
the Warrants, will have been validly authorized and issued by the Corporation; (ii) the
Common Shares, and the Warrant Shares upon exercise of the Warrants, will be
duly issued as fully paid and non-assessable and none of such securities will
have been issued in violation of or subject to any pre-emptive rights or other
contractual rights to purchase securities issued by the Corporation; and

 

(i)            the Corporation is the
legal and beneficial owner of, has good and marketable title to, and possesses
all of the assets material to its business free and clear of any encumbrances
(other than leased equipment used in the ordinary course of business).

 

10.          Prior Agreement

 

This Agreement sets forth all of the terms,
conditions and agreements of the parties relating to the subject matter hereof
and supersedes any and all prior agreements.

 

11.          Restricted Rights of Action 

 

The Purchased Units are being purchased pursuant to an
exemption from the requirement to prepare and file, and provide the Purchaser
with a prospectus under applicable securities legislation and the Purchaser is
aware that as a consequence:

 

(a)           the Purchaser is restricted
from using most of the civil remedies available under applicable securities
legislation;

 

(b)           no securities commission or
similar regulatory authority has reviewed or passed on the merits of the
Offering;

 

(c)           there are risks associated
with the purchase of the Purchased Units;

 

(d)           the Purchaser may not
receive information that would otherwise be required to be provided to the
Purchaser under applicable securities legislation; and

 

(e)           the Corporation is relieved
from certain obligations that would otherwise apply under applicable securities
legislation;

 

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12.          Costs

 

The Purchaser acknowledges and agrees that
all costs and expenses incurred by the Purchaser (including any fees and
disbursements of any special counsel retained by the Purchaser) relating to the
sale of the Purchased Units to the Purchaser shall be borne by the Purchaser.
The Corporation acknowledges and agrees that all costs and expenses incurred by
the Corporation (including any fees and disbursements of any counsel retained
by the Corporation) relating to the sale of the Purchased Units to the
Purchasers shall be borne by the Corporation.

 

13.          Governing Law

 

This Subscription Agreement is governed by
the laws of the Province of Ontario and the federal laws of Canada applicable
therein.  The Purchaser, in his personal
or its corporate capacity, as the case may be, and, if applicable, on behalf of
each beneficial purchaser for whom the Purchaser is acting, irrevocably attorns
to the jurisdiction of the courts of the Province of Ontario.

 

14.          Survival

 

All warranties, representations, covenants
and agreements herein contained or contained in any documents submitted
pursuant to this Agreement and in connection with the transactions herein
contemplated shall survive the Closing and continue in full force and effect
for the benefit of the Purchaser and the Corporation for a period of two years
from the Closing Date and shall not be limited or prejudiced by any
investigation made by or on behalf of the Purchaser or the Corporation in
connection with transactions herein contemplated or otherwise.

 

15.          Assignment

 

This Subscription Agreement is not
transferable or assignable by the parties hereto.

 

16.          Counterparts

 

This Subscription Agreement may be executed
in counterparts and delivered via facsimile transmission, each of which shall
be deemed to be an original and all of which shall constitute one and the same
document.

 

17.          English Language

 

We, the
undersigned, hereby acknowledge that we have consented and requested that all
documents evidencing or relating in any way to the sale of the First Units be
drawn up in the English language only.

 

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18.          Severability

 

In the
event that any provision of this Subscription Agreement is deemed to be void or
unenforceable in whole or in part, it shall be deemed not to affect or impair
the validity of any other provision of this Subscription Agreement and such
void or unenforceable provision shall be severable from this Subscription
Agreement.

 

19.          Modification

 

Neither
this Subscription Agreement nor any provision hereof shall be modified,
changed, discharged or terminated except by an instrument in writing signed by
the party against whom any waiver, change, discharge or termination is sought.

 

20.          No Revocation

 

The
Purchaser, on its own behalf and, if applicable, on behalf of others from whom
he or it is contracting hereunder, agrees that this offer is made for valuable
consideration and may not be withdrawn, cancelled, terminated or revoked by the
Purchaser.

 

21.          Time of the Essence

 

Time
shall, in all respects, be of the essence hereof.

 

22.          Headings

 

The
headings contained herein are for convenience only and shall not affect the
meaning or interpretation hereof.

 

23.          Singular and Plural, etc.

 

Where
the context so requires, words importing the singular number include the plural
and vice versa, and words importing gender shall include the masculine,
feminine and neutral genders.

 

24.          Subscription Particulars

 

Subscription.  The aggregate number of the First Units being
subscribed for is            at a price equal to US$0.60 per First Unit,
the aggregate price of the First Units being subscribed for is $          .

 

Registration.  The First Units are to be registered in the name
of:

 

Delivery.  The certificates representing the First Units
are to be delivered to:

 

13

 

	
   

  	
   

  	
   

  
	
   

  	
  (name)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (address)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (contact name and number)

  	
   

  
	
   

  
	
   

  
	
  DATED as
  of the        day of
                    ,
  200  .

  
	
   

  
	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Purchaser (please type or print)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature of Purchaser)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  (Address of Purchaser)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
							

 

14

 

25.          Acceptance

 

The
Corporation hereby accepts the above-mentioned offer to purchase First Units.

 

	
   

  	
  DATED as
  of this        day of
                  ,
  200  .

  
	
   

  
	
   

  
	
   

  	
  MICROMEM TECHNOLOGIES INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Authorized Signing Officer

  
				

 

15

 

SCHEDULE I

 

CERTIFICATE
OF ONTARIO SUBSCRIBER

 

To:          Micromem Technologies Inc. (the “Corporation”)

 

In addition to the representations and warranties set
forth in the Subscription for Units of the Corporation to which this
Certificate is attached, the Subscriber certifies to the Corporation and       
(and acknowledges that the Corporation and       
are relying thereon) that the Subscriber satisfies (or if the Subscriber is
purchasing as agent for the beneficial purchaser named under “Subscription
Particulars” in the Subscription Agreement, such beneficial purchaser
satisfies) one or more of the categories of “accredited investor”, as defined
by Ontario Securities Commission Rule 45-501 in force in the Province of
Ontario because the Subscriber is (please place an “X” on the appropriate
line):

 

(a)                       
a bank listed in Schedule I or II of the Bank Act(Canada), or an
authorized foreign bank listed in Schedule III of that Act;

 

(b)                       
the Business Development Bank incorporated under the Business Development Bank
Act (Canada);

 

(c)                       
a loan corporation or trust corporation registered under the Loan and Trust
Corporations Act or under the Trust and Loan Companies Act (Canada), or under
comparable legislation in any other jurisdiction;

 

(d)                       
a co-operative credit society, credit union central, federation of caisses
populaires, credit union or league, or regional caisse populaire, or an
association under the Cooperative Credit Associations Act (Canada), in each
case, located in Canada;

 

(e)                       
a company licensed to do business as an insurance company in any jurisdiction;

 

(f)                        
a subsidiary of any company referred to in paragraph (a), (b), (c), (d) or
(e), where the company owns all of the voting shares of the subsidiary;

 

(g)                       
a person or company registered under the Act or securities legislation in
another jurisdiction as an adviser or dealer, other than a limited market
dealer;

 

(h)                       
the government of Canada or of any jurisdiction, or any crown corporation,
instrumentality or agency of a Canadian federal, provincial or territorial
government;

 

(i)                        
any Canadian municipality or any Canadian provincial or territorial capital
city;

 

(j)                        
any national, federal, state, provincial, territorial or municipal government
of or in any foreign jurisdiction, or any instrumentality or agency thereof;

 

(k)                       
a pension fund that is regulated by either the Office of the Superintendent of
Financial Institutions (Canada) or a provincial pension commission or similar
regulatory authority;

 

(l)                        
a registered charity under the Income Tax Act (Canada);

 

(m)                      
an individual who beneficially owns, or who together with a spouse beneficially
own, financial assets having an aggregate realizable value that, before taxes
but net of any related liabilities, exceeds $1,000,000;

 

(n)                       
an individual whose net income before taxes exceeded $200,000 in each of the
two

 

16

 

most recent years or whose net income
before taxes combined with that of a spouse exceeded $300,000 in each of those
years and who, in either case, has a reasonable expectation of exceeding the
same net income level in the current year;

 

(o)                       
an individual who has been granted registration under the Act or securities
legislation in another jurisdiction as a representative of a person or company
referred to in paragraph (g), whether or not the individual’s registration is
still in effect;

 

(p)                       
a promoter of the issuer or an affiliated entity of a promoter of the issuer;

 

(q)                       
a spouse, parent, grandparent or child of an officer, director or promoter of
the issuer;

 

(r)                        
a person or company that, in relation to the issuer, is an affiliated entity or
a person or company referred to in clause (c) of the definition of
distribution in subsection 1(1) of the Act;

 

(s)                       
an issuer that is acquiring securities of its own issue;

 

(t)                        
a company, limited partnership, limited liability partnership, trust or estate,
other than a mutual fund or non-redeemable investment fund, that had net assets
of at least $5,000,000 as reflected in its most recently prepared financial
statements;

 

(u)                       
a person or company that is recognized by the Commission as an accredited
investor;

 

(v)                       
a mutual fund or non-redeemable investment fund that, in Ontario, distributes
its securities only to persons or companies that are accredited investors;

 

(w)                      
a mutual fund or non-redeemable investment fund that, in Ontario, distributes
its securities under a prospectus for which a receipt has been granted by the
Director;

 

(x)                        
a managed account if it is acquiring a security that is not a security of a
mutual fund or non-redeemable investment fund;

 

(y)                       
an account that is fully managed by a trust corporation registered under the
Loan and Trust Corporations Act;

 

(z)                        
an entity organized outside of Canada that is analogous to any of the entities
referred to in paragraphs (a) through (g) and paragraph (k) in form
and function; and

 

(aa)                     
a person or company in respect of which all of the owners of interests, direct
or indirect, legal or beneficial, are persons or companies that are accredited
investors.

 

	
  Dated this
           day of
                          ,

  
	
   

  	
   

  
	
  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)

  

 

17Exhibit
4.7

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights Agreement (the “Agreement”)
is made and entered into as of this        day of
                  ,
200  , by and among Micromem Technologies, Inc., an Ontario
Canada corporation (the “Company”), and the investors set forth on the
signature pages hereto (the “Investors”).

 

The parties hereby agree as follows:

 

1.             Certain
Definitions.

 

As used in this Agreement, the following terms shall
have the following meanings:

 

“Affiliate” means, with respect to any person,
any other person which directly or indirectly controls, is controlled by, or is
under common control with, such person.

 

“Business Day” means a day, other than a
Saturday or Sunday, on which banks in Ontario, Canada are open for the general
transaction of business.

 

“Common Stock” shall mean the Company’s common
stock, without par value, and any securities into which such shares may
hereinafter be reclassified.

 

“Investors” shall mean the Investors and any
Affiliate or permitted transferee of any Investor who is a subsequent holder of
any Warrants or Registrable Securities.

 

“Prospectus” shall mean the prospectus included
in any Registration Statement, as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Securities covered by such Registration Statement and by all other
amendments and supplements to the prospectus, including post-effective
amendments and all material incorporated by reference in such prospectus.

 

“Purchase Agreements” shall mean the purchase
and subscription agreements entered into among the Company and the Investors.

 

“Register,” “registered” and “registration”
refer to a registration made by preparing and filing a Registration Statement
or similar document in compliance with the 1933 Act (as defined below), and the
declaration or ordering of effectiveness of such Registration Statement or
document.

 

“Registrable Securities” shall mean the Shares issued
pursuant to the Purchase Agreements as well as all of the Shares issuable (i) upon
the exercise of the Warrants if any, and (ii) any other securities issued
or issuable with respect to or in exchange for Registrable Securities or
otherwise purchased under the Purchase Agreements; provided, that, a security
shall cease to be a Registrable Security upon (A) sale pursuant to a
Registration Statement or Rule 144 under the 1933 Act, or (B) such
security becoming eligible for sale by the Investors pursuant to Rule 144(k).

 

“Registration Statement” shall mean any
registration statement of the Company filed under the 1933 Act that covers the
resale of any of the Registrable Securities pursuant to the provisions of this
Agreement, amendments and supplements to such Registration Statement,

 

 

including post-effective amendments, all exhibits and all material
incorporated by reference in such Registration Statement.

 

“Required Investors” means the Investors
holding a majority of the Registrable Securities.

 

“SEC” means the U.S. Securities and Exchange
Commission.

 

“Shares” means the shares of Common Stock
issued pursuant to the Purchase Agreements.

 

“1933 Act” means the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.

 

“1934 Act” means the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.

 

“Warrants” means, any and all warrants issued
to Investors pursuant to the Purchase Agreements to purchase shares of Common
Stock, including further warrants issued upon the exercise of other Warrants.

 

“Warrant Shares” means the Shares issuable upon
the exercise of the Warrants.

 

2.             Registration.

 

(a)           Registration
Statements.  Promptly following the
closing of the purchase and sale of the securities contemplated by the Purchase
Agreements (the “Closing Date”), the Company shall prepare and file with the
SEC one Registration Statement on Form F-1 or on such other available form,
covering the resale of the Registrable Securities in an amount at least equal
to the number of Shares plus the number of shares of Common Stock necessary to
permit the exercise in full of the Warrants. 
Such Registration Statement shall include the plan of distribution
attached hereto as Exhibit A. 
Such Registration Statement also shall cover, to the extent allowable
under the 1933 Act and the rules promulgated thereunder (including Rule 416),
such indeterminate number of additional shares of Common Stock resulting from
stock splits, stock dividends or similar transactions with respect to the
Registrable Securities.  The Company
shall include in the Registration Statement only the Registrable Securities and
those securities set forth in Schedule 2(a) annexed
hereto.  The Registration Statement (and
each amendment or supplement thereto, and each request for acceleration of
effectiveness thereof) shall be provided in accordance with Section 3(c) to
the Investors and their counsel prior to its filing or other submission.

 

(b)           Expenses.  The Company will pay all expenses associated
with each registration, including filing and printing fees, the Company’s
counsel and accounting fees and expenses, costs associated with clearing the
Registrable Securities for sale under applicable state securities laws, listing
fees and the Investors’ reasonable expenses in connection with the
registration, but excluding fees and expenses of counsel to the Investors,
discounts, commissions, fees of underwriters, selling brokers, dealer managers
or similar securities industry professionals with respect to the Registrable
Securities being sold.

 

2

 

(c)           Effectiveness.

 

(i)            The
Company shall use commercially reasonable efforts to have the Registration
Statement declared effective as soon as practicable.  The Company shall notify the Investors by facsimile
or e-mail as promptly as practicable, and in any event, within twenty-four (24)
hours, after any Registration Statement is declared effective and shall
simultaneously provide the Investors with copies of any related Prospectus to
be used in connection with the sale or other disposition of the securities
covered thereby.

 

(ii)           For
not more than twenty (20) consecutive days or for a total of not more than
forty-five (45) days in any twelve (12) month period, the Company may delay the
disclosure of material non-public information concerning the Company, by
suspending the use of any Prospectus included in any registration contemplated
by this Section containing such information, the disclosure of which at
the time is not, in the good faith opinion of the Company, in the best
interests of the Company (an “Allowed Delay”); provided, that the Company shall
promptly (a) notify the Investors in writing of the existence of (but in
no event, without the prior written consent of an Investor, shall the Company
disclose to such Investor any of the facts or circumstances regarding) material
non-public information giving rise to an Allowed Delay, (b) advise the
Investors in writing to cease all sales under the Registration Statement until
the end of the Allowed Delay and (c) use commercially reasonable efforts
to terminate an Allowed Delay as promptly as practicable.

 

(d)           Underwritten
Offering.  If any offering pursuant
to a Registration Statement pursuant to Section 2(a) hereof involves
an underwritten offering, the Company shall have the right to select an
investment banker and manager to administer the offering, which investment
banker or manager shall be reasonably satisfactory to the Required Investors.

 

3.             Company
Obligations.  The Company will use
commercially reasonable efforts to effect the registration of the Registrable
Securities in accordance with the terms hereof, and pursuant thereto the
Company will, as expeditiously as possible:

 

(a)           use
commercially reasonable efforts to cause such Registration Statement to become
effective and to remain continuously effective for a period that will terminate
upon the earliest of (i) two years from the initial effectiveness date of
the Registration Statement, (ii) the date on which all Registrable
Securities covered by such Registration Statement as amended from time to time,
have been sold, and (iii) the date on which all Registrable Securities
covered by such Registration Statement may be sold pursuant to Rule 144(k)
(the “Effectiveness Period”) and advise the Investors in writing when the
Effectiveness Period has expired;

 

(b)           prepare
and file with the SEC such amendments and post-effective amendments to the
Registration Statement and the Prospectus as may be necessary to keep the
Registration Statement effective for the period specified in Section 3(a) and
to comply with the provisions of the 1933 Act and the 1934 Act with respect to
the distribution of all of the Registrable Securities covered thereby;

 

(c)           provide
copies to and permit counsel designated by the Investors to review each
Registration Statement and all amendments and supplements thereto no fewer than
seven (7) days prior to their filing with the SEC and not file any
document to which such counsel reasonably objects;

 

3

 

(d)           furnish
to the Investors and their legal counsel (i) promptly after the same is
prepared and publicly distributed, filed with the SEC, or received by the
Company (but not later than two (2) Business Days after the filing date,
receipt date or sending date, as the case may be) one (1) copy of any
Registration Statement and any amendment thereto, each preliminary prospectus
and Prospectus and each amendment or supplement thereto, and each letter
written by or on behalf of the Company to the SEC or the staff of the SEC, and
each item of correspondence from the SEC or the staff of the SEC, in each case
relating to such Registration Statement (other than any portion of any thereof
which contains information for which the Company has sought confidential
treatment), and (ii) such number of copies of a Prospectus, including a
preliminary prospectus, and all amendments and supplements thereto and such
other documents as each Investor may reasonably request in order to facilitate
the disposition of the Registrable Securities owned by such Investor that are
covered by the related Registration Statement;

 

(e)           in
the event the Company selects an underwriter for the offering, the Company
shall enter into and perform its reasonable obligations under an underwriting
agreement, in usual and customary form, including, without limitation,
customary indemnification and contribution obligations, with the underwriter of
such offering;

 

(f)            if
required by the underwriter, or if any Investor is described in the Registration
Statement as an underwriter, the Company shall furnish, on the effective date
of the Registration Statement (except with respect to clause (i) below)
and on the date that Registrable Securities are delivered to an underwriter, if
any, for sale in connection with the Registration Statement (including any
Investor deemed to be an underwriter), (i) (A) in the case of an
underwritten offering, an opinion, dated as of the closing date of the sale of
Registrable Securities to the underwriters, from independent legal counsel
representing the Company for purposes of such Registration Statement, in form,
scope and substance as is customarily given in an underwritten public offering,
addressed to the underwriters and the Investors participating in such underwritten
offering or (B) in the case of an “at the market” offering, an opinion,
dated as of or promptly after the effective date of the Registration Statement
to the Investors, from independent legal counsel representing the Company for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in a public offering, addressed to the Investors, and (ii) a
letter, dated as of the effective date of such Registration Statement and
confirmed as of the applicable dates described above, from the Company’s
independent certified public accountants in form and substance as is
customarily given by independent certified public accountants to underwriters
in an underwritten public offering, addressed to the underwriters (including
any Investor deemed to be an underwriter);

 

(g)           use
commercially reasonable efforts to (i) prevent the issuance of any stop
order or other suspension of effectiveness and, (ii) if such order is
issued, obtain the withdrawal of any such order at the earliest possible
moment;

 

(h)           prior
to any public offering of Registrable Securities, use commercially reasonable
efforts to register or qualify or cooperate with the Investors and their
counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or blue sky laws
of such jurisdictions requested by the Investors and do any and all other
commercially reasonable acts or things necessary or advisable to enable the
distribution in such jurisdictions of the Registrable Securities covered by the
Registration Statement; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (i) qualify
to do business in any jurisdiction

 

4

 

where it would not otherwise be required to qualify but for this Section 3(h),
(ii) subject itself to general taxation in any jurisdiction where it would
not otherwise be so subject but for this Section 3(h), or (iii) file
a general consent to service of process in any such jurisdiction;

 

(i)            use
commercially reasonable efforts to cause all Registrable Securities covered by
a Registration Statement to be listed on each securities exchange, interdealer
quotation system or other market on which similar securities issued by the
Company are then listed;

 

(j)            immediately
notify the Investors, at any time when a Prospectus relating to Registrable
Securities is required to be delivered under the 1933 Act, upon discovery that,
or upon the happening of any event as a result of which, the Prospectus
included in a Registration Statement, as then in effect, includes an untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, and at the request of any such
holder, promptly prepare and furnish to such holder a reasonable number of
copies of a supplement to or an amendment of such Prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and

 

(k)           otherwise
use commercially reasonable efforts to comply with all applicable rules and
regulations of the SEC under the 1933 Act and the 1934 Act, take such other
actions as may be reasonably necessary to facilitate the registration of the
Registrable Securities hereunder; and make available to its security holders,
as soon as reasonably practicable, but not later than the Availability Date (as
defined below), an earnings statement covering a period of at least twelve (12)
months, beginning after the effective date of each Registration Statement,
which earnings statement shall satisfy the provisions of Section 11(a) of
the 1933 Act, including Rule 158 promulgated thereunder (for the purpose
of this subsection 3(k), “Availability Date” means the 45th day following
the end of the fourth fiscal quarter that includes the effective date of such
Registration Statement, except that, if such fourth fiscal quarter is the last
quarter of the Company’s fiscal year, “Availability Date” means the 90th day
after the end of such fourth fiscal quarter).

 

(l)            With
a view to making available to the Investors the benefits of Rule 144 (or
its successor rule) and any other rule or regulation of the SEC that may
at any time permit the Investors to sell shares of Common Stock to the public
without registration, the Company covenants and agrees to:  (i) make and keep public information
available, as those terms are understood and defined in Rule 144, until
the earlier of (A) six months after such date as all of the Registrable
Securities may be resold pursuant to Rule 144(k) or any other rule of
similar effect or (B) such date as all of the Registrable Securities shall
have been resold; (ii) file with the SEC in a timely manner all reports
and other documents required of the Company under the 1934 Act; and (iii) furnish
to each Investor upon request, as long as such Investor owns any Registrable
Securities, (A) a written statement by the Company that it has complied
with the reporting requirements of the 1934 Act, (B) a copy of the Company’s
most recent Annual Report on Form 20-F or Reports on Form 6-K, and (C) such
other information as may be reasonably requested in order to avail such
Investor of any rule or regulation of the SEC that permits the selling of
any such Registrable Securities without registration.

 

5

 

4.             Due
Diligence Review; Information.  The
Company shall make available, during normal business hours, for inspection and
review by the Investors, advisors to and representatives of the Investors (who
may or may not be affiliated with the Investors and who are reasonably
acceptable to the Company), any underwriter participating in any disposition of
shares of Common Stock on behalf of the Investors pursuant to a Registration
Statement or amendments or supplements thereto or any blue sky, NASD or other
filing, all financial and other records, all SEC Filings (as defined in the
Purchase Agreement) and other filings with the SEC, and all other corporate
documents and properties of the Company as may be reasonably necessary for the
purpose of such review, and cause the Company’s officers, directors and
employees, within a reasonable time period, to supply all such information
reasonably requested by the Investors or any such representative, advisor or
underwriter in connection with such Registration Statement (including, without
limitation, in response to all questions and other inquiries reasonably made or
submitted by any of them), prior to and from time to time after the filing and
effectiveness of the Registration Statement for the sole purpose of enabling
the Investors and such representatives, advisors and underwriters and their
respective accountants and attorneys to conduct initial and ongoing due
diligence with respect to the Company and the accuracy of such Registration
Statement.

 

The Company shall not disclose material nonpublic information to the
Investors, or to advisors to or representatives of the Investors, unless prior
to disclosure of such information the Company identifies such information as
being material nonpublic information and provides the Investors, such advisors
and representatives with the opportunity to accept or refuse to accept such material
nonpublic information for review and any Investor wishing to obtain such
information enters into an appropriate confidentiality agreement with the
Company with respect thereto.

 

5.             Obligations
of the Investors.

 

(a)           Each
Investor shall furnish in writing to the Company such information regarding
itself, the Registrable Securities held by it and the intended method of
disposition of the Registrable Securities held by it, as shall be reasonably
required to effect the registration of such Registrable Securities and shall
execute such documents in connection with such registration as the Company may
reasonably request.  At least five (5) Business
Days prior to the first anticipated filing date of any Registration Statement,
the Company shall notify each Investor of the information the Company requires
from such Investor if such Investor elects to have any of the Registrable
Securities included in the Registration Statement.  An Investor shall provide such information to
the Company at least two (2) Business Days prior to the first anticipated
filing date of such Registration Statement if such Investor elects to have any
of the Registrable Securities included in the Registration Statement.

 

(b)           Each
Investor, by its acceptance of the Registrable Securities agrees to cooperate
with the Company as reasonably requested by the Company in connection with the
preparation and filing of a Registration Statement hereunder, unless such
Investor has notified the Company in writing of its election to exclude all of
its Registrable Securities from such Registration Statement.

 

(c)           In
the event the Company, at the request of the Investors, determines to engage
the services of an underwriter, such Investor agrees to enter into and perform
its obligations under an underwriting agreement, in usual and customary form,
including, without limitation, customary indemnification and contribution
obligations, with the

 

6

 

managing underwriter of such offering and take such other actions as
are reasonably required in order to expedite or facilitate the dispositions of
the Registrable Securities.

 

(d)           Each
Investor agrees that, upon receipt of any notice from the Company of either (i) the
commencement of an Allowed Delay pursuant to Section 2(c)(ii) or (ii) the
happening of an event pursuant to Section 3(j) hereof, such Investor will
immediately discontinue disposition of Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities, until the Investor’s
receipt of the copies of the supplemented or amended prospectus filed with the
SEC and until any related post-effective amendment is declared effective and,
if so directed by the Company, the Investor shall deliver to the Company (at
the expense of the Company) or destroy (and deliver to the Company a
certificate of destruction) all copies in the Investor’s possession of the
Prospectus covering the Registrable Securities current at the time of receipt
of such notice.

 

(e)           No
Investor may participate in any third party underwritten registration hereunder
unless it (i) agrees to sell the Registrable Securities on the basis
provided in any underwriting arrangements in usual and customary form entered
into by the Company, (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
reasonably required under the terms of such underwriting arrangements, and (iii) agrees
to pay its pro rata share of all underwriting discounts and commissions.  Notwithstanding the foregoing, no Investor
shall be required to make any representations to such underwriter, other than
those with respect to itself and the Registrable Securities owned by it,
including its right to sell the Registrable Securities, and any indemnification
in favor of the underwriter by the Investors shall be several and not joint and
limited in the case of any Investor, to the proceeds received by such Investor
from the sale of its Registrable Securities. 
The scope of any such indemnification in favor of an underwriter shall
be limited to the same extent as the indemnity provided in Section 6(b) hereof.

 

6.             Indemnification.

 

(a)           Indemnification
by the Company.  The Company will
indemnify and hold harmless each Investor and its officers, directors, members,
employees and agents, successors and assigns, and each other person, if any,
who controls such Investor within the meaning of the 1933 Act, against any
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the 1933 Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or
supplement thereof; (ii) any blue sky application or other document
executed by the Company specifically for that purpose or based upon written
information furnished by the Company filed in any state or other jurisdiction
in order to qualify any or all of the Registrable Securities under the
securities laws thereof (any such application, document or information herein
called a “Blue Sky Application”); (iii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; (iv) any violation by the Company or
its agents of any rule or regulation promulgated under the 1933 Act applicable
to the Company or its agents and relating to action or inaction required of the
Company in connection with such registration; or (v) any failure to
register or qualify the Registrable Securities included in any such
Registration in any state where the Company or its agents has affirmatively
undertaken or agreed in writing that the Company will undertake such
registration or qualification on an Investor’s behalf (the undertaking of any
underwriter chosen

 

7

 

by the Company being attributed to the Company) and will reimburse such
Investor, and each such officer, director or member and each such controlling
person for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company will not
be liable in any such case if and to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission so made in conformity
with information furnished by such Investor or any such controlling person in
writing specifically for use in such Registration Statement or Prospectus.

 

(b)           Indemnification
by the Investors.  In connection with
any registration pursuant to the terms of this Agreement, each Investor will
furnish to the Company in writing such information as the Company reasonably
requests concerning the holders of Registrable Securities or the proposed
manner of distribution for use in connection with any Registration Statement or
Prospectus and agrees, severally but not jointly, to indemnify and hold
harmless, to the fullest extent permitted by law, the Company, its directors,
officers, employees, stockholders and each person who controls the Company
(within the meaning of the 1933 Act) against any losses, claims, damages,
liabilities and expense (including reasonable attorney fees) resulting from any
untrue statement of a material fact or any omission of a material fact required
to be stated in the Registration Statement or Prospectus or preliminary
prospectus or amendment or supplement thereto or necessary to make the
statements therein not misleading, to the extent, but only to the extent that
such untrue statement or omission is contained in any information furnished in
writing by such Investor to the Company specifically for inclusion in such
Registration Statement or Prospectus or amendment or supplement thereto.  In no event shall the liability of an
Investor be greater in amount than the dollar amount of the proceeds (net of
all expense paid by such Investor in connection with any claim relating to this
Section 6 and the amount of any damages such Investor has otherwise been
required to pay by reason of such untrue statement or omission) received by
such Investor upon the sale of the Registrable Securities included in the
Registration Statement giving rise to such indemnification obligation.

 

(c)           Conduct
of Indemnification Proceedings.  Any
person entitled to indemnification hereunder shall (i) give prompt notice
to the indemnifying party of any claim with respect to which it seeks
indemnification and (ii) permit such indemnifying party to assume the
defense of such claim with counsel reasonably satisfactory to the indemnified
party; provided that any person entitled to indemnification hereunder
shall have the right to employ separate counsel and to participate in the
defense of such claim, but the fees and expenses of such counsel shall be at
the expense of such person unless (a) the indemnifying party has agreed to
pay such fees or expenses, or (b) the indemnifying party shall have failed
to assume the defense of such claim and employ counsel reasonably satisfactory
to such person or (c) in the reasonable judgment of any such person, based
upon written advice of its counsel, a conflict of interest exists between such
person and the indemnifying party with respect to such claims (in which case,
if the person notifies the indemnifying party in writing that such person
elects to employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such claim
on behalf of such person); and provided, further, that the
failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations hereunder, except to the
extent that such failure to give notice shall materially adversely affect the
indemnifying party in the defense of any such claim or litigation.  It is understood that the indemnifying party
shall not, in connection with any proceeding in the same jurisdiction, be
liable for fees or expenses of more than one separate firm of attorneys at any
time for all such indemnified parties. 
No indemnifying party will, except

 

8

 

with the consent of the indemnified party, consent to entry of any
judgment or enter into any settlement that does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such indemnified party
of a release from all liability in respect of such claim or litigation.

 

(d)           Contribution.  If for any reason the indemnification
provided for in the preceding paragraphs (a) and (b) is unavailable
to an indemnified party or insufficient to hold it harmless, other than as
expressly specified therein, then the indemnifying party shall contribute to
the amount paid or payable by the indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnified party and the indemnifying party, as well as
any other relevant equitable considerations. 
No person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of
the 1933 Act shall be entitled to contribution from any person not guilty of
such fraudulent misrepresentation.  In no
event shall the contribution obligation of a holder of Registrable Securities
be greater in amount than the dollar amount of the proceeds (net of all
expenses paid by such holder in connection with any claim relating to this Section 6
and the amount of any damages such holder has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission) received by it upon the sale of the Registrable Securities giving
rise to such contribution obligation.

 

7.             Miscellaneous.

 

(a)           Amendments
and Waivers.  This Agreement may be
amended only by a writing signed by the Company and the Investors.  The Company may take any action herein
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company shall have obtained the written consent to such amendment,
action or omission to act, of the Investors.

 

(b)           Notices.  All notices and other communications provided
for or permitted hereunder shall be made as set forth in Section 9.4 of
the Purchase Agreement.

 

(c)           Assignments
and Transfers by Investors.  The
provisions of this Agreement shall be binding upon and inure to the benefit of
the Investors and their respective successors and assigns.  An Investor may transfer or assign, in whole
or from time to time in part, to one or more persons its rights hereunder in
connection with the transfer of Registrable Securities by such Investor to such
person, provided that such Investor complies with all laws applicable thereto
and provides written notice of assignment to the Company promptly after such
assignment is effected.

 

(d)           Assignments
and Transfers by the Company.  This
Agreement may not be assigned by the Company (whether by operation of law or
otherwise) without the prior written consent of the Investors, provided,
however, that the Company may assign its rights and delegate its duties
hereunder to any surviving or successor corporation in connection with a merger
or consolidation of the Company with another corporation, or a sale, transfer
or other disposition of all or substantially all of the Company’s assets to
another corporation, without the prior written consent of the Investors, after
notice duly given by the Company to each Investor.

 

(e)           Benefits
of the Agreement.  The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective permitted successors and assigns of the parties.  Nothing in this Agreement, express or
implied, is intended to confer

 

9

 

upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.

 

(f)            Counterparts;
Faxes.  This Agreement may be
executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.  This Agreement may also be
executed via facsimile, which shall be deemed an original.

 

(g)           Titles
and Subtitles.  The titles and
subtitles used in this Agreement are used for convenience only and are not to
be considered in construing or interpreting this Agreement.

 

(h)           Severability.  Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof but shall be interpreted as if it
were written so as to be enforceable to the maximum extent permitted by
applicable law, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.  To the extent permitted by
applicable law, the parties hereby waive any provision of law which renders any
provisions hereof prohibited or unenforceable in any respect.

 

(i)            Further
Assurances.  The parties shall
execute and deliver all such further instruments and documents and take all
such other actions as may reasonably be required to carry out the transactions
contemplated hereby and to evidence the fulfillment of the agreements herein
contained.

 

(j)            Entire
Agreement.  This Agreement is
intended by the parties as a final expression of their agreement and intended
to be a complete and exclusive statement of the agreement and understanding of
the parties hereto in respect of the subject matter contained herein.  This Agreement supersedes all prior
agreements and understandings between the parties with respect to such subject
matter.

 

(k)           Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York
without regard to the choice of law principles thereof.  Each of the parties hereto irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York
located in New York County and the United States District Court for the
Southern District of New York for the purpose of any suit, action, proceeding
or judgment relating to or arising out of this Agreement and the transactions
contemplated hereby.  Service of process
in connection with any such suit, action or proceeding may be served on each
party hereto anywhere in the world by the same methods as are specified for the
giving of notices under this Agreement. 
Each of the parties hereto irrevocably consents to the jurisdiction of
any such court in any such suit, action or proceeding and to the laying of
venue in such court.  Each party hereto
irrevocably waives any objection to the laying of venue of any such suit,
action or proceeding brought in such courts and irrevocably waives any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum.  EACH OF THE PARTIES HERETO WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT AND
REPRESENTS THAT COUNSEL HAS BEEN CONSULTED SPECIFICALLY AS TO THIS WAIVER.

 

10

 

IN WITNESS WHEREOF, the parties have executed this
Agreement or caused their duly authorized officers to execute this Agreement as
of the date first above written.

 

	
   

  	
  MICROMEM TECHNOLOGIES,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

 

[INVESTORS’ SIGNATURE PAGES TO FOLLOW]

 

11

 

INVESTORS

 

 

	
  If Entity:

  	
   

  	
   ENTITY NAME:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  If
  Individual:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
								

 

12

 

Exhibit A

 

Plan of
Distribution

 

The selling stockholders,
which as used herein includes donees, pledgees, transferees or other
successors-in-interest selling shares of common stock or interests in shares of
common stock received after the date of this prospectus from a selling
stockholder as a gift, pledge, partnership distribution or other transfer, may,
from time to time, sell, transfer or otherwise dispose of any or all of their
shares of common stock or interests in shares of common stock on any stock
exchange, market or trading facility on which the shares are traded or in
private transactions.  These dispositions
may be at fixed prices, at prevailing market prices at the time of sale, at
prices related to the prevailing market price, at varying prices determined at
the time of sale, or at negotiated prices.

 

The selling stockholders
may use any one or more of the following methods when disposing of shares or
interests therein:

 

•
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 

•
block trades in which the broker-dealer will attempt to sell the shares as
agent, but may position and resell a portion of the block as principal to
facilitate the transaction;

 

•
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 

•
an exchange distribution in accordance with the rules of the applicable
exchange;

 

•
privately negotiated transactions;

 

•
short sales;

 

•
through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

 

•
broker-dealers may agree with the selling stockholders to sell a specified
number of such shares at a stipulated price per share;

 

•
a combination of any such methods of sale; and

 

•
any other method permitted pursuant to applicable law.

 

The selling stockholders
may, from time to time, pledge or grant a security interest in some or all of
the shares of common stock owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares of common stock, from time to time, under this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act amending the list of selling
stockholders to include the pledgee, transferee or other successors in interest
as selling stockholders under this prospectus. 
The selling stockholders also may transfer the shares

 

13

 

of common stock in other circumstances, in which case the transferees,
pledgees or other successors in interest will be the selling beneficial owners
for purposes of this prospectus.

 

In connection with the
sale of our common stock or interests therein, the selling stockholders may
enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the common stock in
the course of hedging the positions they assume.  The selling stockholders may also sell shares
of our common stock short and deliver these securities to close out their short
positions, or loan or pledge the common stock to broker-dealers that in turn
may sell these securities.  The selling
stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).

 

The aggregate proceeds to
the selling stockholders from the sale of the common stock offered by them will
be the purchase price of the common stock less discounts or commissions, if
any.  Each of the selling stockholders
reserves the right to accept and, together with their agents from time to time,
to reject, in whole or in part, any proposed purchase of common stock to be
made directly or through agents.  We will
not receive any of the proceeds from this offering. Upon any exercise of the
warrants by payment of cash, however, we will receive the exercise price of the
warrants.

 

The selling stockholders
also may resell all or a portion of the shares in open market transactions in
reliance upon Rule 144 under the Securities Act of 1933, provided that
they meet the criteria and conform to the requirements of that rule.

 

The selling stockholders
and any underwriters, broker-dealers or agents that participate in the sale of
the common stock or interests therein may be “underwriters” within the meaning
of Section 2(11) of the Securities Act. 
Any discounts, commissions, concessions or profit they earn on any
resale of the shares may be underwriting discounts and commissions under the
Securities Act.  Selling stockholders who
are “underwriters” within the meaning of Section 2(11) of the Securities
Act will be subject to the prospectus delivery requirements of the Securities
Act.

 

To the extent required,
the shares of our common stock to be sold, the names of the selling
stockholders, the respective purchase prices and public offering prices, the
names of any agents, dealer or underwriter, any applicable commissions or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement that includes this prospectus.

 

In order to comply with
the securities laws of some states, if applicable, the common stock may be sold
in these jurisdictions only through registered or licensed brokers or dealers.  In addition, in some states the common stock
may not be sold unless it has been registered or qualified for sale or an
exemption from registration or qualification requirements is available and is
complied with.

 

We have advised the
selling stockholders that the anti-manipulation rules of Regulation M
under the Exchange Act may apply to sales of shares in the market and to the
activities of the selling stockholders and their affiliates.  In addition, we will make copies of this
prospectus (as it

 

14

 

may be supplemented or amended from time to time) available to the
selling stockholders for the purpose of satisfying the prospectus delivery
requirements of the Securities Act.  The
selling stockholders may indemnify any broker-dealer that participates in
transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act.

 

We have agreed to
indemnify the selling stockholders against liabilities, including liabilities
under the Securities Act and state securities laws, relating to the
registration of the shares offered by this prospectus.

 

We have agreed with the
selling stockholders to keep the registration statement of which this
prospectus constitutes a part effective until the earlier of (1) such time
as all of the shares covered by this prospectus have been disposed of pursuant
to and in accordance with the registration statement or (2) the date on
which the shares may be sold pursuant to Rule 144(k) of the Securities
Act.

 

15

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