Helius Medical Technologies, Inc.: Exhibit 10.1 - Filed by newsfilecorp.com





Exhibit 10.1 

CONVERTIBLE PROMISSORY NOTE 

PRINCIPAL USD$2,000,000 

(THIS NOTE REPRESENTS THE FIRST TRANCHE OF USD$2,000,000
DRAWN 
DOWN FROM THE USD$7,000,000 CREDIT FACILITY PROVIDED BY THE
LENDER 
TO THE BORROWER SIGNED BETWEEN THE LENDER AND THE BORROWER.)


October 9, 2015 

	1. 	
      PROMISE TO PAY



For value received, the undersigned HELIUS MEDICAL
TECHNOLOGIES, INC. (the “Borrower”) promises to pay to A&B
(HK) Company Limited (the “Lender”) at Unite 2106, 21/F Island
Place Tower No. 510 King’s Road North Point, Hong Kong, or at such other place
as the Lender may direct in writing, the aggregate principal sum of Two Million
Dollars (USD$2,000,000) in lawful money of the United States of America (the
“Principal Amount”) in the manner hereinafter provided, together
with interest in the same currency which may from time to time be owing
hereunder or pursuant hereto. 

	2. 	
      DUE DATE



The Principal Amount then outstanding under this Note together
with all accrued interest shall be due and payable six (6) months from the date
of signing (the “Maturity Date”): 

	3. 	
      SENIORITY



This Note shall rank pari passu to all other present and future
unsubordinated and unsecured senior indebtedness of the Borrower. 

	4. 	
      INTEREST



The Borrower shall pay the Lender interest (the
“Interest”) on the Principal Amount outstanding from time to time
at a rate of 6.0% per annum. Interest shall be calculated on the basis of the
actual number of days elapsed, payable in arrears not in advance, on the basis
of a 365-day year. The Borrower shall pay the Lender accrued and unpaid interest
in cash of the Borrower at the Maturity Date unless such Note has been converted
into common shares according to this document prior to the Maturity Date. 

	5. 	
      PREPAYMENT




	(a) 	
      Mandatory Prepayment.



In the event of a change in control prior to the conversion of
the Note, the outstanding principal amount of this Note, plus all accrued and
unpaid interest, in each case that has not otherwise been converted into common
shares pursuant to this document, shall be due and payable immediately prior to
the closing of such change in control. 

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	(b) 	
      Voluntary Prepayment. Except as provided in
      Section 5(a) above, the principal amount or interest accrued on this Note
      may not be prepaid prior to the Maturity Date without the written consent
      of the Lender.




	6. 	
      CONVERSION OF NOTE



Both parties agree, upon the signature of this document, the
Borrower shall undertake best efforts to convert all of the Principal Amount and
accompanying accrued Interest then outstanding under this Note into common
shares (“Shares”) of the Borrower at a conversion price equal to USD$0.96 (the
“Conversion Price”) as soon as possible. 

Both parties further agree, upon the conversion of the Note,
the Borrower shall issue another warrant certificate to the Lender, according to
which, the Borrower issue the common share purchase warrants at the quantity of
half of the Shares issued to the Lender (“Warrant”). Each Warrant shall entitle
the holder to purchase one (1) additional Share from the Borrower at a price of
USD $1.44 per Share for a period of three (3) years from the date of issuance of
the Shares and Warrants (the “Issuance Date”). 

Conversion Procedures. To convert this Note, the Lender
must surrender this Note to the Borrower with the form of conversion notice
attached hereto as Schedule “A” (the “Conversion Notice”),
executed by the Lender evidencing the Lender’s agreement to convert this
Note. The Lender shall be deemed to be the holder of the Shares and Warrants as
of the Issuance Date. As soon as practicable but no later within one (1) month
after the Lender surrenders this Note to the Borrower for conversion, the
Borrower shall issue and deliver to the Lender the certificates respectively
representing the Shares and the Warrants, to which the Lender shall be entitled
upon such conversion, including a check payable to the Lender for any cash
amounts payable as described below. The Conversion Shares will (i) have been
duly authorized, validly issued, fully paid and nonassessable and (ii) be of the
same type and class of securities as those existing common shares of the
Borrower. Upon the conversion and registration of the Lender in the register of
members of the Borrower in accordance with the applicable laws and regulations
as well as the terms and conditions of this document, the Lender will acquire
good and valid title to the Shares, free and clear of any lien. Subject to
hereinafter section 10, upon receipt of the Conversion Notice, the Borrower
covenants and agrees to take all actions as shall be necessary to properly
authorize the Shares and Warrants as shall be necessary to give full effect to
the conversion privileges of the Lender. 

Fractional Shares; Interest; Effect of Conversion. No
fractional shares shall be issued upon conversion of this Note. In lieu of the
Borrower issuing any fractional shares to the Lender upon the conversion of this
Note, the Borrower shall pay to the Lender an amount equal to the result
obtained by multiplying the Conversion Price by the fraction of a share not
issued pursuant to the previous sentence. Upon conversion of this Note in full
and the payment of the amounts specified in this paragraph, the Borrower shall
be forever released from all its obligations and liabilities under this Note and
this Note shall be deemed of no further force or effect, whether or not the
original of this Note has been delivered to the Borrower for cancellation. 

Reservation of Shares Issuable Upon Conversion. The
Borrower shall reserve and keep available out of its authorized but unissued
Shares and Warrants solely for the purpose of effecting the conversion of this Note such number of the Shares
and Warrants as shall be sufficient to effect the conversion of this Note. 

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	7. 	
      EVENTS OF DEFAULT



The occurrence of any of the following shall constitute an
“Event of Default” under this Note: 

	(a) 	
      Failure to Pay. The Borrower shall fail to pay (i)
      when due any principal payment on the due date hereunder or (ii) any
      interest payment or other payment required under the terms of this Note on
      the date due and such payment shall not have been made within three (3)
      Business Days of the Borrower’s receipt of written notice to the Borrower
      of such failure to pay;

	 	 
	(b) 	
      Breaches of Covenants. The Borrower shall fail to
      observe or perform any other covenant, obligation, condition or agreement
      contained in this Note (other than those specified in Section 7(a) above)
      and such failure shall continue for five (5) Business Days after the
      Borrower’s receipt of written notice by the Lender of such
  failure;

	 	 
	(c) 	
      Representations and Warranties. Any
      representation, warranty, certificate, or other statement (financial or
      otherwise) made or furnished by or on behalf of the Borrower to the Lender
      in writing in connection with this Note, or as an inducement to the Lender
      to enter into this Note, shall be false, incorrect, incomplete or
      misleading in any material respect when made or furnished;

	 	 
	(d) 	
      Other Payment Obligations. Defaults shall exist
      under any financing agreements of the Borrower with any third party or
      parties which consists of the failure to pay any indebtedness for borrowed
      money at maturity or which results in a right by such third party or
      parties, whether or not exercised, to accelerate the maturity of such
      indebtedness for borrowed money of the Borrower, in each case, in an
      aggregate amount in excess of US$2 million;

	 	 
	(e) 	
      Voluntary Bankruptcy or Insolvency Proceedings.
      The Borrower shall (i) apply for or consent to the appointment of a
      receiver, trustee, liquidator or custodian of itself or of all or a
      substantial part of its property, (ii) admit in writing its inability to
      pay its debts generally as they mature, (iii) make a general assignment
      for the benefit of its or any of its creditors, (iv) be dissolved or
      liquidated, (v) commence a voluntary case or other proceeding seeking
      liquidation, reorganization or other relief with respect to itself or its
      debts under any bankruptcy, insolvency or other similar law now or
      hereafter in effect or consent to any such relief or to the appointment of
      or taking possession of its property by any official in an involuntary
      case or other proceeding commenced against it, or (vi) take any action for
      the purpose of effecting any of the foregoing;

	 	 
	(f) 	
      Involuntary Bankruptcy or Insolvency Proceedings.
      Proceedings for the appointment of a receiver, trustee, liquidator or
      custodian of the Borrower, or of all or a substantial part of the property
      thereof, or an involuntary case or other proceedings seeking liquidation,
      reorganization or other relief with respect to the Borrower, or the debts
      thereof under any bankruptcy, insolvency or other similar law now or
      hereafter in effect shall be commenced and an order for relief entered or such proceeding
shall not be dismissed or discharged within 45 days of commencement; 



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	(g) 	
      Judgments. A final non-appealable judgment,
      verdict or government order from any Governmental Authority (including
      without limitation, the Ministry of Finance) for the payment of money in
      excess of US$2 million shall be rendered against the Borrower and the same
      shall remain undischarged for a period of 30 days during which execution
      shall not be effectively stayed, or any judgment, writ, assessment,
      warrant of attachment, or execution or similar process shall be issued or
      levied against a substantial part of the property of the Group Companies,
      and such judgment, writ, or similar process shall not be released, stayed,
      vacated or otherwise dismissed within 30 days after issue or levy;
    and

	 	 
	(h) 	
      Breach of the Asset Purchase Agreement between the
      Lender and NeuroHabilitation Corporation (“NHC”). The Borrower with
      its affiliate NHC breach the Asset Purchase Agreement in material respect
      will constitute the Event of Default under this
Section.




	8. 	
      RIGHTS OF THE LENDER UPON
DEFAULT.



Upon the occurrence of any Event of Default (other than an
Event of Default described in Sections 7(e) or 7(f)) and at any time thereafter
during the continuance of such Event of Default, the Lender may, by written
notice to the Borrower, declare all outstanding obligations payable by the
Borrower hereunder to be immediately due and payable without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived. Upon the occurrence of any Event of Default described in
Sections 7(e) and 7(f), immediately and without notice, all outstanding
obligations payable by the Borrower hereunder shall automatically become
immediately due and payable, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived. In addition to the
foregoing remedies, upon the occurrence and during the continuance of any Event
of Default, the Lender may exercise any other right, power or remedy granted to
it by the Asset Purchase Agreement or other agreements between both parties or
otherwise permitted to it by law, either by suit in equity or by action at law,
or both. 


	9. 	PRICING SCENARIOS FOR THE REMAINING
      USD$5,000,000 DRAWN DOWN FROM THE FACILITY 



Both the Lender and the Borrower hereby agree that, for a
period of six (6) months (the “Draw Down Period”) from the date of the Issuance
Date (as defined above), the Borrower shall have the right to draw down part or
all of the remaining USD$5.0 million from the Facility based on the following
three pricing scenarios: 

	(a) 	
      At any time during the 6-month Draw Down Period when the
      volume weighted average closing price (“VWAP”) of the Shares of the
      Borrower for any period of 30 consecutive trading days is above USD$0.96
      and below USD$2.00, the Borrower can elect to draw down part or all of the
      remaining USD$5.0 million by way of issuing new common shares (the “New
      Shares”) with the aggregate amount of up to USD$5.0 million at a price of
      USD$0.96 per New Share. Upon the issuance of the New Shares, the Borrower
      shall issue another warrant certificate to the Lender, according to which,
      the Borrower issue the common share purchase warrants at the quantity of
      half of the New Shares issued to the Lender (“New Warrant”). Each whole New Warrant entitles the
holder to purchase one (1) additional Share from the Borrower for a period of
three (3) years at a price of USD$1.44 per Share. 



4 






	(b) 	
      At any time during the 6-month Draw Down Period when the
      VWAP of the Shares of the Borrower for any period of 15 consecutive
      trading days is above USD$2.00, the Borrower can elect to draw down part
      or all of the remaining USD$5.0 million by way of issuing the New Shares
      with the aggregate amount of up to USD$5.0 million at a price of USD$1.5
      per New Share. Upon the issuance of the New Shares, the Borrower shall
      issue another warrant certificate to the Lender, according to which, the
      Borrower issue the common share purchase warrants at the quantity of half
      of the New Shares issued to the Lender (“New Warrant”). Each whole New
      Warrant entitles the holder to purchase one (1) additional Share from the
      Borrower for a period of three (3) years at a price of USD$2.25 per
      Share.

	 	 
	(c) 	
      At any time during the 6-month Draw Down Period when the
      VWAP of the Shares of the Borrower for any period of 30 consecutive
      trading days is below USD$0.96, the Borrower can elect to draw down part
      or all of the remaining USD$5.0 million by way of issuing new common
      shares (the “New Shares”) with the aggregate amount of up to USD$5.0
      million at a price equals to the VWAP for such period of 30 consecutive
      trading days. Upon the issuance of the New Shares, the Borrower shall
      issue another warrant certificate to the Lender, according to which, the
      Borrower issue the common share purchase warrants at the quantity of half
      of the New Shares issued to the Lender (“New Warrant”). Each whole New
      Warrant entitles the holder to purchase one (1) additional Share from the
      Borrower for a period of three (3) years at a price of the Price of New
      Share multiplied by a 50% premium.

	 	 
	(d) 	
      In the event that scenarios in Section (a) and/or Section
      (b) and/or Section (c) can be applied simultaneously, for example, the
      VWAP of the Shares of the Borrower for any period of 15 consecutive
      trading days is above USD$2.00, but for any period of 30 consecutive
      trading days including such 15 consecutive trading days is above USD$0.96
      and below USD$2.00, or is below USD$0.96, the scenario with a lower
      Conversion Price shall be applied.

	 	 
	(e) 	
      No matter according to which Scenario the Borrower draws
      down part or whole of the remaining USD$5.0 million and issues the New
      Shares and New Warrants to the Lender, the Borrower undertakes to provide
      a board seat to the Lender.

	 	 
	(f) 	
      The calculation of the VWAP shall be based on the
      aggregate trading volume of the Shares trading in the US market and
      Canadian market, with the trading price to be converted into
  USD$.

	 	 
	(g) 	
      The Borrower hereby acknowledge and warrant that, to its
      knowledge, the pricing schemes as described in the three pricing scenarios
      above are compliant to the Canadian Securities Exchange Policies and
      Procedures and all other applicable rules and regulations in Canada and
      the United States. In the event that the Canadian Securities Exchange
      Policies and Procedures have any restriction on the trading price of
      shares, the Borrower shall undertake every effort to provide share price
      protection mechanism and any other measures to ensure the benefits and interests of the
Lender under the above scenarios. 



5 






	(h) 	
      The Borrower is not obliged to draw from the credit
      facility within this period, and A&B cannot force the Borrower to draw
      from the remaining USD$5.0 million facility.

	 	 
	(i) 	
      Notwithstanding the foregoing, the Lender can withdraw
      such USD$5.0 million facility during the Draw Down Period through written
      notice to the Borrower under the following circumstances: (i) any Event of
      Default under this document occurs; (ii) the development including the
      clinical trials and the registration of the PoNS Device encounters
      material obstacle according to the opinion of general pharmaceutical
      investor familiar with relevant field.

	 	 
	(j) 	
      Within the Draw Down Period, in the event the Borrower
      intends to draw down from the remaining USD$5.0 million facility, the
      Borrower shall give a written notice of its intention as well as its
      intended date (“Draw Down Date”) and concrete amount for drawing down
      (“Draw Down Notice”) at least five (5) trading days prior to the Draw Down
      Date. After receiving the Draw Down Notice, the Lender shall respond to
      the Borrower within three (3) trading days, after receiving the response
      the Borrower shall prepare relevant documents as well as complete relevant
      procedures necessary for the above issuance of New Shares and New
      Warrants.




	10. 	
      LEGEND



The Borrower is a U.S. “domestic issuer” under applicable U.S.
securities laws and, as such, upon the original issuance therefore and until
such time as the same is no longer required under applicable requirements of the
1933 Act or applicable state securities laws. The Lender also acknowledges that
any resale of the Shares and the Warrants (collectively referred to as the
“Underlying Securities”) will be subject to resale restrictions
required by the applicable Securities Laws. The certificates representing the
Underlying Securities and all certificates issued in exchange therefore or in
substitution thereof, shall bear one of the following legends: 

The certificates representing the Underlying Securities issued
outside the United States to non-U.S. Persons shall bear the following legend:


“THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR APPLICABLE STATE SECURITIES
LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES
ACT AND IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR PURSUANT TO
AN EXEMPTION OR EXCLUSION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND
ANY APPLICABLE STATE SECURITIES LAWS. THE SECURITIES REPRESENTED BY THE
CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH
TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE U.S. SECURITIES ACT.” 

6 




All of the certificates representing the Underlying Securities
issued shall bear the following legend: 

“UNLESS PERMITTED UNDER SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE
[FOUR MONTHS PLUS ONE DAY FROM THE ISSUANCE DATE].” 

	11. 	
      REPRESENTATIONS AND WARRANTIES OF THE
  BORROWER




	(a) 	
      Due Incorporation, Qualification, etc. The
      Borrower is a company duly organized and validly existing in good standing
      under the laws of its place of incorporation and has full requisite
      corporate power and authority to own, lease and operate its properties and
      assets it now owns, leases and operates, and to carry on its business as
      presently conducted.

	 	 
	(b) 	
      Authority. The execution, delivery and performance
      by the Borrower of the Note, and the consummation of the transactions
      contemplated hereby (i) are within the power of the Borrower and (ii) have
      been duly authorized by all necessary actions on the part of the
      Borrower.

	 	 
	(c) 	
      Enforceability. Each document executed by the
      Borrower has been duly executed and delivered by the Borrower and
      constitutes a legal, valid and binding obligation of the Borrower,
      enforceable against the Borrower in accordance with its terms, except as
      limited by bankruptcy, insolvency or other laws of general application
      relating to or affecting the enforcement of creditors’ rights generally
      and general principles of equity.

	 	 
	(d) 	
      Non-Contravention. The execution, delivery and
      performance of and compliance with the Note by the Borrower do not and
      will not result in any violation of or conflict with the Corporate
      Constitution, or result in a material breach of, or constitute a material
      default under any material agreement to which the Borrower is a party or
      under which the Borrower’s properties or assets may be bound.

	 	 
	(e) 	
      Approvals. No consent, approval, qualification,
      order or authorization of, or designation, declaration or filing with, any
      Governmental Authority on the part of the Borrower is required in
      connection with the valid execution and delivery of this Agreement, or the
      consummation of the transactions contemplated hereunder.

	 	 
	(f) 	
      Litigation and Compliance. Other than as disclosed
      appropriately to the Lender, there is no action, suit or proceeding by any
      Person pending or threatened, against the Borrower or, to the best
      knowledge of the Borrower, against any of their directors or officers in
      connection with the Borrower, before any Governmental Authority, except
      those, if determined adversely to the Borrower or any of their directors
      and executive officers, would not result in, individually or in the
      aggregate, a Material Adverse Effect. The Borrower is in compliance with
      all applicable laws in all material respects.

	 	 
	(g) 	
      Absence of Changes. Since the date hereof, the
      Borrower with its affiliates has conducted its business in all material
      respects only in the ordinary course consistent with past practice and
      there has not been any event, occurrence, change, violation, inaccuracy,
      circumstance or effect (regardless of whether or not such events,
      occurrences, changes, violations, inaccuracies, circumstances or effects are
inconsistent with the representations or warranties made by the Borrower in this
Agreement) that is, or could reasonably be expected to be materially adverse to
the business, operations, condition (financial or otherwise), assets (tangible
or intangible), liabilities, properties, or results of operations of the
Borrower and its affiliates taken as a whole (“Material Adverse Effect”). 



7 






	(h) 	
      Existing Indebtedness. The Borrower has no more
      than US$1.5 million of outstanding indebtedness, obligations and other
      liabilities, whether absolute, accrued, contingent, fixed or
    otherwise.

	 	 
	(i) 	
      The Borrower covenants and agrees that: (a) it will at
      all times have authorized and reserved, free from pre-emptive rights, the
      Shares to provide for the exercise in full of the Lender’s Conversion
      Right; and,(b) the Shares that may be issued upon the exercise of the
      Conversion Right will, upon issuance, be validly issued, fully paid and
      non- assessable, and free from all transfer taxes, liens and charges with
      respect to the issue thereof.




	12. 	
      REPRESENTATIONS AND WARRANTIES OF THE
  LENDER



The Lender represents and warrants to the Borrower as follows:


	(a) 	
      the Lender has good and sufficient right and authority to
      enter into this Note on the terms and conditions set forth
  herein;

	 	 
	(b) 	
      the Lender is not classified as an “insider” or an
      “associate” of an insider, as such terms are defined by the Securities
      Act (British Columbia);

	 	 
	(c) 	
      the Lender is not registered under Canadian provincial or
      territorial securities legislation and is not engaged in the business of
      trading in securities or exchange contracts as a principal or agent, and
      does not hold himself out as engaging in the business of trading in
      securities or exchange contracts as a principal or
agent.




	13. 	
      NEGATIVE COVENANTS



So long as the Note remains outstanding, the Borrower shall
not, or shall cause any of its affiliates to, without the prior written consent
of the Lender: 

	(a) 	
      Indebtedness. Be indebted, for borrowed money or
      otherwise, or become liable for the obligation of any other party, except
      for the indebtedness of its affiliates under this Agreement or incurred
      during the ordinary course of business.

	 	 
	(b) 	
      Liens. Create, incur, assume or permit to exist
      any Lien on any Borrower’s material assets or property,

	 	 
	(c) 	
      Share Dividends, Splits. If the Borrower or any of
      its affiliates, at any time (A) shall pay a dividend or otherwise make a
      distribution or distributions on any securities (including instruments or
      securities convertible into or exchangeable for such shares) in shares of
      Common Stock, (B) subdivide outstanding common shares into a larger number
      of shares, (C) take any other activities such as consolidation of the
      Borrower or reclassification of its shares, which impact, or is likely to
impact the interests of the Lender hereunder ,then, and in each such case, the
Conversion Price in effect immediately prior to such event shall be adjusted so
that the Lender shall be entitled to receive the number of common shares or
other securities of the Lender which such Lender would have owned or have been
entitled to receive after the occurrence of any of the events described above.
Besides, if any such case occurs before the issuance of New Shares and New
Warrants set forth in Section 9, the Lender can withdraw such USD$5.0 million
facility during the Draw Down Period through written notice to the Borrower.



8 






	(d) 	
      Loans/Investments. Make any loans or investments
      in excess of US$5 million, except accounts receivables, temporary advances
      to cover incidental expenses or otherwise in the ordinary course of
      business.

	 	 
	(e) 	
      Equity Financing. In the event that the Borrower
      intends to make any equity financing prior to the potential USD$5.0
      million facility as set forth in Section 9, the Borrower shall notify the
      Lender and both Parties shall negotiate in good
faith.




	14. 	
      AFFIRMATIVE COVENANTS.




	(a) 	
      Notice of Litigation. So long as the Note remains
      outstanding, the Borrower shall provide to the Lender promptly after the
      commencement thereof, notice of all actions, suits, and proceedings before
      any Governmental Authority against any of its affiliates that has an
      amount in controversy that exceeds US$400,000.

	 	 
	(b) 	
      Registration of Shares. The Borrower undertakes to
      register the common shares it issued hereunder upon the request of the
      Lender as soon as possible within a timeline subject to the applicable
      laws and regulations.

	 	 
	(c) 	
      Notice of Events of Defaults. So long as the Note
      remains outstanding, the Borrower shall provide to the Lender, as soon as
      possible and in any event within seven (7) Business Days after the
      occurrence thereof, with written notice of each event which either (i) is
      an Event of Default (as defined in the Note), or (ii) with the giving of
      notice or lapse of time or both would constitute an Event of Default, in
      each case setting forth the details of such event and the action which is
      proposed to be taken by any of its affiliates with respect
  thereto.

	 	 
	(d) 	
      Use of proceeds. The Borrower agrees and
      undertakes that proceeds from the issuance of the Note shall be used for
      working capital purposes.




	15. 	
      REPLACEMENT OF THE NOTE.



Upon receipt by the Borrower of evidence reasonably
satisfactory to it of the ownership of and the loss, theft, destruction or
mutilation of the Note, the Borrower, at the expense of the Lender requesting
such replacement, will execute and deliver a new Note executed in the same
manner as the Note being replaced, in the same principal amount as the unpaid
principal amount of such Note and dated the date to which interest shall have
been paid on such Note or, if no interest shall have yet been so paid, dated the
date of such Note. 

9 





	16. 	
      GOVERNING LAW



This Note is and will be deemed to be made in the State of New
York and for all purposes be governed exclusively by and construed and enforced
in accordance with the laws of New York applicable therein. 

	17. 	
      CHARGES, TAXES AND EXPENSES



Issuance of certificates for Shares and Warrants (including New
Shares and New Warrants, if applicable) upon the conversion of this Note shall
be made without charge to the Lender hereof for any issue or transfer tax or
other incidental expense in respect of the issuance of such certificate, all of
which taxes and expenses shall be paid by the Borrower. 

	18. 	
      AMENDMENT



This Note may not be amended except in writing executed by each
of the parties hereto. 

	19. 	
      WAIVERS



The Borrower hereby waives presentment for payment, notice of
dishonour, protest and notice of payment and all other notices of any kind in
connection with the enforcement of this Note. 

	20. 	
      SEVERABILITY



If a provision of this Note is at any time unenforceable or
invalid for any reason it will be severable from the remainder of this Note and,
in its application at that time, this Note will be construed as if it had been
executed without the unenforceable or invalid provision. 

	21. 	
      ASSIGNMENT



The Borrower may not assign, delegate or otherwise transfer any
of its obligations under this Note, whether by merger, consolidation or other
business combination, without the prior written consent of the Lender. The
Lender may assign all or any part of this Note without the consent of the
Borrower. 

	22. 	
      BINDING EFFECT



The Borrower represents and warrants that the execution and
delivery by the Borrower of this Note are within the Borrower’s corporate power
and authority and have been duly authorized by all necessary corporate actions.
This Note will enure to the benefit of and be binding upon the respective legal
representatives, successors and permitted assigns of the parties. 

	23. 	
      LEGAL INDEPENDENCE FROM THE ASSET PURCHASE
    AGREEMENT



Both Parties agree that even this document is signed in
conjunction with the Asset Purchase Agreement simultaneously; this document is
totally independent from the Asset Purchase Agreement. It should not be
construed as the performance of this document relies on the performance of the
Asset Purchase Agreement, unless otherwise expressly stipulated in such
document. Vice Versa, 

10 




IN WITNESS WHEREOF, the Borrower has made, executed and
delivered this Note effective as of the day first above written. 

HELIUS MEDICAL TECHNOLOGIES, INC. 


	Per: 	/s/
      Philippe Deschamps 
	  	Authorized Signatory 



A&B (HK) Company Limited 


	Per: 	/s/
      Lam Kong 
	  	Authorized Signatory 



11 




SCHEDULE A 
CONVERSION FORM 

TO: HELIUS MEDICAL TECHNOLOGIES, INC. 

All terms used herein but not defined shall have the meanings
ascribed thereto in the Note. 

Pursuant to Section 6 of the Note, the undersigned hereby
irrevocably elects to convert the Principal Amount of $ ____________________
into ____________________ Shares at the Conversion Price, and additionally issue
____________________ Warrants in accordance with the terms of the Note, and
directs that the Shares and Warrants issuable and deliverable upon the
conversion be issued and delivered to the person indicated below. 

Shares and Warrants issued on conversion are to be issued,
registered and delivered as follows: 

	Name: 	 


 

	(Address) 	(City,
      Province, Postal Code, and Country) 


DATED this ____ day of __________________________, 20
__. 


	By: 	 
	 	 
	 	 
	                     	   Per: