**Exhibit11.1**

 

**ADBSYSTEMS INTERNATIONAL LTD.**

** **

**CODEOF ETHICS**

** **

This Code of Ethics (the“Code of Ethics”) has been unanimously adopted by the Board of Directorsof ADB Systems International Ltd. (the “Company”) and is intended toapply to the Company’s chief executive officer, principal financial officer,principal accounting officer and controller, or any person performing similarfunctions.  References in this Code ofEthics to the Company means the Company or any of its subsidiaries.

 

# **I.**                                         Purpose ofCode of Ethics

# ** **

The purpose of this Codeof Ethics is to promote the honest and ethical conduct of the senior executive,financial and accounting officers of the Company (“employees,” herein),including the ethical handling of actual or apparent conflicts of interestbetween personal and professional relationships; full, fair, accurate, timelyand understandable disclosure in periodic reports required to be filed by theCompany; compliance with all applicable governmental rules and regulations;prompt internal reporting of violations of this Code of Ethics; andaccountability for adherence to this Code of Ethics.

 

# **II.**                                     Conflict ofInterest; Corporate Opportunity

# ** **

No employee shall,directly or indirectly, engage or participate in, or authorize, anytransactions or arrangements involving, or raising questions of, possibleconflict, whether ethical or legal, between the interests of the Company andthe personal interests of the employee or his or her family.  No employee shall take for himself orherself personally any opportunity that arises through the use of corporateproperty, information or position or shall use corporate property, informationor position for personal gain.

 

No employee or any memberof his or her family shall, directly or indirectly, acquire or hold anybeneficial interest of any kind in any firm or entity that does, or in therecent past did, business with the Company, or in any firm or entity which iscurrently or prospectively competing in any manner with the Company.  This prohibition shall not apply to theacquisition or holding of any security through a mutual fund or of any interestnot in excess of 2% of any class of securities listed on a national securitiesexchange or traded in an established over-the-counter securities market.  Activities and holdings that have theappearance of impropriety are also to be avoided.

 

For purposes of thispolicy, a member of an employee’s family shall include a spouse, parents,stepparents, in-laws, siblings, children, stepchildren and any other personresiding in the employee’s residence.

 

No employee or any memberof his or her family shall, directly or indirectly, seek, accept or retaingifts or other personal or business favors from any vendor, supplier orcustomer of the Company or from any individual or organization seeking to dobusiness with the Company.  A

 

----

 

personal benefit means any type of gift, gratuity, useof facilities, favor, entertainment, service, loan, fee or compensation oranything of monetary value.  Specificexceptions to this prohibition will be made if there is no reasonablelikelihood of improper influence in the performance of duties on the part ofthe employee on behalf of the Company and if the personal benefit falls intoone of the following categories:

 

•                                          normalbusiness courtesies, such as meals, involving no more than ordinary amenities;

 

•                                          paidtrips or guest accommodations in connection with proper Company business andwith the prior approval of the CEO or his designate;

 

•                                          feesor other compensation received from any organization in which membership or anofficial position is held only if approved by the CEO or his designate;

 

•                                          loansfrom financial institutions made in the ordinary course of their business oncustomary terms and at prevailing rates; or

 

•                                          giftsof nominal value (less than $200) during the holiday season.

 

No employee or any memberof his or her family may compete with the Company.  No employee or any member of his or her family may serve as adirector, officer, employee of or consultant to a competitor, vendor, supplieror other business partner of the Company without the prior written approval ofthe CEO or his designate.

 

No employee or any memberof his or her family who directly or indirectly owns a financial interest in,or has an obligation to, a competitor, supplier, customer or other businesspartner of the Company, which interest or obligation is significant to suchemployee or family member may conduct business with such entity or personwithout the prior written approval of the CEO or his designate.

 

No employee or any memberof his or her family may act as a broker, finder or other intermediary for hisor her benefit or for the benefit of any third party in a transaction involvingthe Company without the prior written approval of the CEO or his designate.

 

Gifts or entertainmentthat have an aggregate value in any year in excess of $200 are generallyconsidered to be excessive and shall not be accepted by the employee.  This prohibition would also apply to commoncourtesies and hospitalities if their scale or nature would in any way appearto affect the impartiality of the employee or imply a conflict ofinterest.  However, this prohibition isnot meant to preclude an employee’s acceptance of business entertainment thatis not intended to influence loyalty of the employee to the Company and, thatis reasonable in nature, frequency and cost; for example, a lunch, dinner oroccasional athletic, social or cultural event, or participation in corporatepromotional events.

 

An employee should makeevery effort to refuse to accept, or to return, any gift or gifts from asupplier, customer or other business partner exceeding $200 in value.  If the employee determines that the donorwould be insulted or embarrassed if the gift is refused or returned, a

 

2

----

 

conflict can nevertheless be avoided by promptlyreporting the gift to the employee’s superior and delivering to the employee’ssuperior the gift or a check payable to the Company for the fair value of the gift(which the Company will donate to charity).

 

***As a Senior Executive,Financial or Accounting Officer of the Company, it is imperative that you avoidany investment, interest or association that interferes, might interfere, ormight be thought to interfere, with your independent exercise of judgment inthe Company’s best interest.***

*** ***

# **III.**                                 Proper Accounting andFinancial Integrity; Accurate Periodic Reports

# ** **

All transactions must beexecuted only in accordance with management’s general or specific authorization.  The Company’s books, records and accountsmust reflect, accurately and fairly and within the Company’s regular system ofaccountability, all of the Company’s transactions and the acquisition anddisposition of its assets.  Alltransactions shall be accurately recorded to permit the preparation offinancial statements in conformity with generally accepted accountingprinciples consistently applied and other applicable rules, regulations andcriteria, and to insure full accountability for all assets and activities ofthe Company.  Under no circumstancesshall there be any unrecorded funds or assets of the Company, regardless of thepurposes for which such fund or asset may have been intended, or any improperor inaccurate entry, knowingly made on the books and records of theCompany.  No payment on behalf of theCompany shall be approved or made with the intention or understanding that anypart of such payment is to be used for a purpose other than that described bythe documents supporting the payment.

 

All employees mustcooperate fully with the Company’s internal audit staff, independent auditorsand counsel to enable them to discharge their responsibilities to the fullestextent.

 

As you are aware, full,fair, accurate, timely and understandable disclosure in our periodic reportsfiled with the United States Securities and Exchange Commission (“SEC”)and the Toronto Stock Exchange (“TSX”) is required by SEC and TSX rulesand is essential to our continued success. Please exercise the highest standard of care in preparing such reportsin accordance with these guidelines, including, without limitation, thefollowing:

 

•                                          AllCompany accounting records, as well as reports produced from those records,must be kept and presented in accordance with the laws of each applicablejurisdiction.

 

•                                          Allrecords must fairly and accurately reflect the transactions or occurrences towhich they relate.

 

•                                          Allrecords must fairly and accurately reflect in reasonable detail the Company’sassets, liabilities, revenues and expenses.

 

•                                          TheCompany’s accounting records must not contain any intentionally false orintentionally misleading entries.

 

3

----

 

•                                          Notransaction may be intentionally misclassified as to accounts, departments oraccounting periods.

 

•                                          Alltransactions must be supported by accurate documentation in reasonable detailand recorded in the proper account and in the proper accounting period.

 

•                                          Noinformation may be concealed from the internal auditors or the independentauditors (or the Audit Committee or Board of Directors).

 

•                                          Compliancewith Generally Accepted Accounting Principles and the Company’s system ofinternal accounting controls is required at all times.

 

# **IV.**                                Compliance with Laws,Rules and Regulations

# ** **

Recognition of the publicinterest must be a permanent commitment of the Company in the conduct of itsaffairs.  The activities of the Companyand all of its employees, acting on its behalf must always be in full compliancewith both the letter and spirit of all laws, rules and regulations applicableto our business.  Furthermore, noemployee should assist any third party in violating any applicable law, rule orregulation.  This principle applieswhether or not such assistance is, itself, unlawful.  All employees must respect and obey the laws of the cities,states and countries in which we operate and avoid even the appearance ofimpropriety.  When there is a doubt asto the lawfulness of any proposed activity, advice must be sought from the CEOor his designate.

 

Violation of applicablelaws, rules or regulations may subject the Company, as well as any employeesinvolved, to severe adverse consequences, including imposition of injunctions,monetary damages (which could far exceed the value of any gain realized as aresult of the violation, and which may be tripled in certain cases), fines andcriminal penalties, including imprisonment. In addition, actual or apparent violations of applicable laws, rules andregulations by the Company or its employees can undermine the confidence of theCompany’s customers, investors, creditors and bankers, as well as that of thegeneral public.  Employees who fail tocomply with this Code of Ethics and applicable laws will be subject todisciplinary measures up to and including termination of employment from theCompany.

 

# **V.**                                    InternalCommunication and Enforcement of Policy

# ** **

Communication of thepolicies contained in this Code of Ethics will be made to all applicableemployees of the Company who will be required to sign the attachedAcknowledgement of Receipt and Understanding at least annually.

 

It is important that eachemployee comply not only with the letter but, equally importantly, the spiritof these policies.  If you believe thatone of the Company’s employees is acting in a manner that is not in compliancewith this policy, or that you have been requested to so act in such a manner,you should immediately bring this matter to the attention of the CEO or hisdesignate.  In order to encourageuninhibited communication of such matters, such

 

4

----

 

communications will be treated confidentially to thefullest extent possible and no disciplinary or other retaliatory action will betaken against an employee who communicates such matters.

 

# **VI.**                                Effects of Failure toComply

# ** **

Any questions regardingthis Code of Ethics or its application should be discussed with the CEO or hisdesignate.

 

Conduct violative of thisCode of Ethics is expressly outside the employee’s scope of employment.  Any employee whose conduct violates thisCode of Ethics will be subject to disciplinary action by the Company,including, in the Company’s discretion, discharge and/or forfeiture of anybenefits or rights (including contractual rights) which, under applicable law,are forfeitable upon discharge for cause, and to the enforcement of such otherremedies as the Company may have under applicable law.

 

# **VII.**                            Amendments to and Waiversof the Code of Ethics

# ** **

Any amendment to orwaiver of this Code of Ethics will be made only by the Board of Directors andnotified in writing and will be promptly disclosed as required by law or stockexchange regulation.

 

* * *

 

5

----

 

**ACKNOWLEDGEMENTOF RECEIPT AND UNDERSTANDINGOFCODE OF ETHICS**

** **

I hereby acknowledge thatI have been provided with a copy of the Code of Ethics of ADB SYSTEMSINTERNATIONAL LTD.  I furtheracknowledge that I have read the Code of Ethics in its entirety and that Iunderstand it.  I agree to observe thepolicies and procedures contained in the Code of Ethics and have been advisedthat, if I have any questions or concerns relating to such policies orprocedures, I should discuss them with the Human Resources Department.  I understand that failing to abide by theCode of Ethics of ADB SYSTEMS INTERNATIONAL LTD. could lead to disciplinaryaction up to and including termination of employment.  I also understand that no one other than the Board of Directorshas the authority to waive any provision of the Code of Ethics and that anywaiver must be in writing.

 

My signature belowindicates my understanding of the Code of Ethics of ADB SYSTEMS INTERNATIONALLTD. and my agreement to abide by the policies and procedures containedtherein.

 

 
|               |   |   |   |
|--------------------|--------|--------|--------|
| Employee Signature | Date   |
|               |   |
|               |   |
|               |   |   |
| Print Name         |   |

 

6

----