Document:

Form of Series J Convertible Secured Debenture

    

      EXHIBIT
        4.24

       

      UNLESS
        PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
        NOT
        TRADE THE SECURITY BEFORE JUNE ___, 2006.

       

      ADB
        SYSTEMS INTERNATIONAL LTD.

       

      (Organized
        under the laws of Ontario)

       

      Series
        (J) Convertible Secured Debenture

       

      
        	
                Date
                  of Issue:
                  February ____, 2006

              	
                Cdn.
                  $•

              
	
                Interest
                  Rate:
                  11.0% per annum

              	
                Certificate
                  Number:
                  [J-•]

              

      

       

      ADB
        SYSTEMS INTERNATIONAL LTD. (the “Corporation”),
        for value received, hereby acknowledges itself indebted to and promises to
        pay •
(the “Registered
        Holder”)
        on February _____, 2011 (the “Maturity
        Date”)
        or on such earlier date as the principal hereof becomes payable in accordance
        with the provisions of this Debenture (as defined herein), on presentation
        and
        surrender of this Debenture, the principal sum of $• in lawful money of Canada,
        at the address of the Registered Holder set forth on the register of the
        Corporation to be maintained as provided in the terms and conditions attached
        hereto as Schedule “A” and forming part hereof (the “Terms
        and Conditions”),
        subject to the right of the Registered Holder in certain circumstances to
        elect
        to receive Units (as defined herein) of the Corporation in lieu of receiving
        such sum, as provided in the Terms and Conditions, and to pay interest on
        such
        principal amount as provided in the Terms and Conditions. The Terms and
        Conditions are hereby incorporated by reference herein.

       

      This
        Debenture is convertible, at the option of the Registered Holder into Units,
        upon and subject to the provisions and conditions contained in the said Terms
        and Conditions. The Schedules and the Exhibits attached hereto are incorporated
        in this Debenture by reference and are deemed to be an integral part
        hereof.

       

      IN
        WITNESS WHEREOF
        the Corporation has caused this Debenture to be executed under the hand of
        its
        duly authorized officer as of the ____ day
        of February, 2006.

       

      
        	
                ADB
                  SYSTEMS INTERNATIONAL LTD.

              
	
                 

                Per:

              	
                 

                 

              
	 	
                Authorized
                  Signing Officer

              

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      SCHEDULE
        “A”

       

      Terms
        and Conditions applicable to

      Series
        ‘J’ Convertible Secured Debentures

      dated
        as of February____, 2006 issued by

      ADB
        SYSTEMS INTERNATIONAL LTD.

       

      ARTICLE
        1-
        INTERPRETATION

       

      1.1        Defined
        Terms

      
            In
        addition to the
        terms parenthetically defined herein, in this Debenture the following terms
        shall have the following meanings respectively:

       

      “Business
        Day”
        means any day, other than Saturday, Sunday or any statutory holiday in the
        City
        of Toronto;

       

      “Capital
        Reorganization”
        has the meaning attributed to such term in subsection 4.3(4);

       

      “Closing
        Date”
        means February _____, 2006;

       

      “Closing
        Market Price”
        at any date means the closing price per share for Common Shares on or through,
        as applicable, the Principal Market;

       

      “Collateral”
        has the meaning attributed to such term in the General Security
        Agreement;

       

      “Common
        Share Reorganization”
        has the meaning attributed to such term in subsection 4.3(1);

       

      “Common
        Shares”
        means the common shares without nominal or par value in the capital of the
        Corporation, as such shares exist as at the Date of Issue; provided that,
        in the
        event of a subdivision, redivision, reduction, combination or consolidation
        thereof, or successive such subdivisions, redivisions, reductions, combinations
        or consolidations, then, subject to adjustments, if any, having been made
        in
        accordance with Section 4.3, “Common
        Shares”
        shall thereafter mean the shares resulting from such subdivision, redivision,
        reduction, combination or consolidation;

       

      “Conversion”
        has the meaning attributed to such term in subsection 4.1(1);

       

      “Conversion
        Price” has
        the meaning attributed to such term in Section 4.1(2);

       

      “Date
        of Issue” means
        the date hereof;

       

      “Date
        of Conversion” has
        the meaning attributed to such term in subsection 4.2(2);

       

      “Debentures”
        means
        the Series J secured convertible debentures of the Corporation due on February
        ____, 2011, including this Debenture;

       

      “Event
        of Default” has
        the meaning attributed to such term in the General Security
        Agreement;

       

      “General
        Security Agreement”
        means the general security agreement granted by the Corporation in favour
        of the
        Holders, pursuant to which the Corporation shall grant a security interest
        in
        the Collateral in favour of the Holders);

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “Generally
        Accepted Accounting Principles”
        means generally accepted accounting principles in Canada from time to
        time;

       

      “Hold
        Period”
        means four months and one day from the Closing Date;

       

      “Holders”
        means
        the registered holders from time to time of the Debentures, including the
        Registered Holder;

       

      “including”
        means including without limitation;

       

      “Initial
        Period”
        means the period commencing on the Closing Date and ending on the date which
        is
        12 months following the Closing Date;

       

      “Interest
        Rate” means
        11% per annum, calculated and payable as set forth in Section 2.3
        hereof;

       

      “Maturity
        Date” has
        the meaning attributed to such term in Section 2.4 hereof;

       

      “Obligations”
        means the aggregate of all indebtedness, obligations and liabilities, direct
        or
        indirect, absolute or contingent, matured or not, of the Corporation to the
        Registered Holder wheresoever and howsoever incurred and whether incurred
        arising pursuant to this Debenture and whether incurred at the time of, or
        subsequent to the execution hereof, whether incurred alone or with another
        or
        others, including extensions and renewals;

       

      “Offering”
        means the non-brokered best efforts private placement offering of up to $900,000
        principal amount of Debentures by the Corporation to purchasers resident
        in
        Ontario, Alberta and other jurisdictions outside of North America;

       

      “Ontario
        Act”
        means the Securities
        Act
        (Ontario);

       

      “Permitted
        Security Interests” has
        the meaning attributed to such term in the General Security
        Agreement;

       

      “Person”
        means any individual, partnership, limited partnership, joint venture,
        syndicate, sole proprietorship, company or corporation with or without share
        capital, unincorporated association, trust, trustee, executor, administrator
        or
        other legal personal representative, government or governmental authority
        or
        entity, however designated or constituted;

       

      “PPSA”
        means the Personal
        Property Security Act
        (Ontario) as the same may from time to time hereafter be amended or any
        legislation that may be substituted therefor as the same may from time to
        time
        be amended;

       

      “Principal
        Market”
        means such stock exchange or quotation system on or through which the Common
        Shares are listed or quoted which has the highest trading volume in the calendar
        month immediately preceding the applicable date, being as at the date hereof
        the
        TSX;

       

      “Pro
        Rata Basis”
        means, in respect of a Holder, the percentage determined by dividing (i)
        the
        outstanding principal amount of the Holder’s Debenture by (ii) the aggregate
        outstanding principal amount of all Debentures;

       

      
        
          
          

        

        
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      “Rights
        Offering”
        and “Rights
        Period”
        have the respective meanings attributed to such terms in subsection
        4.3(2);

       

      “Security
        Interest”
        means, collectively, the mortgage, charge, pledge, assignment and transfer
        of,
        and the security interest in, the Collateral granted to the Holders by the
        Corporation pursuant to the General Security Agreement;

       

      “Subsequent
        Period”
        means the period commencing on the date that is 12 months and one day following
        the Closing Date and ending on the date which is 5 years following the Closing
        Date;

       

      “Successor
        Corporation”
        means any corporation continuing from and which acquires all or substantially
        all of the undertaking, property and assets of any other corporation pursuant
        to
        any Capital Reorganization;

       

      “Time
        of Expiry”
        means 5:00 p.m. (Toronto time) on the Maturity Date;

       

      “Trading
        Day”
        means a day on which the Principal Market is open for the trading of
        securities;

       

      “Transfer
        Form”
        means the form of transfer annexed as Exhibit 1 hereto;

       

      “TSX”
        means the Toronto Stock Exchange;

       

      “Unit”
        means
        a unit of securities issuable on Conversion in accordance with Article 4
        hereof,
        each such Unit, subject to adjustment as provided in this Debenture, to be
        comprised of one Common Share and one Warrant; 

       

      “U.S.
        Securities Act”
        means the United States Securities Act of 1993, as amended; and

       

      “Warrant”
        means a Common Share purchase warrant to acquire, subject to adjustments
        as
        provided in the certificates representing the Warrants, one Common Share
        at an
        exercise price of $0.20, any time prior to the earlier of (i) the third year
        anniversary of the Closing Date and (ii) the date which is sixty (60) days
        following the issuance of a notice by the Corporation to holders confirming
        that
        the closing price of the common shares of the Corporation on the Toronto
        Stock
        Exchange was greater than or equal to $0.35 for any 10 consecutive trading
        days,
        following the 4 months and one day hold period from the date of issuance
        of the
        Warrant.

       

      1.2        Statutory
        References; Terms defined by the PPSA

       

                  Any
        reference in this
        Debenture to a statute shall be deemed to be a reference to such statute
        as
        amended, re-enacted or replaced from time to time. Unless there is something
        in
        the context or subject matter inconsistent therewith, words and phrases not
        otherwise herein defined that are defined by the PPSA shall have the meanings
        ascribed thereto respectively by the PPSA.

       

      1.3        Gender
        and Number

       

                  Unless
        the context
        otherwise requires, words importing the singular include the plural and
        vice-versa and words importing gender include all genders.

       

      
        
          
          

        

        
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      1.4        Monetary
        References

       

                  Any
        reference in this
        Debenture to “Dollars”, “dollars” or the symbol “$” shall be deemed to be a
        reference to lawful money of Canada.

       

      1.5        Day
        Not a Business Day

       

                  In
        the event that any
        day on which any action is required to be taken hereunder is not a Business
        Day,
        then such action shall be required to be taken on the requisite time on the
        first Business Day thereafter.

       

      1.6        Invalidity
        of Provisions

       

                  Each
        of the
        provisions contained in this Debenture is distinct and severable and a
        declaration of invalidity or unenforceability of any such provision by a
        court
        of competent jurisdiction shall not affect the validity or enforceability
        of any
        other provision hereof or thereof.

       

      1.7        Governing
        Law

       

                  This
        Debenture shall
        be governed by and construed in accordance with the PPSA and the other laws
        of
        the Province of Ontario and the laws of Canada applicable therein and shall
        be
        treated in all respects as an Ontario contract.

       

      1.8        Assignment

       

                  Subject
        to the
        restrictions on, and requirements for, transfer prescribed herein, the rights
        and obligations of the Corporation and the Holders shall be binding upon
        and
        shall enure to the benefit of their respective successors, heirs, executors,
        administrators and permitted transferees and assigns.

       

       

      ARTICLE
        2-
        THE DEBENTURES

       

      2.1        Debentures
        in Series

       

                  This
        Debenture is one
        of a series of convertible debentures issued by the Corporation, designated
        as
“Series J Convertible Secured Debentures”. The maximum aggregate principal
        amount of the Debentures to be issued by the Corporation is $900,000
        pursuant to the Offering.

       

      2.2        Denominations

       

                  Debentures
        shall be
        issued in denominations of $1,000 and integral multiples thereof.

       

      2.3        Terms
        of Debentures

       

                  All
        Debentures shall
        bear simple interest at the Interest Rate from the Date of Issue (or, if
        issued
        after the Date of Issue, from the actual date of issuance thereof) to the
        earlier of the Maturity Date and the Date of Conversion (in respect of the
        Debentures then being Converted). Interest on the Debentures shall accrue
        on the
        outstanding principal amount of the Debentures from day to day both before
        and
        after default, demand, maturity and judgment, for the actual number of days
        elapsed on the basis of a year of 

       

      
        
          
          

        

        
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      365
        days. Where the calendar year of calculation contains 366 days, interest
        hereunder shall be expressed as a yearly rate for purposes of the Interest
        Act
        (Canada) as such rate multiplied by 366 and divided by 365. Such interest
        shall
        be calculated and payable in arrears as follows:

       

      
        	
                (a)

              	
                for
                  interest owing in respect of the Initial Period, upon the earlier
                  of:

              

      

       

                      (i)    the
        Date of
        Conversion (in respect of the principal amount of the Debentures then being
        Converted); and 
               

                      (ii)   the
        date which is 12 months following the Closing Date (in respect of the principal
        amount of the Debentures then outstanding, if any, on such date);
        and

       

      
        	
                (b)

              	
                for
                  interest owing in respect of the Subsequent Period, upon the earlier
                  of:

              

      

       

                      (i)    the
        Date of Conversion (in respect of the principal amount of the Debentures
        then
        being Converted); and

       

                      (ii)    the
        Maturity Date (in respect of the principal amount of the Debentures then
        outstanding, if any, on the Maturity Date),

       

      and,
        for greater certainty, shall be payable as well after as before
        default.

       

      Interest
        owing in respect of the Subsequent Period is payable in cash by cheque or
        money
        order. Interest owing in respect of the Initial Period is payable in full
        by the
        issuance of a number of Common Shares calculated pursuant to the following
        formula:

       

                  A÷B,
        where:

       

      A=
        the accrued interest payable (in dollars); and

       

                  B
        = the volume
        weighted average trading price of the Common Shares over the 20 day trading
        period ending at the close of business on the day prior to the date on which
        the
        interest payment is due, reduced by the maximum percentage discount permitted
        by
        the Toronto Stock Exchange, 

       

      provided
        that the maximum aggregate number of Common Shares issuable pursuant to the
        above-noted calculation is 6,529,959 and in the event the Corporation is
        obligated to, and cannot, issue any further Common Shares over and above
        6,529,959, it shall satisfy the balance of the interest payment owing in
        cash by
        paying the amount calculated as (i) the total amount of accrued interest
        payable, less (ii) the value of the Common Shares issued in satisfaction
        of
        interest payments.

       

      2.4        Maturity
        Date

       

                  Subject
        to Section
        2.5, the Debentures shall mature and the principal hereof shall become payable
        on February ____, 2011 (the “Maturity
        Date”).

       

      
        
          
          

        

        
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      2.5        Debentures
        to Rank Equally

       

                  This
        Debenture shall
        rank equally with all other Debentures of the same series and be equally
        and
        rateably entitled to the benefits hereof as if all the Debentures had been
        issued and negotiated simultaneously. 

       

      2.6        Registration
        of Debentures

       

      (1)        The
        Corporation shall cause to be kept by and at the principal office of the
        Corporation in the City of Toronto a register in which shall be entered the
        names and latest known addresses of the Holders of this and all other Debentures
        and the other particulars, as prescribed by law, of the Debentures held by
        them
        respectively and of all transfers of Debentures. Such registration shall
        be
        noted on the Debentures by the Corporation. No transfer of a Debenture shall
        be
        effective as against the Corporation unless made on the register by the
        Registered Holder or his executors or administrators or other legal
        representatives or his or their attorney duly appointed by an instrument
        in form
        and execution reasonably satisfactory to the Corporation and upon compliance
        with such requirements as the Corporation may reasonably prescribe, and unless
        such transfer shall have been duly noted on such Debenture by the
        Corporation.

       

      (2)        The
        register referred to in this section shall at all reasonable times be open
        for
        inspection by the Holders.

       

      (3)        Subject
        to any restriction under applicable law or policy of any applicable regulatory
        body, any Holder may at any time and from time to time have such Debenture
        or
        any portion of the principal amount thereof transferred at the place at which
        the register is kept pursuant to the provisions of this section in accordance
        with such reasonable regulations as the Corporation may prescribe. The
        transferor of such Debenture or any portion of the principal amount thereof
        shall duly complete and exercise a Transfer Form.

       

      (4)        The
        Corporation shall not be charged with notice of or be bound to see to the
        execution of any trust, whether express, implied or constructive, in respect
        of
        any Debenture, except where the Corporation is required to take notice by
        statute or order of a court of competent jurisdiction and may transfer any
        Debenture on the direction of the Holder thereof, whether named as trustee
        or
        otherwise, as though that Person were the beneficial owner thereof.

       

      (5)        The
        Corporation shall not register any transfers of the Debenture or issue or
        transfer any Units issuable on conversion of the Debenture: 

       

      
        	
              	(i)	
                        to
                  any
                  person in the United States or a resident of the United States
                  or any
                  person for the account or benefit of any person in the United States
                  or a
                  resident of the United States except pursuant to Rule 144 under
                  the U.S.
                  Securities Act, if available; 

              

      

       

      
        	
              	(ii)	
                        in
                  connection with any transfers or conversions which are otherwise
                  not in
                  compliance with (a) the U.S. Securities Act and the regulations
                  thereunder
                  if applicable, (b) the Ontario
                  Act
                  and the rules and regulations thereunder, (c) applicable securities
                  laws
                  and regulations of other relevant jurisdictions, or (d) the policies
                  of
                  the TSX; and 

              

      

       

      
        
          	
                	(iii)	
                          within
                    four months and a day from the Date of Issue, unless the Corporation
                    and
                    its legal counsel are satisfied, acting reasonably, that it is
                    permitted
                    under Ontario securities laws and under the policies of the TSX.
                    

                

        

      

       

       

      
        
          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

       

      The
        Holder acknowledges that this Debenture and the securities underlying the
        Debenture are subject to resale restrictions which provide that this Debenture
        and such securities may not be resold or otherwise distributed until a period
        of
        at least four (4) months and one day have elapsed from the Date of Issue
        except
        as permitted by applicable securities laws and acknowledges that the
        certificates representing the Debenture and if the Debenture is Converted
        or if
        the any of the Warrants are exercised prior to the expiry of such hold period,
        the Common Shares issuable upon Conversion, the Warrants and the Common Shares
        underlying the Warrants will bear the following legend denoting the restrictions
        on transfer under applicable securities laws, in addition to any other legends
        required by the TSX or other stock market on which such securities may
        trade:

       

      “UNLESS
        PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
        NOT
        TRADE THE SECURITY BEFORE [4 MONTHS AND ONE DAY FROM THE DATE OF ISSUANCE
        OF THE
        DEBENTURE].”

       

      2.7        Ownership
        of Debentures

       

      (1)        The
        Holder of a Debenture shall be deemed to be the owner thereof for all purposes
        and payment of or on account of the principal of a Debenture shall be made
        only
        to or upon the order in writing of the Holder thereof and such payment shall
        be
        a complete discharge to the Corporation and any paying agent for the amounts
        so
        paid.

       

      (2)        The
        Holder for the time being of any Debenture shall be entitled to the principal
        evidenced by such Debenture, free from all equities or rights of set-off
        or
        counterclaim between the Corporation and the original or any intermediate
        Holder
        thereof (except any equities of which the Corporation is required to take
        notice
        by law) and all Persons may act accordingly and a transferee of a Debenture
        shall, after the Transfer Form is lodged with the Corporation and upon
        compliance with all other conditions contained in such Debenture or by law
        or by
        any policy of any regulatory body, be entitled to be entered on the register
        as
        the owner of such Debenture free from all equities or rights of set-off or
        counterclaim between the Corporation and the transferor or any previous Holder
        thereof, save in respect of equities of which the Corporation is required
        to
        take notice by statute or by order of a court of competent jurisdiction.
        Delivery to the registered Holder by the Corporation or the receipt by the
        Holder of the principal monies and interest evidenced by this Debenture and
        the
        units issuable pursuant to this Debenture, if any, shall be a good discharge
        to
        the Corporation of its obligations hereunder and the Corporation shall not
        be
        bound to enquire into the title of the Registered Holder, save as ordered
        by a
        Court of competent jurisdiction or as required by statute.

       

      2.8        Exchange
        of Debentures

       

      (1)        Debentures
        of any denomination may be exchanged for Debentures of any other authorized
        denomination or denominations, any such exchange to be for Debentures of
        an
        equivalent aggregate principal amount. Exchanges of Debentures may be made
        at
        the principal offices of the Corporation in the City of Toronto.

       

      (2)        Except
        as otherwise provided herein, upon any exchange of Debentures of any
        denomination for Debentures of any other authorized denominations and upon
        any
        transfer of Debentures, the Corporation or other registrar of Debentures
        may
        make a sufficient charge to reimburse it for any stamp tax, security transfer
        tax or other governmental charge required to be paid, and payment of such
        charge
        shall be made by the party requesting such exchange or transfer as a condition
        precedent thereto.

       

      
        
          
          

        

        
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      2.9        Replacement
        of Debentures

       

                  If
        any of the
        Debentures shall become mutilated or be lost, stolen or destroyed and in
        the
        absence of notice that such Debentures have been acquired by a good faith
        purchaser within the meaning of the Business
        Corporations Act
        (Ontario), the Corporation will issue and deliver a new Debenture upon surrender
        and cancellation of the mutilated Debenture, or, in the case of a lost, stolen
        or destroyed Debenture, in lieu of and in substitution for the same. In case
        of
        loss, theft or destruction, the applicant for a new Debenture shall furnish
        to
        the Corporation such evidence of such loss, theft or destruction as shall
        be
        satisfactory to the Corporation in its discretion and shall also furnish
        an
        indemnity in amount and form satisfactory to the Corporation in its sole
        discretion. The applicant shall pay all reasonable expenses incidental to
        the
        issuance of any such new Debenture.

       

      ARTICLE
        3-
        PURCHASE FOR CANCELLATION OF DEBENTURES

       

      3.1        Purchase
        of Debentures for Cancellation

       

                  The
        Corporation may
        purchase all or any of the Debentures in the market (which shall include
        purchase from or through an investment dealer or a firm holding membership
        on a
        recognized stock exchange) or by invitation for tenders or by private contract;
        provided that the price at which any Debenture may be so purchased shall
        not
        exceed the outstanding principal amount of such Debenture.

       

                  If,
        upon an
        invitation for tenders, more Debentures are tendered at the same price than
        the
        Corporation is prepared to accept, the Debentures to be purchased by the
        Corporation shall be selected by lot, or in such other manner as the Corporation
        may consider equitable, from the Debentures tendered by each Holder who tendered
        at such lowest price. The Holder of any Debenture of which a part only is
        purchased, upon surrender of such Debenture for payment, shall be entitled
        to
        receive, without expense to such Holder, one or more new Debentures for the
        unpurchased part so surrendered and the Corporation shall issue and deliver
        such
        new Debenture or Debentures upon receipt of the Debenture so
        surrendered.

       

      ARTICLE
        4-
        CONVERSION

       

      4.1        Conversion

       

      (1)        The
        conversion price is $0.15 (the “Conversion
        Price”)
        for each Unit to be issued upon the Conversion of the Debentures, unless
        such
        price shall have been adjusted as provided in this Article, in which case
        the
        Conversion Price shall mean the price as so adjusted and in effect at such
        time.

       

      (2)        Subject
        to and upon compliance with the provisions of this Article 4, the Holder
        of each
        Debenture shall have the right, at his option, at any time prior to the Time
        of
        Expiry, to convert such Debenture or any portion of the principal amount
        thereof
        which is $1,000 or an integral multiple of $1,000, into Units at the Conversion
        Price (a “Conversion”).

       

      (3)        In
        the event of a Conversion, the accrued and unpaid interest on the principal
        amount of a Holder’s Debenture which is Converted to Units pursuant to this
        Section 4.1 will be paid in cash or Common Shares, as applicable pursuant
        to
        Section 2.3 above, within 10 Business Days of the Date of
        Conversion.

       

      
        
          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

      4.2        Manner
        of Exercise or Deemed Exercise of Right to Convert

       

      (1)        The
        Holder of a Debenture wishing to Convert such Debenture in whole or in part
        into
        Units shall surrender such Debenture to the Corporation at its principal
        office
        in the City of Toronto, together with written notice in form and substance
        satisfactory to the Corporation substantially in the form of Exhibit “2” annexed
        hereto, duly executed by the Holder, his executors, administrators, other
        legal
        representatives or his or their attorney duly appointed by an instrument
        in form
        and substance satisfactory to the Corporation, exercising his right to convert
        such Debenture in accordance with the provisions of this Article. Thereupon
        such
        Holder or, subject to payment of all applicable stamp taxes, security transfer
        taxes or other governmental charges and compliance with all reasonable
        requirements of the Corporation, his nominee or assignee, shall be entitled
        to
        be entered in the books of the Corporation as at the Date of Conversion (or
        such
        later date as is specified in subsection 4.2(2)) as the registered holder
        of the
        numbers of Common Shares and Warrants into which such Debenture is convertible
        in accordance with the provisions hereof and, as soon as practicable thereafter,
        the Corporation shall deliver to such Holder or, subject as aforesaid, his
        nominee or assignee certificates for such Common Shares and Warrants and
        a
        cheque for any amounts payable under Sections 2.3, 4.1(3) or 4.5.

       

      (2)        For
        the purposes hereof, a Debenture shall be deemed to be surrendered for
        conversion on the date (the ”Date
        of Conversion”)
        which is the date on which it is so surrendered in accordance with the
        provisions hereof and, in the case of a Debenture so surrendered by mail
        or
        other means of delivery, on the date on which it is received by the Corporation
        at its office specified in subsection 4.2(1), provided that if a Debenture
        is
        surrendered for Conversion on a day on which the register of Common Shares
        is
        closed, the Person entitled to receive Units shall become the holder of record
        of such Common Shares and Warrants as at the date on which such register
        is next
        reopened.

       

      (3)        Any
        part, being $1,000 or an integral multiple thereof, of a Debenture may be
        Converted as provided herein and all references in this Debenture to Conversion
        of Debentures shall be deemed to include Conversion of such parts. The Holder
        of
        any Debenture of which part only is Converted shall, upon the exercise of
        his
        right of Conversion, surrender such Debenture to the Corporation, and the
        Corporation shall cancel the same and shall forthwith issue and deliver to
        the
        Holder a new Debenture or Debentures in an aggregate principal amount equal
        to
        the unconverted part of the principal amount of the Debenture so
        surrendered.

       

      (4)        The
        Common Shares issued upon Conversion shall rank only in respect of dividends
        declared in favour of holders of record of Common Shares on or after the
        Date of
        Conversion or such later date as such Holder shall become the holder of record
        of such Common Shares pursuant to subsection 4.2(2), from which applicable
        date
        they will for all purposes be and be deemed to be issued and outstanding
        as
        fully paid and non-assessable Common Shares.

       

      4.3        Adjustment
        of Conversion Price

       

      The
        Conversion Price will be subject to adjustment from time to time in the events
        and in the manner provided as follows:

       

      (1)        If
        and whenever at any time after the date hereof, and prior to the Time of
        Expiry,
        the Corporation:

       

      (i)        issues
        Common Shares or securities exchangeable for or convertible into Common Shares
        to all or substantially all the holders of Common Shares as a stock

      
        
          
          

        

        
          A-9

          
            

          

        

        
          
          

        

      

      dividend
        or other distribution (other than an issue of Common Shares to holders of
        Common
        Shares pursuant to a right granted to such holders to receive such Common
        Shares
        in lieu of dividends paid in the ordinary course);

       

      (ii)        subdivides
        its outstanding Common Shares into a greater number of Common Shares;
        or

       

      (iii)        consolidates
        its outstanding Common Shares into a smaller number of Common
        Shares,

       

      (any
        of such events in clauses (i), (ii) and (iii) of this subsection being called
        a
“Common
        Share Reorganization”),
        then the Conversion Price shall be adjusted effective immediately after the
        effective date or record date for the happening of a Common Share
        Reorganization, as the case may be, at which the holders of Common Shares
        are
        determined for the purpose of the Common Share Reorganization by multiplying
        the
        Conversion Price in effect immediately prior to such effective date or record
        date by a fraction, the numerator of which will be the number of Common Shares
        outstanding on such effective date or record date before giving effect to
        such
        Common Share Reorganization and the denominator of which will be the number
        of
        Common Shares outstanding immediately after giving effect to such Common
        Share
        Reorganization (including, in the case where securities exchangeable for
        or
        convertible into Common Shares are distributed, the number of Common Shares
        that
        would have been outstanding had all such securities been exchanged for or
        converted into Common Shares on such effective date or record
        date).

       

      (2)        If
        and whenever at any time after the date hereof, and prior to the Time of
        Expiry,
        the Corporation fixes a record date for the issue of rights, options or warrants
        to all or substantially all the holders of Common Shares (the “Rights”)
        under which such holders are entitled, during a period expiring not more
        than
        forty-five (45) days after the date of such issue (the “Rights
        Period”),
        to subscribe for or purchase Common Shares (or securities convertible into
        Common Shares) at a price per share to the holder (or at an exchange or
        conversion price per share during the Rights Period to the holder in the
        case of
        securities exchangeable for or convertible into Common Shares) of less than
        95%
        of the price (the “Current
        Market Price”)
        which is equal to the average Closing Market Price for the period of 20 Trading
        Days immediately preceding such record date (any of such events being called
        a
“Rights
        Offering”),
        then the Conversion Price shall be adjusted effective immediately after the
        end
        of the Rights Period to a price determined by multiplying the Conversion
        Price
        in effect on such record date by a fraction:

       

      (iv)        the
        numerator of which will be the aggregate of:

       

                (1)    the
        number of Common Shares outstanding as of the record date for the Rights
        Offering; plus

       

       
        (2)    a
        number determined by dividing (a) the product of the number of Common Shares
        issued or subscribed for during the Rights Period upon the exercise of the
        rights, warrants or options under the Rights Offering and the price at which
        such Common Shares are offered by (b) the Current Market Price of the Common
        Shares as of the record date for the Rights Offering, and

       

      (v)        the
        denominator of which will be the number of Common Shares outstanding after
        giving effect to the Rights Offering and including the number of Common Shares
        

       

       

      
        
          
          

        

        
          A-10

          
            

          

        

        
          
          

        

      

                  actually
        issued or
        subscribed for during the Rights Period upon exercise of the rights, warrants
        or
        options under the Rights Offering.

       

      Any
        Holder who has exercised the right to Convert in accordance with this Article
        4
        during the period beginning immediately after the record date for a Rights
        Offering and ending on the last day of the Rights Period for the Rights Offering
        will, in addition to the Common Shares and Warrants to which that Holder
        would
        otherwise be entitled upon such Conversion, be entitled to that number of
        additional Common Shares equal to the difference between the shares received
        on
        such Conversion and the shares that would have been received if the Conversion
        Price as adjusted for such Rights Offering pursuant to this subsection had
        applied when the Holder exercised the right to Convert; provided that the
        provisions of Section 4.5 will be applicable to any fractional interest in
        a
        Common Share to which such Holder might otherwise be entitled under the
        foregoing provisions of this subsection. Such additional Common Shares will
        be
        deemed to have been issued to the Holder immediately following the end of
        the
        Rights Period and a certificate for such additional Common Shares will be
        delivered to such Holder within five Business Days following the end of the
        Rights Period. To the extent that any such rights, options or warrants are
        not
        so exercised on or before the expiry thereof, the Conversion Price will be
        readjusted to the Conversion Price which would then be in effect based on
        the
        number of Common Shares (or the securities convertible into or exchangeable
        for
        Common Shares) actually delivered on the exercise of such rights, options
        or
        warrants.

       

      (3)        If
        and whenever at any time after the date hereof and prior to the Time of Expiry,
        the Corporation fixes a record date for the issue or the distribution to
        all or
        substantially all the holders of Common Shares of (i) securities of the
        Corporation, including rights, options or warrants to acquire securities
        of the
        Corporation or any of its property or assets and including evidences of
        indebtedness or (ii) any property or other assets, including evidences of
        indebtedness, and if such issuance or distribution does not constitute (A)
        a
        dividend paid in the ordinary course; (B) a Common Share Reorganization;
        (C) a
        Rights Offering; or (D) the
        issue of Rights to the holders of all or substantially all of its outstanding
        Common Shares under which such holders are entitled to subscribe for or purchase
        Common Shares or securities exchangeable for or convertible into Common Shares
        during the Rights Period, where the
        cost per Common Share during the Rights Period, is 95% or more of the Current
        Market Price (any
        of such non-excluded events being called a “Special Distribution”), the
        Conversion Price shall be adjusted effective immediately after such record
        date
        to a price determined by multiplying the Conversion Price in effect on such
        record date by a fraction:

       

      (vi)    the
        numerator of which will be:

       

                                   
(1)    the
        product of the number of Common Shares outstanding on such record date and
        the
        Current Market Price of the Common Shares on such record date; less

       

      (2)    subject
        to the prior written consent of the Principal Market, if applicable, the
        excess,
        if any, of (a) the fair market value, as determined by action by the
        Corporation’s board of directors (whose determination will be conclusive), to
        the holders of Common Shares of such securities or property or other assets
        so
        issued or distributed in the Special Distribution over (b) the fair market
        value
        of the consideration received therefor by the Corporation from the holders
        of
        Common Shares, as determined by the Corporation’s board of directors (whose
        determination will be conclusive); and

       

      
        
          
          

        

        
          A-11

          
            

          

        

        
          
          

        

      

      (vii)    the
        denominator of which will be the product of the number of Common Shares
        outstanding on such record date and the Current Market Price of the Common
        Shares on such record date.

       

      To
        the extent that any Special Distribution is not so made, the Conversion Price
        will be readjusted effective immediately to the Conversion Price which would
        then be in effect based upon such securities or property or other assets
        as
        actually distributed.

       

      (4)        If
        and whenever at any time after the date hereof, and prior to the Time of
        Expiry,
        there is a reclassification of the Common Shares at any time outstanding
        or
        change of the Common Shares into other shares or into other securities or
        other
        capital reorganization (other than a Common Share Reorganization), or a
        consolidation, amalgamation or merger of the Corporation with or into any
        other
        corporation or other entity (other than a consolidation, amalgamation or
        merger
        which does not result in any reclassification of the outstanding Common Shares
        or a change of the Common Shares into other shares), or a transfer of the
        undertaking or assets of the Corporation as an entirety or substantially
        as an
        entirety to another corporation or other entity in which the holders of Common
        Shares are entitled to receive shares, other securities or other property
        (any
        of such events being called a “Capital
        Reorganization”),
        any Holder who exercises the right to Convert Debentures into Common Shares
        pursuant to Debentures then held after the effective date of such Capital
        Reorganization will be entitled to receive, and will accept for the same
        aggregate consideration in lieu of the number of Common Shares to which such
        Holder was previously entitled upon such Conversion, the aggregate number
        of
        shares, other securities or other property or cash which such Holder would
        have
        been entitled to receive as a result of such Capital Reorganization if, on
        the
        effective date thereof, the Holder had been the registered holder of the
        number
        of Common Shares to which such Holder was previously entitled upon Conversion
        subject to adjustment thereafter in accordance with provisions the same,
        as
        nearly possible, as those contained in this Article 4. The Corporation will
        take
        all steps necessary to ensure that, on a Capital Reorganization, the Holders
        of
        Debentures will receive the aggregate number of shares, other securities
        or
        other property or cash to which they are entitled as a result of the Capital
        Reorganization. Appropriate adjustments will be made as a result of any such
        Capital Reorganization in the application of the provisions set forth in
        this
        Article 4 with respect to the rights and interests thereafter of Holders
        of
        Debentures to the end that the provisions set forth in this Article 4 will
        thereafter correspondingly be made applicable as nearly as may reasonably
        be in
        relation to any shares, other securities or other property thereafter
        deliverable upon the conversion of any Debenture. Subject to the prior written
        consent of the Principal Market, if applicable, any such adjustment will
        be made
        by and set forth in an instrument supplemental hereto approved by action
        of the
        board of directors of the Corporation and will for all purposes be conclusively
        deemed to be an appropriate adjustment.

       

      (5)        If
        the purchase price provided for in any rights, options or warrants (the
“Rights
        Offering Price”)
        referred to in subsections 4.3(2) or (3) is decreased, the Conversion Price
        will
        forthwith be changed so as to decrease the Conversion Price to the Conversion
        Price that would have been obtained if the adjustment to the Conversion Price
        made under such subsections, as the case may be, with respect to such rights,
        options or warrants had been made on the basis of the Rights Offering Price
        as
        so decreased, provided that the terms of this subsection will not apply to
        any
        decrease in the Rights Offering Price resulting from terms in any such rights,
        options or warrants designed to prevent dilution except to the extent that
        the
        resulting decrease in the Conversion Price under this subsection would be
        greater than the decrease, if any, in the Conversion Price to be made under
        the
        terms of this section by virtue of the occurrence of the event giving rise
        to
        such decrease in the Rights Offering Price.

       

      
        
          
          

        

        
          A-12

          
            

          

        

        
          
          

        

      

      (6)        In
        any case in which this section requires that an adjustment become effective
        immediately after a record date for an event referred to herein, the Corporation
        may defer, until the occurrence of such event, issuing to the Holder of any
        Debenture Converted after such record date and before the occurrence of such
        event the additional Common Shares issuable upon such Conversion by reason
        of
        the adjustment required by such event; provided, however, that the Corporation
        shall deliver to such Holder an appropriate instrument evidencing such Holder’s
        right to receive such additional Common Shares upon the occurrence of such
        event
        and the right to receive any distributions made on such additional Common
        Shares
        declared in favour of holders of record of Common Shares on and after the
        Date
        of Conversion or such later date on which such Holder would, but for the
        provisions of this subsection, have become the holder of record of such
        additional Common Shares pursuant to subsection 4.2(1).

       

      4.4        Rules
        Regarding Calculation of Adjustment of Conversion Price

       

                  For
        the purposes of
        Section 4.3:

       

      (1)        The
        adjustments provided for in Section 4.3 are cumulative and will be computed
        to
        the nearest one-tenth of one cent and will be made successively whenever
        an
        event referred to therein occurs, subject to the remaining provisions of
        this
        section.

       

      (2)        No
        adjustment in the Conversion Price will be required unless such adjustment
        would
        result in a change of at least 1% in the prevailing Conversion Price; provided,
        however, that any adjustments which, except for the provisions of this
        subsection would otherwise have been required to be made, will be carried
        forward and taken into account in any subsequent adjustment.

       

      (3)        No
        adjustment in the Conversion Price will be made in respect of any event
        described in Section 4.3 if Holders are entitled to participate in such event
        on
        the same terms, mutatis
        mutandis,
        as if they had converted their Debentures prior to or on the effective date
        or
        record date of such event. Any such participation will be subject to the
        prior
        consent of each stock exchange on which the Common Shares are listed or quoted
        for unlisted trading privileges, or were listed in the year prior to the
        occurrence of the event described in this subsection, if
        applicable.

       

      (4)        If
        at any time a dispute arises with respect to adjustments provided for in
        Section
        4.3, subject to the prior written consent of the Principal Market, if
        applicable, such dispute will be conclusively determined by the Corporation’s
        auditors, or if they are unable or unwilling to act, by such other firm of
        independent chartered accountants as may be selected by action of the
        Corporation’s board of directors and any such determination will be binding upon
        the Corporation, the Holders and shareholders of the Corporation; such auditors
        or accountants will be given access to all necessary records of the
        Corporation.

       

      (5)        If
        the Corporation sets a record date to determine the holders of Common Shares
        for
        the purpose of entitling them to receive any dividend or distribution or
        sets a
        record date to take any other action and thereafter and before the distribution
        to such shareholders of any such dividend or distribution or the taking of
        any
        other action, legally abandons its plan to pay or deliver such dividend or
        distribution or take such other action, then no adjustment in the Conversion
        Price shall be made.

       

      (6)        In
        the absence of a resolution of the Corporation’s board of directors fixing a
        record date for a Special Distribution or Rights Offering, the Corporation
        shall
        be deemed to have fixed as a record date therefor the date on which the Special
        Distribution or Rights Offering is effected.

       

      
        
          
          

        

        
          A-13

          
            

          

        

        
          
          

        

      

      4.5        No
        Requirement to Issue Fractional Shares or Warrants

       

                  The
        Corporation shall
        not be required to issue fractional Common Shares or Warrants upon the
        Conversion of Debentures. If more than one Debenture is surrendered for
        Conversion at one time by the same Holder, the number of whole Common Shares
        and
        Warrants issuable upon Conversion thereof shall be computed on the basis
        of the
        aggregate principal amount of the Debentures to be Converted. If any fractional
        interest in a Common Share or Warrant, as applicable, would, except for the
        provisions of this section, be deliverable upon the Conversion of any principal
        amount of Debentures, the Corporation shall, in lieu of delivering any
        certificate of such fractional interest, satisfy such fractional interest
        by
        paying to the Holder of such surrendered Debentures an amount in lawful money
        of
        Canada equal to the value of such fractional interest based upon the Closing
        Market Price of the Common Shares on the Business Day preceding the Date
        of
        Conversion.

       

      4.6        Corporation
        to Reserve Shares

       

                  The
        Corporation
        covenants that it will at all times reserve and keep available out of its
        authorized Common Shares (if the number thereof is or becomes limited) solely
        for the purpose of issue upon Conversion of Debentures as provided herein,
        and
        conditionally issue to Holders who may exercise their Conversion rights
        hereunder, such number of Common Shares as shall then be issuable upon the
        Conversion of all outstanding Debentures and any Warrants which may be issued
        on
        exercise thereof. All Common Shares which shall be so issuable shall be duly
        and
        validly issued as fully paid and non-assessable.

       

      4.7        Cancellation
        of Converted Debentures

       

                  All
        Debentures
        Converted in whole or in part shall be forthwith cancelled by the Corporation
        (with regard to the Debenture or portion thereof which has been Converted)
        and,
        subject to subsection 4.2(3), no Debentures shall be issued in substitution
        therefor.

       

      4.8        Certificate
        as to Adjustment

       

                  The
        Corporation shall
        from time to time, immediately after the occurrence of any event which requires
        an adjustment or readjustment as provided in Section 4.3, deliver a certificate
        to the Holders specifying the nature of the event requiring the same and
        the
        amount of the adjustment or readjustment necessitated thereby and setting
        forth
        in reasonable detail the method of calculation and the facts upon which such
        calculation is based. Except in respect of any subdivision, redivision,
        reduction, combination or consolidation of the Common Shares, the Corporation
        shall forthwith give notice to the Holders specifying the event requiring
        such
        adjustment or readjustment and the amount thereof, including the resulting
        Conversion Price; provided that if the Corporation has given notice under
        Section 4.9 covering all the relevant facts in respect of such event, no
        such
        notice need be given under this section.

       

      4.9        Notice
        of Special Matters

       

                  The
        Corporation
        covenants that, so long as any Debentures remain outstanding, it will give
        notice to the Holders of its intention to fix a record date for any event
        referred to in subsections 4.3(1), (2), (3) or (4) (other than the subdivision,
        redivision, reduction, combination or consolidation of Common Shares) or
        a cash
        dividend (other than a dividend paid in the ordinary course) which may give
        rise
        to an adjustment in the Conversion Price, and such notice shall specify the
        particulars of such event and the record date and the effective date for
        such
        event; provided that the Corporation shall only be required to 

       

      
        
          
          

        

        
          A-14

          
            

          

        

        
          
          

        

      

       

      specify
        in such notice such particulars of such event as shall have been fixed and
        determined on the date on which such notice is given. Such notice shall be
        given
        not less than 14 days prior to the applicable record date.

       

      ARTICLE
        5-
        COVENANTS OF THE CORPORATION

       

      5.1        General
        Covenants

       

                  The
        Corporation
        hereby covenants with the Holders as follows:

       

      
        	
              	
                (a)

              	
                the
                  Corporation will duly and punctually pay or cause to be paid to
                  every
                  Holder the principal thereof and interest accrued on the Debentures
                  (and,
                  in case of default, interest on the amount in default) of which
                  he is the
                  Holder on the dates, at the places, and in the manner mentioned
                  herein;

              

      

       

      
        	
              	
                (b)

              	
                at
                  the request of a Holder, the Corporation will furnish to the Holders
                  a
                  copy of all financial statements, whether annual or interim, of
                  the
                  Corporation and the report, if any, of the Corporation’s auditors thereon
                  and of all annual and other periodic reports of the Corporation
                  furnished
                  to its shareholders after the date hereof and prior to the Time
                  of Expiry;
                  

              

      

       

      
        	
              	
                (c)

              	
                the
                  Corporation will duly and punctually perform and carry out all
                  of the acts
                  or things to be done by it, and perform all covenants required
                  to be
                  performed by it, as provided in this
                  Debenture;

              

      

       

      
        	
              	
                (d)

              	
                upon
                  the occurrence of an Event of Default, the Corporation shall permit
                  a
                  representative of the Holders to inspect the Collateral and the
                  operations
                  of the Corporation and for that purpose to enter to the Corporation’s
                  premises and any other location where the Collateral may be situated
                  during reasonable business hours and upon reasonable
                  notice;

              

      

       

      
        	
              	
                (e)

              	
                the
                  Corporation shall:

              

      

       

      (i)    keep
        proper books of accounts and records covering all of its business and affairs
        on
        a current basis as well as accurate and complete records concerning the
        Collateral;

       

      (ii)    notify
        the Holders promptly of any loss or damage to or any seizure of any significant
        portion of the Collateral;

       

      (iii)    furnish
        the Holders with such information regarding the Collateral and its value
        and
        location as the Holders may from time to time reasonably request;

       

      (iv)    upon
        the occurrence of an Event of Default, permit a representative of the Holders,
        during reasonable business hours and upon reasonable notice, to inspect the
        Corporation’s books of account, records and documents and to make copies,
        extracts and summaries therefrom; and

       

      (v)    at
        any time after an Event of Default, permit the Holder or its representative
        to
        make reasonable inquiries of third parties for the purpose of verification
        of
        any of the foregoing; and

       

      
        	
              	
                (f)

              	
                the
                  Corporation shall promptly notify the Holder in writing of the
                  details
                  of:

              

      

       

      
        
          
          

        

        
          A-15

          
            

          

        

        
          
          

        

      

      (i)    any
        amendment to its articles, including by virtue of the filing of articles
        of
        amalgamation, effecting a change in the Corporation’s name;

       

      (ii)    any
        claim, litigation or proceeding before any court, administrative board or
        other
        tribunal which either does or could have a material adverse effect on the
        Collateral or the Corporation;

       

      (iii)    any
        claim, lien, attachment, execution or other process or encumbrance made or
        asserted against or with respect to the Collateral which either does or could
        have material adverse effect on the validity or enforceability of the Security
        Interest;

       

      (iv)    any
        transfer of the Corporation’s interest in the Collateral, whether or not
        permitted hereunder; or

       

      (v)    any
        material loss of or damage to the Collateral, whether or not such loss or
        damage
        is covered by insurance; and 

       

      
        	
              	
                (g)

              	
                the
                  Corporation shall keep the Collateral insured as would a reasonable
                  prudent owner of similar property against loss or damage by fire,
                  theft or
                  other usual perils, in such amounts as would a reasonably prudent
                  owner of
                  similar property and with such insurers as the Holder may reasonably
                  require from time to time.

              

      

       

      5.2        Specific
        Covenants

                  

                  The
        Corporation
        hereby further covenants with the Holders that: 

       

      
        	
              	
                (a)

              	
                all
                  Common Shares which shall be issued upon a Conversion, payment
                  of interest
                  on the Debentures or upon due exercise of any Warrants, shall be
                  issued as
                  fully paid and non-assessable in the capital of the
                  Corporation;

              

      

       

      
        	
              	
                (b)

              	
                it
                  will at all times maintain its corporate existence and will carry
                  on and
                  conduct its business in a proper and efficient manner; provided,
                  however,
                  that nothing herein contained shall prevent the Corporation from
                  ceasing
                  to operate any business or property if, in the opinion of its board
                  of
                  directors, it shall be advisable and in the best interests of the
                  Corporation to do so;

              

      

       

      
        	
              	
                (c)

              	
                it
                  will use its best efforts to maintain the listing of the Common
                  Shares
                  (including the Common Shares issuable pursuant to the terms of
                  the
                  Debentures) on or through the TSX or another recognized Canadian
                  stock
                  exchange;

              

      

       

      
        	
              	
                (d)

              	
                it
                  will use its best efforts to maintain its status as a reporting
                  issuer in
                  each of the Provinces of Ontario, British Columbia, and Alberta
                  not in
                  default;

              

      

       

      
        	
              	
                (e)

              	
                it
                  will at all times, so long as any Debentures remain outstanding
                  and may be
                  Converted, keep open the register of Debentures and the transfer
                  registers
                  for the Common Shares and will not take any action which would
                  have the
                  effect of preventing the Holders from Converting any of the Debentures
                  or
                  receiving any of the Common Shares upon such
                  Conversion;

              

      

       

      
        
          
          

        

        
          A-16

          
            

          

        

        
          
          

        

      

       

      
        	
              	
                (f)

              	
                it
                  will make all requisite filings, including filings with appropriate
                  securities commissions and stock exchanges, in connection with
                  the
                  creation and sale of the Debentures, the Conversion of the Debentures
                  and
                  the issue of the underlying Common
                  Shares;

              

      

       

      
        	
              	
                (g)

              	
                generally,
                  it will well and truly perform and carry out all of the acts or
                  things to
                  be done by it as provided herein;
                  and

              

      

       

      
        	
              	
                (h)

              	
                it
                  will use its best efforts to comply with, satisfy and fulfil promptly
                  all
                  prerequisites, conditions and requirements imposed by or arising
                  out of
                  legal, regulatory and administrative requirements applicable to
                  the
                  Corporation with respect to the consummation of the transactions
                  contemplated hereby, including filing or causing to be filed all
                  documents, certificates, opinions, forms or undertakings required
                  to be
                  filed by the Corporation in connection with the purchase and sale
                  of the
                  Debentures, the issuance of the Common Shares and Warrants in accordance
                  with the terms of the Debentures and the listing and posting for
                  trading
                  of such Common Shares on the TSX or another recognized Canadian
                  stock
                  exchange, as applicable.

              

      

       

      5.3        Performance
        of Covenants by the Registered Holder

       

                  The
        Registered Holder
        may, in its sole discretion and upon notice to the Corporation, perform any
        covenant of the Corporation under this Debenture that the Corporation fails
        to
        perform and that the Registered Holder is capable of performing, including
        any
        covenant the performance of which requires the payment of money; provided
        that
        the Registered Holder will not be obligated to perform any such covenant
        on
        behalf of the Corporation. No such performance by the Registered Holder will
        require the Registered Holder further to perform the Corporation’s covenants nor
        relieve the Corporation from any default or operate as a derogation of the
        rights and remedies of the Registered Holder under this Debenture. The
        Corporation agrees to indemnify and to reimburse the Registered Holder for
        all
        costs and expenses incurred by the Registered Holder in connection with the
        performance by it of any such covenant, and all such costs and expenses shall
        be
        payable by the Corporation to the Registered Holder on demand, shall bear
        interest at the highest rate per annum borne by any of the Obligations,
        calculated and compounded monthly, and shall (with all such interests) be
        added
        and form part of the Obligations.

       

      ARTICLE
        6-
        SECURITY INTEREST

       

      6.1        Grant
        of Security Interest

       

                  As
        continuing
        collateral security for the due and timely payment and performance by the
        Corporation of the Obligations, the Corporation shall grant to the Holders
        the
        General Security Agreement.

       

      ARTICLE
        7-
        RESTRICTIONS ON DISPOSITIONS OF COLLATERAL

       

      7.1        General
        Restrictions

       

                  Except
        as herein
        expressly provided, the Corporation shall not, without the prior written
        consent
        of the Holder:

       

      
        	
              	
                (a)

              	
                create,
                  allow to be created, assume or suffer to exist any encumbrance
                  upon the
                  Collateral ranking or purporting to rank in priority to or pari
                  passu with
                  the Security Interest other than the Permitted Security
                  Interests;

              

      

       

      
        
          
          

        

        
          A-17

          
            

          

        

        
          
          

        

      

       

      
        	
              	
                (b)

              	
                sell,
                  lease, assign or otherwise dispose of or deal with the Collateral;
                  or

              

      

       

      
        	
              	
                (c)

              	
                release,
                  surrender or abandon possession of the
                  Collateral.

              

      

       

      7.2        Permitted
        Dispositions

       

                  This
        Debenture and
        the Security Interest shall in no way hinder or prevent the Corporation,
        without
        the prior written consent of the Holder, at any time or from time to time
        until
        an Event of Default shall have occurred and the Security Interest shall become
        enforceable:

       

      
        	
              	
                (a)

              	
                from
                  collecting and, where necessary, enforcing the collection of any
                  and all
                  amounts due or to become due to the Corporation under any account;
                  or

              

      

       

      
        	
              	
                (b)

              	
                from
                  selling, leasing, licensing, consigning or otherwise disposing
                  of
                  inventory or of any obsolete, worn out, damaged or otherwise unsuitable
                  equipment forming part of the Collateral in the ordinary course
                  of the
                  Corporation’s business and for the purpose of carrying on the
                  same.

              

      

       

      ARTICLE
        8-
        Notices

       

      8.1        Notice
        to the Corporation

       

                  Any
        notice to the
        Corporation under the provisions of this Debenture shall be valid and effective
        if delivered personally to, or if given by registered mail, postage prepaid,
        addressed to, the Corporation at its offices in 302 The East Mall, Suite
        300,
        Toronto, Ontario, M9B 6C7 Attention: Darryl Kleebaum, telecopier no. (416)
        640-0412, and shall be deemed to have been given on the date of delivery
        or on
        the fifth Business Day after such letter has been mailed, as the case may
        be.
        The Corporation may from time to time notify the Holders of a change in address
        which thereafter, until changed by further notice, shall be the address of
        the
        Corporation for all purposes of the Debentures.

       

      8.2        Notice
        to Holder

       

                  Except
        as otherwise
        expressly provided herein, all notices to be given hereunder with respect
        to the
        Debentures shall be valid and effective if such notice is delivered personally
        or, subject to Section 8.3, sent by first class mail, postage prepaid, addressed
        to such Holders at their post office addresses appearing in any of the registers
        hereinbefore mentioned. Any notice so delivered or sent by mail shall be
        deemed
        to have been given on the day upon which it is delivered or on the fifth
        Business Day after such letter has been mailed, as the case may be. Any
        accidental error, omission or failure in giving or in delivering or mailing
        any
        such notice or the non-receipt of any such notice by any Holder shall not
        invalidate or otherwise prejudicially affect any action or proceeding founded
        thereon.

       

      8.3        Mail
        Service Interruption

       

                  If,
        by reason of any
        actual or threatened interruption of mail service due to strike, lock-out
        or
        otherwise, any notice to be given to the Holders or to the Corporation would
        be
        unlikely to reach its destination in a timely manner, such notice shall be
        valid
        and effective only if delivered personally in accordance with Sections 8.1
        or
        8.2, as the case may be.

       

      
        
          
          

        

        
          A-18

          
            

          

        

        
          
          

        

      

      ARTICLE
        9-
        SUCCESSOR CORPORATIONS

       

      9.1        Certain
        Requirements

       

                  The
        Corporation shall
        not enter into any transaction (whether by way of reconstruction,
        reorganization, consolidation, amalgamation, merger, transfer, sale, lease
        or
        otherwise) whereby all or substantially all of its undertaking, property
        and
        assets would become the property of any other person or, in the case of such
        amalgamation or merger, of the continuing company resulting therefrom unless,
        and may do so if:

       

      (i)    such
        other person or continuing corporation is a corporation (herein called the
        “Successor
        Corporation”)
        incorporated under the laws of Canada or any province thereof;

       

      (ii)    the
        Successor Corporation shall execute, prior to, contemporaneously with or
        forthwith after the consummation of such transaction an instrument supplemental
        hereto and such other instruments as are necessary or advisable to evidence
        the
        assumption by the Successor Corporation of the liability for the due and
        punctual payment of all amounts outstanding and payable hereunder from time
        to
        time and the covenant of the Successor Corporation to pay the same and its
        agreement to observe and perform all of the covenants and obligations of
        the
        Corporation under this Debenture;

       

      (iii)    such
        transaction shall, to the satisfaction of the Holders acting reasonably,
        be upon
        such terms as substantially to preserve and not to impair in any material
        respect the rights and powers of the Holders hereunder; and

       

      (iv)    no
        condition or state of facts shall exist as to the Corporation or the Successor
        Corporation, either at the time of or immediately before or after the
        consummation of any such transaction and after giving full effect thereto
        or
        immediately after the Successor Corporation complying with the provisions
        of
        clause (b) above, that constitutes or would constitute after notice or lapse
        of
        time or both, an Event of Default.

       

      9.2        Vesting
        of Powers in Successor

       

                  Whenever
        the
        conditions of Section 9.1 shall have been duly observed and performed, the
        Holders shall execute and deliver the supplemental instrument provided for
        in
        Section 9.1 and thereupon the Successor Corporation shall be bound by the
        covenants and obligations of the Corporation under this Debenture and shall
        possess and from time to time exercise each and every power of the Corporation
        under this Debenture in the name of the Corporation or otherwise, and any
        act or
        proceeding by any provision of this Debenture required to be done or performed
        by any directors or officers of the Corporation may be done and performed
        with
        like force and effect by the directors or officers of the Successor
        Corporation.

       

      
        
          
          

        

        
          A-19

          
            

          

        

        
          
          

        

      

      

       

      ARTICLE
        10-
        general provisions

       

      10.1        Further
        Assurances

       

                  
The
        Corporation
        shall do, execute, acknowledge and deliver or cause to be done, executed,
        acknowledged and delivered, such further acts, deeds, mortgages, transfers,
        assurances or other documents as the Registered Holder shall reasonably require
        to give effect to or preserve and perfect the Security Interest in the
        Collateral intended to be granted to the Registered Holder hereunder, under
        the
        General Security Agreement, or any security interest the Corporation may
        hereafter grant or become bound to grant to the Registered Holder for the
        purpose of accomplishing and effecting the intention of this Debenture. The
        Corporation hereby irrevocably appoints the Registered Holder to be the attorney
        of the Corporation, coupled with an interest, with full power of substitution,
        for and in the name of the Corporation to execute and to do any deeds,
        documents, transfers, demands, assignments, assurance, consents and things
        which
        the Corporation is obliged to sign, execute or do hereunder.

       

      10.2        Term

       

                   
This
        Debenture
        shall become effective according to its terms immediately upon the execution
        hereof by the Corporation and shall continue as security for the Obligations
        until all of the Obligations are paid and performed in full and this Debenture
        is terminated.

       

      10.3        Non-Substitution

       

                   
This
        Debenture and the Security
        Interest are in addition to and not in substitution for any other agreement
        made
        between the Registered Holder and the Corporation or any other security granted
        by the Corporation to the Registered Holder whether before or after the
        execution of this Debenture.

       

      10.4        No
        Merger

       

                   
Neither
        the
        taking of any action suit or proceeding, judicial or extra-judicial nor the
        exercise of any power of seizure or disposition shall extinguish the liability
        of the Corporation to pay and perform the Obligations nor shall the acceptance
        of any payment or alternate security constitute or create any novation. No
        covenant, representation or warranty of the Corporation herein shall merge
        in
        any judgment.

       

      10.5        Entire
        Agreement

       

                   
There
        are no
        representations, agreements, warranties, conditions, covenants or terms,
        express
        or implied, collateral or otherwise, affecting this Debenture or the Security
        Interest or the Corporation’s obligations and liabilities hereunder other than
        express herein.

       

      10.6        Time
        of Essence

       

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

       

      10.7        Disclosure
        of Information re Corporation

       

                   

      

      
        
          
          

        

        
          A-20

          
            

          

        

        
          
          

        

      

                   
The
        Corporation agrees that the Registered Holder may provide from time to time
        such
        information concerning this Debenture, the Collateral and the Obligations
        to
        such persons as the Registered Holder in good faith believes are entitled
        to the
        same under the PPSA.

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          A-21

          
            

          

        

        
          
          

        

      

      EXHIBIT
        “1”

       

      FORM
        OF TRANSFER

       

      Re:
        Series (J) Convertible Debenture of ADB SYSTEMS INTERNATIONAL LTD. due February
        ___, 2011

       

      For
        value received, the undersigned hereby assigns and transfers unto

       

      ______________________________________
        of _____________________________________ $ of the principal amount of the
        within
        Debenture registered in the name of the undersigned on the books of ADB SYSTEMS
        INTERNATIONAL LTD. (the “Corporation”)
        including the rights thereunder to the accrued and unpaid interest on such
        principal amount and hereby irrevocably constitutes and appoints
        ____________________________ attorney to transfer the said Debenture on the
        books of the Corporation with full powers of substitution in the
        premises.

       

      DATED_____________
        in the presence of __________________________.

       

      Signed:
        ___________________________________

       

      

       

      
        
          
            

             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        “2”

       

      FORM
        OF ELECTION OF CONVERSION PRIVILEGE

       

      TO: ADB
        SYSTEMS INTERNATIONAL LTD. LTD.

      
        	
                Re:
                  

              	
                Series
                  (J) Convertible Debenture of ADB SYSTEMS INTERNATIONAL LTD. due
                  February
                  ___, 2011

              

      

      The
        undersigned hereby irrevocably elects to convert $1,000 or any integral multiple
        thereof principal amount of the within Debenture into Units of the Corporation
        at the Conversion Price in accordance with the Terms and Conditions of the
        Debenture. Please issue share certificates for the Common Shares and Warrants
        comprising such Units as follows:

       

      Principal
        amount converted: $ _____________________________

       

      ($1,000
        or integral multiple thereof only)

       

      
        
          	Name:	 
	
                   

                  Address:

                	 
	
                   

                   

                	 
	
                   

                  Date:

                	 
	
                   

                  Signed:

                	 

        

      

       

        

       

      
        
          
            

             

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        “3”

       

      FORM
        OF WARRANT

       

      UNLESS
        PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
        NOT
        TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS AND A DAY
        AFTER
        THE DATE OF ISSUE.]

       

      Void
        after 5:00 p.m. (Toronto time) on the ________day of________2009.

       

      
        	
                Number
                  of Warrants: •

              	
                Series
                  J Warrant
                  Certificate No. J-W-•

              

      

      

       

      ADB
        SYSTEMS INTERNATIONAL LTD.

       

      (Organized
        under the laws of the Province of Ontario)

       

      This
        is to certify that, for value received,
        ______________________________________________ (the “Holder”),
        shall have the right to purchase from ADB Systems International Ltd. (the
        “Corporation”),
        at any time and from time to time up to the Expiry
        Time
        (as defined below), one fully paid and non-assessable Common Share (as defined
        below) for each Series J Warrant (individually, a “Warrant”)
        represented hereby at a price of Cdn$0.20 per share (the “Exercise
        Price”),
        upon and subject to the following terms and conditions:

       

      
        	
                1.

              	
                For
                  the purpose of this Warrant, the term “Common
                  Shares”
                  means common shares in the capital of the Corporation as constituted
                  on
                  the date hereof; provided that in the event of a change, subdivision,
                  re-division, reduction, combination or consolidation thereof or
                  any other
                  adjustment under clause 7 hereof, or such successive changes,
                  subdivisions, re-divisions, reductions, combinations, consolidations
                  or
                  other adjustments, then subject to the adjustments, if any, having
                  been
                  made in accordance with the provisions of this Warrant Certificate,
                  “Common
                  Shares”
                  shall thereafter mean the shares, other securities or other property
                  resulting from such change, subdivision, re-division, reduction,
                  combination or consolidation or other
                  adjustment.

              

      

       

      
        	
                2.

              	
                For
                  the purpose of this Warrant, the term “Expiry
                  Time”
                  means the earlier of: (i) 5:00 p.m. (Toronto time) on _____________,
                  2009;
                  and (ii) the date which is sixty (60) days following the issuance
                  of a
                  notice by the Corporation to Holders confirming that the closing
                  price of
                  the common shares of the Corporation on the Toronto Stock Exchange
                  was
                  greater than or equal to $0.35 for any 10 consecutive trading days,
                  following the 4 months and one day hold period from the date of
                  issuance
                  of the Warrant. All rights under any of the Warrants in respect
                  of which
                  the right of subscription and purchase therein provided for shall
                  not
                  theretofore have been exercised shall wholly cease and determine
                  and such
                  Warrants shall be wholly void and of no valid or binding effect
                  after the
                  Expiry Time.

              

      

       

      
        	
                3.

              	
                The
                  right to purchase Common Shares pursuant to the Warrants may only
                  be
                  exercised by the Holder before the Expiry Time by duly completing
                  and
                  executing a subscription substantially in the form attached hereto
                  as
                  Schedule “A”, in the manner therein indicated and surrendering this
                  Warrant Certificate and the duly completed and executed subscription
                  form
                  to the Corporation at the principal office of the Corporation at
                  302 The
                  East Mall, Suite 300, Toronto, Ontario, M9B 6C7, together with
                  payment of
                  the purchase price for the Common Shares subscribed for in the
                  form of
                  cash or a certified cheque payable to the Corporation in an amount
                  equal
                  to the then applicable Exercise Price multiplied by the number
                  of Common
                  Shares subscribed for.

              

      

      
         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

        
          	
                   

                	
                  form
                    of cash or a certified cheque payable to the Corporation in an
                    amount
                    equal to the then applicable Exercise Price multiplied by the
                    number of
                    Common Shares subscribed for.

                

        

      

      
      

       

      
        	
                4.

              	
                Issue
                  of Common Shares upon Exercise.

              

      

       

      (a)    Upon
        such delivery and payment as set forth in Section 3, the Corporation shall
        cause
        to be issued to the Holder the number of Common Shares to be issued and the
        Holder shall become a shareholder of the Corporation in respect of such Common
        Shares with effect from the date of such delivery and payment and shall be
        entitled to delivery of a certificate or certificates evidencing such shares.
        The Corporation shall cause such certificate or certificates to be delivered
        via
        bonded overnight courier to the Holder at the address or addresses specified
        in
        such subscription form within three (3) business days of such delivery and
        payment as herein provided.

       

      (b)    The
        Corporation shall not be required to issue fractional Common Shares upon
        the
        exercise of the Warrants and no payment shall be made by the Corporation
        in lieu
        of issuing any fractional interest in a Common Share.

       

      
        	
                5.

              	
                The
                  holding of a Warrant shall not constitute the Holder a shareholder
                  of the
                  Corporation nor entitle the Holder to any right or interest in
                  respect
                  thereof except as herein expressly
                  provided.

              

      

       

      
        	
                6.

              	
                The
                  Corporation covenants and agrees that until the Expiry Time, while
                  any of
                  the Warrants shall be outstanding, it shall reserve and there shall
                  remain
                  unissued out of its authorized capital a sufficient number of Common
                  Shares to satisfy the right of purchase herein provided, as such
                  right of
                  purchase may be adjusted pursuant to clauses 7 and 8 hereof. All
                  Common
                  Shares which shall be issued upon the exercise of the right to
                  purchase
                  herein provided for, upon payment therefor of the amount at which
                  such
                  Common Shares may at the time be purchased pursuant to the provisions
                  hereof, shall be issued as fully paid and non assessable shares
                  and the
                  holders thereof shall not be liable to the Corporation or its creditors
                  in
                  respect thereof.

              

      

       

      
        	
                7.

              	
                Adjustment

              

      

       

      The
        Exercise Price will be subject to adjustment from time to time in the events
        and
        in the manner provided as follows:

       

      (1)        If
        and whenever at any time after _____________, 2006 [insert date of issuance],
        and prior to the Expiry Time, the Corporation:

       

      (i)    issues
        Common Shares or securities exchangeable for or convertible into Common Shares
        to all or substantially all the holders of Common Shares as a stock dividend
        or
        other distribution (other than an issue of Common Shares to holders of Common
        Shares pursuant to a right granted to such holders to receive such Common
        Shares
        in lieu of dividends paid in the ordinary course);

       

      (ii)    subdivides
        its outstanding Common Shares into a greater number of Common Shares;
        or

       

      (iii)    consolidates
        its outstanding Common Shares into a smaller number of Common
        Shares,

       

      (any
        of such events in clauses (i), (ii) and (iii) of this subsection being called
        a
“Common
        Share Reorganization”),
        then the Exercise Price shall be adjusted effective immediately after the
        

       

      
        
          
          

        

        
          -
            2
            -

          
            

          

        

        
          
          

        

      

       

      effective
        date or record date for the happening of a Common Share Reorganization, as
        the
        case may be, at which the holders of Common Shares are determined for the
        purpose of the Common Share Reorganization by multiplying the Exercise Price
        in
        effect immediately prior to such effective date or record date by a fraction,
        the numerator of which will be the number of Common Shares outstanding on
        such
        effective date or record date before giving effect to such Common Share
        Reorganization and the denominator of which will be the number of Common
        Shares
        outstanding immediately after giving effect to such Common Share Reorganization
        (including, in the case where securities exchangeable for or convertible
        into
        Common Shares are distributed, the number of Common Shares that would have
        been
        outstanding had all such securities been exchanged for or converted into
        Common
        Shares on such effective date or record date).

       

      (2)        If
        and whenever at any time after _____________, 2006 [insert date of issuance],
        and prior to the Expiry Time, the Corporation fixes a record date for the
        issue
        of rights, options or warrants to all or substantially all the holders of
        Common
        Shares (the “Rights”)
        under which such holders are entitled, during a period expiring not more
        than
        forty-five (45) days after the date of such issue (the “Rights
        Period”),
        to subscribe for or purchase Common Shares (or securities convertible into
        Common Shares) at a price per share to the holder (or at an exchange or
        conversion price per share during the Rights Period to the holder in the
        case of
        securities exchangeable for or convertible into Common Shares) of less than
        95%
        of the price (the “Current
        Market Price”)
        which is equal to the average closing price on the Toronto Stock Exchange
        for
        the period of 20 trading days immediately preceding such record date (any
        of
        such events being called a “Rights
        Offering”),
        then the Exercise Price shall be adjusted effective immediately after the
        end of
        the Rights Period to a price determined by multiplying the Exercise Price
        in
        effect on such record date by a fraction:

       

      (i)        the
        numerator of which will be the aggregate of:

       

      (1)        the
        number of Common Shares outstanding as of the record date for the Rights
        Offering; plus

       

      (2)        a
        number determined by dividing (a) the product of the number of Common Shares
        issued or subscribed for during the Rights Period upon the exercise of the
        rights, warrants or options under the Rights Offering and the price at which
        such Common Shares are offered by (b) the Current Market Price of the Common
        Shares as of the record date for the Rights Offering, and

       

      (ii)        the
        denominator of which will be the number of Common Shares outstanding after
        giving effect to the Rights Offering and including the number of Common Shares
        actually issued or subscribed for during the Rights Period upon exercise
        of the
        rights, warrants or options under the Rights Offering.

       

      Any
        Holder who has exercised the Warrants represented hereby during the period
        beginning immediately after the record date for a Rights Offering and ending
        on
        the last day of the Rights Period for the Rights Offering will, in addition
        to
        the Common Shares to which that Holder would otherwise be entitled upon such
        exercise, be entitled to that number of additional Common Shares equal to
        the
        difference between the shares received on such exercise and the shares that
        would have been received if the Exercise Price as adjusted for such Rights
        Offering pursuant to this subsection had applied when the Holder exercised
        the
        Warrants; provided that the provisions of Section 4(b) will be applicable
        to any
        fractional interest in a Common Share to which such Holder might otherwise
        be
        entitled under the foregoing provisions of this subsection. Such additional
        Common Shares will be deemed to have been issued to the Holder immediately
        

       

      
        
          
          

        

        
          -
            3
            -

          
            

          

        

        
          
          

        

      

       

      following
        the end of the Rights Period and a certificate for such additional Common
        Shares
        will be delivered to such Holder within three business days following the
        end of
        the Rights Period. To the extent that any such rights, options or warrants
        are
        not so exercised on or before the expiry thereof, the Exercise Price will
        be
        readjusted to the Exercise Price which would then be in effect based on the
        number of Common Shares (or the securities convertible into or exchangeable
        for
        Common Shares) actually delivered on the exercise of such rights, options
        or
        warrants.

       

      (3)        If
        and whenever at any time after _____________, 2006 [insert date of issuance]and
        prior to the Expiry Time, the Corporation fixes a record date for the issue
        or
        the distribution to all or substantially all the holders of Common Shares
        of (i)
        securities of the Corporation, including rights, options or warrants to acquire
        securities of the Corporation or any of its property or assets and including
        evidences of indebtedness or (ii) any property or other assets, including
        evidences of indebtedness, and if such issuance or distribution does not
        constitute (A) a dividend paid in the ordinary course; (B) a Common Share
        Reorganization; (C) a Rights Offering; or (D) the
        issue of Rights to the holders of all or substantially all of its outstanding
        Common Shares under which such holders are entitled to subscribe for or purchase
        Common Shares or securities exchangeable for or convertible into Common Shares
        during the Rights Period, where the cost per Common Share during the Rights
        Period, is 95% or more of the Current Market Price (any
        of such non-excluded events being called a “Special
        Distribution”),
        the Exercise Price shall be adjusted effective immediately after such record
        date to a price determined by multiplying the Exercise Price in effect on
        such
        record date by a fraction:

       

      (i)        the
        numerator of which will be:

       

      (1)        the
        product of the number of Common Shares outstanding on such record date and
        the
        Current Market Price of the Common Shares on such record date; less

       

      (2)        subject
        to the prior written consent of the Toronto Stock Exchange, if applicable,
        the
        excess, if any, of (a) the fair market value, as determined by action by
        the
        Corporation’s board of directors (whose determination will be conclusive), to
        the holders of Common Shares of such securities or property or other assets
        so
        issued or distributed in the Special Distribution over (b) the fair market
        value
        of the consideration received therefor by the Corporation from the holders
        of
        Common Shares, as determined by the Corporation’s board of directors (whose
        determination will be conclusive); and

       

      (ii)        the
        denominator of which will be the product of the number of Common Shares
        outstanding on such record date and the Current Market Price of the Common
        Shares on such record date.

       

      To
        the extent that any Special Distribution is not so made, the Exercise Price
        will
        be readjusted effective immediately to the Exercise Price which would then
        be in
        effect based upon such securities or property or other assets as actually
        distributed.

       

      (4)        If
        and whenever at any time after _____________, 2006 [insert date of issuance],
        and prior to the Expiry Time, there is a reclassification of the Common Shares
        at any time outstanding or change of the Common Shares into other shares
        or into
        other securities or other capital reorganization (other than a Common Share
        Reorganization), or a consolidation, amalgamation or merger of the Corporation
        with or into any other corporation or other entity (other than a consolidation,
        amalgamation or merger which does not result in any reclassification of the
        

       

      
        
          
          

        

        
          -
            4
            -

          
            

          

        

        
          
          

        

      

       

      outstanding
        Common Shares or a change of the Common Shares into other shares), or a transfer
        of the undertaking or assets of the Corporation as an entirety or substantially
        as an entirety to another corporation or other entity in which the holders
        of
        Common Shares are entitled to receive shares, other securities or other property
        (any of such events being called a “Capital
        Reorganization”),
        any Holder who exercises the Warrants represented hereby into Common Shares
        after the effective date of such Capital Reorganization will be entitled
        to
        receive, and will accept for the same aggregate consideration in lieu of
        the
        number of Common Shares to which such Holder was previously entitled upon
        such
        exercise, the aggregate number of shares, other securities or other property
        or
        cash which such Holder would have been entitled to receive as a result of
        such
        Capital Reorganization if, on the effective date thereof, the Holder had
        been
        the registered holder of the number of Common Shares to which such Holder
        was
        previously entitled upon exercise subject to adjustment thereafter in accordance
        with provisions the same, as nearly possible, as those contained in this
        Section
        7. The Corporation will take all steps necessary to ensure that, on a Capital
        Reorganization, the Holders of Warrants will receive the aggregate number
        of
        shares, other securities or other property or cash to which they are entitled
        as
        a result of the Capital Reorganization. Appropriate adjustments will be made
        as
        a result of any such Capital Reorganization in the application of the provisions
        set forth in this Section 7 with respect to the rights and interests thereafter
        of Holders of Warrants to the end that the provisions set forth in this Section
        7 will thereafter correspondingly be made applicable as nearly as may reasonably
        be in relation to any shares, other securities or other property thereafter
        deliverable upon the exercise of any Warrant. Subject to the prior written
        consent of the Toronto Stock Exchange, if applicable, any such adjustment
        will
        be made by and set forth in an instrument supplemental hereto approved by
        action
        of the board of directors of the Corporation and will for all purposes be
        conclusively deemed to be an appropriate adjustment.

       

      (5)        If
        the purchase price provided for in any rights, options or warrants (the
“Rights
        Offering Price”)
        referred to in subsections 7(2) or (3) is decreased, the Exercise Price will
        forthwith be changed so as to decrease the Exercise Price to the Exercise
        Price
        that would have been obtained if the adjustment to the Exercise Price made
        under
        such subsections, as the case may be, with respect to such rights, options
        or
        warrants had been made on the basis of the Rights Offering Price as so
        decreased, provided that the terms of this subsection will not apply to any
        decrease in the Rights Offering Price resulting from terms in any such rights,
        options or warrants designed to prevent dilution except to the extent that
        the
        resulting decrease in the Exercise Price under this subsection would be greater
        than the decrease, if any, in the Exercise Price to be made under the terms
        of
        this section by virtue of the occurrence of the event giving rise to such
        decrease in the Rights Offering Price.

       

      (6)        In
        any case in which this section requires that an adjustment become effective
        immediately after a record date for an event referred to herein, the Corporation
        may defer, until the occurrence of such event, issuing to the Holder of any
        Warrant exercised after such record date and before the occurrence of such
        event
        the additional Common Shares issuable upon such exercise by reason of the
        adjustment required by such event; provided, however, that the Corporation
        shall
        deliver to such Holder an appropriate instrument evidencing such Holder’s right
        to receive such additional Common Shares upon the occurrence of such event
        and
        the right to receive any distributions made on such additional Common Shares
        declared in favour of holders of record of Common Shares on and after the
        date
        of exercise or such later date on which such Holder would, but for the
        provisions of this subsection, have become the holder of record of such
        additional Common Shares.

       

      (7)        If
        and whenever at any time after _____________, 2006 [insert date of issuance]and
        prior to the Expiry Time, any of the events set out in this clause 7 shall
        occur
        and the occurrence of 

       

      
        
          
          

        

        
          -
            5
            -

          
            

          

        

        
          
          

        

      

      such
        event results in an adjustment of the Exercise Price pursuant to the provisions
        of this clause 7, then the number of Common Shares purchasable pursuant to
        this
        Warrant shall be adjusted contemporaneously with the adjustment of the Exercise
        Price by multiplying the number of Common Shares then otherwise purchasable
        on
        the exercise thereof by a fraction, the numerator of which shall be the Exercise
        Price in effect immediately prior to the adjustment and the denominator of
        which
        shall be the Exercise Price resulting from such adjustment.

       

      (8)        If
        the Corporation takes any action affecting its Common Shares to which the
        foregoing provisions of this clause 7, in the opinion of the board of directors
        of the Corporation, acting in good faith, are not strictly applicable, or
        if
        strictly applicable would not fairly adjust the rights of the Holder against
        dilution in accordance with the intent and purposes hereof, or would otherwise
        materially affect the rights of the Holder of the Warrants hereunder, then
        the
        Corporation shall execute and deliver to the Holder an amendment hereto
        providing for an adjustment in the application of such provisions so as to
        adjust such rights as aforesaid in such manner as the board of directors
        of the
        Corporation may determine to be equitable in the circumstances, acting in
        good
        faith. The failure of the taking of action by the board of directors of the
        Corporation to so provide for any adjustment on or prior to the effective
        date
        of any action or occurrence giving rise to such state of facts will be
        conclusive evidence that the board of directors has determined that it is
        equitable to make no adjustment in the circumstances.

       

      
        	
                8.

              	
                The
                  following rules and procedures shall be applicable to the adjustments
                  made
                  pursuant to clause 7:

              

      

       

      The
        adjustments provided for in Section 7 are cumulative and will be computed
        to the
        nearest one-tenth of one cent and will be made successively whenever an event
        referred to therein occurs, subject to the remaining provisions of this
        section.

       

      
        	 	
                (a)

              	
                        No
                  adjustment in the Exercise Price will be required unless such adjustment
                  would result in a change of at least 1% in the prevailing Exercise
                  Price;
                  provided, however, that any adjustments which, except for the provisions
                  of this subsection would otherwise have been required to be made,
                  will be
                  carried forward and taken into account in any subsequent
                  adjustment.

              

      

       

      
        	 	
                (b)

              	
                        No
                  adjustment in the Exercise Price will be made in respect of any
                  event
                  described in Section 7 if Holders are entitled to participate in
                  such
                  event on the same terms, mutatis
                  mutandis,
                  as if they had exercised their Warrants prior to or on the effective
                  date
                  or record date of such event. Any such participation will be subject
                  to
                  the prior consent of each stock exchange on which the Common Shares
                  are
                  listed or quoted for unlisted trading privileges, or were listed
                  in the
                  year prior to the occurrence of the event described in this subsection,
                  if
                  applicable.

              

      

       

      
        	 	
                (c)

              	
                        If
                  at
                  any time a dispute arises with respect to adjustments provided
                  for in
                  Section 7, subject to the prior written consent of the Toronto
                  Stock
                  Exchange, if applicable, such dispute will be conclusively determined
                  by
                  the Corporation’s auditors, or if they are unable or unwilling to act, by
                  such other firm of independent chartered accountants as may be
                  selected by
                  action of the Corporation’s board of directors and any such determination
                  will be binding upon the Corporation, the Holders of Warrants and
                  shareholders of the Corporation; such auditors or accountants will
                  be
                  given access to all necessary records of the
                  Corporation.

              

      

       

      
        	 	
                (d)

              	
                        If
                  the
                  Corporation sets a record date to determine the holders of Common
                  Shares
                  for the purpose of entitling them to receive any dividend or distribution
                  or sets a record date to take any other action and thereafter and
                  before
                  the distribution to such shareholders of any such dividend or distribution
                  or the taking of any other action, legally abandons its plan to
                  pay or
                  deliver such 

              

      

       

      
        
          
          

        

        
          -
            6
            -

          
            

          

        

        
          
          

        

      

      
         

        
          	 	
                   

                	dividend or distribution or take such other
                  action, then
                  no adjustment in the Exercise Price shall be
                  made.

        

      

       

      
        	 	
                (e)

              	
                        In
                  the
                  absence of a resolution of the Corporation’s board of directors fixing a
                  record date for a Special Distribution or Rights Offering, the
                  Corporation
                  shall be deemed to have fixed as a record date therefor the date
                  on which
                  the Special Distribution or Rights Offering is
                  effected.

              

      

       

      
        	
                9.

              	
                On
                  the happening of each and every such event set out in clause 7,
                  the
                  applicable provisions of this Warrant, including the Exercise Price,
                  shall, ipso facto, be deemed to be amended accordingly and the
                  Corporation
                  shall take all necessary action so as to comply with such provisions
                  as so
                  amended.

              

      

       

      
        	
                10.

              	
                The
                  Corporation shall not be required to deliver certificates for Common
                  Shares while the share transfer books of the Corporation are properly
                  closed, having regard to the provisions of clauses 7 and 8 hereof,
                  prior
                  to any meeting of shareholders or for the payment of dividends
                  or for any
                  other purpose and in the event of the surrender of any Warrant
                  in
                  accordance with the provisions hereof and the making of any subscription
                  and payment for the Common Shares called for thereby during any
                  such
                  period delivery of certificates for Common Shares may be postponed
                  for not
                  more than five (5) days after the date of the re opening of said
                  share
                  transfer books. Provided, however, that any such postponement of
                  delivery
                  of certificates shall be without prejudice to the right of the
                  Holder so
                  surrendering the same and making payment during such period to
                  receive
                  after the share transfer books shall have been re opened such certificates
                  for the Common Shares called for, as the same may be adjusted pursuant
                  to
                  clause 8 hereof as a result of the completion of the event in respect
                  of
                  which the transfer books were
                  closed.

              

      

       

      
        	
                11.

              	
                Nothing
                  herein contained or done pursuant hereto shall obligate the Holder
                  to
                  purchase or pay for or the Corporation to issue any securities
                  except
                  those Common Shares in respect of which the Holder shall have exercised
                  its right to purchase hereunder in the manner provided
                  herein.

              

      

       

      
        	
                12.

              	
                All
                  Series
                  J Warrants
                  of the Corporation shall rank pari
                  passu,
                  notwithstanding the actual date of the issue
                  thereof.

              

      

       

      
        	
                13.

              	
                The
                  Corporation shall not enter into any transaction whereby all or
                  substantially all of its undertaking, property and assets would
                  become the
                  property of any other corporation (herein called a “successor
                  corporation”)
                  whether by way of reorganization, reconstruction, consolidation,
                  amalgamation, merger, transfer, sale, disposition or otherwise,
                  unless
                  prior to or contemporaneously with the consummation of such transaction
                  the Corporation and the successor corporation shall have executed
                  such
                  instruments and done such things as, in the opinion of counsel
                  to the
                  Holder, are necessary or advisable to establish that upon the consummation
                  of such transaction:

              

      

       

      
        	 	
                (i)

              	
                the
                  successor corporation will have assumed all the covenants and obligations
                  of the Corporation under this Warrant,
                  and

              

      

       

      
        	 	
                (ii)

              	
                the
                  Warrant will be a valid and binding obligation of the successor
                  corporation entitling the Holder, as against the successor corporation,
                  to
                  all the rights of the Holder under this Warrant, mutatis
                  mutandis.

              

      

       

      Whenever
        the conditions of this subsection 13 shall have been duly observed and performed
        the successor corporation shall possess, and from time to time may exercise,
        each and every right and power of the Corporation under this Warrant in the
        name
        of the Corporation or otherwise and any 

      
        
          
          

        

        
          -
            7
            -

          
            

          

        

        
          
          

        

      

      act
        or proceeding by any provision hereof required to be done or performed by
        any
        director or officer of the Corporation may be done and performed with like
        force
        and effect by the like directors or officers of the successor
        corporation.

       

      
        	
                14.

              	
                The
                  Corporation hereby represents and warrants with and to the Holder
                  that the
                  Corporation is duly authorized and has the corporate and lawful
                  power and
                  authority to create and issue this Warrant and the Common Shares
                  issuable
                  upon the exercise hereof and perform its obligations hereunder
                  and that
                  this Warrant represents a valid, legal and binding obligation of
                  the
                  Corporation enforceable in accordance with its
                  terms.

              

      

       

      
        	
                15.

              	
                If
                  any one or more of the provisions or parts thereof contained in
                  this
                  Warrant should be or become invalid, illegal or unenforceable in
                  any
                  respect in any jurisdiction, the remaining provisions or parts
                  thereof
                  contained herein shall be and shall be conclusively deemed to be,
                  as to
                  such jurisdiction, severable therefrom
                  and:

              

      

       

      
        	 	
                (iii)

              	
                the
                  validity, legality or enforceability of such remaining provisions
                  or parts
                  thereof shall not in any way be affected or impaired by the severance
                  of
                  the provisions or parts thereof severed;
                  and

              

      

       

      
        	 	
                (iv)

              	
                the
                  invalidity, illegality or unenforceability of any provision or
                  part
                  thereof contained in this Warrant in any jurisdiction shall not
                  affect or
                  impair such provision or part thereof or any other provisions of
                  this
                  Warrant in any other jurisdiction.

              

      

       

      
        	
                16.

              	
                Any
                  notice, document or communication required or permitted by this
                  Warrant to
                  be given by a party hereto shall be in writing and is sufficiently
                  given
                  if delivered personally, or if sent by prepaid registered mail,
                  or if
                  transmitted by any form of recorded telecommunication tested prior
                  to
                  transmission, to such party addressed as
                  follows:

              

      

       

      
        	 	
                (v)

              	
                to
                  the Holder, in the register to be maintained pursuant to Section
                  20
                  hereof; and

              

      

       

      
        	 	
                (vi)

              	
                to
                  the Corporation at:

              

      

       

      302
        The East Mall

      Suite
        300

      Toronto,
        Ontario

      M9B
        6C7

       

      Attention:
         Darryl
        Kleeabaum, Controller

       

      Telecopier: 416-640-0412

       

      Notice
        so mailed shall be deemed to have been given on the tenth (10th)
        business day after deposit in a post office or public letter box. Neither
        party
        shall mail any notice, request or other communication hereunder during any
        period in which applicable postal workers are on strike or if such strike
        is
        imminent and may reasonably be anticipated to affect the normal delivery
        of
        mail. Notice transmitted by a form of recorded telecommunication or delivered
        personally shall be deemed given on the day of transmission or personal
        delivery, as the case may be. Any party may from time to time notify the
        other
        in the manner provided herein of any change of address which thereafter,
        until
        change by like notice, shall be the address of such party for all purposes
        hereof.

       

      
        
          
          

        

        
          -
            8
            -

          
            

          

        

        
          
          

        

      

       

      
        	
                17.

              	
                Subject
                  as hereinafter provided, all or any of the rights conferred upon
                  the
                  Holder by the terms hereof may be enforced by the Holder by appropriate
                  legal proceedings. No recourse under or upon any obligation, covenant
                  or
                  agreement contained herein shall be had against any shareholder,
                  director
                  or officer of the Corporation either directly or through the Corporation,
                  it being expressly agreed and declared that the obligations under
                  the
                  Warrants are solely corporate obligations and that no personal
                  liability
                  whatever shall attach to or be incurred by the shareholders, directors
                  or
                  officers of the Corporation or any of them in respect thereof,
                  any and all
                  rights and claims against every such shareholder, officer or director
                  being hereby expressly waived as a condition of and as a consideration
                  for
                  the issue of the Warrants.

              

      

       

      
        	
                18.

              	
                The
                  Holder may subscribe for and purchase any lesser number of Common
                  Shares
                  than the number of shares expressed in this Warrant Certificate.
                  In the
                  case of any subscription for a lesser number of Common Shares than
                  expressed in this Warrant Certificate, the Holder hereof shall
                  be entitled
                  to receive at no cost to the Holder a new Warrant Certificate in
                  respect
                  of the balance of Warrant not then exercised. Such new Warrant
                  Certificate
                  shall be delivered by bonded overnight courier to the Holder by
                  the
                  Corporation, contemporaneously with the delivery of the certificate
                  or
                  certificates representing the Common Shares issued pursuant to
                  clause
                  4.

              

      

       

      
        	
                19.

              	
                If
                  this Warrant Certificate is stolen, lost, mutilated or destroyed,
                  the
                  Corporation shall, on such terms as it may in its discretion acting
                  reasonably impose, issue and sign and direct the Corporation’s transfer
                  agent to countersign a new Warrant Certificate of like denomination,
                  tenor
                  and date as the Warrant Certificate so stolen, lost, mutilated
                  or
                  destroyed for delivery to the
                  Holder.

              

      

       

      
        	
                20.

              	
                The
                  Corporation shall keep at its principal office (or its transfer
                  agent in
                  the City of Toronto): (a) a register of holders in which shall
                  be entered
                  the names and addresses of the holders of the Warrants and of the
                  number
                  of Warrants held by them; and (b) a register of transfers in which
                  shall
                  be entered the date and other particulars of each transfer of Warrants.
                  The registers hereinbefore referred to shall be open at all reasonable
                  times for inspection by any Holder.

              

      

       

      
        	
                21.

              	
                The
                  transferee of a Warrant Certificate shall, after the transfer form
                  attached to the Warrant Certificate as Schedule “B” or any other form of
                  transfer acceptable to the Corporation, acting reasonably, is duly
                  completed and the Warrant Certificate is lodged with the Corporation
                  and
                  upon compliance with all other conditions in that regard required
                  by this
                  Warrant, by the Toronto Stock Exchange or by law, be entitled to
                  have his
                  name entered on the register of holders as the owner of the Warrants
                  represented thereby free from all equities or rights of set off
                  or
                  counterclaim between the Corporation and the transferor or any
                  previous
                  holder of such Warrant, save in respect of equities of which the
                  Corporation or the transferee is required to take notice by statute
                  or by
                  order of a court of competent
                  jurisdiction.

              

      

       

      
        	
                22.

              	
                Warrant
                  Certificates may, upon compliance with the reasonable requirements
                  of the
                  Corporation, be exchanged for Warrant Certificates in any other
                  denomination representing in the aggregate the same number of Warrants.
                  The Corporation shall issue and sign and direct the Corporation’s transfer
                  agent to countersign, all Warrant Certificates necessary to carry
                  out the
                  exchanges contemplated herein,
                  provided:

              

      

       

      (i)        Warrant
        Certificates may be exchanged only at the principal office of the Corporation
        in
        the City of Toronto;

       

      (ii)        any
        Warrant Certificates tendered for exchange shall be surrendered to the
        Corporation and cancelled; and

       

      
        
          
          

        

        
          -
            9
            -

          
            

          

        

        
          
          

        

      

      (iii)       except
        as otherwise herein provided, the Corporation shall not charge Holders
        requesting an exchange any sum for any new Warrant Certificate issued.

       

      
        	
                23.

              	
                The
                  Corporation may deem and treat the registered holder of any Warrant
                  Certificate as the absolute owner of the Warrants represented thereby
                  for
                  all purposes, and the Corporation shall not be affected by any
                  notice or
                  knowledge to the contrary except where the Corporation is required
                  to take
                  notice by statute or by order of a court of competent jurisdiction.
                  A
                  Holder shall be entitled to the rights evidenced by such Warrant
                  free from
                  all equities or rights of set off or counterclaim between the Corporation
                  and the original or any intermediate holder thereof and all persons
                  may
                  act accordingly and the receipt by any such Holder of the Common
                  Shares
                  purchasable pursuant to such Warrant shall be a good discharge
                  to the
                  Corporation for the same and the Corporation shall not be bound
                  to inquire
                  into the title of any such Holder except where the Corporation
                  is required
                  to take notice by statute or by order of a court of competent
                  jurisdiction.

              

      

       

      
        	
                24.

              	
                The
                  Holder, if resident in Canada, acknowledges that appropriate legend,
                  as
                  follows, will be placed upon certificates representing any securities
                  issued on the exchange, assignment or exercise of the Warrants
                  represented
                  by this certificate until the hold period expires for the Warrants
                  so
                  represented hereby.

              

      

       

      LEGEND

       

      “UNLESS
        PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
        NOT
        TRADE THE SECURITY BEFORE [INSERT THE DATE THAT IS FOUR MONTHS AND A DAY
        AFTER
        THE DATE OF ISSUE.]”

       

      
        	
                25.

              	
                This
                  Warrant shall be governed by the laws of the Province of Ontario
                  and the
                  federal laws of Canada applicable
                  herein.

              

      

       

      
        	
                26.

              	
                The
                  Holder, if resident in the United States, acknowledges that appropriate
                  legend, as follows, will be placed upon certificates representing
                  any
                  securities issued on the exchange, assignment or exercise of the
                  Warrants
                  represented by this certificate until the hold period expires for
                  the
                  Warrants so represented hereby.

              

      

       

      LEGEND

       

      “THE
        SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER
        THE
        UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR ANY STATE
        SECURITIES LAWS. THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED, HYPOTHECATED
        OR
        OTHERWISE TRANSFERRED OR ENCUMBERED ONLY (A) OUTSIDE THE UNITED STATES IN
        COMPLIANCE WITH RULE 904 OF REGULATION S PROMULGATED UNDER THE 1933 ACT,
        (B) IN
        COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE
        1933
        ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH
        ANY
        APPLICABLE STATE SECURITIES LAWS, OR (C) IN A TRANSACTION THAT IS OTHERWISE
        EXEMPT FROM 

       

      
        
          
          

        

        
          -
            10
            -

          
            

          

        

        
          
          

        

      

       

      THE
        REGISTRATION REQUIREMENTS OF THE 1933 ACT AND ANY APPLICABLE STATE LAWS,
        AND THE
        HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL
        OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY SATISFACTORY TO
        THE
        COMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN
        SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. IF THESE SECURITIES
        ARE
        BEING SOLD AT ANY TIME THE COMPANY IS A “FOREIGN ISSUER” AS DEFINED IN RULE 902
        UNDER THE 1933 ACT, A NEW CERTIFICATE, BEARING NO LEGEND, THE DELIVERY OF
        WHICH
        WILL CONSTITUTE “GOOD DELIVERY” MAY BE OBTAINED FROM THE COMPANY’S TRANSFER
        AGENT UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION,
        IN FORM
        SATISFACTORY TO THE COMPANY AND THE COMPANY’S TRANSFER AGENT TO THE EFFECT THAT
        THE SALE OF THE SECURITIES IS BEING MADE IN COMPLIANCE WITH RULE 904 OF
        REGULATION S UNDER THE 1933 ACT.”

       

      
        	
                27.

              	
                All
                  references herein to monetary amounts are references to lawful
                  money of
                  Canada.

              

      

       

      28. Time
        shall be of the essence hereof.

       

      IN
        WITNESS WHEREOF,
        the Corporation has caused this Warrant Certificate to be signed by its duly
        authorized officer.

       

      DATED
        this _______day of ___________, 2006.

       

      
        	
                ADB
                  SYSTEMS INTERNATIONAL LTD.

              
	
                Per:

                 

              	 
	 	
                Name: 

              
	 	
                 

                Title:

              

      

      

       

      
        
          
          

        

        
          -
            11
            -

          
            

          

        

        
          
          

        

      

      SCHEDULE
        “A”

       

      SUBSCRIPTION
        FORM

       

      TO
        BE COMPLETED IF WARRANTS ARE TO BE EXERCISED:

       

      
        	
                 

                TO:  

                 

              	
                ADB
                  SYSTEMS INTERNATIONAL LTD.

                302
                  The East Mall, Suite 300

                Toronto,
                  Ontario

                M9B
                  6C7

              
	
                 

                RE:

                 

              	
                 

                Series
                  (J) Warrants 

                 

              

      

      

       

      THE
        UNDERSIGNED
        hereby subscribes for ___________________ common shares of ADB Systems
        International Ltd. according to the terms and conditions set forth in the
        annexed warrant certificate (or such number of other securities or property
        to
        which such warrant entitles the undersigned to acquire under the terms and
        conditions set forth in the annexed warrant certificate).

       

      Address
        for Delivery of
        Shares:_________________________________________________

       

      Exercise
        Price Tendered:
        ______________________________________________________

       

      (Cdn$0.20
        per share or as adjusted)  
        Cdn$____________________________________

       

      DATED
        at Toronto, this _____day of _______________, 200___. 

       

      
        	 	 	 
	
                Witness

                 

              	 	
                Holder’s
                  Name

              
	 	 	 
	 	 	
                Authorized
                  Signature

                 

              
	 	 	 
	 	 	
                Title
                  (if
                  applicable)

                 

              

      

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      SCHEDULE
        “B”

       

      ASSIGNMENT
        FORM

       

      TO
        BE COMPLETED IF WARRANTS ARE TO BE ASSIGNED:

       

      
        	
                 

                TO:  

                 

              	
                ADB
                  SYSTEMS INTERNATIONAL LTD.

                302
                  The East Mall, Suite 300

                Toronto,
                  Ontario

                M9B
                  6C7

              
	
                 

                RE:

                 

              	
                 

                Series
                  (J) Warrants 

                 

              

      

      FOR
        VALUE RECEIVED,
        _________Warrants represented by this Warrant Certificate are

       

      hereby
        transferred to
        ________________________________________________________________

       

      residing
        at
        ________________________________________________________________________

       

      You
        are hereby instructed to take the necessary steps to effect this
        transfer.

       

      DATED
        at _____________________, this ________ day of __________________ , ________
        .

       

      
        	 	 	 
	
                Witness

                 

              	 	
                Holder’s
                  Name

                 

              
	 	 	 
	 	 	
                Authorized
                  Signature

                 

              
	 	 	 
	 	 	
                Title
                  (if
                  applicable)

                 

              

      

      

       

      Signature
        guaranteed:

       

      The
        signature must be guaranteed by a Canadian chartered bank or a member of
        a
        recognized stock exchange or other entity acceptable to the
        Corporation.EX-10.1

Exhibit 10.1 Employment Agreement between Space Systems/Loral, Inc. and C. Patrick DeWitt
dated November 21, 2005 (Management Compensation Plan)

(Incorporated by reference to Exhibit 10.14 of the Company’s Annual Report on Form 10 K for the
fiscal year ended December 31, 2005)

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]