Document:

<PAGE>

                                                                     EXHIBIT 4.5

                                JOINDER AGREEMENT

     JOINDER AGREEMENT, dated as of October 3, 2006 (this "Agreement"), among
Shawn Xiaohua Qu ("Founder"), ATS Automation Tooling Systems Inc., an Ontario
corporation ("ATS"), HSBC HAV 2 (III) Limited ("HSBC"), JAFCO Asia Technology
Fund II (Barbados) Limited ("JAFCO", and together with HSBC, the "Initial
Investors"), Canadian Solar Inc., a Canadian corporation ("CSI" or the
"Company"), and CSI Solartronics Co., Ltd., CSI Solar Technologies Inc. and CSI
Solar Manufacturing Inc. (collectively, the "PRC Subsidiaries").

     WHEREAS the Founder, the Initial Investors, the Company and the PRC
Subsidiaries entered into an investment agreement dated as of November 30, 2005
(the "Investment Agreement") to govern certain aspects of the affairs of the
Company, a true and complete copy of which is attached hereto as Exhibit A.

     WHEREAS, pursuant to a share transfer agreement dated as of September 15,
2006 (the "Share Transfer Agreement") among the Founder, ATS and the Company,
the Founder is transferring 800,171 common shares of the Company, representing
approximately 8% of the share capital of CSI on a fully-diluted basis, to ATS.

     WHEREAS, pursuant to the Investment Agreement, ATS is required to enter
into this Agreement as a condition of the Company approving the above-noted
transfer of common shares from the Founder to ATS.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

     1.1 Definitions and References. As used in this Agreement, and unless the
context requires a different meaning or otherwise defined herein, all defined
terms shall have the meanings ascribed thereto in the Investment Agreement. All
references to Clauses herein shall be to the corresponding clauses in the
Investment Agreement.

                                   ARTICLE II

                            TRANSFER OF COMMON SHARES

     2.1 Transfer of Common Shares. All parties hereto acknowledge and consent
to the transfer of 800,171 Common Shares from the Founder to ATS pursuant to the
Share Transfer Agreement, and waive any and all rights that they may be entitled
to under the Investment Agreement with respect to the transfer of such Common
Shares.
<PAGE>
                                                                              2.

                                  ARTICLE III

                   ACKNOWLEDGEMENT, CONFIRMATION AND AGREEMENT

     ATS hereby acknowledges and agrees to be bound by the Investment Agreement
to the extent set forth herein, and all other parties hereto confirm and agree
as follows:

     3.1 Transfers of Equity Securities (Clause 4 of the Investment Agreement).

     (a) ATS shall not, directly or indirectly, effect or facilitate a Transfer
of all or any portion of its Equity Securities or other interest in the Company
before the completion of a Qualified IPO unless (i) the prior written consent of
all Investors is obtained or (ii) ATS has complied with the provisions of
Clauses 4.3 (Right of First Refusal) and 4.5 (Non-Exercise of Rights) of the
Investment Agreement in the manner set forth herein.

     (b) ATS hereby grants to the Investors a right of first refusal as set
forth in Clause 4.3 of the Investment Agreement, with all necessary
modifications thereto as may be necessary to give proper effect to the grant of
such right herein provided for.

     (c) The Founder hereby grants to ATS a right of co-sale as set forth in
Clause 4.4 of the Investment Agreement, with all necessary modifications thereto
as may be necessary to give effect to the grant of such right herein provided
for.

     (d) None of the restrictions and/or requirements contained in Clauses 4.1
to 4.6 of the Investment Agreement (to the extent applicable to ATS as provided
for in this Agreement) shall apply to any Transfer by ATS to any of its
Affiliates or to Photowatt Technologies Inc. or any of its Affiliates; and all
rights of ATS hereunder shall enure for the benefit of any such transferee when
such transferee signs a Joinder Agreement pursuant to which it undertakes to be
bound by the provisions of the Investment Agreement and this Agreement as if it
was ATS.

     (e) All parties agree that in the event that the Initial Investors no
longer hold any Equity Securities, ATS shall then be entitled to the benefits of
all of the rights of the Investors set forth in Clauses 4.1 to 4.6 of the
Investment Agreement and in furtherance thereof, ATS shall upon the occurrence
of such event be deemed to be the "Investor" for purposes of those Clauses. Upon
the occurrence of such event, the rights set out in sections 3.1(a), 3.1(b),
3.1(c) and 3.1(f) hereof shall terminate and be of no further force and effect.

     (f) ATS hereby grants to the Founder a first right of negotiation as set
forth in Clause 4.6 of the Investment Agreement, the effectiveness of such right
being subject to section 3.1(b) hereof.

     3.2 Pre-emptive Rights (Clause 5 of the Investment Agreement). The Company
hereby grants to ATS the pre-emptive rights as set forth in Clause 5 of the
Investment Agreement as if ATS is deemed to be an "Investor" for purposes of
that Clause.
<PAGE>
                                                                              3.

     3.3 Undertakings after First Completion (Clause 6 of the Investment
Agreement). ATS hereby acknowledges and agrees that the Group may effect a
reorganization for purposes of achieving an IPO as set forth in Clause 6.1 of
the Investment Agreement and may effect a share split, subdivision or share
combination of the Common Shares which does not result in any change in the
proportional ownership of the Common Shares owned by the Shareholders, provided
that ATS is deemed to be an "Investor" for purposes of Clause 6.1(C) (Tax
Indemnity on a Reorganization) of the Investment Agreement. In addition, ATS is
deemed to be an "Investor" for purposes of Clauses 6.2 to 6.10 of the Investment
Agreement.

     3.4 Directors and Management (Clause 7 of the Investment Agreement). All
parties agree that ATS shall be entitled to nominate one individual to the Board
as a Director in the event that: (i) a Qualified IPO is not completed on or
before March 31, 2007; and (ii) HSBC no longer has a right to nominate an
individual to the Board, and upon the occurrence of such events, ATS shall have
the same rights that each "Investor" has pursuant to Clause 7 of the Investment
Agreement and ATS is deemed to be an "Investor" for purposes of that Clause. In
addition, ATS shall be entitled to the "Observer" right as set forth in Clause
7.3(D) of the Investment Agreement from the date hereof until the earlier of:
(i) ATS (or its permitted transferee) no longer holds any Equity Securities, or
(ii) completion of a Qualified IPO.

     3.5 Reserved Matters (Clause 9 of the Investment Agreement). All parties
agree that in the event that the Initial Investors no longer hold any Equity
Securities, each of the reserved matters set out in Clause 9 of the Investment
Agreement shall then require the consent of ATS and in furtherance thereof, ATS
shall upon the occurrence of such event be deemed to be the "Investor" for
purposes of that Clause.

     3.6 Information Rights (Clause 10 of the Investment Agreement). The Company
shall supply to ATS all such information that each of the Investors is entitled
to pursuant to Clause 10 of the Investment Agreement and ATS is deemed to be an
"Investor" for purposes of that Clause, provided that in respect of Clause 10.1
of the Investment Agreement, the financial statements may be prepared in
accordance with U.S. GAAP or IAS.

     3.7 Joinder Agreement. Any Joinder Agreement to be signed by any Person
shall be satisfactory to ATS. For greater certainty, any Transfer pursuant to
Clause 4.6 of the Investment Agreement is conditional upon such transferee(s)
executing a Joinder Agreement

     3.8 General. ATS acknowledges and confirms that all terms of the Investment
Agreement applicable to all Shareholders and/or all Parties shall apply to ATS
as a Shareholder of the Company or Party to the Investment Agreement, including
for the avoidance of doubt, the announcements and confidentiality provisions of
Clause 12 of the Investment Agreement (subject to ATS being deemed to be an
Investor for purposes therein and to ATS being entitled to make such disclosure
about the Company as considered desirable to comply with Applicable Law, to
effect any Transfer in accordance with the Investment Agreement and in
connection with the Photowatt Technologies Inc. F-1 Registration Statement) and
the termination provisions of Clause 13 of the Investment Agreement. In
addition, for greater certainty, at no time shall the Founder be considered the
<PAGE>
                                                                              4.

"Investor" for purposes of the Investment Agreement, including upon any direct
or indirect Transfer by an Investor to the Founder.

                                   ARTICLE IV

                                  MISCELLANEOUS

     4.1 Other Terms and Provisions.. Unless otherwise varied or provided for in
this Agreement, all other terms and provisions of the Investment Agreement
remain in full force and effect, unamended.

     4.2 Successors and Assigns; Third Party Beneficiaries. This Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns
of the parties hereto.

     4.3 Notices. All parties agree that the notice requirements set forth in
Clause 20 of the Investment Agreement shall apply to ATS whose address is set
forth below.

     Address: 250 royal Oak Road
              Cambridge, Ontario N3H 4R6

     Fax Number: 519-650-6520

     Attention: Chief Financial Officer

     4.4 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     4.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF HONG KONG.

            [The remainder of this page is intentionally left blank]
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                                                                              5.

     IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Agreement on the date first written above.

The Common Seal of                            ) /s/
ATS AUTOMATION TOOLING SYSTEMS INC.           ) Vice President Treasurer
was affixed hereto                            ) /s/
in the presence of:-  /s/                     ) Vice President CFO

The Common Seal of                            )
CANADIAN SOLAR INC.                           ) /s/
was affixed hereto                            ) /s/
in the presence of:-                          )

SIGNED by                                     )
for and on behalf of                          )
HSBC HAV2 (III) LIMITED                       ) /s/
in the presence of:-  /s/                     )

SIGNED by                                     )
for and on behalf of                          )
JAFCO ASIA TECHNOLOGY FUND II                 )
(BARBADOS) LIMITED                            ) /s/
in the presence of:-  /s/                     )

SIGNED, SEALED and DELIVERED                  )
as a Deed by                                  ) /s/
QU XIAO HUA                                   )
in the presence of:-                          ) /s/

<PAGE>
                                                                              6.

The Seal of                                   )
("CHINESE CHARACTERS")                        )
(CSI SOLARTRONICS CO., LTD.)                  ) /s/
was affixed hereto                            )
in the presence of:-                          ) /s/

The Seal of                                   )
("CHINESE CHARACTERS")                        )
(CSI SOLAR TECHNOLOGIES INC.)                 ) /s/
was affixed hereto                            )
in the presence of:-                          ) /s/

The Seal of                                   )
("CHINESE CHARACTERS")                        )
(CSI SOLAR MANUFACTURING INC.)                ) /s/
was affixed hereto                            )
in the presence of:-                          ) /s/

<PAGE>
                                                                              7.

                                    EXHIBIT A

                              INVESTMENT AGREEMENT

                                [See exhibit 4.3]<PAGE>

                                                                     EXHIBIT 4.6

                  CERTIFICATE FOR THE CONVERTIBLE NOTES AND THE
                                   CONDITIONS

Certificate No.: 11
Issue Date: November 30, 2005
Amendment and Restatement Date: July 1, 2006

                               CANADIAN SOLAR INC.
    (Continued under the provisions of the Canada Business Corporations Act)
                                 as the Company

                                       and

                             HSBC HAV2 (III) LIMITED
                                  as Noteholder

                                   ----------

                                  US$5,400,000
                     CONVERTIBLE NOTE DUE NOVEMBER 30, 2008

                                   ----------

The issue of this Convertible Note (the "CONVERTIBLE NOTE") was authorised by
resolution of the Board of Directors of Canadian Solar Inc. (the "COMPANY")
passed on November 30, 2005 pursuant to the agreement dated 16 November 2005
between, among others, the Company and the Noteholder (the "SUBSCRIPTION
AGREEMENT").

The issue of this Convertible Note is subject to, in accordance with and with
the benefit of the terms set out in the Subscription Agreement, and the
conditions attached hereto which form part of this Convertible Note (the
"CONDITIONS").

THIS IS TO CERTIFY that the Company will pay to the Noteholder the principal
amount of FIVE MILLION FOUR HUNDRED THOUSAND UNITED STATE DOLLARS (US$5,400,000)
together with such interests and other additional amounts (if any) as may be
payable under the Conditions on the Maturity Date (as defined in the Conditions)
or on such earlier date as such sum may become payable in accordance with the
Conditions.

The performance of the Company's obligations under this Convertible Note is
guaranteed by Mr. QU Xiao Hua (the "FOUNDER").

THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE DONE
IN COMPLIANCE WITH AND PURSUANT TO THE TERMS OF THE INVESTMENT AGREEMENT DATED
NOVEMBER 30, 2005 (AS THE SAME MAY BE FURTHER AMENDED, MODIFIED OR SUPPLEMENTED
FROM TIME TO TIME) AND ENTERED INTO, AMONG OTHERS, BETWEEN THE COMPANY AND THE
NOTEHOLDER (THE "INVESTMENT AGREEMENT"). THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE UNITED

                                        1

<PAGE>

STATES SECURITIES ACT OF 1933, AS AMENDED OR THE SECURITIES LAWS OF ANY OTHER
COUNTRY. THE INVESTMENT AGREEMENT (AS THE SAME MAY BE FURTHER AMENDED, MODIFIED
OR SUPPLEMENTED FROM TIME TO TIME) SHALL, TO THE EXTENT APPLICABLE, BE DEEMED TO
BE AN AGREEMENT PURSUANT TO SECTION 108(2) OF THE BUSINESS CORPORATIONS ACT
(ONTARIO). UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE NOTEHOLDER MUST
NOT TRADE THE SECURITIES PRESENTED BY THIS CERTIFICATE BEFORE THE DATE THAT IS
FOUR (4) MONTHS AND A DAY AFTER THE LATER OF (I) THE DATE OF THIS CERTIFICATE
AND (II) THE DATE THE COMPANY BECAME A REPORTING ISSUER IN ANY PROVINCE OR
TERRITORY.

This Convertible Note and the Conditions are governed by and shall be construed
in accordance with the laws of Hong Kong.

IN WITNESS WHEREOF this Convertible Note has been executed under seal by the
Company on July 1, 2006.

THE COMMON SEAL of                   )
CANADIAN SOLAR INC.                  )
was affixed hereto                   )  /s/
in the presence of :                 )

SIGNED, SEALED and DELIVERED by      )
QU XIAO HUA                          )  /s/
in the presence of :                 )

                                        2

<PAGE>

                         CONDITIONS OF CONVERTIBLE NOTE

(A)  In these Conditions:

1.   the expressions "Company" and "Noteholder" shall, where the context
     permits, include their respective successors and permitted assigns and any
     persons deriving title under them;

2.   terms defined in the Subscription Agreement shall have the same meanings
     herein unless otherwise defined; and

3.   the following expressions shall, unless the context otherwise requires,
     have the following meanings:

     "2005 PAT" means the consolidated net profit after tax (excluding
     exceptional, extraordinary gains and prior year adjustments) of the Group
     in the financial statements for the twelve (12) months ending 28 February
     2006 as prepared in accordance with IAS and audited by one of the "Big
     Four" accounting firms;

     "ADDITIONAL EQUITY SECURITIES" has the meaning ascribed to it in Condition
     (B)4(c)(ii);

     "AUTOMATIC CONVERSION" means the conversion of a Convertible Note into
     Common Shares referred to in Condition (B)3(b);

     "CONVERSION PRICE" means the conversion price for the Convertible Note as
     determined in accordance with Conditions (B)3(c) and (B)4;

     "EVENT OF DEFAULT" has the meaning ascribed to it in Condition (B)7;

     "GUARANTEED 2005 PAT" means Six Million Five Hundred Thousand United States
     Dollars (US$6,500,000) minus any accounting charges incurred by the Company
     arising solely in connection with the prior Condition (B)5(c)(iii)(II)
     (which was included previously in Schedule 5 to the Subscription Agreement
     prior to its amendment);

     "ISSUE DATE" means November 30, 2005;

     "MATURITY DATE" means a date which is three (3) years after the Issue Date;
     and

     "OPTIONAL CONVERSION" means the conversion of a Convertible Note into
     Common Shares referred to in Condition (B)3(a).

                                        3

<PAGE>

(B)  The Convertible Note shall carry the following rights, benefits and
     privileges and be subject to the following restrictions:

1.   Status

     The Convertible Note constitutes, or will after issue constitute, direct,
     unconditional, unsecured and unsubordinated obligations of the Company and
     rank pari passu (save for certain creditors required to be preferred by law
     in Canada) equally with all other present and future unsecured and
     unsubordinated obligations of the Company.

2.   Interest and dividend

     (a)  The Convertible Note shall bear interest from the Issue Date at the
          rate of twelve per cent (12%) per annum on the principal amount of the
          Convertible Note outstanding, such interest shall, subject to
          sub-paragraphs (b) and (c) below, accrue from day to day, be
          calculated on the basis of the actual number of days that elapsed in a
          year of 365 days and be payable as follows: (i) two per cent (2%) per
          annum shall be payable in cash by four equal quarterly instalments in
          arrears (the first payment being on the date falling three (3) months
          after the Issue Date), and (ii) ten per cent (10%) per annum shall be
          payable in a balloon payment as at the date of conversion or
          redemption as the case may be. In the event that the Convertible Note
          has been wholly converted into Common Shares in accordance with these
          Conditions, the Noteholder shall be entitled to interest in respect of
          the whole of the principal amount being converted for the period from
          the date immediately preceding the last interest payment date (or the
          Issue Date, as the case may be) up to and including the date of
          conversion, and such interest (which has not been paid before the
          conversion) shall be payable by the Company on the date of conversion.

     (b)  Interest shall cease to accrue with effect from the date of conversion
          of the Convertible Note.

     (c)  On redemption of the Convertible Note, interest shall cease to accrue
          with effect from the date the redemption monies have been paid in
          full.

     (d)  The Noteholder agrees and acknowledges that the Shareholders as of the
          Issue Date are entitled to all audited retained earnings as of 28
          February 2006. The Company shall not declare or pay any dividend
          before the completion of a Qualified IPO or redemption of all
          Convertible Notes, except with the prior written consent of all
          holders of all outstanding Convertible Notes.

          In the event that the Board declares a dividend or distribution on the
          Common Shares before the completion of a Qualified IPO or redemption
          of all Convertible Notes with the prior written consent of all holders
          of all outstanding Convertible Notes, the Company shall at the same
          time as such dividend or distribution is paid to the holders of Common
          Shares pay a special interest payment to the Noteholder where the
          Convertible Note remains outstanding, such that the Noteholder shall
          be entitled to its pro-rata share of the dividends on earnings
          accumulated after 28

                                        4

<PAGE>

          February 2006. The special interest shall be calculated on an "as
          converted" basis as if the issued share capital of the Company had
          been enlarged (for the purpose of special interest payment) by the
          maximum number of Common Shares that could be converted upon the
          conversion of the outstanding Convertible Note at the then Conversion
          Price after adjustment (if any) in accordance with Condition (B)4,
          such that the special interest payment that the Noteholder receives is
          equal to the dividend it would have received had the outstanding
          Convertible Notes been wholly converted into Common Shares immediately
          prior to the record date for calculation of dividend or distribution
          entitlements.

     (e)  If payment of any principal or interest or other payment in respect of
          the Convertible Note is not made in full when due or if the
          Convertible Note is not converted in full into Common Shares on the
          date fixed for conversion, the Convertible Note shall bear an
          extraordinary interest, at a compounded rate of twelve per cent (12%)
          per annum, accruing from day to day on the basis of the actual number
          of days that elapsed in a year of 365 days, of:

          (i)  in the case of interest accrued pursuant to Condition (B)2(a),
               any outstanding amount of interest, until such payment (together
               with further interest accrued thereon by virtue of this Condition
               (B)2(e)) is made in full;

          (ii) in the case of special interest accrued pursuant to Condition
               (B)2(d), any outstanding amount of interest, until such payment
               (together with further interest accrued thereon by virtue of this
               Condition (B)2(e)) is made in full;

          (iii) in the case of redemption, any outstanding amount of principal,
               premium or interest, until such payment (together with further
               interest accrued thereon by virtue of this Condition (B)2(e)) is
               made in full; or

          (iv) in the case of conversion, any outstanding amount of principal
               not so converted, until conversion of the Convertible Note in
               full into Common Shares in accordance with these Conditions.

3.   Conversion

     (a)  Optional Conversion. The whole or any part of the outstanding
          principal of the Convertible Note shall be convertible at the option
          of the Noteholder, at any time after the Issue Date but prior to the
          full redemption of the Convertible Note, and without the payment of
          any additional consideration therefore, into such number of fully paid
          Common Shares as determined in accordance with the then effective
          Conversion Price (such event being referred to herein as "OPTIONAL
          CONVERSION").

          Before the Noteholder shall be entitled to convert the Convertible
          Note into Common Shares and to receive any certificate therefor, such
          holder shall give written notice to the Company of not less than seven
          (7) Business Days (such notice shall not be withdrawn unless with the
          prior consent of the Board) at the

                                        5

<PAGE>

          Company's notice address specified in Clause 16.1(D) of the
          Subscription Agreement and surrender the certificate or certificates
          for the Convertible Note at the same address. Subject to the above, on
          the date of conversion the Company shall promptly issue and deliver to
          the Noteholder a certificate(s) for the number of Common Shares into
          which such Convertible Note is converted in the name of the
          Noteholder, together with cash in lieu of any fraction of an Common
          Share in accordance with Condition (B)3(g).

     (b)  Automatic Conversion. The outstanding principal of the Convertible
          Note shall automatically be converted (i) immediately before the
          completion of a Qualified IPO or (ii) upon Majority CN Approval, into
          such number of fully paid Common Shares as determined in accordance
          with the then effective Conversion Price (such event being referred to
          herein as "AUTOMATIC Conversion").

          The Company shall give to each holder of Convertible Notes a notice in
          writing of the Automatic Conversion within three (3) Business Days
          before the anticipated Automatic Conversion. In the event of an
          Automatic Conversion, the outstanding Convertible Note shall be
          converted automatically without any further action by the Noteholder
          and whether or not the certificate representing such Convertible Note
          is surrendered to the Company. The Company shall not be obligated to
          issue any certificate evidencing the Common Shares issuable upon such
          Automatic Conversion unless the certificate evidencing such
          Convertible Note is either delivered to the Company, or the holder
          notifies the Company that such certificate has been lost, stolen, or
          destroyed and provides such indemnity as may be reasonably required by
          the Board. The Company shall, as soon as practicable (any in any event
          within ten (10) Business Days) after such delivery of certificate
          evidencing the Convertible Note or such notification in the case of a
          lost, stolen, or destroyed certificate, issue and deliver to such
          Noteholder a certificate or certificates for the number of Common
          Shares to which such holder shall be entitled as aforesaid, together
          with cash in lieu of any fraction of an Common Share in accordance
          with Condition (B)3(g). Within two (2) Business Days from the
          occurrence of Automatic Conversion, the Company shall notify the
          Noteholder in writing that Automatic Conversion has occurred.

     (c)  Conversion Price. The Conversion Price per Common Share shall
          initially be US$4.94, subject to adjustment in accordance with
          Condition (B)4. The number of Common Shares to which a Noteholder
          shall be entitled upon conversion will be the number obtained by
          dividing the principal amount of the Convertible Note to be converted
          by the Conversion Price then in effect. The initial Conversion Price
          is calculated on the basis that (i) a total of Five Million Six
          Hundred and Sixty-Eight Thousand Four Hundred and Twenty (5,668,421)
          Common Shares have been issued on the Issue Date, (ii) the maximum
          number of Common Shares that may be issued pursuant to the ESOP shall
          not exceed One Million (1,000,000); (iii) Seven Hundred Thousand
          (700,000) Common Shares are expected to be issued by the Company to
          ATS; (iv) an aggregate of Two Million Six Hundred and Thirty-One
          Thousand Five Hundred and Eighty (2,631,579) Common Shares are
          expected to be issued to all Investors upon the full

                                        6

<PAGE>

          conversion of all Convertible Notes of an aggregate principle amount
          of Thirteen Million United States Dollars (US$13,000,000); and (v) the
          valuation of the Company after receiving all Convertible Notes
          proceeds of Thirteen Million United States Dollars (US$13,000,000)
          shall be Forty-Nine Million Four Hundred Thousand United States
          Dollars (US$49,400,000). For the purpose of clarity, the total
          expected number of Common Shares to be in issue on a Fully-Diluted
          Basis as set forth above shall be Ten Million (10,000,000). The
          Conversion Price shall be subject to adjustments where any event set
          out in Condition (B)4 occurs or where the actual number of Common
          Shares in respect of paragraphs (ii) or (iii) above shall be different
          from the numbers set forth in the relevant paragraphs.

     (d)  Conversion. Conversion of the Convertible Note may be effected in such
          manner as may be permitted by law and as the Board shall from time to
          time determine (subject to the provisions of the Applicable Law and
          the constitutional documents of the Company).

          Conversion shall be deemed to (in the case of Optional Conversion)
          have been made immediately prior to the close of business on the date
          of such surrender of the certificate(s) evidencing the Convertible
          Note to be converted, or (in the case of Automatic Conversion) on the
          date referred to in Condition (B)3(b). Nevertheless, with respect to
          any principal amount of the Convertible Note to be converted, such
          principal amount shall remain outstanding for all purposes until the
          date of conversion.

          For the avoidance of doubt, no conversion shall prejudice the right of
          a Noteholder to receive dividends and other distributions declared but
          not paid as at the date of conversion pursuant to the Subscription
          Agreement.

          The Common Shares issued upon Optional Conversion or Automatic
          Conversion shall rank pari passu in all respects with the Common
          Shares then in issue and be allotted and issued free from Encumbrances
          save that they shall not entitle the holder to any dividend declared
          or paid upon Common Shares in respect of the audited retained earnings
          as of 28 February 2006 as referred to Condition (B)2(d).

     (e)  Sufficient authorised share capital. The Company shall ensure that at
          all times there is a sufficient number of authorized but unissued
          Common Shares in its authorised share capital to be issued in
          satisfaction of the conversion of the Convertible Note, whether the
          conversion is Optional Conversion or Automatic Conversion. The Company
          shall not do any act or thing if as a result the enforcement of the
          conversion of the Convertible Note would involve the issue of Common
          Shares at a discount.

     (f)  Entry into register of members. Upon the issue of the Common Shares
          into which the Convertible Note is converted, the Company shall enter
          the Noteholder in its register of members in respect of the relevant
          number of Common Shares arising from such conversion. The Noteholder
          shall be treated for all purposes as the record holder or holders of
          such Common Shares at such time.

                                        7

<PAGE>

     (g)  Fractional shares. No fraction of an Common Share shall be issued upon
          conversion of the Convertible Note. In lieu of any fraction of an
          Common Share to which the Noteholder would otherwise be entitled upon
          conversion, the Company shall pay to such holder cash equal to the
          product of such fraction multiplied by the fair market value of one
          Common Share on the date of conversion, as determined reasonably and
          in good faith by the Board.

4.   Adjustments to Conversion Price

     (a)  Adjustments for Splits, Subdivisions, Combinations, or Consolidation
          of Common Shares. In the event the outstanding Common Shares shall be
          increased by share split, subdivision, or other similar transaction
          (apart from issuance of new Shares approved in writing by all holders
          of all outstanding Convertible Notes) into a greater number of Common
          Shares, the Conversion Price then in effect shall, concurrently with
          the effectiveness of such event, be decreased in proportion to the
          percentage increase in the outstanding number of Common Shares. In the
          event the outstanding Common Shares shall be decreased by a reverse
          share split, combination, consolidation, or other similar transaction
          into a smaller number of Common Shares, the Conversion Price then in
          effect shall, concurrently with the effectiveness of such event, be
          increased in proportion to the percentage decrease in the outstanding
          number of Common Shares.

     (b)  Adjustments for Reclassification, Exchange and Substitution. If the
          Common Shares issuable upon conversion of the Convertible Note shall
          be changed into the same or a different number of shares of any other
          class or classes of shares, whether by capital reorganization,
          reclassification, or otherwise (other than a subdivision or
          combination or consolidation of shares provided for above), the
          Conversion Price then in effect shall, concurrently with the
          effectiveness of such reorganization or reclassification, be
          proportionately adjusted such that the Convertible Note shall be
          convertible into, in lieu of the number of Common Shares which the
          holders would otherwise have been entitled to receive, a number of
          shares of such other class or classes of shares equivalent to the
          number of shares of such other class or classes of shares in the
          capital of the Company into which the Common Shares that would have
          been subject to receipt by the Noteholder upon conversion of such
          Convertible Note immediately before that change would have been
          effected.

     (c)  Adjustments on Lower Price Issuance.

          (i)  If and whenever the Company shall issue any "Additional Equity
               Securities" (as defined below) at any time after the Issue Date
               for a consideration per share less than the Conversion Price in
               effect on the date and immediately prior to such issue or on
               terms more favourable to the Person receiving the Additional
               Equity Securities than the Conditions, then and in each such
               event, the Conversion Price then in effect shall be reduced,
               concurrently with such issue, to the price per share received by
               the Company pursuant to the issue of such Additional Equity
               Securities.

                                        8

<PAGE>

          (ii) For the purposes of Condition (B)4(c)(i), "ADDITIONAL EQUITY
               SECURITIES" shall mean all Equity Securities issued after the
               Issue Date other than:

               (I)  Common Shares issued or issuable at any time upon conversion
                    of any Convertible Securities in issue as at the Issue Date;

               (II) Equity Securities issued or issuable out of the surplus of
                    the Company as a dividend or distribution generally to
                    members of the Company in proportion to their holdings of
                    Common Shares (but subject to Condition (B)2(d));

               (III) Equity Securities issued at anytime upon exercise of any
                    rights or options to subscribe for Equity Securities where
                    the Conversion Price in effect immediately prior to the
                    issuance of such Equity Securities has already been adjusted
                    as a result of and in accordance with this Condition
                    (B)4(c);

               (IV) Common Shares issued or issuable pursuant to an offer for
                    subscription made by the Company upon a Qualified IPO;

               (V)  Equity Securities issued or issuable pursuant to the consent
                    in writing of all the members of the Company including all
                    holders of all outstanding Convertible Notes;

               (VI) Equities Securities issued or issuable as a result of any
                    share split or share consolidation or the like which does
                    not affect the total amount of issued share capital in the
                    Company provided that the Conversion Price in effect prior
                    to the issuance of such Equity Securities has already been
                    adjusted as a result of and in accordance with this
                    Condition (B)4;

               (VII) any subsequent Convertible Notes issued pursuant to the
                    Subscription Agreement;

               (VIII) the number of Common Shares issued or issuable pursuant to
                    the ESOP provided that such number of Common Shares shall
                    not be more One Million (1,000,000) on the calculation basis
                    set out in Condition (B)3(c); and

               (IX) Common Shares to be issued to ATS, provided that the number
                    of Common Shares shall not exceed Seven Hundred Thousand
                    (700,000) on the calculation basis set out in Condition
                    (B)3(c).

          (iii) For the purpose of making any adjustment to the Conversion Price
               as provided in paragraph (i) above, the consideration received by
               the Company for any issue of Additional Equity Securities shall
               be computed:

                                        9

<PAGE>

               (I)  to the extent it consists of cash, as to the amount of cash
                    received by the Company (before deduction of any offering
                    expenses payable by the Company and any underwriting or
                    similar commissions, compensation, or concessions paid or
                    allowed by the Company negotiated on an arm's length basis
                    by the Company with such underwriting agent) in connection
                    with such issue;

               (II) to the extent it consists of property other than cash, at
                    the fair market value of that property as reasonably
                    determined in good faith by an independent valuer appointed
                    by the Board;

               (III) if Additional Equity Securities are issued together with
                    other stock or securities or other assets of the Company for
                    a consideration which covers both, as the portion of the
                    consideration so received that may be reasonably determined
                    in good faith by the Board to be allocable to such
                    Additional Equity Securities; and

               (IV) if Additional Equity Securities are issued in connection
                    with any merger in which the Company is the surviving
                    company, the amount of consideration therefor will be deemed
                    to be the fair market value (as reasonably determined in
                    good faith by the Board) of such portion of the net assets
                    and business of the non-surviving company as is attributable
                    to such Additional Equity Securities.

               If the Additional Equity Securities comprise any rights or
               options to subscribe for, purchase, or otherwise acquire Common
               Shares, or any security convertible or exchangeable into Common
               Shares, then, in each case, the price per share received by the
               Company upon new issue of such Additional Equity Securities will
               be determined by dividing the total amount, if any, received or
               receivable by the Company as consideration for the granting of
               the rights or options or the issue of the convertible securities,
               plus the minimum aggregate amount of additional consideration
               payable to the Company on exercise or conversion of the
               securities, by the maximum number of Common Shares issuable on
               such exercise or conversion. Such granting or issue will be
               considered to be an issue for cash of the maximum number of
               Common Shares issuable on exercise or conversion at the price per
               share determined hereunder, and the Conversion Price will be
               adjusted as above provided to reflect (on the basis of that
               determination) the issue. No further adjustment of such
               Conversion Price will be made as a result of the actual issuance
               of Common Shares on the exercise of any such rights or options or
               the conversion of any such convertible securities.

               Upon the redemption or repurchase of any such securities or the
               expiration or termination of the right to convert into, exchange
               for, or exercise with respect to, Common Shares, the Conversion
               Price will be readjusted to

                                       10

<PAGE>

               such price as would have been obtained had the adjustment made
               upon their issuance been made upon the basis of the issuance of
               only the number of such securities as were actually converted
               into, exchanged for, or exercised with respect to, Common Shares.
               If the purchase price or conversion or exchange rate provided for
               in any such security changes at any time, then, upon such change
               becoming effective, the Conversion Price then in effect will be
               readjusted forthwith to such price as would have been obtained
               had the adjustment made upon the issuance of such securities been
               made upon the basis of (I) the issuance of only the number of
               Common Shares theretofor actually delivered upon the conversion,
               exchange or exercise of such securities, and the total
               consideration received therefor, and (II) the granting or
               issuance, at the time of such change, of any such securities then
               still outstanding for the consideration, if any, received by the
               Company therefor and to be received on the basis of such changed
               price or rate.

     (d)  Adjustments for Other Distributions. Subject to Condition (B)2(d), in
          the event the Company at any time or from time to time makes, or fixes
          a record date for the determination of holders of Common Shares
          entitled to receive, any distribution payable in securities of the
          Company other than Common Shares and other than as adjusted elsewhere
          in this Condition (B)4, then and in each such event provision shall be
          made so that the Noteholder shall receive upon conversion thereof, in
          addition to the number of Common Shares receivable thereupon, the
          amount of securities of the Company which it would have received had
          its Convertible Note been converted into Common Shares immediately
          prior to such record date or on the date of such event and had it
          thereafter, during the period from the date of such event to and
          including the date of conversion, retained such securities receivable
          by them as aforesaid during such period, subject to all other
          adjustments called for during such period under this Condition (B)4
          with respect to the rights of the Noteholder. Subject again to
          Condition (B)2(d), if the Company shall declare a distribution payable
          in securities of other Persons, evidence of indebtedness of the
          Company or other Persons, assets (excluding cash dividends) or options
          or rights not referred to in this Condition (B)4(d), the Noteholder
          shall be entitled to a proportionate share of any such distribution as
          though it were the holders of the number of Common Shares into which
          its Convertible Note is convertible as of the record date fixed for
          determination of the holders of Common Shares entitled to receive such
          distribution.

     (e)  [intentionally omitted]

     (f)  ESOP. In the event that the total number of Common Shares issuable
          under the ESOP shall be less than One Million (1,000,000) on the
          calculation basis set out in Condition (B)3(c), the Conversion Price
          then in effect shall be increased in proportion to the percentage
          decrease in the number of enlarged share capital after taking into
          account of all Common Shares issuable under the ESOP.

                                       11

<PAGE>

     (g)  Save as expressly provided in this Condition (B)4, there shall be no
          other adjustment in the Conversion Price. Exhibit (A) sets out
          examples of adjustments to the Conversion Price for illustration
          purpose only.

     (h)  Extension of General Offer. So long as any Convertible Notes are
          outstanding and the Company becomes aware that an offer is made or an
          invitation is extended to all holders of Common Shares generally to
          acquire all or some of the Common Shares or any scheme of arrangement
          is proposed for that acquisition, the Company shall forthwith give
          notice to all holders of outstanding Convertible Notes and the Company
          shall use its best endeavours to ensure that there is made or extended
          at the same time a similar offer or invitation, or that the scheme of
          arrangement is extended, to each holder of Convertible Note, as if its
          conversion rights had been fully exercised on a date which is
          immediately before the record date for the offer or invitation or the
          scheme of arrangement at the Conversion Price applicable at that time.

     (i)  No Impairment. The Company shall not, by amendment of its
          constitutional documents of the Company or through any reorganization,
          transfer of assets, consolidation, merger, dissolution, issue or sale
          of securities, or any other voluntary action, avoid or seek to avoid
          the observance or performance of any of the terms to be observed or
          performed hereunder by the Company but shall at all times in good
          faith assist in the carrying out of all the provisions of this
          Condition (B)4 and in the taking of all such action as may be
          necessary or appropriate in order to protect the conversion rights of
          the Noteholder against impairment.

     (j)  Certificate as to Adjustments. Upon the occurrence of each adjustment
          or readjustment of the Conversion Price pursuant to this Condition
          (B)4, the Company, at its expense, shall promptly compute such
          adjustment or readjustment in accordance with the terms hereof, and
          furnish to the Noteholder a certificate setting forth: (I) such
          adjustment or readjustment, (II) the facts upon which such adjustment
          or readjustment is based, (III) the applicable Conversion Price then
          in effect, and (IV) the number of Common Shares and the amount, if
          any, of other property which the Noteholder would receive upon the
          conversion of the Convertible Note.

     (k)  Notices of Record Date. In the event that the Company shall propose at
          any time to:

          (i)  declare any dividend or distribution upon the Common Shares or
               other class or series of shares, whether in cash, property,
               share, or other securities, and whether or not a regular cash
               dividend;

          (ii) offer for subscription pro rata to the holders of any class or
               series of its capital any additional shares of any class or
               series or other rights;

          (iii) effect any reclassification or recapitalisation of the Common
               Shares outstanding involving a change in the Common Shares; or

                                       12

<PAGE>

          (iv) merge or consolidate with or into any other corporation, or sell,
               lease, or convey all or substantially all its property, assets or
               business, or a majority of the capital of the Company, or to
               liquidate, dissolve, or wind up,

          then, in connection with each such event, the Company shall send to
          the Noteholder:

               (1)  at least fourteen (14) Business Days' prior written notice
                    of the date on which a record shall be taken for such
                    dividend, distribution, or subscription rights (and
                    specifying the date on which the holders of Common Shares
                    shall be entitled thereto) or for determining rights to vote
                    in respect of the matters referred to in subparagraphs (i)
                    to (iv) of this Condition (B)4(j); and

               (2)  in the case of the matters referred to in subparagraphs (i)
                    to (iv) of this Condition (B)4(j), at least fourteen (14)
                    Business Days' prior written notice of the date when the
                    same shall take place (and specifying the date on which the
                    holders of Common Shares shall be entitled to exchange their
                    Common Shares for securities or other property deliverable
                    upon the occurrence of such event or the record date for the
                    determination of such holders if such record date is
                    earlier).

          Each such written notice shall be delivered personally or given by
          first class mail, postage prepaid, addressed to the Noteholder.

5.   Redemption

     (a)  Unless previously redeemed or converted as provided in these
          Conditions, the Noteholder has the right to require the Company to
          forthwith redeem all or part of the Convertible Note:

          (i)  if the Company has not completed a Qualified IPO before the
               Maturity Date, provided that the Noteholder shall give a written
               notice of not less than three (3) months to the Company at the
               Company's notice address specified in Clause 16.1(D) of the
               Subscription Agreement and surrender of the certificate(s) for
               the Convertible Note. If the Noteholder fails or refuses to
               deliver to the Company the certificate(s) for the Convertible
               Note, the Company may retain the redemption monies until delivery
               of such certificate or of an indemnity in respect thereof as the
               Board may reasonably require and shall within three (3) Business
               Days thereafter pay the redemption monies to such holder. No
               holder of a Convertible Note shall have any claim against the
               Company for interest on any redemption monies so retained; or

          (ii) at any time after the occurrence of an Event of Default upon
               written demand from the Noteholder. The Company shall redeem the
               Convertible Note (or such relevant part) to which such demand
               relates forthwith upon

                                       13

<PAGE>

               receipt of such demand. Redemption of the Convertible Note upon
               occurrence of an Event of Default will not require the Noteholder
               to surrender to the Company the certificate(s) for the
               Convertible Note.

     (b)  Upon written consent of all holders of all outstanding Convertible
          Notes, the Company may redeem all or any portion of the then
          outstanding principal, interest or other payment due under this
          Convertible Note, before the Maturity Date.

     (c)  The redemption monies in respect of the Convertible Note (or the
          relevant part thereof) comprise of:

          (i)  the principal amount so redeemed;

          (ii) arrears of interest, special interest and extraordinary interest
               accrued in accordance with Condition (B)2; and

          (iii) any outstanding amount payable in respect of the Convertible
               Note (or the relevant part thereof);

     (d)  The Convertible Note (or such portion thereof) so redeemed shall be
          cancelled and may not be re-issued.

6.   Transferability

     (a)  The Noteholder may transfer the whole or part of the rights in respect
          of this Convertible Note, provided that (without prejudice to any
          right of co-sale of the Noteholder):

               (I)  the Noteholder shall first negotiate with the Founder on
                    terms of the intended transfer before entering into
                    agreement on the transfer if the transfer is intended to be
                    made any other Person not being an Affiliate of the
                    Noteholder;

               (II) the transfer will not be subject to or will be exempted from
                    the prospectus and registration requirements under the
                    Ontario Securities Act; and

               (III) the transferee shall have executed and delivered to the
                    Company, as a condition precedent to any such transfer, a
                    joinder agreement in form and substance satisfactory to the
                    Company and all holders of Convertible Notes under which the
                    transferee undertakes to be bound by certain provisions of
                    the Subscription Agreement and the Investment Agreement,
                    including without limiting the generality of the forgoing
                    the obligation to first negotiation with the Founder on
                    terms of any subsequent intended transfer by such
                    transferee.

                                       14

<PAGE>

                    For the avoidance of doubt, the Noteholder may transfer the
                    Convertible Note to (i) any Person apart from the Founder
                    where no agreement has been reached between the Noteholder
                    and the Founder on the intended transfer within reasonable
                    time or (ii) any of its Affiliates.

     (b)  Title to this Convertible Note passes only upon the cancellation of
          the existing certificate and the issue of a new certificate (or new
          certificates in the case of a transfer of part of this Convertible
          Note) in accordance with Condition (B)6(c).

     (c)  In relation to any transfer of this Convertible Note permitted under
          or otherwise pursuant to this Condition (B)6:

          (i)  this Convertible Note may be transferred by execution of a form
               of transfer as specified by the Board under the hands of the
               transferor and the transferee (or their duly authorised
               representatives) or, where either the transferor or transferee is
               a corporation, executed by a duly authorised officer or director
               thereof. In this Condition, a "transferor" shall, where the
               context permits or requires, includes joint transferors and shall
               be construed accordingly; and

          (ii) save for loss destruction, the certificate(s) for this
               Convertible Note must be delivered for cancellation to the
               Company accompanied by (a) a duly executed transfer form; (b) in
               the case of the execution of the transfer form on behalf of a
               corporation by its officers or directors, the authority of that
               person or those persons to do so. The Company shall, within three
               (3) Business Days of receipt of such documents from the
               Noteholder, cancel the existing certificate for this Convertible
               Note and issue a new certificate for this Convertible Note (or
               new certificates in the case of a transfer of part of this
               Convertible Note) under the seal of the Company and the Founder,
               in favour of the transferee.

7.   Events of Default

     Any of the following shall constitute an "Event of Default":

     (a)  if the Company fails to pay any amount principal or interest on the
          due date under these Conditions, the Subscription Agreement or the
          Transaction Documents and such default is not remedied within seven
          (7) Business Days of the due date;

     (b)  if any Group Company or the Founder is in material default in the due
          performance of any other of its/his covenants or obligations to the
          Noteholder under these Conditions, the Subscription Agreement or the
          Transaction Documents and such default remains not remedied for seven
          (7) Business Days after written notice thereof has been given to the
          Company or such other defaulting party by the Noteholder;

     (c)  save as stated or referred to in the Disclosure Letter, if any
          representation or warranty made by the Company or the Founder in the
          Subscription Agreement or

                                       15

<PAGE>

          the Transaction Documents is or would be materially incorrect,
          misleading or untrue;

     (d)  if any Group Company (or, to the extent applicable, the Founder) takes
          any corporate action or other steps are taken or legal proceedings are
          started or threatened to start for its winding-up, dissolution,
          administration or re-organisation (apart from the Re-organisation)
          (whether by way of voluntary arrangement, creditors' actions or
          otherwise) or for the appointment of a liquidator, receiver,
          administrator, administrative receiver, conservator, custodian,
          security trustee or similar officer of it or of any or all of its
          revenues and assets, without the prior written consent of all
          shareholders of the Company and all holders of all the outstanding
          Convertible Notes;

     (e)  if any Group Company (or, to the extent applicable, the Founder) is
          dissolved and/or wound-up in any way or ceases or attempts to cease
          its activities or a major part thereof, or if any Group Company has
          discontinued or materially changed the nature of its business, or if
          any Group Company merges or consolidates with any other company or
          legal entity without the prior written consent of all shareholders of
          the Company and all holders of all outstanding Convertible Notes;

     (f)  if there is, or is proposed or agreed to be, a change in Control in
          any of the Group Company without the prior written consent of all
          shareholders of the Company and all holders of all outstanding
          Convertible Notes;

     (g)  if the Founder is in material default of any of his/its covenants or
          obligations under the Investment Agreement;

     (h)  if the Company fails to deliver to each Investor on or before April
          30, 2006 the Satisfactory Audited Reports in accordance with Clause
          3.2(A) of the Subscription Agreement;

     (i)  if all or a material part of the properties or rights or interests of
          any Group Company or the Founder are nationalised or expropriated;

     (j)  if there is, or is proposed or agreed to be, any transfer of all or
          substantially all of the assets of any Group Company or the Founder
          without the prior written consent of all shareholders of the Company
          and all holders of all outstanding Convertible Notes;

     (k)  if any Group Company or the Founder is unable to pay its/his debts as
          they fall due, commences negotiations with any one or more of its/his
          creditors with a view to the general readjustment or rescheduling of
          its/his indebtedness or makes a general assignment for the benefit of
          or a composition with its/his creditors;

     (l)  if at any time it is or becomes unlawful for any Group Company or the
          Founder to perform or comply with any or all of its obligations under
          these Conditions, the Subscription Agreement or the Transaction
          Documents, or any of the obligations of any Group Company or the
          Founder under these Conditions, the Subscription

                                       16

<PAGE>
          Agreement or the Transaction Documents cease to be legal, valid,
          binding and enforceable;

     (m)  if any Group Company or the Founder repudiates the Subscription
          Agreement or any of the Transaction Documents or does or causes to be
          done any act or thing evidencing an intention to repudiate the
          Subscription Agreement or any of the Transaction Documents;

     (n)  if any execution or distress is levied against, or an encumbrancer
          takes possession of, the whole or any material part of, the property,
          undertaking or assets of any Group Company;

     (o)  if any of the Group Company fails to obtain all necessary Governmental
          Approvals to own its assets and to carry on its businesses, or any of
          such Governmental Approvals is not valid or is subject to any
          suspension, cancellation or revocation;

     (p)  if the Founder or a company or corporation wholly Controlled by the
          Founder is no longer the largest Shareholder of the Company without
          the prior written consent from all holders of all outstanding
          Convertible Notes and holders of Shares issued upon conversion of
          Convertible Notes; or

     (q)  if the proceeds of the Subscription Price is not used for the purpose
          stated in Clause 2.4 of the Subscription Agreement;

     (r)  if any event occurs which under the laws of any relevant jurisdiction
          has an analogous effect to any of the events referred to in the
          foregoing paragraphs; or

     (s)  if any Group Company fails to comply with any Applicable Law.

8.   Guarantee

     (a)  The Founder irrevocably and unconditionally:

          (i)  guarantees to the Noteholder punctual and due performance by the
               Company of all its obligations under the Convertible Note from
               time to time and the due payment and discharge of all such sums
               of money and liabilities expressed to be due, owing or incurred
               or payable and unpaid by the Company to the Noteholder pursuant
               to the Subscription Agreement and these Conditions from time to
               time or as a result of any breach thereof (including all
               reasonable expenses, including legal fees and Taxes incurred by
               the Noteholder in connection with any of the above);

          (ii) undertakes with the Noteholder that whenever the Company does not
               pay any amount when due under or in connection with the
               Convertible Note, he shall immediately on demand pay that amount
               as if he was the principal obligor; and

                                       17

<PAGE>

          (iii) indemnifies the Noteholder immediately on demand against any
               cost, loss or liability suffered by the Noteholder if any
               obligation guaranteed by him (or anything which would have been
               an obligation if not unenforceable, invalid or illegal) is or
               becomes unenforceable, invalid or illegal. The amount of the
               cost, loss or liability shall be equal to the amount which the
               Noteholder would otherwise have been entitled to recover.

     (b)  This guarantee is a continuing guarantee and will extend to the
          ultimate balance of sums payable by the Company under the Convertible
          Note, regardless of any intermediate payment or discharge in whole or
          in part.

     (c)  If any payment to the Noteholder (whether in respect of the
          obligations of the Company or any security for those obligations or
          otherwise) is avoided or reduced for any reason including, without
          limitation, as a result of insolvency, breach of fiduciary or
          statutory duties or any similar event:

          (i)  the liability of the Company shall continue as if the payment,
               discharge, avoidance or reduction had not occurred; and

          (ii) the Noteholder shall be entitled to recover the value or amount
               of that security or payment from the Founder, as if the payment,
               discharge, avoidance or reduction had not occurred.

     (d)  The obligations of the Founder under this Condition (B)8 will not be
          affected by an act, omission, matter or thing which, but for this
          Condition, would reduce, release or prejudice any of its obligations
          under this Condition (without limitation and whether or not known to
          the Noteholder) including:

          (i)  any time, waiver or consent granted by the Noteholder or other
               Person;

          (ii) the release of the Company or any other Person under the terms of
               any composition or arrangement with any creditor of any member of
               the Group;

          (iii) any lack of power, authority or legal personality of or
               dissolution or change in the members or status of the Company;

          (iv) any amendment (however fundamental) or replacement of the
               Convertible Note;

          (v)  any unenforceability, illegality or invalidity of any obligation
               of any Person under the Convertible Note; and

          (vi) any bankruptcy, insolvency or similar proceedings.

     (e)  The Founder hereby subordinates to the Noteholder any right he may
          have of first requiring the Noteholder (or any trustee or agent on its
          behalf) to proceed against or enforce any other rights or security or
          claim payment from any Person before

                                       18

<PAGE>

          claiming from the Founder under this Condition (B)8 except to preserve
          any such claim. This waiver applies irrespective of any law or any
          provision of the Convertible Note to the contrary.

     (f)  This guarantee is in addition to and is not in any way prejudiced by
          any other guarantee or security now or subsequently held by the
          Noteholder.

     (g)  Without prejudice to the Noteholder's rights against the Company, the
          Founder shall be deemed a principal obligor in respect of his
          obligations under this guarantee and not merely a surety and,
          accordingly, the Founder shall not be discharged nor shall his
          liability hereunder be affected by any act or thing or means
          whatsoever by which such liability would have been discharged or
          affected if the Founder had not been a principal obligor.

     (h)  Until all moneys, obligations and liabilities (including contingent
          obligations and liabilities) due, owing or incurred by the Company
          under the Convertible Note have been paid or discharged in full, the
          Founder waives all rights of subrogation and indemnity against the
          Company and agrees not to claim any set-off or counterclaim against
          the Company or to claim to prove in competition with the Noteholder in
          the event of the bankruptcy, insolvency or liquidation of the Company.

     (i)  All sums payable under this guarantee shall be paid in full without
          set-off or counterclaim and free and clear of and without deduction of
          or withholding for or on account of any present or future Taxes,
          duties and/or other charges.

9.   Payment and Taxation

     (a)  All payments in respect of the Convertible Note will be made without
          withholding or deduction of or on account of any present or future
          Taxes, duties, assessments or governmental charges of whatever nature
          imposed or levied by or on behalf of the government of Hong Kong,
          Canada or any authority therein or thereof having power to tax unless
          the withholding or deduction of such Taxes, duties, assessments or
          governmental charges is required by law. In that event, the Company or
          the Founder (as the case may be) will pay such additional amounts as
          may be necessary in order that the net amounts received by the
          Noteholder after such withholding or deduction shall equal the
          respective amounts receivable in respect of the Convertible Note in
          the absence of such withholding or deduction provided that,
          notwithstanding any agreement to the contrary, no such additional
          amounts shall be payable by the Company or the Founder (as the case
          may be) in respect of any amounts deemed under Canadian income tax
          laws to constitute interest paid upon conversion of the Convertible
          Note.

     (b)  All payments to the Noteholder shall be made in United States Dollars
          (or another currency as the Noteholder may otherwise specify in
          writing), not later than 4:00 p.m. (Hong Kong time) on the due date,
          by remittance to such bank account as the Noteholder may notify from
          time to time.

                                       19

<PAGE>

     (c)  If the due date for payment of any amount in respect of the
          Convertible Note is not a Business Day, the Noteholder shall be
          entitled to payment on the next following Business Day in the same
          manner but shall not be entitled to be paid any interest in respect of
          any such delay.

     (d)  The Company shall pay any and all issue and other Taxes (other than
          income taxes) that may be payable in respect of any issue or delivery
          of Common Shares on conversion of the Convertible Note, provided,
          however, that the Company shall not be obligated to pay any transfer
          taxes resulting from any transfer of the Convertible Note (or rights
          attached thereto) requested by the Noteholder.

10.  Replacement certificate

     If the certificate for this Convertible Note is lost or mutilated, the
     Noteholder shall forthwith notify the Company and a replacement certificate
     for this Convertible Note shall be issued if the Noteholder provides the
     Company with (i) a declaration by the Noteholder or its officer or director
     that this Convertible Note had been lost or mutilated (as the case may be)
     or other evidence that the certificate for this Convertible Note had been
     lost or mutilated; and (ii) an appropriate indemnity in such form and
     content as the Board may reasonably require. The certificate for this
     Convertible Note which has been replaced in accordance with this Condition
     (B)10 shall forthwith be cancelled.

                                      * * *

                                       20

<PAGE>

Exhibit (A) to the Conditions of Convertible Note

                                       21
<PAGE>

            CERTIFICATE FOR THE CONVERTIBLE NOTES AND THE CONDITIONS

Certificate No.: 12
Issue Date: November 30, 2005
Amendment and Restatement Date: July 1, 2006

                               CANADIAN SOLAR INC.
    (Continued under the provisions of the Canada Business Corporations Act)
                                 as the Company

                                       and

                          JAFCO ASIA TECHNOLOGY FUND II
                                  as Noteholder

                                   ----------

                                  US$2,700,000
                     CONVERTIBLE NOTE DUE NOVEMBER 30, 2008

                                   ----------

The issue of this Convertible Note (the "CONVERTIBLE NOTE") was authorised by
resolution of the Board of Directors of Canadian Solar Inc. (the "COMPANY")
passed on November 30, 2005 pursuant to the agreement dated 16 November 2005
between, among others, the Company and the Noteholder (the "SUBSCRIPTION
AGREEMENT").

The issue of this Convertible Note is subject to, in accordance with and with
the benefit of the terms set out in the Subscription Agreement, and the
conditions attached hereto which form part of this Convertible Note (the
"CONDITIONS").

THIS IS TO CERTIFY that the Company will pay to the Noteholder the principal
amount of TWO MILLION SEVEN HUNDRED THOUSAND UNITED STATE DOLLARS (US$2,700,000)
together with such interests and other additional amounts (if any) as may be
payable under the Conditions on the Maturity Date (as defined in the Conditions)
or on such earlier date as such sum may become payable in accordance with the
Conditions.

The performance of the Company's obligations under this Convertible Note is
guaranteed by Mr. QU Xiao Hua (the "FOUNDER").

THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY ONLY BE DONE
IN COMPLIANCE WITH AND PURSUANT TO THE TERMS OF THE INVESTMENT AGREEMENT DATED
NOVEMBER 30, 2005 (AS THE SAME MAY BE FURTHER AMENDED, MODIFIED OR SUPPLEMENTED
FROM TIME TO TIME) AND ENTERED INTO, AMONG OTHERS, BETWEEN THE COMPANY AND THE
NOTEHOLDER (THE "INVESTMENT AGREEMENT"). THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
OR THE SECURITIES LAWS OF

                                       22

<PAGE>

ANY OTHER COUNTRY. THE INVESTMENT AGREEMENT (AS THE SAME MAY BE FURTHER AMENDED,
MODIFIED OR SUPPLEMENTED FROM TIME TO TIME) SHALL, TO THE EXTENT APPLICABLE, BE
DEEMED TO BE AN AGREEMENT PURSUANT TO SECTION 108(2) OF THE BUSINESS
CORPORATIONS ACT (ONTARIO). UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE
NOTEHOLDER MUST NOT TRADE THE SECURITIES PRESENTED BY THIS CERTIFICATE BEFORE
THE DATE THAT IS FOUR (4) MONTHS AND A DAY AFTER THE LATER OF (I) THE DATE OF
THIS CERTIFICATE AND (II) THE DATE THE COMPANY BECAME A REPORTING ISSUER IN ANY
PROVINCE OR TERRITORY.

This Convertible Note and the Conditions are governed by and shall be construed
in accordance with the laws of Hong Kong.

IN WITNESS WHEREOF this Convertible Note has been executed under seal by the
Company on July 1, 2006.

THE COMMON SEAL of                )
CANADIAN SOLAR INC.               )
was affixed hereto                )   /s/
in the presence of :              )

SIGNED, SEALED and DELIVERED by   )
QU XIAO HUA                       )   /s/
in the presence of :              )

                                       23

<PAGE>

                         CONDITIONS OF CONVERTIBLE NOTE

(C) In these Conditions:

1.   the expressions "Company" and "Noteholder" shall, where the context
     permits, include their respective successors and permitted assigns and any
     persons deriving title under them;

2.   terms defined in the Subscription Agreement shall have the same meanings
     herein unless otherwise defined; and

3.   the following expressions shall, unless the context otherwise requires,
     have the following meanings:

     "2005 PAT" means the consolidated net profit after tax (excluding
     exceptional, extraordinary gains and prior year adjustments) of the Group
     in the financial statements for the twelve (12) months ending 28 February
     2006 as prepared in accordance with IAS and audited by one of the "Big
     Four" accounting firms;

     "ADDITIONAL EQUITY SECURITIES" has the meaning ascribed to it in Condition
     (B)4(c)(ii);

     "AUTOMATIC CONVERSION" means the conversion of a Convertible Note into
     Common Shares referred to in Condition (B)3(b);

     "CONVERSION PRICE" means the conversion price for the Convertible Note as
     determined in accordance with Conditions (B)3(c) and (B)4;

     "EVENT OF DEFAULT" has the meaning ascribed to it in Condition (B)7;

     "GUARANTEED 2005 PAT" means Six Million Five Hundred Thousand United States
     Dollars (US$6,500,000) minus any accounting charges incurred by the Company
     arising solely in connection with the prior Condition (B)5(c)(iii)(II)
     (which was included previously in Schedule 5 to the Subscription Agreement
     prior to its amendment);

     "ISSUE DATE" means November 30, 2005;

     "MATURITY DATE" means a date which is three (3) years after the Issue Date;
     and "OPTIONAL CONVERSION" means the conversion of a Convertible Note into
     Common Shares referred to in Condition (B)3(a).

                                       24

<PAGE>

(D) The Convertible Note shall carry the following rights, benefits and
privileges and be subject to the following restrictions:

1.   Status

     The Convertible Note constitutes, or will after issue constitute, direct,
     unconditional, unsecured and unsubordinated obligations of the Company and
     rank pari passu (save for certain creditors required to be preferred by law
     in Canada) equally with all other present and future unsecured and
     unsubordinated obligations of the Company.

2.   Interest and dividend

     (a)  The Convertible Note shall bear interest from the Issue Date at the
          rate of twelve per cent (12%) per annum on the principal amount of the
          Convertible Note outstanding, such interest shall, subject to
          sub-paragraphs (b) and (c) below, accrue from day to day, be
          calculated on the basis of the actual number of days that elapsed in a
          year of 365 days and be payable as follows: (i) two per cent (2%) per
          annum shall be payable in cash by four equal quarterly instalments in
          arrears (the first payment being on the date falling three (3) months
          after the Issue Date), and (ii) ten per cent (10%) per annum shall be
          payable in a balloon payment as at the date of conversion or
          redemption as the case may be. In the event that the Convertible Note
          has been wholly converted into Common Shares in accordance with these
          Conditions, the Noteholder shall be entitled to interest in respect of
          the whole of the principal amount being converted for the period from
          the date immediately preceding the last interest payment date (or the
          Issue Date, as the case may be) up to and including the date of
          conversion, and such interest (which has not been paid before the
          conversion) shall be payable by the Company on the date of conversion.

     (b)  Interest shall cease to accrue with effect from the date of conversion
          of the Convertible Note.

     (c)  On redemption of the Convertible Note, interest shall cease to accrue
          with effect from the date the redemption monies have been paid in
          full.

     (d)  The Noteholder agrees and acknowledges that the Shareholders as of the
          Issue Date are entitled to all audited retained earnings as of 28
          February 2006. The Company shall not declare or pay any dividend
          before the completion of a Qualified IPO or redemption of all
          Convertible Notes, except with the prior written consent of all
          holders of all outstanding Convertible Notes.

          In the event that the Board declares a dividend or distribution on the
          Common Shares before the completion of a Qualified IPO or redemption
          of all Convertible Notes with the prior written consent of all holders
          of all outstanding Convertible Notes, the Company shall at the same
          time as such dividend or distribution is paid to the holders of Common
          Shares pay a special interest payment to the Noteholder where the
          Convertible Note remains outstanding, such that the Noteholder shall
          be entitled to its pro-rata share of the dividends on earnings
          accumulated after 28

                                       25

<PAGE>

          February 2006. The special interest shall be calculated on an "as
          converted" basis as if the issued share capital of the Company had
          been enlarged (for the purpose of special interest payment) by the
          maximum number of Common Shares that could be converted upon the
          conversion of the outstanding Convertible Note at the then Conversion
          Price after adjustment (if any) in accordance with Condition (B)4,
          such that the special interest payment that the Noteholder receives is
          equal to the dividend it would have received had the outstanding
          Convertible Notes been wholly converted into Common Shares immediately
          prior to the record date for calculation of dividend or distribution
          entitlements.

     (e)  If payment of any principal or interest or other payment in respect of
          the Convertible Note is not made in full when due or if the
          Convertible Note is not converted in full into Common Shares on the
          date fixed for conversion, the Convertible Note shall bear an
          extraordinary interest, at a compounded rate of twelve per cent (12%)
          per annum, accruing from day to day on the basis of the actual number
          of days that elapsed in a year of 365 days, of:

          (i)  in the case of interest accrued pursuant to Condition (B)2(a),
               any outstanding amount of interest, until such payment (together
               with further interest accrued thereon by virtue of this Condition
               (B)2(e)) is made in full;

          (ii) in the case of special interest accrued pursuant to Condition
               (B)2(d), any outstanding amount of interest, until such payment
               (together with further interest accrued thereon by virtue of this
               Condition (B)2(e)) is made in full;

          (iii) in the case of redemption, any outstanding amount of principal,
               premium or interest, until such payment (together with further
               interest accrued thereon by virtue of this Condition (B)2(e)) is
               made in full; or

          (iv) in the case of conversion, any outstanding amount of principal
               not so converted, until conversion of the Convertible Note in
               full into Common Shares in accordance with these Conditions.

3.   Conversion

     (a)  Optional Conversion. The whole or any part of the outstanding
          principal of the Convertible Note shall be convertible at the option
          of the Noteholder, at any time after the Issue Date but prior to the
          full redemption of the Convertible Note, and without the payment of
          any additional consideration therefore, into such number of fully paid
          Common Shares as determined in accordance with the then effective
          Conversion Price (such event being referred to herein as "OPTIONAL
          CONVERSION").

          Before the Noteholder shall be entitled to convert the Convertible
          Note into Common Shares and to receive any certificate therefor, such
          holder shall give written notice to the Company of not less than seven
          (7) Business Days (such notice shall not be withdrawn unless with the
          prior consent of the Board) at the

                                       26

<PAGE>

          Company's notice address specified in Clause 16.1(D) of the
          Subscription Agreement and surrender the certificate or certificates
          for the Convertible Note at the same address. Subject to the above, on
          the date of conversion the Company shall promptly issue and deliver to
          the Noteholder a certificate(s) for the number of Common Shares into
          which such Convertible Note is converted in the name of the
          Noteholder, together with cash in lieu of any fraction of an Common
          Share in accordance with Condition (B)3(g).

     (b)  Automatic Conversion. The outstanding principal of the Convertible
          Note shall automatically be converted (i) immediately before the
          completion of a Qualified IPO or (ii) upon Majority CN Approval, into
          such number of fully paid Common Shares as determined in accordance
          with the then effective Conversion Price (such event being referred to
          herein as "AUTOMATIC CONVERSION").

          The Company shall give to each holder of Convertible Notes a notice in
          writing of the Automatic Conversion within three (3) Business Days
          before the anticipated Automatic Conversion. In the event of an
          Automatic Conversion, the outstanding Convertible Note shall be
          converted automatically without any further action by the Noteholder
          and whether or not the certificate representing such Convertible Note
          is surrendered to the Company. The Company shall not be obligated to
          issue any certificate evidencing the Common Shares issuable upon such
          Automatic Conversion unless the certificate evidencing such
          Convertible Note is either delivered to the Company, or the holder
          notifies the Company that such certificate has been lost, stolen, or
          destroyed and provides such indemnity as may be reasonably required by
          the Board. The Company shall, as soon as practicable (any in any event
          within ten (10) Business Days) after such delivery of certificate
          evidencing the Convertible Note or such notification in the case of a
          lost, stolen, or destroyed certificate, issue and deliver to such
          Noteholder a certificate or certificates for the number of Common
          Shares to which such holder shall be entitled as aforesaid, together
          with cash in lieu of any fraction of an Common Share in accordance
          with Condition (B)3(g). Within two (2) Business Days from the
          occurrence of Automatic Conversion, the Company shall notify the
          Noteholder in writing that Automatic Conversion has occurred.

     (c)  Conversion Price. The Conversion Price per Common Share shall
          initially be US$4.94, subject to adjustment in accordance with
          Condition (B)4. The number of Common Shares to which a Noteholder
          shall be entitled upon conversion will be the number obtained by
          dividing the principal amount of the Convertible Note to be converted
          by the Conversion Price then in effect. The initial Conversion Price
          is calculated on the basis that (i) a total of Five Million Six
          Hundred and Sixty-Eight Thousand Four Hundred and Twenty (5,668,421)
          Common Shares have been issued on the Issue Date, (ii) the maximum
          number of Common Shares that may be issued pursuant to the ESOP shall
          not exceed One Million (1,000,000); (iii) Seven Hundred Thousand
          (700,000) Common Shares are expected to be issued by the Company to
          ATS; (iv) an aggregate of Two Million Six Hundred and Thirty-One
          Thousand Five Hundred and Eighty (2,631,579) Common Shares are
          expected to be issued to all Investors upon the full

                                       27

<PAGE>

          conversion of all Convertible Notes of an aggregate principle amount
          of Thirteen Million United States Dollars (US$13,000,000); and (v) the
          valuation of the Company after receiving all Convertible Notes
          proceeds of Thirteen Million United States Dollars (US$13,000,000)
          shall be Forty-Nine Million Four Hundred Thousand United States
          Dollars (US$49,400,000). For the purpose of clarity, the total
          expected number of Common Shares to be in issue on a Fully-Diluted
          Basis as set forth above shall be Ten Million (10,000,000). The
          Conversion Price shall be subject to adjustments where any event set
          out in Condition (B)4 occurs or where the actual number of Common
          Shares in respect of paragraphs (ii) or (iii) above shall be different
          from the numbers set forth in the relevant paragraphs.

     (d)  Conversion. Conversion of the Convertible Note may be effected in such
          manner as may be permitted by law and as the Board shall from time to
          time determine (subject to the provisions of the Applicable Law and
          the constitutional documents of the Company).

          Conversion shall be deemed to (in the case of Optional Conversion)
          have been made immediately prior to the close of business on the date
          of such surrender of the certificate(s) evidencing the Convertible
          Note to be converted, or (in the case of Automatic Conversion) on the
          date referred to in Condition (B)3(b). Nevertheless, with respect to
          any principal amount of the Convertible Note to be converted, such
          principal amount shall remain outstanding for all purposes until the
          date of conversion.

          For the avoidance of doubt, no conversion shall prejudice the right of
          a Noteholder to receive dividends and other distributions declared but
          not paid as at the date of conversion pursuant to the Subscription
          Agreement.

          The Common Shares issued upon Optional Conversion or Automatic
          Conversion shall rank pari passu in all respects with the Common
          Shares then in issue and be allotted and issued free from Encumbrances
          save that they shall not entitle the holder to any dividend declared
          or paid upon Common Shares in respect of the audited retained earnings
          as of 28 February 2006 as referred to Condition (B)2(d).

     (e)  Sufficient authorised share capital. The Company shall ensure that at
          all times there is a sufficient number of authorized but unissued
          Common Shares in its authorised share capital to be issued in
          satisfaction of the conversion of the Convertible Note, whether the
          conversion is Optional Conversion or Automatic Conversion. The Company
          shall not do any act or thing if as a result the enforcement of the
          conversion of the Convertible Note would involve the issue of Common
          Shares at a discount.

     (f)  Entry into register of members. Upon the issue of the Common Shares
          into which the Convertible Note is converted, the Company shall enter
          the Noteholder in its register of members in respect of the relevant
          number of Common Shares arising from such conversion. The Noteholder
          shall be treated for all purposes as the record holder or holders of
          such Common Shares at such time.

                                       28

<PAGE>

     (g)  Fractional shares. No fraction of an Common Share shall be issued upon
          conversion of the Convertible Note. In lieu of any fraction of an
          Common Share to which the Noteholder would otherwise be entitled upon
          conversion, the Company shall pay to such holder cash equal to the
          product of such fraction multiplied by the fair market value of one
          Common Share on the date of conversion, as determined reasonably and
          in good faith by the Board.

4.   Adjustments to Conversion Price

     (a)  Adjustments for Splits, Subdivisions, Combinations, or Consolidation
          of Common Shares. In the event the outstanding Common Shares shall be
          increased by share split, subdivision, or other similar transaction
          (apart from issuance of new Shares approved in writing by all holders
          of all outstanding Convertible Notes) into a greater number of Common
          Shares, the Conversion Price then in effect shall, concurrently with
          the effectiveness of such event, be decreased in proportion to the
          percentage increase in the outstanding number of Common Shares. In the
          event the outstanding Common Shares shall be decreased by a reverse
          share split, combination, consolidation, or other similar transaction
          into a smaller number of Common Shares, the Conversion Price then in
          effect shall, concurrently with the effectiveness of such event, be
          increased in proportion to the percentage decrease in the outstanding
          number of Common Shares.

     (b)  Adjustments for Reclassification, Exchange and Substitution. If the
          Common Shares issuable upon conversion of the Convertible Note shall
          be changed into the same or a different number of shares of any other
          class or classes of shares, whether by capital reorganization,
          reclassification, or otherwise (other than a subdivision or
          combination or consolidation of shares provided for above), the
          Conversion Price then in effect shall, concurrently with the
          effectiveness of such reorganization or reclassification, be
          proportionately adjusted such that the Convertible Note shall be
          convertible into, in lieu of the number of Common Shares which the
          holders would otherwise have been entitled to receive, a number of
          shares of such other class or classes of shares equivalent to the
          number of shares of such other class or classes of shares in the
          capital of the Company into which the Common Shares that would have
          been subject to receipt by the Noteholder upon conversion of such
          Convertible Note immediately before that change would have been
          effected.

     (c)  Adjustments on Lower Price Issuance.

          (i)  If and whenever the Company shall issue any "Additional Equity
               Securities" (as defined below) at any time after the Issue Date
               for a consideration per share less than the Conversion Price in
               effect on the date and immediately prior to such issue or on
               terms more favourable to the Person receiving the Additional
               Equity Securities than the Conditions, then and in each such
               event, the Conversion Price then in effect shall be reduced,
               concurrently with such issue, to the price per share received by
               the Company pursuant to the issue of such Additional Equity
               Securities.

                                       29

<PAGE>

          (ii) For the purposes of Condition (B)4(c)(i), "ADDITIONAL EQUITY
               SECURITIES" shall mean all Equity Securities issued after the
               Issue Date other than:

               (I)  (I) Common Shares issued or issuable at any time upon
                    conversion of any Convertible Securities in issue as at the
                    Issue Date;

               (II) Equity Securities issued or issuable out of the surplus of
                    the Company as a dividend or distribution generally to
                    members of the Company in proportion to their holdings of
                    Common Shares (but subject to Condition (B)2(d));

               (III) Equity Securities issued at anytime upon exercise of any
                    rights or options to subscribe for Equity Securities where
                    the Conversion Price in effect immediately prior to the
                    issuance of such Equity Securities has already been adjusted
                    as a result of and in accordance with this Condition
                    (B)4(c);

               (IV) Common Shares issued or issuable pursuant to an offer for
                    subscription made by the Company upon a Qualified IPO;

               (V)  Equity Securities issued or issuable pursuant to the consent
                    in writing of all the members of the Company including all
                    holders of all outstanding Convertible Notes;

               (VI) Equities Securities issued or issuable as a result of any
                    share split or share consolidation or the like which does
                    not affect the total amount of issued share capital in the
                    Company provided that the Conversion Price in effect prior
                    to the issuance of such Equity Securities has already been
                    adjusted as a result of and in accordance with this
                    Condition (B)4;

               (VII) any subsequent Convertible Notes issued pursuant to the
                    Subscription Agreement;

               (VIII) the number of Common Shares issued or issuable pursuant to
                    the ESOP provided that such number of Common Shares shall
                    not be more One Million (1,000,000) on the calculation basis
                    set out in Condition (B)3(c); and

               (IX) Common Shares to be issued to ATS, provided that the number
                    of Common Shares shall not exceed Seven Hundred Thousand
                    (700,000) on the calculation basis set out in Condition
                    (B)3(c).

          (iii) For the purpose of making any adjustment to the Conversion Price
               as provided in paragraph (i) above, the consideration received by
               the Company for any issue of Additional Equity Securities shall
               be computed:

                                       30

<PAGE>

               (I)  to the extent it consists of cash, as to the amount of cash
                    received by the Company (before deduction of any offering
                    expenses payable by the Company and any underwriting or
                    similar commissions, compensation, or concessions paid or
                    allowed by the Company negotiated on an arm's length basis
                    by the Company with such underwriting agent) in connection
                    with such issue;

               (II) to the extent it consists of property other than cash, at
                    the fair market value of that property as reasonably
                    determined in good faith by an independent valuer appointed
                    by the Board;

               (III) if Additional Equity Securities are issued together with
                    other stock or securities or other assets of the Company for
                    a consideration which covers both, as the portion of the
                    consideration so received that may be reasonably determined
                    in good faith by the Board to be allocable to such
                    Additional Equity Securities; and

               (IV) if Additional Equity Securities are issued in connection
                    with any merger in which the Company is the surviving
                    company, the amount of consideration therefor will be deemed
                    to be the fair market value (as reasonably determined in
                    good faith by the Board) of such portion of the net assets
                    and business of the non-surviving company as is attributable
                    to such Additional Equity Securities.

               If the Additional Equity Securities comprise any rights or
               options to subscribe for, purchase, or otherwise acquire Common
               Shares, or any security convertible or exchangeable into Common
               Shares, then, in each case, the price per share received by the
               Company upon new issue of such Additional Equity Securities will
               be determined by dividing the total amount, if any, received or
               receivable by the Company as consideration for the granting of
               the rights or options or the issue of the convertible securities,
               plus the minimum aggregate amount of additional consideration
               payable to the Company on exercise or conversion of the
               securities, by the maximum number of Common Shares issuable on
               such exercise or conversion. Such granting or issue will be
               considered to be an issue for cash of the maximum number of
               Common Shares issuable on exercise or conversion at the price per
               share determined hereunder, and the Conversion Price will be
               adjusted as above provided to reflect (on the basis of that
               determination) the issue. No further adjustment of such
               Conversion Price will be made as a result of the actual issuance
               of Common Shares on the exercise of any such rights or options or
               the conversion of any such convertible securities.

               Upon the redemption or repurchase of any such securities or the
               expiration or termination of the right to convert into, exchange
               for, or exercise with respect to, Common Shares, the Conversion
               Price will be readjusted to

                                       31

<PAGE>

               such price as would have been obtained had the adjustment made
               upon their issuance been made upon the basis of the issuance of
               only the number of such securities as were actually converted
               into, exchanged for, or exercised with respect to, Common Shares.
               If the purchase price or conversion or exchange rate provided for
               in any such security changes at any time, then, upon such change
               becoming effective, the Conversion Price then in effect will be
               readjusted forthwith to such price as would have been obtained
               had the adjustment made upon the issuance of such securities been
               made upon the basis of (I) the issuance of only the number of
               Common Shares theretofor actually delivered upon the conversion,
               exchange or exercise of such securities, and the total
               consideration received therefor, and (II) the granting or
               issuance, at the time of such change, of any such securities then
               still outstanding for the consideration, if any, received by the
               Company therefor and to be received on the basis of such changed
               price or rate.

     (d)  Adjustments for Other Distributions. Subject to Condition (B)2(d), in
          the event the Company at any time or from time to time makes, or fixes
          a record date for the determination of holders of Common Shares
          entitled to receive, any distribution payable in securities of the
          Company other than Common Shares and other than as adjusted elsewhere
          in this Condition (B)4, then and in each such event provision shall be
          made so that the Noteholder shall receive upon conversion thereof, in
          addition to the number of Common Shares receivable thereupon, the
          amount of securities of the Company which it would have received had
          its Convertible Note been converted into Common Shares immediately
          prior to such record date or on the date of such event and had it
          thereafter, during the period from the date of such event to and
          including the date of conversion, retained such securities receivable
          by them as aforesaid during such period, subject to all other
          adjustments called for during such period under this Condition (B)4
          with respect to the rights of the Noteholder. Subject again to
          Condition (B)2(d), if the Company shall declare a distribution payable
          in securities of other Persons, evidence of indebtedness of the
          Company or other Persons, assets (excluding cash dividends) or options
          or rights not referred to in this Condition (B)4(d), the Noteholder
          shall be entitled to a proportionate share of any such distribution as
          though it were the holders of the number of Common Shares into which
          its Convertible Note is convertible as of the record date fixed for
          determination of the holders of Common Shares entitled to receive such
          distribution.

     (e)  [intentionally omitted]

     (f)  ESOP. In the event that the total number of Common Shares issuable
          under the ESOP shall be less than One Million (1,000,000) on the
          calculation basis set out in Condition (B)3(c), the Conversion Price
          then in effect shall be increased in proportion to the percentage
          decrease in the number of enlarged share capital after taking into
          account of all Common Shares issuable under the ESOP.

                                       32

<PAGE>

     (g)  Save as expressly provided in this Condition (B)4, there shall be no
          other adjustment in the Conversion Price. Exhibit (A) sets out
          examples of adjustments to the Conversion Price for illustration
          purpose only.

     (h)  Extension of General Offer. So long as any Convertible Notes are
          outstanding and the Company becomes aware that an offer is made or an
          invitation is extended to all holders of Common Shares generally to
          acquire all or some of the Common Shares or any scheme of arrangement
          is proposed for that acquisition, the Company shall forthwith give
          notice to all holders of outstanding Convertible Notes and the Company
          shall use its best endeavours to ensure that there is made or extended
          at the same time a similar offer or invitation, or that the scheme of
          arrangement is extended, to each holder of Convertible Note, as if its
          conversion rights had been fully exercised on a date which is
          immediately before the record date for the offer or invitation or the
          scheme of arrangement at the Conversion Price applicable at that time.

     (i)  No Impairment. The Company shall not, by amendment of its
          constitutional documents of the Company or through any reorganization,
          transfer of assets, consolidation, merger, dissolution, issue or sale
          of securities, or any other voluntary action, avoid or seek to avoid
          the observance or performance of any of the terms to be observed or
          performed hereunder by the Company but shall at all times in good
          faith assist in the carrying out of all the provisions of this
          Condition (B)4 and in the taking of all such action as may be
          necessary or appropriate in order to protect the conversion rights of
          the Noteholder against impairment.

     (j)  Certificate as to Adjustments. Upon the occurrence of each adjustment
          or readjustment of the Conversion Price pursuant to this Condition
          (B)4, the Company, at its expense, shall promptly compute such
          adjustment or readjustment in accordance with the terms hereof, and
          furnish to the Noteholder a certificate setting forth: (I) such
          adjustment or readjustment, (II) the facts upon which such adjustment
          or readjustment is based, (III) the applicable Conversion Price then
          in effect, and (IV) the number of Common Shares and the amount, if
          any, of other property which the Noteholder would receive upon the
          conversion of the Convertible Note.

     (k)  Notices of Record Date. In the event that the Company shall propose at
          any time to:

          (i)  declare any dividend or distribution upon the Common Shares or
               other class or series of shares, whether in cash, property,
               share, or other securities, and whether or not a regular cash
               dividend;

          (ii) offer for subscription pro rata to the holders of any class or
               series of its capital any additional shares of any class or
               series or other rights;

          (iii) effect any reclassification or recapitalisation of the Common
               Shares outstanding involving a change in the Common Shares; or

                                       33

<PAGE>

          (iv) merge or consolidate with or into any other corporation, or sell,
               lease, or convey all or substantially all its property, assets or
               business, or a majority of the capital of the Company, or to
               liquidate, dissolve, or wind up,

          then, in connection with each such event, the Company shall send to
          the Noteholder:

          (1)  at least fourteen (14) Business Days' prior written notice of the
               date on which a record shall be taken for such dividend,
               distribution, or subscription rights (and specifying the date on
               which the holders of Common Shares shall be entitled thereto) or
               for determining rights to vote in respect of the matters referred
               to in subparagraphs (i) to (iv) of this Condition (B)4(j); and

          (2)  in the case of the matters referred to in subparagraphs (i) to
               (iv) of this Condition (B)4(j), at least fourteen (14) Business
               Days' prior written notice of the date when the same shall take
               place (and specifying the date on which the holders of Common
               Shares shall be entitled to exchange their Common Shares for
               securities or other property deliverable upon the occurrence of
               such event or the record date for the determination of such
               holders if such record date is earlier).

          Each such written notice shall be delivered personally or given by
          first class mail, postage prepaid, addressed to the Noteholder.

5.   Redemption

     (a)  Unless previously redeemed or converted as provided in these
          Conditions, the Noteholder has the right to require the Company to
          forthwith redeem all or part of the Convertible Note:

          (i)  if the Company has not completed a Qualified IPO before the
               Maturity Date, provided that the Noteholder shall give a written
               notice of not less than three (3) months to the Company at the
               Company's notice address specified in Clause 16.1(D) of the
               Subscription Agreement and surrender of the certificate(s) for
               the Convertible Note. If the Noteholder fails or refuses to
               deliver to the Company the certificate(s) for the Convertible
               Note, the Company may retain the redemption monies until delivery
               of such certificate or of an indemnity in respect thereof as the
               Board may reasonably require and shall within three (3) Business
               Days thereafter pay the redemption monies to such holder. No
               holder of a Convertible Note shall have any claim against the
               Company for interest on any redemption monies so retained; or

          (ii) at any time after the occurrence of an Event of Default upon
               written demand from the Noteholder. The Company shall redeem the
               Convertible Note (or such relevant part) to which such demand
               relates forthwith upon receipt of such demand. Redemption of the
               Convertible Note upon

                                       34

<PAGE>

               occurrence of an Event of Default will not require the Noteholder
               to surrender to the Company the certificate(s) for the
               Convertible Note.

     (b)  Upon written consent of all holders of all outstanding Convertible
          Notes, the Company may redeem all or any portion of the then
          outstanding principal, interest or other payment due under this
          Convertible Note, before the Maturity Date.

     (c)  The redemption monies in respect of the Convertible Note (or the
          relevant part thereof) comprise of:

          (i)  the principal amount so redeemed;

          (ii) arrears of interest, special interest and extraordinary interest
               accrued in accordance with Condition (B)2; and

          (iii) any outstanding amount payable in respect of the Convertible
               Note (or the relevant part thereof).

     (d)  The Convertible Note (or such portion thereof) so redeemed shall be
          cancelled and may not be re-issued.

6.   Transferability

     (a)  The Noteholder may transfer the whole or part of the rights in respect
          of this Convertible Note, provided that (without prejudice to any
          right of co-sale of the Noteholder):

          (I)  the Noteholder shall first negotiate with the Founder on terms of
               the intended transfer before entering into agreement on the
               transfer if the transfer is intended to be made any other Person
               not being an Affiliate of the Noteholder;

          (II) the transfer will not be subject to or will be exempted from the
               prospectus and registration requirements under the Ontario
               Securities Act; and

          (III) the transferee shall have executed and delivered to the Company,
               as a condition precedent to any such transfer, a joinder
               agreement in form and substance satisfactory to the Company and
               all holders of Convertible Notes under which the transferee
               undertakes to be bound by certain provisions of the Subscription
               Agreement and the Investment Agreement, including without
               limiting the generality of the forgoing the obligation to first
               negotiation with the Founder on terms of any subsequent intended
               transfer by such transferee.

          For the avoidance of doubt, the Noteholder may transfer the
          Convertible Note to (i) any Person apart from the Founder where no
          agreement has been reached

                                       35

<PAGE>

          between the Noteholder and the Founder on the intended transfer within
          reasonable time or (ii) any of its Affiliates.

     (b)  Title to this Convertible Note passes only upon the cancellation of
          the existing certificate and the issue of a new certificate (or new
          certificates in the case of a transfer of part of this Convertible
          Note) in accordance with Condition (B)6(c).

     (c)  In relation to any transfer of this Convertible Note permitted under
          or otherwise pursuant to this Condition (B)6:

          (i)  this Convertible Note may be transferred by execution of a form
               of transfer as specified by the Board under the hands of the
               transferor and the transferee (or their duly authorised
               representatives) or, where either the transferor or transferee is
               a corporation, executed by a duly authorised officer or director
               thereof. In this Condition, a "transferor" shall, where the
               context permits or requires, includes joint transferors and shall
               be construed accordingly; and

          (ii) save for loss destruction, the certificate(s) for this
               Convertible Note must be delivered for cancellation to the
               Company accompanied by (a) a duly executed transfer form; (b) in
               the case of the execution of the transfer form on behalf of a
               corporation by its officers or directors, the authority of that
               person or those persons to do so. The Company shall, within three
               (3) Business Days of receipt of such documents from the
               Noteholder, cancel the existing certificate for this Convertible
               Note and issue a new certificate for this Convertible Note (or
               new certificates in the case of a transfer of part of this
               Convertible Note) under the seal of the Company and the Founder,
               in favour of the transferee.

7.   Events of Default

     Any of the following shall constitute an "Event of Default":

     (a)  if the Company fails to pay any amount principal or interest on the
          due date under these Conditions, the Subscription Agreement or the
          Transaction Documents and such default is not remedied within seven
          (7) Business Days of the due date;

     (b)  if any Group Company or the Founder is in material default in the due
          performance of any other of its/his covenants or obligations to the
          Noteholder under these Conditions, the Subscription Agreement or the
          Transaction Documents and such default remains not remedied for seven
          (7) Business Days after written notice thereof has been given to the
          Company or such other defaulting party by the Noteholder;

     (c)  save as stated or referred to in the Disclosure Letter, if any
          representation or warranty made by the Company or the Founder in the
          Subscription Agreement or the Transaction Documents is or would be
          materially incorrect, misleading or untrue;

                                       36

<PAGE>

     (d)  if any Group Company (or, to the extent applicable, the Founder) takes
          any corporate action or other steps are taken or legal proceedings are
          started or threatened to start for its winding-up, dissolution,
          administration or re-organisation (apart from the Re-organisation)
          (whether by way of voluntary arrangement, creditors' actions or
          otherwise) or for the appointment of a liquidator, receiver,
          administrator, administrative receiver, conservator, custodian,
          security trustee or similar officer of it or of any or all of its
          revenues and assets, without the prior written consent of all
          shareholders of the Company and all holders of all the outstanding
          Convertible Notes;

     (e)  if any Group Company (or, to the extent applicable, the Founder) is
          dissolved and/or wound-up in any way or ceases or attempts to cease
          its activities or a major part thereof, or if any Group Company has
          discontinued or materially changed the nature of its business, or if
          any Group Company merges or consolidates with any other company or
          legal entity without the prior written consent of all shareholders of
          the Company and all holders of all outstanding Convertible Notes;

     (f)  if there is, or is proposed or agreed to be, a change in Control in
          any of the Group Company without the prior written consent of all
          shareholders of the Company and all holders of all outstanding
          Convertible Notes;

     (g)  if the Founder is in material default of any of his/its covenants or
          obligations under the Investment Agreement;

     (h)  if the Company fails to deliver to each Investor on or before April
          30, 2006 the Satisfactory Audited Reports in accordance with Clause
          3.2(A) of the Subscription Agreement;

     (i)  if all or a material part of the properties or rights or interests of
          any Group Company or the Founder are nationalised or expropriated;

     (j)  if there is, or is proposed or agreed to be, any transfer of all or
          substantially all of the assets of any Group Company or the Founder
          without the prior written consent of all shareholders of the Company
          and all holders of all outstanding Convertible Notes;

     (k)  if any Group Company or the Founder is unable to pay its/his debts as
          they fall due, commences negotiations with any one or more of its/his
          creditors with a view to the general readjustment or rescheduling of
          its/his indebtedness or makes a general assignment for the benefit of
          or a composition with its/his creditors;

     (l)  if at any time it is or becomes unlawful for any Group Company or the
          Founder to perform or comply with any or all of its obligations under
          these Conditions, the Subscription Agreement or the Transaction
          Documents, or any of the obligations of any Group Company or the
          Founder under these Conditions, the Subscription Agreement or the
          Transaction Documents cease to be legal, valid, binding and
          enforceable;

                                       37

<PAGE>

     (m)  if any Group Company or the Founder repudiates the Subscription
          Agreement or any of the Transaction Documents or does or causes to be
          done any act or thing evidencing an intention to repudiate the
          Subscription Agreement or any of the Transaction Documents;

     (n)  if any execution or distress is levied against, or an encumbrancer
          takes possession of, the whole or any material part of, the property,
          undertaking or assets of any Group Company;

     (o)  if any of the Group Company fails to obtain all necessary Governmental
          Approvals to own its assets and to carry on its businesses, or any of
          such Governmental Approvals is not valid or is subject to any
          suspension, cancellation or revocation;

     (p)  if the Founder or a company or corporation wholly Controlled by the
          Founder is no longer the largest Shareholder of the Company without
          the prior written consent from all holders of all outstanding
          Convertible Notes and holders of Shares issued upon conversion of
          Convertible Notes; or

     (q)  if the proceeds of the Subscription Price is not used for the purpose
          stated in Clause 2.4 of the Subscription Agreement;

     (r)  if any event occurs which under the laws of any relevant jurisdiction
          has an analogous effect to any of the events referred to in the
          foregoing paragraphs; or

     (s)  if any Group Company fails to comply with any Applicable Law.

8.   Guarantee

     (a)  The Founder irrevocably and unconditionally:

          (i)  guarantees to the Noteholder punctual and due performance by the
               Company of all its obligations under the Convertible Note from
               time to time and the due payment and discharge of all such sums
               of money and liabilities expressed to be due, owing or incurred
               or payable and unpaid by the Company to the Noteholder pursuant
               to the Subscription Agreement and these Conditions from time to
               time or as a result of any breach thereof (including all
               reasonable expenses, including legal fees and Taxes incurred by
               the Noteholder in connection with any of the above);

          (ii) undertakes with the Noteholder that whenever the Company does not
               pay any amount when due under or in connection with the
               Convertible Note, he shall immediately on demand pay that amount
               as if he was the principal obligor; and

          (iii) indemnifies the Noteholder immediately on demand against any
               cost, loss or liability suffered by the Noteholder if any
               obligation guaranteed by him (or anything which would have been
               an obligation if not unenforceable,

                                       38

<PAGE>

               invalid or illegal) is or becomes unenforceable, invalid or
               illegal. The amount of the cost, loss or liability shall be equal
               to the amount which the Noteholder would otherwise have been
               entitled to recover.

     (b)  This guarantee is a continuing guarantee and will extend to the
          ultimate balance of sums payable by the Company under the Convertible
          Note, regardless of any intermediate payment or discharge in whole or
          in part.

     (c)  If any payment to the Noteholder (whether in respect of the
          obligations of the Company or any security for those obligations or
          otherwise) is avoided or reduced for any reason including, without
          limitation, as a result of insolvency, breach of fiduciary or
          statutory duties or any similar event:

          (i)  the liability of the Company shall continue as if the payment,
               discharge, avoidance or reduction had not occurred; and

          (ii) the Noteholder shall be entitled to recover the value or amount
               of that security or payment from the Founder, as if the payment,
               discharge, avoidance or reduction had not occurred.

     (d)  The obligations of the Founder under this Condition (B)8 will not be
          affected by an act, omission, matter or thing which, but for this
          Condition, would reduce, release or prejudice any of its obligations
          under this Condition (without limitation and whether or not known to
          the Noteholder) including:

          (i)  any time, waiver or consent granted by the Noteholder or other
               Person;

          (ii) the release of the Company or any other Person under the terms of
               any composition or arrangement with any creditor of any member of
               the Group;

          (iii) any lack of power, authority or legal personality of or
               dissolution or change in the members or status of the Company;

          (iv) any amendment (however fundamental) or replacement of the
               Convertible Note;

          (v)  any unenforceability, illegality or invalidity of any obligation
               of any Person under the Convertible Note; and

          (vi) any bankruptcy, insolvency or similar proceedings.

     (e)  The Founder hereby subordinates to the Noteholder any right he may
          have of first requiring the Noteholder (or any trustee or agent on its
          behalf) to proceed against or enforce any other rights or security or
          claim payment from any Person before claiming from the Founder under
          this Condition (B)8 except to preserve any such claim. This waiver
          applies irrespective of any law or any provision of the Convertible
          Note to the contrary.

                                       39

<PAGE>

     (f)  This guarantee is in addition to and is not in any way prejudiced by
          any other guarantee or security now or subsequently held by the
          Noteholder.

     (g)  Without prejudice to the Noteholder's rights against the Company, the
          Founder shall be deemed a principal obligor in respect of his
          obligations under this guarantee and not merely a surety and,
          accordingly, the Founder shall not be discharged nor shall his
          liability hereunder be affected by any act or thing or means
          whatsoever by which such liability would have been discharged or
          affected if the Founder had not been a principal obligor.

     (h)  Until all moneys, obligations and liabilities (including contingent
          obligations and liabilities) due, owing or incurred by the Company
          under the Convertible Note have been paid or discharged in full, the
          Founder waives all rights of subrogation and indemnity against the
          Company and agrees not to claim any set-off or counterclaim against
          the Company or to claim to prove in competition with the Noteholder in
          the event of the bankruptcy, insolvency or liquidation of the Company.

     (i)  All sums payable under this guarantee shall be paid in full without
          set-off or counterclaim and free and clear of and without deduction of
          or withholding for or on account of any present or future Taxes,
          duties and/or other charges.

9.   Payment and Taxation

     (a)  All payments in respect of the Convertible Note will be made without
          withholding or deduction of or on account of any present or future
          Taxes, duties, assessments or governmental charges of whatever nature
          imposed or levied by or on behalf of the government of Hong Kong,
          Canada or any authority therein or thereof having power to tax unless
          the withholding or deduction of such Taxes, duties, assessments or
          governmental charges is required by law. In that event, the Company or
          the Founder (as the case may be) will pay such additional amounts as
          may be necessary in order that the net amounts received by the
          Noteholder after such withholding or deduction shall equal the
          respective amounts receivable in respect of the Convertible Note in
          the absence of such withholding or deduction provided that,
          notwithstanding any agreement to the contrary, no such additional
          amounts shall be payable by the Company or the Founder (as the case
          may be) in respect of any amounts deemed under Canadian income tax
          laws to constitute interest paid upon conversion of the Convertible
          Note.

     (b)  All payments to the Noteholder shall be made in United States Dollars
          (or another currency as the Noteholder may otherwise specify in
          writing), not later than 4:00 p.m. (Hong Kong time) on the due date,
          by remittance to such bank account as the Noteholder may notify from
          time to time.

     (c)  If the due date for payment of any amount in respect of the
          Convertible Note is not a Business Day, the Noteholder shall be
          entitled to payment on the next

                                       40

<PAGE>

          following Business Day in the same manner but shall not be entitled to
          be paid any interest in respect of any such delay.

     (d)  The Company shall pay any and all issue and other Taxes (other than
          income taxes) that may be payable in respect of any issue or delivery
          of Common Shares on conversion of the Convertible Note, provided,
          however, that the Company shall not be obligated to pay any transfer
          taxes resulting from any transfer of the Convertible Note (or rights
          attached thereto) requested by the Noteholder.

10.  Replacement certificate

     If the certificate for this Convertible Note is lost or mutilated, the
     Noteholder shall forthwith notify the Company and a replacement certificate
     for this Convertible Note shall be issued if the Noteholder provides the
     Company with (i) a declaration by the Noteholder or its officer or director
     that this Convertible Note had been lost or mutilated (as the case may be)
     or other evidence that the certificate for this Convertible Note had been
     lost or mutilated; and (ii) an appropriate indemnity in such form and
     content as the Board may reasonably require. The certificate for this
     Convertible Note which has been replaced in accordance with this Condition
     (B)10 shall forthwith be cancelled.

                                      * * *

                                       41

<PAGE>

Exhibit (A) to the Conditions of Convertible Note

                                       42

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