Document:

<PAGE>

                                                                     Exhibit 4.1

                                                                  Execution Copy

                             DATED 16 NOVEMBER 2005

                            (1)  CANADIAN SOLAR INC.

                          (2)  HSBC HAV2 (III) LIMITED

                       (3)  JAFCO ASIA TECHNOLOGY FUND II

                              (4)  MR. QU XIAO HUA

             (5)  (Chinese Characters) (CSI SOLARTRONICS CO., LTD.)

            (6)  (Chinese Characters) (CSI SOLAR TECHNOLOGIES INC.)

                                      and

           (7)  (Chinese Characters) (CSI SOLAR MANUFACTURING INC.)

                                   ----------

                             SUBSCRIPTION AGREEMENT

                        IN RESPECT OF THE ISSUE OF NOTES

                         CONVERTIBLE INTO COMMON SHARES

                                IN THE CAPITAL OF

                               CANADIAN SOLAR INC.

                                   ----------

                                BAKER & MCKENZIE

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
1.   Definitions ..........................................................    2
2.   Subscription, Consideration and Guarantee ............................    9
3.   Conditions Precedent to First Completion and Second Completion .......   11
4.   Completion ...........................................................   15
5.   Representations and warranties .......................................   18
6.   Undertakings before Completion .......................................   20
7.   Remedies .............................................................   21
8.   Payment and Taxes ....................................................   23
9.   Announcements and Confidentiality ....................................   23
11.  Variation ............................................................   25
12.  Successors and Assigns ...............................................   25
13.  Invalidity ...........................................................   26
14.  Waiver ...............................................................   26
15.  Further assurance ....................................................   26
16.  Notices ..............................................................   26
17.  Counterparts .........................................................   28
18.  Costs ................................................................   28
19.  Process Agents .......................................................   28
20.  Governing Law ........................................................   29
21.  Dispute Resolution ...................................................   29
22.  JAFCO's Rights .......................................................   30
</TABLE>

Schedules

1.   Particulars of the Company
2.   Particulars of the Company's subsidiaries
3.   Warrantors' Warranties
4.   Form of Pre-emptive Right Certificate
5.   Form of the Certificate for the Convertible Notes and the Conditions
6.   Form of Indemnity Deed for an Investor's Director
7.   Form of the Accredited Investor Certificate
8.   Form of the Investment Agreement

                                       ii

<PAGE>

THIS AGREEMENT is made on the 16th day of November 2005

BETWEEN:

(1)  CANADIAN SOLAR INC., a corporation incorporated under the laws of the
     Province of Ontario, Canada with its registered office at 4056 Jefton
     Crescent, Mississauga, Ontario, Canada L5L 1Z3 (the "COMPANY");

(2)  HSBC HAV 2 (III) LIMITED, a company incorporated in the Cayman Islands with
     its registered office at 2nd Floor, Strathvale House, North Church Street,
     George Town, Grand Cayman, Cayman Islands (the "FUNDS");

(3)  JAFCO ASIA TECHNOLOGY FUND II, a Cayman Islands exempted company with its
     registered office at PO Box 309GT, Ugland House, South Church Street,
     George Town, Grand Cayman, Cayman Islands ("JAFCO");

(4)  MR. QU XIAO HUA, holder of Canadian Passport Number BC289772 and whose
     residential address being at 4056 Jefton Crescent, Mississauga, Ontario,
     Canada L5L 1Z3 (the "FOUNDER");

(5)  (Chinese Characters) (CSI SOLARTRONICS CO., LTD.), a company established in
     the People's Republic of China with its registered office at (Chinese
     Characters) (Yangyuan Industrial Park, Changshu, Jiangsu Province 215562,
     the People's Republic of China) ("SOLARTRONICS");

(6)  (Chinese Characters) (CSI SOLAR TECHNOLOGIES INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) (Suite C6017, China Suzhou Pioneering Park for Overseas Chinese
     Scholars, No. 209, Zhuyuan Road, Suzhou New & Hi-Tech District, Jiangsu
     Province 215011, the People's Republic of China) ("SOLAR TECHNOLOGIES");
     and

(7)  (Chinese Characters) (CSI SOLAR MANUFACTURING INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) (Building A6, Export Processing Zone, Suzhou New & Hi-Tech
     District, Jiangsu Province 215151, the People's Republic of China) ("SOLAR
     MANUFACTURING").

The Funds and JAFCO shall be referred to collectively as the "INVESTORS" and
individually as an "INVESTOR".

Solartronics, Solar Technologies and Solar Manufacturing shall be referred to
collectively as the "PRC SUBSIDIARIES" and individually as a "PRC SUBSIDIARY".

                                        1

<PAGE>

WHEREAS:

(A)  The Company is a corporation incorporated under the laws of the Province of
     Ontario, Canada. Particulars of the Company are set out in Schedule 1.

(B)  The Company has agreed to issue, and the Investors have agreed to subscribe
     for, Convertible Notes up to an aggregate principal amount of
     US$10,500,000, and the Company has agreed to grant to the Investors options
     to subscribe for additional Convertible Notes up to an aggregate principal
     amount of US$2,500,000, in accordance with and subject to the terms set out
     in this Agreement and the Conditions.

(C)  In consideration of the Investors agreeing to subscribe for the Convertible
     Notes, the Warrantors have agreed to provide to the Investors such
     representations and warranties as are set forth herein and the Founder has
     agreed to guarantee to the Investors the performance by the Company of its
     obligations under this Agreement, the Transaction Documents and the
     Conditions.

THE PARTIES HEREBY AGREE AS FOLLOWS:

1.   DEFINITIONS

1.1  In this Agreement (including the Recitals), unless the context requires
     otherwise, the following expressions shall have the following meanings:

     "AFFILIATE" of a specified Person means any other Person that, directly or
     indirectly, through one or more intermediaries, Controls, is Controlled by,
     or is under common Control with, such specified Person, and (a) in the case
     of a natural Person, such Person's spouse, parents and descendants (whether
     by blood or adoption and including stepchildren), and (b) in the case of an
     Investor, shall include (i) any Person who holds the Convertible Notes as a
     nominee for such Investor, (ii) any shareholder of such Investor and (iii)
     any entity or individual which has a direct or indirect interest in such
     Investor (including, if applicable, any general partner or limited partner,
     any fund manager or any fund managed by the same fund manager thereof), and
     each Group Company shall be deemed to be an Affiliate of the Founder;

     "AGREED FORM" means, in relation to any document, the form of that document
     which has been or will be agreed and initialled by the Investors' Counsel
     and the Company's Counsel for the purpose of identification;

     "APPLICABLE LAW" means, with respect to any Person, any and all provisions
     of any constitution, treaty, statute, law, regulation, ordinance, code,
     rule, judgement, rule of common law, order, decree, award, injunction,
     Governmental Approval, concession, grant, franchise, license, agreement,
     directive, guideline, policy, requirement, or other governmental
     restriction or any similar form of decision of, or determination by, or any
     interpretation or administration of any of the foregoing by, any
     Governmental Authority, whether in effect as of the date hereof or
     thereafter applicable to such Person;

                                        2

<PAGE>

     "ARBITRATORS" has the meaning ascribed to it in Clause 21.2;

     "ARTICLES OF INCORPORATION" means the duly adopted articles of
     incorporation of the Company in force from time to time;

     "ATS" means ATS Automated Tool Systems Inc., a corporation incorporated in
     Canada;

     "ATS ARRANGEMENT" means the arrangement between the Founder and ATS in
     existence as at the date hereof in relation to, among other things, ATS's
     acquisition of ownership interest of not exceeding 19.5% in the Company;

     "BOARD" means the board of directors of the Company;

     "BUSINESS DAY" means any day (excluding Saturdays, Sundays and public
     holidays) on which banks generally are open for business in Hong Kong and
     Singapore;

     "BUSINESS PLAN" means the business plan and business strategies of the
     Group in the form delivered to the Investors prior to the date hereof and
     as referred to in the Disclosure Letter;

     "BY-LAWS" means the duly adopted by-laws of the Company in force from time
     to time;

     "COMMON SHARES" means common shares in the capital of the Company and all
     other (if any) stock or shares from time to time and for the time being
     ranking pari passu therewith and all other (if any) shares or stock in the
     authorised share capital of the Company resulting from any sub-division,
     consolidation or re-classification of Common Shares;

     "COMPANY'S COUNSEL" means Mr. John Tyrrell, the legal adviser to the
     Company;

     "CONDITIONS" means the terms and conditions in respect of the Convertible
     Notes which shall form part of the Convertible Notes and which are set out
     in Schedule 5;

     "CONTROL", "CONTROLLED" (or any correlative term) means the possession,
     directly or indirectly, of the power to direct or cause the direction of
     the management policies of a Person, whether through the ownership of
     voting securities, by contract, credit arrangement or proxy, as trustee,
     executor, agent or otherwise; and for the purpose of this definition, a
     Person shall be deemed to Control another Person if such first Person,
     directly or indirectly, owns or holds more than 50% of the voting equity
     interests in such another Person;

     "CONVERTIBLE NOTES" the convertible loan notes up to an aggregate principal
     amount of Thirteen Million United States Dollars (US$13,000,000)
     convertible into Common Shares, the form of certificate for and conditions
     of which are set out in Schedule 5;

     "CONVERTIBLE SECURITIES" means (i) any rights, options or warrants to
     acquire Shares, and (ii) any notes, debentures, preference shares
     (including, without

                                       3

<PAGE>

     limitation, the Convertible Notes) or other securities or rights, which are
     ultimately convertible or exercisable into, or exchangeable for, Shares;

     "DIRECTOR" means a director of the Company;

     "DISCLOSURE LETTER" means the letter in the Agreed Form from the Warrantors
     to the Investors of even date hereto as accepted and countersigned by the
     Investors;

     "ENCUMBRANCE" means any lien, encumbrance, hypothecation, right of others,
     proxy, voting trust or similar arrangement, pledge, security interest,
     collateral security agreement, limitations on voting rights, limitations on
     rights of ownership filed with any Governmental Authority, claim, charge,
     equities, mortgage, pledge, objection, title defect, title retention
     agreement, option, restrictive covenant, restriction on transfer, right of
     first refusal, right of first offer, or any comparable interest or right
     created by or arising under Applicable Law, of any nature whatsoever;

     "ENVIRONMENTAL AND SAFETY LAWS" has the meaning ascribed to it in Paragraph
     21 of Schedule 3;

     "EQUITY SECURITIES" means (a) Convertible Securities and (b) shares of any
     class in the capital of the Company and including, without limitation, the
     Common Shares;

     "ESOP" means an employee stock option plan to be adopted by the Company,
     pursuant to which (a) options may be granted to key employees and members
     of the management team of any Group Company to subscribe for Common Shares,
     (b) the number of Common Shares that may be subject to such options shall
     not exceed One Million (1,000,000) on the basis that the total expected
     number of Common Shares to be in issue on a Fully-Diluted Basis after issue
     of all Common Shares to ATS, pursuant to the ESOP and upon conversion of
     all Convertible Notes will be Ten Million (10,000,000), (c) the terms of
     the plan (including but not limited to the exercise price for each Common
     Share under the plan, the vesting date and the lock-up period of the
     options) shall be subject to the approval of the Compensation Committee of
     the Board, and (d) any grant of options under the plan shall be subject to
     the approval of the Compensation Committee of the Board;

     "FINANCING TERMS" has the meaning ascribed to it in Clause 9.1;

     "FIRST COMPLETION" means completion of the First Tranche Subscription in
     accordance with Clause 4.1;

     "FIRST COMPLETION DATE" means the date on which First Completion takes
     place;

     "FIRST TRANCHE SUBSCRIPTION" means the first tranche subscription of
     Convertible Notes as referred to in Clause 2.1;

     "FULLY-DILUTED BASIS" means, when used with respect to issued and
     outstanding share capital of the Company, the total number of all Common
     Shares which are or would be issued and outstanding assuming the full
     conversion of all Convertible Notes in issue at the then applicable
     Conversion Price (as defined in the Conditions);

                                       4

<PAGE>

     "GOVERNMENTAL APPROVAL" means any action, order, authorization, consent,
     approval, license, authorisation, qualification, lease, waiver, franchise,
     concession, agreement, ruling, permit, tariff, rate, certification,
     exemption of, filing or registration by or with, or report or notice to,
     any Governmental Authority;

     "GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
     political subdivision thereof, any entity exercising executive,
     legislative, judicial, regulatory or administrative functions of or
     pertaining to government (including, without limitation, any government
     authority, agency, department, board, commission or instrumentality of
     Canada, the PRC, Hong Kong or any other applicable jurisdiction in the
     world or any political subdivision of any of the foregoing), or any
     tribunal or arbitrator(s) of competent jurisdiction, or any self-regulatory
     organization;

     "GROUP" means the Company and its subsidiaries (including the PRC
     Subsidiaries) and affiliates, and a "GROUP COMPANY" means any or a specific
     member within the Group as the context may require;

     "GROUP INTELLECTUAL PROPERTY" has the meaning ascribed to it in Paragraph
     13.1 of Schedule 3;

     "HKIAC" has the meaning ascribed to it in Clause 21.2;

     "HONG KONG" means the Hong Kong Special Administrative Region of the
     People's Republic of China;

     "IAS" means International Accounting Standards as published by the
     International Accounting Standards Committee from time to time;

     "INTELLECTUAL PROPERTY RIGHTS" means any and patents, patent rights and
     applications therefor, inventions, discoveries, improvements, concepts,
     innovations, industrial models, registered and unregistered copyrights,
     copyright registrations and applications, author's rights, works of
     authorship (including artwork of any kind and software of all types in
     whatever medium, inclusive of computer programs, source code, object code
     and executable code, and related documentation), web sites, web pages,
     technical information, know-how, trade secrets, drawings, designs, design
     protocols, specifications for parts and devices, research and development
     efforts, databases and proprietary data, formulae, operational procedures,
     trade names, trademarks, domain names, and service marks, and registrations
     and applications therefor, the goodwill of the business symbolized or
     represented by the foregoing, customer lists and other proprietary
     information and common law rights;

     "INVESTMENT AGREEMENT" means an agreement substantially in the form set out
     in Schedule 8 to be entered into between the Parties at First Completion
     relating to the management of the Company and the PRC Subsidiaries and the
     relationship between other Parties;

     "INVESTORS' COUNSEL" means Baker & McKenzie of 14/F, Hutchison House, 10
     Harcourt Road, Central, Hong Kong, the legal advisers to the Investors;

                                       5

<PAGE>

     "IP CONFIDENTIAL INFORMATION" has the meaning ascribed to it in Paragraph
     13.13 of Schedule 3;

     "IPO" means the initial public offering of the shares of the Company or
     ListCo;

     "JAFCO MANAGER" has the meaning ascribed to it in Clause 22;

     "JIAP" has the meaning ascribed to it in Clause 22;

     "LIEN" means any lien, pledge, mortgage, deed of trust, security interest,
     claim, lease, charge, option, right of first refusal, transfer restriction,
     hypothecation, Encumbrance or other security interest of any kind or nature
     whatsoever, or any agreement to give or make any of the foregoing;

     "LISTCO" means a new holding company of the Group to be incorporated in a
     jurisdiction acceptable for the purpose of an IPO and the shares of which
     will be offered in the IPO;

     "MAJORITY CN APPROVAL" means the written approval given by holders in
     respect of more than seventy-five per cent. (75%) of the aggregate
     principal amount of Convertible Notes subscribed for by the Investors;

     "MATERIAL ADVERSE EFFECT" means any event, circumstance, occurrence, fact,
     condition, change or effect that is materially adverse to (i) the business,
     operations, results of operations, financial condition, management,
     prospects, properties, assets or liabilities of the Group, taken as a whole
     or otherwise; or (ii) the ability of any of the Company, the PRC
     Subsidiaries or the Founder to perform fully its/his obligations hereunder
     and to consummate the transactions contemplated hereby;

     "MATERIAL CONTRACT" means an agreement, contract, arrangement or
     understanding to which any Group Company is a party and (a) which
     individually results or will result in any Group Company incurring a
     liability, cost or indebtedness or receiving revenue or payment in excess
     of (i) Two Hundred Thousand United States Dollars (US$200,000) out of its
     ordinary course of business or (ii) Five Hundred Thousand United States
     Dollars (US$500,000) in the ordinary course of business or (b) such
     agreement, contract, arrangement, understanding or the indebtedness,
     liability or obligation arsing therefrom is not terminable upon a notice of
     less than thirty (30) days notice without compensation, penalty or
     obligation;

     "NOTE OPTION" has the meaning ascribed to it in Clause 2.2;

     "PARTIES" means the named parties to this Agreement and their respective
     successors, and a "PARTY" shall be construed accordingly;

     "PERSON" or "PERSONS" means any natural person, company, corporation,
     association, partnership, organization, firm, joint venture, trust,
     unincorporated organization or any other entity or organization, and shall
     include any Governmental Authority;

                                       6

<PAGE>

     "PRC" means the People's Republic of China, but shall not include Hong
     Kong, the Macau Special Administrative Region and Taiwan for the purpose of
     this Agreement;

     "PRE-EMPTIVE RIGHT CERTIFICATE" means a certificate to be executed by the
     Founder substantially in the form set out in Schedule 4;

     "QUALIFIED IPO" means a fully underwritten IPO on the main board of The
     Stock Exchange of Hong Kong Limited, the NASDAQ National Market or another
     international stock exchange (including without limiting the generality of
     the forgoing, the Toronto Stock Exchange) approved with Majority CN
     Approval, where (a) the offering size (net of all related expenses and
     underwriting discounts and commissions) being not less than Thirty Million
     United States Dollars (US$30,000,000), (b) the total market capitalization
     of the Company or ListCo (as the case may be) immediately following the
     offering being not less than One Hundred and Twenty Million United States
     Dollars (US$120,000,000) and (c) the public float immediately following the
     offering being not less than twenty-five per cent. (25%) of the enlarged
     share capital of the Company or ListCo (as the case may be);

     "REGISTRATION RIGHTS AGREEMENT" means a registration rights agreement
     relating to the rights of the Investors to cause the Company to register
     its Shares to be entered into between the Company and the Investors in the
     Agreed Form;

     "RELATED PARTIES" means Affiliates of the Founder and a "RELATED PARTY"
     shall mean any or a specific one of the Related Parties;

     "RELATED PARTY TRANSACTION" means a transaction entered into by any Group
     Company with the Founder or any Related Party;

     "RMB" means Renminbi, the lawful currency of the People's Republic of
     China;

     "SATISFACTORY AUDIT REPORTS" means the consolidated financial statements of
     the Group (a) for the twelve (12) months ended 31 December 2004 in which
     the audited consolidated net profit after tax (excluding exceptional,
     extraordinary gains and prior year adjustments) of the Group for the twelve
     (12) months ended 31 December 2004 not being less than One Million United
     States Dollars (US$1,000,000) and (b) for the eight (8) months ended 31
     August 2005 in which the audited consolidated net assets of the Group as at
     31 August 2005 not being less than Four Million and Five Hundred Thousand
     United States Dollars (US$4,500,000), as prepared in accordance with IAS
     and audited by one of the "Big Four" accounting firms;

     "SECOND COMPLETION" means completion of the Second Tranche Subscription in
     accordance with Clause 4.2;

     "SECOND COMPLETION DATE" means the date on which Second Completion takes
     place;

     "SECOND TRANCHE SUBSCRIPTION" means the second tranche subscription of
     Convertible Notes as referred to in Clause 2.1;

                                       7

<PAGE>

     "SHARE(S)" means share(s) of any class in the capital of the Company and
     including, without limitation, the Common Share(s);

     "SHARE PLEDGING AGREEMENT" means the Share Pledging Agreement to be entered
     into between the Founder and each of the Investors as referred to in Clause
     4.1(A)(iv) in the Agreed Form;

     "SHARE PLEDGE RELEASE" means the relevant release of each Share Pledging
     Agreement to be entered into between the Founder and each of the Investors
     as referred to in Clause 4.2(A)(iii) in the Agreed Form;

     "SHAREHOLDER" means a holder of any Share(s);

     "SUBSCRIPTION PRICE" means the price payable for the subscription of the
     Convertible Notes to be issued by the Company to the Investors pursuant to
     this Agreement;

     "SUBSIDIARY" has the meaning that a company is a subsidiary of another
     company if that other company (i) Controls the composition of the board of
     directors of the first-mentioned company; (ii) Controls more than half of
     the voting power of the first-mentioned company; or (iii) holds more than
     half of the issued share capital of the first-mentioned company; and, for
     these purposes, a company shall be treated as being Controlled by another
     if that other company is able to direct its affairs and/or to Control the
     composition of its majority board of directors or equivalent management
     body;

     "TAXES" or "TAXATION" means and includes all forms of tax, levy, duty,
     charge, impost, fee, deduction or withholding of any nature imposed,
     levied, collected withheld or assessed by any Governmental Authority or
     other taxing or similar authority in any part of the world and includes any
     interest, additional tax, penalty or other charge payable or claimed in
     respect thereof;

     "TRANSACTION DOCUMENTS" means all documents (including but without
     limitation to the Investment Agreement, the Share Pledging Agreements, the
     Share Pledge Releases and the Registration Rights Agreement) referred to or
     contemplated in this Agreement;

     "UNCITRAL RULES" has the meaning ascribed to it in Clause 21.2;

     "UNITED STATES" or "US" means the United States of America;

     "US$" means United States dollars, the lawful currency of the United States
     of America;

     "WARRANTORS" means the Company, the PRC Subsidiaries and the Founder and
     each of them shall be referred to as a "WARRANTOR"; and

     "WARRANTORS' WARRANTIES" means the representations and warranties given by
     the Warrantors under Clause 5.1 and Schedule 3.

1.2  In this Agreement:

                                       8

<PAGE>

     (A)  the headings are inserted for convenience only and shall not affect
          the construction and interpretation of this Agreement;

     (B)  references to statutory provisions shall be construed as references to
          those provisions as amended or re-enacted or as their application is
          modified by other statutory provisions (whether before or after the
          date hereof) from time to time and shall include any provisions of
          which they are re-enactments (whether with or without modification)
          except to the extent that any amendment or modification enacted after
          the date hereof would extend or increase the liability of the
          Warrantors under the Warrantors' Warranties or (if applicable)
          materially affect the rights or obligations of any Party under this
          Agreement;

     (C)  all time and dates in this Agreement shall be Hong Kong time and dates
          except where otherwise stated;

     (D)  unless the context requires otherwise, words incorporating the
          singular shall include the plural and vice versa and words importing a
          gender shall include every gender;

     (E)  references herein to Clauses, Recitals and Schedules are to clauses
          and recitals of and schedules to this Agreement; and

     (F)  all Recitals and Schedules form part of this Agreement and shall have
          the same force and effect as if expressly set out in the body of this
          Agreement and any reference to this Agreement shall include such
          Recitals and Schedules.

1.3  Where any obligation in this Agreement is expressed to be undertaken or
     assumed by any Party, that obligation is to be construed as requiring the
     Party concerned to exercise all reasonable rights and powers of Control
     over the affairs of any other Person which that Party is able to reasonably
     exercise (whether directly or indirectly) in order to secure performance of
     that obligation.

1.4  In relation to the Warrantors' Warranties, references to the knowledge,
     information, belief or awareness of any Person shall be deemed to include
     any knowledge, information, belief or awareness which any such Person would
     have if he had made all usual and reasonable enquiries.

2.   SUBSCRIPTION, CONSIDERATION AND GUARANTEE

2.1  Subject to the fulfilment of the conditions set out in Clause 3, the
     Investors agree to subscribe for, and the Company agrees to issue to the
     Investors, the following Convertible Notes free and clear of all
     Encumbrances, at a Subscription Price equivalent to the face value of the
     relevant Convertible Note, in two tranches in the following manner:

                                       9

<PAGE>

<TABLE>
<CAPTION>
                       Face value / Subscription
                    Price of the Convertible Notes
            ----------------------------------------------
            First Tranche   Second Tranche       Total
Investor     Subscription    Subscription      commitment
--------    -------------   --------------   -------------
<S>         <C>             <C>              <C>
The Funds    US$5,400,000    US$1,600,000    US$ 7,000,000
JAFCO        US$2,700,000    US$  800,000    US$ 3,500,000
Total        US$8,100,000    US$2,400,000    US$10,500,000
</TABLE>

2.2  The Company shall grant an option (a "NOTE OPTION") to each Investor to
     subscribe for additional Convertible Notes of, subject to Clauses 2.3 and
     2.6, an aggregate principal amount of Two Million Five Hundred Thousand
     Dollars (US$2,500,000) as follows:

<TABLE>
<CAPTION>
            Face value / Subscription Price of the Convertible
                     Notes subject to the Note Option
Investor       (subject to adjustment set out in Clause 2.3)
--------    --------------------------------------------------
<S>         <C>
The Funds                        US$1,500,000
JAFCO                            US$1,000,000
Total                            US$2,500,000
</TABLE>

     Pursuant to a Note Option, the relevant Investor shall have the right,
     which may be exercised in whole but not in part, at any time during the
     period from the Second Completion Date to 31 March 2006, to subscribe for
     Convertible Notes of the principal amount set opposite its name above.

     The Note Option of each Investor is independent from the Note Option of the
     other Investor. For the avoidance of doubt, one Investor may exercise its
     Note Option even if the other Investor does not exercise its Note Option.

     Each Note Option is transferable in whole but not in part provided that
     such transfer will not be subject to or will be exempted from the
     prospectus and registration requirements under the Ontario Securities Act.

2.3  At any time on or before 31 January 2006, the Company may, by a prior
     written notice given to each of the Investors, elect to reduce the
     principal amount of the Convertible Notes subject to the Note Option as
     follows:

<TABLE>
<CAPTION>
            Face value / Subscription Price of the Convertible
                     Notes subject to the Note Option
Investor       (after adjustment set out in this Clause 2.3)
--------    --------------------------------------------------
<S>         <C>
The Funds                      US$  750,000
JAFCO                          US$  500,000
Total                          US$1,250,000
</TABLE>

                                       10

<PAGE>

2.4  Unless otherwise agreed by all of the Investors in writing, the proceeds of
     the Subscription Price shall be used for one or more of the following
     purposes:

     (A)  purchase of long-term silicon supplies for the Group;

     (B)  the Group's working capital;

     (C)  the Group's capital expenditures; or

     (D)  such other purposes as the Board may decide.

2.5  In consideration of the Investors agreeing to subscribe for the Convertible
     Notes, the Founder agrees to guarantee to the Investors the due and timely
     performance by the Company of its obligations under this Agreement, the
     Transaction Documents and the Conditions (where applicable). In the event
     that the Company fails to comply with any of its obligations under this
     Agreement, the Transaction Documents or the Conditions (where applicable),
     the Founder undertakes to procure the prompt compliance by the Company of
     such obligations and indemnify each of the Investors on demand from and
     against all or any losses, costs, expenses damages, claims and liabilities
     borne, suffered or incurred by the Investor arising or resulting from or in
     connection with such failure of the Company to perform its obligations set
     out in this Agreement, the relevant Transaction Documents and the
     Conditions (where applicable).

2.6  The Investors undertake to extend cooperation to the other Parties to
     convert, before Second Completion, the form of their investment in the
     Company contemplated under this Agreement from Convertible Notes to
     preference shares (which can be converted into Common Shares) to be issued
     by the Company on such terms and conditions agreed upon by all Parties,
     subject to the necessary documentation (which shall (a) confer to the
     Investors in respect of the preference shares substantially the same rights
     as those attaching to the Convertible Notes, (b) allow the Investors to
     subscribe for preference shares in the proportional amount and on terms
     being substantially the same as those for the Second Tranche Subscription
     and (c) contain an option for each Investor to subscribe for additional
     preference shares and an option for the Company to reduce such subscription
     on substantially the same terms set out in Clauses 2.2 and 2.3
     respectively) being finalized to the satisfaction of all Parties. Where
     such conversion does not occur before Second Completion, all Parties agree
     that the Company shall have the right to cancel the Note Options granted to
     the Investors under Clause 2.2.

3.   CONDITIONS PRECEDENT TO FIRST COMPLETION AND SECOND COMPLETION

3.1  The obligation of the Investors to complete the First Tranche Subscription
     is conditional, except as waived in accordance with Clause 3.3, upon the
     following conditions being satisfied prior to First Completion:

     (A)  all of the Investors shall have been satisfied with the results of the
          business, technical, legal and financial due diligence on the Group
          undertaken by any of the Investors and its professional advisers by
          way of means including the following:

                                       11

<PAGE>

          (i)  site visits, discussions with the Company's management on matters
               relating to the business, marketing, future projections,
               prospects, business strategies and development of the Group;

          (ii) legal due diligence; and

          (iii) the financial due diligence report on the Group prepared by
               PricewaterhouseCoopers.

     (B)  the results of the review referred to in paragraph (A)(iii) above
          shall not, in the discretion of the Investors, be significantly
          different from the information presented to the Investors by the
          Company prior to the date hereof;

     (C)  the investment committee of each of the Investors shall have approved
          the transactions contemplated hereby as well as the execution,
          delivery and performance of this Agreement and the Transaction
          Documents (where applicable) by the relevant Investor;

     (D)  the Investors and the Company shall have received a legal opinion
          addressed to, among others, the Investors in the Agreed Form from
          legal counsel accepted by the Investors on laws of Canada relating to
          this Agreement and the Transaction Documents and the transactions
          contemplated under such agreements;

     (E)  the Investors and the Company shall have received a legal opinion
          addressed to, among others, the Investors in the Agreed Form from Chen
          & Co. Law Firm on laws of the PRC relating to the business of the
          Group and the due incorporation of the Group Companies established in
          the PRC;

     (F)  the Investors shall have received a Pre-emptive Right Certificate duly
          executed by the Founder;

     (G)  the Investors shall have received a certified copy of the employment
          contract entered into between the Company and the Founder in the
          Agreed Form of a term of at least three (3) years;

     (H)  the Investors shall have received certified copies of the Board
          resolutions and shareholders' resolutions of the Company duly passed
          in the Agreed Form for (i) approving the execution, delivery and
          performance of this Agreement and the Transaction Documents (where
          applicable) by the Company and (ii) approving and adopting in the
          Agreed Form amendments to the Articles of Incorporation and the
          By-Laws incorporating, among other things, the restrictions imposed on
          the Shareholders under this Agreement and the Investment Agreement;

     (I)  the Company shall have filed the amended Articles of Incorporation
          duly adopted by the Company as referred to in Clause 3.1(H) with all
          relevant Governmental Authorities in Canada and shall have provided to
          each Investor a certified copy of the amended Articles of
          Incorporation;

                                       12

<PAGE>

     (J)  the arrangement between the Company and Swift Allies Inc. shall have
          been terminated and all payments by any Group Company to such company
          shall have been ended;

     (K)  no event or series of events shall have occurred which, in the opinion
          of any of the Investors, has had or would reasonably be expected to
          have a Material Adverse Effect;

     (L)  the consummation of the transactions contemplated hereby for the
          purpose of the First Tranche Subscription shall have been approved, or
          met with consents from, the relevant Governmental Authority where
          necessary and shall not have been restrained, enjoined or otherwise
          prohibited by any Applicable Law, including any order, injunction,
          decree or judgement of any court or other Governmental Authority;

     (M)  except as disclosed in the Disclosure Letter, all the Warrantors'
          Warranties shall be true and accurate in all material respects on the
          date hereof and at all times up to and including the First Completion
          Date;

     (N)  none of the Warrantors shall have breached any of their respective
          obligations, covenants and undertakings under this Agreement or any of
          the Transaction Documents (where applicable); and

     (O)  the Investors shall have received certified copies of the Board
          resolutions of each of the PRC Subsidiaries duly passed in the Agreed
          Form for approving the execution, delivery and performance of this
          Agreement and the Investment Agreement by that PRC Subsidiary.

3.2  The obligation of the Investors to complete the Second Tranche Subscription
     is conditional, except as waived in accordance with Clause 3.3, upon the
     following conditions being satisfied prior to Second Completion:

     (A)  the Company shall have delivered to each of the Investors the
          Satisfactory Audit Reports;

     (B)  no event or series of events shall have occurred which, in the opinion
          of any of the Investors, has had or would reasonably be expected to
          have a Material Adverse Effect;

     (C)  the consummation of the transactions contemplated hereby for the
          purpose of the Second Tranche Subscription shall have been approved,
          or met with consents from, the relevant Governmental Authority where
          necessary and shall not have been restrained, enjoined or otherwise
          prohibited by any Applicable Law, including any order, injunction,
          decree or judgement of any court or other Governmental Authority;

     (D)  except as disclosed in the Disclosure Letter, all the Warrantors'
          Warranties shall be true and accurate in all material respects on the
          date hereof and at all times up to and including the Second Completion
          Date;

     (E)  none of the Warrantors shall have breached any of their respective

                                       13

<PAGE>

          obligations, covenants and undertakings under this Agreement or any of
          the Transaction Documents (where applicable); and

     (F)  the Investors shall have received a certified copy of (i) the
          employment contract entered into between the Company and each Person
          who holds the office of the chief financial officer, the chief
          operating officer or vice president of any Group Company in the Agreed
          Form, each of such contract being of a term of at least three (3)
          years, and (ii) an undertaking entered into between the Company, the
          Investors and each of such employees in the Agreed Form containing
          non-solicitation and non-competition covenants and undertakings in
          respect of Intellectual Property Rights from the relevant Person.

3.3  The Investors together (but no individually) may waive all or any of the
     conditions set out in Clause 3.1 or Clause 3.2 at any time prior to the
     relevant completion date by notice in writing to all of the other Parties.

3.4  The Company shall use all reasonable endeavours to procure that the
     conditions set out in Clause 3.1 (except the one set out in Clause 3.1(C))
     are satisfied on or before 22 November 2005 or such a later date as the
     Parties may agree. As soon as the conditions set out in Clause 3.1 have
     been fully satisfied, the Company shall give written notice of the
     satisfaction of the conditions to all of the Investors. First Completion
     shall not be proceeded with unless the First Tranche Subscription by all of
     the Investors are completed simultaneously. If any of the conditions set
     out in Clause 3.1 shall not have been fulfilled (or waived by the Investors
     in accordance with Clause 3.3) on or before such deadline, First Completion
     shall be postponed to a later date as may be mutually agreed between the
     Parties. If any of the conditions set out in Clause 3.1 shall not have been
     fulfilled (or waived by the Investors in accordance with Clause 3.3) on or
     before such new deadline, this Agreement shall be terminated automatically
     forthwith, and upon such termination, this Agreement (with the exception of
     Clauses 1, 8 to 14, 16 to 22 which shall remain in full force and effect)
     shall cease to have effect between the Parties. The Parties shall not have
     any further right and liability under or pursuant to the provisions of this
     Agreement save and except in respect of any antecedent breach occurring
     prior to such termination.

3.5  The Company shall use all reasonable endeavours to procure that the
     conditions set out in Clause 3.2 are satisfied on or before 31 January
     2006. As soon as the conditions set out in Clause 3.2 have been fully
     satisfied, the Company shall give written notice of the same to all
     Investors. Second Completion shall not be proceeded with unless the Second
     Tranche Subscription by all of the Investors are completed simultaneously.
     If any of the conditions set out in Clause 3.2 shall not have been
     fulfilled (or waived by the Investors in accordance with Clause 3.3) on or
     before such deadline, the Investors shall not be obliged to complete the
     Second Tranche Subscription. Notwithstanding the above, this Clause 3.5
     shall not prejudice any rights of the Investors or any claims that the
     Investors may have against any of the other Parties under this Agreement.

                                       14

<PAGE>

4.   COMPLETION

4.1  Subject to Clause 3, First Completion shall take place on the sixth (6th)
     Business Day after the issue and delivery of the notice by the Company to
     the Investors referred to in Clause 3.4 (which is intended by all Parties
     to be not later than 30 November 2005) or such time and date as may be
     mutually agreed by the Parties, at a place as the Company and the Investors
     may agree, when all of the following business shall be transacted
     simultaneously:

     (A)  the Company shall:

          (i)  deliver to the Investors certified copies of the Board
               resolutions and shareholders' resolutions of the Company duly
               passed in the Agreed Form for (i) approving the issue of the
               Convertible Notes to the Investors and the issue of the
               certificates for the Convertible Notes in respect of the First
               Tranche Subscription to the Investors and (ii) approving the
               appointment of each Person nominated by each Investor as a
               Director;

          (ii) issue to the Investors the Convertible Notes in respect of the
               First Tranche Subscription and deliver to the Investors the
               relevant certificates of the Company (duly executed under seal)
               for such Convertible Notes dated the First Completion Date and
               issued substantially in the form set out in Schedule 5;

          (iii) where the Registration Rights Agreement has not been signed
               before the First Completion Date, deliver to the Investors five
               (5) counterparts of the Registration Rights Agreement each duly
               executed by the Company;

          (iv) deliver to the Investors four (4) counterparts of each set of
               Share Pledging Agreements duly executed by the Founder, pursuant
               to which the Founder shall mortgage, charge and assign absolutely
               by way of first legal mortgage the following number of Shares in
               favour of each relevant Investor as a continuing security for the
               due and punctual performance and observance by the Company of all
               the obligations of the Company under Clause 3.2(A) (individually,
               a "SHARE PLEDGING AGREEMENT" and collectively, the "SHARE
               PLEDGING AGREEMENTS"):

<TABLE>
<CAPTION>
Investor                           Number of Common Shares
--------                           -----------------------
<S>         <C>
The Funds   755,789
JAFCO       377,895
Total       1,133,684 which represents twenty per cent. (20%) of the total
            Shares in issue as at the date hereof
</TABLE>

                                       15

<PAGE>

               together with (a) a certified copy of the Board resolution and
               (b) the stock transfer and power of attorney signed by the
               Founder, both in the Agreed Form in relation to each Share
               Pledging Agreement.

          (v)  deliver to the Investors ten (10) counterparts of the Investment
               Agreement each duly executed by the Company, the PRC Subsidiaries
               and the Founder;

          (vi) enter the name of such Person as shall be nominated by each
               Investor in the register of directors of the Company as a
               Director and make available for collection by the Investors as
               soon as practicable after First Completion a certified copy of
               such updated register of directors; and

          (vii) deliver to each Investor the deed of indemnity executed by the
               Company in favour of the Person referred to in Clause 4.1(A)(vi)
               substantially in the form set out in Schedule 6;

          (viii) a compliance certificate dated as of the First Completion Date
               executed by each Warrantor or a duly authorized representative of
               each Warrantor, as applicable, certifying that all of the
               conditions set forth in Clause 3.1 (other than Clause 3.1(C))
               have been fulfilled; and

     (B)  each of the Investors shall:

          (i)  make the payment of the relevant amount of Subscription Price in
               respect of the First Tranche Subscription to the Company by way
               of telegraphic transfer to the Company's designated bank account
               together with evidence that the Subscription Price has or will be
               credited by telegraphic transfer, for value no later than the
               next Business Day, into the Company's said designated bank
               account, details of which are to be provided by the Company to
               all of the Investors in the same written notice to be given by
               the Company as referred to in Clause 3.4;

          (ii) subject to the receipt of the counterparts from the Company
               referred to in Clause 4.1(A)(iii), deliver to the Company two (2)
               counterparts of the Registration Rights Agreement each duly
               executed by the Investors;

          (iii) subject to the receipt of the counterparts from the Company
               referred to in Clause 4.1(A)(iv), deliver to the Company two (2)
               counterparts of each set of the Share Pledging Agreements each
               duly executed by the relevant Investor;

          (iv) subject to the receipt of the counterparts from the Company
               referred to in Clause 4.1(A)(v), deliver to the Company seven (7)
               counterparts of the Investment Agreement each duly executed by
               the Investors;

                                       16

<PAGE>

          (v)  deliver to the Company a letter appointing a Person as a Director
               and, subject to the Investor's discretion, a Person (or, where
               applicable, the same person) to be a director of a subsidiary of
               the Company;

          (vi) delivery to the Company an acceptance of appointment as Director
               signed by the Person nominated by the Investor to act as a
               Director or, where applicable, a director of the relevant
               subsidiary of the Company; and

          (vii) where applicable, deliver to the Company the duly signed
               Accredited Investor Certificate (the form of which being set out
               in Schedule 7) necessary for the Company to claim exemption from
               the prospectus and registration requirements under the Ontario
               Securities Act.

4.2  Subject to Clause 3, Second Completion shall take place on the sixth (6th)
     Business Day after the issue and delivery of the notice by the Company to
     the Investors referred to in Clause 3.5 or such time and date as may be
     mutually agreed by the Parties (which in any event shall not be later than
     28 February 2006), at a place as the Company and the Investors may agree,
     when all of the following business shall be transacted simultaneously:

     (A)  the Company shall:

          (i)  deliver to the Investors certified copies of the Board
               resolutions and shareholders' resolutions of the Company duly
               passed in the Agreed Form for approving the issue of the
               Convertible Notes to the Investors and the issue of the
               certificates for the Convertible Notes in respect of the Second
               Tranche Subscription to the Investors;

          (ii) issue to the Investors the Convertible Notes in respect of the
               Second Tranche Subscription and deliver to the Investors the
               relevant certificates of the Company (duly executed under seal)
               for such Convertible Notes dated the Second Completion Date and
               issued substantially in the form set out in Schedule 5; and

          (iii) deliver to the Investors four (4) counterparts of each set of
               the Share Pledge Releases duly executed by the Founder, pursuant
               to which the relevant Investor shall release the mortgage created
               under the relevant Share Pledging Agreement (individually, a
               "SHARE PLEDGE RELEASE" and collectively, the "SHARE PLEDGE
               RELEASES"); and

     (B)  each of the Investors shall:

          (i)  make the payment of the relevant amount of Subscription Price in
               respect of the Second Tranche Subscription to the Company by way
               of telegraphic transfer to the Company's designated bank account
               together with evidence that the Subscription Price has or will be
               credited by telegraphic transfer, for value no later than the
               next Business Day, into the Company's said designated bank
               account,

                                       17

<PAGE>

               details of which are to be provided by the Company to all of the
               Investors in the same written notice to be given by the Company
               as referred to in Clause 3.5;

          (ii) subject to the receipt of the counterparts from the Company
               referred to in Clause 4.2(A)(iii), deliver to the Company two (2)
               counterparts of each set of the Share Pledge Releases each duly
               executed by the relevant Investor; and

          (iii) where applicable, deliver to the Company the duly signed
               Accredited Investor Certificate (the form of which being set out
               in Schedule 7) necessary for the Company to claim exemption from
               the prospectus and registration requirements under the Ontario
               Securities Act.

4.3  For the avoidance of doubt, each of the First Completion and the Second
     Completion of the subscription of Convertible Notes by all (but not only
     part) of the Investors shall be conducted simultaneously. Where any
     Investor fails to complete the subscription, the other Investors shall not
     be obliged to complete the subscription.

4.4  Where applicable, the Company undertakes that it shall file the Accredited
     Investor Forms received by the Investors as referred to in Clauses
     4.1(B)(vii) and 4.2(B)(iii) with the relevant Governmental Authority in
     Canada forthwith after the First Completion Date or the Second Completion
     Date (as the case may be).

5.   REPRESENTATIONS AND WARRANTIES

5.1  Warrantors' Warranties

     (A)  Subject to disclosure in the Disclosure Letter, (i) each of the
          Company and the Founder jointly and severally represents and warrants
          to and undertakes with the Investors that each of the Warrantors'
          Warranties in both Parts A and B of Schedule 3, and (ii) each of the
          PRC Subsidiaries for itself only (but not jointly and/or severally
          with other Warrantors) represents and warrants to and undertakes with
          the Investors that each of the Warrantors' Warranties in Part B only
          of Schedule 3, is true and accurate and not misleading as at the date
          of this Agreement and will continue to be true and accurate in all
          respects and not misleading on each day after the date hereof up to
          and including the First Completion Date and the Second Completion Date
          (as the case may be) as if repeated on each such day. For this purpose
          only, where in any of the Warrantors' Warranties there is an express
          or implied reference to the date of this Agreement, that reference is
          to be construed as a reference to each day after the date hereof up to
          and including the First Completion Date and the Second Completion Date
          (as the case may be).

     (B)  The Warrantors acknowledge that the Investors have entered into this
          Agreement in reliance upon the Warrantors' Warranties, and that they
          are given with the intention of inducing the Investors to enter into
          this

                                       18

<PAGE>

          Agreement.

     (C)  Without prejudice to anything contained in this Clause 5, all
          Warrantors' Warranties contained herein shall survive the execution
          and delivery of this Agreement, First Completion and Second
          Completion.

     (D)  Each of the Warrantors hereby agrees with the Investors to waive any
          right which he/it may have in respect of any misrepresentation,
          inaccuracy or omission in or from any information or advice supplied
          or given by any Group Company or its officers and employees or
          advisers in enabling him/it to give the Warrantors' Warranties.

     (E)  The rights and remedies of the Investors in respect of the Warrantors'
          Warranties shall not be affected by any investigation made by or on
          behalf of the Investors into the affairs of any Group Company, save as
          disclosed in the Disclosure Letter.

     (F)  Each of the Warrantors' Warranties shall be construed as a separate
          representation and warranty and (save as expressly provided to the
          contrary) shall not be limited or restricted by reference to or
          inference from the terms of any other representation or warranty or
          any other term of this Agreement.

5.2  Except as disclosed to the Company, each the Investors for itself only (but
     not jointly and/or severally with other Investors) represents and warrants
     to the Company that each of the following representations and warranties is
     true and accurate and not misleading as at the date of this Agreement and
     will continue to be true and accurate in all respects and not misleading on
     each day after the date hereof up to and including the First Completion
     Date and the Second Completion Date (as the case may be) as if repeated on
     each such day:

     (A)  the Investor is a duly incorporated corporation or corporate body, is
          validly existing under the laws of its place of incorporation and is
          not in receivership or liquidation, has not taken any steps to enter
          into liquidation and no petition has been presented for its winding up
          or for the appointment of a receiver thereof; and

     (B)  the Investor has full power and authority to enter into this Agreement
          and all of the other documents contemplated under this Agreement, and
          this Agreement, when executed and delivered, will constitute the
          Investor's valid and legally binding obligation, enforceable in
          accordance with its terms except that the transactions contemplated
          herein as well as the execution, delivery and performance of this
          Agreement and the Transaction Documents (where applicable) by the
          Investor will be subject to the approval of its investment committee.

5.3  Each Warrantor shall promptly notify all of the Investors upon its/his
     becoming aware at any time prior to and after First Completion or Second
     Completion (as the case may be) of any event which could reasonably be
     expected to cause any of the Warrantors' Warranties to be incorrect,
     misleading or breached in any material respect or which may have any
     Material Adverse Effect.

                                       19

<PAGE>

6.   UNDERTAKINGS BEFORE COMPLETION

6.1  The Warrantors hereby agree and undertake with the Investors:

     (A)  that they shall not do, allow or procure any act or omission in the
          period up to and including the First Completion Date and the Second
          Completion Date (as the case may be) which would constitute a breach
          of any of the Warrantors' Warranties; and

     (B)  to disclose promptly to all of the Investors in writing upon becoming
          aware of any matter, event or circumstance (including any omission to
          act) which may arise or become known to the Warrantors or any of them
          after the date of this Agreement and before First Completion or Second
          Completion (as the case may be) and:

          (i)  constitutes a breach of or is inconsistent with any of the
               Warrantors' Warranties if given at any time up to and including
               the First Completion Date or the Second Completion Date (as the
               case may be) or which might make them inaccurate or misleading;
               or

          (ii) has, or is likely to have a Material Adverse Effect; or

          (iii) might otherwise materially and adversely affect the value of the
               Convertible Notes.

6.2  Except as otherwise permitted by this Agreement or with the prior written
     consent of all Investors (such consent shall not be unreasonably withheld
     or delayed), from the date hereof and at all times up to and including the
     First Completion Date or the Second Completion Date (as the case may be),
     the Company shall, and shall cause each other Group Company in respect of
     itself:

     (A)  to carry on its business in the ordinary course consistent with past
          practice in all material respects and to preserve its relationships
          with customers, suppliers and others having business dealings with the
          Group;

     (B)  not materially change its nature or business scope or carry on any
          type of business not ancillary or deviating from the existing
          business;

     (C)  save for the purpose of facilitating the transactions contemplated
          under this Agreement, not to amend, alter or repeal, whether by
          merger, reclassification or otherwise any provision of its
          constitutional documents;

     (D)  save for the purpose of facilitating the transactions contemplated
          under this Agreement, not to increase, reduce, consolidate, sub-divide
          or cancel its authorized and issued share capital;

     (E)  not to change its name or the name under which it carries on business;

     (F)  not to change its jurisdiction of incorporation;

     (G)  not to make any composition or arrangement with its creditors;

                                       20

<PAGE>

     (H)  not to pass any resolution which would result in its winding up,
          liquidation or entering into administration or receivership;

     (I)  not to consolidate or merge with any other business, which is not part
          of its existing business as at the date hereof;

     (J)  not to offer, sell or issue, or enter into any agreement or issue any
          instrument providing for the offer, sale or issuance (contingent or
          otherwise) of, any Equity Securities, or any equity securities of any
          Group Company;

     (K)  not to increase the number of shares available for grant or issuance
          under any share or stock option plan or other share incentive plan or
          arrangement or make any amendment to or terminate any such plan or
          arrangement (if any);

     (L)  not to create or allow to arise any fixed or floating charge,
          mortgage, Lien (other than a Lien arising by operation of law), pledge
          or other Encumbrance over the whole or any part of the undertaking,
          property or assets; or create, allow to arise or issue any debenture
          constituting any of the foregoing;

     (M)  not to make any loan or advance in a substantial amount (except to its
          wholly-owned subsidiary) or give any credit in a substantial amount
          (except trade credit to customers in the ordinary course of business);

     (N)  not to give any guarantee or indemnity for or otherwise secure the
          liabilities or obligations of any Person (except in favour of its
          wholly-owned subsidiary in the ordinary course of business);

     (O)  not to transfer, license or create any Encumbrance over any of its
          Intellectual Property Rights;

     (P)  not to appoint or remove its auditors; and

     (Q)  not to declare or make any dividend on or with respect to any Equity
          Securities, or any equity securities of any Group Company, or
          otherwise distribute its shareholders any of its assets or property or
          reserve.

6.3  The Founder undertakes to the Investors that he shall exercise all his
     powers in relation to each Group Company so as to procure that no action
     shall be taken by or on behalf of the Company or any other Group Company to
     approve, authorise and/or ratify any of the matters set out in Clause 6.2,
     or any agreement or commitment to engage in any such matters, without first
     obtaining the prior written consent of all Investors (such consent shall
     not be unreasonably withheld or delayed).

7.   REMEDIES

7.1  If before First Completion:

     (A)  any material breach of representations and warranties of a Party set
          out in

                                       21

<PAGE>

          this Agreement or any of the Transaction Documents (where applicable)
          comes to the notice of any of the other Parties; or

     (B)  any of the Warrantors or any Investor is in material breach of any
          obligation on its/his part under this Agreement or any of the
          Transaction Documents (where applicable);

     then, but without prejudice to any other rights or remedies available to
     the non-defaulting Parties hereunder, any of the non-defaulting Parties
     may, without any liability to the defaulting Party, elect to terminate this
     Agreement or the relevant Transaction Document by giving notice in writing
     to all other Parties, whereupon this Agreement or such Transaction Document
     (as the case may be) shall terminate.

7.2  The Warrantors hereby jointly and severally agree to indemnify, at anytime
     after First Completion or Second Completion (as the case may be), each
     Investor in respect of all costs and expenses (including, without
     limitation, legal expenses) which an Investor may reasonably incur either
     before or after the commencement of any action in connection with:

     (A)  the settlement of any claim for breach of the undertakings given by
          any of the Warrantors under this Agreement, the Conditions and the
          Transaction Documents (where applicable);

     (B)  the settlement of any claim that any of the Warrantors' Warranties
          made by them are, on or before the First Completion Date or the Second
          Completion Date (as the case may be), untrue or misleading or have
          been breached;

     (C)  any proceedings in which an Investor claims that any of the
          Warrantors' Warranties made by them are, on or before the First
          Completion Date or the Second Completion Date (as the case may be),
          untrue or misleading or have been breached and in which judgment is
          given for the Investor; or

     (D)  the enforcement of any such settlement, arbitral award or judgment.

7.3  The Founder hereby covenants with the Investors that he shall indemnify and
     at all times keep indemnified the Investors and the Company on demand from
     and against all or any depletion or diminution in the value of assets or
     increase in the liabilities of any Group Company arising or resulting from
     any Taxes or Taxation claims which has been imposed or made or may
     hereafter be imposed or made, wholly or partly, in respect of or in
     consequence of any event or any income, profits or gains earned, accrued or
     received or which are alleged to have, or which should have, been earned or
     accrued or received, or any transaction effected on or before the First
     Completion Date PROVIDED THAT the Founder shall be under no liability in
     respect of any breach of the said indemnity as aforesaid:

     (A)  to the extent that provision or reserve in respect of such liability
          was made in the Satisfactory Audit Reports or the Group's other
          financial statements audited by one of the "Big Four" accounting
          firms; or

                                       22

<PAGE>

     (B)  to the extent that such liability arises or is increased as a result
          only of any increase in rates of Tax made after First Completion with
          retrospective effect; or

     (C)  if such liability arises in respect of Tax for which the Group Company
          is primarily liable and which arose in the ordinary course of business
          of the Group Company; or

     (D)  to the extent of the indemnity amount that does not exceed, and has
          been fully absorbed by and paid off from, the aggregate audited
          retained earnings of the Group for all financial periods ending 28
          February 2006.

8.   PAYMENT AND TAXES

     All payments to be made to the Investors by any of the other Parties under
     this Agreement shall be made:

     (A)  in full without any Person being able to set-off any amounts due to it
          or claimed by it; and

     (B)  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 paying
          Party shall pay such additional amounts as may be necessary in order
          that the net amounts received by the relevant Investor after such
          withholding or deduction shall equal the respective amounts receivable
          by the Investor in the absence of such withholding or deduction.

9.   ANNOUNCEMENTS AND CONFIDENTIALITY

9.1  Disclosure of Terms. Each Party acknowledges that the terms and conditions
     (collectively, the "FINANCING TERMS") of this Agreement, the Transaction
     Documents, and all exhibits, restatements and amendments hereto and
     thereto, including their existence, shall be considered confidential
     information and shall not be disclosed by it to any third party except in
     accordance with the provisions set forth in this Clause 9. Each Investor
     agrees severally with the Company that such Investor will keep confidential
     and will not disclose or divulge, any information which such Investor
     obtains from the Company, pursuant to financial statements, reports,
     presentations, correspondence, and any other materials provided by the
     Company or its advisers to, or communications between the Company and such
     Investor, or pursuant to information rights granted under this Agreement or
     any other related documents, unless the information is known, or until the
     information becomes known, to the public through no fault of such Investor,
     or unless the Company gives its written consent to such Investor's release
     of the information.

9.2  Press Releases. Within sixty (60) days from First Completion, the Company
     may issue a press release disclosing that the Investors have invested in
     the Company provided that (a) the release does not disclose any of the
     Financing Terms, (b) the

                                       23

<PAGE>

     press release does not disclose the amount or other specific terms of the
     investment contemplated under this Agreement and the Transaction Documents,
     and (c) the final form of the press release is approved in advance in
     writing by each Investor mentioned therein. Investors' names and the fact
     that Investors have made an investment in the Company can be included in a
     reusable press release boilerplate statement, so long as each Investor has
     given the Company its initial approval of such boilerplate statement and
     the boilerplate statement is reproduced in exactly the form in which it was
     approved. No other announcement regarding any Investor in a press release,
     conference, advertisement, announcement, professional or trade publication,
     mass marketing materials or otherwise to the general public may be made
     without such Investor's prior written consent, which consent may be
     withheld at such Investor's sole discretion.

9.3  Permitted Disclosures. Notwithstanding anything in the foregoing to the
     contrary,

     (A)  the Company may disclose any of the Financing Terms to its current or
          bona fide prospective investors, directors, officers, employees,
          shareholders, investment bankers, lenders, accountants, auditors,
          insurers, business or financial advisors, and attorneys, in each case
          only where such persons or entities are under appropriate
          non-disclosure obligations imposed by professional ethics, law or
          otherwise;

     (B)  each Investor may, without disclosing the identities of the other
          Investors or the Financing Terms of their respective investments in
          the Company without their consent, disclose such Investor's investment
          in the Company to third parties or to the public at its sole
          discretion and, if it does so, the other Parties shall have the right
          to disclose to third parties any such information disclosed in a press
          release or other public announcement by such Investor;

     (C)  each Investor shall have the right to disclose:

          (i)  any information to such Investor's and/or its fund manager's
               and/or its Affiliate's legal counsel, fund manager auditor,
               insurer, accountant, consultant or to an officer, director,
               general partner, limited partner, its fund manager, shareholder,
               investment counsel or advisor, or employee of such Investor
               and/or its Affiliate; provided, however, that any counsel,
               auditor, insurer, accountant, consultant, officer, director,
               general partner, limited partner, fund manager, shareholder,
               investment counsel or advisor, or employee shall be advised of
               the confidential nature of the information or are under
               appropriate non-disclosure obligation imposed by professional
               ethics, law or otherwise;

          (ii) any information for fund and inter-fund reporting purposes;

          (iii) any information as required by law, government authorities,
               exchanges and/or regulatory bodies, including by the Securities
               and Futures Commission of Hong Kong, the China Securities and
               Regulatory Commission of the PRC or the Securities and Exchange

                                       24

<PAGE>

               Commission of the United States (or equivalent for other venues);
               and/or

          (iv) any information to bona fide prospective purchasers/investors of
               any share, security or other interests in the Company, and

          (v)  any information contained in press releases or public
               announcements of the Company pursuant to Clause 9.2.

     (D)  the confidentiality obligations set out in this Clause 9 do not apply
          to:

          (i)  information which was in the public domain or otherwise known to
               the relevant Party before it was furnished to it by another Party
               hereto or, after it was furnished to that Party, entered the
               public domain otherwise than as a result of (i) a breach by that
               Party of this Clause 9 or (ii) a breach of a confidentiality
               obligation by the discloser, where the breach was known to that
               Party;

          (ii) information the disclosure of which is necessary in order to
               comply with any Applicable Law, the order of any court, the
               requirements of a stock exchange or to obtain Tax clearance or
               other clearances or consents from any relevant authority; or

          (iii) information disclosed by any Director or Observers to his/her
               appointer or any of its Affiliate or otherwise in accordance with
               the foregoing provisions of this Clause 9.3.

9.4  The obligations contained in this Clause 9 shall endure, even after the
     termination of this Agreement, without limit in point of time except to the
     extent that and until any confidential information enters the public domain
     as set out above.

10.  ENTIRE AGREEMENT

     This Agreement sets out the entire agreement and understanding between the
     Parties in respect of the transactions and matters contemplated under this
     Agreement.

11.  VARIATION

     No variation of this Agreement (or any document entered into pursuant to
     this Agreement) shall be valid unless it is in writing and signed by or on
     behalf of each of the Parties.

12.  SUCCESSORS AND ASSIGNS

     All rights, covenants and agreements of the Parties contained in this
     Agreement shall, except as otherwise provided herein, be binding upon and
     inure for the benefit of their respective successors or permitted assigns.

                                       25

<PAGE>

13.  INVALIDITY

     If any provision of this Agreement is held to be invalid or unenforceable,
     then such provision shall (so far as it is invalid or unenforceable) be
     given no effect and shall be deemed not to be included in this Agreement
     but without invalidating any of the remaining provisions of this Agreement.

14.  WAIVER

14.1 No failure on the part of any Party to exercise, and no delay on its part
     in exercising, any right or remedy under this Agreement will operate as a
     waiver thereof nor will any single or partial exercise of any right or
     remedy preclude any other or further exercise thereof or the exercise of
     any other right or remedy. The rights and remedies provided in this
     Agreement are cumulative and not exclusive of any rights or remedies
     provided by law.

14.2 Any waiver of any provision of this Agreement, and any consent by a Party
     under any provision of this Agreement, must be in writing. Any waiver or
     consent shall be effective only for that instance and for the purpose for
     which it is given.

15.  FURTHER ASSURANCE

     Each Party shall do or procure to be done all such further acts and things,
     and execute or procure the execution of all such other documents, as the
     other Parties may from time to time reasonably require, whether on or after
     the First Completion Date or the Second Completion Date (as the case may
     be), for the purpose of giving to the other Parties the full benefit of all
     of the provisions of this Agreement.

16.  NOTICES

16.1 Notices or other communications required to be given by any Party pursuant
     to this Agreement shall be written in English and may be delivered
     personally or sent by registered airmail or postage prepaid, by a
     recognized courier service or by facsimile transmission to the address of
     the other Parties set forth below. The dates on which such notices shall be
     deemed to have been effectively given shall be determined as follows:

     (A)  notices given by personal delivery shall be deemed effectively given
          on the date of personal delivery;

     (B)  notices given by registered airmail or postage prepaid shall be deemed
          effectively given on the fifth (5th) Business Day after the date on
          which they were mailed (as indicated by the postmark);

     (C)  notices given by courier shall be deemed effectively given on the
          second (2nd) Business Day after they were sent by recognized courier
          service; and

     (D)  notices given by facsimile transmission shall be deemed effectively
          given immediately following confirmation of its transmission as
          recorded by the sender's facsimile machine.

                                       26

<PAGE>

TO THE COMPANY OR ANY OF THE PRC SUBSIDIARIES:

Address:                                  (Chinese Characters)
                                          (Building A6, Export Processing Zone
                                          Suzhou New & Hi-Tech District
                                          Jiangsu Province 215151
                                          The People's Republic of China)
Fax Number:                               86-512-62696016
Attention:                                Mr. QU Xiao Hua

TO THE FUNDS:

c/o HSBC Private Equity (Asia) Ltd.
Address:                                  Level 17, 1 Queen's Road Central
                                          Hong Kong
Fax Number:                               +852 2845-9992
Attention:                                The Managing Director

TO JAFCO:

c/o JAFCO Investment (Asia Pacific) Ltd
Address:                                  6 Battery Road
                                          #42-01 Singapore 049909
Fax Number:                               +65 6221-3690
Attention:                                The President

With a copy to:

JAFCO Investment (Hong Kong) Ltd.
Address:                                  30/F Two International Finance Centre
                                          8 Finance Street
                                          Central
                                          Hong Kong
Fax Number:                               +852 2536-1979
Attention:                                General Manager
Email:                                    All E-mail correspondence to
                                          vincent.chan@jafcoasia.com and
                                          sam.lai@jafcoasia.com

TO THE FOUNDER:

Address:                                  (Chinese Characters)
                                          (Building A6, Export Processing Zone
                                          Suzhou New & Hi-Tech District
                                          Jiangsu Province 215151
                                          The People's Republic of China)
Fax Number:                               86-512-62696016

16.2 Any Party may at any time change its address or fax number for service of
     notices in writing delivered to the other Parties in accordance with this
     Clause 16.

                                       27

<PAGE>

17.  COUNTERPARTS

     This Agreement may be executed in any number of counterparts and by the
     Parties hereto on separate counterparts, each of which when so executed
     shall be an original, but all of which shall together constitute one and
     the same instrument.

18.  COSTS

18.1 Subject to First Completion, the Company shall bear all costs and expenses
     reasonably incurred by the Investors in relation to the Investors'
     investment contemplated under this Agreement including but not limited to
     the preparation and negotiation of the documentation for the matters
     referred to in this Agreement and the Transaction Documents and the due
     diligence undertaken by the Investors, up to a maximum limit of One Hundred
     Thousand United States Dollars (US$100,000).

18.2 In the event First Completion does not take place, the Company and the
     Investors shall bear their own costs and expenses, provided that if the
     Company unilaterally decides not to proceed with First Completion, the
     Company shall bear all costs and expenses reasonably incurred by or on
     behalf of the Investors in relation to the Investors' intended investment
     under this Agreement including but not limited to the preparation and
     negotiation of the documentation for the matters referred to in this
     Agreement and the Transaction Documents and the due diligence undertaken by
     the Investors, up to a maximum limit set out in Clause 18.1.

18.3 This Clause 18 shall survive the termination of this Agreement.

19.  PROCESS AGENTS

19.1 Each Party hereby irrevocably appoints the Person set out opposite its name
     below as its respective agent to accept service of process in Hong Kong in
     any legal action or proceedings arising out of this Agreement, service upon
     whom shall be deemed completed whether or not such service of process is
     forwarded to such Party by its agent or received by it, and each Party
     warrants and undertakes to the other Parties that the agent appointed by it
     hereunder is a company incorporated in Hong Kong and the address of such
     agent set out below is its registered office address in Hong Kong:

<TABLE>
<CAPTION>
                                                AGENT /
        PARTY                          REGISTERED OFFICE ADDRESS
        -----                          -------------------------
<S>                    <C>
For the Company, the   Key Consultant Limited
Founder and the PRC
Subsidiaries:          Address: Unit 710, 7th Floor, Bank of America Tower,
                       12 Harcourt Road, Central, Hong Kong

The Funds              HSBC Private Equity (Asia) Ltd.

                       Address: Level 17, 1 Queen's Road Central, Hong Kong

JAFCO                  JAFCO Investment (Hong Kong) Ltd.
</TABLE>

                                       28

<PAGE>

<TABLE>
<CAPTION>
                                                AGENT /
        PARTY                          REGISTERED OFFICE ADDRESS
        -----                          -------------------------
<S>                    <C>
                       Address: 30/F Two International Finance Centre,
                       8 Finance Street, Central, Hong Kong
</TABLE>

19.2 If a process agent appointed by any Party pursuant to Clause 19.1 ceases to
     be able to act as such or to have a registered office address in Hong Kong,
     the Party which appoints such process agent shall appoint a new process
     agent, which shall be a company incorporated in Hong Kong, and to deliver
     to the other Parties, before the expiry of fourteen (14) days from the date
     on which such process agent ceases to be able to act as such or to have a
     registered office address in Hong Kong, a copy of the written acceptance of
     appointment by that new process agent.

19.3 Nothing in this Agreement shall affect the right to serve process in any
     other manner permitted by law or the right to bring proceedings in any
     other jurisdiction for the purposes of the enforcement or execution of any
     judgement or other settlement in any other courts.

20.  GOVERNING LAW

     This Agreement is governed by and shall be construed in accordance with the
     laws of Hong Kong.

21.  DISPUTE RESOLUTION

21.1 Any dispute, controversy or claim arising out of or connected with this
     Agreement or the interpretation, breach, termination or validity hereof,
     including a dispute as to the validity or existence of this Agreement,
     shall be resolved by way of arbitration upon the request of any of the
     Parties in dispute with notice to the other Parties.

21.2 Arbitration under this Clause 21 shall be conducted in Hong Kong, under the
     auspices of the Hong Kong International Arbitration Centre (the "HKIAC") by
     three arbitrators (the "ARBITRATORS") pursuant to the rules of the United
     Nations Commission on International Trade Law (the "UNCITRAL RULES"), save
     that, unless the parties in dispute agree otherwise:

     (A)  The three Arbitrators shall be appointed by the HKIAC; and

     (B)  the Parties agree to waive any right of appeal against the arbitration
          award.

21.3 The arbitration shall be administered by HKIAC in accordance with HKIAC's
     procedures for arbitration.

21.4 Each Party shall cooperate with the others in making full disclosure of and
     providing complete access to all information and documents requested by
     another Party in connection with such arbitration proceedings, subject only
     to any confidentiality obligations binding on the disclosing Party.

                                       29

<PAGE>

21.5 The award of the arbitral tribunal shall be final and binding upon the
     disputing parties, and a prevailing party may apply to any court of
     competent jurisdiction for enforcement of such award.

21.6 The cost of the arbitration (including the reasonable and properly incurred
     fees and expenses of the lawyers appointed by each party to the
     arbitration) shall be borne by the Party or Parties against whom the
     arbitration award is made or otherwise in accordance with the ruling of the
     arbitration tribunal.

21.7 Any Party shall be entitled to seek preliminary injunctive relief, if
     possible, from any court of competent jurisdiction pending the constitution
     of the arbitral tribunal.

22.  JAFCO'S RIGHTS

     All Parties acknowledge and agree that any rights of JAFCO under this
     Agreement may, without prejudice to the rights of JAFCO to exercise any
     such rights, be exercised by JAFCO Investment (Asia Pacific) Ltd. ("JIAP")
     or any other fund manager of JAFCO or their nominees (each, a "JAFCO
     MANAGER"), unless JAFCO has (a) given notice to the other Parties that any
     such rights cannot be exercised by JIAP or a JAFCO Manager; and (b) not
     given notice to the other Parties that such notice given under paragraph
     (a) above has been revoked.

IN WITNESS WHEREOF this Agreement has been executed by the Parties the day and
year first before written.

                                       30

<PAGE>

                                   SCHEDULE 1

                           PARTICULARS OF THE COMPANY

NAME:                         Canadian Solar Inc.
DATE OF INCORPORATION:        22 October 2001
PLACE OF INCORPORATION:       Province of Ontario, Canada
REGISTERED OFFICE:            4056 Jefton Crescent. Mississauga, Ontario, Canada
                              L5L 1Z3
DIRECTORS:                    QU Xiao Hua
ISSUED CAPITAL (AS OF THE     5,668,421 Common Shares with no nominal or par
DATE HEREOF):                 value (subdivided from 1,000,000 Common Shares;
                              subject to filing of the Articles with the
                              relevant Governmental Authority in Canada)

<TABLE>
<CAPTION>
SHAREHOLDERS AS AT THE DATE
HEREOF:                       SHAREHOLDER   NO. OF EQUITY SECURITIES HELD
---------------------------   -----------   -----------------------------
<S>                           <C>           <C>
                              QU Xiao Hua   5,668,421 Common Shares
</TABLE>

                                       31

<PAGE>

                                   SCHEDULE 2

                    PARTICULARS OF THE COMPANY'S SUBSIDIARIES

                                     PART I

NAME:                        (Chinese Characters) (CSI Solartronics Co. Ltd.)
DATE OF INCORPORATION:       23 November 2001
PLACE OF INCORPORATION:      (Chinese Characters) (Changshu, Jiangsu Province,
                             the PRC)
REGISTERED OFFICE:           (Chinese Characters) (Yangyuan Industrial Park,
                             Changshu, Jiangsu Province 215562, the PRC)
DIRECTORS:                   QU Xiao Hua,
                             QU Chong Ji,
                             ZHU Bing,
                             Kelvin KING, and
                             ZHANG Guo Xin
TOTAL INVESTMENT:            US$3,000,000
REGISTERED CAPITAL:          US$2,100,000
REGISTERED CAPITAL PAID UP   US$2,100,000
(AS AT THE DATE HEREOF):

<TABLE>
<CAPTION>
SHAREHOLDERS:                    SHAREHOLDER            EQUITY INTEREST HELD
-------------                -------------------   -----------------------------
<S>                          <C>                   <C>
                             Canadian Solar Inc.   100% of the registered capital
</TABLE>

                                       32

<PAGE>

                                     PART II

NAME:                        (Chinese Characters) (CSI Solar Technologies Inc.)
DATE OF INCORPORATION:       8 August 2003
PLACE OF INCORPORATION:      (Chinese Characters) (Suzhou, Jiangsu Province,
                             the PRC)
REGISTERED OFFICE:           (Chinese Characters) 209 (Chinese Characters) C6017
                             (Chinese Characters) (Suite C6017, China Suzhou
                             Pioneering Park for Overseas Chinese Scholars, No.
                             209, Zhuyuan Road, Suzhou New & Hi-Tech District,
                             Jiangsu 215011, the PRC)
DIRECTORS:                   QU Xiao Hua
TOTAL INVESTMENT:            US$1,000,000
REGISTERED CAPITAL:          US$700,000
REGISTERED CAPITAL PAID UP   US$121,460
(AS AT THE DATE HEREOF):

<TABLE>
<CAPTION>
SHAREHOLDERS:                    SHAREHOLDER            EQUITY INTEREST HELD
-------------                -------------------   ------------------------------
<S>                          <C>                   <C>
                             Canadian Solar Inc.   100% of the registered capital
</TABLE>

                                       33

<PAGE>

                                    PART III

NAME:                        (Chinese Characters) (CSI Solar Manufacturing Inc.)
DATE OF INCORPORATION:       7 January 2005
PLACE OF INCORPORATION:      (Chinese Characters) (Suzhou, Jiangsu Province,
                             the PRC)
REGISTERED OFFICE:           (Chinese Characters) (Export Processing Zone,
                             Suzhou New & Hi-Tech District, Jiangsu 215151, the
                             PRC)
DIRECTORS:                   QU Xiao Hua
TOTAL INVESTMENT:            US$25,000,000
REGISTERED CAPITAL:          US$10,000,000
REGISTERED CAPITAL PAID UP   US$1,500,000
(AS AT THE DATE HEREOF):

<TABLE>
<CAPTION>
SHAREHOLDERS:                    SHAREHOLDER            EQUITY INTEREST HELD
-------------                -------------------   ------------------------------
<S>                          <C>                   <C>
                             Canadian Solar Inc.   100% of the registered capital
</TABLE>

                                       34

<PAGE>

                                   SCHEDULE 3
                             WARRANTORS' WARRANTIES

                                     PART A

Save as disclosed in the Disclosure Letter and this Agreement, each of the
Company and the Founder jointly and severally represents and warrants to and
undertakes with the Investors as follows:

1.   THE COMPANY AND ITS SUBSIDIARIES

1.1  The Company has no and never has had any subsidiary or shares in or stock
     of any company other than the companies set out in Schedule 2.

1.2  The Company's interest in its subsidiaries set out in Schedule 2 is held
     free from all charges, Liens, Encumbrances and claims.

2.   EQUITY SECURITIES

     (A)  The Common Shares issued to the Investors upon full conversion of all
          Convertible Notes (assuming the Second Tranche Subscription will be
          completed to the full extent under this Agreement and the Note Options
          will be exercised in full by the Investors and the Company does not
          exercise its option under Clause 2.3) will, immediately after such
          issue, amount to approximately 26.32% of the enlarged issued share
          capital of the Company on a Fully-Diluted Basis.

     (B)  Save as provided in this Agreement, there is no, nor is there any
          legally valid agreement or arrangement to create any pledge, Lien,
          charge, Encumbrance, rights of pre-emption or other equities or third
          party rights of any nature whatsoever on, over or affecting any of
          Shares (except the ATS Arrangement) and no claim has been made by any
          Person (apart from ATS) to be entitled to any of the foregoing.

     (C)  Save the Shares to be issued upon conversion of the Convertible Notes
          and the ESOP, there are no agreements or arrangement in force which
          call for the present or future issue or allotment of, or grant to any
          Person (apart from ATS) the right (whether conditional or otherwise)
          to call for the issue, allotment or transfer of any Equity Securities.

     (D)  The allotment and issue of the Convertible Notes and the subsequent
          conversion thereof into Common Shares are not and will not be subject
          to any Encumbrances.

     (E)  The Company has not granted any options to any Person to subscribe for
          or purchase any Equity Securities (apart from the options which may be
          granted under the ESOP).

     (F)  An accurate and complete list of the Company's shareholders and
          holders of Convertible Securities and their respective holdings of the
          Equity Securities, together with all unissued options being reserved
          for issuance, in

                                       35

<PAGE>

          each case both immediately prior to and after the First Completion, is
          set forth in the Disclosure Letter. Save as disclosed in the
          Disclosure Letter, there are no outstanding and in issue any capital
          stock, option, warrants or securities convertible into or exchangeable
          for common stock of or unissued options or warrants or other Equity
          Securities being reserved for issuance of any Group Company both
          immediately prior to and after the First Completion.

                                       36

<PAGE>

                                     PART B

Save as disclosed in the Disclosure Letter and this Agreement, (i) each of the
Company and the Founder jointly and severally represents and warrants to and
undertakes with the Investors, and (ii) each of the PRC Subsidiaries for itself
only (but not jointly and/or severally with other Warrantors) represents and
warrants to and undertakes with the Investors, as follows:

3.   INFORMATION

3.1  To the best of the knowledge of the Warrantors, all information contained
     in this Agreement (including the Recitals) is true and accurate in all
     material respects and not misleading in any material respect.

3.2  All written information which is set out or referred to in the Disclosure
     Letter or is given by or on behalf of the Warrantors to the Investors or
     their agents in the course of the negotiations leading to this Agreement is
     true and accurate in all material respects and not misleading in any
     material respect.

4.   CAPACITY OF THE WARRANTORS

4.1  Each of the Warrantors has full power and authority to enter into and
     perform this Agreement and the Transaction Documents (where applicable),
     and the provisions of this Agreement and the Transaction Documents (where
     applicable), when executed, will constitute valid and binding obligations
     on him/it, in accordance with its terms.

4.2  The execution and delivery by each of the Warrantors of, and the
     performance of him/it of his/its obligations under, this Agreement and the
     Transaction Documents (where applicable) will neither:

     (A)  (where applicable) result in a breach of any provision of its
          constitutional documents subject, in the case of the Company, to the
          amended Articles of Incorporation referred to in Clause 3.1(H) having
          been filed with the relevant Governmental Authorities in Canada;

     (B)  result in a breach of any order, judgment or decree of any court or
          Governmental Authority to which it is a party or by which he/it is
          bound; nor

     (C)  violate any Applicable Law.

4.3  All consents, permissions, approvals and agreements of third parties which
     are necessary for each Warrantor to obtain in order to enter into and
     perform this Agreement and the Transaction Documents (where applicable) in
     accordance with their terms have been unconditionally obtained.

5.   CORPORATE MATTERS

5.1  Each of the Group Companies has been duly incorporated and is validly
     existing under the Applicable Law, has obtained all necessary Governmental
     Approvals to

                                       37

<PAGE>

     own its assets and to carry on its business as presently conducted and all
     Governmental Approvals are valid and subsisting and, to the best of the
     knowledge of the Warrantors, there is no reason why any of them should be
     suspended, cancelled or revoked.

5.2  No order has been made or petition presented or resolution passed for the
     winding up of any Group Company and no distress, execution or other process
     has been levied on any of its assets. No Group Company is insolvent nor
     unable to pay its debts due for payment, no receiver or receiver and
     manager has been appointed by any person of its business or material assets
     or any substantial part thereof, and no power to make any such appointment
     has arisen. No Group Company has taken steps to enter liquidation and there
     are no valid grounds on which a petition or application could be based for
     the winding up or appointment of a receiver of any Group Company.

5.3  None of the Group Companies has even been a director or other officer of
     any other company.

5.4  None of the Group Companies has at any time:

     (A)  repaid or redeemed or agreed to repay or redeem any shares of any
          class of its share capital or otherwise reduced or agreed to reduce
          any class of its issued share capital or purchased any of its own
          shares or carried out any transaction having the effect of a reduction
          of capital; or

     (B)  given any financial assistance in contravention of any Applicable Law.

5.5  The copies of the constitutional documents of each of the Group Companies
     delivered to the Investors or their agents are accurate and complete in all
     respects and have attached to them copies of all resolutions and agreements
     which are required to be so attached.

5.6  The register of members and all other statutory books of the Group
     Companies are up to date and contain true full and accurate records of all
     matters required to be dealt with therein and none of the Group Companies
     has received any notice of any application or intended application for
     rectification of its register.

5.7  All annual or other corporate returns required to be filed by each of the
     Group Companies with the relevant Governmental Authorities have been
     properly filed within any applicable time limit and all legal requirements
     relating to the issue of shares and other securities by all Group Companies
     have been complied with.

6.   SUBSIDIARIES

     (A)  All issued shares in the capital of each of the Company's subsidiaries
          incorporated in a jurisdiction not being the PRC have been fully paid
          up.

     (B)  All capital and other contributions due to each PRC Subsidiary have
          been paid in full within the respective time limited imposed under the
          terms of the constitutional documents or the relevant Governmental
          Approvals.

                                       38

<PAGE>

     (C)  There is no agreement or arrangement in force which calls for the
          present or future issue or allotment of, or grant to any Person the
          right (whether conditional or otherwise) to call for the issue,
          allotment or transfer of any share or loan capital of any of the
          Company's subsidiaries (including any option, notes, warrants or other
          securities or rights convertible or ultimately convertible into shares
          or equity interests in any of such subsidiaries).

7.   COMPLIANCE

7.1  Each of the Group Companies has complied with its constitutional documents
     in all respects, and has full power, authority and legal right to own its
     assets and carry on its business.

7.2  Each Group Company has complied in all material respects with all
     Applicable Law. To the best of the knowledge of the Warrantors, none of the
     Group Companies has received notice of any violation of any Applicable Law
     from any Governmental Authority. There is no provision of any outstanding
     governmental judgement, decree or Applicable Law applicable to or binding
     upon any Group Company which could materially adversely affect the
     business, prospects, assets or condition, financial situation of any Group
     Company.

7.3  There is no term or provision of any mortgage, indenture, contract,
     agreement or instrument to which a Group Company is a party or by which it
     is bound, which adversely affects its business, prospects, assets or
     condition, financial position.

8.   ACCOUNTS

8.1  The unaudited financial statements of each Group Company have been prepared
     in accordance with the requirements of the Applicable Law and on a
     consistent basis in accordance with IAS or other applicable accounting
     standards.

8.2  Each unaudited financial statement of each Group Company shows a true and
     fair view of the assets, liabilities, capital commitments and the state of
     affairs of such Group Company as at the relevant accounts date or of the
     profits and losses of such Group Company for the period concerned.

8.3  Since 1 September 2005:

                                       39

<PAGE>

     (A)  no Group Company has disposed of any asset (including trading stock)
          or supply of any service or business facility of any kind (including a
          loan of money or the letting, hiring or licensing of any property
          whether tangible or intangible) in circumstances where the
          consideration actually received or receivable for such disposal or
          supply was less than the consideration which would be deemed to have
          been received for Tax purposes;

     (B)  no Group Company has assumed or incurred any liabilities (actual or
          contingent) or expenditure otherwise than in the ordinary course of
          carrying on its business or entered into any transaction which is not
          in its ordinary course of business;

     (C)  no business of any of the Group Companies has been materially and
          adversely affected by the loss of any important contract or customer
          or source of supply or by any abnormal factor not affecting similar
          businesses to a like extent and the Warrantors are not aware of any
          facts which are likely to give rise to any such effects;

     (D)  no dividends, bonuses or distributions have been declared, paid or
          made;

     (E)  no payment has been made by any of the Group Companies which will not
          be deductible for Tax purposes either in computing the profits of the
          relevant Group Company or in computing the Tax chargeable on the
          Group;

     (F)  no Group Company has changed its financial year end;

     (G)  save for resolutions copies of which have been delivered to the
          Investors prior to the date hereof or which are required to be passed
          by any Group Company prior to First Completion and Second Completion
          in order to satisfy the conditions set out in Clause 3.1 and Clause
          3.3 respectively, no board or shareholders' resolutions of any of the
          Group Companies have been or will be passed; and

     (H)  there has not been any waiver or compromise granted by any Group
          Company of a valuable right or of a material debt owing to it; and

     (I)  there has been no material change to a Material Contract which any
          Group Company or any of its assets is bound by or subject to.

9.   TAXATION

9.1  Each of the Group Companies has duly and punctually paid all Taxation which
     is due and which it has become liable to pay and is under no outstanding
     liability to pay any penalty, interest, surcharge or fine in connection
     with any Taxation and has complied in all respects with all legislation
     relating to Taxation applicable to such company.

9.2  Each of the Group Companies has made all such returns and notifications,
     provided all such information, documents and particulars and maintained all
     such records in relation to Taxation as are required to be made or provided
     or maintained by it

                                       40

<PAGE>

     punctually and none of such returns, notifications, information, documents
     or particulars is disputed by the relevant Governmental Authority
     concerned.

9.3  None of the Group Companies is involved in any dispute in relation to
     Taxation. To the best of the knowledge of the Warrantors, there is no
     relevant Governmental Authority concerned which has investigated or
     indicated that it intends to investigate the Tax affairs of any Group
     Company.

9.4  All Taxation in connection with the arrangement between the Company and
     Swift Allies Inc. which are required to be paid on the part of any Group
     Company have been timely paid. None of the Group Companies is involved in
     any dispute with any Governmental Authority on Taxation in relation to such
     agreements. To the best of the knowledge of the Warrantors, there is no
     relevant Governmental Authority concerned which has investigated or
     indicated that it intends to investigate such agreements or the arrangement
     related thereto.

10.  ASSETS

10.1 Title

     (A)  The assets currently employed in the operation of the businesses of
          each Group Company are wholly and beneficially owned assets (other
          than trading stock which is intended to be subsequently disposed of in
          the ordinary course of business or trading stock acquired subject to
          retention or reservation of title by the supplier or manufacturer
          thereof) and all material assets (save and except for the trading
          stock) used by the Group:

          (a)  are legally and beneficially owned by the Group free from all
               Encumbrances; and

          (b)  are in the possession or under the control of the Group.

     (B)  All plant, machinery, vehicles, computers and equipment owned or used
          by each Group Company are (subject to normal wear and tear) in
          reasonable repair, condition and working order, have been regularly
          and properly maintained.

10.2 Stock

     (A)  All trading stock of each Group Company is of merchantable quality
          saleable in the normal course of business.

     (B)  No goods of any Group Company sold or delivered have incurred any
          product liability claimed against any Group Company.

10.3 Book debts

     (A)  No part of the amount shown in the books of account of any Group
          Company in respect of debtors is represented by debts which are more
          than twelve (12) months overdue for payment or by debts in respect of

                                       41

<PAGE>

          arrangements made otherwise than in the ordinary course of any such
          Group Company's business.

     (B)  No debt has been released by any Group Company on terms that the
          debtor paid less than the book value of his debt and no debt owing to
          any such Group Company has proved to any extent to be irrecoverable,
          except for the provision for bad and doubtful debts and discounts made
          in the books of account of any Group Company.

11.  GENERAL COMMERCIAL MATTERS

11.1 None of the Group Companies has capital commitments which exceed One
     Hundred Thousand United States Dollars (US$100,000) in aggregate in respect
     of that Group Company.

11.2 There are no loans, guarantees, pledges, mortgages, charges, Liens,
     debentures or, Encumbrances given, made or incurred by or on behalf of any
     Group Company which may incur material liability to any Group Company,
     except for those incurred in its ordinary course of business.

11.3 To the best of the knowledge of the Warrantors, none of the Group companies
     is the subject of any official investigation or inquiry by any Governmental
     Authority.

12.  PROPERTIES

12.1 The Group has exclusive use and undisturbed possession of the land and the
     buildings erected thereon owned or leased by the Group.

12.2 The Group has good title to the land use right and the buildings it owns,
     free from any mortgage, charge, Encumbrance, right of occupation or third
     party right.

12.3 The landlords of the properties leased by the Group have good title to such
     properties and have the capacity to lease such properties to the Group.

12.4 The use of land and buildings by the each Group Company for operating its
     businesses does not violate any Applicable Law or terms of the leases for
     the relevant properties.

12.5 All buildings erected on the land occupied by the Group are in reasonably
     good and substantial repair and condition and are in such reasonable
     condition and state of repair as to be substantially fit for the purpose
     for which they are used at present by the Group for operating its
     businesses.

13.  INTELLECTUAL PROPERTY RIGHTS

13.1 The Group has independently developed and owns or possesses sufficient
     legal rights to all Intellectual Property Rights (including registrations
     and applications to register or renew such rights), and licenses of any of
     the foregoing necessary for its business as now conducted and as presently
     proposed to be conducted (collectively,

                                       42

<PAGE>

     the "GROUP INTELLECTUAL PROPERTY"), without any infringement of the rights
     of others.

13.2 The Disclosure Letter contains true, complete and accurate lists of all
     trademarks, servicemarks, trademarks applications, servicemarks
     application, patents, patent applications, trade names, copyright
     registration, domain names, software products or applications presently
     used by the Group or necessary for the conduct of the Group's business as
     currently being conducted or proposed to be conducted, and the Group owns,
     or has the right to use under the agreements, all the Intellectual Property
     Rights set out in the Disclosure Letter.

13.3 There are no outstanding options, licenses or agreements of any kind
     relating to the Group Intellectual Property, nor is any Group Company bound
     by or are parties to any options, licenses or agreements of any kind with
     respect to the Group Intellectual Property of any other person or entity
     except, in either case, for standard end-user agreement with respect to
     commercially readily available intellectual property such as
     "off-the-shelf" computer software.

13.4 Each Group Company is in compliance with all material terms of any licenses
     by which it uses any Group Intellectual Property, and each such license is
     in full force and effect. Each licensor thereof is in compliance with all
     material terms of the respective license. No Group Company is aware of the
     existence of any fact or circumstance that would give the licensor thereof
     grounds under the terms of such license to cancel, terminate or suspend
     such license. All such licenses material to the operation of the Group will
     be renewed in the ordinary course of business on terms commercially
     reasonable.

13.5 No Group Company has received any communications alleging that it has
     violated or, by conducting its businesses as presently proposed, would
     violate any of the Intellectual Property Rights of any other person or
     entity.

13.6 The Company is not aware after due and careful enquiry that any of the
     Group's employees is obligated under any contract (including licenses,
     covenants or commitments of any nature) or other agreement, or subject to
     any judgement, decree or order of any court or administrative agency, that
     would interfere with their duties to the Group, or that would conflict with
     the Group's business as presently proposed to be conducted.

13.7 Neither the execution nor delivery of this Agreement or the Transaction
     Documents, nor the carrying on of the Group's business, nor the conduct of
     the Group's business as presently proposed, will conflict with or result in
     a breach of the terms, conditions or provisions of, or constitute a default
     under, any contract, covenant or instrument under which any Group Company
     or any employee is now obligated. It is not nor will it become necessary
     for any Group Company to utilize any Intellectual Property Rights of its
     employees made prior to their employment by the Group, except for the
     Intellectual Property Rights that has been assigned to a Group Company.

13.8 None of the Group Companies and the Founder have entered into any agreement
     to indemnify any other person against any charge of infringement or
     misappropriation of any Group Intellectual Property.

                                       43

<PAGE>

13.9 Each Group Company has taken all reasonably necessary action to protect and
     preserve (i) the validity and enforceability of trade and service marks and
     associated goodwill included in the Group Intellectual Property; (ii) the
     enforceability of copyrights and the confidentiality, validity and
     enforceability of pending patent applications included in the Group
     Intellectual Property; (iii) the validity and enforceability of patents
     included in the Group Intellectual Property; and (iv) the confidentiality
     and enforceability of trade secrets and the confidentiality of other
     proprietary information included in the Group Intellectual Property. All
     current employees and consultants of the Group have executed non-disclosure
     agreements to protect the confidentiality, and to vest in the relevant
     Group Company exclusive ownership, of the Group Intellectual Property.

13.10 To the best knowledge of the Warrantors, no material trade secret or
     confidential information constituting Group Intellectual Property has been
     used, divulged or appropriated for the benefit of any person other than the
     Company or the other Group Companies or otherwise to the detriment of the
     Group, except pursuant to appropriate non-disclosure agreements. To the
     best knowledge of the Warrantors, none of the Founder and current employee
     or consultant of the Group or their respective Affiliates have used any
     trade secrets or other confidential information (except with the consent of
     the owner of such information) of any other person in the course of their
     work for the Group.

13.11 No Group Company has any written or oral agreements with current or former
     employees or consultants with respect to the ownership of Group
     Intellectual Property, including inventions, trade secrets or other works
     created by them as a result of which any such employee or consultant may
     have exclusive or non-exclusive rights to the portions of the Group
     Intellectual Property so created by such individual.

13.12 None of the Founder and current or former officer, employee or consultant
     of the Group are in violation of any term of any written employment
     contract, patent disclosure agreement, proprietary information agreement,
     non-competition agreement, non-solicitation agreement, confidentiality
     agreement, or any other similar contract or agreement or any restrictive
     covenants relating to the right of any such officer, employee, consultant
     or person to be employed or engaged by the Group or relating to the use of
     trade secrets or proprietary information of others, and no former employer
     of any such person has any rights in respect of the Group Intellectual
     Property.

13.13 The Group does not use any processes nor is it engaged in any activities
     which involve the misuse of any know-how, lists of customers or suppliers,
     trade secrets, technical processes or other confidential information ("IP
     CONFIDENTIAL INFORMATION") belonging to any third party. To the best
     knowledge of the Warrantors, there has been no actual or alleged misuse by
     any person of any IP Confidential Information. To the best knowledge of the
     Warrantors, none of the Founder and current or former officers, employees
     or consultants of the Group have disclosed to any person any IP
     Confidential Information except where such disclosure was properly made in
     the normal course of the Group's business and was made subject to an
     agreement under which the recipient is obliged to maintain the
     confidentiality of such IP Confidential Information and is restrained from
     further

                                       44

<PAGE>

     discussing it or using it other than for the purposes for which it was
     disclosed by the Group.

13.14 No royalty, honorarium, fees or other payments are payable by a Group
     Company to any third party by reason of the ownership, possession, sale,
     marketing, use or other exploitations of any Group Intellectual Property.

13.15 No government funding, facilities of any university, college or other
     educational institution or research centre of funding from third parties
     (other than funds received in consideration of capital stock of any Group
     Company or issuance of debt) was used in the development of any Group
     Intellectual Property.

13.16 No Group Company uses or otherwise carries on its business under any name
     other than its corporate name.

14.  INSURANCE

     All the assets (including stock-in-trade) of the Group of an insurable
     nature have at all material times been and are insured in amounts to the
     full replacement value thereof against fire and other risks normally
     insured against by Persons carrying on substantially the same classes of
     business as those carried on by the Group, and as required by Applicable
     Law.

15.  CONTRACTS

15.1 No Group Company is in breach of or has knowledge of the invalidity of or
     grounds for rescission, avoidance or repudiation of any Material Contract
     or has received no notice of any intention to terminate any Material
     Contract.

15.2 Unless otherwise disclosed to the Investors, none of the Group Companies
     has entered into any Material Contract.

16.  EMPLOYEES

16.1 Each Group Company has complied with all obligations in all respects
     imposed on it by, and all orders and awards made under, all Applicable Law
     relevant to the relations between it and its employees and the terms of
     service of its employees.

16.2 No Group Company has any agreement or other arrangement (binding or
     otherwise) with any trade union or other body representing its employees or
     any of them or recognizes any trade union or other body representing its
     employees or any of them for negotiating purposes.

16.3 No Group Company is involved in any industrial or trade disputes or any
     dispute or negotiation regarding a claim of material importance with any
     employees, trade union or body of employees.

16.4 Apart from the ESOP and the intended transfers of Shares to certain senior
     executives of the Group as may be contemplated in the Investment Agreement,
     no Group Company has in existence or is proposing to introduce any share
     incentive

                                       45

<PAGE>

     scheme, share or stock option scheme or profit sharing bonus or other such
     incentive scheme for all or any of its employees.

17.  LITIGATION

17.1 There are no actions, suits or proceedings (including arbitration
     proceedings) pending or threatened against or brought by any Group Company.

17.2 None of the Group Companies is subject to, or in default with respect to,
     any order, writ, injunction or decrees of any court, tribunal or
     Governmental Authority, domestic or foreign.

17.3 There is no unsatisfied judgment, court order or tribunal or arbitral award
     outstanding against any Group Company and no distress, execution or process
     has been levied on any part of their respective business or assets.

18.  RELATED PARTY TRANSACTIONS

18.1 Unless otherwise disclosed to the Investors, there are no Related Party
     Transactions except those in relation to the remuneration of Related
     Parties and reimbursement or advance payment to any Related Party not
     exceeding Five Hundred Thousand United States Dollars (US$500,000) on each
     occasion for each Related Party.

18.2 There is no breach on the part of the Related Party in respect of the terms
     of the agreements, contracts, arrangements or understanding underlying the
     Related Party Transactions.

19.  BROKERAGE OR COMMISSIONS

     No Person is entitled to receive from any Group Company any finder's fee
     brokerage or commission in connection with this Agreement or anything
     contained in it.

20.  REGISTRATION RIGHTS AGREEMENT

     Except as required pursuant to the Registration Rights Agreement, no Group
     Company is presently under any obligation, or has granted any rights to any
     Person to register any Shares or Convertible Securities under or pursuant
     to the Securities Act of the United States.

21.  ENVIRONMENTAL AND SAFETY LAWS

     No Group Company is in violation of any applicable statute, law or
     regulation relating to the environment or occupational health and safety
     ("ENVIRONMENTAL AND SAFETY LAWS"), and to the Warrantors' knowledge, no
     material expenditures are or will be required in order for any Group
     Company to comply with any such existing Environmental and Safety Laws.
     Each of the Group Companies has obtained all material permits, material
     licenses and other material authorizations that are required under
     applicable Environmental and Safety Laws to conduct its business and has
     filed all material reports, material notices, material assessments,

                                       46

<PAGE>

     material plans, material inventories, and material applications required by
     Environmental and Safety Laws.

22.  BUSINESS PLAN

     With respect to the Business Plan:

     (A)  it was prepared in good faith and on a professional workmanlike manner
          and on a realistic basis after careful examination and due
          consideration of all relevant factors;

     (B)  the technology referred to or described therein is proven reliable and
          capable of being applied in the successful economic production of
          premium products;

     (C)  none of the statements therein are untrue or misleading in any way and
          it does not omit to state any material fact necessary to make the
          statements therein not misleading; and

     (D)  the financial and other projections contained therein were prepared in
          good faith and that there is reasonable basis for such projection.

                                       47

<PAGE>

                                   SCHEDULE 4

                      FORM OF PRE-EMPTIVE RIGHT CERTIFICATE

To: (1) Canadian Solar Inc. (the "COMPANY"); and

    (2) HSBC HAV2 (III) Limited and (3) JAFCO Asia Technology Fund II (together,
    the "INVESTORS")

Dear Sirs,

I, the undersigned, the sole shareholder of the Company being the registered
holder of 5,668,421 common shares, without nominal or par value, in the share
capital of the Company, hereby certify to the Company and the Investors that I
have no pre-emptive right or any right capable of becoming a pre-emptive right
to acquire any further shares in the share capital of the Company either by
contract, agreement, arrangement or understanding with any third party or the
Company or under the Articles of Incorporation or By-laws of the Company or
otherwise in respect of the Convertible Notes of an aggregate principal amount
up to Thirteen Million United States Dollars (US$13,000,000) as may be
subscribed for by the Investors.

This undertaking shall be governed by and be construed in accordance with the
laws of Hong Kong and is intended to take effect as a deed.

Dated this ___ day of _____________ 2005.

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

                                       48

<PAGE>

                                   SCHEDULE 5

      FORM OF THE CERTIFICATE FOR THE CONVERTIBLE NOTES AND THE CONDITIONS

Certificate No.: [______]
Issue Date: [___________]

                               CANADIAN SOLAR INC.
 (Incorporated under the provisions of the Business Corporations Act (Ontario))
                                 as the Company

                                       and

                               [_________________]
                                  as Noteholder

                                   ----------

                                   US$[_____]

          CONVERTIBLE NOTE DUE [three years from First Completion Date]

                                   ----------

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 [___________] pursuant to the agreement dated [___________] 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 [_____] United State Dollars (US$_____) 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
[DATE] (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

                                       49

<PAGE>

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 [__________].

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

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

                                       50

<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);

     "ISSUE DATE" means the date of issue of this Convertible Note;

     "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).

                                       51

<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 two per cent (2%) 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 in cash by four equal quarterly
          instalments in arrears (the first payment being on the date falling
          three (3) months after the Issue Date). 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 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

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<PAGE>

          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.

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<PAGE>

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 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").

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<PAGE>

          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 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.

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<PAGE>

     (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.

     (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.

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<PAGE>

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.

          (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:

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<PAGE>

               (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:

               (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

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<PAGE>

                    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 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

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<PAGE>

               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)  Guaranteed 2005 PAT. If the 2005 PAT is less than Six Million United
          States Dollars (US$6,000,000), the Conversion Price shall be adjusted
          in the following manner:

           Conversion Price   Initial Conversion          2005 PAT
          immediately after =  Price set out in   X -------------------
            the adjustment     Condition (B)3(c)    Guaranteed 2005 PAT

          For the avoidance of doubt, no adjustment to the Conversion Price
          shall be required where the 2005 PAT equals to or is more than Six
          Million United States Dollars (US$6,000,000).

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<PAGE>

     (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.

     (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.

     (j)  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;

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<PAGE>

          (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

          (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

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<PAGE>

               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 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;

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

          (iii) a premium:

               (I)  in the case of a redemption under Condition (B)5(a)(i) or
                    (B)5(b), of such amount that would give the Noteholder an
                    internal rate of return of ten per cent. (10%) per annum in
                    respect of the principal amount, all paid and unpaid
                    interest, special interest and extraordinary interest
                    accrued under Condition (B)2 in respect of the Convertible
                    Note (or the relevant part thereof) to be redeemed for the
                    period from the Issue Date up to and including the date of
                    full repayment of redemption monies; and

               (II) in the case of a redemption under Condition (B)5(a)(ii), of
                    such higher amount of:

                    (1)  such amount that would give the Noteholder an internal
                         rate of return of twelve per cent. (12%) per annum in
                         respect of the principal amount, all paid and unpaid
                         interest, special interest and extraordinary interest
                         accrued under Condition (B)2 in respect of the
                         Convertible Note (or the relevant part thereof) to be
                         redeemed for the period from the Issue Date up to and
                         including the date of full repayment of redemption
                         monies; and

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<PAGE>

                    (2)  assuming full conversion of all Convertible Notes held
                         by all holders thereof, the proportional share of the
                         Group's total market value as represented by the Shares
                         into which the principal so redeemed might convert. For
                         such purpose, the Group's total market value shall be
                         determined as a going concern by an independent
                         professional valuer that has experience determining
                         value of businesses similar to those of the Group. The
                         independent valuer shall be appointed upon the approval
                         of both the Company and the Noteholder, and whose costs
                         and expenses relating to the valuation of the Group
                         shall be borne solely by the Company.

     (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 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).

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<PAGE>

     (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;

     (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

                                       65

<PAGE>

          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 31
          January 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;

     (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;

                                       66

<PAGE>

     (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, 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.

                                       67

<PAGE>

     (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.

     (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.

                                       68

<PAGE>

     (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.

     (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 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

                                       69

<PAGE>

     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.

                                      * * *

                                       70

<PAGE>

Exhibit (A) to the Conditions of Convertible Note

<TABLE>
<CAPTION>
                               Scenario 1           Scenario 2           Scenario 3           Scenario 4           Scenario 5
                          -------------------  -------------------  -------------------  -------------------  -------------------
                                                                        If the Note                             If Common Shares
                                                                        Options are                              subject to the
                             Original Plan                           exercised but are      If more Common     ESOP are less than
                                 as per         If no Note Options     reduced by the     Shares are issued    10% of the issued
                           Condition (B)3(c)      are exercised           Company               to ATS           share capital
                          -------------------  -------------------  -------------------  -------------------  -------------------
<S>                       <C>          <C>     <C>          <C>     <C>          <C>     <C>          <C>     <C>          <C>
Founder and
   Executives (Note 1)..    5,668,421   56.68%   5,668,421   56.68%   5,668,421   56.68%   5,668,421   53.68%   5,668,421   58.68%
New Commons Shares
   issued to the
   Founder and
   Executive (Note 2)...                           506,073    5.06%     253,036    2.53%
ATS.....................      700,000    7.00%     700,000    7.00%     700,000    7.00%   1,055,882   10.00%     676,143    7.00%
ESOP....................    1,000,000   10.00%   1,000,000   10.00%   1,000,000   10.00%   1,055,882   10.00%     772,735    8.00%
Investors...............    2,631,579   26.32%   2,125,506   21.26%   2,378,543   23.79%   2,778,638   26.32%   2,541,893   26.32%
                          -----------  ------  -----------  ------  -----------  ------  -----------  ------  -----------  ------
Total...................   10,000,000  100.00%  10,000,000  100.00%  10,000,000  100.00%  10,558,823  100.00%   9,659,193  100.00%

Valuation...............  $49,400,000          $49,400,000          $49,400,000          $49,400,000          $49,400,000
Investment..............  $13,000,000   26.32% $10,500,000   21.26% $11,750,000   23.79% $13,000,000   26.32% $13,000,000   26.32%
Conversion Price........  $    4.9400          $    4.9400          $    4.9400          $    4.6786          $    5.1143

                                                                                                               Adjustment upwards
                                                                                                                if Common Shares
                                                                                              Adjustment      subject to the ESOP
                                                                                          downwards if more    are less than 10%
ADJUSTMENT TO                                     No adjustment        No adjustment      Common Shares are   of the issued share
   CONVERSION PRICE.....          N/A                required             required          issued to ATS       capital (Note 3)
</TABLE>

Notes:

(1)  Such number of Common Shares held by the Founder and/or a corporation
     wholly Controlled by him and Common Shares which will be transferred to the
     Executives contemplated in the Investment Agreement.

(2)  New Commons Shares may be issued to the Founder and/or the Executives upon
     consent of all members of the Company and holder of Convertible Notes as
     per Condition (B)4(c)(ii)(V) in order to keep the total number of Common
     Shares at 10,000,000 (on a Full-Dilute Basis). Alternatively, the number of
     Common Shares to be issued to ATS and under ESOP may be reduced to keep the
     shareholding percentages amongst the Parties the same.

(3)  Although the Conversion Price is adjusted upwards, the Founder and the
     Company are still to ensure that the total number of (i) Common Shares
     subject to options granted under the ESOP and (ii) Common Shares
     Transferred to the Executives contemplated in the Investment Agreement
     shall, at any time, not be less than 10% of the total Common Shares in the
     enlarged share capital of the Company calculated on a Fully-Diluted Basis
     at 31 March 2006.

                                       71

<PAGE>

                                   SCHEDULE 6

                FORM OF INDEMNITY DEED FOR AN INVESTOR'S DIRECTOR

THIS DEED is made on the ___________ day of _______ by Canadian Solar Inc. (the
"COMPANY") in favour of [name of the director] (the "DIRECTOR").

Terms used herein shall have the same meanings as defined in the Subscription
Agreement dated [date] between, among others, the Company and HSBC HAV2 (III)
Limited, unless the context otherwise requires.

NOW THIS DEED WITNESSES as follows:

1.   In consideration of the Director agreeing to act as a director of [the
     Company] / [name of the subsidiary, a subsidiary of the Company], subject
     to the Applicable Law and the Company's Articles of Incorporation, By-Laws,
     and any unanimous shareholder agreement, the Company hereby agrees to
     indemnify the Director, to the fullest extent permitted by laws, from and
     against all liabilities, damages, actions, suits, proceedings, claims,
     costs, charges and expenses suffered or incurred by or brought or made
     against such Director as a result of any act, matter or thing done or
     omitted to be done by him/her in good faith in the course of his/her acting
     as a director of [the Company] / [name of the subsidiary] unless:-

     (A)  such liability is a result of the gross negligence or wilful default
          of the Director; or

     (B)  such Director have already been fully indemnified in respect of such
          liabilities, damages, actions, suits, proceedings, claims, costs,
          charges and expenses by a separate insurance policy taken out by the
          Company.

2.   The Director hereby accepts the appointment as a director of [the Company]
     / [name of the subsidiary] and so long as he continues to be a director of
     [the Company] / [name of the subsidiary], the Director shall, within the
     limits imposed by law and ethics, exercise all functions required by the
     Company's Articles of Incorporation, By-Laws and any unanimous shareholder
     agreement in relation to the Company, honestly and in good faith with a
     view to the best interests of [the Company] / [name of the subsidiary] and
     in connection therewith, and the Director shall exercise the care,
     diligence and skill that a reasonably prudent person would exercise in
     comparable circumstances.

3.   The Company hereby represents and warrants that it has all requisite power
     and authority to enter into and to perform this Deed and this Deed
     constitutes a valid, binding and enforceable obligation of the Company in
     accordance with its terms.

4.   Each reference herein to any party shall be deemed to include his or her or
     its (as the case may be) heirs, executors, administrators, legal
     representatives, successors and assigns.

5.   The provisions of this Deed may be enlarged, modified, altered, waived,
     discharged or terminated only by an instrument in writing executed by all
     of the parties hereto.

                                       72

<PAGE>

6.   This Deed shall terminate on the date on which the Director ceases to be a
     director of any of the Company and its subsidiaries; provided however that
     the rights and obligations of each party shall survive and continue in full
     force and effect with respect to any matter arising up to the date of
     termination of this Deed, whether or not any demand, claim, proceeding or
     action is asserted, made or instituted after such date.

7.   This Deed shall be governed by the laws of the Hong Kong Special
     Administrative Region of the People's Republic of China.

IN WITNESS WHEREOF the parties hereto have executed this Deed as of the date
hereinabove mentioned.

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

SIGNED, SEALED and DELIVERED by   )
[THE DIRECTOR]                    )
in the presence of:-              )

                                       73

<PAGE>

                                   SCHEDULE 7

                   FORM OF THE ACCREDITED INVESTOR CERTIFICATE

                         ACCREDITED INVESTOR CERTIFICATE

1. The Subscriber represents, warrants and certifies to the Corporation and the
Agent as at the date of this Certificate and as at the Closing Time that:
[Initial or check only one of boxes I (a) (b) or (c)];

     [ ]  (a)  The Subscriber is an "accredited investor" and is purchasing the
               securities as principal for its own account and not for the
               benefit of any other person, and it is purchasing for investment
               only and not with a view to resale or distribution and no other
               person, corporation, firm or other organization has a beneficial
               interest in the securities; or

     [ ]  (b)  The Subscriber is purchasing the securities as agent for a
               "Disclosed Principal", and the Disclosed Principal is an
               "accredited investor" purchasing as principal for its own
               account, and not for the benefit of any other person, and is
               purchasing for investment only and not for a view to resale or
               distribution; or

     [ ]  (c)  The Subscriber is a person described in paragraph (p) or (q) of
               section 2 below and is purchasing the securities on behalf of one
               or more fully managed accounts.

2. IF YOU OR THE DISCLOSED PRINCIPAL ARE AN "ACCREDITED INVESTOR "PURCHASING
PURSUANT TO (A) OR (B) ABOVE , CHECK OR INITIAL THE BOXES THAT APPLY TO YOU OR
SUCH DISCLOSED PRINCIPAL SITUATION:

     [ ]  (a)  a Canadian financial institution, or a Schedule III bank;

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

     [ ]  (c)  a subsidiary of any person referred to in paragraphs (a) or (b),
               if the person owns all of the voting securities of the
               subsidiary, except the voting securities required by law to be
               owned by directors of that subsidiary;

     [ ]  (d)  a person registered under the securities legislation of a
               jurisdiction of Canada as an adviser or dealer, other than a
               person registered solely as a limited market dealer under one or
               both of the Securities Act (Ontario) or the Securities Act
               (Newfoundland and Labrador);

     [ ]  (e)  an individual registered or formerly registered under the
               securities legislation of a jurisdiction of Canada as a
               representative of a person referred to in paragraph (d);

                                       74

<PAGE>

     [ ]  (f)  the Government of Canada or a jurisdiction of Canada, or any
               crown corporation, agency or wholly owned entity of the
               Government of Canada or a jurisdiction of Canada;

     [ ]  (g)  a municipality, public board or commission in Canada and a
               metropolitan community, school board, the Comite de gestion de la
               taxe scolaire de Tile de Montreal or an intermunicipal management
               board in Quebec;

     [ ]  (h)  any national, federal, state, provincial, territorial or
               municipal government of or in any foreign jurisdiction, or any
               agency of that government;

     [ ]  (i)  a pension fund that is regulated by either the Office of the
               Superintendent of Financial Institutions (Canada) or a pension
               commission or similar regulatory authority of a jurisdiction of
               Canada;

     [ ]  (j)  an individual who, either alone or with a spouse, beneficially
               owns, directly or indirectly, financial assets having an
               aggregate realizable value that before taxes, but net of any
               related liabilities, exceeds $1,000,000;

     [ ]  (k)  an individual whose net income before taxes exceeded $200,000 in
               each of the 2 most recent calendar years or whose net income
               before taxes combined with that of a spouse exceeded $300,000 in
               each of the 2 most recent calendar years and who, in either case,
               reasonably expects to exceed that net income level in the current
               calendar year;

     [ ]  (l)  an individual who, either alone or with a spouse, has net assets
               of at least $5,000,000;

     [ ]  (m)  a person, other than an individual or investment fund, that has
               net assets of at least $5,000,000 as shown on its most recently
               prepared financial statements;

     [ ]  (n)  an investment fund that distributes or has distributed its
               securities only to

               (i)  a person that is or was an accredited investor at the time
                    of the distribution;

               (ii) a person that acquires or acquired securities in the
                    circumstances referred to in section 2.10 of NI 45-106
                    (Minimum amount investment), and section 2.19 of NI 45-106
                    (Additional investment in investment funds) or

               (iii) a person described in paragraph (i) or (ii) above that
                    acquires or acquired securities under section 2,18 of NI
                    45-106 (Investment fund reinvestment)',

     [ ]  (o)  an investment fund that distributes or has distributed securities
               under a prospectus in a jurisdiction of Canada for which the
               regulator or, in Quebec, the securities regulatory authority, has
               issued a receipt;

     [ ]  (p)  a trust company or trust corporation registered or authorized to
               carry on business under the Trust and Loan Companies Act (Canada)
               or

                                       75

<PAGE>

               under comparable legislation in a jurisdiction of Canada or a
               foreign jurisdiction, acting on behalf of a fully managed account
               managed by the trust company or trust corporation, as the case
               may be;

     [ ]  (q)  a person acting on behalf of a fully managed account managed by
               that person, if that person

               (i)  is registered or authorized to carry on business as an
                    adviser or the equivalent under the securities legislation
                    of a jurisdiction of Canada or a foreign jurisdiction, and

               (ii) in Ontario is purchasing a security that is not a security
                    of an investment fund;

     [ ]  (r)  a registered charity under the Income Tax Act (Canada) that, in
               regard to the trade, has obtained advice from an eligibility
               adviser or an advisor registered under the securities legislation
               of the jurisdiction of the registered charity to give advice on
               the securities being traded;

     [ ]  (s)  an entity organized in a foreign jurisdiction that is analogous
               to any of the entities referred to in paragraphs (a) to (d) or
               paragraph (i) in form and function;

     [ ]  (t)  a person in respect of which all of the owners of interests,
               direct, indirect or beneficial, except the voting securities
               required by law to be owned by directors, are persons that are
               accredited investors;

     [ ]  (u)  an investment fund that is advised by a person registered as an
               adviser or a person that is exempt from registration as an
               adviser; or

     [ ]  (v)  a person that is recognized or designated by the securities
               regulatory authority or, except in Ontario and Quebec, the
               regulator as

               (i)  an accredited investor, or

               (ii) an exempt purchaser in Alberta or British Columbia and the
                    person has provided the Corporation and the Agent with
                    evidence of such recognition or designation.

                                  CERTIFICATION

The foregoing certificate is true and accurate as of the date hereof and will be
true and accurate as of the Closing Time. If any representation or warranty
shall not be true and accurate prior to the Closing Time, the undersigned agrees
to give immediate written notice of that fact to the Corporation and the Agent.

The undersigned has executed this Certificate as of the _______ day of ________,
2005.

If a Corporation, Partnership or        If an Individual:
Other Entity:

-------------------------------------   ----------------------------------------
Name of Entity                          Signature

                                       76

<PAGE>

-------------------------------------   ----------------------------------------
Type of Entity                          Name of Individual

-------------------------------------
Name of Signing Person

-------------------------------------
Title of Person Signing

                                       77

<PAGE>

                                   SCHEDULE 8

                        FORM OF THE INVESTMENT AGREEMENT

                                       78

<PAGE>

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

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

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

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

The Seal of                             ) /s/
(Chinese Characters)                    ) /s/
[company seal of CSI Solartronics
(Changshu) Co., Ltd.]

(CSI SOLARTRONICS CO., LTD.)            )
was affixed hereto                      ) /s/
in the presence of:-                    ) /s/
[company seal of CSI
Solartronics Co., Ltd.]

                                       79

<PAGE>

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLAR TECHNOLOGIES INC.)           ) /s/
was affixed hereto                      ) /s/
in the presence of:-                    )
[company seal of CSI Solar
Technologies Inc.]

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLAR MANUFACTURING INC.)          ) /s/
was affixed hereto                      ) /s/
in the presence of:-                    )
[company seal of CSI Solar
Manufacturing Inc.]

                                       80

<PAGE>

                 Supplemental Agreement dated February 28, 2006

<PAGE>

                                                                  EXECUTION COPY

     THIS SUPPLEMENTAL AGREEMENT (this "AGREEMENT") is entered into as of
February 28, 2006 by and among:

(1)  CANADIAN SOLAR INC., a corporation incorporated under the laws of the
     Province of Ontario, Canada with its registered office at 4056 Jefton
     Crescent, Mississauga, Ontario, Canada L5L 1Z3 (the "COMPANY");

(2)  HSBC HAV 2 (III) LIMITED, a company incorporated in the Cayman Islands with
     its registered office at 2nd Floor, Strathvale House, North Church Street,
     George Town, Grand Cayman, Cayman Islands (the "FUNDS");

(3)  JAFCO ASIA TECHNOLOGY FUND II, a Cayman Islands exempted company with its
     registered office at PO Box 309 GT, Ugland House, South Church Street,
     George Town, Grand Cayman, Cayman Islands ("JAFCO");

(4)  MR. QU XIAO HUA, holder of Canadian Passport Number BC289772 and whose
     residential address being at 4056 Jefton Crescent, Mississauga, Ontario,
     Canada L5L 1Z3 (the "FOUNDER");

(5)  (Chinese Characters) (CSI SOLARTRONICS CO., LTD.), a company established in
     the People's Republic of China with its registered office at (Chinese
     Characters) (Yangyuan Industrial Park, Changshu, Jiangsu Province 215562,
     the People's Republic of China) ("SOLARTRONICS");

(6)  (Chinese Characters) (CSI SOLAR TECHNOLOGIES INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) 209 (Chinese Characters) C6017 (Chinese Characters) (Suite
     C6017, China Suzhou Pioneering Park for Overseas Chinese Scholars, No. 209,
     Zhuyuan Road, Suzhou New & Hi-Tech District, Jiangsu Province 215011, the
     People's Republic of China) ("SOLAR TECHNOLOGIES"); and

(7)  (Chinese Characters) (CSI SOLAR MANUFACTURING INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) (Building A6, Export Processing Zone, Suzhou New & Hi-Tech
     District, Jiangsu Province 215151, the People's Republic of China) ("SOLAR
     MANUFACTURING").

     The Funds and JAFCO shall be referred to collectively as the "INVESTORS"
     and individually as an "INVESTOR". Solartronics, Solar Technologies and
     Solar Manufacturing shall be referred to collectively as the "PRC
     SUBSIDIARIES" and individually as a "PRC SUBSIDIARY".

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO are parties to a Subscription Agreement dated as of 16 November 2005 (the
"SUBSCRIPTION AGREEMENT"), pursuant to which the Investors agreed to subscribe,
and the Company agrees to issue to the Investors the Convertible Notes (as
defined in the

                                        1

<PAGE>

Subscription Agreement) up to an aggregate principal amount of US$10,500,000, in
accordance with and subject to the terms set out in the Subscription Agreement
and the Conditions (as defined in the Subscription Agreement).

     WHEREAS, the Subscription Agreement contemplated the Second Tranche
Subscription, subject to the terms and conditions thereof.

     WHEREAS, the obligation of the Investors to complete the Second Tranche
Subscription is conditional upon satisfaction of certain conditions, one of
which being the delivery of the Satisfactory Audit Reports by the Company to
each of the Investors on or before 31 January 2006.

     WHEREAS, in order to focus on the preparation of the proposed listing of
the Shares (or any other security) of the Company scheduled to occur in the
third quarter of 2006, the Company has delayed the delivery of the Satisfactory
Audit Report and has requested to extend the deadline for delivering the
Satisfactory Audit Report from January 31, 2006 to a later date and desires to
extend the deadline for Second Tranche Subscription to a date later than
February 28, 2006.

     WHEREAS, in order to facilitate the Second Tranche Subscription , as set
forth herein, the Parties are desirous of modifying certain terms in the
Subscription Agreement on the terms and subject to the conditions set forth
herein.

     WHEREAS, the Founder entered into Share Pledging Agreements.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:

SECTION 1. AMENDMENT OF SUBSCRIPTION AGREEMENT

1.1  The second paragraph of Clause 2.2 of the Subscription Agreement is hereby
     amended in its entirety to read as follows:

     "PURSUANT TO A NOTE OPTION, THE RELEVANT INVESTOR SHALL HAVE THE RIGHT,
     WHICH MAY BE EXERCISED IN WHOLE BUT NOT IN PART, AT ANY TIME DURING THE
     PERIOD FROM THE SECOND COMPLETION DATE TO MAY 31, 2006, TO SUBSCRIBE FOR
     CONVERTIBLE NOTES OF THE PRINCIPAL AMOUNT SET OPPOSITE ITS NAME ABOVE."

1.2  The first sentence of Clause 3.5 of the Subscription Agreement is hereby
     amended in its entirety to read as follows:

     "THE COMPANY SHALL USE ALL REASONABLE ENDEAVOURS TO PROCURE THAT THE
     CONDITIONS SET OUT IN CLAUSE 3.2 ARE SATISFIED ON OR BEFORE APRIL 15,
     2006".

1.3  The first paragraph of Clause 4.2 of the Subscription Agreement is hereby
     amended in its entirety to read as follows:

     "SUBJECT TO CLAUSE 3, SECOND COMPLETION SHALL TAKE PLACE ON THE SIXTH (6TH)
     BUSINESS DAY AFTER ALL OF THE CONDITIONS SET OUT IN CLAUSE 3.2 HAVE BEEN
     FULLY SATISFIED, OR IF NOT ALL OF THE CONDITIONS ARE SATISFIED, AFTER SUCH
     CONDITIONS HAVE

                                        2

<PAGE>

     BEEN WAIVED BY ALL OF THE INVESTORS IN WRITING. THE SECOND COMPLETION SHALL
     OCCUR ON OR BEFORE MAY 15, 2006, OR SUCH OTHER LATER DATE AS THE COMPANY
     AND ALL INVESTORS MAY AGREE IN WRITING, AT A PLACE AS THE COMPANY AND THE
     INVESTORS MAY AGREE, WHEN ALL OF THE FOLLOWING BUSINESS SHALL BE TRANSACTED
     SIMULTANEOUSLY".

SECTION 2. AMENDMENTS TO THE SHARE PLEDGING AGREEMENTS

2.1. The last sentence of Section 4 of each Share Pledging Agreement is hereby
     amended in its entirety to read as follows:

     "THE PLEDGEE ACKNOWLEDGES THAT IN THE EVENT THAT THE SATISFACTORY AUDIT
     REPORT IS DELIVERED AFTER JANUARY 31, 2006 BUT ON OR BEFORE APRIL 15, 2006,
     THE PLEDGEE SHALL NOT DECLARE AN "EVENT OF DEFAULT" UNDER CONDITION B7(H)
     AS SET OUT IN CONDITIONS OF CONVERTIBLE NOTE."

2.2  Section 7 of each Share Pledging Agreement is hereby amended in its
     entirety to read as follows:

     "IF (A) CSI DELIVERS TO THE PLEDGEE THE SATISFACTORY AUDIT REPORTS
     ACCORDING TO SECTION 4; (B) CSI FAILS TO DELIVER SUCH SATISFACTORY AUDIT
     REPORTS ACCORDING TO SECTION 4 BUT THE PLEDGEE DOES NOT DELIVER ANY NOTICE
     OF REDEMPTION REFERRED TO IN SECTION 4 ON OR BEFORE MAY 15, 2006; OR (C)
     CSI FAILS TO DELIVER SUCH SATISFACTORY AUDIT REPORTS ACCORDING TO SECTION 4
     BUT REDEEMS THE CONVERTIBLE NOTES WITHIN TWO (2) MONTHS FROM THE DATE ON
     WHICH CSI RECEIVES THE PLEDGEE'S NOTICE OF REDEMPTION, THEN THE PLEDGEE
     SHALL BE REQUIRED TO DELIVER UP TO THE PLEDGOR THE PLEDGED SHARES AND UPON
     SUCH DELIVERY TO THE PLEDGOR THIS SHARE PLEDGING AGREEMENT SHALL BE
     TERMINATED AND OF NO FURTHER FORCE OR EFFECT. FOR THE AVOIDANCE OF DOUBT,
     THE TERMINATION OF THIS SHARE PLEDGING AGREEMENT SHALL NOT AFFECT ANY
     RIGHTS OF THE PLEDGEE UNDER THE TRANSACTION DOCUMENTS.".

SECTION 3. AMENDMENTS TO THE CERTIFICATE FOR THE CONVERTIBLE NOTES AND THE
     CONDITIONS

3.1  Condition (B)7(h) of the Certificate for the Convertible Notes and the
     Conditions is hereby amended in its entirety to read as follows:

     "(H) IF THE COMPANY FAILS TO DELIVER TO EACH INVESTOR ON OR BEFORE APRIL
     15, 2006 THE SATISFACTORY AUDITED REPORTS IN ACCORDANCE WITH CLAUSE 3.2(A)
     OF THE SUBSCRIPTION AGREEMENT;".

SECTION 4. MISCELLANEOUS

4.1  Definitions and Interpretation. Capitalized terms used but not otherwise
     defined in this Agreement shall have the meanings given them in the
     Subscription Agreement.

4.2  Assignment. This Agreement shall be binding upon and shall inure to the
     benefit of the parties hereto and their respective successors and assigns.
     No party to this Agreement shall assign any of its rights hereunder without
     the written consent of the other parties.

                                        3

<PAGE>

4.3  Counterparts. This Agreement may be executed in counterparts, each of which
     shall be deemed to be an original with the same effect as if the signatures
     thereto and hereto were upon the same instrument.

4.4  Survival. All other provisions of the Subscription Agreement (including the
     definitions, Schedules and Disclosure Letter) and the Share Pledging
     Agreements which are not specifically amended pursuant to Section 1 or
     Section 2, as the case may be, of this Agreement shall survive this
     Agreement and continue in full force and effect.

4.5  Entire Agreement; Conflict. The Transaction Documents, as amended by this
     Agreement constitutes the entire understanding of the parties with respect
     to the subject matter hereof and supersedes all prior agreements and
     understandings, both written and oral, of the parties with respect to the
     subject matter of such documents. In the event of any conflict or
     inconsistency between the Subscription Agreement or the Share Pledging
     Agreements on the one hand, and this Agreement on the other hand, the terms
     of this Agreement shall prevail.

4.6  Governing Law. This Agreement is governed by and shall be construed in
     accordance with the laws of Hong Kong.

                               (Signatures Follow)

                                        4

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first above written.

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

                                        5

<PAGE>

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

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLARTRONICS CO., LTD.)            ) /s/
was affixed hereto                      ) /s/
in the presence of:-                    )
[Company seal of CSI Solartronics Co.,
Ltd.]

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLAR TECHNOLOGIES INC.)           ) /s/
was affixed hereto                      ) /s/
in the presence of:-                    )
[Company seal of CSI Solar
Technologies Inc.]

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLAR MANUFACTURING INC.)          ) /s/
was affixed hereto                      ) /s/
in the presence of:-                    )
[Company seal of CSI Solar
Manufacturing Inc.]

                                        6

<PAGE>

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

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

                                        7

<PAGE>

                   Supplemental Agreement dated March 29, 2006

<PAGE>

                                                                  EXECUTION COPY

     THIS SUPPLEMENTAL AGREEMENT (this "SUPPLEMENTAL AGREEMENT") is entered into
as of March 29, 2006 by and among:

(1)  CANADIAN SOLAR INC., a corporation incorporated under the laws of the
     Province of Ontario, Canada with its registered office at 4056 Jefton
     Crescent, Mississauga, Ontario, Canada L5L 1Z3 (the "COMPANY");

(2)  HSBC HAV 2 (III) LIMITED, a company incorporated in the Cayman Islands with
     its registered office at 2nd Floor, Strathvale House, North Church Street,
     George Town, Grand Cayman, Cayman Islands (the "FUNDS");

(3)  JAFCO ASIA TECHNOLOGY FUND II, a Cayman Islands exempted company with its
     registered office at PO Box 309 GT, Ugland House, South Church Street,
     George Town, Grand Cayman, Cayman Islands ("JAFCO");

(4)  MR. QU XIAO HUA, holder of Canadian Passport Number BC289772 and whose
     residential address being at 4056 Jefton Crescent, Mississauga, Ontario,
     Canada L5L 1Z3 (the "FOUNDER");

(5)  (Chinese Characters) (CSI SOLARTRONICS CO., LTD.), a company established in
     the People's Republic of China with its registered office at (Chinese
     Characters) (Yangyuan Industrial Park, Changshu, Jiangsu Province 215562,
     the People's Republic of China) ("SOLARTRONICS");

(6)  (Chinese Characters) (CSI SOLAR TECHNOLOGIES INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) 209 (Chinese Characters) C6017 (Chinese Characters) (Suite
     C6017, China Suzhou Pioneering Park for Overseas Chinese Scholars, No. 209,
     Zhuyuan Road, Suzhou New & Hi-Tech District, Jiangsu Province 215011, the
     People's Republic of China) ("SOLAR TECHNOLOGIES"); and

(7)  (Chinese Characters) (CSI SOLAR MANUFACTURING INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) (Building A6, Export Processing Zone, Suzhou New & Hi-Tech
     District, Jiangsu Province 215151, the People's Republic of China) ("SOLAR
     MANUFACTURING").

     The Funds and JAFCO shall be referred to collectively as the "INVESTORS"
     and individually as an "INVESTOR". Solartronics, Solar Technologies and
     Solar Manufacturing shall be referred to collectively as the "PRC
     SUBSIDIARIES" and individually as a "PRC SUBSIDIARY".

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO are parties to a Subscription Agreement dated as of November 16, 2005, as
amended on February 28, 2006, (the "SUBSCRIPTION AGREEMENT"), pursuant to which
the Investors agreed to subscribe, and the Company agreed to issue to the
Investors the Convertible Notes (as defined in the Subscription Agreement) up to
an aggregate principal amount of US$10,500,000 together with the granting of
options (the "NOTES OPTION") to

                                        1

<PAGE>

the Investors to acquire additional Convertible Notes up to an aggregate
principal amount of $2,500,000, in accordance with and subject to the terms set
out in the Subscription Agreement and the Conditions (as defined in the
Subscription Agreement).

     WHEREAS, on November 30, 2005, pursuant to the First Tranche Subscription
(as defined in the Subscription Agreement), the Company issued: (i) a
Certificate for the Convertible Notes and the Conditions in the principal amount
of US$5,400,000 to the Funds (the "FUNDS CONVERTIBLE NOTES"); and (ii) a
Certificate for the Convertible Notes and the Conditions in the principal amount
of US$2,700,000 to JAFCO (the "JAFCO CONVERTIBLE NOTES" and together with the
Funds Convertible Notes, the "FIRST TRANCHE CONVERTIBLE NOTES").

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO entered into a supplemental agreement on February 28, 2006 modifying
certain terms in the Subscription Agreement, the Share Pledging Agreements and
the Certificate for the Convertible Notes and the Conditions on the terms and
subject to the conditions set forth therein (the "FEBRUARY 28 SUPPLEMENTAL
AGREEMENT").

     WHEREAS, the Parties are desirous of further modifying certain terms in the
Subscription Agreement and the Certificate for the Convertibles Notes and the
Conditions on the terms and subject to the conditions set forth herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree, as follows:

SECTION 1. AMENDMENTS TO THE SUBSCRIPTION AGREEMENT AND CERTIFICATE FOR THE
     CONVERTIBLE NOTES AND THE CONDITIONS

1.1  Schedule 5 (Form of the Certificate for the Convertible Notes and the
     Conditions) to the Subscription Agreement is hereby amended by:

     (a) replacing Condition (B)5(c)(iii)(II) in its entirety with the
     following:

     (II) IN THE CASE OF A REDEMPTION UNDER CONDITION (B)5(A)(II), OF SUCH
     AMOUNT THAT WOULD GIVE THE NOTEHOLDER AN INTERNAL RATE OF RETURN OF
     EIGHTEEN PER CENT. (18%) PER ANNUM IN RESPECT OF THE PRINCIPAL AMOUNT, ALL
     PAID AND UNPAID INTEREST, SPECIAL INTEREST AND EXTRAORDINARY INTEREST
     ACCRUED UNDER CONDITION (B)2 IN RESPECT OF THE CONVERTIBLE NOTE (OR THE
     RELEVANT PART THEREOF) TO BE REDEEMED FOR THE PERIOD FROM THE ISSUE DATE UP
     TO AND INCLUDING THE DATE OF FULL REPAYMENT OF REDEMPTION MONIES.

     (b) replacing Condition (B)7(h) in its entirely with the following:

     "(H) IF THE COMPANY FAILS TO DELIVER TO EACH INVESTOR ON OR BEFORE APRIL
     30, 2006 THE SATISFACTORY AUDIT REPORTS IN ACCORDANCE WITH CLAUSE 3.2(A) OF
     THE SUBSCRIPTION AGREEMENT;"

     (c) replacing the definition of "Guaranteed 2005 PAT" in Condition A(3) in
     its entirely with the following:

                                        2

<PAGE>

     "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 PRIOR CONDITION (B)5(C)(III)(II) (WHICH
     WAS INCLUDED PREVIOUSLY IN SCHEDULE 5 TO THE SUBSCRIPTION AGREEMENT PRIOR
     TO ITS AMENDMENT)"

1.2  If the Company issues Convertible Notes to the Investors pursuant to the
     Second Tranche Subscription (as defined in the Subscription Agreement) and
     the Notes Option, the Certificates for the Convertible Notes and Conditions
     issued in connection therewith shall be in the form set forth in Schedule
     5, as amended in this Supplemental Agreement and the February 28
     Supplemental Agreement.

1.3  The parties have reached an agreement as of the date hereof that the Form
     of the Certificate for the Convertible Notes and the Conditions as set
     forth in Schedule 5 (as amended) to the Subscription Agreement will apply
     to the First Tranche Convertible Notes. To effect this agreement, the
     Investors shall return forthwith the First Tranche Convertible Notes to the
     Company and the Company shall, in exchange therefor, provide forthwith new
     Certificates for Convertible Notes and Conditions to the Investors
     identical to the First Tranche Convertible Notes and on the same terms and
     conditions and in the same principal amounts, except for such amended terms
     that are reflected in Schedule 5 (as amended) to the Subscription
     Agreement.

SECTION 2. MISCELLANEOUS

2.1  Definitions and Interpretation. Capitalized terms used but not otherwise
     defined in this Supplemental Agreement shall have the meanings given them
     in the Subscription Agreement.

2.2  Assignment. This Supplemental Agreement shall be binding upon and shall
     inure to the benefit of the parties hereto and their respective successors
     and assigns. No party to this Supplemental Agreement shall assign any of
     its rights hereunder without the written consent of the other parties.

2.3  Counterparts. This Supplemental Agreement may be executed in counterparts,
     each of which shall be deemed to be an original with the same effect as if
     the signatures thereto and hereto were upon the same instrument.

2.4  Survival. All other provisions of the Subscription Agreement (including the
     definitions, Schedules and Disclosure Letter) which are not specifically
     amended pursuant to Section 1 of this Supplemental Agreement shall survive
     this Supplemental Agreement and continue in full force and effect.

2.5  Entire Agreement; Conflict. The Transaction Documents, as amended by this
     Supplemental Agreement constitutes the entire understanding of the parties
     with respect to the subject matter hereof and supersedes all prior
     agreements and understandings, both written and oral, of the parties with
     respect to the subject matter of such documents. In the event of any
     conflict or inconsistency between the Subscription Agreement on the one
     hand, and this Supplemental Agreement on the other hand, the terms of this
     Supplemental Agreement shall prevail.

                                        3

<PAGE>

2.6  Governing Law. This Supplemental Agreement is governed by and shall be
     construed in accordance with the laws of Hong Kong.

                               (Signatures Follow)

                                        4

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement
to be executed as of the date first above written.

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

                  [Signature Pages for Supplemental Agreement]

                                        5

<PAGE>

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

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLARTRONICS CO., LTD.)            ) /s/
was affixed hereto                      ) /s/
in the presence of:-                    )
[Company seal of CSI Solartronics Co.,
Ltd.]

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLAR TECHNOLOGIES INC.)           ) /s/
was affixed hereto                      ) /s/
in the presence of:-                    )
[Company seal of CSI Solar Technologies
Inc.]

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLAR MANUFACTURING INC.)          ) /s/
was affixed hereto                      ) /s/
in the presence of:-                    )
[Company seal of CSI Solar
Manufacturing Inc.]

                  [Signature Pages for Supplemental Agreement]

                                        6
<PAGE>

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

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

                  [Signature Pages for Supplemental Agreement]

                                        7

<PAGE>

                    Supplemental Agreement dated June 9, 2006

<PAGE>

                                                                  EXECUTION COPY

     THIS SUPPLEMENTAL AGREEMENT (this "SUPPLEMENTAL AGREEMENT") is entered into
as of June 9, 2006 by and among:

(1)  CANADIAN SOLAR INC., a corporation incorporated under the laws of the
     Province of Ontario, Canada with its registered office at 4056 Jefton
     Crescent, Mississauga, Ontario, Canada L5L 1Z3 (the "COMPANY");

(2)  HSBC HAV 2 (III) LIMITED, a company incorporated in the Cayman Islands with
     its registered office at 2nd Floor, Strathvale House, North Church Street,
     George Town, Grand Cayman, Cayman Islands (the "FUNDS");

(3)  JAFCO ASIA TECHNOLOGY FUND II, a Cayman Islands exempted company with its
     registered office at PO Box 309 GT, Ugland House, South Church Street,
     George Town, Grand Cayman, Cayman Islands ("JAFCO");

(4)  MR. QU XIAO HUA, holder of Canadian Passport Number BC289772 and whose
     residential address being at 4056 Jefton Crescent, Mississauga, Ontario,
     Canada L5L 1Z3 (the "FOUNDER");

(5)  (Chinese Characters) (CSI SOLARTRONICS CO., LTD.), a company established in
     the People's Republic of China with its registered office at (Chinese
     Characters) (Yangyuan Industrial Park, Changshu, Jiangsu Province 215562,
     the People's Republic of China) ("SOLARTRONICS");

(6)  (Chinese Characters) (CSI SOLAR TECHNOLOGIES INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) 209 (Chinese Characters) C6017 (Chinese Characters) (Suite
     C6017, China Suzhou Pioneering Park for Overseas Chinese Scholars, No. 209,
     Zhuyuan Road, Suzhou New & Hi-Tech District, Jiangsu Province 215011, the
     People's Republic of China) ("SOLAR TECHNOLOGIES"); and

(7)  (Chinese Characters) (CSI SOLAR MANUFACTURING INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) (Building A6, Export Processing Zone, Suzhou New & Hi-Tech
     District, Jiangsu Province 215151, the People's Republic of China) ("SOLAR
     MANUFACTURING").

     The Funds and JAFCO shall be referred to collectively as the "INVESTORS"
     and individually as an "INVESTOR". Solartronics, Solar Technologies and
     Solar Manufacturing shall be referred to collectively as the "PRC
     SUBSIDIARIES" and individually as a "PRC SUBSIDIARY".

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO are parties to a Subscription Agreement dated as of November 16, 2005, as
amended (the "SUBSCRIPTION AGREEMENT"), pursuant to which the Investors agreed
to subscribe, and the Company agreed to issue to the Investors the Convertible
Notes (as

                                        1

<PAGE>

defined in the Subscription Agreement) up to an aggregate principal amount of
US$10,500,000 together with the granting of options (the "NOTES OPTION") to the
Investors to acquire additional Convertible Notes up to an aggregate principal
amount of $2,500,000, in accordance with and subject to the terms set out in the
Subscription Agreement and the Conditions (as defined in the Subscription
Agreement).

     WHEREAS, on November 30, 2005, pursuant to the First Tranche Subscription
(as defined in the Subscription Agreement), the Company issued: (i) a
Certificate for the Convertible Notes and the Conditions in the principal amount
of US$5,400,000 to the Funds (the "FIRST TRANCHE FUNDS CONVERTIBLE NOTES"); and
(ii) a Certificate for the Convertible Notes and the Conditions in the principal
amount of US$2,700,000 to JAFCO (the "FIRST TRANCHE JAFCO CONVERTIBLE NOTES" and
together with the First Tranche Funds Convertible Notes, the "FIRST TRANCHE
CONVERTIBLE NOTES").

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO entered into a supplemental agreement on February 28, 2006 modifying
certain terms in the Subscription Agreement, the Share Pledging Agreements and
the Certificate for the Convertible Notes and the Conditions on the terms and
subject to the conditions set forth therein (the "FEBRUARY 28 SUPPLEMENTAL
AGREEMENT").

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO entered into a supplemental agreement on March 29, 2006 modifying certain
terms in the Subscription Agreement and the Certificate for the Convertible
Notes and the Conditions on the terms and subject to the conditions set forth
therein (the "MARCH 29 SUPPLEMENTAL AGREEMENT").

     WHEREAS, on March 30, 2006, pursuant to the March 29 Supplemental
Agreement, the Company issued: (i) a Certificate for the Convertible Notes and
the Conditions in the principal amount of US$5,400,000 to the Funds (the "FIRST
TRANCHE FUNDS REPLACEMENT CONVERTIBLE NOTES") in replacement of the First
Tranche Funds Convertible Notes which became cancelled upon such replacement;
and (ii) a Certificate for the Convertible Notes and the Conditions in the
principal amount of US$2,700,000 to JAFCO (the "FIRST TRANCHE JAFCO REPLACEMENT
CONVERTIBLE NOTES") in replacement of the First Tranche JAFCO Convertible Notes
which became cancelled upon such replacement; and First Tranche JAFCO
Replacement Convertible Notes together with the First Tranche Funds Replacement
Convertible Notes, the "FIRST TRANCHE REPLACEMENT CONVERTIBLE NOTES").

     WHEREAS, on March 30, 2006, pursuant to the Second Tranche Subscription (as
defined in the Subscription Agreement), the Company issued: (i) a Certificate
for the Convertible Notes and the Conditions in the principal amount of
US$2,350,000 to the Funds (the "SECOND TRANCHE FUNDS CONVERTIBLE NOTES"); and
(ii) a Certificate for the Convertible Notes and the Conditions in the principal
amount of US$1,300,000 to JAFCO (the "SECOND TRANCHE JAFCO CONVERTIBLE NOTES"
and together with the Funds Convertible Notes, the "SECOND TRANCHE CONVERTIBLE
NOTES").

     WHEREAS, the Parties are desirous of further modifying certain terms in the
Subscription Agreement and the Certificate for the Convertibles Notes and the
Conditions on the terms and subject to the conditions set forth herein.

                                        2

<PAGE>

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree, as follows:

SECTION 1. AMENDMENTS TO THE SUBSCRIPTION AGREEMENT AND CERTIFICATE FOR THE
     CONVERTIBLE NOTES AND THE CONDITIONS

1.1  Schedule 5 (Form of the Certificate for the Convertible Notes and the
     Conditions) to the Subscription Agreement is hereby amended by:

     (a) deleting Condition (B)4(e) in its entirety.

1.2  The parties have reached an agreement as of the date hereof that the Form
     of the Certificate for the Convertible Notes and the Conditions as set
     forth in Schedule 5 (as amended) to the Subscription Agreement will apply
     to the First Tranche Replacement Convertible Notes. To effect this
     agreement, the Investors shall return forthwith the First Tranche
     Replacement Convertible Notes to the Company and the Company shall, in
     exchange therefor, provide forthwith new Certificates for Convertible Notes
     and Conditions to the Investors identical to the First Tranche Replacement
     Convertible Notes and on the same terms and conditions and in the same
     principal amounts, except for such amended terms that are reflected in
     Schedule 5 (as amended by this Supplemental Agreement, the February 28
     Supplemental Agreement and the March 29 Supplemental Agreement) to the
     Subscription Agreement.

1.3  The parties have reached an agreement as of the date hereof that the Form
     of the Certificate for the Convertible Notes and the Conditions as set
     forth in Schedule 5 (as amended) to the Subscription Agreement will apply
     to the Second Tranche Convertible Notes. To effect this agreement, the
     Investors shall return forthwith the Second Tranche Convertible Notes to
     the Company and the Company shall, in exchange therefor, provide forthwith
     new Certificates for Convertible Notes and Conditions to the Investors
     identical to the Second Tranche Convertible Notes and on the same terms and
     conditions and in the same principal amounts, except for such amended terms
     that are reflected in Schedule 5 (as amended by this Supplemental
     Agreement, the February 28 Supplemental Agreement and the March 29
     Supplemental Agreement) to the Subscription Agreement.

SECTION 2. MISCELLANEOUS

2.1  Definitions and Interpretation. Capitalized terms used but not otherwise
     defined in this Supplemental Agreement shall have the meanings given them
     in the Subscription Agreement.

2.2  Assignment. This Supplemental Agreement shall be binding upon and shall
     inure to the benefit of the parties hereto and their respective successors
     and assigns. No party to this Supplemental Agreement shall assign any of
     its rights hereunder without the written consent of the other parties.

                                        3

<PAGE>

2.3  Counterparts. This Supplemental Agreement may be executed in counterparts,
     each of which shall be deemed to be an original with the same effect as if
     the signatures thereto and hereto were upon the same instrument.

2.4  Survival. All other provisions of the Subscription Agreement (including the
     definitions, Schedules and Disclosure Letter) which are not specifically
     amended pursuant to Section 1 of this Supplemental Agreement shall survive
     this Supplemental Agreement and continue in full force and effect.

2.5  Entire Agreement; Conflict. The Transaction Documents, as amended by this
     Supplemental Agreement constitutes the entire understanding of the parties
     with respect to the subject matter hereof and supersedes all prior
     agreements and understandings, both written and oral, of the parties with
     respect to the subject matter of such documents. In the event of any
     conflict or inconsistency between the Subscription Agreement on the one
     hand, and this Supplemental Agreement on the other hand, the terms of this
     Supplemental Agreement shall prevail.

2.6  Governing Law. This Supplemental Agreement is governed by and shall be
     construed in accordance with the laws of Hong Kong.

                               (Signatures Follow)

                                        4

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement
to be executed as of the date first above written.

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

                  [Signature Pages for Supplemental Agreement]

                                        5

<PAGE>

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

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLARTRONICS CO., LTD.)            ) /s/
was affixed hereto                      )
in the presence of:-                    )
[Company seal of CSI Solartronics Co.,
Ltd.]

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLAR TECHNOLOGIES INC.)           ) /s/
was affixed hereto                      )
in the presence of:-                    )
[Company seal of CSI Solar Technologies
Inc.]

The Seal of                             )
(Chinese Characters)                    )
(CSI SOLAR MANUFACTURING INC.)          ) /s/
was affixed hereto                      )
in the presence of:-                    )
[Company seal of CSI Solar
Manufacturing Inc.]

                  [Signature Pages for Supplemental Agreement]

                                        6

<PAGE>

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

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

                  [Signature Pages for Supplemental Agreement]

                                        7

<PAGE>

                    Supplemental Agreement dated July 1, 2006

<PAGE>

                                                                  EXECUTION COPY

     THIS SUPPLEMENTAL AGREEMENT (this "SUPPLEMENTAL AGREEMENT") is entered into
as of July 1, 2006 by and among:

(1)  CANADIAN SOLAR INC., a corporation incorporated under the laws of the
     Province of Ontario, Canada with its registered office at 4056 Jefton
     Crescent, Mississauga, Ontario, Canada L5L 1Z3 (the "COMPANY");

(2)  HSBC HAV 2 (III) LIMITED, a company incorporated in the Cayman Islands with
     its registered office at 2nd Floor, Strathvale House, North Church Street,
     George Town, Grand Cayman, Cayman Islands (the "FUNDS");

(3)  JAFCO ASIA TECHNOLOGY FUND II, a Cayman Islands exempted company with its
     registered office at PO Box 309 GT, Ugland House, South Church Street,
     George Town, Grand Cayman, Cayman Islands ("JAFCO");

(4)  MR. QU XIAO HUA, holder of Canadian Passport Number BC289772 and whose
     residential address being at 4056 Jefton Crescent, Mississauga, Ontario,
     Canada L5L 1Z3 (the "FOUNDER");

(5)  (Chinese Characters) (CSI SOLARTRONICS CO., LTD.), a company established in
     the People's Republic of China with its registered office at (Chinese
     Characters) (Yangyuan Industrial Park, Changshu, Jiangsu Province 215562,
     the People's Republic of China) ("SOLARTRONICS");

(6)  (Chinese Characters) (CSI SOLAR TECHNOLOGIES INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters)209(Chinese Characters)C6017(Chinese Characters) (Suite C6017,
     China Suzhou Pioneering Park for Overseas Chinese Scholars, No. 209,
     Zhuyuan Road, Suzhou New & Hi-Tech District, Jiangsu Province 215011, the
     People's Republic of China) ("SOLAR TECHNOLOGIES"); and

(7)  (Chinese Characters) (CSI SOLAR MANUFACTURING INC.), a company established
     in the People's Republic of China with its registered office at (Chinese
     Characters) (Building A6, Export Processing Zone, Suzhou New & Hi-Tech
     District, Jiangsu Province 215151, the People's Republic of China) ("SOLAR
     MANUFACTURING").

     The Funds and JAFCO shall be referred to collectively as the "INVESTORS"
     and individually as an "INVESTOR". Solartronics, Solar Technologies and
     Solar Manufacturing shall be referred to collectively as the "PRC
     SUBSIDIARIES" and individually as a "PRC SUBSIDIARY".

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO are parties to a Subscription Agreement dated as of November 16, 2005, as
amended (the "SUBSCRIPTION AGREEMENT"), pursuant to which the Investors agreed
to subscribe, and the Company agreed to issue to the Investors the Convertible
Notes (as defined in the Subscription Agreement) up to an aggregate principal
amount of US$10,500,000 together with the granting of options (the "NOTES
OPTION") to the Investors

                                       1

<PAGE>

to acquire additional Convertible Notes up to an aggregate principal amount of
$2,500,000, in accordance with and subject to the terms set out in the
Subscription Agreement and the Conditions (as defined in the Subscription
Agreement).

     WHEREAS, on November 30, 2005, pursuant to the First Tranche Subscription
(as defined in the Subscription Agreement), the Company issued: (i) a
Certificate for the Convertible Notes and the Conditions in the principal amount
of US$5,400,000 to the Funds (the "FIRST TRANCHE FUNDS CONVERTIBLE NOTES"); and
(ii) a Certificate for the Convertible Notes and the Conditions in the principal
amount of US$2,700,000 to JAFCO (the "FIRST TRANCHE JAFCO CONVERTIBLE NOTES" and
together with the First Tranche Funds Convertible Notes, the "FIRST TRANCHE
CONVERTIBLE NOTES").

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO entered into a supplemental agreement on February 28, 2006 modifying
certain terms in the Subscription Agreement, the Share Pledging Agreements and
the Certificate for the Convertible Notes and the Conditions on the terms and
subject to the conditions set forth therein (the "FEBRUARY 28 SUPPLEMENTAL
AGREEMENT").

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO entered into a supplemental agreement on March 29, 2006 modifying certain
terms in the Subscription Agreement and the Certificate for the Convertible
Notes and the Conditions on the terms and subject to the conditions set forth
therein (the "MARCH 29 SUPPLEMENTAL AGREEMENT").

     WHEREAS, on March 30, 2006, pursuant to the March 29 Supplemental
Agreement, the Company issued: (i) a Certificate for the Convertible Notes and
the Conditions in the principal amount of US$5,400,000 to the Funds (the "FIRST
TRANCHE FUNDS REPLACEMENT CONVERTIBLE NOTES") in replacement of the First
Tranche Funds Convertible Notes which became cancelled upon such replacement;
and (ii) a Certificate for the Convertible Notes and the Conditions in the
principal amount of US$2,700,000 to JAFCO (the "FIRST TRANCHE JAFCO REPLACEMENT
CONVERTIBLE NOTES") in replacement of the First Tranche JAFCO Convertible Notes
which became cancelled upon such replacement; and First Tranche JAFCO
Replacement Convertible Notes together with the First Tranche Funds Replacement
Convertible Notes, the "FIRST TRANCHE REPLACEMENT CONVERTIBLE NOTES").

     WHEREAS, on March 30, 2006, pursuant to the Second Tranche Subscription (as
defined in the Subscription Agreement), the Company issued: (i) a Certificate
for the Convertible Notes and the Conditions in the principal amount of
US$2,350,000 to the Funds (the "SECOND TRANCHE FUNDS CONVERTIBLE NOTES"); and
(ii) a Certificate for the Convertible Notes and the Conditions in the principal
amount of US$1,300,000 to JAFCO (the "SECOND TRANCHE JAFCO CONVERTIBLE NOTES"
and together with the Second Tranche Funds Convertible Notes, the "SECOND
TRANCHE CONVERTIBLE NOTES").

     WHEREAS, the Company, the PRC Subsidiaries, the Founder, the Funds and
JAFCO entered into a supplemental agreement on June 9, 2006 modifying certain
terms in the Subscription Agreement and the Certificate for the Convertible
Notes and the Conditions on the terms and subject to the conditions set forth
therein (the "JUNE 9 SUPPLEMENTAL Agreement").

                                       2

<PAGE>

     WHEREAS, on June 9, 2006, pursuant to the June 9 Supplemental Agreement,
the Company issued: (i) a Certificate for the Convertible Notes and the
Conditions in the principal amount of US$5,400,000 to the Funds (the "FIRST
TRANCHE FUNDS REPLACEMENT (2) CONVERTIBLE NOTES") in replacement of the First
Tranche Funds Convertible Replacement Notes which became cancelled upon such
replacement; (ii) a Certificate for the Convertible Notes and the Conditions in
the principal amount of US$2,700,000 to JAFCO (the "FIRST TRANCHE JAFCO
REPLACEMENT (2) CONVERTIBLE NOTES" together with the First Tranche Funds
Replacement (2) Convertible Notes, the "FIRST TRANCHE REPLACEMENT (2)
CONVERTIBLE NOTES") in replacement of the First Tranche JAFCO Replacement
Convertible Notes which became cancelled upon such replacement; (i) a
Certificate for the Convertible Notes and the Conditions in the principal amount
of US$2,350,000 to the Funds (the "SECOND TRANCHE FUNDS REPLACEMENT CONVERTIBLE
NOTES") in replacement of the Second Tranche Funds Convertible Notes which
became cancelled upon such replacement; and (ii) a Certificate for the
Convertible Notes and the Conditions in the principal amount of US$1,300,000 to
JAFCO (the "SECOND TRANCHE JAFCO REPLACEMENT CONVERTIBLE NOTES" together with
the Second Tranche Funds Replacement Convertible Notes, the "SECOND TRANCHE
REPLACEMENT CONVERTIBLE NOTES") in replacement of the Second Tranche JAFCO
Convertible Notes which became cancelled upon such replacement.

     WHEREAS, the Parties are desirous of further modifying certain terms in the
Subscription Agreement and the Certificate for the Convertibles Notes and the
Conditions on the terms and subject to the conditions set forth herein.

     NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree, as follows:

SECTION 1. AMENDMENTS TO THE SUBSCRIPTION AGREEMENT AND CERTIFICATE FOR THE
     CONVERTIBLE NOTES AND THE CONDITIONS

1.1  Schedule 5 (Form of the Certificate for the Convertible Notes and the
     Conditions) to the Subscription Agreement is hereby amended, so as to
     conform with the original intention of the parties, by:

     (a)  deleting Condition (B)2(a) in its entirety and replacing it with the
          following:

     "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

                                       3

<PAGE>

     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)  deleting Condition (B)5(c) in its entirety and replacing it with the
          following:

          "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)."

     (c)  deleting Condition (B)9(a) in its entirety and replacing it with the
          following:

          "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 withholding tax
          shall be payable under the Canadian income tax laws in respect of any
          amounts deemed to constitute interest paid upon conversion of the
          Convertible Note."

1.2  The parties have reached an agreement as of the date hereof that the Form
     of the Certificate for the Convertible Notes and the Conditions as set
     forth in Schedule 5 (as amended) to the Subscription Agreement will apply
     to the First Tranche Replacement (2) Convertible Notes. To effect this
     agreement, the Investors shall return forthwith the First Tranche
     Replacement (2) Convertible Notes to the Company and the Company shall, in
     exchange therefor, provide forthwith new Certificates for Convertible Notes
     and Conditions to the Investors identical to the First Tranche Replacement
     (2) Convertible Notes and on the same terms and conditions and in the same
     principal amounts, except for such amended terms that are reflected in
     Schedule 5 (as amended by this Supplemental Agreement, the February 28
     Supplemental Agreement, the March 29 Supplemental Agreement and the June 9
     Supplemental Agreement) to the Subscription Agreement.

                                       4

<PAGE>

1.3  The parties have reached an agreement as of the date hereof that the Form
     of the Certificate for the Convertible Notes and the Conditions as set
     forth in Schedule 5 (as amended) to the Subscription Agreement will apply
     to the Second Tranche Convertible Replacement Notes. To effect this
     agreement, the Investors shall return forthwith the Second Tranche
     Replacement Convertible Notes to the Company and the Company shall, in
     exchange therefor, provide forthwith new Certificates for Convertible Notes
     and Conditions to the Investors identical to the Second Tranche Replacement
     Convertible Notes and on the same terms and conditions and in the same
     principal amounts, except for such amended terms that are reflected in
     Schedule 5 (as amended by this Supplemental Agreement, the February 28
     Supplemental Agreement, the March 29 Supplemental Agreement and the June 9
     Supplemental Agreement) to the Subscription Agreement.

1.4  The parties agree that the Conversion Price per Common Share should be
     adjusted to be US$5.770563156 on the basis that (i) a total of 5,668,421
     Common Shares are currently in issue; (ii) the maximum number of Common
     Shares that may be issued pursuant to the ESOP shall be 1,000,000; (iii) an
     aggregate of 2,036,195.824 Common Shares are expected to be issued to all
     Investors upon the full conversion of all Convertible Notes of an aggregate
     principal amount of US$11,750,000; and (iv) immediately following the full
     conversion of all Convertible Notes, the Common Shares will be split on a 1
     for 1.168130772 basis although the maximum number of Common Shares that may
     be issued pursuant to the ESOP shall remain 1,000,000, such that the
     aggregate shareholding of all Investors in the Company following the share
     split shall be 23.79%.

SECTION 2. MISCELLANEOUS

2.1  Definitions and Interpretation. Capitalized terms used but not otherwise
     defined in this Supplemental Agreement shall have the meanings given them
     in the Subscription Agreement.

2.2  Assignment. This Supplemental Agreement shall be binding upon and shall
     inure to the benefit of the parties hereto and their respective successors
     and assigns. No party to this Supplemental Agreement shall assign any of
     its rights hereunder without the written consent of the other parties.

2.3  Counterparts. This Supplemental Agreement may be executed in counterparts,
     each of which shall be deemed to be an original with the same effect as if
     the signatures thereto and hereto were upon the same instrument.

2.4  Survival. All other provisions of the Subscription Agreement (including the
     definitions, Schedules and Disclosure Letter) which are not specifically
     amended pursuant to Section 1 of this Supplemental Agreement shall survive
     this Supplemental Agreement and continue in full force and effect.

2.5  Entire Agreement; Conflict. The Transaction Documents, as amended by this
     Supplemental Agreement constitutes the entire understanding of the parties
     with respect to the subject matter hereof and supersedes all prior
     agreements and understandings, both written and oral, of the parties with
     respect to the subject matter of such documents. In the event of any
     conflict or inconsistency between the

                                       5

<PAGE>

     Subscription Agreement on the one hand, and this Supplemental Agreement on
     the other hand, the terms of this Supplemental Agreement shall prevail.

2.6  Governing Law. This Supplemental Agreement is governed by and shall be
     construed in accordance with the laws of Hong Kong.

                               (Signatures Follow)

                                       6

<PAGE>

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Agreement
to be executed as of the date first above written.

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

                  [Signature Pages for Supplemental Agreement]

                                       7

<PAGE>

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

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

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

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

                  [Signature Pages for Supplemental Agreement]

                                       8

<PAGE>

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

/s/
-------------------------------------
Laetitia K.W. Yu
Witness

                  [Signature Pages for Supplemental Agreement]

                                       9

<PAGE>

SIGNED by                               )
for and on behalf of                    )
JAFCO ASIA TECHNOLOGY FUND II           ) /s/
in the presence of:- Liu Xiao Ning      ) /s/

                  [Signature Pages for Supplemental Agreement]

                                       10<PAGE>

                                                                     EXHIBIT 4.2

                             DATED 30 NOVEMBER 2005

                            (1)  CANADIAN SOLAR INC.

                          (2)  HSBC HAV2 (III) LIMITED

                       (3)  JAFCO ASIA TECHNOLOGY FUND II

                              (4)  MR. QU XIAO HUA

             (5)  [chinese characters] (CSI SOLARTRONICS CO., LTD.)

            (6)  [chinese characters] (CSI SOLAR TECHNOLOGIES INC.)

                                      and

            (7)  [chinese characters] (CSI SOLAR MANUFACTURING INC.)

                                   ----------

                              INVESTMENT AGREEMENT

                                   relating to

                               CANADIAN SOLAR INC.

                                   ----------

                                BAKER & MCKENZIE

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                           <C>
1.  Definitions............................................................    2
2.  Guarantee..............................................................    9
3.  Ownership of Equity Securities.........................................    9
4.  Transfers of Equity Securities.........................................   10
5.  Pre-emptive Rights.....................................................   17
6.  Undertakings after First Completion....................................   19
7.  Directors and Management...............................................   23
8.  Meetings of Shareholders...............................................   25
9.  Reserved Matters.......................................................   26
10. Information Rights.....................................................   28
11. Payment and Taxes......................................................   29
12. Announcements and Confidentiality......................................   29
13. Termination of this Agreement..........................................   31
14. Entire Agreement.......................................................   32
15. Variation..............................................................   32
16. Successors and Assigns.................................................   32
17. Invalidity.............................................................   32
18. Waiver.................................................................   32
19. Unanimous Shareholder Agreement........................................   33
20. Notices................................................................   33
21. Counterparts...........................................................   34
22. Process Agents.........................................................   34
23. Governing Law..........................................................   35
24. Dispute Resolution.....................................................   35
25. JAFCO's Rights.........................................................   36
</TABLE>

Schedule

1.  Particulars of the Company
2.  Representations and warranties referred to in Clause 4.7(C)(i)

                                       ii

<PAGE>

THIS AGREEMENT is made on the 30th day of November 2005

BETWEEN:

(1)  CANADIAN SOLAR INC., a corporation incorporated under the laws of the
     Province of Ontario, Canada with its registered office at 4056 Jefton
     Crescent, Mississauga, Ontario, Canada L5L 1Z3 (the "COMPANY");

(2)  HSBC HAV 2 (III) LIMITED, a company incorporated in the Cayman Islands with
     its registered office at 2nd Floor, Strathvale House, North Church Street,
     George Town, Grand Cayman, Cayman Islands (the "FUNDS");

(3)  JAFCO ASIA TECHNOLOGY FUND II, a Cayman Islands exempted company with its
     registered office at PO Box 309GT, Ugland House, South Church Street,
     George Town, Grand Cayman, Cayman Islands ("JAFCO");

(4)  MR. QU XIAO HUA, holder of Canadian Passport Number BC289772 and whose
     residential address being at 4056 Jefton Crescent, Mississauga, Ontario,
     Canada L5L 1Z3 (the "FOUNDER");

(5)  [chinese characters] (CSI SOLARTRONICS CO., LTD.), a company established in
     the People's Republic of China with its registered office at [chinese
     characters] (Yangyuan Industrial Park, Changshu, Jiangsu Province 215562,
     the People's Republic of China) ("SOLARTRONICS");

(6)  [chinese characters] (CSI SOLAR TECHNOLOGIES INC.), a company established
     in the People's Republic of China with its registered office at [chinese
     characters]209[chinese characters]C6017[chinese characters] (Suite C6017,
     China Suzhou Pioneering Park for Overseas Chinese Scholars, No. 209,
     Zhuyuan Road, Suzhou New & Hi-Tech District, Jiangsu Province 215011, the
     People's Republic of China) ("SOLAR TECHNOLOGIES"); and

(7)  [chinese characters] (CSI SOLAR MANUFACTURING INC.), a company established
     in the People's Republic of China with its registered office at [chinese
     characters] (Building A6, Export Processing Zone, Suzhou New & Hi-Tech
     District, Jiangsu Province 215151, the People's Republic of China) ("SOLAR
     MANUFACTURING").

The Funds and JAFCO shall be referred to collectively as the "INVESTORS" and
individually as an "INVESTOR".

Solartronics, Solar Technologies and Solar Manufacturing shall be referred to
collectively as the "PRC SUBSIDIARIES" and individually as a "PRC SUBSIDIARY".

                                       1

<PAGE>

WHEREAS:

(A)  The Company is a corporation incorporated under the laws of the Province of
     Ontario, Canada.

(B)  The Investors has subscribed for Convertible Notes pursuant to the
     Subscription Agreement.

(C)  The Founder, the PRC Subsidiaries and the Investors wish to enter into this
     Agreement with each other to govern certain aspects of the affairs of the
     Company.

(D)  Founder has agreed to guarantee to the Investors the performance by the
     Company of its obligations under this Agreement.

THE PARTIES HEREBY AGREE AS FOLLOWS:

1.   DEFINITIONS

1.1  In this Agreement (including the Recitals), unless the context requires
     otherwise, the following expressions shall have the following meanings:

     "AFFILIATE" of a specified Person means any other Person that, directly or
     indirectly, through one or more intermediaries, Controls, is Controlled by,
     or is under common Control with, such specified Person, and (a) in the case
     of a natural Person, such Person's spouse, parents and descendants (whether
     by blood or adoption and including stepchildren), and (b) in the case of an
     Investor, shall include (i) any Person who holds the Convertible Notes as a
     nominee for such Investor, (ii) any shareholder of such Investor and (iii)
     any entity or individual which has a direct or indirect interest in such
     Investor (including, if applicable, any general partner or limited partner,
     any fund manager or any fund managed by the same fund manager thereof), and
     each Group Company shall be deemed to be an Affiliate of the Founder;

     "APPLICABLE LAW" means, with respect to any Person, any and all provisions
     of any constitution, treaty, statute, law, regulation, ordinance, code,
     rule, judgement, rule of common law, order, decree, award, injunction,
     Governmental Approval, concession, grant, franchise, license, agreement,
     directive, guideline, policy, requirement, or other governmental
     restriction or any similar form of decision of, or determination by, or any
     interpretation or administration of any of the foregoing by, any
     Governmental Authority, whether in effect as of the date hereof or
     thereafter applicable to such Person;

     "ARBITRATORS" has the meaning ascribed to it in Clause 24.2;

     "ARTICLES OF INCORPORATION" means the duly adopted articles of
     incorporation of the Company in force from time to time;

     "ATS" means ATS Automation Tooling Systems Inc., a corporation incorporated
     in Canada;

                                       2

<PAGE>

     "ATS ARRANGEMENT" means the arrangement between the Founder and ATS in
     existence as at the date of the Subscription Agreement in relation to,
     among other things, ATS's acquisition of ownership interest of not
     exceeding nineteen point five per cent. (19.5%) in the Company;

     "BOARD" means the board of directors of the Company;

     "BUSINESS DAY" means any day (excluding Saturdays, Sundays and public
     holidays) on which banks generally are open for business in Hong Kong and
     Singapore;

     "BY-LAWS" means the duly adopted by-laws of the Company in force from time
     to time;

     "COMMON SHARES" means common shares in the capital of the Company and all
     other (if any) stock or shares from time to time and for the time being
     ranking pari passu therewith and all other (if any) shares or stock in the
     authorised share capital of the Company resulting from any sub-division,
     consolidation or re-classification of Common Shares;

     "COMMON SHARES EQUIVALENTS" means, with respect to any Investor, the
     aggregate number of Common Shares owned by such Investor together with the
     number of Common Shares into or for which any Convertible Notes owned by
     such Investor shall be convertible;

     "COMPENSATION COMMITTEE" means the compensation committee of the Board as
     referred to in Clause 7.2(B);

     "CONTROL", "CONTROLLED" (or any correlative term) means the possession,
     directly or indirectly, of the power to direct or cause the direction of
     the management policies of a Person, whether through the ownership of
     voting securities, by contract, credit arrangement or proxy, as trustee,
     executor, agent or otherwise; and for the purpose of this definition, a
     Person shall be deemed to Control another Person if such first Person,
     directly or indirectly, owns or holds more than 50% of the voting equity
     interests in such another Person;

     "CONVERTIBLE NOTES" the convertible loan notes up to an aggregate principal
     amount of Thirteen Million United States Dollars (US$13,000,000)
     convertible into Common Shares issued or to be issued to the Investors
     under the Subscription Agreement;

     "CONVERTIBLE SECURITIES" means (i) any rights, options or warrants to
     acquire Shares, and (ii) any notes, debentures, preference shares
     (including, without limitation, the Convertible Notes) or other securities
     or rights, which are ultimately convertible or exercisable into, or
     exchangeable for, Shares;

     "CO-SALE EXERCISE AMOUNT" has the meaning ascribed to it in Clause 4.4(A);

     "CO-SALE NOTICE" has the meaning ascribed to it in Clause 4.4(A);

     "CO-SALE PROPORTIONATE AMOUNT" has the meaning ascribed to it in Clause
     4.4(E);

     "CO-SALE SECURITIES" has the meaning ascribed to it in Clause 4.4(A);

                                       3

<PAGE>

     "DIRECTLY OWNED SUBSIDIARY" has the meaning ascribed to it in Clause 9.2;

     "DIRECTOR" means a director of the Company;

     "ENCUMBRANCE" means any lien, encumbrance, hypothecation, right of others,
     proxy, voting trust or similar arrangement, pledge, security interest,
     collateral security agreement, limitations on voting rights, limitations on
     rights of ownership filed with any Governmental Authority, claim, charge,
     equities, mortgage, pledge, objection, title defect, title retention
     agreement, option, restrictive covenant, restriction on transfer, right of
     first refusal, right of first offer, or any comparable interest or right
     created by or arising under Applicable Law, of any nature whatsoever;

     "ESOP" means an employee stock option plan to be adopted by the Company,
     pursuant to which (a) options may be granted to key employees and members
     of the management team of any Group Company to subscribe for Common Shares,
     (b) the number of Common Shares that may be subject to such options shall
     not exceed One Million (1,000,000) on the basis that the total expected
     number of Common Shares to be in issue on a Fully-Diluted Basis after issue
     of all Common Shares to ATS, pursuant to the ESOP and upon conversion of
     all Convertible Notes will be Ten Million (10,000,000), (c) the terms of
     the plan (including but not limited to the exercise price for each Common
     Share under the plan, the vesting date and the lock-up period of the
     options) shall be subject to the approval of the Compensation Committee,
     and (d) any grant of options under the plan shall be subject to the
     approval of the Compensation Committee;

     "EXECUTIVE" means a director, the chief executive officer, the chief
     operation officer, the chief financial officer, the general manager or a
     vice-president of any Group Company, or such other Person as the
     Compensation Committee may nominate from time to time;

     "EQUITY SECURITIES" means (a) Convertible Securities and (b) shares of any
     class in the capital of the Company and including, without limitation, the
     Common Shares;

     "EXCESS OFFERED SECURITIES" has the meaning ascribed to it in Clause
     4.3(B)(b);

     "EXCESS NEW SECURITIES" has the meaning ascribed to it in Clause 5.2(B);

     "EXCESS PRO-RATA AMOUNT" has the meaning ascribed to it in Clause 5.2(D);

     "EXCESS PROPORTIONATE AMOUNT" has the meaning ascribed to it in Clause
     4.3(B)(d);

     "EXERCISE AMOUNT" has the meaning ascribed to it in Clause 4.3(B)(a);

     "EXERCISE NOTICE" has the meaning ascribed to it in Clause 5.2(A);

     "EXERCISING PARTY" has the meaning ascribed to it in Clause 4.3(B)(a);

     "FINANCING TERMS" has the meaning ascribed to it in Clause 12.1;

     "FIRST COMPLETION" has the meaning ascribed to it in the Subscription
     Agreement;

                                       4

<PAGE>

     "FULLY-DILUTED BASIS" means, when used with respect to issued and
     outstanding share capital of the Company, the total number of all Common
     Shares which are or would be issued and outstanding assuming the full
     conversion of all Convertible Notes in issue at the then applicable
     Conversion Price (as defined in the conditions of the Convertible Notes);

     "GOVERNMENTAL APPROVAL" means any action, order, authorization, consent,
     approval, license, authorisation, qualification, lease, waiver, franchise,
     concession, agreement, ruling, permit, tariff, rate, certification,
     exemption of, filing or registration by or with, or report or notice to,
     any Governmental Authority;

     "GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
     political subdivision thereof, any entity exercising executive,
     legislative, judicial, regulatory or administrative functions of or
     pertaining to government (including, without limitation, any government
     authority, agency, department, board, commission or instrumentality of
     Canada, the PRC, Hong Kong or any other applicable jurisdiction in the
     world or any political subdivision of any of the foregoing), or any
     tribunal or arbitrator(s) of competent jurisdiction, or any self-regulatory
     organization;

     "GROUP" means the Company and its subsidiaries and affiliates, and a "GROUP
     COMPANY" means any or a specific member within the Group as the context may
     require;

     "HKIAC" has the meaning ascribed to it in Clause 24.2;

     "HONG KONG" means the Hong Kong Special Administrative Region of the
     People's Republic of China;

     "IAS" means International Accounting Standards as published by the
     International Accounting Standards Committee from time to time;

     "INDIRECTLY OWNED SUBSIDIARY" has the meaning ascribed to it in Clause 9.3;

     "INVESTOR'S DIRECTOR" means the Person nominated by each Investor pursuant
     to Clause 7.3 and duly appointed as a Director or a director of a
     subsidiary of the Company;

     "IPO" means the initial public offering of the shares of the Company or
     ListCo;

     "ISSUANCE NOTICE" has the meaning ascribed to it in Clause 5.1;

     "JAFCO MANAGER" has the meaning ascribed to it in Clause 25;

     "JOINDER AGREEMENT" means, an agreement, the terms and conditions of which
     shall be satisfactory to the Investors, which a Person is required to enter
     into with or in favour of all the Parties as a condition of the Company
     approving any Transfer or issuance and allotment of Equity Securities to
     such Person to which such Person undertakes to be bound by certain
     provisions of this Agreement, as if it were a party to this Agreement;

     "JIAP" has the meaning ascribed to it in Clause 25;

                                       5

<PAGE>

     "LIEN" means any lien, pledge, mortgage, deed of trust, security interest,
     claim, lease, charge, option, right of first refusal, transfer restriction,
     hypothecation, Encumbrance or other security interest of any kind or nature
     whatsoever, or any agreement to give or make any of the foregoing;

     "LISTCO" means a new holding company of the Group to be incorporated in a
     jurisdiction acceptable for the purpose of the IPO and the shares of which
     will be offered in the IPO;

     "MAJORITY CN APPROVAL" means the written approval given by holders in
     respect of more than seventy-five per cent. (75%) of the aggregate
     principal amount of Convertible Notes subscribed for by the Investors;

     "MATERIAL ADVERSE EFFECT" means any event, circumstance, occurrence, fact,
     condition, change or effect that is materially adverse to (i) the business,
     operations, results of operations, financial condition, management,
     prospects, properties, assets or liabilities of the Group, taken as a whole
     or otherwise; or (ii) the ability of any of the Company, the PRC
     Subsidiaries or the Founder to perform fully its/his obligations hereunder
     and to consummate the transactions contemplated hereby;

     "NEW SECURITIES" has the meaning ascribed to it in Clause 5.1(B);

     "OBSERVER" has the meaning ascribed to it in Clause 7.3(D);

     "OFFER PRICE" has the meaning ascribed to it in Clause 4.3(A);

     "OFFERED SECURITIES" has the meaning ascribed to it in Clause 4.3(A);

     "PARTIES" means the named parties to this Agreement and their respective
     successors, and a "PARTY" shall be construed accordingly;

     "PERMITTED TRANSFER" has the meaning ascribed to it in Clause 4.7(B);

     "PERMITTED TRANSFEREE" has the meaning ascribed to it in Clause 4.7(B);

     "PERSON" or "PERSONS" means any natural person, company, corporation,
     association, partnership, organization, firm, joint venture, trust,
     unincorporated organization or any other entity or organization, and shall
     include any Governmental Authority;

     "PRC" means the People's Republic of China, but shall not include Hong
     Kong, the Macau Special Administrative Region and Taiwan for the purpose of
     this Agreement;

     "PRE-EMPTIVE AMOUNT" has the meaning ascribed to it in Clause 5.2(A);

     "PRE-EMPTIVE PARTY" has the meaning ascribed to it in Clause 5.2(A);

     "PRO-RATA AMOUNT" has the meaning ascribed to it in Clause 5.2(C);

     "PROPORTIONATE AMOUNT" has the meaning ascribed to it in Clause 4.3(B)(c);

                                       6

<PAGE>

     "QUALIFIED IPO" means a fully underwritten IPO on the main board of The
     Stock Exchange of Hong Kong Limited, the NASDAQ National Market or another
     international stock exchange (including without limiting the generality of
     the forgoing, the Toronto Stock Exchange) approved with Majority CN
     Approval, where (a) the offering size (net of all related expenses and
     underwriting discounts and commissions) being not less than Thirty Million
     United States Dollars (US$30,000,000), (b) the total market capitalization
     of the Company or ListCo (as the case may be) immediately following the
     offering being not less than One Hundred and Twenty Million United States
     Dollars (US$120,000,000) and (c) the public float immediately following the
     offering being not less than twenty-five per cent. (25%) of the enlarged
     share capital of the Company or ListCo (as the case may be);

     "REGISTRATION RIGHTS AGREEMENT" has the meaning ascribed to it in the
     Subscription Agreement;

     "REORGANISATION" has the meaning ascribed to it in Clause 6.1(A);

     "RELATED PARTIES" means Affiliates of the Founder and a "RELATED PARTY"
     shall mean any or a specific one of the Related Parties;

     "RELATED PARTY TRANSACTION" means a transaction entered into by any Group
     Company with the Founder or any Related Party;

     "REMAINING EQUITIES HOLDER" has the meaning ascribed to it in Clause
     4.3(A);

     "REPLY NOTICE" has the meaning ascribed to it in Clause 4.3(B)(a);

     "RESERVED MATTERS" has the meaning ascribed to it in Clause 9.1;

     "SECOND COMPLETION" has the meaning ascribed to it in the Subscription
     Agreement;

     "SHARE(S)" means share(s) of any class in the capital of the Company and
     including, without limitation, the Common Share(s);

     "SHARE SWAP" has the meaning ascribed to it in Clause 6.1(A);

     "SHAREHOLDER" means a holder of any Share(s);

     "SUBSCRIPTION AGREEMENT" means a subscription agreement dated 16 November
     2005 relating to, among other things, the subscription of Convertible Notes
     by the Investors, and entered into between the Parties;

     "SUBSIDIARY" has the meaning that a company is a subsidiary of another
     company if that other company (i) Controls the composition of the board of
     directors of the first-mentioned company; (ii) Controls more than half of
     the voting power of the first-mentioned company; or (iii) holds more than
     half of the issued share capital of the first-mentioned company; and, for
     these purposes, a company shall be treated as being Controlled by another
     if that other company is able to direct its affairs and/or to Control the
     composition of its majority board of directors or equivalent management
     body;

                                       7

<PAGE>

     "TAXES" or "TAXATION" means and includes all forms of tax, levy, duty,
     charge, impost, fee, deduction or withholding of any nature imposed,
     levied, collected withheld or assessed by any Governmental Authority or
     other taxing or similar authority in any part of the world and includes any
     interest, additional tax, penalty or other charge payable or claimed in
     respect thereof;

     "TERRITORY" has the meaning ascribed to it in Clause 6.6(A)(i);

     "TRANSACTION DOCUMENTS" means all documents (including but without
     limitation to the Share Pledging Agreements (as defined in the Subscription
     Agreement), the Share Pledge Releases (as defined in the Subscription
     Agreement) and the Registration Rights Agreement) referred to or
     contemplated in this Agreement;

     "TRANSFER", "TRANSFERRING" (or any correlative term) means a sale,
     assignment, pledge, charge, mortgage, hypothecation, gift, placement in
     trust (voting or otherwise) or transfer by operation of law of, creation of
     a security interest in, or Lien on, or any other encumbering or disposal
     (directly or indirectly and whether or not voluntary), and shall include
     any transfer by will or intestate succession;

     "TRANSFER NOTICE" has the meaning ascribed to it in Clause 4.3(A);

     "TRANSFEROR" has the meaning ascribed to it in Clause 4.3(A);

     "UNCITRAL RULES" has the meaning ascribed to it in Clause 23.2;

     "UNITED STATES" or "US" means the United States of America;

     "US$" means United States dollars, the lawful currency of the United States
     of America; and

     "VALUER" has the meaning ascribed to it in Clause 4.3(E).

1.2  In this Agreement:

     (A)  the headings are inserted for convenience only and shall not affect
          the construction and interpretation of this Agreement;

     (B)  references to statutory provisions shall be construed as references to
          those provisions as amended or re-enacted or as their application is
          modified by other statutory provisions (whether before or after the
          date hereof) from time to time and shall include any provisions of
          which they are re-enactments (whether with or without modification)
          except to the extent that any amendment or modification enacted after
          the date hereof would materially affect the rights or obligations of
          any Party under this Agreement;

     (C)  all time and dates in this Agreement shall be Hong Kong time and dates
          except where otherwise stated;

     (D)  unless the context requires otherwise, words incorporating the
          singular shall include the plural and vice versa and words importing a
          gender shall include every gender;

                                       8

<PAGE>

     (E)  references herein to Clauses, Recitals and Schedules are to clauses
          and recitals of and schedules to this Agreement; and

     (F)  all Recitals and Schedules form part of this Agreement and shall have
          the same force and effect as if expressly set out in the body of this
          Agreement and any reference to this Agreement shall include such
          Recitals and Schedules.

1.3  Where any obligation in this Agreement is expressed to be undertaken or
     assumed by any Party, that obligation is to be construed as requiring the
     Party concerned to exercise all reasonable rights and powers of Control
     over the affairs of any other Person which that Party is able to reasonably
     exercise (whether directly or indirectly) in order to secure performance of
     that obligation.

2.   GUARANTEE

     The Founder guarantees to the Investors the due and timely performance by
     the Company and the PRC Subsidiaries of their respective obligations under
     this Agreement. In the event that the Company or any of the PRC
     Subsidiaries fails to comply with any of its obligations under this
     Agreement, the Founder undertakes to procure the prompt compliance by the
     Company or the relevant PRC Subsidiary (as the case may be) of such
     obligations and indemnify each of the Investors on demand from and against
     all or any losses, costs, expenses damages, claims and liabilities borne,
     suffered or incurred by the Investor arising or resulting from or in
     connection with such failure of the Company or the PRC Subsidiary (as the
     case may be) to perform its obligations set out in this Agreement.

3.   OWNERSHIP OF EQUITY SECURITIES

3.1  The Founder represents and warrants to the Investors that each of the
     following statements is true:

     (A)  the Founder owns beneficially the number and types of Equity
          Securities set out opposite his name in Schedule 1, and that he has
          not pledged, hypothecated or granted any security interest in such
          Equity Securities to any Person (except as disclosed in the Disclosure
          Letter referred to in the Subscription Agreement);

     (B)  he has not granted to any Person any right to purchase or otherwise
          acquire any interest in such Equity Securities save as contemplated by
          this Agreement, the Subscription Agreement and the Articles of
          Incorporation and By-Laws and except the ATS Arrangement;

     (C)  he owns such Equity Securities free and clear of all Encumbrance save
          as contemplated by this Agreement and the Articles of Incorporation
          and By-Laws and except the ATS Arrangement;

     (D)  he has all requisite right, power and authority and full legal
          capacity to enter into this Agreement, to carry out his obligations
          hereunder and to consummate the transactions contemplated hereby. The
          execution and delivery of this Agreement by him and the consummation
          of the transactions contemplated hereby has been duly authorized by
          all necessary

                                       9

<PAGE>

          action on his part (where applicable), and no other consent or
          approval (corporate or otherwise) on his part or the part of any other
          Person are necessary for him to enter into this Agreement or to
          consummate the transactions contemplated hereby. This Agreement has
          been duly executed and delivered by him and constitutes a legal, valid
          and binding obligation of his enforceable against him in accordance
          with its terms; and

     (E)  the execution, delivery and performance of this Agreement by him and
          the consummation of the transactions contemplated hereby, do not and
          will not (a) conflict with or violate any Applicable Law in any
          material respect; (b) result in the creation of any Encumbrance over
          any Equity Securities owned by him save as contemplated by this
          Agreement or the Subscription Agreement; or (c) result in any material
          breach of, or constitute a material default (or event which with the
          giving of notice or lapse of time, or both, would become a material
          default) under, or give to others any rights of termination,
          amendment, acceleration or cancellation pursuant to any note, bond,
          mortgage, indenture, contract, agreement, lease, license, permit,
          franchise or other instrument to which he is a party or by which any
          Equity Securities owned by him or any of his other assets may be
          bound.

4.   TRANSFERS OF EQUITY SECURITIES

4.1  Upon First Completion:

     (A)  the Founder shall not, directly or indirectly, effect or facilitate a
          Transfer of all or any portion of his Equity Securities or other
          interests in the Company before the completion of a Qualified IPO
          unless (i) the prior written consent of all Investors is obtained and
          (ii) the Founder has complied with the provisions of Clauses 4.3 to
          4.5; and

     (B)  each of the Investors shall not, directly or indirectly, effect or
          facilitate a Transfer of all or any portion of its Equity Securities
          unless it has complied with the provisions of Clause 4.6.

4.2  Any purported Transfer by any Shareholder in violation of this Clause 4 or
     the Articles of Incorporation and By-Laws shall be null and void and of no
     force and effect and the purported transferee shall have no rights or
     privileges in or with respect to the Company. The Company shall refuse to
     recognize any such Transfer and shall not reflect on its records any change
     in ownership of such Equity Securities purported to have been transferred.

4.3  Right of First Refusal

     (A)  Subject to the provisions in Clause 4.1(A), if the Founder (the
          "TRANSFEROR") wishes to Transfer all or part of his Equity Securities
          to any Person, then such Transferor shall, prior to consummating any
          such desired Transfer, give to each Investor (each, the "REMAINING
          EQUITIES HOLDER") a written notice of his intention to make such
          Transfer (the "TRANSFER NOTICE"), which shall include (i) a
          description (including the class and the total number) of the Equity
          Securities to be transferred (the "OFFERED SECURITIES"); (ii) the
          identity of the prospective transferee(s); and (iii) the proposed
          offer price per Offered Security (the "OFFER PRICE") and the

                                       10

<PAGE>

          material terms and conditions upon which the proposed Transfer is to
          be made. The Transfer Notice shall certify that the Transferor has
          received a firm offer from the prospective bona fide transferee(s) and
          in good faith believes a binding agreement for the Transfer is
          obtainable on the terms set forth in the Transfer Notice. The Transfer
          Notice shall also include a copy of any written proposal, term sheet
          or letter of intent or other agreement relating to the proposed
          Transfer. Once given, the Transfer Notice shall not be revoked save
          with the prior written consent of all Remaining Equities Holders.

     (B)  (a)  The Remaining Equities Holder(s) (an "EXERCISING PARTY") who
               wish(es) to purchase any Offered Securities shall provide the
               Transferor and the Company with a written notice (a "REPLY
               NOTICE") specifying the maximum number of any Offered Securities
               which it irrevocably commits to purchase (the "EXERCISE AMOUNT")
               within thirty (30) days of the receipt by an Exercising Party of
               the Transfer Notice. For the avoidance of doubt, such Exercising
               Party may specify in its Reply Notice an Exercise Amount higher
               or lower than its Proportionate Amount (as defined below). The
               Offered Securities shall be allocated among each Exercising Party
               in proportion to its respective Proportionate Amount (with
               rounding to avoid fractional shares), at the Offer Price and on
               the same material terms and conditions as specified in the
               Transfer Notice PROVIDED THAT in no event shall an amount greater
               than such Exercising Party's Exercise Amount be allocated to such
               Exercising Party.

          (b)  Any Offered Securities not yet allocated to the Exercising
               Parties after employing the procedures set out in Clause
               4.3(B)(a) (the "EXCESS OFFERED SECURITIES") shall be allocated,
               among all such Exercising Parties whose Exercise Amounts have not
               yet been satisfied, in proportion to each such Exercising Party's
               respective Excess Proportionate Amount (as defined below) (with
               rounding to avoid fractional shares), at the Offer Price and on
               the same material terms and conditions as specified in the
               Transfer Notice PROVIDED THAT in no event shall an Exercising
               Party be required to purchase more Equity Securities pursuant to
               this Clause 4.3(B)(b) than the Exercise Amount specified by such
               Exercising Party in its Reply Notice. The procedures set out in
               this Clause 4.3(B)(b) shall be repeatedly employed until the
               Exercise Amounts of all such Exercising Parties shall have been
               satisfied or until the total number of the Offered Securities
               shall have been fully allocated to the Exercising Parties after
               employing the procedures set out herein, whichever to occur
               first. The Remaining Equities Holder(s)'(s) right to purchase any
               Offered Securities pursuant to this Clause 4.3(B) shall be
               subject to Clause 4.3(C).

          (c)  An Exercising Party's "PROPORTIONATE AMOUNT" is equal to the
               product obtainable by multiplying (x) the total number of Offered
               Securities, by (y) a fraction, the numerator of which shall be
               the number of Common Shares Equivalents owned by such Exercising

                                       11

<PAGE>

               Party on the date of the Transfer Notice and the denominator of
               which shall be the aggregate number of all Common Shares
               Equivalents owned by all the Exercising Parties on the date of
               the Transfer Notice.

          (d)  An Exercising Party's "EXCESS PROPORTIONATE AMOUNT" is equal to
               the product obtainable by multiplying (x) the total number of
               Excess Offered Securities, by (y) a fraction, the numerator of
               which shall be the number of Common Shares Equivalents owned by
               such Exercising Party on the date of the Transfer Notice and the
               denominator of which shall be the aggregate number of Common
               Shares Equivalents owned by all the Exercising Parties on the
               date of the Transfer Notice whose Exercise Amount has not yet
               been satisfied after employing the procedures set out herein.

     (C)  If and only if not all of the Offered Securities being offered by the
          Transferor are allocated to the Remaining Equities Holder(s) after
          employing the procedures set out in Clause 4.3(B), the Transferor
          shall still be obliged to sell the Offered Securities to the
          Exercising Party(s) but may sell the remaining Offered Securities to
          the prospective transferee(s) as specified in the Transfer Notice on
          terms not more favourable to the proposed transferee than as specified
          in the Transfer Notice in accordance with and subject to the terms set
          out in Clauses 4.4 and 4.5.

     (D)  The completion of the purchase by the Exercising Parties of the
          Offered Securities pursuant to this Clause 4.3 shall occur at such a
          place and time as the parties to the transaction may agree, which
          shall not be later than forty-five (45) days after the receipt of the
          Transfer Notice by the Exercising Parties. At such closing, the
          Transferor shall deliver certificates representing the Offered
          Securities and share transfer form(s) for such Offered Securities duly
          executed by the Transferor and accompanied by all requisite transfer
          documents. The Transferor shall represent and warrant that the Offered
          Securities shall be free and clear of all Encumbrances and Liens
          (other than those imposed by this Agreement, the Registration Rights
          Agreement and the Articles of Incorporation and By-Laws) but subject
          to any registration requirements imposed by any Applicable Law and
          that he is the beneficial owner of the Offered Securities or otherwise
          has full authority to Transfer the Offered Securities. Each Exercising
          Party shall deliver at such completion to the Transferor by bank
          cheque the appropriate amount in respect of the Offered Securities to
          be purchased.

     (E)  Should the Offer Price specified in the Transfer Notice be payable in
          securities or property other than cash or evidences of indebtedness,
          the Exercising Parties shall have the right to pay for the Offer Price
          in such securities or property or in the form of cash equal in amount
          to the fair market value of such securities or property, and the
          Transferor shall liaise with the Company before the dispatch of the
          Transfer Notice to appoint an independent third party valuer (the
          "VALUER") approved by the Company to determine such fair market value
          as at the latest practicable date reasonably selected by the Valuer.
          The determination of such fair market value by the Valuer shall, in
          the absence of manifest error, be final and binding for all parties
          concerned and shall be included in the Transfer Notice together with

                                       12

<PAGE>

          a copy of the report from the Valuer stating therein the basis for
          calculating such fair market value. The costs for appointing the
          Valuer for determination of such fair market value shall be borne
          solely by the Transferor. The Valuer shall act as expert and not as an
          arbitrator.

4.4  Right of Co-Sale

     (A)  In respect of any Offered Securities proposed to be Transferred by the
          Transferor, an Investor, if it does not exercise its right of first
          refusal pursuant to Clause 4.3 shall, upon notifying the Transferor
          and the Company in writing (a "CO-SALE NOTICE") within thirty (30)
          days after the receipt by the Investor of the Transfer Notice, have
          the right to participate in the sale of such Offered Securities
          including, for the avoidance of doubt, sales effected to any
          Exercising Party pursuant to Clause 4.3, on the same terms and
          conditions as specified in the Transfer Notice. The Co-Sale Notice
          shall indicate the class and number (the "CO-SALE EXERCISE AMOUNT"),
          which shall be up to the Investor's Co-Sale Proportionate Amount (as
          defined below), of the Equity Securities (the "CO-SALE SECURITIES")
          which the Investor wishes to co-sell under its right to participate
          hereunder. To the extent that the Investor exercises its right of
          participation in accordance with the terms and conditions set forth in
          this Clause 4.4, the number of Offered Securities that the Transferor
          may sell shall be correspondingly reduced. In no event shall the
          Investor be allowed or required to sell more Equity Securities
          pursuant to this Clause 4.4 than the Co-Sale Exercise Amount as
          specified in its Co-Sale Notice.

     (B)  Notwithstanding any contrary provision in this Clause 4.4, where the
          Offered Securities consist of Common Shares and the Investor has no
          Common Shares or insufficient Common Shares to participate in the sale
          of the Offered Securities, the Investor shall be entitled to exercise
          its right of co-sale by first converting any Convertible Securities it
          then holds into Common Shares, and to sell such converted Common
          Shares in the exercise of its rights under this Clause 4.4. The
          Company agrees to make any such conversion contingent upon the
          completion of the actual sale of such converted Common Shares by the
          Investor to any prospective purchaser pursuant to this Clause 4.4.

     (C)  The Investor shall effect its participation in the co-sale by promptly
          delivering to the Company for transfer to the prospective purchaser or
          purchasers one or more certificates, share transfer form(s) for duly
          executed by the Investor (and accompanied by all requisite transfer
          documents), which represent the number of Co-Sale Securities which the
          Investor elects to sell pursuant to this Clause 4.4.

     (D)  The share certificate or certificates and all requisite transfer
          documents that the Investor delivers to the Company pursuant to Clause
          4.4(C) shall be transferred to the prospective purchaser or purchasers
          in consummation of the sale of the Equity Securities pursuant to the
          terms and conditions specified in the Transfer Notice, and the Company
          shall concurrently therewith remit to the Investor that portion of the
          sale proceeds to which the Investor is entitled by reason of its
          participation in the co-sale. To the extent that any prospective
          purchaser or purchasers refuses to purchase Common

                                       13

<PAGE>

          Shares or Convertible Notes (as the case may be) from the Investor
          exercising its rights of co-sale hereunder, the Transferor shall not
          sell to such prospective purchaser or purchasers any Equity Securities
          unless and until, simultaneously with such sale, such prospective
          purchaser or purchasers shall purchase such Common Shares or
          Convertible Notes (as the case may be) from the Investor for the same
          consideration and on terms and conditions no less favourable to the
          Investor than as described in the Transfer Notice, provided that the
          Remaining Equities Holder(s) shall not be required to make any
          representations and warranties other than those on Encumbrance-free
          title of the Co-Sale Securities.

     (E)  An Investor's "CO-SALE PROPORTIONATE AMOUNT" is equal to the product
          obtainable by multiplying (x) the total number of Offered Securities,
          by (y) a fraction, the numerator of which shall be the number of
          Common Shares Equivalents owned by such Investor on the date of the
          Transfer Notice and the denominator of which shall be the aggregate
          number of Common Shares Equivalents owned by the Transferor and all of
          the Investors who exercise the right of co-sale under this Clause 4.4,
          calculated as on the date of the Transfer Notice.

4.5  Non-Exercise of Rights

     (A)  To the extent that all of the Remaining Equities Holder(s) has
          not/have not exercised its or their rights to purchase the Offered
          Securities under Clause 4.3 or if not all of the Offered Securities
          are allocated to the Remaining Equities Holder(s) after employing the
          procedures set out in Clause 4.3(B) but, subject to compliance with
          Clause 4.4 where applicable, then upon expiration of the forty-five
          (45) days from the date of receipt of the Transfer Notice by the
          Remaining Equities Holder(s), the Transferor shall have a period of
          twenty-eight (28) days from the expiration of such forty-five (45)
          days' period in which to sell any remaining portion of the Offered
          Securities upon terms and conditions no more favourable to the
          transferee than those specified in the Transfer Notice to the
          third-party transferee(s) identified in the Transfer Notice PROVIDED
          THAT no Shareholder and no Investor may sell or Transfer its Equity
          Securities unless and until (i) such transferee(s) have delivered to
          the Company and each of the Investors a duly executed Joinder
          Agreement, (ii) such Transfer will not be subject to or will be
          exempted from the prospectus and registration requirements under the
          Ontario Securities Act and (iii) where necessary, the transferee(s)
          shall sign and deliver to the Company an Accredited Investor
          Certificate in the form set out in schedule 8 to the Subscription
          Agreement.

     (B)  In the event the Transferor does not consummate the sale or
          disposition of the Offered Securities within the twenty-eight (28)
          days' period as referred to in Clause 4.5(A), the Transferor shall not
          thereafter sell or Transfer any such Offered Securities without again
          first offering them in accordance with this Clause 4.

4.6  First Right of Negotiation

     Without prejudice to each Investor's right under Clauses 4.4 and 4.7(A), if
     an Investor wishes to Transfer all or part of its Equity Securities to any
     Person, it shall first

                                       14

<PAGE>

     negotiate with the Founder on terms of the intended Transfer before
     entering into agreement on the Transfer with any other Person. For the
     avoidance of doubt, the Investor may proceed with the Transfer to any
     Person apart from the Founder where no agreement has been reached between
     the Investor and the Founder on the intended Transfer within reasonable
     time.

4.7  Permitted Transfers

     (A)  None of the restrictions and/or requirements contained in Clauses 4.1
          to 4.6 with respect to Transfers of Equity Securities shall, subject
          to any Applicable Law, the Articles and By-Laws, apply to:

          (i)  any Transfer of Equity Securities to achieve the Share Swap or
               the Reorganisation;

          (ii) any re-purchase or redemption of Equity Securities by the Company
               as one of the Reserved Matters;

          (iii) any Transfer as part of an IPO;

          (iv) any Transfer by an Investor to any of its Affiliates;

          (v)  any Transfer by the Founder to a company or corporation which is
               wholly Controlled by the Founder; and

          (vi) any Transfer to the Executives by the Founder of Common Shares,

          Provided that such Transfer (save under paragraph (iii) above) will
          not be subject to or will be exempted from the prospectus and
          registration requirements under the Ontario Securities Act. Where
          necessary, the transferee(s) shall sign and deliver to the Company an
          Accredited Investor Certificate in the form set out in schedule 8 to
          the Subscription Agreement

     (B)  In the case of any Transfer described in Clause 4.7(A)(i), (iv) to
          (vi) (any such Transfer shall be referred to hereinafter as a
          "PERMITTED TRANSFER" and any such transferee being referred to as a
          "PERMITTED TRANSFEREE"):

          (i)  each Permitted Transferee shall have executed and delivered to
               the Company and each of the Investors, as a condition precedent
               to any such Transfer or acquisition of the Equity Securities, a
               Joinder Agreement; and

          (ii) the Permitted Transfer shall not, in the Company's reasonable
               opinion formed after consulting the relevant stock exchange,
               regulatory body and professionals, adversely affect the IPO.

     (C)  In the case of any Permitted Transfer described in Clause 4.7(A)(v),
          the Founder undertakes that:

          (i)  he shall give such representations and warranties as set out in
               Schedule 2, as a condition precedent to such Permitted Transfer;

                                       15

<PAGE>

          (ii) if the Share Pledging Agreements have not yet released at the
               material time, he shall ensure that he and the Permitted
               Transferee shall enter into share pledging agreements as pledgors
               with all the Investors as pledges in place of and on
               substantially the same terms as the Share Pledging Agreements, as
               a condition precedent to such Permitted Transfer;

          (iii) where the Permitted Transferee ceases to be wholly Controlled by
               the Founder at any time, the Founder shall ensure that the
               Permitted Transferee shall Transfer all Equity Securities then
               held by the Permitted Transfer to the Founder or another company
               or corporation wholly Controlled by the Founder; and

          (iv) he shall remain liable under the Subscription Agreement, this
               Agreement and the Transaction Documents even though the Permitted
               Transferee is to enter into a Joinder Agreement pursuant to
               Clause 4.7(B)(i), and such continuation of his liabilities shall
               be set out in that Joinder Agreement.

4.8  Legend

     Each certificate representing issued Equity Securities held as at First
     Completion or hereinafter acquired by any Person shall, subject to any
     Applicable Law, the Articles and the By-Laws and for as long as this
     Agreement remains effective, be stamped or otherwise imprinted with a
     legend in substantially the following form in the English language:

          "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 [DATE] (AS THE SAME MAY BE FURTHER AMENDED,
          MODIFIED OR SUPPLEMENTED FROM TIME TO TIME) AND ENTERED INTO, AMONG
          OTHERS, BETWEEN CANADIAN SOLAR INC. (THE "COMPANY") AND CERTAIN OTHER
          PERSONS (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 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 HOLDER OF THIS CERTIFICATE 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."

                                       16

<PAGE>

5.   PRE-EMPTIVE RIGHTS

5.1  If at anytime after First Completion, the Company proposes to issue any
     Equity Securities (after obtaining any requisite approval required as one
     of the Reserved Matters), the Company shall first offer such Equity
     Securities to each Investor in a written notice (an "ISSUANCE NOTICE")
     setting forth:

     (A)  a description of the Equity Securities to be issued, including the
          rights and powers associated therewith;

     (B)  the number of such Equity Securities to be offered (the "NEW
          SECURITIES"); and

     (C)  the price and terms upon which it proposes to offer the New
          Securities.

5.2  (A)  Each Investor who wishes to purchase any New Securities (an
          "PRE-EMPTIVE PARTY") shall provide the Company with a written notice
          (the "EXERCISE NOTICE") specifying the maximum number of New
          Securities which it irrevocably commits to purchase (the "PRE-EMPTIVE
          AMOUNT") within thirty (30) days of the receipt by such Pre-emptive
          Party of the Issuance Notice. For the avoidance of doubt, each
          Pre-emptive Party may specify in its Exercise Notice a Pre-emptive
          Amount higher or lower than its Pro-rata Amount (as defined below).
          The New Securities shall be allocated among each Pre-emptive Party
          (with rounding to avoid fractional shares) in proportion to its
          respective Pro-rata Amount PROVIDED THAT in no event shall an amount
          greater than such Pre-emptive Party's Pre-emptive Amount be allocated
          to such Pre-emptive Party.

     (B)  Any excess New Securities (the "EXCESS NEW SECURITIES") not yet
          allocated after employing the procedures set out in Clause 5.2(A)
          shall be allocated among all the Pre-emptive Parties whose Pre-emptive
          Amounts have not yet been satisfied in proportion to each such
          Pre-emptive Party's respective Excess Pro-rata Amount (as defined
          below) (with rounding to avoid fractional shares) PROVIDED THAT in no
          event shall a Pre-emptive Party be required to purchase more New
          Securities pursuant to this Clause 5.2(B) than as specified in the
          Exercise Notice of such Pre-emptive Party, and the procedures set out
          in this Clause 5.2(B) shall be repeatedly employed until the
          Pre-emptive Amounts of all Pre-emptive Parties shall have been
          satisfied or until the total number of the New Securities have been
          fully allocated to all the Pre-emptive Parties after employing the
          procedures set out in this Clause 5.2(B), whichever is to occur first.

     (C)  For the purpose of this Clause 5.2, a Pre-emptive Party's "PRO-RATA
          AMOUNT" is equal to the product obtainable by multiplying (x) the
          total number of New Securities, by (y) a fraction, the numerator of
          which shall be the number of Common Shares Equivalents owned by such
          Pre-emptive Party on the date of the Issuance Notice and the
          denominator of which shall be the aggregate number of all Common
          Shares Equivalents owned by all the Pre-emptive Parties on the date of
          the Issuance Notice.

     (D)  For the purpose of this Clause 5.2, a Pre-emptive Party's "EXCESS
          PRO-RATA AMOUNT" is equal to the product obtainable by multiplying (x)
          the total

                                       17

<PAGE>

          number of Excess New Securities, by (y) a fraction, the numerator of
          which shall be the number of Common Shares Equivalents owned by such
          Pre-emptive Party on the date of the Issuance Notice and the
          denominator of which shall be the aggregate number of all Common
          Shares Equivalents owned by all the Pre-emptive Parties on the date of
          the Issuance Notice whose Pre-emptive Amounts have not yet been
          satisfied after employing the procedures set out in this Clause 5.2.

5.3  If there remain excess New Securities after employing the procedures set
     out in Clauses 5.2(A) and 5.2(B) or if no Investor exercises its right
     under this Clause 5 to purchase New Securities within thirty (30) days
     following the receipt by all Investors of the Issuance Notice, the
     unsubscribed New Securities may be offered by the Company within sixty (60)
     days thereafter to any Person at a price not less, and upon terms no more
     favourable to such Person than specified in the Issuance Notice, PROVIDED
     THAT no New Securities shall be allotted or issued to any Person who is not
     a Party unless and until (i) such Person has delivered to the Company and
     each of the Investors a duly executed Joinder Agreement, (ii) such issuance
     will not be subject to or will be exempted from the prospectus and
     registration requirements under the Ontario Securities Act and (iii) where
     necessary, such Person shall sign and deliver to the Company an Accredited
     Investor Certificate in the form set out in schedule 8 to the Subscription
     Agreement. If the Company does not enter into an agreement for the sale of
     the unsubscribed New Securities within such sixty (60) days' period or, if
     such agreement is not completed within thirty (30) days after the execution
     thereof, the Company shall not thereafter issue or sell any such
     unsubscribed New Securities without again first offering such unsubscribed
     securities in the manner provided in Clauses 5.1 and 5.2.

5.4  Notwithstanding anything stated to the contrary herein, the pre-emptive
     rights described in this Clause 5 shall not apply to:

     (A)  Common Shares issued or offered in a Qualified IPO;

     (B)  Convertible Notes issued pursuant to the Subscription Agreement;

     (C)  Common Shares issued upon exercise of the conversion right attached to
          the Convertible Notes;

     (D)  Equity Securities issued in connection with a share split, scrip
          dividend or other similar event in which all Pre-emptive Parties are
          entitled to participate on a pro rata basis;

     (E)  options granted under the ESOP for issuance of in aggregate up to One
          Million (1,000,000) Common Shares (on the basis that the total
          expected number of Common Shares to be in issue on a Fully-Diluted
          Basis after issue of all Common Shares to ATS, pursuant to the ESOP
          and upon conversion of all Convertible Notes will be Ten Million
          (10,000,000));

     (F)  in aggregate not more than One Million (1,000,000) Common Shares
          issued under the ESOP (on the basis that the total expected number of
          Common Shares to be in issue on a Fully-Diluted Basis after issue of
          all Common Shares to ATS, pursuant to the ESOP and upon conversion of
          all Convertible Notes will be Ten Million (10,000,000)), provided that
          the

                                       18
<PAGE>

          Person to whom the Common Shares are issued shall have delivered to
          the Company and each of the Investors a duly executed Joinder
          Agreement as a condition precedent to the issuance; and

     (G)  Common Shares to be issued to ATS pursuant to the ATS Arrangement or
          otherwise, provided that ATS shall have delivered to the Company and
          each of the Investors a duly executed Joinder Agreement as a condition
          precedent to the issuance,

     Provided further that such issuance (save under paragraph (A) above) will
     not be subject to or will be exempted from the prospectus and registration
     requirements under the Ontario Securities Act. Where necessary, the Person
     to which the issuance is made shall sign and deliver to the Company an
     Accredited Investor Certificate in the form set out in schedule 8 to the
     Subscription Agreement

6.   UNDERTAKINGS AFTER FIRST COMPLETION

6.1  In respect of an IPO, all Parties agree that:

     (A)  the Group may effect a reorganisation for the purpose of achieving an
          IPO (the "REORGANISATION"), including the formation of ListCo, the
          sale of all Equity Securities to ListCo and the issue of securities by
          ListCo to the then holder of Equity Securities (the "SHARE SWAP");

     (B)  where a Reorganisation is required, the timing and the terms of the
          Reorganisation shall be subject to the approval of the Board and the
          Investors and shall provide the Investors with the rights and benefits
          which are the same in all material respects to those existing under
          this Agreement, the Subscription Agreement and the Transaction
          Documents;

     (C)  the Company and the Founder shall, jointly and severally, indemnify
          and keep indemnified the Investors against all Taxes which may be
          charged or chargeable on the Investors in respect of the share
          transfers contemplated in the Reorganisation;

     (D)  at an IPO (whether or not a Qualified IPO) each Investor shall have
          the right to sell its pro-rata number of shares (based on the
          aggregate number of shares that will be in issue in the capital of the
          Company or ListCo (as the case may be) immediately after full
          conversion of all Convertible Notes) in the IPO at the price and on
          other terms not less favourable to such Investor than to other selling
          Shareholder in the IPO or, where there is no other selling
          Shareholder, to the Company or ListCo (as the case may be);

     (E)  to the extent permitted by the relevant stock exchange and regulatory
          body, all costs and expenses (excluding underwriting discounts and
          commissions but including fees of counsel to selling shareholders and
          all other expenses related to the IPO or the registration in relation
          to the IPO) in connection with the shares of the Investor being sold
          in the IPO as referred to in Clause 6.1(D) shall be borne by the
          Company; and

     (F)  the right of the Investor referred to in Clause 6.1(D) shall be freely
          assigned together with the Transfer of any Equity Securities owned or
          held by the

                                       19

<PAGE>

          Investor.

6.2  The Company undertakes with the Investors that at any time after First
     Completion:

     (A)  the Group's consolidated debt (excluding the debt underlying the
          Convertible Notes) shall not exceed one and a half (1.5) times of the
          Group's consolidated tangible net worth; and

     (B)  the ratio of the Group's earnings before interest and tax to the
          Group's interest shall always exceed three and a half (3.5) times.

6.3  The Company shall (A) take out key person life and liability insurance
     policies for the Founder and director's liability insurance for each
     Investor's Director for such an insured amount, on such other terms and
     conditions and at such time agreed upon by the Company and the Investors
     and (B) deliver to each Investor certified copies of such policies
     forthwith after the policies have been taken out. The Company shall deliver
     to each Investor all such necessary documents in relation to any liability
     incurred by any of the persons referred to above in the course of
     discharging their duties as Directors or officers of the Company which has
     arisen or will arise a claim under such insurance policies.

6.4  The Company shall permit any representative designated by each Investor, at
     such Investor's expense, to visit and inspect any of the properties of any
     Group Company, including its books of account and records (and to make
     copies thereof and to take extracts therefrom) and facilities, and to
     discuss that Group Company's affairs, finances and accounts with its
     officers or employees, the Group's Company's auditors and legal advisers,
     or representatives of that Group Company's lenders, at such reasonable
     times with reasonable prior notice by the Investor.

6.5  Where any banking facilities made available to an Group Company by its
     bankers have been withdrawn, the Company shall, and shall procure the
     relevant Group Company to, use its best efforts to restore adequate banking
     facilities for its normal operation of business.

6.6  (A)  The Founder undertakes to the Company and the Investors that for so
          long as he has any beneficial interest in any Equity Securities either
          directly or indirectly or he remains to be a Director or an officer of
          any Group Company, and for a period of twelve (12) months after he
          ceases to be so interested or ceases to be a Director or officer of
          any Group Company (as the case may be), he will not, without the prior
          written consent of all the Investors:

          (i)  in the PRC and such other territories where the Group carries on
               its business or part thereof (the "TERRITORY") either on his own
               account or through any of his Affiliates, or in conjunction with
               or on behalf of any other person, carry on or be engaged,
               concerned or interested directly or indirectly whether as
               shareholder, director, employee, partner, adviser, agent or
               otherwise carry on any business in direct competition with the
               business or proposed business of the Group;

          (ii) either on his own account or through any of his Affiliates or in
               conjunction with or on behalf of any other person solicit or
               entice away or attempt to solicit or entice

                                       20

<PAGE>

               away from any Group Company, the custom of any person, firm,
               company or organization who is or shall at any time within twelve
               (12) months prior to such cessation have been a customer, client,
               representative, agent or correspondent of such Group Company;

          (iii) either on his own account or through any of his Affiliates or in
               conjunction with or on behalf of any other person, employ,
               solicit or entice away or attempt to employ, solicit or entice
               away from any Group Company any person who is or shall have been
               at the date of or within twelve (12) months prior to such
               cessation an officer, manager, consultant or employee of any such
               Group Company, whether or not such person would commit a breach
               of contract by reason of leaving such employment; and

          (iv) neither he nor any of his Affiliates will at any time hereafter,
               in relation to any trade, business or company use a name
               including any word used by any Group Company in its name or in
               the name of any of its products, services or their derivative
               terms, or the Chinese or English equivalent or any similar word
               in such a way as to be capable of or likely to be confused with
               the name of any Group Company or the product or services or any
               other products or services of any Group Company, and shall use
               all reasonable endeavours to procure that no such name shall be
               used by any of his/her Affiliates or otherwise by any person with
               which he/she is connected.

     (B)  Each and every obligation under Clause 6.6(A) shall be treated as a
          separate obligation and shall be severally enforceable as such and in
          the event of any obligation or obligations being or becoming
          unenforceable in whole or in part, such part or parts which are
          unenforceable shall be deleted from such clause and any such deletion
          shall not affect the enforceability of the remainder parts of such
          clause.

     (C)  The Founder, the Company and the Investors agree that having regard to
          all the circumstances, the restrictive covenants contained in Clause
          6.6(A) are reasonable and necessary for the protection of the Group
          and the Investors, and further agree that having regard to those
          circumstances the said covenants are not excessive or unduly onerous
          upon the Founder. However, it is recognized that restrictions of the
          nature in question may fail for technical reasons currently unforeseen
          and accordingly it is hereby agreed and declared that if any of such
          restrictions shall be adjudged to be void as going beyond what is
          reasonable in all the circumstances for the protection of the Group or
          the Investors, but would be valid if part of the wording thereof were
          deleted or the periods thereof reduced or the range of activities or
          area dealt with thereby reduced in scope, the said restriction shall
          apply with such modification as may be necessary to make it valid and
          effective.

     (D)  The Founder, the Company and the Investors further agree that if the
          Founder breaches any undertaking herein, damages may not be an
          adequate remedy in which case such undertaking may be enforced by
          injunction, order for specific performance or such other equitable
          release as a court of competent jurisdiction may see fit to award.

                                       21

<PAGE>

6.7  (A)  The Parties foresee that the Founder has created and may create
          Intellectual Property Rights in the course of his duties as a
          director, employee, consultant or agent of any Group Company and agree
          and acknowledge that the Founder has a special responsibility in such
          respect to further the interests of the Group.

     (B)  Any invention, production, improvement or design made or process or
          information discovered or copyright work or trade mark or trade name
          or get-up source code or any other Intellectual Property Rights
          created by the Founder during the continuance of his office of
          directorship or employment with any Group Company (whether before or
          after the date hereof or whether capable of being patented or
          registered or not and whether or not made or discovered in the course
          of his office of directorship or employment with any Group Company) in
          conjunction with or in any way affecting or relating to the business
          of any Group Company or capable of being used or adapted for use by
          any Group Company shall forthwith be disclosed to the Company and
          shall belong to and be the absolute property of such Group Company as
          the Company may direct.

     (C)  The Founder, if and whenever required to do by the Company or any of
          the Investors, shall at the expense of the Group apply or join with
          the relevant Group Company in applying for patent or other protection
          or registration for any such Intellectual Property Rights referred to
          in Clause 6.7(B) which belongs to such Group Company, and shall at the
          expense of such Group Company execute and do all instruments and
          things necessary for vesting the said patent or other protection or
          registration when obtained and all right title and interest to and in
          the same in such Group Company absolutely as the sole beneficial
          owner.

     (D)  The Founder hereby irrevocably appoints the Company to be his Attorney
          in his name and on his behalf to execute and do any such instrument or
          thing and generally to use his name for the purpose of giving to the
          Company the full benefit of this Clause 6.7.

6.8  The Founder undertakes to assume whatever liabilities or obligations
     (whether or not contingent in nature) arising from the ATS Arrangement and
     agrees to indemnify each of the Group Companies and the Investors on demand
     from and against all or any losses, costs, expenses damages, claims and
     liabilities borne, suffered or incurred by it arising or resulting from or
     in connection with the ATS Arrangement.

6.9  Where any PRC legal counsel to the Company or to any Investor are of the
     view that the Notice on Foreign Exchange Control Issues Relating to
     Financing and Reverse Investment by Domestic Residents Through Offshore
     Special Purpose Vehicles issued by the State Administration of Foreign
     Exchange of the PRC ([chinese characters]) on 21 October 2005 is applicable
     to the Founder or any other Person, the Founder shall, and shall ensure
     that the relevant Person(s) shall, complete all foreign exchange
     registration procedures in accordance with, and within the time limit set
     out in, such notice.

6.10 The Founder and the Company undertake that the summation of (i) the number
     of

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<PAGE>

     Common Shares issued or to be issued in relation to options already granted
     under the ESOP and (ii) the number of Common Shares Transferred to the
     Executives under Clause 4.7(A)(vi) shall, at any time after 31 March 2006,
     not be less than ten per cent. (10%) of the total Common Shares in the
     enlarged share capital of the Company calculated on a Fully-Diluted Basis.

7.   DIRECTORS AND MANAGEMENT

7.1  The Board shall be responsible for the overall direction, supervision and
     management of the Company and shall ensure that all Group Companies shall
     conduct their businesses in accordance with instructions of the Board. The
     Board shall not, however, take any decision which may contravene with the
     provisions set out in Clause 9 in relation to any of the Reserved Matters
     unless approval shall have been obtained in accordance with Clause 9.

7.2  Following the First Completion:

     (A)  the Board shall consist of up to seven (7) Directors including an
          Investor's Director nominated by each Investor; and

     (B)  the Board shall establish a compensation committee (the "COMPENSATION
          COMMITTEE"), the duties of which shall include, among other things,
          consider and approve the remuneration of members of the senior
          management of each Group Company and the terms of the ESOP and grant
          options under the ESOP.

7.3  At all times whilst an Investor (or any Affiliates thereof) holds any
     Equity Securities:

     (A)  it shall have the right to nominate one Person to the Board as a
          Director and as a member of any committee of the Board (including but
          not limited to the Compensation Committee) and one Person to the board
          of director of each subsidiary of the Company (each Person nominated
          by each Investor being referred in this Agreement as the "INVESTOR'S
          DIRECTOR") and, for the avoidance of doubt, each Investor's Director
          shall have the voting rights of, where applicable, any Director in any
          Board meeting, any committee of the Board in accordance with the
          By-Laws and any director in any board meeting of the relevant
          subsidiary of the Company in accordance with the constitutional
          documents of that subsidiary;

     (B)  upon the death, resignation or incapacity of an Investor's Director
          appointed in accordance with Clause 7.3(A), the Investor shall be
          entitled to appoint such Investor's Director's replacement to the
          Board, the relevant committee of the Board and the board of the
          relevant subsidiary of the Company;

     (C)  an Investor's Director may be removed from office by notice to the
          Company of the Investor and the Investor shall be entitled to appoint
          a successor to fill the resulting vacancy. The Founder hereby agrees
          to procure that an Investor's Director appointed pursuant to Clause
          7.3(A) or 10.3(B) shall not be removed from such position unless the
          relevant Investor expressly consents in writing to such removal; and

                                       23

<PAGE>

     (D)  where an Investor does not exercise its rights under Clause 7.3(A) or
          (B), it shall have be entitled to nominate a representative (each, an
          "OBSERVER") to attend, at its own expense, all meetings of the Board,
          all committees of the Board and the boards of all subsidiaries of the
          Company. An Observer is entitled to receive all notices of meetings of
          the Board, all committees of the Board and the boards of all
          subsidiaries of the Company as well as copies of all minutes, consents
          and other materials, financial or otherwise, in the same manner as
          such notices, minutes, consents and other materials are provided to,
          where applicable, any Director or any director of any subsidiary of
          the Company. An Observer shall have full rights of audience and may
          speak at all relevant meetings, but shall not be entitled to vote or
          be counted towards the quorum at any such meetings.

7.4  At least seven (7) Business Days written notice shall be given to each
     Director (and each Observer, where applicable) of any meeting of the Board,
     any committee of the Board and the board of any subsidiary of the Company.
     Any notice shall include an agenda identifying in reasonable detail the
     matters to be discussed at the meeting together with copies of any relevant
     papers to be discussed at the meeting and shall be copied to each Investor
     at the same time as it is sent to the Directors (and the Observers, where
     applicable). No amendments or additions shall be made to such agenda
     following such delivery without the unanimous consent of all the Directors.
     The Company shall procure that draft minutes of all meetings of the Board,
     all committees of the Board and the boards of all subsidiaries of the
     Company are sent to each of the Directors (and the Observers, where
     applicable) and the Investors within Fourteen (14) Business Days after the
     holding of such meetings.

7.5  Any Director (and any Observer, where applicable) may participate in any
     meeting of the Board, any committee of the Board and the board of any
     subsidiary of the Company by telephone, video conferencing or other means
     by which all participants may speak and hear each other, and any Director
     so participating shall be deemed to be present in person at such meeting.

7.6  Meetings of the Board shall be held at least once every three (3) calendar
     months and, subject to Clause 9, matters arising at any meeting of the
     Board or any committee of the Board shall be decided by a simple majority
     of votes, provided that in the case of a meeting of the Compensation
     Committee, the majority of votes shall include the favourable votes of the
     Investor's Director appointed by each Investor. The quorum necessary for
     the transaction of business at a meeting of the Board or any committee of
     the Board shall be at least three (3) Directors present in person or by
     telephone or video conference including the Investor's Director nominated
     by each Investor where the membership of the Board or the relevant
     committee comprises of such Investor's Director. If, within one hour from
     the time of the meeting specified in the notice given pursuant to Clause
     7.4, such a quorum is not present, the meeting shall stand adjourned to the
     same day in the following week at the same time and place and, if at such
     adjourned meeting, such a quorum is still not present, those Directors
     present, provided that there are at least two (2) Directors present (and,
     in the case of a meeting of the Compensation Committee only, the Investor's
     Director nominated by each Investor) shall be deemed a quorum and may,
     subject to Clause 9, transact the business for which the adjourned meeting
     was originally convened.

                                       24

<PAGE>

7.7  A resolution signed in writing by all the Directors (which resolution may
     consist of several counterparts) shall be as valid and effective as if
     passed at a duly convened meeting of the Board. A resolution signed in
     writing by all members of a committee of the Board (which resolution may
     consist of several counterparts) shall be as valid and effective as if
     passed at a duly convened meeting of that committee.

7.8  The Company, the PRC Subsidiaries and the Founder shall procure that all
     directors of all Group Companies and all members of Group's senior
     management, but excluding any Investor's Director and any non-executive
     director or any Group Company:

     (B)  shall devote substantially all their time to the Group's business; and

     (C)  shall not engage directly or indirectly in a business which competes
          with the Group's business or proposed business.

7.9  The Parties agree and acknowledge that the number of directors of each PRC
     Subsidiary shall be increased from three (3) to five (5) and the Company
     undertakes to take the appropriate actions to achieve such increase as soon
     as practical after the date hereof.

8.   MEETINGS OF SHAREHOLDERS

8.1  Meetings of Shareholder shall be held at least once every twelve (12)
     calendar months and, subject to Clause 9.

8.2  At least fourteen (14) Business Days written notice of any meeting of
     Shareholders shall be given to each Shareholder by the Board (or such
     longer period as may be required by law for any specific matters) unless
     all Shareholders agree in writing to a shorter notice period. Any notice
     shall include an agenda identifying in reasonable detail the matters to be
     discussed at the meeting together with copies of any relevant papers to be
     discussed at the meeting.

8.3  Any Shareholder may participate in any meeting of Shareholders by
     telephone, video conferencing or other means by which all participants may
     speak and hear each other, and any Shareholder so participating shall be
     deemed to be present in person at such meeting.

8.4  If, within one hour from the time of the meeting specified in the notice
     given pursuant to Clause 8.2, a quorum is still not present, the meeting
     shall stand adjourned to the same day in the following week at the same
     time and place and, if at such adjourned meeting, such a quorum is still
     not present, the Shareholder(s) present, provided that the Shareholder(s)
     present in person or by proxy together holding not less than fifty per
     cent. (50%) of all the issued and outstanding Common Shares shall be deemed
     a quorum.

8.5  A resolution in writing (in one or more counterparts) signed by all
     Shareholders for the time being entitled to receive notice of and to attend
     and vote at meetings of Shareholders shall be as valid and effective as if
     the same had been passed at a meeting of Shareholders duly convened and
     held.

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<PAGE>

9.   RESERVED MATTERS

9.1  The Company, the PRC Subsidiaries and the Founder undertake to the
     Investors, and each of the Shareholders (other than an Investor who holds
     any Common Shares) undertakes to the other Shareholders that, following the
     First Completion it/he shall exercise all its/his powers in relation to the
     Company and/or other Group Companies (including the PRC Subsidiaries) so as
     to procure that, subject to any Applicable Law, the following matters (the
     "RESERVED MATTERS") shall not be effected, and no agreement or commitment
     to engage in any such matters shall be entered into by the Company or any
     other Group Companies (with references herein to the "Company" deemed to be
     read also as a reference to all of the other Group Companies under this
     Clause 9.1), except as contemplated in this Agreement, the Subscription
     Agreement and the Transaction Documents:

     9.1.1 without the prior written consent of all Investors:

          (A)  make any loans or investments or acquire any securities (listed
               or unlisted) or grant any loans or give any credit (other than
               normal trade credit or to other Group Companies) or give any
               guarantee or indemnity (save to the Company's bankers to secure
               borrowings by the Company within the agreed limit) with an
               aggregate accumulative value at any time being in excess of Five
               Hundred Thousand United States Dollars (US$500,000);

          (B)  acquire, grant an operating right in relation to or otherwise
               dispose of any shares or securities or material part of its
               business or assets (excluding current assets) with an aggregate
               accumulative value for any financial year being in excess of One
               Million United States Dollars (US$1,000,000),

          (C)  make any material change in the nature of its business;

          (D)  enter into transactions not on a bona fide arm's length basis or
               not in the ordinary course of business;

          (E)  enter into any arrangement with any of its directors or
               shareholders or any Related Party Transactions (except pursuant
               to the ESOP);

          (F)  change its auditors or accounting reference date or accounting
               policies and bases;

          (G)  adopt or approve any business plan or annual budget;

          (H)  pass any resolution for or which would result in the winding up,
               liquidation or entering into administration or receivership of
               any Group Company; or undertake any amalgamation or merger (other
               for the purpose of a Reorganisation or a Share Swap),
               reconstruction or liquidation exercise concerning any Group
               Company; or apply for the appointment of a receiver, manager or
               judicial manager or like officer of any Group Company or any
               material assets thereof;

          (I)  create or issue any new class of shares having preference over
               the Common Shares or equity interests in issue as at the date
               hereof, or

                                       26

<PAGE>

               do any act which has the effect of diluting or reducing the
               effective shareholding of any Investor in the Company on a
               Fully-Diluted Basis, save for the purpose of implementing the
               ESOP and issue of up to 700,000 Common Shares to ATS (on the
               basis of the shareholding structure set out in Schedule 1);

          (J)  select the listing exchange or the underwriters for an IPO or
               approve the valuation and terms and conditions for the IPO,
               whether or not the IPO is a Qualified IPO;

          (K)  change its authorized or issued share capital, constitutional
               documents, or capitalize any debenture (except conversion of the
               Convertible Notes and issue of Common Shares upon exercise of
               options granted under the ESOP), or re-purchase, redeem or
               acquire any securities (except as provided in the conditions of
               the Convertible Notes);

          (L)  issue any new shares or options or other securities (including
               warrants, options or other rights to acquire shares) for
               acquisitions or otherwise (except pursuant to the ESOP);

          (M)  enter into any joint venture, partnership or consortium
               arrangement;

          (N)  enter into any contract or arrangement which involves a
               consideration or payment or receipt exceeding Five Million United
               States Dollars (US$5,000,000) to be made within any one year; or

          (O)  make any capital commitment of an amount exceeding Two Million
               United States Dollars (US$2,000,000);

     9.1.2 without the favourable votes from the Investor's Director nominated
          by each Investor in a duly convened meeting of the Board or the
          relevant committee of the Board:

          (A)  hire any Person as the chief financial officer, the chief
               operation officer and any position with vice-president titles;

          (B)  approve the terms of the ESOP, or any new employee share or stock
               option plan apart from the ESOP;

          (C)  change the terms of employment of any employee whose base salary
               is in excess of Fifty Thousand United States Dollars (US$50,000)
               per annum; or

          (D)  declare, make or pay any dividend or distribution to its
               shareholders.

9.1  Each of the Company and the PRC Subsidiaries agrees that it will exercise
     or refrain from exercising any voting rights or other powers of Control
     which it may have in or over any of its directly owned subsidiaries (each a
     "DIRECTLY OWNED SUBSIDIARY") so as to ensure that none of the actions set
     out in Clause 9.1 will be taken by any such Directly Owned Subsidiary
     without the same prior approval as required under Clause 9.1, insofar as it
     is not inconsistent with or contrary to the

                                       27

<PAGE>

     Applicable Law of the jurisdiction in which such Directly Owned Subsidiary
     is organised or the constitutional document of such Directly Owned
     Subsidiary.

9.2  Each of the Company and the PRC Subsidiaries also agrees that it will
     procure each of its Directly Owned Subsidiaries to exercise or refrain from
     exercising any voting rights or other powers of Control (whether direct or
     indirect) which it may have in or over any company which is an indirectly
     owned subsidiary of the Company (an "INDIRECTLY OWNED SUBSIDIARY") so as to
     ensure that none of the actions set out in Clause 9.1 will be taken by such
     Indirectly Owned Subsidiary without the same prior approval as required
     under Clause 9.1, insofar as it is not inconsistent with or contrary to the
     Applicable Law of the jurisdiction in which such Indirectly Owned
     Subsidiary is organised or the constitutional document of such Indirectly
     Owned Subsidiary.

10.  INFORMATION RIGHTS

10.1 Following the First Completion, the Company shall supply each of the
     Investors with:

     (A)  audited consolidated profit and loss accounts, balance sheets and
          statements of cash flow of the Group within three (3) months after the
          end of each financial year;

     (B)  monthly consolidated management accounts of the Company and individual
          company standard accounts for each other Group Company within fifteen
          (15) Business Days after each month end;

     (C)  quarterly consolidated management accounts of the Group within thirty
          (30) days after each quarter end;

     (D)  annual budgets and trading forecasts of the Group not less than thirty
          (30) days prior to the commencement of each financial year;

     (E)  all other information which an Investor may reasonably require within
          seven (7) days of the Company's receipt of a notice requesting such
          information or, where the Company provides a clear demonstration of
          best efforts if more than seven (7) days are required, within the
          deadline indicated by the Company;

     (F)  full details of any progress in relation to any IPO as soon as
          practicable;

     (G)  prompt notification of any withdrawal of banking facilities made
          available to any Group Company;

     (H)  prompt notification of any material dispute, litigation or arbitration
          and of any circumstances that would likely give rise to material
          dispute, litigation or arbitration;

     (I)  prior notification of any change in the equity holding percentages of
          the Company in any of its subsidiaries or affiliates or any joint
          venture to which the Company is a party; and

                                       28

<PAGE>

     (J)  promptly upon written request from an Investor the then current
          versions of (i) this Agreement, other related investment documents
          (including the Subscription Agreement and the Transaction Documents)
          and all documents relating to any subsequent financings by the
          Company, the management of the Company or otherwise affecting the
          Convertible Notes or Shares issued upon conversion of the Convertible
          Notes, each bearing the signatures of all parties and (ii) of the
          Articles of Incorporation and By-Laws, bearing the file stamp of the
          relevant Governmental Authority, in each case with all amendments and
          restatements.

10.2 All financial statements referred to in Clause 10.1 shall be prepared in
     accordance with IAS and presented to the Investors in English language. The
     documents to be provided under Clause 10.1 may be delivered in either hard
     copies or in Portable Document Format (PDF).

11.  PAYMENT AND TAXES

     All payments to be made to the Investors by any of the other Parties under
     this Agreement shall be made:

     (A)  in full without any Person being able to set-off any amounts due to it
          or claimed by it; and

     (B)  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 paying
          Party shall pay such additional amounts as may be necessary in order
          that the net amounts received by the relevant Investor after such
          withholding or deduction shall equal the respective amounts receivable
          by the Investor in the absence of such withholding or deduction.

12.  ANNOUNCEMENTS AND CONFIDENTIALITY

12.1 Disclosure of Terms. Each Party acknowledges that the terms and conditions
     (collectively, the "FINANCING TERMS") of the Subscription Agreement, this
     Agreement, the Transaction Documents, and all exhibits, restatements and
     amendments hereto and thereto, including their existence, shall be
     considered confidential information and shall not be disclosed by it to any
     third party except in accordance with the provisions set forth in this
     Clause 12. Each Investor agrees severally with the Company that such
     Investor will keep confidential and will not disclose or divulge, any
     information which such Investor obtains from the Company, pursuant to
     financial statements, reports, presentations, correspondence, and any other
     materials provided by the Company or its advisers to, or communications
     between the Company and such Investor, or pursuant to information rights
     granted under this Agreement or any other related documents, unless the
     information is known, or until the information becomes known, to the public
     through no fault of such Investor, or unless the Company gives its written
     consent to such Investor's release of the information.

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<PAGE>

12.2 Press Releases. Within sixty (60) days from First Completion, the Company
     may issue a press release disclosing that the Investors have invested in
     the Company provided that (a) the release does not disclose any of the
     Financing Terms, (b) the press release does not disclose the amount or
     other specific terms of the investment contemplated under the Subscription
     Agreement, this Agreement and the Transaction Documents, and (c) the final
     form of the press release is approved in advance in writing by each
     Investor mentioned therein. Investors' names and the fact that Investors
     have made an investment in the Company can be included in a reusable press
     release boilerplate statement, so long as each Investor has given the
     Company its initial approval of such boilerplate statement and the
     boilerplate statement is reproduced in exactly the form in which it was
     approved. No other announcement regarding any Investor in a press release,
     conference, advertisement, announcement, professional or trade publication,
     mass marketing materials or otherwise to the general public may be made
     without such Investor's prior written consent, which consent may be
     withheld at such Investor's sole discretion.

12.3 Permitted Disclosures. Notwithstanding anything in the foregoing to the
     contrary,

     (A)  the Company may disclose any of the Financing Terms to its current or
          bona fide prospective investors, directors, officers, employees,
          shareholders, investment bankers, lenders, accountants, auditors,
          insurers, business or financial advisors, and attorneys, in each case
          only where such persons or entities are under appropriate
          non-disclosure obligations imposed by professional ethics, law or
          otherwise;

     (B)  each Investor may, without disclosing the identities of the other
          Investors or the Financing Terms of their respective investments in
          the Company without their consent, disclose such Investor's investment
          in the Company to third parties or to the public at its sole
          discretion and, if it does so, the other Parties shall have the right
          to disclose to third parties any such information disclosed in a press
          release or other public announcement by such Investor;

     (C)  each Investor shall have the right to disclose:

          (i)  any information to such Investor's and/or its fund manager's
               and/or its Affiliate's legal counsel, fund manager auditor,
               insurer, accountant, consultant or to an officer, director,
               general partner, limited partner, its fund manager, shareholder,
               investment counsel or advisor, or employee of such Investor
               and/or its Affiliate; provided, however, that any counsel,
               auditor, insurer, accountant, consultant, officer, director,
               general partner, limited partner, fund manager, shareholder,
               investment counsel or advisor, or employee shall be advised of
               the confidential nature of the information or are under
               appropriate non-disclosure obligation imposed by professional
               ethics, law or otherwise;

          (ii) any information for fund and inter-fund reporting purposes;

          (iii) any information as required by law, government authorities,
               exchanges and/or regulatory bodies, including by the Securities
               and Futures Commission of Hong Kong, the China Securities and

                                       30

<PAGE>

               Regulatory Commission of the PRC or the Securities and Exchange
               Commission of the United States (or equivalent for other venues);
               and/or

          (iv) any information to bona fide prospective purchasers/investors of
               any share, security or other interests in the Company, and

          (v)  any information contained in press releases or public
               announcements of the Company pursuant to Clause 12.2.

     (D)  the confidentiality obligations set out in this Clause 12 do not apply
          to:

          (i)  information which was in the public domain or otherwise known to
               the relevant Party before it was furnished to it by another Party
               hereto or, after it was furnished to that Party, entered the
               public domain otherwise than as a result of (i) a breach by that
               Party of this Clause 12 or (ii) a breach of a confidentiality
               obligation by the discloser, where the breach was known to that
               Party;

          (ii) information the disclosure of which is necessary in order to
               comply with any Applicable Law, the order of any court, the
               requirements of a stock exchange or to obtain Tax clearance or
               other clearances or consents from any relevant authority; or

          (iii) information disclosed by any Director (and any Observer, where
               applicable) to his/her appointer or any of its Affiliate or
               otherwise in accordance with the foregoing provisions of this
               Clause 12.3.

12.4 Each Party agrees that an Investor's Director (and an Observer, where
     applicable) shall be entitled to report all matters concerning the Group,
     including but not limited to matters discussed at any meeting of the Board
     and of any committee of the Board, to his/her respective appointer, and
     that each the Investor's Directors (and each Observer, where applicable)
     may take advice and obtain instructions from his/her respective appointer,
     but without prejudice to the Investor's Director's obligation to act at all
     times in the best interests of the Company or the relevant subsidiary of
     the Company (where applicable).

12.5 The obligations contained in this Clause 12 shall endure, even after the
     termination of this Agreement, without limit in point of time except to the
     extent that and until any confidential information enters the public domain
     as set out above.

13.  TERMINATION OF THIS AGREEMENT

13.1 This Agreement (save for any provisions which shall come into or continue
     to be in force and effect on or after the termination of this Agreement as
     expressly stated herein, in the Subscription Agreement or the Transaction
     Documents and those provisions which are necessary for the purposes of
     interpretation of this Agreement in respect thereof) shall terminate and
     cease to have effect on the earliest of the date on which:

     (A)  a Qualified IPO is completed; or

                                       31

<PAGE>

     (B)  this Agreement is terminated by operations of law or by mutual
          agreement of all the Shareholders from time to time,

     PROVIDED THAT upon the Transfer by any Person of all Equity Securities
     owned by it in accordance with the provisions hereof, such Person shall
     automatically cease to be a Party and shall have no further rights or
     obligations hereunder

13.2 The termination of this Agreement or rights and obligations hereunder shall
     not apply to (a) the public offering or registration rights of the
     Investors under the Registration Rights Agreement, (b) the rights and
     obligations under the undertakings referred to in clause 3.1(G) of the
     Subscription Agreement and (c) the rights and obligations under Clause 12
     (where applicable).

13.3 Any termination pursuant to Clause 13.1 shall be without prejudice to any
     accrued rights and liabilities of the Parties.

14.  ENTIRE AGREEMENT

     This Agreement sets out the entire agreement and understanding between the
     Parties in respect of the transactions and matters contemplated under this
     Agreement.

15.  VARIATION

     No variation of this Agreement (or any document entered into pursuant to
     this Agreement) shall be valid unless it is in writing and signed by or on
     behalf of each of the Parties.

16.  SUCCESSORS AND ASSIGNS

     All rights, covenants and agreements of the Parties contained in this
     Agreement shall, except as otherwise provided herein, be binding upon and
     inure for the benefit of their respective successors or permitted assigns.

17.  INVALIDITY

     If any provision of this Agreement is held to be invalid or unenforceable,
     then such provision shall (so far as it is invalid or unenforceable) be
     given no effect and shall be deemed not to be included in this Agreement
     but without invalidating any of the remaining provisions of this Agreement.

18.  WAIVER

18.1 No failure on the part of any Party to exercise, and no delay on its part
     in exercising, any right or remedy under this Agreement will operate as a
     waiver thereof nor will any single or partial exercise of any right or
     remedy preclude any other or further exercise thereof or the exercise of
     any other right or remedy. The rights and remedies provided in this
     Agreement are cumulative and not exclusive of any rights or remedies
     provided by law.

18.2 Any waiver of any provision of this Agreement, and any consent by a Party
     under any provision of this Agreement, must be in writing. Any waiver or
     consent shall be effective only for that instance and for the purpose for
     which it is given.

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<PAGE>

19.  THIS AGREEMENT

     The Parties acknowledge and agree that: (a) to the extent applicable, this
     Agreement shall be deemed to be an agreement pursuant to section 108(2) of
     the Business Corporations Act (Ontario) and (b) where there is any conflict
     between the provisions of this Agreement and the Subscription Agreement on
     one hand and the Articles and By-Laws on the other hand, the provisions of
     this Agreement and the Subscription Agreement shall prevail.

20.  NOTICES

20.1 Notices or other communications required to be given by any Party pursuant
     to this Agreement shall be written in English and may be delivered
     personally or sent by registered airmail or postage prepaid, by a
     recognized courier service or by facsimile transmission to the address of
     the other Parties set forth below. The dates on which such notices shall be
     deemed to have been effectively given shall be determined as follows:

     (A)  notices given by personal delivery shall be deemed effectively given
          on the date of personal delivery;

     (B)  notices given by registered airmail or postage prepaid shall be deemed
          effectively given on the fifth (5th) Business Day after the date on
          which they were mailed (as indicated by the postmark);

     (C)  notices given by courier shall be deemed effectively given on the
          second (2nd) Business Day after they were sent by recognized courier
          service; and

     (D)  notices given by facsimile transmission shall be deemed effectively
          given immediately following confirmation of its transmission as
          recorded by the sender's facsimile machine.

          TO THE COMPANY OR ANY OF THE PRC SUBSIDIARIES:

          Address:                  [chinese characters]
                                    (Building A6, Export Processing Zone
                                    Suzhou New & Hi-Tech District
                                    Jiangsu Province 215151
                                    The People's Republic of China)
          Fax Number:               86-512-62696016
          Attention:                The President

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<PAGE>

          TO THE FUNDS:
          c/o HSBC Private Equity
          (Asia) Ltd.
          Address:                  Level 17, 1 Queen's Road Central
                                    Hong Kong
          Fax Number:               +852 2845-9992
          Attention:                The Managing Director

          TO JAFCO:
          c/o JAFCO Investment
          (Asia Pacific) Ltd
          Address:                  6 Battery Road
                                    #42-01 Singapore 049909
          Fax Number:               +65 6221-3690
          Attention:                The President

          With a copy to:
          JAFCO Investment
          (Hong Kong) Ltd.
          Address:                  30/F Two International Finance Centre
                                    8 Finance Street
                                    Central
                                    Hong Kong
          Fax Number:               +852 2536-1979
          Attention:                General Manager
          Email:                    All E-mail correspondence to
                                    vincent.chan@jafcoasia.com and
                                    sam.lai@jafcoasia.com

          TO THE FOUNDER:
          Address:                  [chinese characters]
                                    (Building A6, Export Processing Zone
                                    Suzhou New & Hi-Tech District
                                    Jiangsu Province 215151
                                    The People's Republic of China)
          Fax Number:               86-512-62696016

20.2 Any Party may at any time change its address or fax number for service of
     notices in writing delivered to the other Parties in accordance with this
     Clause 20.

21.  COUNTERPARTS

     This Agreement may be executed in any number of counterparts and by the
     Parties hereto on separate counterparts, each of which when so executed
     shall be an original, but all of which shall together constitute one and
     the same instrument.

22.  PROCESS AGENTS

22.1 Each Party hereby irrevocably appoints the Person set out opposite its name
     below as its respective agent to accept service of process in Hong Kong in
     any legal action or proceedings arising out of this Agreement, service upon
     whom shall be deemed completed whether or not such service of process is
     forwarded to such Party by its

                                       34

<PAGE>

     agent or received by it, and each Party warrants and undertakes to the
     other Parties that the agent appointed by it hereunder is a company
     incorporated in Hong Kong and the address of such agent set out below is
     its registered office address in Hong Kong:

<TABLE>
<CAPTION>
                                                      AGENT /
              PARTY                          REGISTERED OFFICE ADDRESS
              -----                          -------------------------
<S>                                <C>
For the Company, the Founder and   Key Consultant Limited
the PRC Subsidiaries:
                                   Address: Unit 710, 7th Floor, Bank of America
                                   Tower, 12 Harcourt Road, Central, Hong Kong

The Funds                          HSBC Private Equity (Asia) Ltd.

                                   Address: Level 17, 1 Queen's Road Central,
                                   Hong Kong

JAFCO                              JAFCO Investment (Hong Kong) Ltd.

                                   Address: 30/F Two International Finance
                                   Centre, 8 Finance Street, Central, Hong Kong
</TABLE>

22.2 If a process agent appointed by any Party pursuant to Clause 22.1 ceases to
     be able to act as such or to have a registered office address in Hong Kong,
     the Party which appoints such process agent shall appoint a new process
     agent, which shall be a company incorporated in Hong Kong, and to deliver
     to the other Parties, before the expiry of fourteen (14) days from the date
     on which such process agent ceases to be able to act as such or to have a
     registered office address in Hong Kong, a copy of the written acceptance of
     appointment by that new process agent.

22.3 Nothing in this Agreement shall affect the right to serve process in any
     other manner permitted by law or the right to bring proceedings in any
     other jurisdiction for the purposes of the enforcement or execution of any
     judgement or other settlement in any other courts.

23.  GOVERNING LAW

     This Agreement is governed by and shall be construed in accordance with the
     laws of Hong Kong.

24.  DISPUTE RESOLUTION

24.1 Any dispute, controversy or claim arising out of or connected with this
     Agreement or the interpretation, breach, termination or validity hereof,
     including a dispute as to the validity or existence of this Agreement,
     shall be resolved by way of arbitration upon the request of any of the
     Parties in dispute with notice to the other Parties.

24.2 Arbitration under this Clause 24 shall be conducted in Hong Kong, under the
     auspices of the Hong Kong International Arbitration Centre (the "HKIAC") by
     three arbitrators (the "ARBITRATORS") pursuant to the rules of the United
     Nations

                                       35

<PAGE>

     Commission on International Trade Law (the "UNCITRAL RULES"), save that,
     unless the parties in dispute agree otherwise:

     (A)  The three Arbitrators shall be appointed by the HKIAC; and

     (B)  the Parties agree to waive any right of appeal against the arbitration
          award.

24.3 The arbitration shall be administered by HKIAC in accordance with HKIAC's
     procedures for arbitration.

24.4 Each Party shall cooperate with the others in making full disclosure of and
     providing complete access to all information and documents requested by
     another Party in connection with such arbitration proceedings, subject only
     to any confidentiality obligations binding on the disclosing Party.

24.5 The award of the arbitral tribunal shall be final and binding upon the
     disputing parties, and a prevailing party may apply to any court of
     competent jurisdiction for enforcement of such award.

24.6 The cost of the arbitration (including the reasonable and properly incurred
     fees and expenses of the lawyers appointed by each party to the
     arbitration) shall be borne by the Party or Parties against whom the
     arbitration award is made or otherwise in accordance with the ruling of the
     arbitration tribunal.

24.7 Any Party shall be entitled to seek preliminary injunctive relief, if
     possible, from any court of competent jurisdiction pending the constitution
     of the arbitral tribunal.

25.  JAFCO'S RIGHTS

     All Parties acknowledge and agree that any rights of JAFCO under this
     Agreement may, without prejudice to the rights of JAFCO to exercise any
     such rights, be exercised by JAFCO Investment (Asia Pacific) Ltd. ("JIAP")
     or any other fund manager of JAFCO or their nominees (each, a "JAFCO
     MANAGER"), unless JAFCO has (a) given notice to the other Parties that any
     such rights cannot be exercised by JIAP or a JAFCO Manager; and (b) not
     given notice to the other Parties that such notice given under paragraph
     (a) above has been revoked.

IN WITNESS WHEREOF this Agreement has been executed by the Parties the day and
year first before written.

                                       36

<PAGE>

                                   SCHEDULE 1

                           PARTICULARS OF THE COMPANY

NAME:                         Canadian Solar Inc.
DATE OF INCORPORATION:        22 October 2001
PLACE OF INCORPORATION:       Province of Ontario, Canada
REGISTERED OFFICE:            4056 Jefton Crescent. Mississauga, Ontario, Canada
                              L5L 1Z3
DIRECTORS:                    QU Xiao Hua
ISSUED CAPITAL (AS OF THE     5,668,421 Common Shares with no nominal or par
DATE HEREOF):                 value (subdivided from 1,000,000 Common Shares;
                              subject to filing of the Articles with the
                              relevant Governmental Authority in Canada)

<TABLE>
<CAPTION>
SHAREHOLDERS AS AT THE DATE
HEREOF:                       SHAREHOLDER   NO. OF EQUITY SECURITIES HELD
---------------------------   -----------   -----------------------------
<S>                           <C>           <C>
                              QU Xiao Hua   5,668,421 Common Shares
</TABLE>

                                       37

<PAGE>

                                   SCHEDULE 2

         REPRESENTATIONS AND WARRANTIES REFERRED TO IN CLAUSE 4.7(C)(I)

The Founder warrants to the Investors as follows in relation to the company /
corporation referred to in Clause 4.7(A)(v) (the "VEHICLE"):

1.   DUE INCORPORATION

     The Vehicle which is a corporation or corporate body has been duly
     incorporated and is validly existing under the laws of its place of
     incorporation and is not in receivership or liquidation, has not taken any
     steps to enter into liquidation and no petition has been presented for its
     winding up and there are no valid and justifiable grounds on which a
     petition or application could be based for the winding up or appointment of
     a receiver thereof.

2.   COMPLIANCE

2.1  The Vehicle has duly obtained all necessary corporate authorisations (where
     applicable) and all other applicable governmental, statutory, regulatory or
     other consents, licences, waivers or exemptions required to empower it to
     enter into and to perform its obligations under the Joinder Agreement, the
     Investment Agreement and the Transaction Documents (as defined in the
     Investment Agreement) (where applicable). The Joinder Agreement will, upon
     execution be, duly executed and delivered by the Vehicle and the Founder,
     and constitute valid and binding obligations of the Vehicle and the Founder
     enforceable in accordance with their respective terms.

2.2  The execution and performance of the transactions contemplated by the
     Joinder Agreement, the Investment Agreement and the Transaction Documents
     and compliance with their provisions by the Vehicle will not violate any
     provision of law or conflict with or result in a breach of any of the
     terms, conditions or provisions of, or if applicable, constitute a default
     under the Vehicle's constitutional documents, or any indenture, lease,
     agreement or other instrument to which the Vehicle or the Founder is a
     party or by which he/it or any of his/its properties are bound or any
     judgement, decree, order, statute, rule or regulation applicable to the
     Vehicle or the Founder.

3.   SHAREHOLDING AND SUBSIDIARIES

3.1  Shareholding

     (A)  All shares in the capital of the Vehicle issued have been fully paid
          up and held and owned by the Founder.

     (B)  There is no, nor is there any legally valid agreement or arrangement
          to create any, pledge, lien, charge, encumbrance, rights of
          pre-emption or other equities or third party rights of any nature
          whatsoever on, over or affecting any of the shares in the capital of
          the Vehicle and no claim has been made by any Person to be entitled to
          any of the foregoing.

     (C)  There are no legally valid agreements or arrangement in force which
          call for the present or future issue or allotment of, or grant to any
          Person the right

                                       38

<PAGE>

          (whether conditional or otherwise) to call for the issue, allotment or
          transfer of any shares of the Vehicle.

3.2  Subsidiaries

     The Vehicle does not have and has never had any subsidiary other than the
     Group Companies. Save for the Group Companies, the Vehicle is not the legal
     or beneficial owner of any share or equity interests in any Person.

                                       39

<PAGE>

The Common Seal of                               )
CANADIAN SOLAR INC.                              )

was affixed hereto                               ) /s/
                                                   -----------------------------

in the presence of:-                             ) /s/
                                                   -----------------------------

SIGNED by                                        )
for and on behalf of                             )

HSBC HAV2 (III) LIMITED                          ) /s/
                                                   -----------------------------
in the presence of:-                             )

SIGNED by                                        )
for and on behalf of                             )

JAFCO ASIA TECHNOLOGY FUND II                    ) /s/
                                                   -----------------------------
in the presence of:-                             )

SIGNED, SEALED and DELIVERED                     )
as a Deed by                                     )

QU XIAO HUA                                      ) /s/
                                                   -----------------------------

in the presence of:-                             ) /s/
                                                   -----------------------------

The Seal of                                      )
[chinese characters]                             )
(CSI SOLARTRONICS CO., LTD.)                     )

was affixed hereto                               ) /s/
                                                   -----------------------------

in the presence of:-                             ) /s/
                                                   -----------------------------
[Company seal of CSI Solartronics Co., Ltd.]

The Seal of                                      )
[chinese characters]                             )
(CSI SOLAR TECHNOLOGIES INC.)                    )

was affixed hereto                               ) /s/
                                                   -----------------------------

in the presence of:-                             ) /s/
                                                   -----------------------------
[Company seal of CSI Solar Technologies Inc.]

                                       40

<PAGE>

The Seal of                                      )
[chinese characters]                             )
(CSI SOLAR MANUFACTURING INC.)                   )

was affixed hereto                               ) /s/
                                                   -----------------------------

in the presence of:-                             ) /s/
                                                   -----------------------------
[Company seal of CSI Solar Manufacturing Inc.]

                                       41

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