EXHIBIT 4.1  







THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED, SOLD OR
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR TRANSFERRED PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE LAWS.  



THE TRANSFER OF THIS
WARRANT IS 

RESTRICTED AS DESCRIBED HEREIN. 



QSound Labs, Inc. 



Warrant for the
Purchase of Shares of Common Stock, 



	
No.  KB-2	
75,000 Shares  







        THIS
CERTIFIES that, for value received, KAUFMAN BROS., L.P., 800 Third Avenue — 25th
Floor, New York, New York 10022 (the “Holder”), is entitled to subscribe for and
purchase from QSound Labs, Inc., an Alberta, Canada corporation (the “Company”),
upon the terms and conditions set forth herein, at any time or from time to time after
December 17, 2004, and before 5:00 P.M. on December 17, 2009, New York time (the
“Exercise Period”), 75,000 shares of the Company’s Common Stock, par value
$0.01 per share (“Common Stock”), at a price of $7.77 USD per share (the
“Exercise Price”). As used herein the term “this Warrant” shall mean
and include this Warrant and any Common Stock or Warrants hereafter issued as a
consequence of the exercise or transfer of this Warrant in whole or in part. This Warrant
may not be sold, transferred, assigned or hypothecated except that it may be transferred,
in whole or in part, to (i) one or more officers or partners of the Holder (or the
officers or partners of any such partner); (ii) a successor to the Holder, or the officers
or partners of such successor; (iii) a purchaser of substantially all of the assets of the
Holder; or (iv) by operation of law; and the term the “Holder” as used herein
shall include any transferee to whom this Warrant has been transferred in accordance with
the above. 



        The
number of shares of Common Stock issuable upon exercise of the Warrant (the “Warrant
Shares”) and the Exercise Price may be adjusted from time to time as hereinafter set
forth. 




        
          
          1.     This
Warrant may be exercised during the Exercise Period, as to the whole or any
          lesser number of whole Warrant Shares, by the surrender of this Warrant (with
          the election at the end hereof duly executed) to the Company at its office at
          400 – 3115 12th Street  






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NE, Calgary, AB T2E 7J2, or at such
other place as is designated in writing by the Company, together with a certified or bank
cashier’s check payable to the order of the Company in an amount equal to the
Exercise Price multiplied by the number of Warrant Shares for which this Warrant is being
exercised (the “Stock Purchase Price”). 



	  	
          
          2.      (a)
    If, at any time when the Holder wishes to exercise this Warrant in whole or
               in part, this Warrant and the Warrant Shares are not the subject of an
effective                registration statement filed with the SEC, then, in lieu of the
payment of the                Stock Purchase Price, the Holder shall have the right (but
not the obligation),                to require the Company to convert this Warrant, in
whole or in part, into shares                of Common Stock (the “Conversion Right”)
as provided for in this                Section 2. Upon exercise of the Conversion Right,
the Company shall deliver to                the Holder (without payment by the Holder of
any of the Stock Purchase Price)                that number of shares of Common Stock
(the “Conversion Shares”) equal                to the quotient obtained by
dividing (x) the value of this Warrant (or portion                thereof as to which the
Conversion Right is being exercised if the Conversion                Right is being
exercised in part) at the time the Conversion Right is exercised
               (determined by subtracting the aggregate Stock Purchase Price of the
shares of                Common Stock as to which the Conversion Right is being exercised
in effect                immediately prior to the exercise of the Conversion Right from
the aggregate                Current Market Price (as defined in Section 6(e) hereof) of
the shares of Common                Stock as to which the Conversion Right is being
exercised) by (y) the Current                Market Price of one share of Common Stock
immediately prior to the exercise of                the Conversion Right.  







	  	
                   (b)
    The Conversion Right provided under this Section 2 may be exercised in whole
or                in part and at any time and from time to time while this Warrant
remains                outstanding. In order to exercise the Conversion Right, the Holder
shall                surrender to the Company, at its offices, this Warrant with the
Notice of                Conversion at the end hereof duly executed. The presentation and
surrender shall                be deemed a waiver of the Holder’s obligation to pay
all or any portion of                the aggregate purchase price payable for the shares
of Common Stock as to which                such Conversion Right is being exercised. This
Warrant (or so much thereof as                shall have been surrendered for conversion)
shall be deemed to have been                converted immediately prior to the close of
business on the day of surrender of                such Warrant for conversion in
accordance with the foregoing provisions.  








        
          
          3.     Upon
each exercise of the Holder’s rights to purchase Warrant Shares or
          Conversion Shares, the Holder shall be deemed to be the holder of record of the
          Warrant Shares or Conversion Shares issuable upon such exercise or conversion,
          notwithstanding that the transfer books of the Company shall then be closed or
          certificates representing such Warrant Shares or Conversion Shares shall not
          then have been actually delivered to the Holder. As soon as practicable after
          each such exercise or conversion of this Warrant, the Company shall issue and
          deliver to the Holder a certificate or certificates for the Warrant Shares or
          Conversion Shares issuable upon such exercise or conversion, registered in the
          name of the Holder or its designee. If this Warrant should be exercised or
          converted in part only, the Company shall, upon surrender of this Warrant for
          cancellation, execute and deliver a new Warrant evidencing  




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the right of the Holder to purchase
the balance of the Warrant Shares (or portions thereof) subject to purchase hereunder. 




        
          
          4.                    Any
Warrant issued upon the transfer or exercise or conversion in part of this
               Warrant shall be numbered and shall be registered in a Warrant Register as
they                are issued. The Company shall be entitled to treat the registered
holder of any                Warrant on the Warrant Register as the owner in fact thereof
for all purposes                and shall not be bound to recognize any equitable or
other claim to or interest                in such Warrant on the part of any other
person, and shall not be liable for any                registration or transfer of
Warrants which are registered or to be registered in                the name of a
fiduciary or the nominee of a fiduciary unless made with the                actual
knowledge that a fiduciary or nominee is committing a breach of trust in
               requesting such registration or transfer, or with the knowledge of such
facts                that its participation therein amounts to bad faith. This Warrant
shall be                transferable only on the books of the Company upon delivery
thereof duly                endorsed by the Holder or by his duly authorized attorney or
representative, or                accompanied by proper evidence of succession,
assignment, or authority to                transfer. In all cases of transfer by an
attorney, executor, administrator,                guardian, or other legal
representative, duly authenticated evidence of his or                its authority shall
be produced. Upon any registration of transfer, the Company                shall deliver
a new Warrant or Warrants to the person entitled thereto. This                Warrant may
be exchanged, at the option of the Holder thereof, for another                Warrant, or
other Warrants of different denominations, of like tenor and                representing
in the aggregate the right to purchase a like number of Warrant                Shares (or
portions thereof), upon surrender to the Company or its duly                authorized
agent. Notwithstanding the foregoing, the Company shall have no                obligation
to cause Warrants to be transferred on its books to any person if, in                the
opinion of counsel to the Company, such transfer does not comply with the
               provisions of the Securities Act of 1933, as amended (the “Act”),
and                the rules and regulations thereunder.  




        
          
          5.                    The
Company shall at all times reserve and keep available out of its authorized
               and unissued Common Stock, solely for the purpose of providing for the
exercise                of the rights to purchase all Warrant Shares and/or Conversion
Shares granted                pursuant to this Warrant, such number of shares of Common
Stock as shall, from                time to time, be sufficient therefor. The Company
covenants that all shares of                Common Stock issuable upon exercise of this
Warrant, upon receipt by the Company                of the full Exercise Price therefor,
and all shares of Common Stock issuable                upon conversion of this Warrant,
shall be validly issued, fully paid,                non-assessable, and free of
preemptive rights.  



	  	
                    6.      
(a)    
In case the Company shall at any time after the date the Warrants were first
               issued (i) declare a dividend on the outstanding Common Stock payable in
shares                of its capital stock, (ii) subdivide the outstanding Common Stock,
(iii) combine                the outstanding Common Stock into a smaller number of
shares, or (iv) issue any                shares of its capital stock by reclassification
of the Common Stock (including                any such reclassification in connection
with a consolidation or merger in which                the Company is the continuing
corporation), then, in each case, the Exercise                Price, and the number and
kind of securities issuable upon exercise or                conversion of this Warrant,
in effect at the time of the record date for such                dividend or of the
effective date of such subdivision, combination, or                reclassification,
shall be proportionately adjusted so that the Holder  









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after
such time shall be entitled to receive the aggregate number and kind of shares which, if
such Warrant had been exercised or converted immediately prior to such time, he would have
owned upon such exercise or conversion and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification. Such adjustment shall be made
successively whenever any event listed above shall occur. 






	  	
                   
(b)    In
case the Company shall issue or fix a record date for the issuance to all
               holders of Common Stock of rights, options, or warrants to subscribe for
or                purchase Common Stock (or securities convertible into or exchangeable
for Common                Stock) at a price per share (or having a conversion or exchange
price per share,                if a security convertible into or exchangeable for Common
Stock) less than the                Current Market Price per share of Common Stock on
such record date, then, in                each case, the Exercise Price shall be adjusted
by multiplying the Exercise                Price in effect immediately prior to such
record date by a fraction, the                numerator of which shall be the number of
shares of Common Stock outstanding on                such record date plus the number of
shares of Common Stock which the aggregate                offering price of the total
number of shares of Common Stock so to be offered                (or the aggregate
initial conversion or exchange price of the convertible or                exchangeable
securities so to be offered) would purchase at such Current Market                Price
and the denominator of which shall be the number of shares of Common Stock
               outstanding on such record date plus the number of additional shares of
Common                Stock to be offered for subscription or purchase (or into which the
convertible                or exchangeable securities so to be offered are initially
convertible or                exchangeable). Such adjustment shall become effective at
the close of business                on such record date; provided, however,
that, to the extent the                shares of Common Stock (or securities convertible
into or exchangeable for                shares of Common Stock) are not delivered, the
Exercise Price shall be                readjusted after the expiration of such rights,
options, or warrants (but only                with respect to Warrants exercised after
such expiration), to the Exercise Price                which would then be in effect had
the adjustments made upon the issuance of such                rights, options, or
warrants been made upon the basis of delivery of only the                number of shares
of Common Stock (or securities convertible into or exchangeable                for shares
of Common Stock) actually issued. In case any subscription price may                be
paid in a consideration part or all of which shall be in a form other than
               cash, the value of such consideration shall be as determined in good faith
by                the board of directors of the Company, whose determination shall be
conclusive                absent manifest error. Shares of Common Stock owned by or held
for the account                of the Company or any majority-owned subsidiary shall not
be deemed outstanding                for the purpose of any such computation.  







	  	
                   
(c)    
case the Company shall distribute to all holders of Common Stock (including
               any such distribution made to the stockholders of the Company in
connection with                a consolidation or merger in which the Company is the
continuing corporation)                evidences of its indebtedness or assets (other
than cash dividends or                distributions and dividends payable in shares of
Common Stock), or rights,                options, or warrants to subscribe for or
purchase Common Stock, or securities                convertible into or exchangeable for
shares of Common Stock (excluding those                with respect to the issuance  











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of
which an adjustment of the Exercise Price is provided pursuant to Section 6(b) hereof),
then, in each case, the Exercise Price shall be adjusted by multiplying the Exercise Price
in effect immediately prior to the record date for the determination of stockholders
entitled to receive such distribution by a fraction, the numerator of which shall be the
Current Market Price per share of Common Stock on such record date, less the fair market
value (as determined in good faith by the board of directors of the Company, whose
determination shall be conclusive absent manifest error) of the portion of the evidences
of indebtedness or assets so to be distributed, or of such rights, options, or warrants or
convertible or exchangeable securities, applicable to one share, and the denominator of
which shall be such Current Market Price per share of Common Stock. Such adjustment shall
be made whenever any such distribution is made, and shall become effective on the record
date for the determination of stockholders entitled to receive such distribution. 






	  	
                   
(e)    For
the purpose of any computation under this Section 6, the Current Market
               Price per share of Common Stock on any date shall be deemed to be the
average of                the daily closing prices for the 30 consecutive trading days
immediately                preceding the date in question. The closing price for each day
shall be the last                reported sales price regular way or, in case no such
reported sale takes place                on such day, the closing bid price regular way,
in either case on the principal                national securities exchange (including,
for purposes hereof, the NASDAQ                National Market System) on which the
Common Stock is listed or admitted to                trading or, if the Common Stock is
not listed or admitted to trading on any                national securities exchange, the
highest reported bid price for the Common                Stock as furnished by the
National Association of Securities Dealers, Inc.                through NASDAQ or a
similar organization if NASDAQ is no longer reporting such                information. If
on any such date the Common Stock is not listed or admitted to                trading on
any national securities exchange and is not quoted by NASDAQ or any
               similar organization, the fair value of a share of Common Stock on such
date, as                determined in good faith by the board of directors of the
Company, whose                determination shall be conclusive absent manifest error,
shall be used.  







	  	
                   
(f)    No
adjustment in the Exercise Price shall be required if such adjustment is less
               than $.05; provided, however, that any adjustments which by
reason                of this Section 6 are not required to be made shall be carried
forward and taken                into account in any subsequent adjustment. All
calculations under this Section 6                shall be made to the nearest cent or to
the nearest one-thousandth of a share,                as the case may be.  







	  	
                   
(g)    In
any case in which this Section 6 shall require that an adjustment in the
               Exercise Price be made effective as of a record date for a specified
event, the                Company may elect to defer, until the occurrence of such event,
issuing to the                Holder, if the Holder exercised or converted this Warrant
after such record                date, the shares of Common Stock, if any, issuable upon
such exercise or                conversion over and above the shares of Common Stock, if
any, issuable upon such                exercise or conversion  










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on
the basis of the Exercise Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to the Holder a due bill or other
appropriate instrument evidencing the Holder’s right to receive such additional
shares upon the occurrence of the event requiring such adjustment. 






	  	
                   
(h)    Upon
each adjustment of the Exercise Price as a result of the calculations made
               in Sections 6(b), 6(c), or 6(d) hereof, this Warrant shall thereafter
evidence                the right to purchase, at the adjusted Exercise Price, that
number of shares                (calculated to the nearest thousandth) obtained by
dividing (i) the product                obtained by multiplying the number of shares
purchasable upon exercise of this                Warrant prior to adjustment of the
number of shares by the Exercise Price in                effect prior to adjustment of
the Exercise Price, by (ii) the Exercise Price in                effect after such
adjustment of the Exercise Price.  







	  	
                   
(i)    Whenever
there shall be an adjustment as provided in this Section 6, the Company
               shall promptly cause written notice thereof to be sent by registered mail,
               postage prepaid, to the Holder, at its address as it shall appear in the
Warrant                Register, which notice shall be accompanied by an officer’s
certificate                setting forth the number of Warrant Shares purchasable upon
the exercise of this                Warrant and the Exercise Price after such adjustment
and setting forth a brief                statement of the facts requiring such adjustment
and the computation thereof,                which officer’s certificate shall be
conclusive evidence of the correctness                of any such adjustment absent
manifest error.  







	  	
                   
(j)    The
Company shall not be required to issue fractions of shares of Common Stock
               or other capital stock of the Company upon the exercise or conversion of
this                Warrant. If any fraction of a share would be issuable on the exercise
or                conversion of this Warrant (or specified portions thereof), the Company
shall                purchase such fraction for an amount in cash equal to the same
fraction of the                Current Market Price of such share of Common Stock on the
date of exercise or                conversion of this Warrant.  







	  	
                    
7.                     (a)    
    In case of any consolidation with or merger of the Company with
or into                another corporation (other than a merger or consolidation in which
the Company                is the surviving or continuing corporation), or in case of any
sale, lease, or                conveyance to another corporation of the property and
assets of any nature of                the Company as an entirety or substantially as an
entirety, such successor,                leasing, or purchasing corporation, as the case
may be, shall (i) execute with                the Holder an agreement providing that the
Holder shall have the right                thereafter to receive upon exercise or
conversion of this Warrant solely the                kind and amount of shares of stock
and other securities, property, cash, or any                combination thereof
receivable upon such consolidation, merger, sale, lease, or                conveyance by
a holder of the number of shares of Common Stock for which this                Warrant
might have been exercised or converted immediately prior to such
               consolidation, merger, sale, lease, or conveyance, and (ii) make effective
               provision in its certificate of incorporation or otherwise, if necessary,
to  










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effect
such agreement. Such agreement shall provide for adjustments which shall be as nearly
equivalent as practicable to the adjustments in Section 6. 






	  	
                   
(b)    In
case of any reclassification or change of the shares of Common Stock issuable
               upon exercise or conversion of this Warrant (other than a change in par
value or                from no par value to a specified par value, or as a result of a
subdivision or                combination, but including any change in the shares into
two or more classes or                series of shares), or in case of any consolidation
or merger of another                corporation into the Company in which the Company is
the continuing corporation                and in which there is a reclassification or
change (including a change to the                right to receive cash or other property)
of the shares of Common Stock (other                than a change in par value, or from
no par value to a specified par value, or as                a result of a subdivision or
combination, but including any change in the shares                into two or more
classes or series of shares), the Holder shall have the right                thereafter
to receive upon exercise or conversion of this Warrant solely the                kind and
amount of shares of stock and other securities, property, cash, or any
               combination thereof receivable upon such reclassification, change,
               consolidation, or merger by a holder of the number of shares of Common
Stock for                which this Warrant might have been exercised or converted
immediately prior to                such reclassification, change, consolidation, or
merger. Thereafter, appropriate                provision shall be made for adjustments
which shall be as nearly equivalent as                practicable to the adjustments in
Section 6.  







	  	
                   
(c)    The
above provisions of this Section 7 shall similarly apply to successive
               reclassifications and changes of shares of Common Stock and to successive
               consolidations, mergers, sales, leases, or conveyances.  







     
        
          
          8.     
          In case at any time the Company shall propose 



	  	
                   
(a)    to
pay any dividend or make any distribution on shares of Common Stock in shares
               of Common Stock or make any other distribution (other than regularly
scheduled                cash dividends which are not in a greater amount per share than
the most recent                such cash dividend) to all holders of Common Stock; or  







	  	
                   (b)                   to
issue any rights, warrants, or other securities to all holders of Common
               Stock entitling them to purchase any additional shares of Common Stock or
any                other rights, warrants, or other securities; or  







	  	
                   (c)    to
effect any reclassification or change of outstanding shares of Common Stock,
               or any consolidation, merger, sale, lease, or conveyance of property,
described                in Section 7; or  







          		
                   (d)    
               to effect any liquidation, dissolution, or winding-up of the Company; or 



               






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                   (e)    
to
take any other action which would cause an adjustment to the Exercise Price;  







then, and in any one or more of such
cases, the Company shall give written notice thereof, by registered mail, postage prepaid,
to the Holder at the Holder’s address as it shall appear in the Warrant Register,
mailed at least 15 days prior to (i) the date as of which the holders of record of shares
of Common Stock to be entitled to receive any such dividend, distribution, rights,
warrants, or other securities are to be determined, (ii) the date on which any such
reclassification, change of outstanding shares of Common Stock, consolidation, merger,
sale, lease, conveyance of property, liquidation, dissolution, or winding-up is expected
to become effective, and the date as of which it is expected that holders of record of
shares of Common Stock shall be entitled to exchange their shares for securities or other
property, if any, deliverable upon such reclassification, change of outstanding shares,
consolidation, merger, sale, lease, conveyance of property, liquidation, dissolution, or
winding-up, or (iii) the date of such action which would require an adjustment to the
Exercise Price. 



        
          
          9.     The
issuance of any shares or other securities upon the exercise or conversion
               of this Warrant, and the delivery of certificates or other instruments
               representing such shares or other securities, shall be made without charge
to                the Holder for any tax or other charge in respect of such issuance. The
Company                shall not, however, be required to pay any tax which may be
payable in respect                of any transfer involved in the issue and delivery of
any certificate in a name                other than that of the Holder and the Company
shall not be required to issue or                deliver any such certificate unless and
until the person or persons requesting                the issue thereof shall have paid
to the Company the amount of such tax or shall                have established to the
satisfaction of the Company that such tax has been paid.  



	  	
          
                     10.      (a)
If, at any time prior to December 17, 2009, the Company shall file a
               registration statement (other than on Form S-4, Form S-8, or any successor
form)                with the Securities and Exchange Commission (the “Commission”)
while                any Warrant or Warrant Shares are outstanding, the Company shall
give the Holder                at least 45 days prior written notice of the filing of
such registration                statement. If requested by the Holder in writing within
30 days after receipt of                any such notice, the Company shall, at the Company’s
sole expense (other                than the fees and disbursements of counsel for the
Holder and the underwriting                discounts, if any, payable in respect of the
Warrant or Warrant Shares sold by                the Holder), register or qualify all or,
at the Holders’ option, any                portion of the Warrant or Warrant Shares
of the Holder concurrently with the                registration of such other securities,
all to the extent requisite to permit the                public offering and sale of the
Warrant or Warrant Shares through the facilities                of all appropriate
securities exchanges and the over-the-counter market, and                will use its
reasonable commercial efforts through its officers, directors,                auditors,
and counsel to cause such registration statement to become effective                as
promptly as practicable. Notwithstanding the foregoing, if the managing
               underwriter of any such offering shall advise the Company in writing that,
in                its opinion, the distribution of all or a portion of the Warrant or
Warrant                Shares requested to be included in the registration concurrently
with the                securities being registered by the Company would materially
adversely affect  










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the
distribution of such securities by the Company for its own account, then the Holder shall
delay the offering and sale of Warrant or Warrant Shares (or the portions thereof so
designated by such managing underwriter) for such period, not to exceed 120 days (the
“Delay Period”), as the managing underwriter shall request. As used herein,
“Warrant or Warrant Shares” shall mean the Warrants and the Warrant Shares and
the Conversion Shares which, in each case, have not been previously sold pursuant to a
registration statement or Rule 144 promulgated under the Act. 






	  	
                   
(c)    In
the event of a registration pursuant to the provisions of this Section 10,
               the Company shall, at the expense of the Holder, use its reasonable
commercial                efforts to cause the Warrant or Warrant Shares so registered to
be registered or                qualified for sale under the securities or blue sky laws
of such jurisdictions                as the Holder may reasonably request; provided,
however, that the                Company shall not be required to qualify to do
business in any state by reason                of this Section 10(c) in which it is not
otherwise required to qualify to do                business.  







	  	
                   
(d)    The
Company shall keep effective any registration or qualification contemplated
               by this Section 10 and shall from time to time amend or supplement each
               applicable registration statement, preliminary prospectus, final
prospectus,                application, document, and communication for such period of
time as shall be                required to permit the Holder to complete the offer and
sale of the Warrant or                Warrant Shares covered thereby. The Company shall
in no event be required to                keep any such registration or qualification in
effect for a period in excess of                nine months from the date on which the
Holder is first free to sell such Warrant                or Warrant Shares; provided,
however, that, if the Company is                required to keep any such
registration or qualification in effect with respect                to securities other
than the Warrant or Warrant Shares beyond such period, the                Company shall
keep such registration or qualification in effect as it relates to                the
Warrant or Warrant Shares for so long as such registration or qualification
               remains or is required to remain in effect in respect of such other
securities.  







	  	
                   
(e)    In
the event of a registration pursuant to the provisions of this Section 10,
               the Company shall furnish to the Holder such number of copies of the
               registration statement and of each amendment and supplement thereto (in
each                case, including all exhibits), such reasonable number of copies of
each                prospectus contained in such registration statement and each
supplement or                amendment thereto (including each preliminary prospectus),
all of which shall                conform to the requirements of the Act and the rules
and regulations thereunder,                and such other documents, as the Holder may
reasonably request to facilitate the                disposition of the Warrant or Warrant
Shares included in such registration.  







	  	
                   
(f)    In
the event of a registration pursuant to the provisions of this Section 10,
               the Company shall furnish the Holder so registered with an opinion of its
               in-house counsel (or if the Company does not have in-house counsel then
counsel  










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reasonably
acceptable to the Holder) to the effect that (i) the registration statement has become
effective under the Act and no order suspending the effectiveness of the registration
statement, preventing or suspending the use of the registration statement, any preliminary
prospectus, any final prospectus, or any amendment or supplement thereto has been issued,
nor has the Commission or any securities or blue sky authority of any jurisdiction
instituted or threatened to institute any proceedings with respect to such an order, (ii)
the registration statement and each prospectus forming a part thereof (including each
preliminary prospectus), and any amendment or supplement thereto, complies as to form with
the Act and the rules and regulations thereunder, and (iii) such counsel has no knowledge
of any material misstatement or omission in such registration statement or any prospectus,
as amended or supplemented. Such opinion shall also state the jurisdictions in which the
Warrant or Warrant Shares have been registered or qualified for sale pursuant to the
provisions of Section 10(c). 






	  	
                   
(h)    The
Company agrees that until all the Warrant or Warrant Shares have been sold
               under a registration statement or pursuant to Rule 144 under the Act, it
shall                keep current in filing all reports, statements and other materials
required to                be filed with the Commission to permit the Holder to sell the
Warrant or Warrant                Shares under Rule 144.  







	  	
          
                     11.      (a)
    Subject to the conditions set forth below, the Company agrees to indemnify
               and hold harmless the Holder, its officers, directors, partners,
employees,                agents, and counsel, and each person, if any, who controls any
such person                within the meaning of Section 15 of the Act or Section 20(a)
of the Securities                Exchange Act of 1934, as amended (the “Exchange Act”),
from and                against any and all loss, liability, charge, claim, damage, and
expense                whatsoever (which shall include, for all purposes of this Section
11, but not be                limited to, reasonable attorneys’ fees and any and all
reasonable expense                whatsoever incurred in investigating, preparing, or
defending against any                litigation, commenced or threatened, or any claim
whatsoever, and any and all                amounts paid in settlement of any claim or
litigation), as and when incurred,                arising out of, based upon, or in
connection with (i) any untrue statement or                alleged untrue statement of a
material fact contained (A) in any registration                statement, preliminary
prospectus, or final prospectus (as from time to time                amended and
supplemented), or any amendment or supplement thereto, relating to                the
sale of any of the Warrant or Warrant Shares, or (B) in any application or
               other document or communication (in this Section 11 collectively called an
               “application”) executed by or on behalf of the Company or based
upon                written information furnished by or on behalf of the Company filed in
any                jurisdiction in order to register or qualify any of the Warrant or
Warrant                Shares under the securities or blue sky laws thereof or filed with
the                Commission or any securities exchange; or any omission or alleged
omission to                state a material fact required to be stated therein or
necessary to make the                statements therein not misleading, unless such
statement or omission was made in                reliance upon and in conformity with
written  










- 10 - 


















	  	
information
furnished to the Company with respect to the Holder by or on behalf of the Holder
expressly for inclusion in any registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any application, as the case may
be, or (ii) any breach of any representation, warranty, covenant, or agreement of the
Company contained in this Warrant. The foregoing agreement to indemnify shall be in
addition to any liability the Company may otherwise have, including liabilities arising
under this Warrant. 






	  	          If
any action is brought against the Holder or any of its officers, directors, partners,
employees, agents, or counsel, or any controlling persons of such person (an
“indemnified party”) in respect of which indemnity may be sought against the
Company pursuant to the foregoing paragraph, such indemnified party or parties shall
promptly notify the Company in writing of the institution of such action (but the failure
so to notify shall not relieve the Company from any liability pursuant to this Section
11(a) and the Company shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such indemnified party or parties) and
payment of expenses. Such indemnified party or parties shall have the right to employ its
or their own counsel in any such case, but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties unless the employment of such counsel
shall have been authorized in writing by the Company in connection with the defense of
such action or the Company shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or parties to have charge of the defense of such
action or such indemnified party or parties shall have reasonably concluded that there may
be one or more legal defenses available to it or them or to other indemnified parties
which are different from or additional to those available to the Company, in any of which
events such fees and expenses shall be borne by the Company and the Company shall not have
the right to direct the defense of such action on behalf of the indemnified party or
parties. Anything in this Section 11 to the contrary notwithstanding, the Company shall
not be liable for any settlement of any such claim or action effected without its written
consent, which shall not be unreasonably withheld. The Company shall not, without the
prior written consent of each indemnified party that is not released as described in this
sentence, settle or compromise any action, or permit a default or consent to the entry of
judgment in or otherwise seek to terminate any pending or threatened action, in respect of
which indemnity may be sought hereunder (whether or not any indemnified party is a party
thereto), unless such settlement, compromise, consent, or termination includes an
unconditional release of each indemnified party from all liability in respect of such
action. The Company agrees promptly to notify the Holder of the commencement of any
litigation or proceedings against the Company or any of its officers or directors in
connection with the sale of any Warrant or Warrant Shares or any preliminary prospectus,
prospectus, registration statement, or amendment or supplement thereto, or any application
relating to any sale of any Warrant or Warrant Shares. 







	  	
                   
(b)    The
Holder agrees to indemnify and hold harmless the Company, each director and
               officer of the Company, each other person, if any, who controls the  










- 11 - 


















	  	
Company
within the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and its
or their respective counsel, to the same extent as the foregoing indemnity from the
Company to the Holder in Section 11(a), but only with respect to statements or omissions,
if any, made in any registration statement, preliminary prospectus, or final prospectus
(as from time to time amended and supplemented), or any amendment or supplement thereto,
or in any application, in reliance upon and in conformity with written information
furnished to the Company with respect to the Holder by or on behalf of the Holder
expressly for inclusion in any such registration statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto, or in any application, as the
case may be. If any action shall be brought against the Company or any other person so
indemnified based on any such registration statement, preliminary prospectus, or final
prospectus, or any amendment or supplement thereto, or in any application, and in respect
of which indemnity may be sought against the Holder pursuant to this Section 11(b), the
Holder shall have the rights and duties given to the Company, and the Company and each
other person so indemnified shall have the rights and duties given to the indemnified
parties, by the provisions of Section 11(a). 






	  	
                   
(c)    To
provide for just and equitable contribution, if (i) an indemnified party
               makes a claim for indemnification pursuant to Section 11(a) or 11(b)
(subject to                the limitations thereof) but it is found in a final judicial
determination, not                subject to further appeal, that such indemnification
may not be enforced in such                case, even though this Agreement expressly
provides for indemnification in such                case, or (ii) any indemnified or
indemnifying party seeks contribution under the                Act, the Exchange Act or
otherwise, then the Company (including for this purpose                any contribution
made by or on behalf of any director, or officer of the                Company, any
controlling person of the Company, and its or their respective                counsel),
as one entity, and the Holder (including for this purpose any                contribution
by or on behalf of an indemnified party), as a second entity, shall
               contribute to the losses, liabilities, claims, damages, and expenses
whatsoever                to which any of them may be subject, on the basis of relevant
equitable                considerations such as the relative fault of the Company and
such Holder in                connection with the facts which resulted in such losses,
liabilities, claims,                damages, and expenses. The relative fault, in the
case of an untrue statement,                alleged untrue statement, omission, or
alleged omission, shall be determined by,                among other things, whether such
statement, alleged statement, omission, or                alleged omission relates to
information supplied by the Company or by such                Holder, and the parties’ relative
intent, knowledge, access to information,                and opportunity to correct or
prevent such statement, alleged statement,                omission, or alleged omission.
The Company and the Holder agree that it would be                unjust and inequitable
if the respective obligations of the Company and the                Holder for
contribution were determined by pro rata or per capita allocation of                the
aggregate losses, liabilities, claims, damages, and expenses (even if the
               Holder and the other indemnified parties were treated as one entity for
such                purpose) or by any other method of allocation that does not reflect
the                equitable considerations referred to in this Section 11(c). In no case
shall the                Holder be responsible for a portion of the contribution
obligation imposed on it                in excess of its pro rata share based on the
number of shares of Common Stock                owned (or which would be owned upon
exercise of all  











- 12 - 

















	  	
Warrant
or Warrant Shares) by it and included in such registration as compared to the total number
of shares of Common Stock included in such registration. No person guilty of a fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who is not guilty of such fraudulent misrepresentation. For
purposes of this Section 11(c), each person, if any, who controls the Holder within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each officer,
director, partner, employee, agent, and counsel of each such Holder or control person
shall have the same rights to contribution as such Holder or control person and each
person, if any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, each officer of the Company who shall have signed any
such registration statement, each director of the Company, and its or their respective
counsel shall have the same rights to contribution as the Company, subject in each case to
the provisions of this Section 11(c). Anything in this Section 11(c) to the contrary
notwithstanding, no party shall be liable for contribution with respect to the settlement
of any claim or action effected without its written consent. This Section 11(c) is
intended to supersede any right to contribution under the Act, the Exchange Act or
otherwise. 






     
        
          
          12.     
          Unless registered pursuant to the provisions of Section 10 hereof, the Warrant
          Shares issued upon exercise or conversion of the Warrants shall be subject to a
          stop transfer order and the certificate or certificates evidencing such Warrant
          Shares shall bear the following legends: 



	  	
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. THE SECURITIES REPRESENTED HEREBY
MAY NOT BE OFFERED, SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER APPLICABLE SECURITIES LAWS UNLESS OFFERED, SOLD OR
TRANSFERRED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THOSE
LAWS. 






	  	
UNLESS
PERMITTED UNDER SECURITIES LEGISLATION, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE SOLD TO A RESIDENT OF ALBERTA DURING THE PERIOD ENDING FOUR MONTHS AFTER THEIR
ISSUANCE. 






     
        
          
          
13.     
          Upon receipt of evidence satisfactory to the Company of the loss, theft,
          destruction, or mutilation of this Warrant (and upon surrender of this Warrant
          if mutilated), and upon reimbursement of the Company’s reasonable
          incidental expenses, the Company shall execute and deliver to the Holder thereof
          a new Warrant of like date, tenor, and denomination. 



     
        
          
          
14.     
          The Holder shall not have, solely on account of such status, any rights of a
          stockholder of the Company, either at law or in equity, or to any notice of
          meetings of stockholders or of any other proceedings of the Company, except as
          provided in this Warrant. 








- 13 - 



















     
        
          
          
15.     
          This Warrant shall be construed in accordance with the laws of the State of New
          York applicable to contracts made and performed within such State, without
          regard to principles of conflicts of law. 



     
        
          
          
16.     
          The Company irrevocably consents to the jurisdiction of the courts of the State
          of New York and of any federal court located in such State in connection with
          any action or proceeding arising out of or relating to this Warrant, any
          document or instrument delivered pursuant to, in connection with or
          simultaneously with this Warrant, or a breach of this Warrant or any such
          document or instrument. In any such action or proceeding, the Company waives
          personal service of any summons, complaint or other process and agrees that
          service thereof may be made in accordance with Section 12 of the Underwriting
          Agreement. Within 30 days after such service, or such other time as may be
          mutually agreed upon in writing by the attorneys for the parties to such action
          or proceeding, the Company shall appear to answer such summons, complaint or
          other process. Should the Company so served fail to appear or answer within such
          30-day period or such extended period, as the case may be, the Company shall be
          deemed in default and judgment may be entered against the Company for the amount
          as demanded in any summons, complaint or other process so served. 






Dated:   December 16, 2004 



	  	
QSound Labs, Inc.





By:  /s/ David Gallagher

       David Gallagher

       Chairman & CEO
 








[Seal] 






Secretary 







- 14 - 



















FORM OF ASSIGNMENT 



(To be executed by the registered
holder if such holder desires to transfer the attached Warrant.) 



        FOR
VALUE RECEIVED, _______________ hereby sells, assigns, and transfers unto __________________ a
Warrant to purchase __________ shares of Common Stock of QSound Labs, Inc. (the
“Company”), together with all right, title, and interest therein, and does
hereby irrevocably constitute and appoint ________________ attorney to transfer such Warrant on
the books of the Company, with full power of substitution. 



	  	
Dated:   _______________________________       

              

              

By:   _______________________________           

           Signature
 






        The
signature on the foregoing Assignment must correspond to the name as written upon the face
of this Warrant in every particular, without alteration or enlargement or any change
whatsoever. 








- 15 - 

















	To:  	  	QSound
Labs, Inc. 








ELECTION TO EXERCISE 



        The
undersigned hereby exercises his or its rights to purchase _______ Warrant Shares covered
by the within Warrant and tenders payment herewith in the amount of $_________ in
accordance with the terms thereof, and requests that certificates for such securities be
issued in the name of, and delivered to: 



__________________________________ 



__________________________________ 



__________________________________ 



(Print Name, Address and
Social Security

or Tax Identification Number) 



and, if such number of Warrant Shares
shall not be all the Warrant Shares covered by the within Warrant, that a new Warrant for
the balance of the Warrant Shares covered by the within Warrant be registered in the name
of, and delivered to, the undersigned at the address stated below. 





	  	
Dated:   _______________________________       

              

              

By:   _______________________________           

           Print Name

       _______________________________

       Signature
 







Address: 



_____________________________________


_____________________________________


_____________________________________







- 16 - 
















	To:  	  	QSound
Labs, Inc. 










CASHLESS EXERCISE FORM 



(To be executed upon
conversion of the attached Warrant) 



        The
undersigned hereby irrevocably elects to surrender its Warrant for the number of shares of
Common Stock as shall be issuable pursuant to the cashless exercise provisions of the
within Warrant, in respect of __________ shares of Common Stock underlying the within
Warrant, and requests that certificates for such securities be issued in the name of and
delivered to: 





______________________________________________________________________________ 



______________________________________________________________________________



______________________________________________________________________________





(Print Name, Address and Social
Security

or Tax Identification Number) 





and, if such number of shares shall
not be all the shares exchangeable or purchasable under the within Warrant, that a new
Warrant for the balance of the Warrant Shares covered by the within Warrant be registered
in the name of, and delivered to, the undersigned at the addressed stated below. 



	
Dated:   _________________________	
Name   _____________________________ 

            







Address:  
_____________________________________________________________ 





	
 	
___________________________________ 

            (Signature)










- 17 -