THIS WARRANT INDENTURE is made as of the 12th day of September, 2000.

BETWEEN:

          SPECTRUM SIGNAL PROCESSING INC., 200 - 2700
          Production Way, Burnaby, British Columbia, V5A 4X1

          (herein called the "Company")

                                                               OF THE FIRST PART

AND:

          MONTREAL TRUST COMPANY OF CANADA, of 3rd Floor,
          510 Burrard Street, Vancouver, British Columbia, V6C 3B9

          (herein called the "Trustee")

                                                              OF THE SECOND PART

          WHEREAS the Company is proposing to issue warrants (each, a "Warrant")
in the manner herein set forth;

          AND WHEREAS one Warrants  shall entitle the holder  thereof to acquire
one  Common  Share of the  Company  at the  Exercise  Price  upon the  terms and
conditions herein set forth;

          AND WHEREAS all acts and deeds  necessary have been done and performed
to make the Warrants when issued, as in this Indenture  provided,  legal,  valid
and binding  upon the Company with the benefits and subject to the terms of this
Indenture;

          NOW THEREFORE THIS INDENTURE  WITNESSETH that in  consideration of the
mutual  covenants and agreements of the parties  contained  herein,  the parties
hereto agree as follows:

                                   ARTICLE 1
                                 INTERPRETATION

1.1       Definitions

          In this Indenture,  including the recitals and schedules hereto and in
all indentures supplemental hereto:

          (a)  "Applicable  Legislation" means the provisions of the Company Act
               (British  Columbia) as from time to time  amended,  and any other
               statute  of Canada or a  province  thereof,  and the  regulations
               under  any  such  named  or  other  statute,  relating  to  trust
               indentures or to the rights,  duties and  obligations of trustees
               and of corporations  under trust  indentures,  to the extent that
               such  provisions  are at the time in force and applicable to this
               Indenture;


<PAGE>

                                      -2-


          (b)  "Business  Day" means a day which is not  Saturday or Sunday or a
               legal  holiday in the Cities of  Vancouver,  British  Columbia or
               Toronto, Ontario;

          (c)  "Common Shares" means fully paid and non-assessable common shares
               of the Company as presently constituted;

          (d)  "Company's  Auditors" means a firm of chartered  accountants duly
               appointed as auditors of the Company;

          (e)  "Counsel"  means  a  barrister  or  solicitor  acceptable  to the
               Trustee;

          (f)  "Effective Date" means, with respect to any Warrant,  the date on
               which such Warrant is issued;

          (g)  "Equity  Shares"  means the  Common  Shares and any shares of any
               other class or series of the Company  which may from time to time
               be  authorized  for issue if by their terms such shares confer on
               the holders thereof the right to participate in the  distribution
               of  assets  upon  the  voluntary  or   involuntary   liquidation,
               dissolution  or winding-up of the Company beyond a fixed sum or a
               fixed sum plus accrued dividends;

          (h)  "Exercise Date" means,  with respect to any Warrant,  the date on
               which  the  Warrant  Certificate  representing  such  Warrant  is
               surrendered  for exercise in  accordance  with the  provisions of
               Article 3 hereof;

          (i)  "Exercise  Price"  means in  respect of the  Warrants,  $4.75 per
               Common  Share  when the  Warrant  is  exercised  on or before the
               Expiry  Date,  unless  such  price  shall have been  adjusted  in
               accordance  with the  provisions  of  Article 4, in which case it
               shall mean the adjusted price then in effect;

          (j)  "Expiry  Date" means the first  Business Day  following  the date
               which is  eighteen  (18)  months  after  the date of issue of all
               Warrants;

          (k)  "person" means an individual, body corporate, partnership, trust,
               trustee,  executor,  administrator,  legal  representative or any
               unincorporated organization;

          (l)  "Warrants"  means  warrants  issued by the Company in  registered
               form  in  accordance  with  the  terms  and  conditions  of  this
               Indenture;

          (m)  "Shareholder"  means a holder  of  record  of one or more  Common
               Shares;

          (n)  "this Warrant Indenture",  "this Indenture",  "herein",  "hereby"
               and similar  expressions mean and refer to this Indenture and any
               indenture,  deed  or  instrument  supplemental  hereto;  and  the
               expressions  "Article",  "Section",  "subsection" and "paragraph"
               followed  by a number  mean and refer to the  specified  article,
               section, subsection or paragraph of this Indenture;


<PAGE>

                                      -3-


          (o)  "Time of Expiry" means 4:30 o'clock in the  afternoon,  Vancouver
               time, on the Expiry Date;

          (p)  "Trading Day" means,  with respect to a stock exchange,  a day on
               which such exchange is open for the transaction of business;

          (q)  "Transfer  Agent" means the Transfer  Agent for the time being of
               the Common Shares;

          (r)  "Warrant Agency" means the principal office of the Trustee in the
               Cities of Vancouver, British Columbia and Toronto, Ontario;

          (s)  "Warrant  Certificate"  means,  with  respect to any  Warrant,  a
               certificate  issued on or after the  Effective  Date to  evidence
               such Warrant;

          (t)  "Warrantholders"  or "holders"  means the persons who,  after the
               Effective Date, are registered owners of Warrants;

          (u)  "Warrantholders'  Request"  means an instrument  signed in one or
               more  counterparts by  Warrantholders  entitled to acquire in the
               aggregate  not less  than 10% of the  aggregate  number of Common
               Shares  which could be acquired  pursuant  to all  Warrants  then
               unexercised and outstanding,  requesting the Trustee to take some
               action or proceeding specified therein; and

          (v)  "written order of the Company", "written request of the Company",
               "written consent of the Company" and "certificate of the Company"
               mean,  respectively,   a  written  order,  request,  consent  and
               certificate  signed in the name of the  Company by its  Chairman,
               President,  a Vice-President,  or a director and, in addition, by
               its Secretary,  Treasurer,  or a director, and may consist of one
               or more instruments so executed.

1.2       Gender and Number

          Unless  herein  otherwise  expressly  provided  or unless the  context
otherwise  requires,  words  importing the singular  include the plural and vice
versa and words importing gender include all genders.

1.3       Interpretation not Affected by Headings, Etc.

          The division of this  Indenture  into Articles and  Sections,  and the
insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Indenture.


<PAGE>

                                      -4-


1.4       Day not a Business Day

          In the event that any day on or before which any action is required to
be taken  hereunder is not a Business Day, then such action shall be required to
be taken at or before the requisite  time on the next  succeeding  day that is a
Business Day.

1.5       Time of the Essence

          Time shall be of the essence of this Indenture.

1.6       Applicable Law

          This  Indenture  and the Warrant  Certificates  shall be  construed in
accordance  with the laws of the  Province  of  British  Columbia  and  shall be
treated in all respects as British Columbia contracts.

1.7       Currency

          All currency amounts set out herein refer to Canadian  currency unless
otherwise indicated.

                                   ARTICLE 2
                               ISSUE OF WARRANTS

2.1       Issue of Warrants

          (a)  1,764,705  Warrants,  entitling  the  holders to acquire up to an
               aggregate of 1,764,705  Common  Shares,  subject to adjustment in
               accordance  with  Article  4  hereof,   are  hereby  created  and
               authorized to be issued.

          (b)  The Warrant  Certificates  shall be substantially in the form set
               out in  Schedule  "A"  hereto,  shall be dated in  respect of any
               Warrant  Certificate as of the Effective Date in respect of those
               Warrants  represented by the Warrant  Certificate  (including all
               replacements  issued in accordance  with this  Indenture),  shall
               bear such distinguishing  letters and numbers as the Company may,
               with  the  approval  of the  Trustee,  prescribe,  and  shall  be
               issuable in any denomination excluding fractions.

2.2       Form and Terms of Warrants

          (a)  One (1) Warrant  authorized to be issued  hereunder shall entitle
               the holder  thereof to acquire one (1) Common  Share,  subject to
               adjustment in accordance with Article 4 hereof, at any time after
               the  Effective  Date until the Time of Expiry upon payment of the
               Exercise Price.

          (b)  No  fractional  Warrants  or  Common  Shares  shall be  issued or
               otherwise  provided for  hereunder.  In the event that any person
               would  have been  entitled,  but for this  section,  to receive a
               whole  number of  Warrants  or Common  Shares and a fraction of a
               Warrants or a Common Share,  as the case may be, such person will
               not be entitled to receive any cash or  securities of the Company
               in lieu of such fraction of a Warrant or Common Share.


<PAGE>

                                      -5-


          (c)  The number of Common Shares which may be acquired pursuant to the
               Warrants  shall  be  adjusted  in the  events  and in the  manner
               specified in Article 4.

2.3       Warrantholder not a Shareholder

          Nothing  in this  Indenture  or in the  holding  of a  Warrant  itself
evidenced by a Warrant Certificate or otherwise, shall confer or be construed as
conferring  upon  a  Warrantholder  any  right  or  interest   whatsoever  as  a
Shareholder  or as any other  shareholder  of the  Company,  including,  but not
limited to, the right to vote at, to receive  notice of, or to attend,  meetings
of shareholders or any other proceedings of the Company, or the right to receive
dividends and other distributions.

2.4       Warrants to Rank Pari Passu

          All Warrants shall rank pari passu, whatever may be the actual date of
issue of the same.

2.5       Signing of Warrant Certificates

          The  Warrant  Certificates  shall be  signed  by any one  director  or
officer of the Company, under seal or otherwise.  The signature of such director
or officer may be mechanically  reproduced in facsimile and Warrant Certificates
bearing such  facsimile  signature  shall be binding upon the Company as if they
had been manually signed by such director or officer.  Notwithstanding  that any
person whose manual or facsimile signature appears on any Warrant Certificate as
such  director or officer may no longer hold office at the date of such  Warrant
Certificate or at the date of  certification  or delivery  thereof,  any Warrant
Certificate  signed as  aforesaid  shall,  subject to Section  2.6, be valid and
binding  upon the  Company  and the  holder  thereof  shall be  entitled  to the
benefits of this Indenture.

2.6       Countersignature by the Trustee

          (a)  No Warrant  Certificate  shall be issued or, if issued,  shall be
               valid for any purpose or entitle the holder to the benefit hereof
               until it has been  countersigned  by  manual  signature  by or on
               behalf of the Trustee in the form set out in Schedule "A" hereto,
               and  such  countersignature  by  the  Trustee  upon  any  Warrant
               Certificate  shall be conclusive  evidence as against the Company
               that the Warrant  Certificate  so certified  has been duly issued
               hereunder and that the holder is entitled to the benefits hereof.

          (b)  The  countersignature  of the  Trustee  on  Warrant  Certificates
               issued  hereunder shall not be construed as a  representation  or
               warranty by the Trustee as to the  validity of this  Indenture or
               the Warrant Certificates (except the due countersigning  thereof)
               and the Trustee shall in no respect be liable or  answerable  for
               the use made of the Warrant Certificates or any of them or of the
               consideration therefor except as otherwise specified herein.


<PAGE>

                                      -6-


2.7       Issue in Substitution for Warrant Certificates Lost, Etc.

          (a)  In case any of the Warrant Certificates shall become mutilated or
               be lost, destroyed or stolen, the Company,  subject to Applicable
               Legislation,  shall issue and thereupon the Trustee shall certify
               and deliver,  a new Warrant  Certificate of like tenor as the one
               mutilated,  lost,  destroyed  or stolen,  in exchange  for and in
               place of such mutilated  Warrant  Certificate  upon surrender and
               cancellation  thereof, or in lieu of and in substitution for such
               lost,   destroyed  or  stolen   Warrant   Certificate,   and  the
               substituted  Warrant  Certificate  shall be in a form approved by
               the  Trustee and shall be  entitled  to the  benefits  hereof and
               shall  rank  equally in  accordance  with its terms and all other
               Warrant Certificates issued or to be issued hereunder.

          (b)  The applicant for the issue of a new Warrant Certificate pursuant
               to this Section 2.7 shall bear the cost of the issue  thereof and
               in case of loss,  destruction  or  theft  shall,  as a  condition
               precedent to the issue thereof, furnish to the Company and to the
               Trustee such evidence of ownership  and of the loss,  destruction
               or theft of the Warrant Certificate so lost,  destroyed or stolen
               as shall be  satisfactory  to the  Company  and to the Trustee in
               their sole discretion, and such applicant may also be required to
               furnish  an  indemnity   and  surety  bond  in  amount  and  form
               satisfactory  to the Company and the Trustee in their  discretion
               and shall  pay the  reasonable  charges  of the  Company  and the
               Trustee in connection therewith.

2.8       Exchange of Warrant Certificates

          (a)  Warrant  Certificates   representing   Warrants  to  acquire  any
               specified  number of Common Shares may, upon  compliance with the
               reasonable  requirements of the Trustee, be exchanged for another
               Warrant Certificate or Warrant Certificates  entitling the holder
               thereto  to acquire in the  aggregate  the same  number of Common
               Shares  as may be  acquired  under  the  Warrant  Certificate  or
               Warrant Certificates so exchanged.

          (b)  Warrant  Certificates may be exchanged only at the Warrant Agency
               or at any other place that is  designated by the Company with the
               approval of the  Trustee.  Any Warrant  Certificate  tendered for
               exchange shall be cancelled and surrendered to the Trustee at the
               Warrant Agency.

2.9       Charges for Exchange

          Except as otherwise herein  provided,  the Trustee shall charge to the
holder reasonable fees for each new Warrant  Certificate  issued in exchange for
or upon the transfer of Warrant  Certificate(s);  and payment of such charge and
reimbursement  of the  Trustee  or the  Company  for any and all stamp  taxes or
governmental  or other charges  required to be paid shall be made by such holder
as a condition precedent to such exchange or transfer.


<PAGE>

                                      -7-


2.10     Transferability and Ownership of Warrants

          (a)  The Warrants may only be  transferred on the register kept by the
               Trustee  at the  Warrant  Agency  by  the  holder  or  its  legal
               representatives  or its attorney duly  appointed by an instrument
               in writing in form and execution satisfactory to the Trustee only
               upon  surrendering  to the  Trustee  at the  Warrant  Agency  the
               Warrant Certificates  representing the Warrants to be transferred
               and upon compliance with:

               (i)  the conditions herein;

               (ii) such  reasonable  requirements as the Trustee may prescribe;
                    and

               (iii)all applicable  securities  legislation and  requirements of
                    regulatory authorities;

               and such  transfer  shall be duly noted in such  register  by the
               Trustee.  Upon  compliance  with such  requirements,  the Trustee
               shall issue to the transferee a Warrant Certificate  representing
               the Warrants transferred;

          (b)  the Trustee  acknowledges that the Warrants and the Common Shares
               issuable upon exercise thereof have not been registered under the
               U.S.  Securities  Act, or the securities laws of any state of the
               United States, and may not be transferred in the United States or
               to a U.S.  Person  unless  the  Warrants  and the  Common  Shares
               issuable upon  exercise  thereof have been  registered  under the
               U.S.  Securities  Act and the  securities  laws of all applicable
               states  of  the  United   States  or  an   exemption   from  such
               registration  requirements is available and the Warrantholder has
               presented to the Corporation  evidence of the availability of the
               exemption satisfactory to the Corporation.

          (c)  Subject  to the  provisions  of  this  Indenture  and  Applicable
               Legislation,  the  Warrantholder  shall be entitled to the rights
               and privileges attaching to the Warrants.

          (d)  Subject  to the  provisions  of  this  Indenture  and  Applicable
               Legislation,  the issue of Common  Shares by the Company upon the
               exercise of Warrants by any  Warrantholder in accordance with the
               terms  and  conditions   herein  contained  shall  discharge  all
               responsibilities  of the Company and the Trustee  with respect to
               such  Warrants  and neither the Company nor the Trustee  shall be
               bound to inquire into the title of any such holder.

                                   ARTICLE 3
                              EXERCISE OF WARRANTS

3.1       Holders Eligible to Exercise Warrants

          The Warrants may not be  exercised  within the United  States by or on
behalf of any U.S.  Person or person in the United States nor will  certificates
representing Warrants be delivered in the United States unless the Common Shares

<PAGE>

                                      -8-


issuable upon exercise of the Warrants are registered under the U.S.  Securities
Act and the securities laws of all applicable states of the United States or any
exemption  from such  registration  requirement  is  available.  Any  person who
exercises a Warrant shall provide to the Trustee either:

          (a)  (i)  written  certification that it is not a U.S. Person and that
                    such Warrant is not being exercised within the United States
                    or on behalf of, or for the  account  or benefit  of, a U.S.
                    Person or a person in the United States; or

               (ii) a written opinion of counsel or other evidence  satisfactory
                    to the Corporation to the effect that the Common Shares have
                    been registered under the U.S. Securities Act and applicable
                    state  securities  laws  or  are  exempt  from  registration
                    thereunder; or

          (b)  written  certification  that  it  was a  transferee  pursuant  to
               section  2.10(b)  who  was a  U.S.  Person  at  the  time  of the
               acquisition  of  such  Warrants  and  the   representations   and
               warranties made by such person in connection with the acquisition
               of such Warrants remain true and correct on the date of exercise.

3.2       Method of Exercise of Warrants

          (a)  The  holder  of  any  Warrant  may  exercise  the  right  thereby
               conferred   on  such   holder  to   acquire   Common   Shares  by
               surrendering,  prior to the Time of Expiry, to the Trustee at the
               Warrant Agency the Warrant  Certificate with a duly completed and
               executed exercise form as attached to the Warrant Certificate and
               cash or a certified  cheque,  bank draft or money order in lawful
               money of Canada  payable to or to the order of the Company or the
               Trustee in an amount equal to the Exercise  Price  multiplied  by
               the number of Common Shares to be acquired.

               A  Warrant  Certificate  with the  duly  completed  and  executed
               exercise  form  referred to in this  subsection  3.2(a)  shall be
               deemed to be surrendered only upon personal  delivery thereof or,
               if sent by mail or  other  means  of  transmission,  upon  actual
               receipt thereof at, in each case, the Warrant Agency.

          (b)  Any  exercise  form  referred to in  subsection  3.2(a)  shall be
               signed by the  Warrantholder  and  shall  specify  the  number of
               Common Shares which the holder desires to acquire (being not more
               than those which the holder is  entitled  to acquire  pursuant to
               the Warrant Certificate(s) surrendered), the person or persons in
               whose name or names  such  Common  Shares  are to be issued,  the
               address or  addresses  of such  persons  and the number of Common
               Shares to be  issued  to each such  person if more than one is so
               specified.  If any of the Common Shares  subscribed for are to be
               issued to a person or persons other than the Warrantholder:

               (i)  the Warrantholder shall pay to the Company or the Trustee on
                    behalf of the Company,  all  applicable  transfer or similar
                    taxes  and the  Company  shall not be  required  to issue or
                    deliver  certificates  evidencing  Common  Shares  unless or
                    until such Warrantholder  shall have paid to the Company, or


<PAGE>

                                      -9-


                    the Trustee on behalf of the Company, the amount of such tax
                    or shall have established to the satisfaction of the Company
                    that such tax has been paid or that no tax is due; and

               (ii) the signature of the Warrantholder on the exercise form will
                    be guaranteed by a Canadian  Schedule "A" chartered  bank or
                    trust  company  or by a member  of an  acceptable  Medallion
                    Guarantee Program.

          (c)  Notwithstanding any provision to the contrary herein or contained
               in the Warrant Certificates,  on the exercise of Warrants, Common
               Shares  will not be issued to a person  whose  address  is in, or
               whom the  Company  or the  Trustee  has  reason to  believe  is a
               citizen or national or resident of, the United States of America,
               its territories and possessions except pursuant to a registration
               statement  under the United States  Securities Act of 1933 and in
               compliance with  applicable  securities laws of various States or
               pursuant to an exemption  available  from  registration  and such
               Common  Shares may not be offered or sold  directly or indirectly
               in the United States of America or its  territories or possession
               or  to a  national  or  resident  thereof,  or  any  partnership,
               corporation or other entity  organized or incorporated  under the
               laws of the United States during the 90 day period  commencing on
               the exercise of such Warrants  except  pursuant to a registration
               statement  under the United States  Securities Act of 1933 and in
               compliance with  applicable  securities laws of various States or
               pursuant to an exemption available from such registration.

3.3       Effect of Exercise of Warrants

          (a)  Upon compliance by the holder of any Warrant Certificate with the
               provisions of Section 3.2, and subject to Section 3.4, the Common
               Shares subscribed for shall be deemed to have been issued and the
               person or  persons  to whom such  Common  Shares are to be issued
               shall be deemed to have become the holder or holders of record of
               such  Common  Shares on the  Exercise  Date  unless the  transfer
               registers of the Company  shall be closed on such date,  in which
               case the  Common  Shares  subscribed  for shall be deemed to have
               been issued, and such person or persons deemed to have become the
               holder or holders of record of such Common Shares, on the date on
               which such transfer registers are reopened.

          (b)  Within  five (5)  Business  Days  after  the  Exercise  Date of a
               Warrant as aforesaid, the Company shall cause to be mailed to the
               person or persons  in whose  name or names the  Common  Shares so
               subscribed   for  have  been   issued,   as   specified   in  the
               subscription,  at the address  specified in such subscription or,
               if so  specified in such  subscription,  cause to be delivered to
               such  person or persons at the address for such person or persons
               set  forth  in  the  register  maintained  for  the  Warrants,  a
               certificate or certificates for the appropriate  number of Common
               Shares so subscribed for.


<PAGE>

                                      -10-


3.4       Partial Exercise of Warrants; Fractions

          (a)  The holder of any Warrant  Certificate(s) may acquire a number of
               Common  Shares less than the number  which the holder is entitled
               to acquire  pursuant to the  surrendered  Warrant  Certificate(s)
               provided  that,  in no event shall  fractional  Common  Shares be
               issued  with regard to  Warrants  exercised.  In the event of any
               acquisition  of a number of Common  Shares  less than the  number
               which the  holder  is  entitled  to  acquire,  the  holder of the
               Warrant  Certificate(s) upon exercise thereof shall, in addition,
               be entitled to receive,  without charge  therefor,  a new Warrant
               Certificate(s)  in  respect of the  balance of the Common  Shares
               which  such  holder  was  entitled  to  acquire  pursuant  to the
               surrendered  Warrant  Certificate(s)  and  which  were  not  then
               acquired.

          (b)  Notwithstanding   anything   herein   contained   including   any
               adjustment  provided  for in Article 4, the Company  shall not be
               required,  upon the exercise of any Warrants,  to issue fractions
               of Common Shares or to  distribute  certificates  which  evidence
               fractional  Common Shares.  In lieu of fractional  Common Shares,
               there  shall be paid to the  holder  upon  surrender  of  Warrant
               Certificate(s)  for exercise of Warrants pursuant to Section 3.1,
               within  ten (10)  Business  Days  after  surrender,  an amount in
               lawful money of Canada equal to the then current  market value of
               such fractional  interest  calculated on the basis of the closing
               price of the Common Shares on The Toronto  Stock  Exchange on the
               Trading Day immediately prior to the Exercise Date, provided that
               no such cheque shall be issued for less than $5.00.

3.5       Common Share Certificates

          At the  instruction  of the Company,  Common Shares issued to a person
who  does not  provide  the  certificate  referred  to in  3.1(a)(i)  hereof  in
connection with the exercise of the Warrants may bear a legend in  substantially
the following form:

          THE SECURITIES  REPRESENTED  HEREBY HAVE NOT BEEN REGISTERED UNDER THE
          UNITED  STATES  SECURITIES  ACT OF 1933,  AS AMENDED (THE  "SECURITIES
          ACT") OR THE  SECURITIES  LAWS OF ANY  STATE.  THE HOLDER  HEREOF,  BY
          PURCHASING SUCH SECURITIES,  AGREES FOR THE BENEFIT OF THE CORPORATION
          THAT SUCH  SECURITIES  MAY BE OFFERED,  SOLD OR OTHERWISE  TRANSFERRED
          ONLY  (A)  TO  THE  CORPORATION  (B)  OUTSIDE  THE  UNITED  STATES  IN
          COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C)
          IN  COMPLIANCE  WITH  THE  EXEMPTION  FROM   REGISTRATION   UNDER  THE
          SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER,  OR (D) IN COMPLIANCE
          WITH ANOTHER EXEMPTION FROM REGISTRATION AFTER PROVIDING AN OPINION OF
          COUNSEL SATISFACTORY TO THE CORPORATION TO EFFECT THAT REGISTRATION IS

<PAGE>

                                      -11-


          NOT REQUIRED.  DELIVERY OF THIS  CERTIFICATE MAY NOT CONSTITUTE  "GOOD
          DELIVERY' IN SETTLEMENT OF  TRANSACTIONS ON STOCK EXCHANGES IN CANADA.
          AT ANY TIME THE  CORPORATION  IS A  "FOREIGN  ISSUER"  AS  DEFINED  IN
          REGULATION S UNDER THE SECURITIES ACT, A NEW  CERTIFICATE,  BEARING NO
          LEGEND,  DELIVERY OF WHICH WILL  CONSTITUTE  "GOOD  DELIVERY",  MAY BE
          OBTAINED FROM  MONTREAL  TRUST COMPANY OF CANADA UPON DELIVERY OF THIS
          CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO
          MONTREAL  TRUST COMPANY OF CANADA AND THE  CORPORATION,  TO THE EFFECT
          THAT THE SALE OF THE  SECURITIES  REPRESENTED  HEREBY IS BEING MADE IN
          COMPLIANCE WITH RULE 904 OF REGULATIONS UNDER THE SECURITIES ACT;

provided,  that if the Common  Shares or Warrants  are being sold outside of the
United  States  in  compliance  with  Rule 904 of  Regulation  S under  the U.S.
Securities Act at the time that the Company is a "foreign  issuer" as defined in
Rule 902 of  Regulation  S under the U.S.  Securities  Act,  the  legend  may be
removed by providing a declaration  to the Transfer  Agent for the Common Shares
of the  Company  and the Warrant  Agency for the  Warrants,  in such form as the
Company may prescribe  from time to time, it being  understood  that the Company
has  instructed  Montreal  Trust  Company  of  Canada  to  accept  the  form  of
declaration  set forth  below,  but  reserves  the  right to change  the form of
declaration  to reflect  applicable  law or  practice  or to suspend  removal of
legends  if it  should  determine  that  such  removal  is not  consistent  with
applicable law:

          "The undersigned (a)  acknowledges  that the sale of the securities of
Spectrum Signal Processing Inc. to which this declaration  relates is being made
in reliance on Rule 904 of Regulation S under the United States  Securities  Act
of 1933, as amended (the "U.S.  Securities  Act") and (b) certifies that (1) the
undersigned is not an affiliate of the Corporation as that term is defined under
the U.S.  Securities  Act,  (2) the offer of such  securities  was not made to a
person  in the  United  States  and  either  (A) at the time the buy  order  was
originated,  the buyer was  outside  the  United  States,  or the seller and any
person acting on its behalf  reasonably  believed that the buyer was outside the
United States or (B) the  transaction  was executed on or through the facilities
of The Toronto  Stock  Exchange and neither the seller nor any person  acting on
its behalf knows that the transaction has been  prearranged  with a buyer in the
United  States,  (3) neither the seller nor any  affiliate of the seller nor any
person  acting on any of their behalf has engaged or will engage in any directed
selling  efforts in the United States in  connection  with the offer and sale of
such  securities,  (4) the sale is bona fide and not for the purpose of "washing
off" the resale  restrictions  imposed  because the securities  are  "restricted
securities" (as that term is defined in Rule 144(a)(3) under the U.S. Securities
Act),  (5) the seller does not intend to replace such  securities  with fungible
unrestricted  securities and (6) the contemplated sale is not a transaction,  or
part of a series of transactions,  which,  although in technical compliance with
Regulation S, is part of a plan or scheme to evade the  registration  provisions
of the U.S. Securities Act. Terms used herein have the meanings given to them by
Regulation S."


<PAGE>

                                      -12-


3.6       Expiration of Warrants

          After the Time of Expiry,  all rights  under any Warrant in respect of
which the right of subscription and acquisition  herein and therein provided for
shall not theretofore  have been exercised in accordance  herewith and therewith
shall  wholly  cease  and  terminate  and such  Warrant  shall be void and of no
effect.

3.7       Cancellation of Surrendered Warrants

          All  Warrant  Certificates  surrendered  to the Trustee at the Warrant
Agency  pursuant to s 2.7, 2.8, 3.1, 3.4 and 5.1 shall be cancelled  and,  after
the  expiry of any  period of  retention  prescribed  by law,  destroyed  by the
Trustee and the Trustee shall furnish the Company with a destruction certificate
identifying  the Warrant  Certificates  so destroyed  and the number of Warrants
evidenced thereby and the number of Common Shares which could have been acquired
pursuant to each destroyed Warrant Certificate.

3.8       Accounting and Recording

          (a)  The Trustee shall promptly account to the Company with respect to
               Warrants  exercised.  Any securities or other  instruments,  from
               time to time  received by the Trustee  shall be received in trust
               for,  and shall be  segregated  and kept apart by the  Trustee in
               trust for, the Company.

          (b)  The Trustee shall record the  particulars  of Warrants  exercised
               which shall  include the names and  addresses  of the persons who
               become  holders of Common  Shares on  exercise  and the  Exercise
               Date.  Within five (5) Business Days of each Exercise  Date,  the
               Trustee shall provide such particulars in writing to the Company.

                                   ARTICLE 4
                     ADJUSTMENT OF NUMBER OF COMMON SHARES

4.1       Adjustment of Number of Common Shares

          The acquisition rights in effect at any date attaching to the Warrants
shall be subject to adjustment from time to time as follows:

          (a)  if and whenever at any time from the date hereof and prior to the
               Time of Expiry, the Company shall:

               (i)  subdivide,  redivide or change its outstanding Common Shares
                    into a greater number of shares; or

               (ii) reduce, combine or consolidate its outstanding Common Shares
                    into a smaller number of shares, the number of Common Shares


<PAGE>

                                      -13-


                    obtainable   under  each  Warrant  shall  each  be  adjusted
                    immediately  after the effective date of the events referred
                    to in (i) and (ii) above by multiplying the number of Common
                    Shares  theretofore   obtainable  on  the  exercise  of  the
                    Warrants by a fraction of which the  numerator  shall be the
                    total number of Common Shares outstanding  immediately after
                    such date and the  denominator  shall be the total number of
                    Common Shares  outstanding  immediately  prior to such date.
                    Such  adjustment  shall be made  successively  whenever  any
                    event referred to in this subsection shall occur;

          (b)  if and whenever at any time from the date hereof and prior to the
               Time of Expiry,  there is a reclassification  or redesignation of
               the  Common  Shares or a capital  reorganization  of the  Company
               other than as described in subsection  4.1(a) or a consolidation,
               arrangement,  amalgamation  or merger of the Company with or into
               any other body corporate,  trust, partnership or other entity, or
               a sale or conveyance of the property and assets of the Company as
               an  entirety  or  substantially  as an entirety to any other body
               corporate,  trust, partnership or other entity, any Warrantholder
               who has not  exercised  his  right  of  acquisition  prior to the
               effective date of such reclassification,  redesignation,  capital
               reorganization, consolidation, arrangement, amalgamation, merger,
               sale or conveyance,  upon the exercise of such right  thereafter,
               shall be  entitled  to  receive  and  shall  accept  for the same
               aggregate  consideration,  in lieu of the number of Common Shares
               then sought to be acquired by him,  the number of shares or other
               securities  or property of the Company or of the body  corporate,
               trust,  partnership  or other entity  resulting from such merger,
               amalgamation,  arrangement,  or  consolidation,  or to which such
               sale or  conveyance  may be made,  as the case may be,  that such
               Warrantholder  would  have  been  entitled  to  receive  on  such
               reclassification,    redesignation,    capital    reorganization,
               consolidation,   arrangement,   amalgamation,   merger,  sale  or
               conveyance, if, on the record date or the effective date thereof,
               as the case may be,  the  Warrantholder  had been the  registered
               holder  of the  number  of  Common  Shares  receivable  upon  the
               exercise of Warrants then held. If determined  appropriate by the
               Trustee to give effect to or to evidence the  provisions  of this
               subsection 4.1(b), the Company, its successor, or such purchasing
               body corporate,  partnership,  trust or other entity, as the case
               may be,  shall,  prior  to or  contemporaneously  with  any  such
               reclassification,    redesignation,    capital    reorganization,
               consolidation,   amalgamation,   arrangement,   merger,  sale  or
               conveyance,  enter into an indenture which shall provide,  to the
               extent possible,  for the application of the provisions set forth
               in this  Indenture  with  respect  to the  rights  and  interests
               thereafter of the  Warrantholders  to the end that the provisions
               set forth in this Indenture shall thereafter  correspondingly  be
               made applicable,  as nearly as may reasonably be, with respect to
               any shares, other securities or property to which a Warrantholder
               is entitled on the exercise of his acquisition rights thereafter.
               Any  indenture  entered  into between the Company and the Trustee
               pursuant to the  provision of this  subsection  4.1(b) shall be a
               supplemental indenture entered into pursuant to the provisions of
               Article 8 hereof. Any indenture entered into between the Company,
               any successor to the Company or such  purchasing  body corporate,
               partnership,  trust or other entity and the Trustee shall provide
               for  adjustments  which shall be as nearly  equivalent  as may be
               practicable to the  adjustments  provided in this Section 4.1 and
               which    shall    apply    to    successive    reclassifications,
               redesignations,    capital    reorganizations,    consolidations,
               arrangements, amalgamations, mergers, sales or conveyances;


<PAGE>

                                      -14-


          (c)  if and  whenever  at any time  prior to the Time of  Expiry,  the
               Company shall:

               (i)  subdivide  the  outstanding  Common  Shares  into a  greater
                    number of Common Shares,

               (ii) consolidate  the  outstanding  Common  Shares  into a lesser
                    number of Common Shares, or

               (iii)issue Common Shares by way of a stock  dividend  (other than
                    the issue of Common  Shares to holders of Common Shares as a
                    stock  dividend  in  lieu  of a cash  dividend  paid  in the
                    ordinary course),

               the  Exercise  Price  shall,   on  the  effective  date  of  such
               subdivision  or  consolidation  or on the  record  date  of  such
               subdivision or stock dividend, as the case may be, be adjusted to
               that amount which is in the same proportion to the Exercise Price
               in effect immediately prior to such subdivision, consolidation or
               stock dividend,  as the number of outstanding Common Shares after
               giving  effect  to  such  subdivision,   consolidation  or  stock
               dividend bears to the number of  outstanding  Common Shares after
               giving effect such subdivision,  consolidation or stock dividend.
               Such  adjustment  shall be made  successively  whenever any event
               referred  to in this  subsection  (1) shall  occur;  and any such
               issue of Common Shares by way of a stock dividend shall be deemed
               to have been made on the record date for the stock  dividend  for
               the  purpose  of  calculating  the number of  outstanding  Common
               Shares under subsections (d) and (e) of this Section 4.1;

          (d)  if and  whenever  at any time  prior to the Time of  Expiry,  the
               Company  shall  fix a record  date for the  issuance  of  rights,
               options or  warrants to all or  substantially  all the holders of
               the outstanding  Common Shares entitling them to subscribe for or
               purchase  Common Shares,  or securities  convertible  into Common
               Shares at a price per share or having a  conversion  or  exchange
               price per share  less than 95% of the  Current  Market  Price (as
               defined in  subsection  (f) of this Section  4.1), on such record
               date, the Exercise Price shall be adjusted immediately after such
               record  date so that it  shall  equal  the  price  determined  by
               multiplying the Exercise Price in effect on such record date by a
               fraction  of which the  numerator  shall be the  total  number of
               Common  Shares  outstanding  at such record date plus a number of
               Common  Shares  equal to the number  arrived at by  dividing  the
               aggregate  price of the total number of additional  Common Shares
               offered  for   subscription  or  purchase,   or  into  which  the
               convertible  securities  so  offered  are  convertible,   or  the
               aggregate   conversion  or  exchange  price  of  the  convertible
               securities so offered, by such Current Market Price, and of which
               the  denominator  shall be the  total  number  of  Common  Shares
               outstanding  on  such  record  date  plus  the  total  number  of
               additional Common Shares offered for subscription or purchase, or
               into which the convertible securities so offered are convertible;
               Common  Shares owned by or held for the account of the Company or

<PAGE>

                                      -15-


               any  subsidiary  of  the  Company  shall  be  deemed  not  to  be
               outstanding  for  the  purpose  of  any  such  computation;  such
               adjustment shall be made successively whenever such a record date
               is fixed; to the extent that any rights,  options or warrants are
               not so issued or any such  rights,  options or  warrants  are not
               exercised  prior to the  expiration  thereof,  the Exercise Price
               shall then be readjusted  to the Exercise  Price which would then
               be in effect  if such  record  date had not been  fixed or to the
               Exercise  Price  which  would  then be in effect  based  upon the
               number of Common Shares,  or securities  convertible  into Common
               Shares, actually issued upon the exercise of such rights, options
               or warrants, as the case may be;

          (e)  if and  whenever  at any time  prior to the Time of  Expiry,  the
               Company shall fix a record date for the making of a  distribution
               to all or substantially all the holders of its outstanding Common
               Shares of:

               (i)  shares of any class other than Common Shares  whether of the
                    Company  or  any  other   corporation   (other  than  shares
                    distributed  to holders of Common Shares as a stock dividend
                    in lieu of a cash dividend paid in the ordinary course), or

               (ii) rights, options or warrants (other than those referred to in
                    subsection (d) of this Section 4.1), or

               (iii) evidences of its indebtedness, or

               (iv) assets  (other  than  cash  dividends  paid in the  ordinary
                    course)

               then,  in each such case,  the  Exercise  Price shall be adjusted
               immediately  after such  record  date so that it shall  equal the
               price  determined by multiplying  the Exercise Price in effect on
               such record date by a fraction,  of which the numerator  shall be
               the total number of Common Shares outstanding on such record date
               multiplied by the Current Market Price on such record date,  less
               the aggregate  fair market value (as  determined by the directors
               and approved by the Trustee) of such shares or rights, options or
               warrants or evidences of  indebtedness  or assets so distributed,
               and of which the denominator  shall be the total number of Common
               Shares outstanding on such record date multiplied by such Current
               Market  Price;  Common Shares owned by or held for the account of
               the Company or any  subsidiary of the Company shall be deemed not
               to be outstanding for the purpose of any such  computation;  such
               adjustment shall be made successively whenever such a record date
               is fixed;  and to the  extent  that such  distribution  is not so
               made, the Exercise Price shall then be readjusted to the Exercise
               Price  which  would then be in effect if such record date had not
               been fixed or to the Exercise Price which would then be in effect
               based  upon  such  shares  or  rights,  options  or  warrants  or
               evidences of indebtedness or assets actually distributed,  as the
               case may be;


<PAGE>

                                      -16-


          (f)  for the purpose of any computation  under  subsections (d) or (e)
               of this Section 4.1, the "Current Market Price" at any date shall
               be the  weighted  average  of the  closing  prices  per share for
               Common Shares for any 30 consecutive trading days selected by the
               Company commencing not more than 45 trading days before such date
               on The Toronto Stock Exchange.  The weighted  average price shall
               be determined by dividing the aggregate sale price or the average
               closing  bid and ask prices of all such  shares  sold on the said
               exchange during the said 30 consecutive trading days by the total
               number of such shares so sold;

          (g)  in any  case  in  which  this  Article  4 shall  require  that an
               adjustment shall become effective immediately after a record date
               for an event referred to herein, the Company may defer, until the
               occurrence  of such  event,  issuing to the holder of any Warrant
               exercised  after such  record date and before the  occurrence  of
               such  event  the  additional  Common  Shares  issuable  upon such
               exercise  by  reason of the  adjustment  required  by such  event
               before giving effect to such adjustment;  provided, however, that
               the  Company  shall   deliver  to  such  holder  an   appropriate
               instrument   evidencing  such  holder's  right  to  receive  such
               additional  Common  Shares  upon  the  occurrence  of  the  event
               requiring   such   adjustment   and  the  right  to  receive  any
               distributions  made on such additional Common Shares which may be
               acquired  upon the  exercise  of  Warrants  declared in favour of
               holders of record of Common Shares on and after the Exercise Date
               or such later date as such holder would,  but for the  provisions
               of this  subsection (g), have become the holder of record of such
               additional Common Shares pursuant to Section 4.1; and

          (h)  the  adjustments  provided for in this Article 4 in the number of
               Common Shares, Exercise Price and classes of securities which are
               to be received on the exercise of Warrants, are cumulative. After
               any  adjustment  pursuant to this  Section  4.1, the term "Common
               Shares" where used in this Indenture shall be interpreted to mean
               securities  of any class or  classes  which,  as a result of such
               adjustment  and all prior  adjustments  pursuant to this  Section
               4.1, the  Warrantholder  is entitled to receive upon the exercise
               of his Warrant,  and the number of Common Shares indicated by any
               exercise made pursuant to a Warrant shall be  interpreted to mean
               the number of Common  Shares or other  property or  securities  a
               Warrantholder  is  entitled  to  receive,  as a  result  of  such
               adjustment  and all prior  adjustments  pursuant to this  Section
               4.1, upon the full exercise of a Warrant.

4.2       Entitlement to Common Shares on Exercise of Warrant

          All shares of any class, or other  securities which a Warrantholder is
at the time in  question  entitled to receive on the  exercise  of his  Warrant,
whether or not as a result of  adjustments  made pursuant to this Section shall,
for the purposes of the interpretation of this Indenture, be deemed to be shares
and other securities which such Warrantholder is entitled to acquire pursuant to
such Warrant.

4.3       Determination by Company's Auditors

          In the event of any question  arising with respect to the  adjustments
provided for in this Article 4 such question shall be conclusively determined by
the  Company's  Auditors who shall have access to all  necessary  records of the
Company,  and such determination shall be binding upon the Company, the Trustee,
all Warrantholders and all other persons interested therein.


<PAGE>

                                      -17-


4.4       Proceedings Prior to any Action Requiring Adjustment

          As a  condition  precedent  to the  taking of any action  which  would
require an adjustment in any of the  acquisition  rights  pursuant to any of the
Warrants,  including  the number of Common  Shares which are to be received upon
the exercise thereof,  the Company shall take any corporate action which may, in
the opinion of counsel,  be necessary in order that the Company has unissued and
reserved in its  authorized  capital and may validly and legally  issue as fully
paid and  non-assessable  all the shares which the holders of such  Warrants are
entitled  to  receive  on the  full  exercise  thereof  in  accordance  with the
provisions hereof.

4.5       Certificate of Adjustment

          The Company shall from time to time  immediately  after the occurrence
of any event which requires an adjustment or readjustment as provided in Article
4, deliver a certificate of the Company to the Trustee  specifying the nature of
the  event  requiring  the same and the  amount of the  adjustment  necessitated
thereby and setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based,  which certificate and the amount of
the adjustment specified therein shall be verified by the Trustee.

4.6       Protection of Trustee

          The Trustee:

          (a)  shall not at any time be under any duty or  responsibility to any
               Warrantholder  to  determine  whether  any facts  exist which may
               require  any  adjustment  contemplated  by  Section  4.1 or  with
               respect to the nature or extent of any such adjustment when made,
               or with respect to the method employed in making the same;

          (b)  shall not be  accountable  with  respect to the validity or value
               (or the kind or amount) of any Common  Shares or of any shares or
               other  securities or property  which may at any time be issued or
               delivered  upon  the  exercise  of the  rights  attaching  to any
               Warrant;

          (c)  shall not be responsible for any failure of the Company to issue,
               transfer or deliver  Common Shares or  certificates  for the same
               upon  the  surrender  of any  Warrants  for  the  purpose  of the
               exercise of such  rights or to comply  with any of the  covenants
               contained in this Article 4; and

          (d)  shall not incur any liability or responsibility whatever or be in
               any way  responsible  for the  consequences  of any breach on the
               part of the Company of any of the representations,  warranties or
               covenants  herein  contained  or of any  acts  of the  agents  or
               servants of the Company.


<PAGE>

                                      -18-


                                   ARTICLE 5
                      RIGHTS OF THE COMPANY AND COVENANTS

5.1       Optional Purchases by the Company

          The Company may from time to time  purchase for  cancellation,  in the
market,  by private  contract or otherwise any or all of the Warrants.  Any such
purchase shall be made at the lowest price or prices at which, in the opinion of
the  directors,  such Warrants are then  obtainable,  plus  reasonable  costs of
purchase,  and may be made in such  manner,  from such persons and on such other
terms as the  Company,  in its  sole  discretion,  may  determine.  The  Warrant
Certificates  representing the Warrants  purchased  pursuant to this Section 5.1
shall forthwith be delivered to and cancelled by the Trustee.

5.2       General Covenants

          The Company  covenants  with the Trustee  that so long as any Warrants
remain outstanding:

          (a)  it will reserve and keep available a sufficient  number of Common
               Shares for the purpose of enabling it to satisfy its  obligations
               to issue  Common  Shares upon the exercise of the Warrants in the
               event  that the  Company  does not have an  unlimited  number  of
               Common Shares authorized;

          (b)  it will cause the Common Shares and the certificates representing
               the Common  Shares  from time to time  acquired  pursuant  to the
               exercise  of the  Warrants  to be duly  issued and  delivered  in
               accordance with the Warrant Certificates and the terms hereof;

          (c)  all Common  Shares  which  shall be issued  upon  exercise of the
               right  to  acquire   provided  for  herein  and  in  the  Warrant
               Certificates shall be fully paid and non-assessable;

          (d)  it will use its best efforts to maintain its corporate existence,
               carry  on  and  conduct  its  business  in a  prudent  manner  in
               accordance  with industry  standards and good business  practice,
               keep or cause to be kept  proper  books of account in  accordance
               with applicable law, and, if and whenever  required in writing by
               the Trustee, file with the Trustee copies of all annual financial
               statements of the Corporation  furnished to  Shareholders  during
               the term of this Indenture;

          (e)  it will use its best efforts to ensure that all Common  Shares of
               the Company outstanding or issuable from time to time continue to
               be traded on the Toronto Stock  Exchange,  NASDAQ National Market
               and  such  other  exchange  satisfactory  or  electronic  trading
               facility to the directors of the Company;

          (f)  it will make all  requisite  filings  under  applicable  Canadian
               securities  legislation,  including  those  necessary to remain a
               reporting  issuer  not in  default  in the  Province  of  British
               Columbia, Alberta and Ontario;


<PAGE>

                                      -19-


          (g)  generally,  it will well and truly  perform  and carry out all of
               the  acts  or  things  to  be  done  by it as  provided  in  this
               Indenture.

5.3       Trustee's Remuneration and Expenses

          The Company  covenants  that it will pay to the  Trustee  from time to
time  reasonable  remuneration  for  its  services  hereunder  and  will  pay or
reimburse   the  Trustee   upon  its  request  for  all   reasonable   expenses,
disbursements and advances incurred or made by the Trustee in the administration
or execution of the trusts hereby created (including the reasonable compensation
and the  disbursements  of its counsel and all other advisers and assistants not
regularly in its employ) both before any default  hereunder and thereafter until
all duties of the Trustee hereunder shall be finally and fully performed, except
any such expense, disbursement or advance as may arise out of or result from the
Trustee's negligence or wilful misconduct.

5.4       Performance of Covenants by Trustee

          If the Company shall fail to perform any of its covenants contained in
this  Warrant  Indenture,  the  Trustee  may notify the  Warrantholders  of such
failure  on the  part of the  Company  or may  itself  perform  any of the  said
covenants  capable of being performed by it, but,  subject to Section 9.2, shall
be under no obligation to perform said covenants or to notify the Warrantholders
of such  performance  by it. All sums  expended or advanced by the Trustee in so
doing  shall be  repayable  as provided  in Section  5.3.  No such  performance,
expenditure  or advance by the Trustee  shall relieve the Company of any default
hereunder or of its continuing obligations under the covenants herein contained.

                                   ARTICLE 6
                                  ENFORCEMENT

6.1       Suits by Warrantholders

          All or any of the rights  conferred upon any  Warrantholder  by any of
the terms of the Warrant  Certificates  or of the Indenture,  or of both, may be
enforced by the  Warrantholder by appropriate  proceedings but without prejudice
to the right  which is hereby  conferred  upon the Trustee to proceed in its own
name to enforce each and all of the provisions  herein contained for the benefit
of the Warrantholders.

6.2       Immunity of Shareholders, Etc.

          The Trustee and, by the acceptance of the Warrant  Certificates and as
part of the  consideration  for the issue of the  Warrants,  the  Warrantholders
hereby  waive and release any right,  cause of action or remedy now or hereafter
existing in any jurisdiction  against any  incorporator or any past,  present or
future shareholder,  director,  officer, employee or agent of the Company or any
successor  corporation  for the  issue  of the  Common  Shares  pursuant  to any
Warrants  or on any  covenant,  agreement,  representation  or  warranty  by the
Company herein or contained in the Warrant Certificates.


<PAGE>

                                      -20-


6.3      Limitation of Liability

          The obligations  hereunder are not personally  binding upon, nor shall
resort hereunder be had to, the private property of any of the past,  present or
future directors or shareholders of the Company or any successor  corporation or
any of the past, present or future officers,  employees or agents of the Company
or any  successor  corporation,  but only the  property  of the  Company  or any
successor corporation shall be bound in respect hereof.

6.4       Waiver of Default

          Upon the happening of any default hereunder:

          (a)  the holders of not less than 75% of the Warrants then outstanding
               shall  have  power (in  addition  to the  powers  exercisable  by
               extraordinary   resolution   as  provided  in  Section  7.10)  by
               requisition  in  writing  to  instruct  the  Trustee to waive any
               default  hereunder  and the  Trustee  shall  thereupon  waive the
               default upon such terms and  conditions as shall be prescribed in
               such requisition; or

          (b)  the Trustee shall have power to waive any default  hereunder upon
               such terms and conditions as the Trustee may deem advisable,  if,
               in the Trustee's opinion based on the advice of Counsel, the same
               shall have been cured or adequate provision made therefor;

provided  that no delay or omission of the Trustee or of the  Warrantholders  to
exercise  any right or power  accruing  upon any default  shall  impair any such
right  or power or shall be  construed  to be a waiver  of any such  default  or
acquiescence  therein and provided further that no act or omission either of the
Trustee  or of the  Warrantholders  shall  extend  to or be taken in any  manner
whatsoever to affect any subsequent  default  hereunder or the rights  resulting
therefrom.

                                   ARTICLE 7
                           MEETINGS OF WARRANTHOLDERS

7.1       Right to Convene Meetings

          The  Trustee  may at any  time and from  time to  time,  and  shall on
receipt of a written request of the Company or of a Warrantholders'  Request and
upon being indemnified and funded to its reasonable  satisfaction by the Company
or by the Warrantholders signing such Warrantholders'  Request against the costs
which may be  incurred  in  connection  with the  calling,  and  holding of such
meeting,  convene a meeting of the  Warrantholders.  In the event of the Trustee
failing to convene a meeting  within  seven days after  receipt of such  written
request of the Company or such Warrantholders' Request and indemnity and funding
given as aforesaid, the Company or such Warrantholders,  as the case may be, may
convene such meeting.  Every such meeting shall be held in the City of Vancouver
or at such other place as may be approved or determined by the Trustee.


<PAGE>

                                      -21-


7.2       Notice

          At  least   fourteen  (14)  days'  prior  notice  of  any  meeting  of
Warrantholders  shall be given to the  Warrantholders in the manner provided for
in Section  10.2 and a copy of such notice  shall be sent by mail to the Trustee
(unless the meeting has been called by the Trustee)  and to the Company  (unless
the meeting has been called by the  Company).  Such notice  shall state the time
when and the place  where the  meeting is to be held,  shall  state  briefly the
general  nature of the business to be transacted  thereat and shall contain such
information as is reasonably  necessary to enable the  Warrantholders  to make a
reasoned  decision on the  matter,  but it shall not be  necessary  for any such
notice  to set out the  terms of any  resolution  to be  proposed  or any of the
provisions of this Article 7.

7.3       Chairman

          An individual (who need not be a Warrantholder)  designated in writing
by the Trustee  shall be chairman  of the  meeting  and if no  individual  is so
designated,  or if the individual so designated is not present within 15 minutes
from the time fixed for the holding of the meeting,  the Warrantholders  present
in person or by proxy shall choose some individual present to be chairman.

7.4       Quorum

          Subject to the  provisions  of  Section  7.11,  at any  meeting of the
Warrantholders a quorum shall consist of Warrantholders  present in person or by
proxy and  entitled  to acquire at least 25% of the  aggregate  number of Common
Shares which could be acquired  pursuant to all the then  outstanding  Warrants,
provided  that at least two  persons  entitled to vote  thereat  are  personally
present.  If a quorum  of the  Warrantholders  shall  not be  present  within 30
minutes from the time fixed for holding any meeting, the meeting, if summoned by
the Warrantholders or on a Warrantholders'  Request, shall be dissolved;  but in
any other case the meeting  shall be  adjourned to the same day in the next week
(unless  such day is not a Business  Day, in which case it shall be adjourned to
the next following Business Day) at the same time and place and no notice of the
adjournment  need be given.  Any business may be brought before or dealt with at
an adjourned meeting which might have been dealt with at the original meeting in
accordance  with the notice calling the same. No business shall be transacted at
any meeting unless a quorum be present at the  commencement of business.  At the
adjourned meeting the Warrantholders  present in person or by proxy shall form a
quorum and may  transact  the  business  for which the  meeting  was  originally
convened,  notwithstanding that they may not be entitled to acquire at least 25%
of the aggregate  number of Common Shares which may be acquired  pursuant to all
then outstanding Warrants.

7.5       Power to Adjourn

          The chairman of any meeting at which a quorum of the Warrantholders is
present may, with the consent of the meeting,  adjourn any such meeting,  and no
notice of such  adjournment  need be given  except such  notice,  if any, as the
meeting may prescribe.


<PAGE>

                                      -22-


7.6       Show of Hands

          Every  question  submitted to a meeting  shall be decided in the first
place by a majority of the votes  given on a show of hands  except that votes on
an extraordinary  resolution shall be given in the manner hereinafter  provided.
At any such  meeting,  unless a poll is duly  demanded  as  herein  provided,  a
declaration  by the  chairman  that a  resolution  has been  carried  or carried
unanimously  or by a particular  majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.

7.7       Poll and Voting

          On every extraordinary resolution, and on any other question submitted
to a meeting and after a vote by show of hands when  demanded by the chairman or
by one or more of the  Warrantholders  acting in person or by proxy and entitled
to acquire in the aggregate at least 5% of the aggregate number of Common Shares
which could be acquired  pursuant to all the Warrants then  outstanding,  a poll
shall be taken in such manner as the chairman shall direct. Questions other than
those required to be determined by extraordinary  resolution shall be decided by
a majority of the votes cast on the poll.

          On a show of hands,  every person who is present and entitled to vote,
whether as a Warrantholder or as proxy for one or more absent Warrantholders, or
both,  shall have one vote. On a poll, each  Warrantholder  present in person or
represented by a proxy duly appointed by instrument in writing shall be entitled
to one vote in respect of each  Common  Share  which he is  entitled  to acquire
pursuant  to the  Warrant or Warrants  then held by him or  represented  by such
proxy. A proxy need not be a Warrantholder. The chairman of any meeting shall be
entitled,  both on a show of  hands  and on a poll,  to vote in  respect  of the
Warrants, if any, held or represented by him.

7.8       Regulations

          The Trustee, or the Company with the approval of the Trustee, may from
time to time make and from time to time vary such  regulations as it shall think
fit for:

          (a)  the  setting of the record  date for a meeting for the purpose of
               determining  Warrantholders  entitled to receive notice of and to
               vote at a meeting;

          (b)  the issue of voting  certificates  by any bank,  trust company or
               other  depository  satisfactory  to the Trustee  stating that the
               Warrant  Certificates  specified therein have been deposited with
               it by a named  person and will remain on deposit  until after the
               meeting,  which  voting  certificates  shall  entitle the persons
               named  therein to be present and vote at any such  meeting and at
               any  adjournment  thereof  or to  appoint a proxy or  proxies  to
               represent  them and vote for them at any such  meeting and at any
               adjournment  thereof in the same  manner and with the same effect
               as though the persons so named in such voting  certificates  were
               the actual bearers of the Warrant Certificates specified therein;


<PAGE>

                                      -23-


          (c)  the deposit of voting  certificates  and  instruments  appointing
               proxies at such place and time as the Trustee, the Company or the
               Warrantholders  convening the meeting, as the case may be, may in
               the notice convening the meeting direct;

          (d)  the deposit of voting  certificates  and  instruments  appointing
               proxies at some approved  place or places other than the place at
               which the meeting is to be held and enabling  particulars of such
               instruments appointing proxies to be mailed or telecopied or sent
               by other means of electronic  transmission  before the meeting to
               the  Company or to the  Trustee at the place where the same is to
               be held and for the voting of proxies so  deposited as though the
               instruments themselves were produced at the meeting;

          (e)  the form of the instrument of proxy; and

          (f)  generally for the calling of meetings of  Warrantholders  and the
               conduct of business thereat.

          Any  regulations  so made shall be binding and effective and the votes
given in accordance therewith shall be valid and shall be counted.  Save as such
regulations may provide, the only persons who shall be recognized at any meeting
as a  Warrantholder,  or be  entitled  to vote or be present  at the  meeting in
respect  thereof  (subject to Section  7.9),  shall be  Warrantholders  or their
counsel, or proxies of Warrantholders.

7.9       Company and Trustee may be Represented

          The Company and the Trustee, by their respective directors,  employees
and officers, and the counsel for the Company and for the Trustee may attend any
meeting of the  Warrantholders,  but shall have no vote as such  unless in their
capacity as a Warrantholder.

7.10      Powers Exercisable by Extraordinary Resolution

          In  addition  to all  other  powers  conferred  upon them by any other
provisions of this Indenture or by law, the  Warrantholders  at a meeting shall,
subject to the provisions of Section 7.11, have the power, exercisable from time
to time by extraordinary resolution:

          (a)  to agree to any modification,  abrogation, alteration, compromise
               or arrangement of the rights of  Warrantholders or the Trustee in
               its   capacity  as  trustee   hereunder   or  on  behalf  of  the
               Warrantholders  against the  Company  whether  such rights  arise
               under this Indenture or the Warrant Certificates or otherwise;

          (b)  to amend, alter or repeal any extraordinary resolution previously
               passed or sanctioned by the Warrantholders;

          (c)  to direct or to  authorize  the  Trustee  to  enforce  any of the
               covenants on the part of the Company  contained in this Indenture
               or the  Warrant  Certificates  or to enforce any of the rights of
               the  Warrantholders in any manner specified in such extraordinary
               resolution  or to refrain  from  enforcing  any such  covenant or
               right;


<PAGE>

                                      -24-


          (d)  to waive,  and to direct the Trustee to waive, any default on the
               part of the  Company in  complying  with any  provisions  of this
               Indenture or the Warrant  Certificates either  unconditionally or
               upon any conditions specified in such extraordinary resolution;

          (e)  to restrain  any  Warrantholder  from taking or  instituting  any
               suit,   action  or   proceeding   against  the  Company  for  the
               enforcement of any of the covenants on the part of the Company in
               this Indenture or the Warrant  Certificates  or to enforce any of
               the rights of the Warrantholders;

          (f)  to direct any  Warrantholder  who, as such, has brought any suit,
               action or  proceeding to stay or to  discontinue  or otherwise to
               deal  with  the same  upon  payment  of the  costs,  charges  and
               expenses  reasonably and properly incurred by such  Warrantholder
               in connection therewith;

          (g)  to  assent  to any  change  in or  omission  from the  provisions
               contained in the Warrant  Certificates  and this Indenture or any
               ancillary or  supplemental  instrument  which may be agreed to by
               the  Company,  and to  authorize  the  Trustee  to  concur in and
               execute any  ancillary or  supplemental  indenture  embodying the
               change or omission;

          (h)  with the  consent of the  Company,  to remove the  Trustee or its
               successor  in office and to appoint a new  trustee or trustees to
               take the place of the Trustee so removed; and

          (i)  to assent to any compromise or  arrangement  with any creditor or
               creditors or any class or classes of creditors,  whether  secured
               or otherwise,  and with holders of any shares or other securities
               of the Company.

7.11      Meaning of Extraordinary Resolution

          (a)  The  expression  "extraordinary  resolution"  when  used  in this
               Indenture means,  subject as hereinafter provided in this Section
               7.11 and in Section  7.14, a resolution  proposed at a meeting of
               Warrantholders  duly  convened  for  that  purpose  and  held  in
               accordance  with the  provisions of this Article 7 at which there
               are  present  in person or by proxy  Warrantholders  entitled  to
               acquire  at least 25% of the  aggregate  number of Common  Shares
               which  may be  acquired  pursuant  to all  the  then  outstanding
               Warrants and passed by the  affirmative  votes of  Warrantholders
               entitled to acquire not less than 75% of the aggregate  number of
               Common  Shares  which may be  acquired  pursuant  to all the then
               outstanding  Warrants represented at the meeting and voted on the
               poll upon such resolution.

          (b)  If,  at  any  meeting  called  for  the  purpose  of  passing  an
               extraordinary  resolution,  Warrantholders entitled to acquire at
               least 25% of the  aggregate  number of Common Shares which may be
               acquired  pursuant to all the then  outstanding  Warrants are not
               present in person or by proxy  within 30  minutes  after the time
               appointed  for the  meeting,  then the  meeting,  if  convened by
               Warrantholders  or  on  a  Warrantholders'   Request,   shall  be
               dissolved; but in any other case it shall stand adjourned to such

<PAGE>

                                      -25-


               day,  being not less than 15 or more than 60 days  later,  and to
               such place and time as may be appointed by the chairman. Not less
               than ten (10) days' prior  notice  shall be given of the time and
               place of such  adjourned  meeting in the manner  provided  for in
               Section  10.2.  Such  notice  shall  state that at the  adjourned
               meeting the Warrantholders  present in person or by proxy did not
               form a quorum  but it shall  not be  necessary  to set  forth the
               purposes for which the meeting was originally called or any other
               particulars.  At the adjourned meeting the Warrantholders present
               in person or by proxy  shall form a quorum and may  transact  the
               business  for which the meeting  was  originally  convened  and a
               resolution  proposed at such adjourned  meeting and passed by the
               requisite  vote as provided  in  subsection  7.11(a)  shall be an
               extraordinary  resolution  within the  meaning of this  Indenture
               notwithstanding that Warrantholders  entitled to acquire at least
               25% of  the  aggregate  number  of  Common  Shares  which  may be
               acquired  pursuant to all the then  outstanding  Warrants are not
               present in person or by proxy at such adjourned meeting.

          (c)  Votes on an  extraordinary  resolution shall always be given on a
               poll  and no  demand  for a poll on an  extraordinary  resolution
               shall be necessary.

7.12      Powers Cumulative

          Any one or more of the powers or any combination of the powers in this
Indenture  stated  to be  exercisable  by the  Warrantholders  by  extraordinary
resolution or otherwise  may be exercised  from time to time and the exercise of
any one or more of such  powers or any  combination  of powers from time to time
shall not be deemed to exhaust the right of the  Warrantholders to exercise such
power or powers or combination of powers then or thereafter from time to time.

7.13      Minutes

          Minutes  of all  resolutions  and  proceedings  at  every  meeting  of
Warrantholders  shall be made and duly entered in books to be provided from time
to time for that purpose by the Trustee at the expense of the  Company,  and any
such minutes as  aforesaid,  if signed by the  chairman or the  secretary of the
meeting at which such  resolutions were passed or proceedings had shall be prima
facie evidence of the matters  therein stated and, until the contrary is proved,
every such meeting in respect of the  proceedings  of which  minutes  shall have
been  made  shall be  deemed  to have  been  duly  convened  and  held,  and all
resolutions  passed  thereat or  proceedings  taken shall be deemed to have been
duly passed and taken.

7.14      Instruments in Writing

          All actions which may be taken and all powers that may be exercised by
the  Warrantholders  at a meeting held as provided in this Article 7 may also be
taken and  exercised by  Warrantholders  entitled to acquire at least 75% of the
aggregate number of Common Shares which may be acquired pursuant to all the then
outstanding  Warrants  by an  instrument  in  writing  signed  in  one  or  more
counterparts by such  Warrantholders  in person or by attorney duly appointed in
writing,  provided that such instrument was submitted to all the  Warrantholders
for their prior  consideration,  and the expression  "extraordinary  resolution"
when used in this Indenture shall include an instrument so signed.


<PAGE>

                                      -26-


7.15      Binding Effect of Resolutions

          Every  resolution  and  every   extraordinary   resolution  passed  in
accordance with the provisions of this Article 7 at a meeting of  Warrantholders
shall be binding upon all the Warrantholders,  whether present at or absent from
such  meeting,  and every  instrument  in writing  signed by  Warrantholders  in
accordance  with  Section  7.14  shall be binding  upon all the  Warrantholders,
whether  signatories  thereto or not, and each and every  Warrantholder  and the
Trustee  (subject to the provisions  for indemnity  herein  contained)  shall be
bound to give effect  accordingly  to every such  resolution  and  instrument in
writing.

7.16      Holdings by Company Disregarded

          In determining  whether  Warrantholders  holding Warrant  Certificates
evidencing the  entitlement to acquire the required  number of Common Shares are
present at a meeting of  Warrantholders  for the purpose of determining a quorum
or  have   concurred  in  any   consent,   waiver,   extraordinary   resolution,
Warrantholders'  Request or other action under this  Indenture,  Warrants  owned
legally or beneficially by the Company or any subsidiary of the Company shall be
disregarded in accordance with the provisions of Section 10.7.

                                   ARTICLE 8
                            SUPPLEMENTAL INDENTURES

8.1       Provision for Supplemental Indentures for Certain Purposes

          From  time to time the  Company  (when  authorized  by  action  by the
directors)  and the Trustee  may,  subject to the  provisions  hereof,  and they
shall,  when so directed in accordance with the provisions  hereof,  execute and
deliver by their proper officers, indentures or instruments supplemental hereto,
which  thereafter  shall  form  part  hereof,  for any one or more or all of the
following purposes:

          (a)  setting forth any  adjustments  resulting from the application of
               the provisions of Article 4;

          (b)  adding to the  provisions  hereof such  additional  covenants and
               enforcement  provisions  as,  in  the  opinion  of  counsel,  are
               necessary or advisable in the  premises,  provided  that the same
               are not in the opinion of the  Trustee,  based upon the advice of
               counsel, prejudicial to the interests of the Warrantholders;

          (c)  giving effect to any extraordinary  resolution passed as provided
               in Article 7;

          (d)  making such  provisions not  inconsistent  with this Indenture as
               may  be  necessary  or  desirable  with  respect  to  matters  or
               questions  arising  hereunder  or for the purpose of  obtaining a
               listing  or  quotation  of the  Warrants  on any stock  exchange,
               provided  that such  provisions  are not,  in the  opinion of the
               Trustee,  based upon the advice of  counsel,  prejudicial  to the
               interests of the Warrantholders;


<PAGE>

                                      -27-


          (e)  adding to or  altering  the  provisions  hereof in respect of the
               transfer  of  Warrants,  making  provision  for the  exchange  of
               Warrant Certificates,  and making any modification in the form of
               the  Warrant  Certificates  which does not  affect the  substance
               thereof;

          (f)  modifying  any of the  provisions  of this  Indenture,  including
               relieving the Company from any of the obligations,  conditions or
               restrictions herein contained, provided that such modification or
               relief shall be or become  operative or effective only if, in the
               opinion of the  Trustee  based upon the advice of  counsel,  such
               modification  or relief in no way prejudices any of the rights of
               the  Warrantholders or of the Trustee,  and provided further that
               the Trustee may in its sole discretion  decline to enter into any
               such supplemental  indenture which in its opinion, based upon the
               advice of  counsel,  may not afford  adequate  protection  to the
               Trustee when the same shall become operative; and

          (g)  for any other  purpose  not  inconsistent  with the terms of this
               Indenture,  including  the  correction  or  rectification  of any
               ambiguities,   defective  or  inconsistent  provisions,   errors,
               mistakes or omissions herein, provided that in the opinion of the
               Trustee,  based  upon the  advice of  counsel,  the rights of the
               Trustee  and of  the  Warrantholders  are  in no  way  prejudiced
               thereby.

8.2       Successor Companies

          In the case of the consolidation,  amalgamation, merger or transfer of
the undertaking or assets of the Company as an entirety or  substantially  as an
entirety  to  another  corporation  ("successor  corporation"),   the  successor
corporation resulting from such consolidation,  amalgamation, merger or transfer
(if  not  the  Company)  shall  expressly  assume,  by  supplemental   indenture
satisfactory  in form to the Trustee and executed and  delivered to the Trustee,
the due and punctual  performance  and observance of each and every covenant and
condition of this Indenture to be performed and observed by the Company.

8.3       Amending Adjustment Provisions

          From time to time the  Corporation  (when  authorized by action by the
directors)  and the  Trustee  may  modify  the  adjustments  resulting  from the
application of the provisions of Article 4, if such  modification is required as
a result of any approval of the Toronto Stock Exchange and the  Corporation  and
the Trustee may execute and deliver such documents as may be necessary to effect
the modifications.

                                   ARTICLE 9
                             CONCERNING THE TRUSTEE

9.1       Trust Indenture Legislation

          (a)  If and to the extent that any provision of this Indenture limits,
               qualifies or conflicts with a mandatory requirement of Applicable
               Legislation, such mandatory requirement shall prevail.


<PAGE>

                                      -28-


          (b)  The Company and the Trustee agree that each will, at all times in
               relation to this Indenture and any action to be taken  hereunder,
               observe  and  comply  with and be  entitled  to the  benefits  of
               Applicable Legislation.

9.2       Rights and Duties of Trustee

          (a)  In the exercise of the rights and duties  prescribed or conferred
               by the terms of this  Indenture,  the Trustee shall exercise that
               degree of care,  diligence  and skill that a  reasonably  prudent
               trustee would exercise in comparable circumstances.  No provision
               of this Indenture  shall be construed to relieve the Trustee from
               liability for its own negligent action, its own negligent failure
               to act, or its own wilful misconduct or bad faith.

          (b)  The  obligation  of the Trustee to commence or continue  any act,
               action or  proceeding  for the purpose of enforcing any rights of
               the Trustee or the Warrantholders  hereunder shall be conditional
               upon the  Warrantholders  furnishing,  when required by notice by
               the  Trustee,  sufficient  funds to commence or to continue  such
               act,   action  or   proceeding   and  an   indemnity   reasonably
               satisfactory  to the Trustee to protect and to hold  harmless the
               Trustee  against the costs,  charges and expenses and liabilities
               to be  incurred  thereby and any loss and damage it may suffer by
               reason  thereof.   None  of  the  provisions  contained  in  this
               Indenture  shall require the Trustee to expend or to risk its own
               funds  or   otherwise  to  incur   financial   liability  in  the
               performance of any of its duties or in the exercise of any of its
               rights or powers unless indemnified as aforesaid.

          (c)  The  Trustee  may,  before  commencing  or at any time during the
               continuance of any such act,  action or  proceeding,  require the
               Warrantholders,  at whose  instance it is acting to deposit  with
               the Trustee the  Warrants  held by them,  for which  Warrants the
               Trustee shall issue receipts.

          (d)  Every  provision of this Indenture that by its terms relieves the
               Trustee of  liability  or entitles  it to rely upon any  evidence
               submitted  to it is  subject  to  the  provisions  of  Applicable
               Legislation, of this Section 9.2 and of Section 9.3.

9.3       Evidence, Experts and Advisers

          (a)  In  addition to the  reports,  certificates,  opinions  and other
               evidence required by this Indenture, the Company shall furnish to
               the  Trustee  such  additional  evidence of  compliance  with any
               provision  hereof,  and in such  form,  as may be  prescribed  by
               Applicable  Legislation or as the Trustee may reasonably  require
               by written notice to the Company.

          (b)  In the exercise of its rights and duties  hereunder,  the Trustee
               may, if it is acting in good  faith,  rely as to the truth of the
               statements  and  the  accuracy  of  the  opinions   expressed  in
               statutory  declarations,  opinions,  reports,  written  requests,
               consents,  or orders of the Company,  certificates of the Company
               or  other  evidence  furnished  to the  Trustee  pursuant  to any
               provision  hereof or of Applicable  Legislation  or pursuant to a
               request of the Trustee, provided that such evidence complies with

<PAGE>

                                      -29-


               Applicable   Legislation  and  that  the  Trustee  complies  with
               Applicable Legislation and that the Trustee examines the same and
               determines  that  such  evidence  complies  with  the  applicable
               requirements of this Indenture.

          (c)  Whenever  it is provided in this  Indenture  or under  Applicable
               Legislation  that the  Company  shall  deposit  with the  Trustee
               resolutions, certificates, reports, opinions, requests, orders or
               other documents, it is intended that the trust, accuracy and good
               faith on the  effective  date  thereof and the facts and opinions
               stated in all such  documents  so  deposited  shall,  in each and
               every  such case,  be  conditions  precedent  to the right of the
               Company to have the Trustee take the action to be based thereon.

          (d)  The  Trustee  may  employ or retain  such  counsel,  accountants,
               appraisers  or other  experts or  advisers  as it may  reasonably
               require for the purpose of discharging  its duties  hereunder and
               may pay reasonable  remuneration for all services so performed by
               any of them, without taxation of costs of any counsel,  and shall
               not be  responsible  for any misconduct or negligence on the part
               of any such experts or advisers who have been  appointed with due
               care by the Trustee.

9.4       Documents, Monies, etc. held by Trustee

          Any securities,  documents of title or other  instruments  that may at
any time be held by the  Trustee  subject to the trusts  hereof may be placed in
the deposit vaults of the Trustee or of any Canadian chartered bank or deposited
for safekeeping with any such bank. Unless herein otherwise  expressly provided,
any monies so held  pending the  application  or  withdrawal  thereof  under any
provisions of this  Indenture may be deposited in the name of the Trustee in any
Canadian chartered bank at the rate of interest (if any) then current on similar
deposits or, with the consent of the Company, may be:

          (a)  deposited in the deposit  department  of the Trustee or any other
               loan or trust  company  authorized to accept  deposits  under the
               laws of Canada or a province thereof, or

          (b)  invested in securities  issued or guaranteed by the Government of
               Canada or a province thereof or in obligations  maturing not more
               than  one  year  from the  date of  investment,  of any  Canadian
               chartered bank or loan or trust company. Unless the Company shall
               be in default hereunder, all interest or other income received by
               the Trustee in respect of such  deposits  and  investments  shall
               belong to the Company.

9.5       Actions by Trustee to Protect Interest

          The Trustee shall have power to institute and to maintain such actions
and proceedings as it may consider  necessary or expedient to preserve,  protect
or enforce its interests and the interests of the Warrantholders.


<PAGE>

                                      -30-


9.6       Trustee not Required to Give Security

          The  Trustee  shall not be  required  to give any bond or  security in
respect of the execution of the trusts and powers of this Indenture or otherwise
in respect of the premises.

9.7       Protection of Trustee

          By way of supplement  to the  provisions of any law for the time being
relating to Trustees it is expressly declared and agreed as follows:

          (a)  the  Trustee  shall  not  be  liable  for  or by  reason  of  any
               statements  of  fact or  recitals  in  this  Indenture  or in the
               Warrant  Certificates  (except the  representation  contained  in
               Section  9.9 or in the  signature  of the  Trustee on the Warrant
               Certificates)  or be  required  to verify the same,  but all such
               statements  or recitals are and shall be deemed to be made by the
               Company;

          (b)  nothing  herein  contained  shall  impose any  obligation  on the
               Trustee to see to or to require  evidence of the  registration or
               filing (or renewal  thereof) of this  Indenture or any instrument
               ancillary or supplemental hereto;

          (c)  the  Trustee  shall not be bound to give  notice to any person or
               persons of the execution hereof;

          (d)  the  Trustee  shall  not incur any  liability  or  responsibility
               whatever or be in any way  responsible for the consequence of any
               breach on the part of the Company of any of the covenants  herein
               contained or of any acts of any directors,  officers,  employees,
               agents or servants of the Company; and

          (e)  the  Trustee  shall  not be bound to give any  notice or to do or
               take any act,  action  or  proceeding  by  virtue  of the  powers
               conferred  on it  hereby  unless  and  until it shall  have  been
               required so to do under the terms hereof nor shall the Trustee be
               required to take  notice of any default of the Company  hereunder
               unless and until notified in writing of the default (which notice
               must  specify the nature of the  default)  and, in the absence of
               that  notice,   the  Trustee  may  for  all  purposes   hereunder
               conclusively  assume that no default by the Company hereunder has
               occurred.  The  giving  of any  notice  shall in no way limit the
               discretion  of the Trustee  hereunder as to whether any action is
               required to be taken in respect of any default hereunder.

9.8       Replacement of Trustee; Successor by Merger

          (a)  The  Trustee  may  resign  its trust and be  discharged  from all
               further duties and liabilities hereunder, subject to this Section
               9.8, by giving to the Company not less than 90 days' prior notice
               in writing or such shorter prior notice as the Company may accept
               as sufficient.  The  Warrantholders  by extraordinary  resolution
               shall have power at any time to remove the  existing  Trustee and
               to appoint a new trustee.  In the event of the Trustee  resigning
               or  being  removed  as  aforesaid  or being  dissolved,  becoming
               bankrupt,  going into liquidation or otherwise becoming incapable

<PAGE>

                                      -31-


               of acting  hereunder,  the Company shall forthwith  appoint a new
               trustee  unless a new trustee has already  been  appointed by the
               Warrantholders;  failing such  appointment  by the  Company,  the
               retiring Trustee or any  Warrantholder  may apply to a justice of
               the  British  Columbia  Supreme  Court,  on such  notice  as such
               justice may direct, for the appointment of a new trustee; but any
               new trustee so  appointed by the Company or by the Court shall be
               subject to removal as  aforesaid by the  Warrantholders.  Any new
               trustee  appointed  under any provision of this Section 9.8 shall
               be a  corporation  authorized to carry on the business of a trust
               company in the Province of British  Columbia  and, if required by
               the Applicable Legislation for any other provinces, in such other
               provinces.  On any  such  appointment  the new  trustee  shall be
               vested with the same powers,  rights, duties and responsibilities
               as if it had been originally named herein as Trustee hereunder.

          (b)  Upon the  appointment of a successor  trustee,  the Company shall
               promptly notify the Warrantholders thereof in the manner provided
               for in Article 10 hereof.

          (c)  Any  corporation  into or with which the Trustee may be merged or
               consolidated  or  amalgamated,   or  any  corporation   resulting
               therefrom  to  which  the  Trustee  shall  be  a  party,  or  any
               corporation succeeding to the trust business of the Trustee shall
               be the successor to the Trustee hereunder without any further act
               on its part or any of the  parties  hereto,  provided  that  such
               corporation  would be  eligible  for  appointment  as a successor
               trustee under subsection 9.8(a).

          (d)  Any Warrant  Certificates  countersigned  but not  delivered by a
               predecessor trustee may be countersigned by the successor trustee
               in the name of the predecessor or successor trustee.

9.9       Conflict of Interest

          (a)  The  Trustee  represents  to the  Company  that  at the  time  of
               execution  and delivery  hereof no material  conflict of interest
               exists  between its role as a trustee  hereunder  and its role in
               any other  capacity  and  agrees  that in the event of a material
               conflict of interest  arising  hereafter it will,  within 90 days
               after   ascertaining  that  it  has  such  material  conflict  of
               interest, either eliminate the same or assign its trust hereunder
               to a  successor  trustee  approved by the Company and meeting the
               requirements set forth in subsection 9.8(a).  Notwithstanding the
               foregoing  provisions  of this  subsection  9.9(a),  if any  such
               material  conflict of interest  exists or hereafter  shall exist,
               the validity and enforceability of this Indenture and the Warrant
               Certificates  shall not be affected in any manner  whatsoever  by
               reason thereof.

          (b)  Subject to subsection 9.9(a), the Trustee, in its personal or any
               other capacity,  may buy, lend upon and deal in securities of the
               Company  and  generally  may  contract  and enter into  financial
               transactions  with the Company or any  subsidiary  of the Company
               without being liable to account for any profit made thereby.


<PAGE>

                                      -32-


9.10      Acceptance of Trust

          The Trustee hereby  accepts the trusts in this Indenture  declared and
provided for and agrees to perform the same upon the terms and conditions herein
set forth.

9.11      Trustee not to be Appointed Receiver

          The  Trustee  and any  person  related  to the  Trustee  shall  not be
appointed a receiver, a receiver and manager or liquidator of all or any part of
the assets or undertaking of the Company.

9.12      Indemnification

          Without  limiting any protection or indemnity of the Trustee under any
other  provision  hereof,  or  otherwise at law,  the Company  hereby  agrees to
indemnify   and  hold  harmless  the  Trustee  from  and  against  any  and  all
liabilities, losses, damages, penalties, claims, actions, suits, costs, expenses
and disbursements, including reasonable legal or advisor fees and disbursements,
of whatever kind and nature which may at any time be imposed on,  incurred by or
asserted  against the Trustee in connection  with the  performance of its duties
and  obligations  hereunder,  other  than  such  liabilities,  losses,  damages,
penalties,  claims, actions, suits, costs, expenses and disbursements arising by
reason of the negligence or fraud of the Trustee.  This provision  shall survive
the resignation or removal of the Trustee,  or the termination of the Indenture.
The Trustee  shall not be under any  obligation  to  prosecute  or to defend any
action or suit in  respect  of the  relationship  which,  in the  opinion of its
counsel,  may involve it in expense or liability,  unless the Company shall,  so
often as required,  furnish the Trustee with satisfactory  indemnity and funding
against such expense or liability.

                                   ARTICLE 10
                                    GENERAL

10.1      Notice to the Company and the Trustee

          (a)  Unless  herein  otherwise  expressly  provided,  any notice to be
               given  hereunder to the Company or the Trustee shall be deemed to
               be validly given if delivered,  or if sent by registered  letter,
               postage prepaid, or by telecopier:

               if to the Company:

               Spectrum Signal Processing Inc.
               200 - 2700 Production Way
               Burnaby, B.C.
               V5A 4X1
               Attention:        Pascal Spothelfer

               Facsimile No.: (604) 421-1764


<PAGE>

                                      -33-


               if to the Trustee:

               Montreal Trust Company of Canada
               3rd Floor, 510 Burrard Street
               Vancouver, B.C.
               V6C 3B9
               Attention:        Corporate Trust Department

               Facsimile No.: (604) 685-4079

and any such notice delivered on a business day in accordance with the foregoing
shall be deemed to have been  received  on the date of  delivery,  or if sent by
telecopier on a business day, on the date of such transmission, or if mailed, on
the fifth Business Day following the date of the postmark on such notice.

          (b)  The Company or the Trustee,  as the case may be, may from time to
               time  notify  the  other in the  manner  provided  in  subsection
               10.1(a) of a change of address which,  from the effective date of
               such  notice  and  until  changed  by like  notice,  shall be the
               address of the  Company or the  Trustee,  as the case may be, for
               all purposes of this Indenture. A copy of any notice of change of
               address given pursuant to subsection 10.1(b) shall be sent to the
               Warrant  Agency,  where it shall be available  for  inspection by
               Warrantholders during normal business hours.

          (c)  If, by reason of a strike, lockout or other work stoppage, actual
               or threatened, involving postal employees, any notice to be given
               to the Trustee or to the Company  hereunder  could  reasonably be
               considered  unlikely to reach its destination,  such notice shall
               be valid  and  effective  only if it is  delivered  to the  named
               officer  of the  party  to  which it is  addressed  or,  if it is
               delivered to such party at the  appropriate  address  provided in
               subsection  10.1(a),  by  telecopier  or other  means of prepaid,
               transmitted and recorded communication.

10.2      Notice to Warrantholders

          (a)  Any notice to the  Warrantholders  under the  provisions  of this
               Indenture  shall be valid  and  effective  if sent by  telecopier
               other means of prepaid,  transmitted and recorded  communication,
               or if sent by  letter  or  circular  through  the  ordinary  post
               addressed  to  such  holders  at  their  post  office   addresses
               appearing on the register  hereinbefore  mentioned,  and shall be
               deemed to have been effectively given on the date of delivery or,
               if mailed, five (5) Business Days following actual posting of the
               notice.

          (b)  If, by reason of a strike, lockout or other work stoppage, actual
               or threatened, involving postal employees, any notice to be given
               to the  Warrantholders  hereunder could  reasonably be considered
               unlikely to reach its destination, such notice shall be valid and
               effective   only   if  it  is   delivered   personally   to  such
               Warrantholders   or  if   delivered   to  the  address  for  such
               Warrantholders  contained in the register of Warrants  maintained
               by  the  Trustee,  by  telecopier  or  other  means  of  prepaid,
               transmitted and recorded communication.


<PAGE>

                                      -34-


10.3      Ownership of Warrants

          The Company and the Trustee may deem and treat the registered owner of
any Warrant Certificate as the absolute owner of the Warrant represented thereby
for all  purposes,  and the Company and the Trustee shall not be affected by any
notice or knowledge  to the contrary  except where the Company or the Trustee is
required  to  take  notice  by  statute  or by  order  of a court  of  competent
jurisdiction.  A Warrantholder shall be entitled to the rights evidenced by such
Warrant  Certificate free from all equities or rights of set off or counterclaim
between the Company and the original or any intermediate  holder thereof and all
persons may act  accordingly and the receipt of any such  Warrantholder  for the
Common Shares which may be acquired  pursuant  thereto shall be a good discharge
to the  Company  and the  Trustee  for the same and  neither the Company nor the
Trustee shall be bound to inquire into the title of any such holder except where
the  Company or the Trustee is required to take notice by statute or by order of
a court of competent jurisdiction.

10.4      Counterparts

          This Indenture may be executed in several counterparts,  each of which
when so  executed  shall be  deemed  to be an  original  and  such  counterparts
together shall constitute one and the same instrument and notwithstanding  their
date of execution they shall be deemed to be dated as of the date hereof.

10.5      Satisfaction and Discharge of Indenture

          Upon the earlier of:

          (a)  the date by which there shall have been  delivered to the Trustee
               for exercise or destruction all Warrant Certificates  theretofore
               countersigned hereunder; or

          (b)  the Time of Expiry;

this Indenture shall cease to be of further effect and the Trustee, on demand of
and at the cost and expense of the Company and upon delivery to the Trustee of a
certificate  of  the  Company  stating  that  all  conditions  precedent  to the
satisfaction  and discharge of this  Indenture  have been complied  with,  shall
execute proper  instruments  acknowledging  satisfaction of and discharging this
Indenture.

10.6      Provisions of Indentures and Warrants for the Sole Benefit of Parties
          and Warrantholders

          Nothing in this Indenture or in the Warrant Certificates, expressed or
implied, shall give or be construed to give to any person other than the parties
hereto and the Warrantholders, as the case may be, any legal or equitable right,
remedy or claim under this Indenture,  or under any covenant or provision herein
or therein  contained,  all such  covenants  and  provisions  being for the sole
benefit of the parties hereto and the Warrantholders.


<PAGE>

                                      -35-


10.7      Common Shares or Warrants Owned by the Company or its Subsidiaries -
          Certificate to be Provided

          For  the  purpose  of  disregarding  any  Warrants  owned  legally  or
beneficially  by the Company or any  subsidiary  of the Company in Section 7.16,
the Company  shall provide to the Trustee,  from time to time, a certificate  of
the Company setting forth as at the date of such certificate:

          (a)  the names (other than the name of the Company) of the  registered
               holders of Common Shares which,  to the knowledge of the Company,
               are  owned  by or held  for the  account  of the  Company  or any
               subsidiary of the Company; and

          (b)  the  number of  Warrants  owned  legally or  beneficially  by the
               Company or any subsidiary of the Company;

and the Trustee,  in making the  computations in Section 7.16, shall be entitled
to rely conclusively on such certificate.

IN WITNESS  WHEREOF the parties hereto have executed this Indenture  under their
respective corporate seals and the hands of their proper officers in that behalf
as of the date first above written.

SPECTRUM SIGNAL PROCESSING INC.

Per:     "Pascal Spothelfer"
         Authorized Signatory

MONTREAL TRUST COMPANY OF CANADA

Per:     "Nicole Clement"
         Authorized Signatory

Per:     "Georgia Stavridis"
         Authorized Signatory



<PAGE>

                 THIS IS SCHEDULE "A" TO THE WARRANT INDENTURE
     MADE AS OF September 12, 2000, BETWEEN SPECTRUM SIGNAL PROCESSING INC.
               AND MONTREAL TRUST COMPANY OF CANADA, AS TRUSTEE.

                                    WARRANTS
                        Spectrum Signal Processing Inc.
                           __________________________

               (Incorporated under the laws of British Columbia)

WARRANT CERTIFICATE NO.                        __________________ WARRANTS
________________________

                                               One (1) such  warrant  entitling
                                               the holder to  purchase  one (1)
                                               Common Share at a price of $4.75
                                               per  Common  Share on or  before
                                               ________________,  2002 (subject
                                               to adjustment in accordance with
                                               the   terms   of   the   Warrant
                                               Indenture).

                DATE OF ISSUANCE: _____________________________.

THIS IS TO CERTIFY THAT  ______________________________________________  (herein
called the  "holder")  is  entitled  to acquire in the manner  herein  provided,
subject to the restrictions  herein  contained,  during the period commencing on
the date hereof and ending at 4:30 p.m. (Vancouver time) on ___________________,
2002 (the "Expiry  Date"),  the number of fully paid and  non-assessable  common
shares  ("Common  Shares")  without  nominal  or par  value of  Spectrum  Signal
Processing Inc. ("the Company") as set forth above.

Such right to purchase  Common Shares may only be exercised by the holder hereof
within the time hereinbefore set out by:

          (a)  duly  completing  in  the  manner  indicated  and  executing  the
               Exercise Form attached hereto; and

          (b)  surrendering  this Warrant  Certificate to Montreal Trust Company
               of Canada (the "Trustee") at the principal  office of the Trustee
               in any of the Cities of Vancouver,  British  Columbia or Toronto,
               Ontario; and

          (c)  payment  by cash or  certified  cheque  or money  order in lawful
               monies of Canada,  payable  to or to the order of the  Company in
               the amount of $4.75 for each Common  Share to be  purchased on or
               before  5:00  p.m.  (Vancouver  time)  on the  Expiry  Date  (the
               "Exercise  Price") at the principal  office of the Trustee in any
               of the Cities of Vancouver, British Columbia or Toronto, Ontario.


<PAGE>

                                      -2-


The  Warrants  represented  by this  Warrant  Certificate  are issued  under and
pursuant  to a Warrant  indenture  (herein  called the  "Indenture")  made as of
September  12th,  2000,  between the Company and the Trustee  (which  expression
shall include any successor  trustee  appointed under the  Indenture),  to which
Indenture and any instruments  supplemental thereto reference is hereby made for
a full  description  of the rights of the holders of the  Warrants and the terms
and conditions  upon which such Warrants are, or are to be, issued and held, all
to the same effect as if the  provisions of the  Indenture  and all  instruments
supplemental  thereto were herein set forth,  and to all of which provisions the
holder of these Warrants by acceptance hereof assents.

These Warrants shall be deemed to be so surrendered only upon personal  delivery
thereof or, if sent by post or other means of transmission,  upon actual receipt
thereof by the Trustee at any of the offices referred to above.

Upon such  surrender,  the  person or  persons in whose name or names the Common
Shares  issuable  upon exercise of the Warrants are to be issued shall be deemed
for all purposes (except as provided in the Indenture  hereinafter  referred to)
the holder or holders of record of such Common Shares and the Company  covenants
that it will (subject to the provisions of the Indenture) cause a certificate or
certificates  representing  such Common Shares to be delivered or mailed to such
person or persons at the address or addresses specified in such Exercise Form.

The registered  holder of these Warrants may acquire any lesser number of Common
Shares than the number of Common  Shares  which may be acquired for the Warrants
represented by this Warrant  Certificate  and in such event shall be entitled to
receive a new Warrant Certificate in respect of the balance of the Common Shares
which may be acquired.

To the extent that the Warrants  represented by this Warrant  Certificate confer
the right to acquire a fraction of a Common  Share,  such right may be exercised
in respect of such fraction only in  combination  with an additional  Warrant or
Warrants which in the aggregate  entitle the holder to acquire a whole number of
Common Shares. No fractional Common Shares will be issued.

In the event of any alteration of the Common Shares,  including any subdivision,
consolidation   or   reclassification,   and  in  the   event  of  any  form  of
reorganization   of  the  Company,   including  any   amalgamation,   merger  or
arrangement,  an adjustment shall be made to the terms of the Warrants such that
the holders thereof,  upon exercise of any Warrants  following the completion of
any of the above noted  events,  will be entitled to receive the same number and
kind of  securities  that they would  have been  entitled  to  receive  had they
exercised their Warrants immediately prior to such event.

The registered  holder of this Warrant  Certificate may at any time prior to the
Expiry  Date of the  Warrants,  upon  surrender  hereof  to the  Trustee  at its
principal  office in the  Cities of  Vancouver,  British  Columbia  or  Toronto,
Ontario and payment of the charges provided for in the Indenture,  exchange this
Warrant Certificate for other Warrant Certificates evidencing Warrants entitling
the holder to acquire in the  aggregate  the same number of Common Shares as may
be acquired under this Warrant Certificate.


<PAGE>

                                      -3-


The holding of the  Warrants  evidenced by this  Warrant  Certificate  shall not
constitute the holder hereof a shareholder of the Company or entitle such holder
to any  right or  interest  in  respect  thereof  except  as  herein  and in the
Indenture expressly provided.

The Indenture  contains  provisions  making  binding upon all holders of Warrant
Certificates  outstanding  thereunder  resolutions  passed at  meetings  of such
holders held in  accordance  with such  provisions  and  instruments  in writing
signed by the  holders of Warrants  entitled to acquire a specified  majority of
the Common Shares which may be acquired pursuant to all then outstanding Warrant
Certificates.

The  Warrants  evidenced  by this  Warrant  Certificate  may be  transferred  or
assigned.

This Warrant  Certificate shall not be valid for any purpose whatever unless and
until it has been countersigned by or on behalf of the Trustee.

Time shall be of the essence hereof.

Words  and  phrases  defined  in  the  Indenture  where  used  in  this  Warrant
Certificate shall be given the meanings ascribed thereto in the Indenture unless
otherwise defined herein.

IN WITNESS WHEREOF the Company has caused this Warrant  Certificate to be signed
by its duly authorized officer effective as of _____________________, 2000.

                                                 SPECTRUM SIGNAL PROCESSING INC.


                                                 Per:___________________________
                                                     Authorized Signatory

Countersigned by:
MONTREAL TRUST COMPANY OF CANADA

Trustee

Per: _____________________________
     Authorized Signatory



<PAGE>

EXERCISE FORM

TO:      Montreal Trust Company of Canada

The  undersigned  holder of  Warrants  hereby  exercises  the  right to  acquire
____________Common  Shares  without  nominal  or par  value of  Spectrum  Signal
Processing  Inc. (or such number of other  securities  or property to which such
Warrants  entitle the  undersigned in lieu thereof or in addition  thereto under
the provisions of the Indenture mentioned in the Warrant Certificate)  according
to the terms of the Indenture mentioned in the Warrant Certificate.

Such securities or property are to be issued as follows:

Name:            _______________________________________________________

Address in Full: _______________________________________________________

The undersigned  acknowledges  that Warrants and the Common Shares have not been
registered with the United States  Securities and Exchange  Commission under the
United States Securities Act of 1933 (the "U.S. Act"), as amended,  or under the
securities  laws  of any  state  of the  United  States,  and may not be sold or
otherwise  transferred in the United States or its territories or possessions or
to a citizen, resident or national of the United States during the 90 day period
commencing on the date of issuance of the Warrants in accordance with Regulation
S or unless such securities are registered  under the U.S. Act or pursuant to an
exemption from the U.S. Act.

The undersigned  further  acknowledges  that the  certificates  representing the
Common Shares issuable hereunder may bear the following legend:

The  security  represented  by this  certificate  is  subject  to a hold  period
expiring  _____________________,  2001 and may not be traded in British Columbia
until the expiry of the hold period,  except as permitted by the  Securities Act
(British Columbia) and Regulations made under the Act.

DATED this _______ day of __________________, 2000.


<PAGE>

                                      -2-


                                        )
                                        )
_______________________________         )     ______________________________
Signature Guaranteed                    )     Signature
                                        )
                                        )     ______________________________
                                        )     (Print full name)
(by a Canadian Schedule "A" chartered   )
bank, trust company or a member of an   )     ______________________________
acceptable Medallion Guarantee Program) )     (Print full address)

Instructions:

The  registered  holder  may  exercise  his right to  acquire  Common  Shares by
completing the above form,  surrendering this Warrant Certificate and paying the
Exercise Price to Computershare  Investor  Services Inc. at its principal office
in Vancouver,  British  Columbia.  For the protection of the holder, it would be
prudent to register if forwarding by mail.  Certificates  for Common Shares will
be  delivered  or  mailed  as soon as  practicable  after  the  exercise  of the
Warrants.  The rights of the  registered  holder  cease if the  Warrants are not
exercised prior to 5:00 p.m.  (Vancouver time) on the Expiry Date. If any of the
Common Shares  subscribed for are to be issued to a person or persons other than
the registered holder, the signature of the registered holder must be guaranteed
by a Canadian Schedule "A" major chartered bank, trust company or by a member of
an acceptable Medallion Guarantee Program.

* Please Note - Signature  guarantees are not accepted from treasury branches or
credit unions unless they are members of the Stamp Medallion Program.

** Please Note - In the United States of America,  signature  guarantees must be
done by members of the Medallion Signature Guarantee Program only.