<PAGE>

                                                                    EXHIBIT 4.33

             CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 24B-2

    CERTAIN PORTIONS, INDICATED BY [*****], OF THIS EXHIBIT HAVE BEEN OMITTED
   PURSUANT TO RULE 24b-2 OF THE SECURITIES ACT OF 1934. THE OMITTED MATERIALS
     HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

                         TECHNOLOGY PARTNERSHIPS CANADA

                   SOFTWARE DEFINED RADIO FOR DEFENCE PURPOSES

This Agreement made

Between:             HER MAJESTY THE QUEEN IN RIGHT OF CANADA as represented by
                     the Minister of Industry

                             (hereinafter referred to as "the MINISTER")

AND:                 SPECTRUM SIGNAL PROCESSING INC., a corporation duly
                     incorporated under the laws of British Columbia, having
                     its head office located at 200-2700 Production Way,
                     Burnaby, British Columbia, (hereinafter referred to as "the
                     PROPONENT")

WHEREAS in a context in which innovation is essential in an increasingly
knowledge-based economy, the minister is charged with the achievement of
Canada's objectives of increase economic growth, creating jobs and wealth, and
supporting sustainable development; and

WHEREAS the Technology Partnerships Canada ("TPC") Program is specifically
designed to promote the above objectives by means of strategically investing in
research, development and innovation in order to encourage private sector
investment, and so maintain and grow the technology base and technological
capabilities of Canadian industry throughout the country; and

WHEREAS the Minister agrees to make a TPC investment in the Proponent's project
described in this Agreement, considering that:

a)       The project will enhance Canadian technological capability in software
         defined radio;

b)       The new technologies and resulting products are expected to offer
         significant performance advantages over existing communications
         technologies;

c)       The resulting products are expected to contribute to meeting a growing
         demand for high performance military communications products; and

                                                             FILE NO. 710-487968

<PAGE>

d)       The project is expected to generate significant jobs and leverage
         additional R&D activity in Canada;

AND WHEREAS the entering into this Agreement is not contingent upon any export
performance on the part of the Proponent.

NOW, THEREFORE, in consideration of their respective obligations set out below,
the parties hereto agree as follows.

ARTICLE 1 - Deadline for receipt of signed agreement

1.1               This Agreement must be signed by the Proponent and received by
         the Minister within thirty (30) days of its signature on behalf of the
         Minister, failing which it will be null and void.

ARTICLE 2 - DOCUMENTS FORMING PART OF THIS AGREEMENT

2.1               The following documents form an integral part of this
         Agreement:

                  These Articles of Agreement
                  Schedule 1 - TPC General Conditions
                  Schedule 2 - The Project
                  Schedule 3 - Claims and TPC Project Cost Principles
                  Schedule 4 - Contractual Benefits
                  Schedule 5 - Reporting Requirements
                  Schedule 6 - Project Fact Sheet for News release

2.2               In the event of conflict or inconsistency, the order of
         precedence amongst the documents forming part of this Agreement shall
         be:

                  These Articles of Agreement,
                  Schedule 1 - General Conditions
                  Schedule 2 - The Project
                  Other Schedules

ARTICLE 3 - THE PROPONENT'S OBLIGATIONS

3.1               The Proponent will carry out the Software Defined Radio for
         Defense Purposes Project ("the "PROJECT") as described in Schedule 2,
         will make claims in accordance with Schedule 3, will provide the
         benefits mentioned in Schedule 4, will issue the reports required under
         Schedule 5 and will fulfil all of its other obligations hereunder, in a
         diligent and professional manner using qualified personnel.

3.2               The Proponent shall ensure that the Project is completed on or
         before December 31, 2006 ("PROJECT COMPLETION DATE"), unless otherwise
         agreed to in writing by the Minister.

                                                             FILE NO. 710-487968

<PAGE>

ARTICLE 4 - THE CONTRIBUTION

4.1               Subject to all the other provisions of this Agreement, the
         Minister will make a Contribution to the Proponent in respect of the
         Project, of the lesser of:

         (a)      25% of the Eligible Costs; and

         (b)      $8,299,616

4.2               The Minister will not contribute to any Eligible Costs
         incurred by the Proponent prior to June 19, 2003 nor after the Project
         Completion Date, unless otherwise agreed to in writing by the Minister.

ARTICLE 5 - ENVIRONMENTAL ASSESSMENT

5.1               The Minister has assessed the Project under Canadian
         Environmental Assessment Act and is satisfied that any potentially
         adverse environmental effects that may be caused by the Project are
         insignificant.

ARTICLE 6 - OTHER GOVERNMENT ASSISTANCE

6.1               The Proponent hereby acknowledges that, except for scientific
         research and experimental development tax credits, deductions or
         allowances, no other federal, provincial or municipal government
         financial assistance other than that described below has been requested
         or received by the Proponent for the Eligible Costs of the Project.

<TABLE>
<S>               <C>
Federal           $ 0.0
Provincial        $ 0.0
Municipal         $ 0.0
                  -----
Total             $ 0.0
</TABLE>

6.2               The Proponent will inform the Minister promptly in writing of
         any other federal, provincial or municipal government assistance
         (except for scientific research and experimental development tax
         credits, deductions or allowances) to be received for the Eligible
         Costs of the Project and the Minister will have the right to reduce the
         Contribution under this Agreement to the extent of any such assistance.

ARTICLE 7 - ADDRESSES

7.1               Any notice to the Minister will be addressed to:

                  Director, Aerospace & Defence Directorate
                  Technology Partnerships Canada

                                                             FILE NO. 710-487968

<PAGE>

                  10th Floor
                  300 Slater Street
                  Ottawa, Ontario K1A 0C8

                  Fax No: (613) 954-9117

7.2               Any notice to the Proponent will be addressed to:

                  Spectrum Signal Processing Inc.
                  200-2700 Production Way
                  Burnaby, British Columbia
                  V5A 4X1

                  Fax No: (604) 421-1764

ARTICLE 8 - SPECIAL CONDITIONS

8.1               ALTERNATE DISPUTE RESOLUTION

         If a dispute arises concerning the application or interpretation of
         this Agreement, the parties will attempt to resolve the matter through
         good faith negotiation, and may, if necessary and the parties consent
         in writing, resolve the matter through mediation by a mutually
         acceptable mediator or arbitration in accordance with the Commercial
         Arbitration Code set out in the schedule to the Commercial Arbitration
         Act (Canada), and all regulations made pursuant to that Act.

8.2               CONDITIONS PRECEDENT - EVIDENCE OF FINANCING

         Spectrum shall demonstrate, by 31 March 2004, that the company has
         maintained the financial means and intent to complete this project.
         Proof of access to a minimum of $5 million working capital or in the
         event of a change in control of the company an equivalent financial
         guarantee by the parent company, combined with a reaffirmation in
         writing of the intent to complete the project in accordance with the
         terms of the agreement shall constitute a satisfactory demonstration.
         In the event that satisfactory demonstration is not achieved, TPC will
         make payment on claims submitted by Spectrum for eligible costs
         incurred up to and including 31 March 2004 after which TPC's funding
         obligation will cease until such time as the company provides
         satisfactory evidence of financing. In the event that the company is
         unable to provide satisfactory evidence of financing before 30
         September 2004, the agreement will terminate on September 30, 2004 or
         earlier, upon the issuance of a letter, from the Minister, informing
         that in his or her sole opinion, Spectrum has not provided satisfactory
         evidence of financing.

8.3               REQUIRED GOVERNMENT APPROVALS

         All payments to be made by the Minister to the Proponent, pursuant to
         this Agreement, on or after December 31, 2005 are subject to the
         required

                                                             FILE NO. 710-487968

<PAGE>

         Governmental approvals, including Treasury Board. In the event that the
         Minister is prevented from disbursing the full amount of the
         Contribution, the Parties agree to review the effects of such a
         shortfall in the Contribution on the implementation of the Agreement
         and to adjust, as appropriate, the Contractual Benefits specified
         therein.

8.4               VISIBILITY PROTOCOL

         (a)      The following sub-articles concerning public announcements by
                  the Proponent as well as the obligations set-out in Article 10
                  of the General Terms and Conditions are Material Undertakings
                  under this Agreement:

                  (i)      The Proponent shall obtain the prior consent of the
                           Minister prior to mentioning TPC in any of its public
                           statements. The Proponent shall mention TPC (name and
                           logo) in its promotional activities, in its
                           publicities and in its public relations when it
                           mentions the Project. A qualifying statement shall be
                           added to underscore the importance of the TPC
                           contribution.

                  (ii)     The Proponent shall invite representatives of TPC to
                           be present at public activities involving the Project
                           and shall inform the public of TPC's collaboration in
                           the Project.

         (b)      For information purposes, the following Government of Canada
                  URL provides protocol guidelines for use when planning public
                  ceremonies related to the Project:

                <http://pch.gc.ca/progs/cpsc-ccsp/pe/index_e.cfm>

ARTICLE 9 - ENTIRE AGREEMENT

                                                             FILE NO. 710-487968

<PAGE>

IN WITNESS WHEREOF the parties hereto have executed this Agreement through duly
authorized representatives.

HER MAJESTY THE QUEEN IN RIGHT OF CANADA,
as represented by the Minister of Industry

Per:  /s/ Jeff Parker                                   16/03/04
    ------------------------------------------            Date
      Technology Partnerships Canada (TPC)

      Jeff Parker - Executive Director, TPC

SPECTRUM SIGNAL PROCESSING INC.

Per:  /s/ Brent Flichel                               March 16, 2004
    ------------------------------------------            Date
      BRENT FLICHEL
      Chief Financial Officer
      Name & Title

                                                             FILE NO. 710-487968

<PAGE>

                       SCHEDULE 1 - TPC GENERAL CONDITIONS

                                TABLE OF CONTENTS

1.       DEFINITIONS

Agreement
Background Intellectual Property
Contribution
Eligible Costs
Fiscal Year
Intellectual Property
Interest Rate
Project
Project Completion Date
Schedule
Statement of work

2.       MATERIAL CHANGES

3.       DISPOSAL OF ASSETS

4.       CLAIMS FOR PAYMENT

         4.1      Payment of Claims

         4.2      Hold-back Rights

         4.3      Overpayment by Minister

         4.4      Set-off Rights of Minister

5.       MONITORING

         5.1      Ministers Right to Audit Accounts and Records

         5.2      Access to Premises

         5.3      Access to Third-party Information

6.       REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS

         6.1      Power and Authority of Proponent

         6.2      Authorized Signatories

         6.3      Binding Obligations

         6.4      No Pending Suits or Actions

         6.5      No Gifts or Inducements

         6.6      Intellectual Property

         6.7      Compliance with Environmental Protection Requirements

         6.8      Other Agreements

         6.9      Dividend Restriction

         6.10     Other Financing

         6.11     Lobbyist Act

7.       TERM OF AGREEMENT

         7.1      Contractual Benefits

         7.2      Advance Payment

         7.3      Audit

8.       DEFAULT AND RECOVERY

         8.1      Events of Default

         8.2      Remedies on Default

         8.3      Remedies Fair and Reasonable

         8.4      No Waiver

9.       FORCE MAJEURE

         9.1      Event of Force Majeure

         9.2      Definition of Force Majeure

10.      ANNOUNCEMENTS

         10.1     Consent to Public Announcement

         10.2     Confidentiality Obligation

         10.3     Reporting under Security Laws

11.      NOTICE

         11.1     Form and Timing of Notice

         11.2     Change of Address

12.      COMPLIANCE WITH LAWS

13.      MEMBERS OF PARLIAMENT

14.      ANNUAL APPROPRIATIONS

         14.1     Parliamentary Allocation

         14.2     Lack of Appropriation

15.      CONFIDENTIALITY

         15.1     Consent Required

         15.2     International Dispute

         15.3     Financing and Licensing

16.      CONSENT OF THE MINISTER

17.      NO ASSIGNMENT OF AGREEMENT

18.      COMPLIANCE WITH POST-EMPLOYMENT PROVISIONS

19.      CONTRIBUTION AGREEMENT ONLY

20.      BINDING AGREEMENT

21.      SEVERABILITY

22.      APPLICABLE LAW

23.      SIGNATURE IN COUNTERPARTS

                                                             FILE NO. 710-487968

<PAGE>

                            SCHEDULE 2 - THE PROJECT

                             STATEMENT OF WORK (SOW)

1.01     DESCRIPTION OF THE WORK

      This project, Software Defined Radio for Defence Purposes, is focused on
      developing new technologies to enable the implementation of software
      definable reconfigurable RF signal processing platforms for use in
      aerospace and defence applications.

      The key enabler of 'software define-ability' in a Software Defined Radio
      (SDR) rests in the signal processing heart of the radio and it is the
      creative implementation of this processing heart that is the focus of this
      project. Making SDR a reality involves significant advances in
      communications signal processing, software algorithms, software tools,
      Field Programmable Gate Array (FPGA) software, communications fabrics and
      Digital Signal Processor (DSP) system design. Spectrum's R&D program
      pursues next generation advances in all of these disciplines which,
      combined, will allow us to produce the sophisticated technology necessary
      to implement SDR.

                  THE OBJECTIVES OF THE PROJECT ARE TO DEVELOP:

         -        SDR hardware with enhanced scalability, modularity and
                  heterogeneity (supporting additional processor types);

         -        Broad analog and digital input/output capability for SDR

         -        Application support, including signal processing algorithms
                  and tools, libraries, tools, operating systems, the Software
                  Communications Architecture (SCA), communications fabrics,
                  development of front/back-end interfaces; and,

         -        [*****]

      THE ULTIMATE GOAL OF THIS PROJECT IS TO DEVELOP A PORTFOLIO OF HARDWARE
      AND SOFTWARE BUILDING BLOCKS FOR SOFTWARE DEFINED RADIO, WHICH IS OPTIMAL
      FOR THE DEFENCE MARKET AND CAN BE LEVERAGED INTO COMMERCIAL APPLICATIONS
      AS THAT MARKET MATURES.

2.0      DESCRIPTION OF MAJOR ACTIVITIES AND MILESTONES

      The major activities, which constitute this project, are research and
      development of:

         -        PERFORMANCE. This includes:

                  -        New and more powerful processors including FPGAs;

                  -        Adding further configurability such as more choice of
                           processor types;

                  -        Reduced electrical power needs; and,

                  -        Reduced cost for a given performance.

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<PAGE>

         -        I/O. This includes:

                  -        Faster analog I/O;

                  -        Adding digital I/O interfaces such as Fibrechannel;
                           and,

                  -        Enabling our customers to create their own I/O.

         -        APPLICATION SUPPORT. This includes:

                  -        Signal processing algorithms and tools;

                  -        Hardware abstraction tools (quicComm);

                  -        Real-time operating system (RTOS) independence;

                  -        Application abstraction tools (e.g., SCA); and,

                  -        Demonstrating and benchmarking the SDR design for
                           defence applications.

         -        [*****]

         Spectrum subscribes to a diligent R&D approval process that is aimed at
         prioritizing and committing to R&D activities in a timeframe that
         minimizes market risk. In order to consider an R&D activity, there must
         be strategic fit, economic opportunity and validation of market demand.
         [*****]

         [*****]

         All R&D activities will be conducted at the company's facility in
         Burnaby, British Columbia, with the exception that some subcontracting
         work may be done at the subcontractor's premises. All subcontracting
         work will be performed by Canadian companies unless suitable domestic
         capability does not exist.

1.1      MAJOR ACTIVITY 1: PERFORMANCE

         [*****]

         -        Channelization

                           Synchronizing multiple channels of data within one
                           physical stream, and multiple streams across multiple
                           boards is a very difficult task. This must be solved
                           by using common clock sources, time-stamping data,
                           the provision of packet numbering, and using error
                           checking.

                           There are generally no standardized requirements
                           across our customer base. [*****]

         -        Higher speed processors on cPCI

                           The defence community has asked for an upgrade in the
                           FPGA type, from Xilinx Virtex E to Virtex II, and to
                           support the Texas Instruments C6416 processor.
                           Carrier boards always implement multiple processors,
                           or the same type or a heterogeneous mix. An example
                           is our Mosport board that implements 8 C6203
                           processors. Mezzanine module cards may have one or
                           more processors. Two projects in progress are a
                           module with one Xilinx Virtex II, and a module with
                           two C6416 processors.

1.01     Research Rapid I/O to a mezzanine

                                                             FILE NO. 710-487968

<PAGE>

         Spectrum wishes to increase the data throughput between a carrier card
         and a mezzanine module, and to further drive this as an industry
         standard. Much of this involves simulation and then empirical testing
         to prove the throughputs can be achieved and a design can be
         manufactured.

         [*****]

         -        First VxS bus boards

                           The VME bus backplane standard, which we currently
                           use, is evolving to support Serial Rapid I/O fabric
                           over the backplane, supporting considerably faster
                           data rate necessary for supporting the new DOD
                           wideband protocols. This new technology standard is
                           called VxS, recently ratified by the VITA standards
                           body. In designing new boards to support this, the
                           latest processors will be incorporated. The Xilinx
                           Virtex II Pro supports PowerPC processors on the same
                           chip as the FPGA. The latest PowerPC processor (7457)
                           provides a performance upgrade from the current
                           7410s.

         -        Higher speed processors on cPCI

         -        Continuing development with the latest FPGAs and processors.
                  Research SoC semiconductors.

                           Semiconductor vendors are attempting to place more
                           communications functions on one chip. FPGA vendors
                           are putting processors such as PowerPCs on their
                           chips (for example, the Xilinx Virtex-II Pro series
                           support embedded PowerPCs). DSP vendors such as Texas
                           Instruments are putting special function blocks on
                           their DSP chips such as Turbo Decoders. Yet other
                           companies are designing massively parallel computing
                           engines for wireless communications.

                           We are attempting to determine the direction of
                           semiconductor development in our area of expertise:
                           high-performance, software-reconfigurable,
                           heterogeneous processing platforms. There are
                           representations made regularly that SoC architectures
                           will come to market that will supercede more generic
                           processors such as DSPs and FPGAs. Spectrum must
                           continue to validate these claims and be prepared to
                           utilize them in a timely manner to maintain its
                           technological lead over competitors.

         -        Design in SoC technology

                           This project involves implementing the SOC technology
                           or technologies chosen in the earlier research phase.
                           Although Spectrum has designed its own custom ASICs
                           in the past, it has no desire to create custom
                           semiconductors going forward. Our direction will be
                           to utilize SoC semiconductors that others have
                           developed within our boards and with additional
                           intellectual property added through software and
                           application development.

1.06     Research next-gen backplane standards

                           Standards bodies are considering the next leap in
                           backplane standards, such as PICMG AdvancedTCA, and
                           VITA 34. Spectrum believes that it must research and
                           select the appropriate standards that SDR must
                           migrate to,

                                                             FILE NO. 710-487968

<PAGE>

                           including performing any prototyping to verify
                           performance and operability.

                           Whereas the VxS standard, mentioned above, is stable
                           enough to develop product on, this task and the next
                           involve research and development in backplanes that
                           are not fully specified and are months to years away
                           from becoming ratified. The companies defining these
                           specifications, including ours, must still prove the
                           technical feasibility. For example, today we can
                           achieve 1.25 gigabits-per-second from chips across
                           boards and backplanes to other chips. The new
                           possible standards mentioned are attempting to
                           achieve 10 Gbps over a single differential line.

         -        Design in next-generation backplane

                           This project involves implementing the backplane
                           technology or technologies chosen in the earlier
                           research phase.

2.2      MAJOR ACTIVITY 2: I/O

         [*****]

         -        High-speed mass storage

                           The Signals Intelligence (SIGINT) community must deal
                           with an ever-increasing number of RF channels. An
                           upcoming requirement is to buffer a wide swath of RF
                           data onto extremely high-speed disk arrays, and then
                           after deciding what signals are of interest, to
                           retrieve the buffered data and process only the
                           channels of interest. [*****]

1.09     Transition Module reference design kit

                           Our experience with previous products and again with
                           our first implementation of SDR shows that a signal
                           processing solution can be developed that meets the
                           needs of many customers. However, the input/output
                           section, whether analog or digital, may need to be
                           different for each customer. We have partially
                           ameliorated the need to change our products for each
                           customer by separating the processing function from
                           the I/O, with a novel communications bus that
                           functions at very high-speed and supports packetizing
                           and time-stamping of the data (to enable
                           channelization).

                           [*****]

         [*****]

         -        [*****]I/O module

                           Spectrum's current SDR-3000 subsystem supports I/O
                           streams from the RF transceiver of 80 mega-samples
                           per second (MSPS). [*****]This technology is
                           important to the SIGINT community, but is of special
                           interest to Military Satellite Communications
                           programs wishing to implement new very high-speed
                           waveforms. There is both research and development in
                           achieving this module. Other public companies have
                           recently proven 1 gigabit receive technology, but not
                           transceive. It is unknown today if we can
                           sufficiently reduce clock jitter

                                                             FILE NO. 710-487968

<PAGE>

                           and break the data into parallel, slower data-rate,
                           streams that can be supported by today's FPGAs. We
                           will need to propose solutions, prototype and test
                           them before proceeding with the development of the
                           module.

         -        [*****]

         -        Fibrechannel connectivity

                           Spectrum expects to use the Fibrechannel
                           communications standard to allow connectivity to
                           external high-speed RF transceivers, and for
                           connecting to back-end processing systems.

1.3      MAJOR ACTIVITY 3: APPLICATION SUPPORT

         [*****]

         -        FPGA core support

                           Developing VHDL code for FPGAs is still in very early
                           stages, much like software a few decades ago.
                           Currently what we offer are the "copper" connections
                           between an FPGA and the outside world, and the
                           beginnings of coding support. Our customers must then
                           spend a great deal of time learning our architecture,
                           writing and debugging the FPGA code.

                           Our goal, exactly as we have done with traditional
                           processors, is to abstract the hardware details and
                           greatly reduce the development time for our
                           customers, allowing them to concentrate on their
                           application instead of being forced to become experts
                           on Spectrum's hardware design.

                           Some interesting points: FPGAs today must interface
                           to other FPGAs, communications fabrics, processors,
                           high-speed memory, etc. These interfaces can be
                           parallel, serial, and/or packetized. FPGAs now have
                           over 1000 pin connections. If the designer
                           accidentally drives both ends of a circuit board
                           connection through incorrect programming, he can
                           destroy a $40,000 board.

                           [*****]

         -        SCA Beta test

                           The SCA standard driven by the defence community is
                           still being modified and discussed. Spectrum expects
                           to be the first company to offer a COTS SDR
                           supporting SCA. Customers want to begin testing our
                           SDR platform for compliance as soon as possible.

                           Spectrum must develop a board support package
                           necessary to install an SCA core framework on our SDR
                           products. This is several man-years of work,
                           involving the definition of our hardware resources
                           and providing device drivers that represent them.

                           Spectrum must then port an SCA core framework on the
                           SDR platform. This work is under way. We are
                           currently working with Harris Corporation to use
                           their dmTK product, the only publicly available
                           supported framework. All of our work is completely
                           applicable to other frameworks developed, such as the
                           SCARI product developed in Canada by DRDC.

                           The SCA standard is still very new and there has been
                           no certification

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<PAGE>

                           process established. We anticipate that it will take
                           many man-months of work to test, debug and certify
                           our platform.

         [*****]

         -        RTOS Independence

                           Customers demand different RTOS', often dictated
                           within a defence program. Spectrum expects that it
                           must support a second operating system, with two
                           possible choices being Linux or Greenhills Integrity
                           OS. The selection criteria is primarily business
                           based. We must verify an OS technically meets
                           real-time performance requirements and supports all
                           the features needed, but after that our customer or
                           the end program may dictate the OS.

                           An important direction we see is the use of Linux
                           within the military and government community. Linux
                           was not developed initially to support real-time
                           systems and there are tentative solutions that we
                           must evaluate. We are planning a research project on
                           this.

         -        System examples for target applications

                           There are several defence applications that require
                           unique data flows between the different processing
                           elements within a SDR. These include: RADAR,
                           Direction Finding, and Beamforming. Spectrum must
                           demonstrate, and benchmark, these data flows to its
                           customers.

                           Our platform supports a number of heterogeneous
                           processors (DSPs, PowerPCs, FPGAs) that are
                           interconnected by multiple data paths. Some
                           applications require a serialized approach, such as
                           I/O to FPGA to PowerPC to back-end processing. Some
                           require a parallel approach, such as a
                           direction-finding system having four antennas, each
                           going to an FPGA, with a certain amount of data
                           needing to be transferred between the FPGAs, and then
                           processed data from the FPGAs proceeding to DSP
                           processors. Each application specifies the processing
                           power at each step and the amount of data that must
                           flow continuously through each path.

                           An example of performance characteristics are:
                           multi-channel direction finding, RF being monitored
                           is 70 MHz wide with a sampling rate of 93
                           megasamples/second, the data rate for each channel
                           (antenna) is 186 megabytes/second, the mass storage
                           required is 5 terabytes, the FPGAs must do 16,000
                           point FFTs, the FPGA to processor bandwidth is 151
                           megabytes/second, and the data out of the processor
                           is 1 megabyte/second. Spectrum must empirically
                           determine, and often prove to customers, that these
                           data rates are achievable.

1.4      [*****]

         [*****]

         -        [*****]

         [*****]

                                                             FILE NO. 710-487968

<PAGE>

                  [*****]

                  -        [*****]

                           [*****]

                           [*****]

         -        [*****]

         -        [*****]

                                                             FILE NO. 710-487968

<PAGE>

                                     ANNEX A

                               FORM B: MILESTONES

PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

[*****]

                                                             FILE NO. 710-487968

<PAGE>

        FORM C - CURRENT FISCAL YEAR COST BREAKDOWN BY MAJOR ACTIVITIES

   PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

                     FOR FISCAL YEAR ENDING MARCH 31, 2004

[*****]

1. TITLE OF KEY PROJECT TASKS ENUMERATED AND DESCRIBED IN THE SOW.

                                                             FILE NO. 710-487968

<PAGE>

                                     ANNEX A

                     FORM D - COST BREAKDOWN BY FISCAL YEAR

   PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

[*****]

                                                             FILE NO. 710-487968

<PAGE>

                                     ANNEX A

                      FORM E-1 - PROJECT LOCATION AND COSTS

   PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

<TABLE>
<CAPTION>
                                      START PERIOD
                                    (FISCAL YEAR AND                                                 COSTS
     PROJECT LOCATION                   QUARTER)                    WORK PERFORMED                    ($)
-------------------------------------------------------------------------------------------------------------
<S>                                 <C>                      <C>                                    <C>
BURNABY, BRITISH COLUMBIA             2002/2003 Q1           ALL OF THE WORK IN THIS                [*****]
                                                             INVESTMENT PROPOSAL WILL BE
                                                             PERFORMED BY SPECTRUM
                                                             SIGNAL PROCESSING INC. AND
                                                             ITS SUBCONTRACTORS
-------------------------------------------------------------------------------------------------------------
TOTAL                                                                                               [*****]
-------------------------------------------------------------------------------------------------------------
</TABLE>

NOTE: GOVERNMENT FISCAL YEAR RUNS APRIL 1 - MARCH 31.

                                                             FILE NO. 710-487968

<PAGE>


                                     ANNEX A

                       FORM E-2 - EQUIPMENT COST BREAKDOWN

   PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

<TABLE>
<CAPTION>
                                                                                     PLANNED
                                                                                   ACQUISITION
                                                                                      PERIOD            ESTIMATED
                                                                                 (FISCAL YEAR AND         COSTS
                            EQUIPMENT DESCRIPTION                                    QUARTER)              ($)
-----------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                    <C>
1. NO INDIVIDUAL EQUIPMENT COSTING MORE THAN $250K WILL BE PURCHASED.
2.
3.
4.
5.
6.
-----------------------------------------------------------------------------------------------------------------
TOTAL
-----------------------------------------------------------------------------------------------------------------
</TABLE>

Notes:

1) [*****]

2) Government fiscal year rues April 1 - March 31.

                                                             FILE NO. 710-487968

<PAGE>

                       FORM E-3 - MATERIALS COST BREAKDOWN

   PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

<TABLE>
<CAPTION>
                                                                         PLANNED ACQUISITION
                                                                               PERIOD             ESTIMATED
                                                                          (FISCAL YEAR AND          COSTS
                       MATERIALS DESCRIPTION                                  QUARTER)               ($)
-----------------------------------------------------------------------------------------------------------
<S>                                                                      <C>                      <C>
1. COMPONENTS                                                                   2004               [*****]
2. COMPONENTS                                                                   2005               [*****]
3. COMPONENTS                                                                   2006               [*****]
4. COMPONENTS                                                                   2007               [*****]
-----------------------------------------------------------------------------------------------------------
TOTAL:                                                                                             [*****]
-----------------------------------------------------------------------------------------------------------
</TABLE>

NOTES:

GOVERNMENT FISCAL YEAR RUNS APRIL 1 - MARCH 31

                                                             FILE NO. 710-487968

<PAGE>

                                     ANNEX A

                     FORM E-4 - SUB-CONTRACT COST BREAKDOWN

PROPONENT NAME; SPECTRUM SIGNAL PROCESSING INC.      PROJECT NUMBER: 710-487968

[*****]

                                                            FILE NO. 710-487968

<PAGE>

                                     ANNEX A

                        FORM E-5 - OTHER COSTS BREAKDOWN

   PROPONENT NAME: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

[*****]

NOTES:

GOVERNMENT FISCAL YEAR RUNS APRIL 1 - MARCH 31.

                                                             FILE NO. 710-487968

<PAGE>

              SCHEDULE 3 - CLAIMS AND TPC PROJECT COSTS PRINCIPLES

A - CLAIMS

1.       The Minister will pay the Contribution to the Proponent, in respect of
         Eligible Costs incurred, on the basis of claims which will:

                  (a)      be submitted on a quarterly basis ("CLAIM PERIOD"),
                  except for the first claim which will cover a longer period
                  going back to June 19, 2003;

                  (b)      be submitted on TPC claim forms, within forty-five
                  (45) days of the end of each Claim Period;

                  (c)      be accompanied with details of all costs being
                  claimed, which will be substantiated by such

                  (d)      documents as may be required by the Minister and
                  presented in accordance with the structure and the milestones
                  contained in the Statement of Work in Schedule 2.

                  (e)      be certified by the chief financial officer of the
                  Proponent or other person satisfactory to the Minister;

                  (f)      be accompanied by a report on the progress made in
                  carrying out the Project during the Claim Period, containing
                  such information as mentioned in the section of Schedule 5
                  (Reporting Requirements) entitled Claim Reports.

                  (g)      include a deduction for Eligible Costs included in a
                  previous claim but which have not been paid by the proponent
                  within ninety (90 days) of such claim.

2.       In regard to paragraph 1(f) above, the minister may request at any time
         that the Proponent provide satisfactory evidence to demonstrate that
         Eligible Costs have been paid.

3.       Within one hundred and twenty (120) days of the submission of the final
         claim, the Proponent shall submit an itemized statement certified by
         the Proponent's chief financial officer attesting to the Eligible Costs
         for the entire Project having been incurred and paid.

                                                             FILE NO. 710-487968

<PAGE>

B - TPC PROJECT COST PRINCIPLES

1.       GENERAL PRINCIPLE

The total Eligible Costs of the Project shall be the sum of the applicable
direct and indirect costs which are, or are to be reasonably and properly
incurred and/or allocated, in the performance of the Project, less any
applicable credits. These costs shall be determined in accordance with the
Proponent's cost accounting system as accepted by the Minister and applied
consistently over time.

2.       DEFINITION OF REASONABLE COST

(1)      A cost is reasonable if, in nature and amount, it does not exceed that
which would be incurred by an ordinary prudent person in the conduct of a
competitive business.

(2)      In determining the reasonableness of a particular cost, consideration
shall be given to:

         (a)      whether the cost is of a type generally recognized as normal
                  and necessary for the conduct of the Proponent's business or
                  performance of the Project;

         (b)      the restraints and requirements by such factors as generally
                  accepted sound business practices, arm's length bargaining,
                  federal, provincial and local laws and regulations, and
                  Agreement terms;

         (c)      the action that prudent business persons would take in the
                  circumstances, considering their responsibilities to the
                  owners of the business, their employees, customers, the
                  Government and public at large;

         (d)      significant deviations from the established practices of the
                  Proponent which may unjustifiably increase the Eligible Costs;
                  and

         (e)      the specifications, delivery schedule and quality requirements
                  of the particular Project as they affect costs.

3.       DIRECT COSTS

There are three categories of direct costs:

         (a)      Direct Material Cost meaning the cost of materials which can
                  be specifically identified and measured as having been used or
                  to be used for the performance of the Project and which are so
                  identified and measured consistently by the Proponent's cost
                  accounting system as accepted by the Minister.

                  (i)      These materials may include, in addition to materials
                           purchased solely for the Project and processed by the
                           Proponent, or obtained from

                                                             FILE NO. 710-487968

<PAGE>

                           subcontractors, any other materials issued from the
                           Proponent's general stocks.

                  (ii)     Materials purchased solely for the Project or
                           subcontracts shall be charged to the Project at the
                           net laid down cost to the Proponent before cash
                           discounts for prompt payment.

                  (iii)    Materials issued from the Proponent's general stocks
                           shall be charged to the Project in accordance with
                           the method as used consistently by the Proponent in
                           pricing material inventories.

         (b)      Direct Labour Cost meaning that portion of gross wages or
                  salaries incurred for activities which can be specifically
                  identified and measured as having been performed or to be
                  performed on the Project and which is so identified and
                  measured consistently by the Proponent's cost accounting
                  system as accepted by the Minister.

         (c)      Other Direct Costs meaning those applicable costs, not falling
                  within the categories of direct material or direct labour, but
                  which can be specifically identified and measured as having
                  been incurred or to be incurred in performance of Project
                  activities and which are so identified and measured
                  consistently by the Proponent's costing system as accepted by
                  the Minister.

4.       INDIRECT COSTS

Indirect Costs (overhead) meaning those costs which, though necessarily having
been incurred during the period of the performance of the Project activities for
the conduct of the Proponent's business in general, cannot be identified and
measured as directly applicable to the Project.

         (1)      The Indirect Costs may include, but are not necessarily
                  restricted to, such items as:

                  (a)      indirect materials and supplies (*);

                  (b)      indirect labour;

                  (c)      fringe benefits (the Proponent's contribution only);

                  (d)      service expenses: expenses of a general nature such
                           as power, heat, light, operation and maintenance of
                           general assets and facilities;

                  (e)      fixed/period charges: recurring charges such as
                           property taxes, rentals and reasonable provision for
                           depreciation;

                  (f)      general and administrative expenses: including
                           remuneration of executive and corporate officers,
                           office wages and salaries and expenses such as

                                                             FILE NO. 710-487968

<PAGE>

                           stationery, office supplies, postage and other
                           necessary administration and management expenses;

                  (g)      selling and marketing expenses associated with the
                           products or services being acquired under the
                           Agreement;

                  (h)      general research and development expenses as
                           considered applicable by the Minister.

*        For supplies of similar low-value, high-usage items the costs of which
         meet the above definition of Direct Material Costs but for which it is
         economically expensive to account for these costs in the manner
         prescribed for direct costs, then they may be deemed to be indirect
         costs for the purposes of the Project.

5.       ALLOCATION OF INDIRECT COSTS

Indirect costs shall be accumulated in appropriate indirect cost pools,
reflecting the Proponent's organizational or operational lines and these pools
subsequently allocated to the Project or contracts, in accordance with the
following two principles:

         (a)      the costs included in a particular indirect cost pool should
                  have a similarity of relationship with the Project or
                  contracts, as applicable, to which that indirect cost pool is
                  subsequently distributed; further, the costs included in an
                  indirect cost pool should be similar enough in their
                  relationship to each other that the allocation of the total
                  costs in the pool provides a result which would be similar to
                  that achieved if each cost within that pool were separately
                  distributed;

         (b)      the allocation basis for each indirect cost pool should
                  reflect, as far as possible, the casual relationship of the
                  pooled costs to the Project to which these costs are
                  distributed.

6.       CREDITS

The applicable portion of any income, rebate, allowance, or any other credit
relating to any applicable direct or indirect costs, received by or accruing to
the Proponent, shall be credited to the Eligible Costs.

7.       NON-APPLICABLE COSTS

Notwithstanding that the following costs may have been or may be reasonably and
properly incurred by the Proponent during the performance of the Project
activities, they are considered non-applicable costs to the Project:

         (a)      allowance for interest on invested capital, bonds, debentures,
                  bank or other loans together with related bond discounts and
                  finance charges;

                                                             FILE NO. 710-487968

<PAGE>

         (b)      legal, accounting and consulting fees in connection with
                  financial reorganization, security issues, capital stock
                  issues, obtaining of patents and licenses and prosecution of
                  claims against the Minister;

         (c)      losses on investments, bad debts and expenses for the
                  collection thereof;

         (d)      losses on other projects or contracts;

         (e)      federal and provincial income taxes, excess profit taxes or
                  surtaxes and/or special expenses in connection therewith;

         (f)      provisions for contingencies;

         (g)      premiums for life insurance on the lives of officers and/or
                  directors where proceeds accrue to the Proponent;

         (h)      amortization of unrealized appreciation of assets;

         (i)      depreciation of assets paid for by the Minister;

         (j)      fines and penalties;

         (k)      expenses and depreciation of excess facilities;

         (l)      unreasonable compensation for officers and employees;

         (m)      product development or improvement expenses not associated
                  with the product being acquired under the Project;

         (n)      advertising, except reasonable advertising of an industrial or
                  institutional character placed in trade, technical or
                  professional journals for the dissemination of information for
                  the industry or institution;

         (o)      entertainment expenses;

         (p)      donations except those to charities registered under the
                  Income Tax Act;

         (q)      dues and other memberships other than regular trade and
                  professional associations;

         (r)      fees, extraordinary or abnormal for professional advice in
                  regard to technical, administrative or accounting matters,
                  unless approval from the Minister is obtained.

                                                             FILE NO. 710-487968

<PAGE>

                     ADDENDUM TO TPC PROJECT COST PRINCIPLES

A.       INTELLECTUAL PROPERTY PROTECTION

         Notwithstanding section 7(b) above, legal, accounting and consulting
         fees in connection with the obtaining of patents and statutory
         protection of other elements of the Intellectual Property are Eligible
         Costs.

B.       SR&ED METHOD OF CALCULATING LABOUR AND OVERHEAD ALLOWANCE (IF
         APPLICABLE)

         Notwithstanding the provisions on Direct Labour Costs and Indirect
         Costs contained above, in the event that it is mentioned in the
         Statement of Work that the Canada Customs and Revenue Agency policy on
         Scientific Research and Experimental Development has been chosen by the
         Proponent as a proxy for Overhead calculations for this Project, please
         see the attached guide, TPC Overhead Proxy.

                                                             FILE NO. 710-487968

<PAGE>

                               TPC OVERHEAD PROXY

         Calculating the Prescribed Proxy Amount for Eligible Overhead
Expenditures, A Summary of CCRA T4088(E) Rev.03 Guide to Form T661 - Claiming
Scientific Research and Experimental Development Expenditures
http://www.ccra-adrc.gc.ca/E/pub/tg/t4088eq/ README.html. This summary has been
prepared to outline the major elements of calculating the prescribed proxy
amount (PPA). In case of disagreement between this summary and the SR&ED rules,
SR&ED will apply.

         In lieu of standard PWGSC direct labour and overhead negotiations, TPC
clients may choose to follow the SR&ED rules. Under this method, rather than
specifically identifying and allocating incremental overhead expenditures to the
Project, a PPA for eligible overhead costs may be calculated based on a fixed
percentage of the salaries or wages, or portion thereof, of the employees
directly engaged in the Project. The base will include wages/salaries as well as
normal sick and vacation leave and statutory holidays. It will not include
expenditures for taxable benefits, as well as remuneration based on profits and
bonuses, or related benefits (the employer's share of EI, CPP or QPP, WCB or
CSST, employee pension and medical plans).

         The current SR&ED PPA rate is 65% of the base.

         The PPA will cover overhead expenditures such as:

-    the related benefits (employer's share) of the approved wages/salaries

-    office supplies

-    general purpose office equipment

-    heat, water, electricity and telephones

-    support staff salaries or wages

-    travel and training

-    property taxes

-    maintenance and upkeep of Project premises, facilities or equipment

-    any other eligible expenditures, not specifically identified in the
     Statement of Work, that are incremental costs as a result of the
     approved Project activity.

         Note, there are rules that limit the amount of wage/salary costs of
specified employees that can be included in the base. For year 2002, the maximum
amount is $97,750 per specified employee. Specified employees are those
employees who do not deal at arm's length with the employer or who own directly
or indirectly, at any time during the year, 10% or more of the issued shares of
any capital stock of the employer or of any corporation related to the employer.

         The following table highlights the types of activity that should be
included in calculating the base as well as applicable limits.

                  CALCULATING THE PRESCRIBED PROXY AMOUNT BASE

                                                             FILE NO. 710-487968

<PAGE>

<TABLE>
<CAPTION>
   INCLUDE THE PORTION OF WAGES/SALARIES FOR TIME SPENT ON
                       THE PROJECT OF:                                                 DO NOT INCLUDE:
------------------------------------------------------------------------------------------------------------------------
<S>                                                                  <C>
Employees directly engaged in the Project, based on such             Employees providing a service to the Project staff
tasks as:                                                            including clerks, secretaries and receptionists
                                                                     are engaged in activities in such areas as
-        preparing equipment and materials for experiments,          accounting, payroll, finance, legal, shipping,
         tests and analyses (but not for maintaining                 inventory control, maintenance and word
         equipment);                                                 processing.

-        experimenting, testing and analyzing;                       Time managers and supervisors spend on the
                                                                     non-technical management aspects of activities
-        collecting data for experimentation and analysis;           such as long-term decision-making, contract
         and,                                                        administration and other decision-making functions
                                                                     that do not directly influence the Project
-        directing the course of the ongoing Project                 activities.
         activities being claimed for the year.
                                                                     Usually, do not include work performed beyond the
Other employees' time is also considered to be directly              first-line supervision level.
engaged in the Project to the extent the following tasks are
required as part of the SOW:                                         For a specified employee, the maximum amount of
                                                                     salary that can be included in the base is limited
-        recording measurements, making calculations and             to 75% of salary/wage costs, regardless of the
         preparing charts and graphs;                                share of time working on the Project exceeds this
                                                                     amount. This amount is further restricted, to be
-        conducting statistical surveys and interviews;              the lessor of the prior calculation or the
                                                                     following formula:
-        preparing computer programs; and,
                                                                     2.5 times the Maximum Pensionable Earnings (for
-        working in areas of engineering or design,                  CPP purposes, $39,100 for year 2002) times the
         operations research, mathematical analysis and              number of days in the taxation year that the
         psychological research.                                     person is employed by the client divided by 365.

Supervisors' or managers' time spent directly involved in
the technical aspects of the Project.

Note: employees who spend all or substantially all of their
time (90%) on SOW activities are considered to spend all of
their time on the Project.
------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                             FILE NO. 710-487968

<PAGE>

                        SCHEDULE 4 - CONTRACTUAL BENEFITS

                            A - PAYMENTS TO MINISTER

1.       DEFINITIONS

         "GROSS BUSINESS REVENUES" means all revenues, receipts, monies and
         other considerations of whatever nature in excess of $22,368,421 per
         annum received by the Wireless Systems Group of the Proponent, whether
         in cash, or by way of benefit, advantage, or concession, and without
         deductions of any nature, but net of any returns or discounts actually
         credited and any sales, excise, ad valorem or similar taxes paid but
         without deduction for bad debts or doubtful accounts, as determined in
         accordance with generally accepted accounting principles, applied on a
         consistent basis.

         "ROYALTY PERIOD" means the period during which royalties will accrue,
         as specified in paragraph 2.2 below.

2.       ROYALTY PAYMENTS

         2.1      ROYALTY RATE AND ROYALTY BASIS

                  The Proponent will pay the Minister a royalty of 1.75% of the
                  annual Gross Business Revenues during the Royalty Period.

         2.2      ROYALTY PERIOD

                  The Royalty Period will begin on January 1, 2004 and will on
                  December 31, 2010. If, however, cumulative royalties are less
                  than $10,500,484 by December 31, 2010, then the royalty period
                  will continue until the earlier of December 31, 2013 or until
                  a cumulative royalty ceiling of 10,500,484 is reached.

         2.3      ROYALTY STATEMENTS AND PAYMENTS

                  The Proponent will provide to the Minister an annual statement
                  of the Gross Business Revenues, certified by the Proponent's
                  Chief Financial Officer, within four (4) months of the end of
                  each company fiscal year December, together with the related
                  royalty payment. The first statement and related royalty
                  payment must be provided to the Minister by May 1, 2005 in
                  respect of the fiscal year ending December 31, 2004 and by
                  each year thereafter in regard to the previous fiscal year.
                  Payments shall be made by cheque to the order of the Receiver
                  General and sent to the Minister.

         2.4      LATE PAYMENTS

                  The Proponent will pay interest on overdue royalty payments,
                  at the Interest Rate, from the date on which the royalty
                  payment is due, until payment in full is

                                       31
<PAGE>

                  received by the Minister. Such interest is payable without
                  notice to the Proponent, and in addition to any remedies of
                  the Minister for default by the Proponent.

3.       CHANGES IN REGARD TO COMPANY'S BUSINESS

         3.1      The Proponent shall notify the Minister should the business
                  carried out by the Proponent be split so as to be carried out
                  in part by other persons.

         3.2      In the event that part of the Proponent's business is carried
                  out by related persons (subsidiaries or otherwise affiliated),
                  the same royalty base shall continue to apply and the
                  Proponent shall have the related persons involved report their
                  gross revenues to the Minister and the Proponent shall make,
                  or continue to make, as the case may be, payments to the
                  Minister as if the Proponent's business had not been split.
                  The audit rights of the Minister as mentioned in Section 5 of
                  the General Corporations shall extend to these related persons
                  and Proponent shall ensure that such audit rights may be
                  exercised by the Minister.

         3.3      In the event that part of the Proponent's business is carried
                  out by an unrelated person, the royalty rate shall be
                  increased so that the Minister is receiving comparable
                  royalties as if that part of the Proponent's business had
                  remained with the Proponent. After due consultation with the
                  Proponent, the Minister shall make a determination as to the
                  increased royalty rate. In the event that the Proponent
                  disagrees with such increased rate, the Proponent may refer
                  the matter to arbitration under the federal Commercial
                  Arbitration Act, within 45 days of being notified of the new
                  rate by the Minister.

B - CONTRACTUAL BENEFITS TO CANADA

1.       WORK IN CANADA

         (a)      Unless otherwise agreed to in writing by the Minister, the
                  Proponent will ensure that the Intellectual Property is
                  exploited through the production in Canada of resulting
                  products until the end of the Royalty Period as set out in
                  section 2.2 of this schedule.

         (b)      The Proponent will not, without the prior written consent of
                  the Minister, grant any right to the production of resulting
                  products or transfer title to any of the Intellectual Property
                  outside of Canada, except the license or sublicense in
                  conjunction with the sale of resulting products, and will
                  impose the same restriction on all licensees and transferees.

         (c)      The expression "resulting products" as used in paragraph (a)
                  and (b) above means products, including services, resulting
                  from use of the Intellectual Property.

                                       32
<PAGE>

                       SCHEDULE 5 - REPORTING REQUIREMENTS

1.       CLAIM REPORTS

         Whenever the Proponent submits a claim, it shall attach to the claim a
         progress report containing:

         (a)      a description of the progress made in the fulfilment of the
                  Statement of Work during the Claim Period, detailed by
                  Activity as defined in the Statement of Work;

         (b)      a statement of milestones achieved, if any, during the Claim
                  Period;

         (c)      an assessment of any significant delay in completing the
                  Project or the attainment of any milestone identified in the
                  Statement of Work, the reasons for such delay, and mitigation
                  measures being taken;

         (d)      a Proponent's revised projections of Project cash flows for
                  the current Fiscal Year, except that in cases where the Claim
                  Period is monthly, this information is to be provided on March
                  31st, July 31st and November 30th of each year.

         No claim for the Contribution will be processed unless and until such
         report is provided to the Minister.

2.       ANNUAL REVIEW

         Unless otherwise agreed to, the parties shall meet at least once
         annually during the Project period, at a mutually agreeable time, to
         review the Project.

3.       PROJECT PROGRESS REPORTS

         At least one (1) month prior to the date set for the Annual Review
         meeting mentioned in section 2 above, the Proponent shall provide the
         Minister with a written progress report containing:

         (a)      a description of the progress in completion of the Project
                  activities, in comparison with the schedule and milestones
                  contained in the Statement of Work and the related Project
                  expenditures for that segment of Project activities;

         (b)      the Proponent's revised cost breakdown for the Project,
                  including an estimated cost breakdown by major activity and by
                  Fiscal Year; and

         (c)      an indication of any delay in completing the Project and the
                  reasons for such delay, together with the Proponents revised
                  schedule and any proposed revisions to the Statement of Work.

                                       33
<PAGE>

4.       ANNUAL INFORMATION UPDATES

         By February 15, 2004, and by the same date each year thereafter until
         this Agreement ends in accordance with section 7 of the General
         Conditions, the Proponent shall provide the following information
         updates to the Minister:

         (a)      an update of the projected and actual repayments to the
                  Minister, as set out in Form TPC-1 (Reports on Estimated &
                  Actual Repayments to the Minister) attached hereto, together
                  with an explanation of any significant changes from the last
                  update;

                  (Note: Once the repayment period starts, this update shall be
                  provided annually at the time of making repayment, in
                  accordance with the provisions entitled "Payments to Minister"
                  in Schedule 4)

         (b)      an update of projected and actual person years (PYs), as set
                  out on Form TPC-2 (Report on Job Creation and Maintenance)
                  attached hereto, together with an explanation of any
                  significant changes from the last update;

         (c)      an update of other representations and expected results as set
                  out in Form TPC-3 (Report on Other Representations & Expected
                  Results) attached hereto, together with an explanation of any
                  significant changes from the last update;

         (d)      an update of investment leverage, as set out in Form TPC-4
                  (Report on Investment Leverage) attached hereto, together with
                  an explanation of any significant changes from the last
                  update;

         (e)      an update on sustainable development impacts, as set out in
                  Form TPC-5 (Report on Sustainable Development Impacts)
                  attached hereto, together with an explanation of any
                  significant changes from the last update;

         (f)      a summary of the progress made in the fulfillment of specific
                  commitments in regard to contractual benefits to Canada
                  identified in Schedule 4.

5.       ANNUAL FINANCIAL STATEMENTS

         The Proponent shall provide the Minister with a copy of its annual
         audited financial statements within four (4) months of the end of each
         of the Proponent's fiscal years.

                                       34
<PAGE>

                                  FORM TPC - 1

             REPORT ON ESTIMATED & ACTUAL REPAYMENTS TO THE MINISTER

      PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

<TABLE>
<CAPTION>
     1                      2                       3                  4
--------------------------------------------------------------------------------
   YEAR                                                               DUE
  ENDING            ESTIMATED PAYMENT         ACTUAL PAYMENT          DATE
(MM/DD/YY)                (IN $)                   (IN $)          (MM/DD/YY)
--------------------------------------------------------------------------------
<S>                 <C>                       <C>                  <C>
 12/31/04                [*****]                                     5/1/05
--------------------------------------------------------------------------------
 12/31/05                [*****]                                     5/1/06
--------------------------------------------------------------------------------
 12/31/06                [*****]                                     5/1/07
--------------------------------------------------------------------------------
 12/31/07                [*****]                                     5/1/08
--------------------------------------------------------------------------------
 12/31/08                [*****]                                     5/1/09
--------------------------------------------------------------------------------
 12/31/09                [*****]                                     5/1/10
--------------------------------------------------------------------------------
 12/31/10                [*****]                                     5/1/11
--------------------------------------------------------------------------------
 12/31/11                                                            5/1/12
--------------------------------------------------------------------------------
 12/31/12                                                            5/1/13
--------------------------------------------------------------------------------
 12/31/13                                                            5/1/14
--------------------------------------------------------------------------------
 TOTAL                 10,500,484
--------------------------------------------------------------------------------
</TABLE>

SIGNATURE OF AUTHORIZED OFFICER:____________________________________________

REPORT DATE:____________________________

The Proponent certifies that the initial repayment projections provided at the
time of the Agreement, and as may be revised from time to time per the
requirements of Schedule 5, represent reasonable estimates of the repayments
that the Minister can expect from this Project, as they could be determined at
any particular time. The Minister recognizes that those estimates may vary
through time, due to factors over which the Proponent has little or no control.

                                       35
<PAGE>

                                  FORM TPC - 2

                     REPORT ON JOB CREATION AND MAINTENANCE

      PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

GENERAL INSTRUCTIONS

The intent of this schedule is to Identify the number of PYs expended on Project
related activities during any one year of the duration of the Agreement,
according to category of employment. Both part-time and full-time employees
should be claimed, as employment of all types represents a Protect benefit.
Part-time work should be converted into PY units on the basis normally used by
the Proponent provided it is between 1800 and 2000 hours of work paid in a given
year.

1.       Data is to be provided based on a 32 week calendar year and should be
         expressed in PY units.

2.       Direct PYs are to be counted. The term "direct PY" relates to the work
         performed in Canada by employees of the proponent. Only those direct
         PYs which result from the project are to be counted. Work performed
         outside of Canada by Canadian employees is not to be included except
         for eligible activities performed as part of the Statement of Work
         during the Work Phase. Reported PYs may be performed by existing staff
         or by new hires. These PYs are normally located in the Proponent's
         facility and involve an eligible operation or activity supported by the
         industrial assistance program. During the Benefits Phase, these PYs
         normally pertain to production/distribution activities associated with
         the supported facility, product or processes of the proponent

3.       Indirect PYs refer to work performed in Canada as a result of the
         project by employees who are not employed by the Proponent, and
         normally at a location other than the Proponent's facility. Apart from
         the following two exceptions, indirect PYs are never to be included in
         the PY count:

         1)       Sub-contracted PYs in the Work phase of R&D/innovation
                  projects are included in the PY count, provided that the
                  related activity is explicitly set out in the Statement of
                  Work in the Contribution Agreement.

         2)       Benefit phase production PYs of related entities to the
                  Proponent are included in the PY count, provided that the
                  Contribution Agreement explicitly includes PY reporting
                  requirements on the parties concerned and provides the
                  Minister access to the related facilities for monitoring
                  purposes.

4.       Reporting during the Work phase requires a yearly breakdown by category
         of employment. Reporting during the Benefits phase requires the average
         number of PYs during this phase by category of employment.

                                       36
<PAGE>

PART 1 : WORK PHASE - DATA COMPILED AS OF DECEMBER 31,

<TABLE>
<CAPTION>
                                                                 TOTAL NUMBER OF PERSON YEARS
                                                                 ----------------------------
                  CATEGORY OF EMPLOYMENT                         ESTIMATE              ACTUAL
---------------------------------------------------------------------------------------------
<S>                                  <C>                         <C>                   <C>
 A)   KNOWLEDGE-BASED                YR 1 ENDING 12/31/03        [*****]
      (SCIENCE, ENGINEERING &        YR 2 ENDING 12/31/04
      TECHNICAL)                     YR 3 ENDING 12/31/05
                                     YR 4 ENDING 12/31/06
---------------------------------------------------------------------------------------------
 B)  MANAGEMENT & ADMINISTRATION     YR 1 ENDING 12/31/03        [*****]
                                     YR 2 ENDING 12/31/04
                                     YR 3 ENDING 12/31/05
                                     YR 4 ENDING 12/31/06
---------------------------------------------------------------------------------------------
 C)  SUB-CONTRACTED WORK             YR 1 ENDING 12/31/03        [*****]
                                     YR 2 ENDING 12/31/04
                                     YR 3 ENDING 12/31/05
                                     YR 4 ENDING 12/31/06
---------------------------------------------------------------------------------------------
     TOTAL                           YR 1 ENDING 12/31/03        [*****]
                                     YR 2 ENDING 12/31/04
                                     YR 3 ENDING 12/31/05
                                     YR 4 ENDING 12/31/06
---------------------------------------------------------------------------------------------
</TABLE>

PART 2 - BENEFIT PHASE - DATA COMPILED AS OF DECEMBER 31,

<TABLE>
<CAPTION>
                                                              TOTAL NUMBER OF PERSON YEARS
                                                         ---------------------------------------
                                                          ESTIMATED AVERAGE
                                                           NUMBER OF PERSON      ACTUAL PERSON
                                                         YEARS FOR DURATION        YEARS FOR
              CATEGORY OF EMPLOYMENT                      OF BENEFIT PHASE      REPORTING PERIOD
------------------------------------------------------------------------------------------------
<S>                                                      <C>                    <C>
A)  KNOWLEDGE-BASED
    (SCIENCE, ENGINEERING &TECHNICAL)                         [*****]
------------------------------------------------------------------------------------------------
B)  GENERAL PRODUCTION                                        [*****]
------------------------------------------------------------------------------------------------
C)  MANAGEMENT. ADMINISTRATION, MARKETING,  SALES &
    SUPPORT                                                   [*****]
------------------------------------------------------------------------------------------------
                                                              [*****]
    TOTAL
------------------------------------------------------------------------------------------------
</TABLE>

SIGNATURE OF AUTHORIZED OFFICER:______________________________________________

REPORT DATE:______________________________

The Proponent certifies that the initial repayment projections provided at the
time of the Agreement, and as may be revised from time to time per the
requirements of Schedule 5, represent reasonable estimates of the employment
benefits that the Minister can expect from this Project, as they could be
determined at any particular time. The Minister recognizes that those estimates
may vary through time, due to factors over which the Proponent has little or no
control.

                                       37
<PAGE>

                                  FORM TPC - 3

               REPORT ON OTHER REPRESENTATIONS & EXPECTED RESULTS

      PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

OTHER REPRESENTATIONS AND EXPECTED RESULTS INCLUDE:

         1.       PATENTS: [are there any patents that arc expected to result
                  from the development work of the Project]

         2.       ACQUISITION OF TECHNOLOGY: [is the Proponent planning to
                  acquire intellectual property rights, technology, or know-how
                  essential to the success of the Project]

         3.       CORPORATE MANDATES: [specify any new or enhanced mandates
                  expected)

         4.       OTHER SIGNIFICANT REPRESENTATIONS/EXPECTED RESULTS: [strategic
                  alliances or partnerships, new applications of technology,
                  technology diffusion, etc.]

<TABLE>
<CAPTION>
                                                                     PLANNED/REVISED           STATUS/ACTUAL
    DESCRIPTION OF EXPECTED RESULT/ REPRESENTATION                        DATE                     DATE
------------------------------------------------------------------------------------------------------------
<S>                                                               <C>                          <C>
1. Patent applications to be filed in each of calendar            December 31, 2004 -2
   years                                                          Apps

                                                                  December 31, 2005 -2
                                                                  Apps

                                                                  December 31, 2006 -2
                                                                  Apps
------------------------------------------------------------------------------------------------------------
</TABLE>

SIGNATURE OF AUTHORIZED OFFICER:______________________________________________

REPORT DATE:______________________________

The Proponent certifies that the initial repayment projections provided at the
time of the Agreement, and as may be revised from time to time per the
requirements of Schedule 5, represent reasonable estimates of the benefits that
the Minister can expect from this Project, as they could be determined at any
particular time. The Minister recognizes that those estimates may vary through
time, due to factors over which the Proponent has little or no control.

                                       38
<PAGE>

                                  FORM TPC - 4

                          REPORT ON INVESTMENT LEVERAGE

      PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

         This form estimates all costs incurred in Canada and investment that
may be leveraged by TPC funds. These include:

-        ELIGIBLE SUPPORTED COSTS: Those costs incurred by the Proponent and
         towards which TPC provides financial support.

-        OTHER PROJECT RELATED COSTS (INCLUDING POST WORK PHASE INVESTMENT):
         Other non-recurring costs incurred in Canada that are directly related
         to the project. This would include items such as cost overruns but
         would not include coats prior to the date indicated in Article 4.2. For
         example, a project may include capital costs (for land and building)
         that are not eligible for TPC support, but which the company will incur
         directly related to the project.

         Post work phase investment refers to any additional non-recurring, post
         work phase, project related investment in Canada by the Proponent (e.g.
         non-recurring related to production facilities, marketing and
         distribution activities, etc.). For example, a company may have to
         build new production lines, or create a new marketing team, or
         establish a new distribution line/network for the resulting
         product/technology.

-        OTHER INVESTMENT: Other investment unrelated to the specific project
         but included in the contractual commitments made by the Proponent. For
         example, a company may commit to construction of a building as a
         condition of receiving a TPC investment, although the building is not
         directly part of the project.

<TABLE>
<CAPTION>
                   ESTIMATES ($ 000)                                      ACTUAL ($ 000)
--------------------------------------------------------    --------------------------------------------
                                  (3)                                             (2)
   (1)                           OTHER                                           OTHER
  YEAR            (2)           PROJECT          (4)             (1)            PROJECT           (3)
(ENDING         ELIGIBLE        RELATED         OTHER          ELIGIBLE         RELATED          OTHER
DEC. 31)    SUPPORTED COSTS      COSTS        INVESTMENT    SUPPORTED COSTS      COSTS        INVESTMENT
--------------------------------------------------------------------------------------------------------
<S>         <C>                 <C>           <C>           <C>                 <C>           <C>
 2003           [*****]
--------------------------------------------------------------------------------------------------------
 2004           [*****]
--------------------------------------------------------------------------------------------------------
 2005           [*****]
--------------------------------------------------------------------------------------------------------
 2006           [*****]
--------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------
</TABLE>

SIGNATURE OF AUTHORIZED OFFICER:__________________________________________

REPORT DATE:__________________________

         The Proponent certifies that the initial repayment projections provided
         at the time of the Agreement, and as may be revised from time to time
         per the requirements of Schedule 5, represent reasonable estimates of
         the benefits that the Minister can expect from this Project, as they
         could be determined at any particular time. The Minister recognizes
         that those estimates may vary through time, due to factors over which
         the Proponent has little or no control.

                                       39
<PAGE>

                                  FORM TPC - 5

                   REPORT ON SUSTAINABLE DEVELOPMENT BENEFITS

      PROPONENT: SPECTRUM SIGNAL PROCESSING INC. PROJECT NUMBER: 710-487968

On a full life cycle basis (from design through manufacture/operation and
decommissioning or disposal/recycling), the technologies that are to be
developed during the course of this R&D project are expected to provide the
following downstream Sustainable Development benefits (over existing industrial
practices) as they are incorporated into the commercial activities of the firm.

<TABLE>
<CAPTION>
                       BENEFITS                               SIGNIFICANT         MODERATE           MINOR/NONE
---------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                 <C>                <C>
Reduced energy consumption (i.e. efficiency of use) or
increased energy production through sustainable means
(i.e. efficiency of generation)                                                                           x
---------------------------------------------------------------------------------------------------------------
Increased supply of energy from renewable sources                                                         x
---------------------------------------------------------------------------------------------------------------
Reduced water consumption or increased supply of clean                                                    x
water
---------------------------------------------------------------------------------------------------------------
Reduced consumption of raw materials or manufactured
materials (reduced material intensity)                                                x
---------------------------------------------------------------------------------------------------------------
Reduced production and/or release of pollutant species of                                                 x
any kind to the atmosphere
---------------------------------------------------------------------------------------------------------------
Reduced production and/or release of pollutant species of                                                 x
any kind to receiving waters
---------------------------------------------------------------------------------------------------------------
Reduced production and/or disposal of solid wastes to the                             x
land
---------------------------------------------------------------------------------------------------------------
Reduced usage and/or production and/or disposal of                                    x
hazardous/toxic substances
---------------------------------------------------------------------------------------------------------------
Remediation or rehabilitation of contaminated land or water                                               x
---------------------------------------------------------------------------------------------------------------
</TABLE>

                                       40
<PAGE>

                SCHEDULE 6 - PROJECT FACT SHEET FOR NEWS RELEASE

PROGRAM: TECHNOLOGY PARTNERSHIPS CANADA         PROJECT NO.: 710-487968

NAME & ADDRESS OF PROPONENT:                    PROPONENT CONTACT:
SPECTRUM SIGNAL PROCESSING INC.                 NAME: NAME: DAN SIMARD
200-2700 PRODUCTION WAY                         TELEPHONE: (604) 421-5422
BURNABY, BRITISH COLUMBIA                       FAX: (604) 421-1764
V5A 4X1

PROJECT LOCATION: BURNABY, BRITISH COLUMBIA     PROJECT TYPE: PRE-COMPETITIVE
                                                DEVELOPMENT

INDUSTRIAL SECTOR: DEFENCE ELECTRONICS          PROJECT PURPOSE: SOFTWARE
                                                DEFINED RADIO FOR DEFENCE
                                                PURPOSES

AUTHORIZED ASSISTANCE:  $8,299,616

PROJECT DESCRIPTION AND ANTICIPATED RESULTS: TO COME

SPECTRUM WILL USE TPC'S INVESTMENT TO BROADEN ITS EXISTING SOFTWARE
RECONFIGURABLE PROCESSING PLATFORM PORTFOLIO. SPECTRUM'S SOFTWARE RECONFIGURABLE
PLATFORMS ENABLE SOFTWARE DEFINED RADIOS (SDRS). SDRS ARC
SOFTWARE-RECONFIGURABLE, WHICH MEANS THAT THEY CAN CHANGE MODE OF OPERATION AND
BE UPGRADED VIA SOFTWARE WITHOUT ANY HARDWARE CHANGES. THIS FLEXIBILITY PERMITS
SDRS TO BE REPROGRAMMED 'ON THE FLY' TO INTEROPERATE WITH OTHER RADIOS.
SPECTRUM'S PRIMARY TARGET MARKETS FOR SDR ARE MILITARY COMMUNICATIONS, SIGNALS
INTELLIGENCE AND RADAR AND SONAR.

SDR IS THE TERM USED TO DESCRIBE A RADIO THAT PROVIDES SOFTWARE CONTROL OF A
VARIETY OF MODULATION TECHNIQUES AND WAVEFORM REQUIREMENTS, OF CURRENT AND
EVOLVING STANDARDS, OVER A BROAD FREQUENCY RANGE. THIS TECHNOLOGY USES A COMMON
HARDWARE PLATFORM TO ACCOMMODATE DIFFERENT COMMUNICATIONS STANDARDS AND
TECHNOLOGIES, VIA SOFTWARE MODULES AND FIRMWARE. SPECTRUM'S SDR RESEARCH AND
DEVELOPMENT IS AT THE FOREFRONT OF EFFORTS TO IMPROVE CANADIAN AND WORLDWIDE
MILITARY COMMUNICATIONS INTEROPERABILITY.

SPECTRUM'S CURRENT SOFTWARE RECONFIGURABLE PROCESSING PLATFORM, THE SDR-3000,
HAS BEEN ADOPTED AS ONE OF THE PLATFORMS USED BY JOINT TACTICAL RADIO SYSTEM
TECHNOLOGY LABORATORY (JTEL) TO SUPPORT THE TEST AND ACCEPTANCE OF PROGRAM
DELIVERABLES. THE JOINT TACTICAL RADIO SYSTEM (JTRS) IS A MULTI BILLION DOLLAR
US PROGRAM THAT WILL PROVIDE A FAMILY OF SOFTWARE PROGRAMMABLE RADIOS, TO ENSURE
INTEROPERABILITY AND PORTABILITY ACROSS DISPARATE RADIO NETWORKS. JOINT TACTICAL
RADIOS WILL BE MULTI-MODE AND MULTI-BAND ALLOWING ONE RADIO TO COMMUNICATE WITH
ALL OTHER RADIOS. JTRS WILL CARRY INFORMATION IN REAL-TIME TO THE WARFIGHTER IN
THE FIELD, WHETHER IT BE GROUND-BASED, SHIPBORNE, OR AIRBORNE. ONCE IMPLEMENTED,
JTRS WILL ENABLE THE INFORMATION SUPERIORITY NECESSARY FOR EFFICIENT MILITARY
ENGAGEMENTS. OTHER COUNTRIES WORLDWIDE HAVE THEIR OWN MILITARY SDR PROGRAMS THAT
ARE EXPECTED TO INTEROPERATE WITH JTRS RADIOS.

SPECTRUM SIGNAL PROCESSING DESIGNS, DEVELOPS, AND MARKETS HIGH PERFORMANCE
SIGNAL PROCESSING AND PACKET VOICE PROCESSING PLATFORMS FOR USE IN DEFENCE AND
COMMUNICATIONS INFRASTRUCTURE EQUIPMENT. SPECTRUM'S OPTIMIZED HARDWARE, SOFTWARE
AND CHIP TECHNOLOGY WORK TOGETHER TO COLLECT, COMPRESS AND CONVERT VOICE AND
DATA SIGNALS. LEVERAGING ITS 17 YEARS OF DESIGN EXPERTISE, SPECTRUM PROVIDES ITS
CUSTOMERS WITH FASTER TIME TO MARKET AND LOWER COSTS BY DELIVERING HIGHLY
FLEXIBLE, RELIABLE AND HIGH- DENSITY SOLUTIONS. SPECTRUM SUBSYSTEMS ARE TARGETED
FOR USE IN GOVERNMENT INTELLIGENCE, SURVEILLANCE AND COMMUNICATIONS SYSTEMS,
SATELLITE HUBS, CELLULAR BASE STATIONS, MEDIA GATEWAYS AND NEXT-GENERATION VOICE
AND DATA SWITCHES. MORE INFORMATION ON SPECTRUM AND ITS FLEXCOMM(TM) AND AXS(TM)
PRODUCT LINES IS AVAILABLE AT WWW.SPECTRUMSIGNAL.COM.

                                       41