Document:

LEASE AGREEMENT

                                PRODUCTION COURT

                                    LAKE CITY

TENANT:    SPECTRUM SIGNAL PROCESSING INC.

LEASE COMMENCEMENT:  February 1, 1999

<PAGE>

                                TABLE OF CONTENTS

                                                                           PAGE

1.         DEFINITIONS........................................................1

           1.1       Additional Rent..........................................1
           1.2       Additional Services......................................1
           1.3       Base Rent................................................2
           1.4       Building.................................................2
           1.5       Business Day.............................................2
           1.6       Capital Tax..............................................2
           1.7       Commencement Date........................................2
           1.8       Common Areas.............................................2
           1.9       Cost of Additional Services..............................2
           1.10      Insured Damage...........................................3
           1.11      Land.....................................................3
           1.12      Landlord's Architect.....................................3
           1.13      Lease....................................................3
           1.14      Leasehold Improvements...................................3
           1.15      Normal Business Hours....................................3
           1.16      Offer to Lease...........................................4
           1.17      Operating Costs..........................................4
           1.18      Parking Garage...........................................5
           1.19      Permitted Use............................................5
           1.20      Premises.................................................5
           1.21      Prime Rate...............................................6
           1.22      Property.................................................6
           1.23      Proportionate Share......................................7
           1.24      Rent.....................................................7
           1.25      Rentable Area............................................7
           1.26      Sales Tax................................................7
           1.27      Taxes....................................................7
           1.28      Term.....................................................8

2.         PREMISES AND INTENT................................................8

           2.1       Premises.................................................8
           2.2       Intent...................................................8
           2.3       Parking..................................................8
           2.4       Subdivision of Land......................................9

3.         TERM...............................................................9

           3.1       Term.....................................................9

4.         RENT..............................................................10

           4.1       Base Rent...............................................10

                                       i
<PAGE>

           4.2       Additional Rent.........................................11
           4.3       Estimate of Additional Rent.............................12
           4.4       Adjustment for Additional Rent..........................12
           4.5       Building Not Fully Occupied.............................12
           4.6       Direct Assessment.......................................12
           4.7       Landlord Tax Obligation.................................13
           4.8       Amounts Past Due........................................13
           4.9       Value-Added Tax.........................................13
           4.10      Waiver of Offset........................................14
           4.11      Receipts, etc...........................................14
           4.12      Allocation of Taxes.....................................14

5.         TENANT'S COVENANTS................................................14

           5.1       Occupancy...............................................14
           5.2       Rent....................................................14
           5.3       Permitted Use...........................................14
           5.4       Waste and Nuisance......................................15
           5.5       Floor Loads.............................................15
           5.6       Insurance Risks.........................................16
           5.7       Noxious Fumes and Odours................................16
           5.8       Condition...............................................16
           5.9       By-Laws.................................................16
           5.10      Rules and Regulations...................................17
           5.11      Surrender, Overholding..................................17
           5.12      Exterior Signage........................................17
           5.13      Inspection and Access...................................18
           5.14      Exhibiting Premises.....................................18
           5.15      Name of Building........................................18
           5.16      Acceptance of Premises..................................18
           5.17      No Auction..............................................18
           5.18      Yard and Parking Obstruction............................19
           5.19      Relocation of Premises..................................19

6.         LANDLORD'S COVENANTS..............................................19

           6.1       Quiet Enjoyment.........................................19
           6.2       By-Laws.................................................19

7.         UTILITIES.........................................................19

           7.1       Utilities...............................................19
           7.2       Excess Use..............................................20
           7.3       Energy Conservation.....................................20

8.         REPAIR, DAMAGE AND DESTRUCTION....................................20

           8.1       Landlord's Repairs......................................20
           8.2       Tenant's Repairs........................................21

                                       ii
<PAGE>

           8.3       Abatement and Termination...............................22

9.         LICENSES, ASSIGNMENTS AND SUBLETTINGS.............................24

           9.1       Licenses................................................25
           9.2       Assignments and Sublettings.............................25

10.        FIXTURES AND IMPROVEMENTS.........................................27

           10.1      Installation of Fixtures and Improvements...............27
           10.2      Liens and Encumbrances on Fixtures and Improvements.....28
           10.3      Tenant's Goods..........................................29
           10.4      Removal of Fixtures and Improvements....................29

11.        INSURANCE, LIABILITY AND INDEMNITY................................29

           11.1      Landlord's Insurance....................................29
           11.2      Tenant's Insurance......................................30
           11.3      Limitation of Landlord's Liability......................31
           11.4      Indemnity...............................................31

12.        SUBORDINATION, ATTORNMENT, REGISTRATION AND

           CERTIFICATES......................................................32

           12.1      Subordination and Attornment............................32
           12.2      Registration............................................33
           12.3      Certificates............................................33

13.        REMEDIES OF LANDLORD ON TENANT'S DEFAULT..........................33

           13.1      Remedying by Landlord, Non-Payment and Interest.........34
           13.2      Remedies Cumulative.....................................34
           13.3      Right of Re-entry on Termination........................34
           13.4      Re-entry and Termination................................35
           13.5      Rights on Re-entry......................................35
           13.6      Distress................................................35
           13.7      Payment of Rent, etc., on Termination...................35

14.        CANCELLATION OF INSURANCE AND EVENTS TERMINATING LEASE............36

           14.1      Cancellation of Insurance...............................36
           14.2      Default.................................................36

15.        MISCELLANEOUS.....................................................38

           15.1      Notices.................................................38
           15.2      Entire Agreement........................................39
           15.3      Area Determination......................................39
           15.4      Successors and Assigns, Interpretation..................39
           15.5      Force Majeure...........................................39
           15.6      Waiver..................................................39

                                       iii

<PAGE>

           15.7      Governing Law, Covenants, Severability..................40
           15.8      Headings, Captions......................................40
           15.9      Time for Payment........................................40
           15.10     Time of Essence.........................................40
           15.11     Option to Expand........................................40
           15.12     Right of First Offer....................................41
           15.13     Right of Cancellation...................................42
           15.14     Options to Renew........................................43
           15.15     Bicycle Storage.........................................44
           15.16     Landlord's Warranty.....................................44
           15.17     Consents and Approvals..................................44
           15.18     Landlord's Notice.......................................44
           15.19     Arbitration.............................................45

                                       iv

<PAGE>

LEASE AGREEMENT made the                day of July, 1998
                         --------------

BETWEEN:

     KAB PROPERTIES INC., B.C. Incorporation No. 397623, a body corporate
     carrying on business at 2694 -1055 Dunsmuir Street, Four Bentall Centre,
     P.O. Box 49297, in the City of Vancouver, in the Province of British
     Columbia, V7X 1L3

     (hereinafter called the "Landlord")

AND:

     SPECTRUM SIGNAL PROCESSING INC., B.C. Incorporation No. 331399, a body
     corporate carrying on business at 100 Production Court, 8525 Baxter Place,
     in the City of Burnaby, in the Province of British Columbia, V5A 4V7

     (hereinafter called the "Tenant")

WHEREAS:

A. the Landlord is the registered owner of that certain parcel of land situated
in the City of Burnaby, in the Province of British Columbia and more
particularly described in Schedule A hereof (the "Land"); and

B. the Landlord has constructed office/warehouse buildings upon the Land, one of
which is shown as "the Building" on the site plan attached hereto as Schedule B1
(the "Building"); and

C. the Tenant has agreed to lease space in the Building, which will comprise the
area more particularly hereinafter set forth for the term and at the rental and
subject to the terms, covenants, conditions and agreements hereinafter
contained;

WITNESSETH THAT:

1. DEFINITIONS

In this Lease the following expressions shall have the following meanings:

1.1 ADDITIONAL RENT

"Additional Rent" means the payments of Operating Costs and Taxes and any other
payments which the Tenant is required to make to the Landlord pursuant to this
Lease.

1.2 ADDITIONAL SERVICES

"Additional Services" means the services and supervision supplied by the
Landlord from time to time to the Tenant and which are additional to the normal
operation and maintenance of the Property and other services which the Landlord
may agree or has agreed to supply pursuant to the provisions of this Lease and
"Additional Service" means any one of them.

<PAGE>

1.3        BASE RENT

"Base Rent" means the fixed annual rent calculated and payable pursuant to
Article 4.1.

1.4        BUILDING

"Building" means the building as defined in Recital C on page 1 of this Lease.

1.5        BUSINESS DAY

"Business Day" means a day other than a Saturday, Sunday or statutory holiday in
British Columbia.

1.6        CAPITAL TAX

"Capital Tax" means an imputed amount presently or hereafter imposed from time
to time upon the Landlord and payable by the Landlord and which is levied or
assessed against the Landlord on account of its ownership of or capital employed
in the Land and Building. Capital Tax shall be imputed as if the amount of such
tax were that amount due if the Land and Building were the only real property of
the Landlord and Capital Tax includes the amount of any capital or place of
business tax levied by the provincial government, the government of Canada, or
any other applicable taxing authority against the Landlord with respect to the
Land and Building whether or not known as Capital Tax or by any other name.

1.7        COMMENCEMENT DATE

"Commencement Date" means the first day of the Term as set out in Article 3.1.

1.8        COMMON AREAS

"Common Areas" means those areas of the Building and those areas of the Property
other than any other building thereon, as may be so designated by the Landlord
from time to time, including without limitation, corridors, electrical rooms,
washrooms, staircases, retaining walls, roofs, all exterior areas, facilities,
improvements, equipment and installations of the Building and on the Property,
pedestrian sidewalks, landscaped and planted areas, general signs, entrances and
exits, roads and other means of access to and serving the Building and Property,
loading docks and areas, delivery passages, truckways, parking areas, all
general signs and all other facilities available for the use and/or benefit of
all tenants, their officers, employees, agents, customers, invitees and
licensees.

1.9        COST OF ADDITIONAL SERVICES

"Cost of Additional Services" means in the case of Additional Services provided
by the Landlord a reasonable charge made therefor by the Landlord which shall
not exceed the cost of obtaining such services from independent contractors, and
in the case of Additional Services provided by independent contractors, the
Landlord's total cost of providing Additional Services to the Tenant including
the cost of all labour (including salaries, wages and fringe benefits) and
materials and other direct expenses incurred, the cost of supervision and other

                                       2
<PAGE>

indirect expenses capable of being allocated thereto (such allocation to be made
upon a reasonable basis) and all other out-of-pocket expenses made in connection
therewith including amounts paid to independent contractors, plus in either
case, an amount equal to 15 percent thereof. A report of the Landlord's
independent chartered accountant as to the amount of any Cost of Additional
Services shall be conclusive, should a dispute arise. The determination of the
Cost of Additional Services shall exclude any goods and services taxes, sales
taxes, value added taxes or any other taxes payable or paid by the Landlord in
respect of Additional Services except to the extent that the Landlord does not
receive, or is not entitled to receive, a credit or reimbursement for those
taxes pursuant to the applicable tax legislation.

1.10       INSURED DAMAGE

"Insured Damage" means the part of any damage occurring to the Premises for
which the Landlord is responsible of which the cost of repair is actually
recoverable by the Landlord under a policy of insurance in respect of fire and
other perils from time to time effected by the Landlord.

1.11       LAND

"Land" means the land as defined in Recital A on page 1 of this Lease. If the
Land is subdivided at any time, then except as used in Articles 1.17 and 5.4 and
Schedule C, where its meaning will remain unchanged at the Landlord's option,
"Land" will thereafter mean the resulting legal parcel within which the Building
is then located.

1.12       LANDLORD'S ARCHITECT

"Landlord's Architect" means the architect, or engineer or quantity surveyor
selected by the Landlord from time to time for the purposes of making
determinations hereunder.

1.13       LEASE

"Lease", "hereof", "herein", "hereunder" and similar expressions mean or refer
to this Lease and includes all other Schedules attached hereto, and any
amendments thereof made from time to time by the parties in writing.

1.14       LEASEHOLD IMPROVEMENTS

"Leasehold Improvements" means all fixtures, improvements, installations,
alterations and additions from time to time made, erected or installed by or on
behalf of the Tenant or any previous tenant of the Premises with the exception
of trade fixtures or furniture and equipment not of the nature of fixtures, and
includes all wall-to-wall carpeting (whether or not supplied by the Landlord),
and all window coverings.

1.15       NORMAL BUSINESS HOURS

"Normal Business Hours" means the hours from 7:30 a.m. to 6:00 p.m., Monday to
Friday, inclusive, of each week, statutory holidays excepted.

                                       3
<PAGE>

1.16       OFFER TO LEASE

"Offer to Lease" means that certain Counter-Offer to Lease dated for reference
December 23, 1997 including amendments proposed by the Landlord dated January 9,
1998, proposed amendments set forth in a letter dated January 16, 1998 from
Royal LePage Commercial Inc. to the Landlord, comments set forth in a letter
dated January 16, 1998 from the Landlord to Royal LePage Commercial Inc., all as
amended and finalized by agreement between the parties dated for reference
January 28, 1998, copies of which are annexed hereto as Exhibit 1.

1.17       OPERATING COSTS

"Operating Costs" means the total of all expenses, costs and outlays of every
nature incurred in the complete maintenance, repair (excluding repairs which
pursuant to Article 8.1 the Landlord is to carry out at its own expense),
operation, insuring and management of the Property and the carrying out of the
Landlord's obligations under this Lease and similar tenant leases, all
calculated in accordance with generally accepted accounting principles. Without
limiting the generality of the foregoing, Operating Costs includes all such
expenses, costs and outlays relating to the following: Common Areas; all
utilities not separately metered to tenants; security; all insurance required to
be carried by the Landlord pursuant hereto and all other insurance relating to
the Property as placed by the Landlord from time to time in the Landlord's sole
discretion; repairs and replacements to the Building and its components
including, without limitation, repairs pursuant to Article 8.1; accounting and
auditing; all amounts paid to employees or third parties relating to work
performed in relation to the Property including in the case of employees all
usual benefits; should the Landlord elect to manage the Property itself a fee
for management and administration of the Property calculated at four percent of
the total Rent payable by all tenants in the Building; supplies and materials
used in relation to operating and maintaining the Property; uniforms; provision
of a building superintendent and associated personnel including a reasonable
rental value for office space used by those persons and related expenses; all
outdoor maintenance including landscaping and snow removal; operation and
maintenance of parking area (including reasonable depreciation and materials for
resurfacing the parking area); preventative maintenance and inspection; cost of
consulting engineering fees; costs of all service contracts, legal and
consulting services; taxes (other than income taxes and any so-called "corporate
profits" or "excess profits" taxes assessed on the Landlord's income),
including:

     (a)  Capital Tax, goods and services taxes, sales taxes, excise taxes,
          value added taxes and any other taxes payable or paid by the Landlord
          in respect of Operating Costs, except to the extent that the Landlord
          receives, or is entitled to receive, a credit or reimbursement for
          those taxes pursuant to the applicable tax legislation;

     (b)  cost of each "major expenditure" (as hereinafter defined) as amortized
          over the period of the Landlord's reasonable estimate of the economic
          life of the item acquired, but not to exceed 15 years, using equal
          monthly installments of principal and interest at the prime commercial
          loan rate charged at the time of the expenditure to borrowers having
          the highest credit rating from time to time by the main branch, in
          British Columbia of the Landlord's principal bank at the time, per
          annum compounded semi-annually, where "major expenditure" shall mean
          any single expenditure incurred during or subsequent to the fiscal
          period in which the lease commences, for replacement of machinery,
          equipment, building elements, repairs, systems or facilities in
          connection with the Property or the Building, which expenditure is
          more than ten percent of the total Operating Costs for the previous
          fiscal period, or for modifications or additions to the Property if
          one of the principal purposes of such modification or addition was to
          reduce energy consumption or Operating Costs or was required by
          government regulation; and

                                       4
<PAGE>

     (c)  depreciation of: (1) the costs and expenses including repair and
          replacement, of all maintenance and cleaning equipment and master
          utility meters, and (2) the costs and expenses incurred for repairing
          or replacing all other fixtures, equipment and facilities serving or
          comprising the Building which by their nature, require periodic or
          substantial repair or replacement unless they are charged fully in the
          year in which they are incurred, in accordance with sound accounting
          principles.

For greater certainty, the determination of Operating Costs shall exclude any
taxes payable by the Landlord in respect of Operating Costs to the extent that
the Landlord receives, or is entitled to receive, a credit or reimbursement for
those taxes pursuant to the applicable tax legislation.

To the extent that any component of Operating Costs should be allocated, in the
reasonable opinion of the Landlord, to the Building, to any other building or
buildings on the Land, or to a particular tenant or group of tenants, the
Landlord shall allocate that component of Operating Costs accordingly.

Operating Costs will not include the Landlord's payments of principal and
interest in repayment of any loan secured by a mortgage encumbering the Building
and the Land.

Any report of the Landlord's auditor or other licensed public accountant
appointed by the Landlord for the purpose, shall be conclusive as to the amount
of Operating Costs for any period to which such report relates.

1.18       PARKING GARAGE

"Parking Garage" means the parking garage constituting part of the Building as
shown outlined in red on the plans attached hereto as Schedule B2.

1.19       PERMITTED USE

"Permitted Use" means the use specified in Article 5.3.

1.20       PREMISES

"Premises" means the following portions of the Building:

     (a)  beginning on the Commencement Date and continuing throughout the Term,
          those portions of the Building shown outlined in red on the plans
          attached hereto as Schedule B3 will be the Premises, or will be
          included in the Premises together with any other portions of the
          Building so designated in any or all of the following paragraphs (b),
          (c) and (d);

                                       5
<PAGE>

     (b)  if the Tenant exercises its option under Article 15.11 as and when
          provided in Article 15.11, then beginning on the "Option Space.
          Commencement Date" (as defined in Article 15.11) and continuing
          throughout the remainder of the Term, the portion of the third floor
          of the Building shown outlined in red on the plan attached hereto as
          Schedule B4 (the "Option Space") will be included in the Premises;

     (c)  if the Tenant exercises its rights under Article 15.12 as and when
          provided in Article 15.12, then beginning on any "RFO Commencement
          Date" (as defined in Article 15.12) and continuing throughout the
          remainder of the Term, the "RFO Space" (as defined in Article 15.12)
          as to which the Tenant exercises said rights will be included in the
          Premises; and

     (d)  beginning on the fifth anniversary of the Commencement Date and
          continuing throughout the Term, the portion of the fourth floor of the
          Building shown outlined in red on the plan attached hereto as Schedule
          B5 (the "Expansion Space") will be included in the Premises, except
          that if the Landlord gives the Tenant the notice provided for under
          Article 15.11(c)(2), then the Option Space and not the Expansion Space
          will become included in the Premises beginning on the fifth
          anniversary of the Commencement Date and, except as may be applicable
          under Article 15.12, the Landlord will have no further obligation
          whatsoever to the Tenant regarding the Expansion Space and the Tenant
          will have no further rights with respect to the Expansion Space;

The foregoing notwithstanding, the exterior face of the Building, all stacks,
shafts, pipes, conduits, ducts and other building facilities, the heating,
electrical, plumbing, air conditioning and other systems in the Building, and
all stairways, passageways, balconies, mechanical rooms, washrooms and other
facilities not exclusively or primarily serving the Premises in whole or in
part, are expressly excluded from the Premises and the use thereof, as well as
access thereto through the Premises for the purpose of use, operation,
maintenance, replacement and repair, are expressly reserved to the Landlord.

1.21       PRIME RATE

"Prime Rate" means that rate of interest announced from time to time by the main
branch in the Province of British Columbia of the Landlord's principle bank at
the time, as a reference rate then in effect for determining interest rates on
Canadian Dollar denominated commercial loans made in Canada.

1.22       PROPERTY

"Property" means the Land and the Building and all other buildings and
improvements on the Land as are from time to time existing thereon.

                                       6
<PAGE>

1.23       PROPORTIONATE SHARE

"Proportionate Share" means the ratio which (during each calendar year) the
Rentable Area of the Premises bears to the total Rentable Area in the Building.

1.24       RENT

"Rent" means the Base Rent and the Additional Rent.

1.25       RENTABLE AREA

"Rentable Area" means, as to the Building, all floor area (excluding portions of
the Parking Garage not included within the Premises or premises leased to any
other tenant of the Building) measured from the exterior face of the predominant
building line and includes, without limitation, all stairways, passageways,
balconies, mechanical rooms, washrooms and other facilities and, as to the
Premises, all floor area measured from the exterior face of the predominant
building line in the case of exterior walls and to the centre of partitions that
separate the Premises from adjoining premises or Common Areas and includes,
without limitation, all stairways, passageways, balconies, mechanical rooms,
washrooms and other facilities exclusively or primarily serving the Premises in
whole or in part and a portion of the Common Areas in the Building (excluding
the Parking Garage) being that ratio that the Premises bear to the Rentable Area
of the Building less the Common Areas. There shall be no deductions for
vestibules or other recessed areas inside the said predominant building line, or
for columns, ducts, projections or other structural elements necessary to the
Building. The foregoing notwithstanding, the Rentable Area of the Premises will
be determined in accordance with the 1986 BOMA Measurement Standards.

1.26       SALES TAX

"Sales Tax" shall have the meaning set out in Article 4.9.

1.27       TAXES

"Taxes" means all taxes, rates, duties, levies and assessments whatsoever,
whether municipal, provincial, federal or otherwise, levied, imposed or assessed
against the Building, the Land and any Leasehold Improvements or any of them, or
upon the Landlord in respect thereof or from time to time levied, imposed or
assessed in lieu thereof, including those levied, imposed or assessed for
education, schools and local improvements, and including all costs and expenses
(including legal and other professional fees and interest and penalties on
deferred payments, unless the deferred payments are the result of the Landlord's
negligence) incurred by the Landlord in good faith in contesting, resisting or
appealing any taxes, rates, duties, levies or assessments, but excluding taxes
and license fees in respect of any business carried on by tenants and occupants
of the Building (including the Landlord), income or profits taxes upon the
income of the Landlord to the extent such taxes are not levied in lieu of taxes,
rates, duties, levies and assessments against the Building, the Land or
Leasehold Improvements or upon the Landlord in respect thereof and Sales Tax
imposed or levied against the Tenant in respect of the Rent or Cost of
Additional Services payable by the Tenant to the Landlord or the provision of
rental space by the Landlord to the Tenant, and shall also include any and all
taxes which may in the future be levied in lieu of Taxes as hereinbefore
defined.

                                       7
<PAGE>

1.28       TERM

"Term" means the term of this Lease set forth in Article 3.1 and any extension
thereof and any period of permitted overholding.

2.         PREMISES AND INTENT

2.1        PREMISES

In consideration of the rents, covenants, agreements and conditions hereinafter
reserved and contained on the part of the Tenant to be respectively paid, kept,
observed and performed, the Landlord hereby demises and leases unto the Tenant
the Premises. Subject to final determination by the Landlord's Architect in
accordance with BOMA 1986 standards and subject to any change in Rentable Area
due to the exercise of any of the Tenant's rights under Article 15.11 or Article
15.12 by amendment of this Lease in accordance with its terms, the Rentable Area
of the Premises will be approximately 62,600 square feet during the first
through fifth years of the Term and approximately 74,600 square feet during the
sixth through tenth years of the Term. The certificate of measurement prepared
by the Landlord's Architect shall be final and binding upon the parties hereto
as to such Rentable Area.

2.2        INTENT

The Tenant acknowledges and agrees that this Lease shall be a completely net
lease for the Landlord except as expressly herein set out and the Landlord shall
not be responsible during the Term for any costs, charges, expenses and outlays
of any nature whatsoever arising from or relating to the Premises, or the
contents thereof and without limiting the generality of the foregoing, the
Tenant shall be liable for the payment of all charges, impositions and expenses
of every nature and kind relating to the Premises and the contents thereof and
its Proportionate Share of Operating Costs and Taxes as defined herein.

2.3        PARKING

     (a)  Throughout the Term, the Tenant will be entitled at no additional cost
          to the use of four reserved parking stalls on the top levels of the
          Parking Garage for each 1,000 square feet of Rentable Area of the
          Premises as of the Commencement Date.

     (b)  From and after the date on which the Expansion Space (or the Option
          Space in place thereof) becomes part of the Premises under Article
          1.20(d), and continuing throughout the Term, the Tenant will be
          entitled at no additional cost to the use of three reserved parking
          stalls on the top levels of the Parking Garage for each 1,000 square
          feet of Rentable Area of such portion of the Expansion Space (or the
          Option Space if applicable under Article 1.20(d).

                                       8
<PAGE>

     (c)  From and after the date on which the Tenant begins to pay Rent for all
          or any portion of the Option Space (unless the Option Space is in
          place of the Expansion Premises under Article 1.20(d)) or RFO Space,
          the Tenant will be entitled, upon payment of a charge per parking
          stall equal to the then prevailing market rate as mutually agreed to
          by the Landlord and the Tenant, to the use of a number of reserved
          parking stalls in the Parking Garage calculated by multiplying the
          "Building Parking Ratio" (as defined below) by the Rentable Area of
          such portion of the Option Space or RFO Space, and dividing the result
          by 1,000. As used herein, the term "Building Parking Ratio" means the
          total number of parking spaces designated by the Landlord from time to
          time in the Parking Garage for the use of tenants in the Building,
          divided by the Rentable Area of all portions of the Building rented or
          available to be rented to tenants from time to time, and multiplied by
          1,000, provided however, that the "Building Parking Ratio" will never
          be less than 2.71 for purposes of this Article 2.3(c).

     (d)  The Landlord will have no obligation to monitor the use of or to
          police the Parking Garage or any other parking area, lot, facility or
          structure used by the Tenant or any tenant of the Building.

2.4        SUBDIVISION OF LAND

Should the Landlord deem it advisable to subdivide the Land, the Tenant will on
the Landlord's request sign and deliver any documents required by any government
authority with jurisdiction over subdivision or registration of land to evidence
the Tenant's assent to such subdivision and, if any notice of this Lease is
registered as a charge against the Landlord's title to the Land, the release of
that charge except as to the resulting legal parcel on which the Building is
then located. Any subdivision of the Land will not interfere with or restrict
the Tenant's rights explicitly provided for hereunder.

3.         TERM

3.1        TERM

The term of this Lease shall be ten years and shall commence on February 1, 1999
(the "Commencement Date") to be fully completed and ended on January 31, 2009.
The foregoing notwithstanding, if the Premises are not available to receive the
Leasehold Improvements on or before November 3, 1998, then the Commencement Date
will be postponed from February 1, 1999, one day for each day after November 3,
1998 that the Premises are not available to receive the Leasehold Improvements.
If the Premises are not available to receive the Tenant's Leasehold Improvements
on or before May 1, 1999, then the Landlord will pay the Tenant the reasonable
costs that the Tenant demonstrates were incurred by the Tenant as a direct
result of the delay in the Commencement Date from February 1, 1999. Subject to
delays resulting from force majeure, if the Premises are not available to
receive the Leasehold Improvements on or before August 1, 1999, either party may
by written notice to the other terminate this Lease and the Offer to Lease, and
upon the giving of such notice this Lease and the Offer to Lease will be null

                                       9
<PAGE>

and void and of no further force or effect and neither party will have any
liability or obligations to the other hereunder or under the Offer to Lease
except for then existing defaults. Except as provided above, if the Premises
should not be ready for occupancy by the Commencement Date for any reason, the
Landlord shall not be liable or responsible for any claims, damages or
liabilities in connection therewith or by reason thereof. Should the term of
this Lease commence on a date other than February 1, 1999, the Landlord and the
Tenant will, at the request of the other, execute a declaration specifying a
revised commencement date of the term of this Lease and in such event, rental
under this Lease shall not commence until the said revised commencement date
which shall be deemed to be the Commencement Date, and the stated Term in this
Lease shall thereupon commence and the expiration date shall be extended so as
to give effect to the full ten year term stated above plus the remaining
portion, if any, of the calendar month in which the tenth anniversary of the
revised commencement date occurs, such that the last day of the Term will be the
last day of the calendar month in which the tenth anniversary of the revised
commencement date occurs (and the Tenant will pay Rent, and all other sums due
hereunder, for said remaining portion of the calendar month calculated on a pro
rata basis).

4.         RENT

4.1        BASE RENT

From and after the Commencement Date, the Tenant shall pay to the Landlord a
base annual rent (herein called "Base Rent") calculated as follows:

     (a)  during each of the first through fifth years of the term (beginning on
          the Commencement Date and ending on the day immediately preceding the
          fifth anniversary of the Commencement Date), the Base Rent will be
          calculated by multiplying (1) the rate of $17.50 per square foot of
          Rentable Area of the Premises times (2) the Rentable Area of the
          Premises; and

     (b)  during each of the sixth through tenth years of the term (beginning on
          the fifth anniversary of the Commencement Date and ending on the day
          immediately preceding the tenth anniversary of the Commencement Date)
          calculated by multiplying (1) the rate of $18.50 per square foot of
          Rentable Area of the Premises times (2) the Rentable Area of the
          Premises.

Such Base Rent, together with any adjustment of rent provided for herein then in
effect, shall be due and payable in 12 equal installments during each year, on
the first day of each calendar month during the Term, and the Tenant hereby
agrees to so pay such rent to the Landlord at the Landlord's address as provided
herein (or such other address as may be designated by the Landlord from time to
time) monthly in advance without demand. If the Term as heretofore established
commences on other than the first day of a month or terminates on other than the
last day of a month, then the installment or installments so prorated shall be
paid in advance.

The parties acknowledge that applying the provisions set forth above, and
subject to any change in the Rentable Area of the Premises when measured by the
Landlord's Architect, or due to the exercise of any of the Tenant's rights under
Article 15.11 or Article 15.12, or by amendment of this Lease in accordance with
its terms, the total amount of Base Rent due during each of the first five years
of the Term will be $1,095,500 and the total amount of Base Rent due during each
of the sixth through tenth years of the Term will be $1,380,100.

                                       10
<PAGE>

The foregoing notwithstanding, the portions of the Base Rent specified below
will be abated and will not be due hereunder for the following specified
periods:

     1.   during each of the first three months of the Term, Base Rent in the
          amount of $73,791.67 (applicable to 50,600 square feet of Rentable
          Area) will be abated;

     2.   during each of the first through 12th months of the Term, Base Rent in
          the amount of $17,500 (applicable to 12,000 square feet of Rentable
          Area) will be abated;

     3.   during each of the 13th and 25th months of the Term, Base Rent on
          those portions of the Building shown outlined in red on the plans
          attached hereto as Schedule B3 (for certainty, these areas are the
          entire first and second floors of the building, consisting of
          approximately 24,000 square feet each, a portion of the third floor of
          the building consisting of approximately 12,000 square feet,
          approximately 600 square feet behind the Building's ground floor
          entrance lobby, approximately 1,500 square feet on the ground floor
          and approximately 500 square feet on the second level of the Parking
          Garage) will be abated;

     4.   during the 61st and 62nd months of the Term, Base Rent on the
          Expansion Space (or the Option Space if applicable under Article
          1.20(d)), will be abated; and

     5.   during the 63rd month of the Term, Base Rent on those portions of the
          Building shown outlined in red on the plans attached hereto as
          Schedule B3 and approximately 12,000 additional square feet, being the
          Expansion Space (or the Option Space in place thereof) will be abated.

4.2        ADDITIONAL RENT

From and after the Commencement Date, the Tenant shall pay as Additional Rent
its Proportionate Share of Operating Costs and of Taxes, and all other sums to
be paid by the Tenant hereunder including, without limitation, the Cost of
Additional Services, if any, and the Landlord shall have the same remedies for
default for the payment of Additional Rent as are available to the Landlord in
the case of default in the payment of Base Rent. The foregoing notwithstanding,
the Tenant will not be obligated to pay Additional Rent during the periods
specified below with respect to the areas specified below:

     (a)  during any portion of the first through 12th months of the Term
          preceding the date on which the Tenant or any of its personnel
          physically occupy, for the conduct of the Tenant's business, all or
          any part of the portion of the third floor of the Building included in
          the Premises as of the Commencement Date, the Tenant will not be
          obligated to pay additional Rent for the portion of the third floor of
          the Building included in the Premises as of the Commencement Date; and

     (b)  during any portion of the 61st and 62nd months of the Term preceding
          the date on which the leasehold improvements in the Expansion Space
          are complete and the Tenant has occupied the Expansion Space for the
          conduct of its business, the Tenant will not be obligated to pay
          Additional Rent for the Expansion Space.

                                       11
<PAGE>

If prior to the Commencement Date the Tenant or any of its personnel physically
occupy, for the conduct of the Tenant's business, any portion of the Premises,
then during the period from the commencement of such occupation until the
Commencement Date, the Tenant will pay as Additional Rent its Proportionate
Share of Operating Costs and of Taxes, and all other sums to be paid by the
Tenant hereunder including, without limitation, the Cost of Additional Services,
for the portion of the Premises so occupied. The Tenant will, however, be
released from its obligation to pay Additional Rent relative to the amount of
space in their premises at 8525 Baxter Place, Burnaby, B.C. vacated as a result
of them occupying space as outlined above prior to the Commencement Date.

4.3        ESTIMATE OF ADDITIONAL RENT

Prior to the Commencement Date, and thereafter prior to the commencement of each
calendar year of the Tenant's occupancy the Landlord shall provide an estimate
of Operating Costs and of Taxes for the portion of the calendar year in which
the Commencement Date occurs and thereafter for each calendar year. The Tenant
shall pay as Additional Rent its Proportionate Share of such estimate in 12
equal monthly installments during each year, on the first day of each calendar
month during the Term, to the Landlord at the Landlord's address as provided
herein (or such other address as may be designated by the Landlord from time to
time) monthly in advance without demand. If the Term as heretofore established
commences on other than the first day of a month, then the installment so
prorated shall be paid in advance.

4.4        ADJUSTMENT FOR ADDITIONAL RENT

Within 150 days, or as soon thereafter as possible after the conclusion of each
calendar year of the Term, the Landlord shall furnish to the Tenant a statement
of the Landlord's actual Operating Costs and Taxes for the said calendar year or
portion thereof as the case may be. A lump sum payment will be made from the
Landlord to the Tenant or from the Tenant to the Landlord, equal to the
Proportionate Share of an amount by which the actual Operating Costs and Taxes
is less than the estimated Operating Costs and Taxes or equal to the
Proportionate Share of an amount by which the actual Operating Costs and Taxes
exceeds the estimated Operating Costs and Taxes respectively.

4.5        BUILDING NOT FULLY OCCUPIED

If the Building is not fully occupied during any year of the Term, an adjustment
shall be made in computing the Operating Costs and Taxes for such year so that
the Operating Costs and Taxes shall be computed for such year by dividing the
initial figures by the fraction the numerator of which is the aggregate of the
Rentable Area of the Premises and the rentable area of all other occupied
premises in the Building and the denominator of which is the total Rentable Area
in the Building, the intention being that, as this Lease is completely net to
the Landlord, the Tenant together with all other tenants in the Building will
pay the full amounts of Operating Costs and Taxes, each to the extent of its
respective proportionate share.

4.6        DIRECT ASSESSMENT

The Tenant covenants to pay promptly:

                                       12
<PAGE>

     (a)  when billed, all taxes, rates, duties, and charges levied, imposed, or
          assessed on its personal property, its use or occupation of the
          Premises, the business carried on therein, all fixtures, equipment,
          machinery of the Tenant therein or from time to time levied, imposed
          or assessed in the future in lieu thereof; and Taxes levied, imposed
          or assessed on all Leasehold Improvements in the Premises; and

     (b)  in the event of a direct assessment of Taxes in respect of the
          Premises, the amount of such direct assessment, when billed (and to
          provide a copy of such assessment notice to the Landlord with evidence
          of such payment), plus its Proportionate Share of all Taxes on areas
          of the Property not demised specifically to tenants.

4.7        LANDLORD TAX OBLIGATION

The Landlord covenants with the Tenant, subject to the provisions of Articles
4.2 and 4.6, to pay the Taxes promptly when due. The Landlord shall have the
right to appeal any Taxes assessed or levied against the Property or the
Premises but shall not be obligated to so do. The reasonable cost, as determined
by the Landlord, incurred by the Landlord to contest the Taxes shall be included
in Operating Costs.

4.8        AMOUNTS PAST DUE

If the Tenant fails to pay, when the same is due and payable, any Base Rent, any
Additional Rent or any other amounts payable by the Tenant under this Lease,
such unpaid amounts shall bear interest from the due date thereof to the date of
payment at a rate per annum which is two percentage points above the Prime Rate.

4.9        VALUE-ADDED TAX

Notwithstanding anything herein contained to the contrary, the Landlord and the
Tenant acknowledge that the Rent and the Cost of Additional Services and any
other amounts payable by the Tenant to the Landlord are exclusive of any goods
and services taxes, sales taxes, excise taxes, value added taxes or any other
taxes imposed in respect of the Rent and Cost of Additional Services payable by
the Tenant to the Landlord for the provision of rental space and Additional
Services by the Landlord to the Tenant under this Lease ("Sales Tax"). The
Tenant shall pay to the Landlord an amount equal to any Sales Tax imposed on the
Tenant which the Landlord is obligated to collect from the Tenant or which is
assessed upon the Landlord with respect to the Rent and Cost of Additional
Services payable by the Tenant to the Landlord pursuant to this Lease in respect
of the rental of space (including parking stalls) and provision of Additional
Services under this Lease, it being the intention of the Landlord and the Tenant
that the Tenant shall bear full responsibility for payment of Sales Tax in
respect of the rental of space (including parking stalls) and the provision of
Additional Services by the Landlord to the Tenant hereunder. The amount of Sales
Tax so payable by the Tenant shall be calculated by the Landlord in accordance
with the applicable legislation and shall be paid to the Landlord at the same
time as the amounts against which that Sales Tax is being applied are payable to
the Landlord under the terms of this Lease or upon demand at such other time or
times as the Landlord from time to time determines. Despite any other provision
of this Lease, the amounts payable by the Tenant under this paragraph shall be
deemed not to be rent, but the Landlord shall have all of the same remedies for
and recovery of such amounts as it has for recovery of Base Rent under this
Lease.

                                       13
<PAGE>

4.10       WAIVER OF OFFSET

The Tenant hereby waives and renounces any and all existing and future claims,
offsets and compensation against any Rent and agrees to pay such Rent regardless
of any claim, offset or compensation which may be asserted by the Tenant or on
its behalf.

4.11       RECEIPTS, ETC.

Whenever requested by the Landlord the Tenant will deliver to it receipts for
payments of all taxes, rates, duties, levies and assessments payable by the
Tenant pursuant to Article 4.6(a) hereof and furnish such other information in
connection therewith as the Landlord may reasonably require.

4.12       ALLOCATION OF TAXES

If a separate allocation of Taxes is not issued by the relevant taxing authority
with respect to the Building on the Land or to any Leasehold Improvements, the
Landlord or the Tenant may from time to time apply to the taxing authority for a
determination of the portion of Taxes attributable to the Building or Leasehold
Improvements, which determination shall be conclusive for the purposes of this
Article. In the event that no such determination may be obtained from the taxing
authority, the Landlord shall establish the portion of Taxes attributable to the
Building or Leasehold Improvements using the then current established principles
of assessment used by the taxing authority, or such other method which is fair,
reasonable and equitable as determined by the Landlord.

5.         TENANT'S COVENANTS

The Tenant covenants and agrees with and represents as follows to the Landlord
and acknowledges that the Landlord is relying on such covenants, agreements,
representations and warranties in connection with the leasing of the Premises to
the Tenant:

5.1        OCCUPANCY

Intentionally Deleted.

5.2        RENT

To pay the Rent hereby reserved, and all other sums payable hereunder to the
Landlord, promptly on the days and at the times and in the manner specified
herein, without demand, deduction or set-off.

5.3        PERMITTED USE

To use the Premises only for the purpose of commercial offices for the purposes
of administrative office, research, development and manufacturing of electronic
equipment and ancillary storage and not to use or permit to be used the Premises
or any part thereof for any other purpose or business whatsoever or to carry on

                                       14
<PAGE>

business therefrom other than under the corporate name of Spectrum Signal
Processing Inc. without the prior written consent of the Landlord. The Tenant
will also be permitted to distribute and receive product, ancillary to the above
permitted uses, via semi-trailer at the Building's loading dock. The Tenant will
utilize the Premises for the Permitted Use in an up to date first class and
reputable manner in the best interests of the Building as a whole. The Tenant
acknowledges the Landlord will not have any liability or responsibility to the
Tenant for the breach, non-observance or other violation of any other tenant in
the Building of any obligations or provisions in this Lease. Notwithstanding the
foregoing sentence, the Landlord agrees to undertake reasonable efforts to
enforce other Tenants' occupancy of premises within the Building such that said
occupancy is not in breach of the lease.

5.4        WASTE AND NUISANCE

Not to commit or permit any waste, including waste as it is defined in the WASTE
MANAGEMENT ACT, R.S.B.C. 1996, c. 482, as amended from time to time, to be
brought upon, kept, or used in or about the Premises by the Tenant, its agents,
employees, contractors or invitees, without the prior written consent of the
Landlord, not to commit or permit any damage to the Premises, including the
Leasehold Improvements and trade fixtures therein, not to commit or permit any
nuisance therein or any use or manner of use causing annoyance to other tenants
and occupants of the Building or the Land and not to use or permit to be used
any part of the Premises for any trade or business which is, in the opinion of
the Landlord, dangerous, noxious or offensive; not cause or suffer or permit any
waste, oil or grease or any harmful, objectionable, dangerous, poisonous or
explosive matter or substance to be discharged into the Premises or the
Property; and not to place any objects on or otherwise howsoever obstruct the
heating or air conditioning vents within the Premises.

If the presence of any waste on the Premises results in any contamination of the
Premises or Property, subject to the Landlord's prior approval, the Tenant shall
promptly take all actions at its sole expense as are necessary to return the
Premises and Property to the condition existing prior to the introduction of any
such waste to the Premises.

As used in this Article 5.4, the term "Property" will include in all events the
properties now known as and numbered 8525 Baxter Place and 8555 Baxter Place,
Burnaby, B.C.

5.5        FLOOR LOADS

Not to place a load upon any portion of any floor of the Premises which exceeds
the floor load which the area of such floor being loaded was designed to carry
having regard to the loading of adjacent areas and that which is allowed by
code. The Landlord reserves the right to prescribe the weight and position of
all safes and heavy installation which the Tenant wishes to place in the
Premises, so as to distribute properly the weight thereof and the Tenant shall
pay for all costs incurred by the Landlord and the Landlord's Architect in
making such assessment. The Tenant shall repair any damage done in the Premises
or the Building by reason of any excessive weight placed in the Premises or
excessive vibration caused in the Premises.

                                       15
<PAGE>

5.6        INSURANCE RISKS

Not to do, omit to do or permit to be done upon the Premises anything which the
Tenant knows or ought to know or which a prudent person would know or ought to
know would or might cause the Landlord's cost of insurance (whether fire,
liability or other) to be increased (and, without waiving the foregoing
prohibition the Landlord may demand, and the Tenant shall pay to the Landlord
upon demand, the amount of any such increase of cost caused by anything so done
or omitted or permitted to be done or omitted) or which would or might cause any
policy of insurance to be subject to cancellation or refusal of placement or
renewal.

5.7        NOXIOUS FUMES AND ODOURS

To use the Premises so that noxious or objectionable fumes, vapours and odours
will not occur beyond the extent to which they are discharged or eliminated by
means of the flues and other devices provided in the Building by the Landlord
and to prevent any such noxious or objectionable fumes, vapours and odours from
entering into the air conditioning or being discharged into other vents or flues
of the Building or annoying any of the tenants in the Building. Any discharge of
fumes, vapours and odours shall be permitted only during such period or periods,
to such extent, in such conditions and in such manner as directed by the
Landlord from time to time.

5.8        CONDITION

Not to permit, in the opinion of the Landlord, the Premises to become untidy,
unsightly, offensive or hazardous or permit unreasonable quantities of waste or
refuse to accumulate therein. The Tenant shall store all such garbage, refuse or
other objectionable material (including commercial garbage containers) within
the Premises and dispose of such garbage on a regular basis.

5.9        BY-LAWS

To comply at its own expense with all municipal, federal, provincial, sanitary,
fire, building and safety statutes, laws, bylaws, regulations, ordinances,
orders and requirements pertaining to the operation and use of the Premises and
the conduct of business therein (including, without limitation, obtaining all
necessary permits, licenses and approvals), the condition of the Leasehold
Improvements, trade fixtures, furniture and equipment installed by the Tenant
therein and the making by the Tenant of any repairs, changes or improvements
therein or any other matter pertaining to the Premises or the Tenant and all
laws, ordinances, regulations or requirements pertaining to solid or other
wastes, chemicals, oil and gas, toxic, corrosive or hazardous materials, air,
water (surface or ground water) or noise pollution and the storage, handling,
use or disposal of any such material, as well as all rules and regulations of
the Canadian Board of Fire Underwriters, or any successor body and with the
requirements of all insurance companies having policies of any kind whatsoever
in effect covering the Building which are communicated to the Tenant.

                                       16
<PAGE>

5.10       RULES AND REGULATIONS

To observe, and to cause its employees, invitees and all others over whom the
Tenant can reasonably be expected to exercise control to observe the Rules and
Regulations attached hereto as Schedule C, and such further and other reasonable
Rules and Regulations and amendments and changes therein as may hereafter be
made by the Landlord of which notice in writing shall be given to the Tenant and
all such Rules and Regulations shall be deemed to be incorporated into and form
part of this Lease. For the enforcement of such Rules and Regulations, the
Landlord shall have available to it all remedies in this Lease provided for a
breach thereof and all legal remedies whether or not provided for in this Lease,
both at law and in equity. The Landlord will use reasonable efforts to enforce
the Rules and Regulations if violated by other tenants in the Building. However,
the Landlord will not be required to commence or continue any legal proceedings
to enforce the Rules and Regulations and shall not be responsible or liable to
the Tenant for the non-observance or violation by any other tenant of any such
Rules and Regulations or the non-enforcement as against other tenants of such
Rules and Regulations or any loss or damage arising out of the same.

5.11       SURRENDER, OVERHOLDING

That upon the expiration or other termination of the Term, the Tenant shall quit
and surrender the Premises in vacant and clean possession and in good order,
repair, decoration, and condition (subject to the exceptions to the Tenant's
repair obligations contained in Article 8.2(a) hereof) and shall remove all its
property therefrom, except as otherwise provided in this Lease. The Tenant's
obligation to observe or perform this covenant shall survive the expiration or
other termination of the Term. If the Tenant shall continue to occupy the
Premises after the expiration of this Lease without further written agreement
and without objection by the Landlord, the Tenant shall be a month-to-month
tenant at double the Base Rent provided for herein (plus Additional Rent) and
(except as to length of tenancy) on and subject to the provisions and conditions
herein set out.

5.12       EXTERIOR SIGNAGE

The Landlord grants to the Tenant the exclusive, right, during the Term and
subject to the requirements of this Section, at its own expense to install
identification signs of the Tenant at the top of the Building elevator shaft and
the top two corners of the Building facing north toward Broadway and southeast
towards Baxter Place, as shown on Schedule. All costs of such signage, including
costs of installation and maintenance, will be at the Tenant's sole cost, risk
and expense. The signage will be subject to the prior approval of the Landlord
and the City of Burnaby and shall be similar in style and quality to the
Tenant's signage existing as of the date hereof at the building located at 8525
Baxter Place, Burnaby, B.C. except that the size may vary in proportion to the
difference in size between the Building and the building at 8525 Baxter Place
and will be at least 25 percent larger than any other tenant signage on the
Building. The manner and timing of the installation thereof shall be subject to
the Landlord's prior approval. On the expiration or sooner termination of the
Term, such sign or signs shall be removed by the Tenant at its sole cost, risk
and expense and any damage caused by such removal shall forthwith be repaired by
the Tenant. Except as aforesaid, the Tenant shall not paint, display, inscribe,
place or affix any other sign, symbol, notice or lettering of any kind anywhere
outside the Premises (whether on the outside or inside of the Building) or
within the Premises so as to be visible from the outside of the Premises. The
Tenant shall also be entitled to signage on the Building directory.

                                       17
<PAGE>

5.13       INSPECTION AND ACCESS

To allow the Landlord an its agents acting reasonably at any time and from time
to time to enter and to have its authorized agents, employees and contractors
enter the Premises for the purpose of (i) inspection, maintenance, making
repairs, alterations or improvements to the Premises, adjoining premises or the
Building, or to have access to or make changes in utilities and services
(including underfloor and overhead ducts, air conditioning, heating, plumbing,
electrical and telephone facilities and access panels, all of which the Tenant
agrees not to obstruct) and (ii) to determine the electric light and power
consumption by the Tenant in the Premises and the Tenant shall provide free and
unhampered access for such purposes, and shall not be entitled to compensation
for any inconvenience, nuisance and discomfort or loss caused thereby, but the
Landlord in exercising its rights hereunder shall proceed to the extent
reasonably possible so as to minimize interference with the Tenant's use and
enjoyment of the Premises.

5.14       EXHIBITING PREMISES

To allow the Landlord or its agents acting reasonably to enter and exhibit the
Premises to prospective tenants or purchasers of the Property or the Premises
during Normal Business Hours during the Term, and place upon the Premises a
notice of reasonable dimensions and reasonably placed stating that the Property
or the Premises are for sale or for let, which notice the Tenant shall not
remove or obscure or permit to be removed or obscured.

5.15       NAME OF BUILDING

The Building will be designated as "One Spectrum Court". The Tenant agrees not
to refer to the Building by any name other than "One Spectrum Court", and not to
use such name for any purpose other than that of the business address of the
Tenant.

5.16       ACCEPTANCE OF PREMISES

To examine the Premises before taking possession and the taking of possession
shall be conclusive evidence as against the Tenant that at the time thereof the
Premises were in good order and satisfactory condition and that all alterations,
remodeling, decorating and installation of equipment and fixtures required to be
done by the Landlord have been satisfactorily completed save only for such list
in writing prepared by the Tenant during a joint inspection by the Landlord and
Tenant at the time of taking such possession. Any dispute as to any aspects of
such work required to be done by the Landlord or completion or adequacy of the
Building, the Premises or any part thereof shall be determined by the Landlord's
Architect.

5.17       NO AUCTION

The Tenant shall not at any time during the Term, permit any sale by auction to
be held within the Premises or upon the Property or any part thereof.

                                       18
<PAGE>

5.18       YARD AND PARKING OBSTRUCTION

The Tenant shall not place, nor suffer or permit its customers, invitees,
licensees, agents or servants to place any materials in the yard or yards of the
Property or the driveways, parking or Common Areas thereof and shall cause no
obstruction to vehicles operating on the said driveways, parking or Common
Areas.

5.19       RELOCATION OF PREMISES

Intentionally Deleted.

6.         LANDLORD'S COVENANTS

The Landlord covenants with the Tenant as follows:

6.1        QUIET ENJOYMENT

That the Tenant paying the Rent hereby reserved at the times and in the manner
aforesaid and observing and performing each and every of the covenants,
conditions, restrictions and stipulations by the Tenant to be observed or
performed shall and may peaceably and quietly possess and enjoy the Premises for
the Term hereby granted without any interruption from the Landlord or any other
person lawfully claiming by, through, or under it.

6.2        BY-LAWS

That the Building will comply will all municipal, federal, provincial, sanitary,
fire, building and safety statutes, laws, regulations, ordinances, orders and
requirements pertaining to its construction at the Commencement Date.

7.         UTILITIES

The Landlord and Tenant further covenant and agree as follows:

7.1        UTILITIES

The Tenant shall pay when due the cost of all utilities provided for its
exclusive use in the Premises, including without restricting the generality of
the foregoing gas, water, electricity, telephone and communication service
charges and/or rates relating to services and/or utilities provided for the
exclusive use of the Tenant in respect of the Tenant's occupation of the
Premises and operation of its business carried on therein or therefrom,
including laboratory work and any special systems servicing its own computers or
any other machinery. At the Tenant's written request, and subject to the
Tenant's payment for same and to interruption in service for reasons beyond the
Landlord's control, the Landlord will provide for a continued supply for up to
24 hours a day and seven days a week as requested by the Tenant, of electrical
power, hot and cold running water, and building standard HVAC to the Premises,
lighting within the Premises, and elevator service if required to the Premises.
The Tenant will pay all costs of or relating to the provision of such services
to the extent such costs exceed the costs of or relating to the provision of
such services during from 7:00 a.m. to 7:00 p.m. on Business Days.

                                       19
<PAGE>

7.2        EXCESS USE

The Landlord may from time to time determine the Tenant's water consumption in
the Premises upon whatever reasonable basis the Landlord may select. If the
Landlord determines that the Tenant's water consumption is disproportionate to
the water consumption of other tenants in the Building, the Landlord may require
the Tenant to install at the Tenant's expense a domestic meter for measurement
or checking of the Tenant's water consumption; and in that event Tenant shall
pay to the Landlord (or, as required by law, directly to the supplier of the
water) as and when due from time to time any and all water charges for such
water consumption which is disproportionate as aforesaid and which the Landlord
has required to be metered. The Landlord's determination shall be verified by an
engineer selected by the Landlord (who may be an employee of the Landlord) and
being so verified shall be binding on the parties hereto.

7.3        ENERGY CONSERVATION

The Tenant covenants with the Landlord:

     (a)  that the Tenant will cooperate with the Landlord in the conservation
          of all forms of energy in the Building, including without limitation
          the Premises;

     (b)  that the Tenant will comply with all laws, by-laws, regulations and
          orders relating to the conservation of energy and affecting the
          Premises or the Building;

     (c)  that the Tenant will at its own cost and expense comply with all
          reasonable requests and demands of the Landlord made with a view to
          such energy conservation provided that such requests are made in
          accordance with good management practice and would be made by a
          prudent owner of like property of like age; and

     (d)  that any and all costs and expenses paid or incurred by the Landlord
          in complying with such laws, by-laws, regulations and orders, so far
          as the same shall apply to or reasonably be apportioned to the
          Building by the Landlord, shall be included in Operating Costs.

The Landlord shall not be liable to the Tenant in any way for any loss, costs,
damages or expenses whether direct or consequential paid, suffered or incurred
by the Tenant as a result of any reduction in the services provided by the
Landlord to the Tenant or to the Building as a result of the Landlord's
compliance with such laws, by-laws, regulations or orders.

8.         REPAIR, DAMAGE AND DESTRUCTION

The Landlord and Tenant further covenant and agree as follows:

8.1        LANDLORD'S REPAIRS

The Landlord covenants with the Tenant subject to Article 8.3(b) and Article
11.3 hereof and except for reasonable wear and tear and damage not covered by
insurance normally maintained by prudent landlords, to:

                                       20
<PAGE>

     (a)  keep in a good and substantial state of repair the exterior walls,
          roof, Common Areas and common facilities including the heating,
          ventilating and air-conditioning systems, and at its own cost the
          foundations and bearing structure, of the Building;

     (b)  repair all damage to the Leased Premises which is covered by the
          proceeds of any insurance policy which the Landlord procures under
          Article 11.1(a);

     (c)  at its sole cost, perform any repairs or maintenance required as a
          result of the negligent or wilful acts or omission of the Landlord or
          those for whom the Landlord is in law responsible;

provided, however, that if any such repairs are necessitated by the negligence
or misconduct of the Tenant, its servants, agents, contractors, licensees,
employees or others for whom in law the Tenant is responsible, the Tenant shall
pay to the Landlord on demand the cost of such repairs and a fee of 20% for the
Landlord's supervisory function and interest on the aggregate amount of both of
the foregoing from the date of expenditure of the first mentioned monies by the
Landlord.

Anything to the contrary contained in this Lease notwithstanding, in no event
will the Landlord be responsible for any damages, loss or injury sustained by
the Tenant or any person or persons claiming through or under the Tenant, by
reason of defects giving rise to the need for any repairs or the consequence
thereof, including any inconvenience occasioned to the Tenant by the entry of
the Landlord, its employees, servants, agents, or contractors on the Premises to
effect such repairs, except to the extent that such damage, loss or injury is a
result of a negligent act or omission of the Landlord.

8.2        TENANT'S REPAIRS

The Tenant covenants with the Landlord:

     (a)  subject to Article 8.3(b) and except for reasonable wear and tear, at
          its own cost and expense to keep in a good and substantial state of
          repair and decoration to at least the standard existing at the
          beginning of the Term, the Premises including all Leasehold
          Improvements, all facilities exclusively or primarily serving the
          Premises, and all trade fixtures therein and all glass therein, and
          without limiting the generality of the foregoing, the Tenant shall:

          (1)  maintain in good operating condition to the satisfaction of the
               Landlord any water, sewer, gas and other mechanical systems in
               the Premises;

          (2)  repair or replace to the satisfaction of the Landlord, the glass,
               locks, and doors (including overhead doors) in or upon the
               Premises which become damaged or broken; and

          (3)  replace and maintain (at its expense as is necessary from time to
               time) all light fixtures, bulbs, tubes, ballasts, starters and
               fuses.

                                       21
<PAGE>

     (b)  that the Landlord may from time to time enter the Premises and view
          the state of repair, and that the Tenant will repair according to
          notice in writing;

     (c)  that if any part of the Building including without limitation the
          structure or the structural elements of the building, or the systems
          for the provision of utilities or services fall into disrepair, or
          become damaged or destroyed through the negligence or misuse of the
          Tenant or of its employees, invitees or others over whom the Tenant
          can reasonably be expected to exercise control, the expense of repairs
          or replacements thereto necessitated thereby, other than to the extent
          the same is recovered under a policy of insurance required to be
          carried by the Landlord hereunder, shall be paid by the Tenant at the
          Landlord's actual cost plus 15 percent thereof; and

     (d)  that the Tenant will notify the Landlord immediately upon the Tenant
          becoming aware of any defect in the Premises or of any other condition
          which may cause damage to the Premises or the Building.

Notwithstanding the foregoing provisions of this Article 8.2, for so long as the
Building is used primarily for office purposes, the Landlord will be responsible
for seeing to the proper repair, maintenance and operation of the heating,
ventilating and air-condition systems and other mechanical systems within or
serving the Premises (except only to the extent that any such equipment or
systems are installed by or for the sole use of the Tenant) and the costs
thereof shall be included in Operating Costs.

Other than with respect to Tenant's alterations, fixtures and equipment, the
Tenant shall not be directly responsible for repairs or replacements within the
Premises the costs of which are capital expenditures under generally accepted
accounting principles. Nothing in this paragraph will diminish or otherwise
affect Landlord's rights under this Lease to include such capital costs or a
portion thereof in Operating Costs.

8.3        ABATEMENT AND TERMINATION

It is agreed between the Landlord and the Tenant that:

     (a)  (1)  In the event of partial destruction (as hereinafter defined) of
               the Premises by fire, the elements or other cause or casualty,
               then in such event, if the destruction is such, in the opinion of
               the Landlord's Architect, that the Premises cannot be used for
               the Tenant's business until repaired, the Base Rent and
               Additional Rent shall abate as hereinafter provided until the
               repair has been made and any municipal and other governmental
               approvals required for occupation have been given.

               If the destruction is such that, in the opinion of the Landlord's
               Architect, the Premises may be partially used for the Tenant's
               business while the repairs are being made, then the Base Rent and
               Additional Rent shall abate in the proportion that the part of
               the Premises rendered unusable bears to the whole of the
               Premises, PROVIDED ALWAYS that if the part rendered unusable
               exceeds one-half of the Rentable Area of the Premises there shall

                                       22
<PAGE>

               be a total abatement of Base Rent and Additional Rent until the
               repairs have been made unless the Tenant, with the permission of
               the Landlord, in fact uses the undamaged part in which case the
               Tenant shall pay proportionate Base Rent and Additional Rent for
               the part so used (being in the same proportion to the Base Rent
               and Additional Rent, as the area in square feet of the part of
               the Premises being used bears to the Rentable Area of the
               Premises). "Partial destruction" shall mean any damage to the
               Premises less than total destruction (as hereinafter defined),
               but which renders all or any part of the Premises temporarily
               unfit for use by the Tenant for the Tenant's business. A
               certificate of the Landlord's Architect as to whether the whole
               or a part of the Premises is rendered unusable, and certifying
               the extent of the part rendered unusable, shall be binding and
               conclusive upon both the Landlord and the Tenant for the purposes
               hereof. If the partial destruction is repaired within 15 days
               after the date of destruction there shall be no abatement of
               Rent.

          (2)  In the event of partial destruction (as hereinbefore defined) the
               Landlord shall, to the extent of proceeds of insurance it
               receives, repair and restore the Premises according to the nature
               of the damage with all reasonable diligence, except for Leasehold
               Improvements which the Tenant shall repair and restore, in both
               cases, to substantially the condition the Premises and those
               Leasehold Improvements were in immediately before such
               destruction occurred, but to the extent that any part of the
               Premises is not reasonably capable of use by reason of damage
               which the Tenant is obligated to repair hereunder, any abatement
               of Rent to which the Tenant is otherwise entitled hereunder shall
               not extend later than the time by which, in the reasonable
               opinion of the Landlord, repairs by the Tenant ought to have been
               completed with reasonable diligence. To the extent the Landlord
               receives proceeds of insurance respecting damage the Tenant is to
               repair, the Landlord will turn over those proceeds upon the
               Tenant completing such repair.

               Notwithstanding anything herein otherwise contained, there shall
               be no abatement of Rent if the damage is caused by wilful act or
               neglect of the Tenant.

         (b)  (1)  In the event of the total destruction (as hereinafter
                    defined) of the Premises by fire, the elements or other
                    cause or casualty, then in such event the Landlord may at
                    its option, to be exercised within 60 days of the date of
                    such total destruction, terminate this Lease effective from
                    the date when such destruction occurs. Upon the Landlord
                    exercising such option the Tenant shall immediately
                    surrender the Premises and all its interest therein to the
                    Landlord and the Tenant shall pay Base Rent and Additional
                    Rent to the time of such destruction and the Landlord may
                    re-enter and repossess the Premises discharged of this
                    Lease. Upon such termination the Tenant shall remain liable
                    to the Landlord for all sums accrued due to the Landlord
                    pursuant to the terms hereof to the date of such
                    destruction. If the Landlord does not exercise its option of

                                       23
<PAGE>

                    termination the provisions of repair and restoration set
                    forth in Article 8.3(a)(2) shall apply. "Total destruction"
                    shall mean such damage to the Premises that renders same
                    unfit for use by the Tenant for the Tenant's business and
                    which cannot reasonably be repaired within six months of the
                    date of the destruction to the state wherein the Tenant
                    could use substantially all of the Premises for its
                    business. A certificate of the Landlord's Architect
                    certifying that "total destruction" has occurred shall be
                    binding and conclusive upon both Landlord and Tenant for the
                    purposes hereof.

               (2)  Notwithstanding the foregoing provisions concerning total or
                    partial destruction of the Premises, in the event of total
                    or partial destruction of the Building (and whether or not
                    the Premises are destroyed) to such a material extent or of
                    such a nature that in the opinion of the Landlord the damage
                    to the Building cannot be repaired within 180 days from the
                    date of destruction or the Building must be or should be
                    totally or partially demolished, whether to be reconstructed
                    in whole or in part or not, then the Landlord may, at its
                    option (to be exercised within 60 days from the date of
                    total or partial destruction) give notice to the Tenant that
                    this Lease is terminated with effect from the date stated in
                    the notice. If the Tenant is able effectively to use the
                    Premises after the destruction, such date of termination
                    shall be not less than 30 days from the date of the notice.
                    If the Tenant is unable effectively to use the Premises
                    after the destruction, such date of termination shall be the
                    date of destruction. Upon such termination, the Tenant shall
                    immediately surrender the Premises and all its interest
                    therein to the Landlord and the Base Rent and Additional
                    Rent shall abate and be apportioned to the date of
                    termination and the Tenant shall remain liable to the
                    Landlord for all sums accrued due pursuant to the terms
                    hereof to the date of termination. The Landlord's Architect
                    shall determine whether the Premises can or cannot be
                    effectively used by the Tenant and his certificate thereon
                    shall be binding and conclusive upon both Landlord and
                    Tenant for the purposes hereof.

               (3)  In none of the cases aforesaid shall the Tenant have any
                    claim upon the Landlord for any damages sustained by it nor
                    shall the Landlord be obligated to rebuild the Building or
                    any part thereof in accordance with the original plans and
                    specifications therefor. No damages, compensation or claim
                    whatsoever shall be payable by the Landlord for
                    inconvenience, loss of business or annoyance or other loss
                    or damage whatsoever arising from the occurrence of any such
                    damage or destruction of the Premises or of the Building
                    and/or the repair or restoration thereof.

9.         LICENSES, ASSIGNMENTS AND SUBLETTINGS

The Landlord and Tenant further covenant and agree as follows:

                                       24
<PAGE>

9.1        LICENSES

The Tenant shall not suffer or permit any part of the Premises to be used or
occupied by any persons other than the Tenant, any assignees or subtenants
permitted under Article 9.2 and the employees of the Tenant and any such
permitted assignee or subtenant, or suffer or permit any part of the Premises to
be used or occupied by any licensee or concessionaire, or suffer or permit any
persons to be upon the Premises other than the Tenant, such permitted assignees
or subtenants and their respective employees, customers and others having lawful
business with them.

9.2        ASSIGNMENTS AND SUBLETTINGS

     (a)  Except as hereinafter provided in this Article 9.2(a), the Tenant
          shall not assign or mortgage this Lease or sublet the whole or any
          part of the Premises unless it shall have first requested and obtained
          the consent in writing of the Landlord thereto. Any request for such
          consent shall be in writing and shall be accompanied by a true copy of
          any offer to take an assignment or sublease which the Tenant may have
          received as well as a copy of the proposed assignment or sublease or
          mortgage and the Tenant shall furnish to the Landlord all information
          available to the Tenant or requested by the Landlord as to the
          business and financial responsibility and standing of the proposed
          assignee or subtenant. The Tenant may sublet the Premises to, or
          assign this Lease to, any "affiliate" (as defined in the CANADA
          BUSINESS CORPORATIONS ACT) of the Tenant, without the Landlord's
          written consent, provided:

          (1)  the Tenant gives the Landlord prior written notice of such
               subletting or assignment;

          (2)  prior to the effective date of such subletting or assignment,
               said affiliate enters into a binding agreement directly with the
               Landlord to perform and observe all of the terms and conditions
               of the Tenant under this Lease; and

          (3)  said subletting or assignment notwithstanding, Spectrum Signal
               Processing Inc. or other party being the sublandlord under said
               sublease or the assignor under the assignment will continue to be
               fully and completely obligated for the performance and
               observation of all of the terms and conditions of the Tenant
               under this Lease.

     (b)  If the Landlord consents to the Tenant's request for consent to
          assign, mortgage or sublet, or if a consent to assign, mortgage or
          sublet is obtained by order of a Court of competent jurisdiction, the
          Tenant shall assign, mortgage or sublet, as the case may be, only upon
          the terms submitted to the Landlord as aforesaid and not otherwise,
          PROVIDED THAT no such assignment, mortgaging or subletting shall:

          (1)  in any manner or extent release or relieve the Tenant from the
               performance or observance of any of its covenants or obligations
               hereunder including, without limiting the generality of the
               foregoing, the performance or observance of the covenants and
               obligations hereunder required to be performed or observed during
               any renewal or extension of the Term in accordance with the
               provisions of this Lease, notwithstanding that such renewal or
               extension arises after the date of such assignment, mortgaging or
               subletting and notwithstanding that the Base Rent is increased
               for such period of renewal or extension;

                                       25
<PAGE>

          (2)  in the case of an assignment or subletting, be made other than to
               responsible persons, firms, partnerships or bodies corporate who
               undertake by agreement in writing with the Landlord to perform
               and observe the obligations of the Tenant hereunder;

          (3)  be made unless the Tenant is not in default of any of its
               obligations under this Lease;

          (4)  in the case of an assignment or subletting, be made to any
               person, firm, partnership or body corporate who intends to or
               does use the Premises for any business or use which is prohibited
               hereunder or which the Landlord is obliged to restrict by reason
               of any other lease or contract relating to the Building, or any
               use, purpose or business (other than the Permitted Use) to which
               the Landlord in its entire discretion may object; and

         PROVIDED THAT no such mortgage shall:

          (5)  be made unless the mortgagee covenants to pay to the Landlord all
               sums payable by the Tenant hereunder (including all arrears)
               during any period the mortgagee actually or constructively
               occupies the Premises and to otherwise perform and observe the
               obligations of the Tenant hereunder during any such period; and

          (6)  unless the mortgagee covenants that any assignment or sublease it
               may wish to make shall be subject to all the same terms affecting
               an assignment or subletting made by the Tenant.

     (c)  The Landlord's consent to any assignment or sublease shall not be or
          operate as a consent to any further assignment or sublease; and the
          Landlord's prior consent in writing shall be required for each and
          every assignment or sublease. The Landlord will not arbitrarily
          withhold consent to any assignment, sublease or mortgage requested by
          the Tenant in accordance with the terms hereof. The Tenant
          acknowledges that the Landlord's strict application of the terms
          hereof, including without limitation the terms of clause (b)(4) above
          in the case of a request for consent to an assignment or sublease,
          will not in any case be deemed arbitrary or unreasonable.

     (d)  Notwithstanding any prior provisions of this Article 9.2 to the
          contrary, after the Landlord receives request for consent to an
          assignment or subletting and the required information related thereto
          in writing, it shall have the option, to be exercised by written
          notice within 30 days after the receipt of such request and
          information, to terminate this Lease and the Term on a date not less
          than 30 days and not more than 90 days after the Landlord's giving of
          such written notice. If the Landlord elects to terminate this Lease,
          the Tenant may by written notice to the Landlord within 15 days after
          receipt by the Landlord of such notice of termination, withdraw the
          request for consent to the proposed assignment or subletting, in which
          case the Tenant shall not proceed with such assignment or subletting,
          the notice of termination shall be null and void and this Lease shall
          continue in full force and effect in accordance with its terms.

                                       26
<PAGE>

     (e)  If the Tenant is a corporation, other than a corporation the shares of
          which are listed on any recognized stock exchange, effective control
          of the corporation shall not be changed directly or indirectly by a
          sale, encumbrance or other disposition of shares or otherwise
          howsoever without the Tenant first obtaining the written consent of
          the Landlord; provided that the Landlord's consent shall not be
          required for any sale or other disposition of shares by present
          shareholders to and between themselves or in the event of any
          transmission of shares on death or by operation of law and provided
          further that the Landlord's consent shall not be unreasonably withheld
          where control of the Tenant is to pass to a subsidiary or parent of
          the Tenant.

     (f)  Whether or not the Landlord consents to any request of the Tenant for
          an assignment, subletting or mortgage, the reasonable costs incurred
          by the Landlord in considering and processing the request for consent
          and in completing any of the documentation involved in implementing
          such assignment, subletting or mortgage shall be for the Tenant's
          account and payable forthwith on demand by the Tenant to the Landlord.

     (g)  The Landlord may sell, transfer, lease, mortgage, encumber or
          otherwise deal with the Property or any portion thereof or any
          interest of the Landlord therein, in every case without the consent of
          the Tenant, and without restriction, and to the extent that any
          purchaser, transferee or lessee from the Landlord has become bound by
          and covenanted to perform the covenants and obligations of the
          Landlord under this Lease, the Landlord shall without further written
          agreement be freed and relieved of liability upon such covenants and
          obligations.

10.        FIXTURES AND IMPROVEMENTS

The Landlord and Tenant further covenant and agree as follows:

10.1       INSTALLATION OF FIXTURES AND IMPROVEMENTS

     (a)  The Tenant will not make, erect, install or alter any Leasehold
          Improvements or trade fixtures in the Premises without having
          requested and obtained the Landlord's prior written approval. The
          Landlord will advise the Tenant, within ten Business Days after the
          Landlord's receipt of the Tenant's request, of the Landlord's approval
          or refusal to give approval.

                                       27
<PAGE>

     (b)  In making, erecting, installing or altering any Leasehold Improvements
          or trade fixtures the Tenant will not alter or interfere with any
          installations which have been made by the Landlord without the prior
          written approval of the Landlord, and in no event shall alter or
          interfere with or affect the structural elements or the strength or
          outside appearance of the Building, or the mechanical, electrical,
          plumbing and climate control systems if any or the window coverings
          installed on exterior windows.

     (c)  The Tenant's request for any approval hereunder shall be in writing
          and accompanied by an adequate description of the contemplated work
          and, where appropriate, working drawings and specifications therefor.
          Any out-of-pocket expense incurred by the Landlord in connection with
          any such request for approval shall be deemed incurred by way of an
          Additional Service. All work to be performed in the Premises shall be
          performed by competent contractors and subcontractors of whom the
          Landlord shall have approved (such approval not to be unreasonably
          withheld, but provided that the Landlord may require that the
          Landlord's contractors and subcontractors be engaged for any
          mechanical or electrical work) and by workmen whose labour
          affiliations are compatible with those of workmen employed by the
          Landlord and its contractors and subcontractors. At the option of the
          Landlord, all such work shall be subject to inspection by and the
          reasonable supervision of the Landlord, as an Additional Service, and
          shall be performed in accordance with any reasonable conditions or
          regulations imposed by the Landlord (including without limitation the
          examination by the Landlord's Architect or other experts of the
          detailed drawings and specification as an Additional Service and
          contractor's liability insurance in reasonable amounts) and completed
          in a good workmanlike manner in accordance with the description of the
          work approved by the Landlord.

10.2       LIENS AND ENCUMBRANCES ON FIXTURES AND IMPROVEMENTS

In connection with the making, erection, installation or alteration of Leasehold
Improvements and trade fixtures and all other work or installations made by or
for the Tenant in the Premises, the Tenant shall comply with all the provisions
of the applicable provincial legislation in respect of builders' lien and
worker's compensation and other statutes from time to time applicable thereto
(including any provision requiring or enabling the retention of portions of any
sums payable by way of holdbacks) and except as to any such holdback shall
promptly pay all accounts relating thereto. The Tenant will not create or cause
to be created any mortgage, conditional sale agreement, lease or other
encumbrance in respect of the Leasehold Improvements or permit any such
mortgage, conditional sale agreement, lease or other encumbrance in respect of
the Leasehold Improvements to attach to the Premises or the Building or any part
thereof. If and whenever any builders' or other lien for work, labour, services
or materials supplied to or for the Tenant or for the cost of which the Tenant
may be in any way liable or claims therefor shall arise or be filed or any such
mortgage, conditional sale agreement, lease or other encumbrance shall attach,
the Tenant shall within four days after receipt of notice thereof procure the
discharge thereof, including any certificate of lis pendens registered in
respect of any lien, by payment or giving security or in such other manner as

                                       28
<PAGE>

may be required or permitted by law, and failing which the Landlord may in
addition to all other remedies hereunder avail itself of its remedy under
Article 13.1 and may make any payments required to procure the discharge of any
such liens or encumbrances, and shall be reimbursed by the Tenant as provided in
Article 13.1, and its right to reimbursement shall not be affected or impaired
if the Tenant shall then or subsequently establish or claim that any lien or
encumbrance so discharged was without merit or excessive or subject to any
abatement, set-off or defense.

10.3       TENANT'S GOODS

Intentionally Deleted.

10.4       REMOVAL OF FIXTURES AND IMPROVEMENTS

Except as otherwise provided in this Article 10.4, all Leasehold Improvements in
or upon the Premises installed or affixed by the Tenant shall immediately upon
termination of this Lease be and become the Landlord's property without
compensation therefor to the Tenant. Except to the extent herein or otherwise
expressly agreed by the Landlord in writing, no Leasehold Improvements, trade
fixtures, furniture or equipment shall be removed by the Tenant from the
Premises either during or at the expiration or sooner termination of the Term,
except that (a) the Tenant, if not in default hereunder, may at the end of the
Term remove its trade fixtures, furniture and equipment; (b) the Tenant shall at
the end of the Term remove such of its trade fixtures, furniture, equipment and
Leasehold Improvements installed by it as the Landlord shall require to be
removed and such Leasehold Improvements upon being removed shall be and become
the Tenant's property; and (c) the Tenant, if not in default hereunder, may
during the Term remove such of its trade fixtures, furniture and equipment that
are being replaced with similar items in the ordinary course of business. The
Tenant shall, in the case of every removal either during or at the end of the
Term, make good any damage caused to the Premises and/or the Building by the
installation and removal. Any contrary provision or implication of this Article
10.4 notwithstanding, the Tenant's mainframe computers shall not be deemed to be
fixtures or the property of the Landlord by virtue only of their being bolted or
otherwise attached to the walls or floor of the Premises.

11.        INSURANCE, LIABILITY AND INDEMNITY

11.1       LANDLORD'S INSURANCE

The Landlord shall throughout the Term provide and keep in force or cause to be
provided and kept in force:

     (a)  fire insurance (including standard extended coverage endorsement
          perils and leakage from fire protective devices) or alternatively at
          Landlord's option, all risk insurance in respect of the Building and
          its fixed improvements including all rentable premises including the
          Premises but excluding tenant's fixtures and (except to the extent
          that the Landlord elects to insure them) Leasehold Improvements
          installed or constructed by tenants including the Tenant;

     (b)  at the Landlord's option, loss of rental income insurance relating to
          rental abatement contemplated in Article 8.3;

                                       29
<PAGE>

     (c)  if any boilers or pressure vessels are operated in the Building other
          than in any rentable premises therein, boiler and pressure vessel
          insurance with respect thereto;

     (d)  comprehensive general business liability insurance with respect to the
          operation of the Building for personal and bodily injury or death and
          damage to property of others; and

     (e)  insurance against any other occurrences and in such amounts as the
          Landlord may deem prudent.

Insurance effected by the Landlord under this clause shall be with insurers duly
licensed to transact insurance in British Columbia and shall be in amounts which
the Landlord shall from time to time determine as being reasonable and
sufficient, shall be subject to such reasonable deductibles and exclusions as
the Landlord may determine and shall otherwise be upon such terms and conditions
as the Landlord shall from time to time determine as being reasonable and
sufficient.

11.2       TENANT'S INSURANCE

The Tenant shall, at its own cost, throughout the Term provide and keep in
force:

     (a)  fire insurance (including standard extended coverage endorsement
          perils, leakage from fire protective devices and water damage
          generally) in respect of the Tenant's fixtures, furniture, equipment,
          inventory and stock-in-trade, the Tenant's Leasehold Improvements to
          the extent that the Landlord has not elected to insure them pursuant
          to Article 11.1, and such other property in or forming part of the
          Premises (not being property which the Landlord is bound to insure
          pursuant to Article 11.1) as the Landlord may from time to time
          require;

     (b)  plate and other glass insurance;

     (c)  if any boiler or pressure vessel is operated in the Premises, boiler
          and pressure vessel insurance with respect thereto;

     (d)  comprehensive general business liability insurance with respect to the
          business carried on in or from the Premises and the use and occupancy
          thereof for personal and bodily injury or death and damage to property
          of others; and

     (e)  Tenant's legal liability insurance and such other forms of insurance
          including business interruption insurance as the Landlord may
          reasonably require.

Insurance effected by the Tenant under this clause shall be with insurers duly
licensed to transact insurance in British Columbia, shall be in amounts which
the Landlord shall from time to time determine as being reasonable and
sufficient (and, without limiting the generality of the foregoing, in the case
of insurance under paragraphs (a), (b) and (c) shall be on a full replacement
cost basis subject only to such deductibles and exclusions as the Landlord may
approve and in the case of insurance under paragraph (d) shall have original
limits not less than $2,000,000 in respect of any one accident or occurrence),
shall permit the release of the Landlord from certain liability as set out in
Article 11.3, shall include the Landlord as an additional named insured, and
shall otherwise be upon such terms and conditions as the Landlord shall from

                                       30
<PAGE>

time to time require as being reasonable and sufficient. Within five days after
the request of the Landlord, the Tenant shall file with the Landlord such copies
of current policies or certificates or other proofs as may be required to
establish the Tenant's insurance coverage in effect from time to time and the
payment of premiums thereon, and if the Tenant fails to insure or pay premiums
or to file satisfactory proof thereof as so required, the Landlord may without
notice to the Tenant effect such insurance and recover any premiums paid
therefor from the Tenant on demand. All such policies of insurance shall contain
an undertaking by the insurance company to notify the Landlord in writing 30
days prior to any material change in any such policies. To the extent
applicable, the Tenant agrees to use the proceeds of insurance to restore the
Premises to the condition existing immediately prior to any loss or damage.

11.3       LIMITATION OF LANDLORD'S LIABILITY

The Landlord shall not be liable or in any way responsible to the Tenant in
respect of any loss, injury or damage suffered by the Tenant or its employees,
invitees or licensees, or others unless resulting from the negligence of the
Landlord or those for whom the Landlord is in law responsible, but in no event
shall the Landlord be liable for loss, injury or damage:

     (a)  to any property of the Tenant or others from theft, damage or any
          other cause;

     (b)  caused by other tenants or occupants or persons or the public in or
          about the Premises or other rentable premises or elsewhere in the
          Building, or caused by operations in the conduct of any private or
          public work;

     (c)  of the nature of indirect or consequential loss, injury or damage of
          any nature whatsoever including without limitation matters affected by
          interruptions in the supply of water, electricity, heating, air
          conditioning and other utilities; or

     (d)  required to be insured by the Tenant under the provisions of Article
          11.2.

11.4       INDEMNITY

Notwithstanding any other provision of this Lease to the contrary the Tenant
shall be liable to the Landlord for and does hereby hold harmless and indemnify
the Landlord, its officers, employees and agents and the successors and
permitted assigns of the Landlord from and against all losses, costs,
liabilities, claims, damages, expenses, demands, suits, actions or other
proceedings, judgments, penalties and fines (including, without limiting the
generality of the foregoing, direct losses, costs, damages and expenses of the
Landlord, including solicitor-client costs) which arise during or after the Term
and are in any manner based upon, arise out of or are connected with:

     (a)  any breach, violation, or non-performance of any covenant, condition
          or agreement in this Lease set forth and contained on the part of the
          Tenant to be fulfilled, kept, observed or performed;

                                       31
<PAGE>

     (b)  any damage to property, including property of the Landlord, occasioned
          by the operation of the Tenant's business on, or the Tenant's
          occupation of, the Premises or arising out of any work done by, or any
          act, neglect, or omission of, the Tenant or its employees, agents,
          contractors, invitees, concessionaires, or licensees in or about the
          Building;

     (c)  any injury to person or persons, including death at any time resulting
          therefrom, occasioned by the operation of the Tenant's business on, or
          the Tenant's occupation of, the Premises or arising out of any work
          done by, or any act, neglect, or omission of, the Tenant or its
          employees, agents, contractors, invitees, concessionaires, or
          licensees in or about the Building;

     (d)  any contract, lien, privilege, charge or encumbrance of the Premises
          arising from or occasioned by the act, default, omission or negligence
          of the Tenant and those for whom the Tenant is responsible;

     (e)  the presence or suspected presence of any waste, as that term is
          defined in the WASTE MANAGEMENT ACT, R.S.B.C. 1996, c. 482, as amended
          from time to time, toxic or hazardous substances in, on or under the
          Premises or any other contamination including that resulting from
          waste, an unhealthful, hazardous or dangerous condition caused by,
          contributed to or aggravated by the Tenant's violation of any laws,
          ordinances, regulations or requirements pertaining to solid or other
          wastes, chemicals, oil and gas, toxic, corrosive or hazardous
          materials, air, water (surface or ground water) or noise pollution and
          the storage, handling, use or disposal of such matter (unless the
          waste, toxic or hazardous substances or any other contaminants are
          present solely as a result of the negligence or wilful misconduct of
          the Landlord), including, without limitation, costs incurred in
          connection with any investigation of site conditions or any clean-up,
          remedial, removal or restoration work required by any federal,
          provincial or municipal government agency;

such covenant of the Tenant to survive the expiration or sooner termination of
the Term, notwithstanding anything herein to the contrary. The Tenant hereby
further expressly agrees that any statutory limitation period on actions to
enforce these obligations shall not be deemed to commence until the Landlord
discovers any such circumstances as may give rise to their enforcement and the
Tenant hereby knowingly and voluntarily waives the benefits of any shorter
limitation period.

12.        SUBORDINATION, ATTORNMENT, REGISTRATION AND CERTIFICATES

The Tenant agrees with the Landlord that:

12.1       SUBORDINATION AND ATTORNMENT

This Lease shall, at the option of the Landlord or the mortgagee under any
mortgage or the trustee under any trust deed or trust indenture, now or
hereafter existing, (such mortgagee or trustee being in this Article 12.1 called
the "Holder" and such mortgage or trust deed or trust indenture being called the
"Security") affecting the Land or Building, exercisable at any time and from
time to time by the Landlord or such Holder, be either subject and subordinate
to such Security and accordingly not binding upon such Holder or, alternatively,

                                       32
<PAGE>

prior to such Security and binding upon such Holder. On request at any time and
from time to time, the Tenant shall either postpone and subordinate this Lease
with the intent and effect that this Lease and all rights of the Tenant shall be
subject to the rights of such Holder as fully as if the Security, regardless of
when made, had been made prior to the making of this Lease or, alternatively, to
attorn to such Holder and become bound to it as its tenant of the Premises for
the then unexpired residue of the Term and upon the terms and conditions
contained in this Lease, in each case as the Landlord or such Holder may
require, without limiting the foregoing (and notwithstanding that any of
previous attornment or subordination in favour of such Holder shall have been
given) the Tenant shall execute promptly the appropriate instrument of
postponement and subordination or alternatively the right instrument of
attornment, as the case may be, in order to give effect to the foregoing. At the
request of the Tenant, the Landlord shall obtain a Non-Disturbance Agreement
from any present or future Holders.

12.2       REGISTRATION

Neither the Tenant nor any one on the Tenant's behalf or claiming under the
Tenant will register this Lease against the Lands or any part thereof comprising
the Building or the Premises. If the Tenant intends to register a document for
the purpose only of giving notice of this Lease or of any permitted assignment
or sublease of this Lease, then, upon the request of the Tenant, the Landlord
will join in the execution of a short form or notice of this Lease which will be
subject to the Landlord's prior written approval and will only refer to the
following terms comprising the Lease: (a) parties; (b) demised Premises; (c)
Commencement Date; (d) expiration date of the Term; and (e) any options to
renew. All costs incurred in connection with the registration shall be borne
solely by the Tenant and the Tenant shall reimburse the Landlord for all legal
fees and other expenses incurred. At the Landlord's option, the Tenant shall
provide the Landlord with a registrable power of attorney whereby the Tenant
appoints the Landlord as its attorney to execute any instruments required under
this Article 12.

12.3       CERTIFICATES

The Tenant shall within ten days of receipt of notice in writing from Landlord
execute and deliver to the Landlord and if required by the Landlord, to any
mortgagee (including any trustee under a trust deed or trust indenture)
designated by the Landlord a confirmation in writing as to the status of this
Lease, including as to whether it is in full force and effect, is modified or
unmodified, confirming the rental payable hereunder and the state of the
accounts between the Landlord and Tenant, the existence or non-existence of
defaults, the Rentable Area of the Premises, and any other matters pertaining to
this Lease as to which the Landlord shall request confirmation. Such certificate
shall be substantially in the form attached hereto as Schedule D.

13.        REMEDIES OF LANDLORD ON TENANT'S DEFAULT

The Landlord and Tenant further covenant and agree as follows:

                                       33
<PAGE>

13.1       REMEDYING BY LANDLORD, NON-PAYMENT AND INTEREST

Subject to any rights of the Tenant to cure under Article 14.2 below, in
addition to all rights and remedies of the Landlord available to it in the event
of any default hereunder by the Tenant either by any other provision of this
Lease or by statute or common law, the Landlord:

     (a)  shall have the right at all times (but shall never be obligated) to
          remedy or attempt to remedy any default of the Tenant, and in so doing
          may make any payments due or alleged to be due by the Tenant to third
          parties and may enter upon the Premises to do work or other things
          therein, and in such event all expenses of the Landlord in remedying
          or attempting to remedy such default shall be payable by the Tenant to
          the Landlord forthwith upon demand, together with a fee for
          supervision for carrying out the Tenant's obligations in an amount
          equal to 15 percent of the cost of repairs or other work carried out
          by or under the supervision of the Landlord which amount shall be in
          addition to the incurred costs of such work together with interest at
          a rate of six percent per annum above the Prime Rate from time to time
          on the aggregate of the foregoing from the date funds were expended by
          the Landlord until actual payment thereof by the Tenant;

          (b)  may recover as Additional Rent all sums paid or expenses incurred
               hereunder by the Landlord, which ought to have been paid or
               incurred by the Tenant, or for which the Landlord hereunder is
               entitled to reimbursement from the Tenant, and any interest owing
               to the Landlord hereunder by any and all remedies available to it
               for the recovery of Base Rent in arrears;

          (c)  if the Tenant shall fail to pay any Rent or other amount from
               time to time payable by it to the Landlord hereunder promptly
               when due, shall be entitled to interest thereon at a rate of six
               percent per annum above the Prime Rate from time to time from,
               (except where interest commences to accrue earlier pursuant to
               Article 13.1(a)), the date upon which the same was due until
               actual payment thereof.

13.2       REMEDIES CUMULATIVE

The Landlord may from time to time resort to any or all of the rights and
remedies available to it in the event of any default hereunder by the Tenant,
either by any provision of this Lease or by statute or the general law, all of
which rights and remedies are intended to be cumulative and not alternative, and
the express provisions hereunder as to certain rights and remedies are not to be
interpreted as excluding any other or additional rights and remedies available
to the Landlord by statute or the general law.

13.3       RIGHT OF RE-ENTRY ON TERMINATION

If this Lease shall have become terminated pursuant to any provision hereof, or
if the Landlord shall have become entitled to terminate this Lease and shall
have given notice terminating it pursuant to any provision hereof, then and in
every such case it shall be lawful for the Landlord thereafter to enter into and
upon the Premises or any part thereof in the name of the whole and the same to
have again, repossess and enjoy as of its former estate.

                                       34
<PAGE>

13.4       RE-ENTRY AND TERMINATION

If and whenever the Landlord becomes entitled to or does re-enter the Premises
under any provision of this Lease, the Landlord, in addition to all other rights
and remedies, shall have the right to terminate this Lease forthwith by leaving
upon the Premises notice in writing of such termination, and in such event the
Tenant shall forthwith vacate and surrender the Premises.

13.5       RIGHTS ON RE-ENTRY

Whenever the Landlord becomes entitled to re-enter upon the Premises under any
provision of this Lease, the Landlord, in addition to all other rights it may
have, shall have the right to enter the Premises, as agent of the Tenant, either
by force or otherwise without being liable for any loss or damage occasioned
thereby and to relet them and to receive the rent therefor and as the agent of
the Tenant to take possession of any furniture or other property thereon and to
sell the same at public or private sale without notice and to apply the proceeds
thereof and any rent derived from reletting the Premises, after deducting its
costs of conducting such sale and its cost of reletting, upon account of the
Rent due and to become due under this Lease and the Tenant shall be liable to
the Landlord for the deficiency, if any.

13.6       DISTRESS

The Tenant waives and renounces the benefit of any present or future law taking
away or limiting the Landlord's right of distress on the property of the Tenant
and, notwithstanding any such law, the Landlord may seize and sell the Tenant's
goods and chattels, excepting for records and reports of a confidential nature,
whether within the Premises or removed therefrom and apply the proceeds of such
sale upon Rent and all other amounts outstanding including the cost of the
seizure and sale in the same manner as might have been done if such law had not
been passed. The Tenant further agrees that if it leaves the Premises leaving
any Rent or other amounts provided to be paid under this Lease unpaid, the
Landlord, in addition to any remedy otherwise provided at law or in equity, may
seize the goods and chattels of the Tenant at any place to which the Tenant or
any other person may have removed them from the Premises in the same manner as
if such goods and chattels had remained upon the Premises. For the purposes of
making any such distress the Landlord, by itself, its agents and bailiffs may
break open any door or window and enter upon the Premises at any time after Rent
or other monies shall accrue due.

13.7       PAYMENT OF RENT, ETC., ON TERMINATION

If the Landlord shall re-enter and this Lease shall be terminated as provided
for herein, then the Tenant shall pay to the Landlord on demand:

          (a)  Rent up to the time of re-entry or termination, whichever shall
               be the later, plus accelerated Rent as herein provided;

          (b)  all other amounts payable hereunder until such time;

          (c)  such expenses as the Landlord may incur or have incurred in
               connection with reentering or terminating and reletting, or
               collecting sums due or payable by the Tenant or realizing upon
               assets seized including brokerage, legal fees and disbursements
               (on a solicitor-client basis), and the expense of keeping the
               Premises in good order, repairing the same and preparing them for
               reletting; and

                                       35

<PAGE>

          (d)  as liquidated damages for the loss of Rent and other income of
               the Landlord expected to be derived from the Lease during the
               period which would have constituted the unexpired portion of the
               Term had it not been terminated, the amount, if any, by which the
               rental value of the Premises for such period established by
               reference to the terms and provisions of this Lease exceeds the
               rental value of the Premises for such period established by
               reference to the terms and provisions upon which the Landlord
               relets them, if such reletting is accomplished within a
               reasonable time after termination of this Lease, and otherwise
               with reference to all market and other relevant circumstances.
               Rental value is to be computed in each case by reducing to
               present worth at an interest rate equal to the then current Prime
               Rate all Rent and other amounts to become payable for such period
               and where the ascertainment of amounts to become payable requires
               it, the Landlord may make estimates and assumptions of fact which
               shall govern unless shown to be unreasonable or erroneous.

14.        CANCELLATION OF INSURANCE AND EVENTS TERMINATING LEASE

The Landlord and Tenant further covenant and agree as follows:

14.1       CANCELLATION OF INSURANCE

If any policy of insurance upon the Building from time to time effected by the
Landlord shall be cancelled or be about to be cancelled by the insurer or an
insurer shall refuse or decline to place or renew insurance by reason of the use
or occupation of the Premises by the Tenant or any assignee, subtenant or
licensee of the Tenant or anyone permitted by the Tenant to be upon the Premises
and the Tenant after receipt of notice in writing from the Landlord shall have
failed to take such immediate steps in respect of such use or occupation as
shall enable the Landlord to reinstate, renew, replace or avoid cancellation of
(as the case may be), such policy of insurance, without limitation to any other
right or remedy of the Landlord under this Lease, the Landlord may at its
option, at any time and without notice enter upon the Premises and remove the
said use or condition in which event the Tenant shall forthwith on demand pay to
the Landlord the cost to the Landlord related to such removal together with a
supervisory fee of 15 percent of such cost and with interest on the aggregate of
the foregoing from the date funds were expended by the Landlord until actual
payment thereof.

14.2       DEFAULT

If and whenever:

          (a)  the Rent hereby reserved, or any part thereof, be not paid when
               due, or there is non-payment of any other sum which the Tenant is
               obligated to pay under any provisions hereof, and in either case
               such default shall continue for ten days after notice by the
               Landlord requiring the Tenant to rectify the same; or

                                       36

<PAGE>

          (b)  the Term or any goods, chattels, equipment or other personal
               property of the Tenant shall at any time be taken or be eligible
               in execution or attachment or if a writ of execution shall issue
               against the Tenant, or the Tenant shall attempt or threaten to
               move its goods, chattels or equipment out of the Premises (other
               than in the ordinary course of its business or as permitted
               hereunder) or shall, for a period of ten consecutive days
               (without the prior written consent of the Landlord) fail to
               conduct business from the Premises; or

          (c)  the Premises shall be vacated or abandoned or remain unoccupied
               for 15 days or more while capable of being occupied; or

          (d)  the Tenant shall become insolvent or commit an act of bankruptcy
               or become bankrupt or take the benefit of any Act that may be in
               force for bankrupt or insolvent debtors or, if the Tenant is a
               corporation, become involved in a winding up proceeding or other
               proceeding for the termination of its corporate existence or if a
               receiver shall be appointed for the business, property, affairs
               or revenues of the Tenant or if any governmental authority should
               take possession of the business or property of the Tenant or the
               Tenant shall make a general assignment for the benefit of
               creditors; or

          (e)  without the written consent of the Landlord, the Premises shall
               be used by any persons other than the Tenant or its permitted
               assigns or sub-tenants or for any purpose other than that for
               which they were leased, or shall be occupied by any person whose
               occupancy is prohibited by this Lease; or

          (f)  the Tenant shall assign or sublet or purport to assign or sublet
               any portion or all of the Term or the Premises without the
               written consent of the Landlord or control of the Tenant, if a
               corporation, is changed without the prior written consent of the
               Landlord, in either case as required pursuant to Article 9; or

          (g)  the Tenant shall fail to:

               (1)  remedy any condition giving rise to cancellation, threatened
                    cancellation, reduction or threatened reduction of any
                    insurance policy on the Property or any part thereof within
                    24 hours after notice thereof by the Landlord; or

               (2)  in the case of any such condition which reasonably would
                    require more than 24 hours to remedy, commence remedial
                    action within the said 24 hour period and thereafter
                    promptly, diligently and continuously proceed with the
                    remedial action until the condition has been remedied; or

          (h)  the Tenant shall breach or fail to observe or perform any other
               of the covenants, agreements, provisions, stipulations and
               conditions herein to be observed, performed and kept by the
               Tenant and shall persist in such failure for 15 days after notice
               by the Landlord requiring that the Tenant remedy, correct, desist
               or comply (or in the case of any such breach which reasonably
               would require more than 15 days to rectify, unless the Tenant
               shall commence rectification within the said 15 day period and
               thereafter promptly and diligently and continuously proceed with
               the rectification of the breach);

                                       37
<PAGE>

then and in any of such cases, at the option of the Landlord, the full amount of
the current month's and the next three months' monthly Rent shall immediately
become due and payable and the Landlord may without notice or any form of legal
process forthwith re-enter upon and take possession of the Premises or any part
thereof in the name of the whole and remove and sell the Tenant's goods,
chattels and equipment therefrom any rule of law or equity to the contrary
notwithstanding; and the Landlord may seize and sell such goods, chattels and
equipment of the Tenant as are in the Premises or at any place to which the
Tenant or any other person may have removed them in the same manner as if they
had remained and been distrained upon the Premises; and such sale may be
effected in the discretion of the Landlord either by public auction or by
private treaty, and either in bulk or by individual item, or partly by one means
and partly by another, all as the Landlord in its entire discretion may decide.

15.        MISCELLANEOUS

The Landlord and Tenant further covenant and agree as follows:

15.1       NOTICES

All notices, demands, requests, consents, approvals and other instruments
required or permitted to be given pursuant to the terms of this Lease shall be
in writing and shall be deemed to have been properly given if personally served
or sent by registered mail (postage prepaid with return receipt requested) or
sent by telecopier to the Landlord or the Tenant at the addresses hereinbefore
set forth or in the case of the Tenant at the Premises in lieu of the address
hereinbefore set forth.

Provided, however, that such address may be changed upon five Business Days
written notice thereof, similarly given, to the other party.

The date of receipt of any such notice, demand, request, consent, approval or
other instrument shall be deemed to be as follows:

          (a)  in the case of personal service, the date of service;

          (b)  in the case of registered mail, the fifth Business Day following
               the date of delivery to the Post Office, provided, however, that
               in the event of an interruption of normal mail service receipt
               shall be deemed to be the fifth Business Day following the date
               on which normal mail service is restored;

          (c)  in the case of telecopy, the Business Day next following the day
               of sending.

Any notices required or permitted to be given by the Landlord pursuant to the
terms of this Lease may be served by the Landlord, its lawyer or its managing
agent.

                                       38
<PAGE>

15.2       ENTIRE AGREEMENT

The Tenant acknowledges that there are no covenants, representations,
warranties, agreements or conditions expressed or implied relating to this Lease
or the Premises save as expressly set out in this Lease and the Offer to Lease.
In the event of any conflict between the provisions of the Offer to Lease and
this Lease, the provisions of this Lease will govern. This Lease may not be
modified except by an agreement in writing executed by the Landlord and the
Tenant.

15.3       AREA DETERMINATION

In the event that any calculation or determination by the Landlord of the
Rentable Area of any premises (including the Premises) of the Building is
disputed or called into question, it shall be calculated or determined by the
Landlord's Architect, whose certification shall be conclusive, the cost of such
remeasurement to be paid by and borne by the party so disputing or calling into
question the previous calculation or determination. The Landlord may at any time
convert all measurements relating to this Lease to metric measurements and the
Lease shall be appropriately modified.

15.4       SUCCESSORS AND ASSIGNS, INTERPRETATION

This Lease and everything herein contained shall enure to the benefit of and be
binding upon the successors and assigns of the Landlord and the heirs,
executors, administrators, successors and permitted assigns of the Tenant.
References to the Tenant shall be read with such changes in gender as may be
appropriate, depending on whether the Tenant is a male or female person or a
firm or corporation, and if the Tenant is more than one person or entity, the
covenants of the Tenant shall be deemed joint and several.

15.5       FORCE MAJEURE

Save and except for the obligations of the Tenant as set forth in this Lease to
pay Base Rent, Additional Rent, rent and any other monies required to be paid to
the Landlord, if either party shall fail to meet its obligations hereunder
within the time prescribed, and such failure shall be caused or materially
contributed to by any cause beyond the reasonable control of such party (but
lack of funds on the part of such party shall be deemed not to be a force
majeure), such failure shall be deemed not to be a breach of the obligations of
such party hereunder but such party shall use reasonable diligence to put itself
in a position to carry out its obligations hereunder, and the time for
fulfilment of such obligation shall be extended for the period in which such
circumstance operates to delay or prevent the fulfilment thereof and the other
party to this Lease shall not be entitled to compensation for any inconvenience,
nuisance or discomfort thereby occasioned.

15.6       WAIVER

Failure of the Landlord to insist upon strict performance of any of the
covenants or conditions of this Lease or to exercise any right or option herein
contained shall not be construed as a waiver or relinquishment of any such
covenant, condition, right or option, but the same shall remain in full force
and effect. The Tenant undertakes and agrees, for itself and for any person
claiming to be a subtenant or assignee, that the acceptance by the Landlord of
any rent from any person other than the Tenant shall not be construed as a

                                       39
<PAGE>

recognition of any rights not herein expressly granted, or as a waiver of any of
the Landlord's rights, or as an admission that such person is, or as a consent
that such person shall be deemed to be, a subtenant or assignee of this Lease,
irrespective of whether the Landlord or said person claims that such person is a
subtenant or assignee of this Lease. The Landlord may accept rent from any
person occupying the Premises at any time without in any way waiving any right
under this Lease.

15.7       GOVERNING LAW, COVENANTS, SEVERABILITY

This Lease shall be governed by and construed in accordance with the laws of the
Province of British Columbia. The Landlord and the Tenant agree that all of the
provisions of this Lease are to be construed as covenants and agreements as
though the words importing such covenants and agreements were used in each
separate section hereof. Should any provision or provisions of this Lease be
illegal or not enforceable, it or they shall be considered separate and
severable from the Lease and its remaining provisions shall remain in force and
be binding upon the parties hereto as though the said provision or provisions
had never been included.

15.8       HEADINGS, CAPTIONS

The headings and captions appearing in this Lease have been inserted for
convenience of reference only and in no way define, limit or enlarge the scope
or meaning of this Lease or of any provisions hereof.

15.9       TIME FOR PAYMENT

Unless otherwise expressly provided in this Lease, all amounts (other than Rent)
required to be paid by the Tenant to the Landlord pursuant to this Lease shall
be payable on demand at the place designated by the Landlord for payment of Rent
and if not so paid within ten days of such demand be treated as Rent in arrears.

15.10      TIME OF ESSENCE

Time shall be of the essence of this Lease.

15.11      OPTION TO EXPAND

          (a)  Provided that the Tenant has then duly and punctually met and
               performed each and every one of the covenants, provisos and
               agreements herein contained on the part of the Tenant to be
               per-formed, except only for any failure to do so which is deemed
               to be immaterial in nature, the Landlord will, on or before the
               last day of the 36th month of the Term, deliver to the Tenant a
               written notice stating a date (the "Option Space Commencement
               Date") not earlier than the first day of the 37th month of the
               Term and not later than the first day of the 43rd month of the
               Term on which the Option Space will become part of the Premises
               if within five Business Days after receiving said notice the
               Tenant, by written notice delivered to the Landlord, exercises
               its option to expand the Premises to include the Option Space.

                                       40
<PAGE>

          (b)  If the Tenant exercises its option under Article 15.11(a) by
               delivering said notice to the Landlord as and when provided in
               Article 15.11(a), then beginning on the Option Space Commencement
               Date and continuing throughout the Term the Option Space will be
               and be deemed to be part of the Premises for all purposes
               hereunder, except that no abatements of rent or fixturing period
               provided for in the Offer to Lease or this Lease will apply to
               the Option Space and any contributions by the Landlord to the
               cost of Leasehold Improvements and any other incentives provided
               by the Landlord will be prorated based on the portion of the Term
               then remaining as of the Option Space Commencement Date. Nothing
               in this paragraph (b) will prevent the Base Rent abatements in
               clauses 4. and 5. of Article 4.1 from applying to the Option
               Space if pursuant to Article 1.20(d) the Option Space becomes
               included in the Premises in place of the Expansion Space.

          (c)  If the Tenant does not exercise its option under Article 15.11(a)
               by delivering said notice to the Landlord as and when provided in
               Article 15.11(a), then:

               (1)  except as may be applicable under Article 15.12, the
                    Landlord will have no further obligation whatsoever to the
                    Tenant regarding the Option Space and the Tenant will have
                    no further rights with respect to the Option Space; and

               (2)  at any time before the date that is 180 days before the
                    fifth anniversary of the Commencement Date the Landlord will
                    have the right, in its sole discretion, to notify the Tenant
                    in writing that for purposes of Article 1.20(d) the Option
                    Space and not the Expansion Space will become included in
                    the Premises beginning on the fifth anniversary of the
                    Commencement Date.

15.12      RIGHT OF FIRST OFFER

          (a)  Provided that the Tenant has, at the time it wishes to exercise
               any rights under this Article 15.12, duly and punctually met and
               performed each and every one of the covenants, provisos and
               agreements herein contained on the part of the Tenant to be
               performed, except only for any failure to do so which is deemed
               to be immaterial in nature, then beginning on the third
               anniversary of the Commencement Date and continuing throughout
               the Term the Tenant will have a continuous "Right of First Offer"
               as follows. Whenever any portion of the Building becomes
               available for lease, the Landlord will give the Tenant a written
               notice stating:

               (1)  that said portion of the Building ("RFO Space") has become
                    available for lease;

               (2)  the Base Rent and any terms and conditions different from
                    those in this Lease for and on which the Landlord proposes
                    to lease the RFO Space; and

                                       41
<PAGE>

               (3)  the date (the "RFO Commencement Date") as of which the
                    Landlord is prepared to lease the RFO Space.

               The Tenant will have the right for a period of five clear
               Business Days after receipt of said notice (the "Landlord's RFO
               Notice") to notify the Landlord in writing that the Tenant will
               lease the RFO Space. The Tenant's giving such notice (the
               "Tenant's RFO Notice") will create a binding agreement between
               the Landlord and the Tenant for the lease of the RFO Space by the
               Landlord to the Tenant for a term commencing on the RFO
               Commencement Date and expiring simultaneously with the expiration
               of the Term, for the Base Rent and on the terms and conditions
               specified in the Landlord's RFO Notice, and otherwise on the
               terms and conditions in this Lease except that no abatements of
               rent or fixturing period provided for in the Offer to Lease or
               this Lease will apply to the RFO Space and any contributions by
               the Landlord to the cost of Leasehold Improvements and any other
               incentives provided by the Landlord will be prorated based on the
               portion of the Term then remaining as of the RFO Commencement
               Date. Nothing in this paragraph (a) will prevent the Tenant from
               having the benefit of any rent abatement or fixturing period
               provided for in the Landlord's RFO Notice.

          (b)  If the Tenant does not give the Landlord a Tenant's RFO Notice
               within the time specified in Article 15.12(a) following receipt
               of a Landlord's RFO Notice, then for a period of six months from
               and after the date of receipt of the Landlord's RFO Notice, the
               Landlord shall be free to lease the RFO Space identified in the
               Landlord's RFO Notice to any third party for a base annual rent
               and on terms and conditions no more favourable to said third
               party than those offered to the Tenant in the Landlord's RFO
               Notice.

          (c)  After the expiration of a period of six months following the
               Landlord's delivery of a Landlord's RFO Notice as to any
               particular RFO Space, the Tenant's rights under Article 15.12(a)
               will again pertain as to such RFO Space, and the Landlord's
               obligation under Article 15.12(a) to provide a Landlord's RFO
               Notice before leasing such RFO Space to a third party will again
               apply.

          (d)  The Tenant shall not assign any of its rights set forth in this
               Article 15.12 and shall not sublet any RFO Space, other than in
               conjunction with an assignment otherwise permitted hereunder of
               all of the Tenant's right, title and interest in and to this
               Lease, or a sublease otherwise permitted hereunder of the entire
               Premises.

15.13      RIGHT OF CANCELLATION

The Tenant will have the right, by delivering a notice to the Landlord before
the sixth anniversary of the Commencement Date stating that the Tenant wishes to
terminate this Lease as of the day immediately preceding the seventh anniversary
of the Commencement Date (the "Cancellation Date"), to so terminate this Lease.
The Tenant agrees that if the Tenant exercises the right to so terminate this
Lease, the Tenant will pay to the Landlord, no later than the Cancellation Date,
a dollar amount equal to the unamortized balance (as of the Cancellation Date)
of the sum of all abatements of Base Rent, the "Improvement Allowance" and
"Moving Expenses" paid by the Landlord to the Tenant under the Offer to Lease,
based on a ten percent interest rate compounded semi-annually.

                                       42
<PAGE>

15.14      OPTIONS TO RENEW

          (a)  FIRST OPTION TO RENEW. Provided that the Tenant has then duly and
               punctually met and performed each and every one of the covenants,
               provisos and agreements herein contained on the part of the
               Tenant to be performed, except only for any failure to do so
               which is deemed to be immaterial in nature, the Landlord shall,
               at the expiration of the Term and on the written request of the
               Tenant delivered to the Landlord not earlier than the date that
               is one year before the last day of the Term and not later than
               the day that is six months before the last day of the Term, grant
               to the Tenant a renewal of this Lease of the Premises for a
               further term of five years from the end of the Term (the "First
               Extended Term") on the same terms and conditions as in this
               Lease, except as to Base Rent, any abatements of rent, any
               fixturing period, any contributions by the Landlord to the cost
               of Leasehold Improvements, any other incentives provided by the
               Landlord, this First Option to Renew and the Second Option to
               Renew set forth in paragraph (b) below. The Landlord and the
               Tenant shall make all reasonable efforts to reach agreement as to
               the base annual rent for such five year period not more than
               three months prior to the commencement of the First Extended Term
               and not less than two months prior to the commencement of the
               First Extended Term and failing such agreement such base annual
               rent shall be fixed by a single arbitrator under the provisions
               of the COMMERCIAL ARBITRATION ACT, R.S.B.C. 1996, c. 55, and
               shall be the fair market rent for the Premises, having regard to
               the rent then currently being charged for premises of similar
               size, age, condition, quality, use and location in buildings
               similar to the Building and in comparable locations in the City
               of Burnaby. Such annual rent shall in any event be not less than
               the annual rent fixed in respect of the previous period for which
               annual rent has been fixed under this Lease.

          (b)  SECOND OPTION TO RENEW. Provided that the Tenant has then duly
               and punctually met and performed each and every one of the
               covenants, provisos and agreements herein contained on the part
               of the Tenant to be performed, except only for any failure to do
               so which is deemed to be immaterial in nature, the Landlord
               shall, at the expiration of the First Extended Term and on the
               written request of the Tenant delivered to the Landlord not
               earlier than the date that is one year before the last day of the
               First Extended Term and not later than the day that is six months
               before the last day of the First Extended Term, grant to the
               Tenant a renewal of this Lease of the Premises for a further term
               of five years from the end of the First Extended Term (the
               "Second Extended Term") on the same terms and conditions as in
               this Lease, except as to Base Rent, any abatements of rent, any
               fixturing period, any contributions by the Landlord to the cost
               of Leasehold Improvements, any other incentives provided by the
               Landlord, and this Second Option to Renew. The Landlord and the

                                       43
<PAGE>

               Tenant shall make all reasonable efforts to reach agreement as to
               the base annual rent for such five year period not more than
               three months prior to the commencement of the Second Extended
               Term and not less than two months prior to the com- mencement of
               the Second Extended Term and failing such agreement such base
               annual rent shall be fixed by a single arbitrator under the
               provisions of the COMMERCIAL ARBITRATION ACT, R.S.B.C. 1996, c.
               55, and shall be the fair market rent for the Premises, having
               regard to the rent then currently being charged for premises of
               similar size, age, condition, quality, use and location in
               buildings similar to the Building and in comparable locations in
               the City of Burnaby. Such annual rent shall in any event be not
               less than the annual rent fixed in respect of the previous period
               for which annual rent has been fixed under this Lease.

15.15      BICYCLE STORAGE

The Landlord shall make a provision for secured bicycle storage within the
Building, for the Tenant's exclusive use, with space to accommodate at least 60
bicycles. The Landlord will pay for the initial set-up of said space, but all
operating, maintenance and repair costs will be included in Operating Costs.

15.16      LANDLORD'S WARRANTY

The Landlord warrants that as of the Commencement Date:

          (a)  the Building will be zoned to permit the Permitted Use; and

          (b)  the Building will comply with applicable municipal codes
               pertaining to handicap accessibility.

15.17      CONSENTS AND APPROVALS

Wherever the consent or approval of a party is required under the terms hereof
it shall be understood that such shall not be unreasonably delayed or withheld
unless the provisions hereof expressly provide for the contrary.

15.18      LANDLORD'S NOTICE

The Landlord acknowledges that due to the nature of the Tenant's business, the
Tenant is subject to confidentiality agreements and in consideration thereof,
the Landlord agrees that whenever (except in the case of emergency) it enters
the Premises under any of Articles 5.13, 5.14 and 8.2(b) of this Lease, the
Landlord's prior written notice will identify, to the extent reasonably
possible, the Landlord's purpose in entering the Premises, the area or areas of
the Premises to be entered, and the identity of the individual or individuals
entering the Premises, and the persons entering the Premises will comply with
the Tenant's reasonable security procedures such as wearing identification
badges, if required.

                                       44
<PAGE>

15.19      ARBITRATION

If there is a dispute between the Landlord and the Tenant with respect to the
calculation of Additional Rent, a party may give notice to the other party
requiring that the dispute be referred to the chief executive officer of each
party. When this notice is given, each party will cause its respective chief
executive officer to promptly begin discussions with each other with a view to
settling the dispute. A unanimous decision of the chief executive officers which
is communicated by notice from them to the parties will be binding on the
parties. If the chief executive officers do not communicate a unanimous decision
by notice within 15 days after the date of the notice referring the matter to
them, then the dispute or issue will be submitted to arbitration under the
British Columbia COMMERCIAL ARBITRATION ACT. The award of the arbitrator will be
final and binding on the parties.

IN WITNESS WHEREOF the Landlord and Tenant have executed this Lease the day and
year first above written.

The common seal of KAB Properties         )
Inc was hereto affixed in the presence    )
of:                                       )
                                          )
__/S/ ILLEGIBLE___________________________)                             c/s
Authorized Signatory                      )
                                          )
--------------------------------          )
Authorized Signatory                      )
                                          )
                                          )
The common seal of SPECTRUM               )
SIGNAL PROCESSING INC was                 )
hereto affixed in the presence of:        )
__________________________________________)                              c/s
   ---------------
Authorized Signature                      )
                                          )
____ S/ MARTIN MCCONNELL__________________)
Authorized Signatory                      )

<PAGE>

                               AMENDMENT OF LEASE

                                                           DATE: January 5, 2000

BETWEEN:    KAB PROPERTIES INC., B.C. Incorporation No. 397623, a body corporate
            carrying on business at 2694 - 1055 Dunsmuir Street, Four Bentall
            Centre, P.O. Box 49297, in the City of Vancouver, in the Province of
            British Columbia, V7X 1L3

                                  ("Landlord")

AND:        SPECTRUM SIGNAL PROCESSING INC., B.C. Incorporation No.331399, a
            body corporate carrying on business at One Spectrum Court, 2700
            Production Way, in the City of Burnaby, in the Province of British
            Columbia, V5A 4V7

                                   ("Tenant")

IN RESPECT OF PREMISES 1N:

                     2700 Production Way, Burnaby, B.C.

LANDLORD AND TENANT, in consideration of the covenants herein contained, hereby
agree as follows:

1.        (a)  "Building" means One Spectrum Court, 2700 Production Way located
               in the City of Burnaby, B.C.

          (b)  "Premises" means Sixty-three thousand, six hundred and
               seventy-three (63,673) square feet of space on the First, Second,
               Third, Fourth and P1 floors.

          (c)  "Lease" means the lease between the Landlord and Tenant dated
               July 21, 1998 covering the Premises.

          (d)  "Amendment Date" means the 1st day of July, 1999.

2.   Effective on the Amendment Date,

          "Article 3.1 Term" of the Lease shall be declared to be as follows:
          The term of this Lease shall be ten years and shall commence on July
          1, 1999 (the "Commencement Date") to be fully completed and ended on
          June 30, 2009.

                                                                     page 1 of 2

<PAGE>

              "Article 1.20 Premises" of the Lease is clarified as follows:

         Floor               Rentable Area

         P1    1,826 sq. ft. (men's change room)
           1   2,893 sq. ft. (reception and fitness area)
           2  24,027 sq. ft.
           3  23,932 sq. ft.
           4  10,995 sq. ft. (balance of floor future option space)
           5  is where the expansion space is located

3.   Except as specifically provided herein, the terms and conditions of the
     Lease are confirmed and continued in full force and effect.

4.   This indenture shall be binding on the heirs, administrators, successors
     and assigns (as the case may be) of the parties hereto.

IN WITNESS WHEREOF the parties hereto have executed this indenture by affixing
their corporate seals by their authorized officers in that behalf, or by
Tenant's signature hereto, as of the date first above written.

The common seal of KAB Properties         )
Inc was hereto affixed in the presence    )
of:                                       )
                                          )
__/S/ ILLEGIBLE___________________________)                             c/s
Authorized Signatory                      )
                                          )
--------------------------------          )
Authorized Signatory                      )
                                          )
                                          )
The common seal of SPECTRUM               )
SIGNAL PROCESSING INC was                 )
hereto affixed in the presence of:        )
__________________________________________)                              c/s
   ---------------
Authorized Signature                      )
                                          )
____ S/ MARTIN MCCONNELL__________________)
Authorized Signatory                      )

                          page 2 of 2<PAGE>   1

                                                                     EXHIBIT 4.1

                            MICRO THERAPEUTICS, INC.

                           FOURTH AMENDED AND RESTATED
                            1996 STOCK INCENTIVE PLAN

        This 1996 STOCK INCENTIVE PLAN (the "Plan") was established and adopted
in August 1996 (the "Effective Date") by Micro Therapeutics, Inc., a Delaware
corporation (the "Company"), was amended as of May 29, 1998, was amended as of
May 27, 1999, was amended as of July 27, 2000 and is hereby amended and restated
as of May 31, 2001 (the "Amendment Date").

                                       1.

                              PURPOSES OF THE PLAN

        1.1 PURPOSES. The purposes of the Plan are (a) to enhance the Company's
ability to attract and retain the services of qualified employees, officers and
directors (including non-employee officers and directors), and consultants and
other service providers upon whose judgment, initiative and efforts the
successful conduct and development of the Company's business largely depends,
and (b) to provide additional incentives to such persons or entities to devote
their utmost effort and skill to the advancement and betterment of the Company,
by providing them an opportunity to participate in the ownership of the Company
and thereby have an interest in the success and increased value of the Company.

                                       2.

                                   DEFINITIONS

        For purposes of this Plan, the following terms shall have the meanings
indicated:

        2.1 ADMINISTRATOR. "Administrator" means the Board or, if the Board
delegates responsibility for any matter to the Committee, the term Administrator
shall mean the Committee.

        2.2 AFFILIATED COMPANY. "Affiliated Company" means any "parent
corporation" or "subsidiary corporation" of the Company, whether now existing or
hereafter created or acquired, as those terms are defined in Sections 424(e) and
424(f) of the Code, respectively.

         2.3      BOARD.  "Board" means the Board of Directors of the Company.

        2.4 CHANGE IN CONTROL. "Change in Control" shall mean (i) the
acquisition, directly or indirectly, by any person or group (within the meaning
of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of the
beneficial ownership of more than fifty percent (50%) of the outstanding
securities of the Company; (ii) a merger or consolidation in which the Company
is not the surviving entity, except for a transaction the principal purpose of
which is to change the state in which the Company is incorporated; (iii) the
sale, transfer or other disposition of all or substantially all of the assets of
the Company; (iv) a complete liquidation or dissolution of the Company; or (v)
any reverse merger in which the Company is the surviving entity but in which
securities possessing more than fifty percent (50%) of the total combined voting
power of the Company's outstanding securities are transferred to a person or
persons different from the persons holding those securities immediately prior to
such merger.

        2.5 CODE. "Code" means the Internal Revenue Code of 1986, as amended
from time to time.

<PAGE>   2

        2.6 COMMITTEE. "Committee" means a committee of two or more members of
the Board appointed to administer the Plan, as set forth in Section 7.1 hereof.

        2.7 COMMON STOCK. "Common Stock" means the Common Stock, $.001 par value
of the Company, subject to adjustment pursuant to Section 4.2 hereof.

        2.8 DISABILITY. "Disability" means permanent and total disability as
defined in Section 22(e)(3) of the Code. The Administrator's determination of a
Disability or the absence thereof shall be conclusive and binding on all
interested parties.

        2.9 EFFECTIVE DATE. "Effective Date" means August 1, 1997, which was the
date on which the Plan was originally adopted by the Board.

        2.10 EXERCISE PRICE. "Exercise Price" means the purchase price per share
of Common Stock payable upon exercise of an Option.

        2.11 FAIR MARKET VALUE. "Fair Market Value" on any given date means the
value of one share of Common Stock, determined as follows:

             If the Common Stock is then listed or admitted to trading on a
Nasdaq market system or a stock exchange which reports closing sale prices, the
Fair Market Value shall be the closing sale price on the date of valuation on
such Nasdaq market system or principal stock exchange on which the Common Stock
is then listed or admitted to trading, or, if no closing sale price is quoted on
such day, then the Fair Market Value shall be the closing sale price of the
Common Stock on such Nasdaq market system or such exchange on the next preceding
day on which a closing sale price is quoted.

             If the Common Stock is not then listed or admitted to trading on a
Nasdaq market system or a stock exchange which reports closing sale prices, the
Fair Market Value shall be the average of the closing bid and asked prices of
the Common Stock in the over-the-counter market on the date of valuation.

             If neither (a) nor (b) is applicable as of the date of valuation,
then the Fair Market Value shall be determined by the Administrator in good
faith using any reasonable method of evaluation, which determination shall be
conclusive and binding on all interested parties.

        2.12 INCENTIVE OPTION. "Incentive Option" means any Option designated
and qualified as an "incentive stock option" as defined in Section 422 of the
Code.

        2.13 INCENTIVE OPTION AGREEMENT. "Incentive Option Agreement" means an
Option Agreement with respect to an Incentive Option.

        2.14 NASD DEALER. "NASD Dealer" means a broker-dealer that is a member
of the National Association of Securities Dealers, Inc.

        2.15 NONQUALIFIED OPTION. "Nonqualified Option" means any Option that is
not an Incentive Option. To the extent that any Option designated as an
Incentive Option fails in whole or in part to qualify as an Incentive Option,
including, without limitation, for failure to meet the limitations applicable to
a 10% Shareholder or because it exceeds the annual limit provided for in Section
5.6 below, it shall to that extent constitute a Nonqualified Option.

        2.16 NONQUALIFIED OPTION AGREEMENT. "Nonqualified Option Agreement"
means an Option Agreement with respect to a Nonqualified Option.

                                       2

<PAGE>   3

        2.17 OFFEREE. "Offeree" means a Participant to whom a Right to Purchase
has been offered or who has acquired Restricted Stock under the Plan.

        2.18 OPTION. "Option" means any option to purchase Common Stock granted
pursuant to the Plan.

        2.19 OPTION AGREEMENT. "Option Agreement" means the written agreement
entered into between the Company and the Optionee with respect to an Option
granted under the Plan.

        2.20 OPTIONEE. "Optionee" means a Participant who holds an Option.

        2.21 PARTICIPANT. "Participant" means an individual or entity who holds
an Option, a Right to Purchase or Restricted Stock under the Plan.

        2.22 PURCHASE PRICE. "Purchase Price" means the purchase price per share
of Restricted Stock payable upon acceptance of a Right to Purchase.

        2.23 RESTRICTED STOCK. "Restricted Stock" means shares of Common Stock
issued pursuant to Article 6 hereof, subject to any restrictions and conditions
as are established pursuant to such Article 6.

        2.24 RIGHT TO PURCHASE. "Right to Purchase" means a right to purchase
Restricted Stock granted to an Offeree pursuant to Article 6 hereof.

        2.25 SERVICE PROVIDER. "Service Provider" means a consultant or other
person or entity who provides services to the Company or an Affiliated Company
and who the Administrator authorizes to become a Participant in the Plan.

        2.26 STOCK PURCHASE AGREEMENT. "Stock Purchase Agreement" means the
written agreement entered into between the Company and the Offeree with respect
to a Right to Purchase offered under the Plan.

        2.27 10% SHAREHOLDER. "10% Shareholder" means a person who, as of a
relevant date, owns or is deemed to own (by reason of the attribution rules
applicable under Section 424(d) of the Code) stock possessing more than 10% of
the total combined voting power of all classes of stock of the Company or of an
Affiliated Company.

                                       3.

                                   ELIGIBILITY

        3.1 INCENTIVE OPTIONS. Officers and other key employees of the Company
or of an Affiliated Company (including members of the Board if they are
employees of the Company or of an Affiliated Company) are eligible to receive
Incentive Options under the Plan.

        3.2 NONQUALIFIED OPTIONS AND RIGHTS TO PURCHASE. Officers and other key
employees of the Company or of an Affiliated Company, members of the Board
(whether or not employed by the Company or an Affiliated Company), and Service
Providers are eligible to receive Nonqualified Options or Rights to Purchase
under the Plan.

        3.3 LIMITATION ON SHARES. In no event shall any Participant be granted
Rights to Purchase or Options in any one calendar year pursuant to which the
aggregate number of shares of Common Stock that may be acquired thereunder
exceeds 100,000 shares.

                                       3

<PAGE>   4

                                       4.

                                   PLAN SHARES

        4.1 SHARES SUBJECT TO THE PLAN. A total of 3,250,000 shares of Common
Stock may be issued under the Plan, subject to adjustment as to the number and
kind of shares pursuant to Section 4.2 hereof. For purposes of this limitation,
in the event that (a) all or any portion of any Option or Right to Purchase
granted or offered under the Plan can no longer under any circumstances be
exercised, or (b) any shares of Common Stock are reacquired by the Company
pursuant to an Incentive Option Agreement, Nonqualified Option Agreement or
Stock Purchase Agreement, the shares of Common Stock allocable to the
unexercised portion of such Option or such Right to Purchase, or the shares so
reacquired, shall again be available for grant or issuance under the Plan.

        4.2 CHANGES IN CAPITAL STRUCTURE. In the event that the outstanding
shares of Common Stock are hereafter increased or decreased or changed into or
exchanged for a different number or kind of shares or other securities of the
Company by reason of a recapitalization, stock split, combination of shares,
reclassification, stock dividend, or other change in the capital structure of
the Company, then appropriate adjustments shall be made by the Administrator to
the aggregate number and kind of shares subject to this Plan, and the number and
kind of shares and the price per share subject to outstanding Option Agreements,
Rights to Purchase and Stock Purchase Agreements in order to preserve, as nearly
as practical, but not to increase, the benefits to Participants.

                                       5.

                                     OPTIONS

        5.1 OPTION AGREEMENT. Each Option granted pursuant to this Plan shall be
evidenced by an Option Agreement which shall specify the number of shares
subject thereto, the Exercise Price per share, and whether the Option is an
Incentive Option or Nonqualified Option. As soon as is practical following the
grant of an Option, an Option Agreement shall be duly executed and delivered by
or on behalf of the Company to the Optionee to whom such Option was granted.
Each Option Agreement shall be in such form and contain such additional terms
and conditions, not inconsistent with the provisions of this Plan, as the
Administrator shall, from time to time, deem desirable, including, without
limitation, the imposition of any rights of first refusal and resale obligations
upon any shares of Common Stock acquired pursuant to an Option Agreement. Each
Option Agreement may be different from each other Option Agreement.

        5.2 EXERCISE PRICE. The Exercise Price per share of Common Stock covered
by each Option shall be determined by the Administrator, subject to the
following: (a) the Exercise Price of an Incentive Option shall not be less than
100% of Fair Market Value on the date the Incentive Option is granted, (b) the
Exercise Price of a Nonqualified Option shall not be less than 85% of Fair
Market Value on the date the Nonqualified Option is granted, and (c) if the
person to whom an Incentive Option is granted is a 10% Shareholder on the date
of grant, the Exercise Price shall not be less than 110% of Fair Market Value on
the date the Option is granted.

        5.3 PAYMENT OF EXERCISE PRICE. Payment of the Exercise Price shall be
made upon exercise of an Option and may be made, in the discretion of the
Administrator, subject to any legal restrictions, by: (a) cash; (b) check; (c)
the surrender of shares of Common Stock owned by the Optionee that have been
held by the Optionee for at least six (6) months, which surrendered shares shall
be valued at Fair Market Value as of the date of such exercise; (d) the
Optionee's promissory note in a form and on terms acceptable to the
Administrator; (e) the cancellation of indebtedness of the Company to the
Optionee; (f) the waiver of compensation due or accrued to the Optionee for
services rendered; (g) provided that a

                                       4

<PAGE>   5

public market for the Common Stock exists, a "same day sale" commitment from the
Optionee and an NASD Dealer whereby the Optionee irrevocably elects to exercise
the Option and to sell a portion of the shares so purchased to pay for the
Exercise Price and whereby the NASD Dealer irrevocably commits upon receipt of
such shares to forward the Exercise Price directly to the Company; (h) provided
that a public market for the Common Stock exists, a "margin" commitment from the
Optionee and an NASD Dealer whereby the Optionee irrevocably elects to exercise
the Option and to pledge the shares so purchased to the NASD Dealer in a margin
account as security for a loan from the NASD Dealer in the amount of the
Exercise Price, and whereby the NASD Dealer irrevocably commits upon receipt of
such shares to forward the Exercise Price directly to the Company; or (i) any
combination of the foregoing methods of payment or any other consideration or
method of payment as shall be permitted by applicable corporate law.

        5.4 TERM AND TERMINATION OF OPTIONS. The term and termination of each
Option shall be as fixed by the Administrator, but no Option may be exercisable
more than ten (10) years after the date it is granted. An Incentive Option
granted to a person who is a 10% Shareholder on the date of grant shall not be
exercisable more than five (5) years after the date it is granted.

        5.5 VESTING AND EXERCISE OF OPTIONS. Each Option shall vest and be
exercisable in one or more installments at such time or times and subject to
such conditions, including without limitation the achievement of specified
performance goals or objectives, as shall be determined by the Administrator.

        5.6 ANNUAL LIMIT ON INCENTIVE OPTIONS. To the extent required for
"incentive stock option" treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the Common Stock shall
not, with respect to which Incentive Options granted under this Plan and any
other plan of the Company or any Affiliated Company become exercisable for the
first time by an Optionee during any calendar year, exceed $100,000.

        5.7 NONTRANSFERABILITY OF OPTIONS. No Option shall be assignable or
transferable except by will or the laws of descent and distribution, and during
the life of the Optionee shall be exercisable only by such Optionee; provided,
however, that, in the discretion of the Administrator, any Option may be
assigned or transferred in any manner which an "incentive stock option" is
permitted to be assigned or transferred under the Code.

        5.8 RIGHTS AS SHAREHOLDER. An Optionee or permitted transferee of an
Option shall have no rights or privileges as a shareholder with respect to any
shares covered by an Option until such Option has been duly exercised and
certificates representing shares purchased upon such exercise have been issued
to such person.

        5.9 NON-EMPLOYEE DIRECTORS. Each non-employee director of the Company
shall automatically be granted a Nonqualified Option to purchase 16,000 shares
of Common Stock (subject to vesting as provided below) upon his or her
commencement of service on the Board of Directors and every year thereafter
shall automatically be granted a Nonqualified Option to purchase 4,000 shares of
the Common Stock (provided, that on such date he or she is a non-employee of the
Company); provided, however, that no such director shall be issued options to
acquire shares of Common Stock, which when added to any shares of Common Stock
owned by such director or subject to an option of such director exercisable
within sixty (60) days would equal or exceed one percent 1% of the total
outstanding Common Stock of the Company plus shares of Common Stock of the
Company subject to stock options held by any person and exercisable within sixty
(60) days. The option price of such Options, in the case of the initial grant,
shall be at the Fair Market Value of the Common Stock on the date of
commencement of such director's service on the Board of Directors and,
thereafter, shall be at the Fair Market Value of the Common Stock on the date of
grant. All such options shall become exercisable twenty-five percent (25%)
immediately and the remaining seventy-five percent (75%) shall become
exercisable an additional

                                       5

<PAGE>   6

twenty-five percent (25%) on each anniversary of the date of the initial grant;
provided, however, that upon termination of a non-employee director's service on
the Board of Directors, for any reason, all unvested options held by such
non-employee director shall terminate immediately and all vested options held by
such non-employee director shall be exercisable for a period of twelve (12)
months subsequent to such termination. The term of such Options shall be ten
years.

                                       6.

                               RIGHTS TO PURCHASE

        6.1 NATURE OF RIGHT TO PURCHASE. A Right to Purchase granted to an
Offeree entitles the Offeree to purchase, for a Purchase Price determined by the
Administrator, shares of Common Stock subject to such terms, restrictions and
conditions as the Administrator may determine at the time of grant ("Restricted
Stock"). Such conditions may include, but are not limited to, continued
employment or the achievement of specified performance goals or objectives.

        6.2 ACCEPTANCE OF RIGHT TO PURCHASE. An Offeree shall have no rights
with respect to the Restricted Stock subject to a Right to Purchase unless the
Offeree shall have accepted the Right to Purchase within ten (10) days (or such
longer or shorter period as the Administrator may specify) following the grant
of the Right to Purchase by making payment of the full Purchase Price to the
Company in the manner set forth in Section 6.3 hereof and by executing and
delivering to the Company a Stock Purchase Agreement. Each Stock Purchase
Agreement shall be in such form, and shall set forth the Purchase Price and such
other terms, conditions and restrictions of the Restricted Stock, not
inconsistent with the provisions of this Plan, as the Administrator shall, from
time to time, deem desirable. Each Stock Purchase Agreement may be different
from each other Stock Purchase Agreement.

        6.3 PAYMENT OF PURCHASE PRICE. Subject to any legal restrictions,
payment of the Purchase Price upon acceptance of a Right to Purchase Restricted
Stock may be made, in the discretion of the Administrator, by: (a) cash; (b)
check; (c) the surrender of shares of Common Stock owned by the Offeree that
have been held by the Offeree for at least six (6) months, which surrendered
shares shall be valued at Fair Market Value as of the date of such exercise; (d)
the Offeree's promissory note in a form and on terms acceptable to the
Administrator; (e) the cancellation of indebtedness of the Company to the
Offeree; (f) the waiver of compensation due or accrued to the Offeree for
services rendered; or (g) any combination of the foregoing methods of payment or
any other consideration or method of payment as shall be permitted by applicable
corporate law.

        6.4 RIGHTS AS A SHAREHOLDER. Upon complying with the provisions of
Section 6.2 hereof, an Offeree shall have the rights of a shareholder with
respect to the Restricted Stock purchased pursuant to the Right to Purchase,
including voting and dividend rights, subject to the terms, restrictions and
conditions as are set forth in the Stock Purchase Agreement. Unless the
Administrator shall determine otherwise, certificates evidencing shares of
Restricted Stock shall remain in the possession of the Company in accordance
with the terms of the Stock Purchase Agreement.

        6.5 RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided in the Stock Purchase Agreement or by the Administrator.
In the event of termination of a Participant's employment, service as a director
of the Company or Service Provider status for any reason whatsoever (including
death or disability), the Stock Purchase Agreement may provide, in the
discretion of the Administrator, that the Company shall have the right,
exercisable at the discretion of the Administrator, to repurchase (i) at the
original Purchase Price, any shares of Restricted Stock which have not vested as
of the date of termination, and (ii) at Fair Market Value, any shares of
Restricted Stock which have vested as of such date, on such terms as may be
provided in the Stock Purchase Agreement.

                                       6

<PAGE>   7

        6.6 VESTING OF RESTRICTED STOCK. The Stock Purchase Agreement shall
specify the date or dates, the performance goals or objectives which must be
achieved, and any other conditions on which the Restricted Stock may vest.

        6.7 DIVIDENDS. If payment for shares of Restricted Stock is made by
promissory note, any cash dividends paid with respect to the Restricted Stock
may be applied, in the discretion of the Administrator, to repayment of such
note.

        6.8 NONASSIGNABILITY OF RIGHTS. No Right to Purchase shall be assignable
or transferable except by will or the laws of descent and distribution or as
otherwise provided by the Administrator.

                                       7.

                           ADMINISTRATION OF THE PLAN

        7.1 ADMINISTRATOR. Authority to control and manage the operation and
administration of the Plan shall be vested in the Board, which may delegate such
responsibilities in whole or in part to a committee consisting of two (2) or
more members of the Board (the "Committee"). Members of the Committee may be
appointed from time to time by, and shall serve at the pleasure of, the Board.
As used herein, the term "Administrator" means the Board or, with respect to any
matter as to which responsibility has been delegated to the Committee, the term
Administrator shall mean the Committee.

        7.2 POWERS OF THE ADMINISTRATOR. In addition to any other powers or
authority conferred upon the Administrator elsewhere in the Plan or by law, the
Administrator shall have full power and authority: (a) to determine the persons
to whom, and the time or times at which, Incentive Options or Nonqualified
Options shall be granted and Rights to Purchase shall be offered, the number of
shares to be represented by each Option and Right to Purchase and the
consideration to be received by the Company upon the exercise thereof; (b) to
interpret the Plan; (c) to create, amend or rescind rules and regulations
relating to the Plan; (d) to determine the terms, conditions and restrictions
contained in, and the form of, Option Agreements and Stock Purchase Agreements;
(e) to determine the identity or capacity of any persons who may be entitled to
exercise a Participant's rights under any Option or Right to Purchase under the
Plan; (f) to correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Option Agreement or Stock Purchase
Agreement; (g) to accelerate the vesting of any Option or release or waive any
repurchase rights of the Company with respect to Restricted Stock; (h) to extend
the exercise date of any Option or acceptance date of any Right to Purchase; (i)
to provide for rights of first refusal and/or repurchase rights; (j) to amend
outstanding Option Agreements and Stock Purchase Agreements to provide for,
among other things, any change or modification which the Administrator could
have provided for upon the grant of an Option or Right to Purchase or in
furtherance of the powers provided for herein; and (k) to make all other
determinations necessary or advisable for the administration of the Plan, but
only to the extent not contrary to the express provisions of the Plan. Any
action, decision, interpretation or determination made in good faith by the
Administrator in the exercise of its authority conferred upon it under the Plan
shall be final and binding on the Company and all Participants.

        7.3 LIMITATION ON LIABILITY. No employee of the Company or member of the
Board or Committee shall be subject to any liability with respect to duties
under the Plan unless the person acts fraudulently or in bad faith. To the
extent permitted by law, the Company shall indemnify each member of the Board or
Committee, and any employee of the Company with duties under the Plan, who was
or is a party, or is threatened to be made a party, to any threatened, pending
or completed proceeding, whether civil, criminal, administrative or
investigative, by reason of such person's conduct in the performance of duties
under the Plan.

                                       7

<PAGE>   8

                                       8.

                                CHANGE IN CONTROL

        8.1 CHANGE IN CONTROL. In order to preserve a Participant's rights in
the event of a Change in Control of the Company, (i) the time period relating to
the exercise or realization of all outstanding Options, Rights to Purchase and
Restricted Stock shall automatically accelerate immediately prior to the
consummation of such Change in Control and (ii) with respect to Options and
Rights to Purchase, the Administrator in its discretion may, at any time an
Option or Right to Purchase is granted, or at any time thereafter, take one or
more of the following actions: (A) provide for the purchase of each Option or
Right to Purchase for an amount of cash or other property that could have been
received upon the exercise of the Option or Right to Purchase had the Option
been currently exercisable, (B) adjust the terms of the Options and Rights to
Purchase in a manner determined by the Administrator to reflect the Change in
Control, (C) cause the Options and Rights to Purchase to be assumed, or new
rights substituted therefor, by another entity, through the continuance of the
Plan and the assumption of outstanding Options and Rights to Purchase, or the
substitution for such Options and Rights to Purchase of new options and new
rights to purchase of comparable value covering shares of a successor
corporation, with appropriate adjustments as to the number and kind of shares
and Exercise Prices, in which event the Plan and such Options and Rights to
Purchase, or the new options and rights to purchase substituted therefor, shall
continue in the manner and under the terms so provided or (D) make such other
provision as the Committee may consider equitable. If the Administrator does not
take any of the forgoing actions, all Options and Rights to Purchase shall
terminate upon the consummation of the Change in Control and the Administrator
shall cause written notice of the proposed transaction to be given to all
Participants not less than fifteen (15) days prior to the anticipated effective
date of the proposed transaction.

                                       9.

                      AMENDMENT AND TERMINATION OF THE PLAN

        9.1 AMENDMENTS. The Board may from time to time alter, amend, suspend or
terminate the Plan in such respects as the Board may deem advisable. No such
alteration, amendment, suspension or termination shall be made which shall
substantially affect or impair the rights of any Participant under an
outstanding Option Agreement or Stock Purchase Agreement without such
Participant's consent. The Board may alter or amend the Plan to comply with
requirements under the Code relating to Incentive Options or other types of
options which give Optionee more favorable tax treatment than that applicable to
Options granted under this Plan as of the date of its adoption. Upon any such
alteration or amendment, any outstanding Option granted hereunder may, if the
Administrator so determines and if permitted by applicable law, be subject to
the more favorable tax treatment afforded to an Optionee pursuant to such terms
and conditions.

        9.2 PLAN TERMINATION. Unless the Plan shall theretofore have been
terminated, the Plan shall terminate on the tenth (10th) anniversary of the
Effective Date and no Options or Rights to Purchase may be granted under the
Plan thereafter, but Option Agreements, Stock Purchase Agreements and Rights to
Purchase then outstanding shall continue in effect in accordance with their
respective terms.

                                       10.

                                 TAX WITHHOLDING

        10.1 WITHHOLDING. The Company shall have the power to withhold, or
require a Participant to remit to the Company, an amount sufficient to satisfy
any applicable Federal, state, and local tax withholding requirements with
respect to any Options exercised or Restricted Stock issued under the Plan.

                                       8

<PAGE>   9

To the extent permissible under applicable tax, securities and other laws, the
Administrator may, in its sole discretion and upon such terms and conditions as
it may deem appropriate, permit a Participant to satisfy his or her obligation
to pay any such tax, in whole or in part, up to an amount determined on the
basis of the highest marginal tax rate applicable to such Participant, by (a)
directing the Company to apply shares of Common Stock to which the Participant
is entitled as a result of the exercise of an Option or as a result of the
purchase of or lapse of restrictions on Restricted Stock or (b) delivering to
the Company shares of Common Stock owned by the Participant. The shares of
Common Stock so applied or delivered in satisfaction of the Participant's tax
withholding obligation shall be valued at their Fair Market Value as of the date
of measurement of the amount of income subject to withholding.

                                       11.

                                  MISCELLANEOUS

        11.1 BENEFITS NOT ALIENABLE. Other than as provided above, benefits
under the Plan may not be assigned or alienated, whether voluntarily or
involuntarily. Any unauthorized attempt at assignment, transfer, pledge or other
disposition shall be without effect.

        11.2 NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is strictly a
voluntary undertaking on the part of the Company and shall not be deemed to
constitute a contract between the Company and any Participant to be
consideration for, or an inducement to, or a condition of, the employment of any
Participant. Nothing contained in the Plan shall be deemed to give the right to
any Participant to be retained as an employee of the Company or any Affiliated
Company or to interfere with the right of the Company or any Affiliated Company
to discharge any Participant at any time.

        11.3 APPLICATION OF FUNDS. The proceeds received by the Company from the
sale of Common Stock pursuant to Option Agreements and Stock Purchase
Agreements, except as otherwise provided herein, will be used for general
corporate purposes.

                                       9

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}]]