Document:

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                                                                    Exhibit 4.28

                                WARRANT INDENTURE

                   Providing for the Issue of Offered Warrants

                                     BETWEEN

                         SPECTRUM SIGNAL PROCESSING INC.

                                     - and -

                      COMPUTERSHARE TRUST COMPANY OF CANADA

                           Dated as of March 23, 2004

                              McCarthy Tetrault LLP

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                                TABLE OF CONTENTS

<TABLE>

<S>                                                                                                             <C>
Article 1 INTERPRETATION..........................................................................................1

   1.1      Definitions...........................................................................................1
   1.2      Gender and Number.....................................................................................5
   1.3      Interpretation not Affected by Headings, Etc..........................................................5
   1.4      Day not a Business Day................................................................................6
   1.5      Time of the Essence...................................................................................6
   1.6      Currency..............................................................................................6
   1.7      Applicable Law........................................................................................6

Article 2 THE OFFERED WARRANTS....................................................................................6

   2.1      Creation and Issue of Offered Warrants................................................................6
   2.2      Terms of Offered Warrants.............................................................................6
   2.3      Offered Warrantholder not a Shareholder...............................................................7
   2.4      Offered Warrants to Rank Pari Passu...................................................................7
   2.5      Form of Offered Warrant Certificates..................................................................7
   2.6      Signing of Offered Warrant Certificates...............................................................7
   2.7      Certification by the Trustee..........................................................................8
   2.8      Issue in Substitution for Offered Warrant Certificates Lost, Etc......................................8
   2.9      Exchange of Offered Warrant Certificates..............................................................9
   2.10     Transfer and Ownership of Offered Warrants............................................................9
   2.11     Charges for Exchange or Transfer.....................................................................10
   2.12     Cancellation of Surrendered Offered Warrants.........................................................10
   2.13     Registration of Offered Warrants.....................................................................10

Article 3 EXERCISE OF OFFERED WARRANTS...........................................................................11

   3.1      Method of Exercise of Offered Warrants...............................................................11
   3.2      Effect of Exercise of Offered Warrants...............................................................12
   3.3      Partial Exercise of Offered Warrants; Fractions......................................................13
   3.4      Expiration of Offered Warrants.......................................................................13
   3.5      Accounting and Recording.............................................................................13
   3.6      Securities Restrictions..............................................................................14
   3.7      U.S. Transfer Restrictions and Legends...............................................................14

Article 4 ADJUSTMENT OF NUMBER OF COMMON SHARES AND EXERCISE PRICE...............................................17

   4.1      Adjustment of Number of Common Shares and Exercise Price.............................................17
   4.2      Entitlement to Shares on Exercise of Offered Warrant.................................................21
   4.3      No Adjustment for Certain Transactions...............................................................21
   4.4      Determination by Corporation's Auditors..............................................................22
   4.5      Proceedings Prior to any Action Requiring Adjustment.................................................22
   4.6      Certificate of Adjustment............................................................................22
   4.7      Notice of Special Matters............................................................................22
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                                     - ii -

<TABLE>

<S>                                                                                                             <C>
   4.8      No Action after Notice...............................................................................22
   4.9      Other Action.........................................................................................23
   4.10     Protection of Trustee................................................................................23

Article 5 RIGHTS OF THE CORPORATION AND COVENANTS................................................................23

   5.1      Optional Purchases by the Corporation................................................................23
   5.2      General Covenants....................................................................................24
   5.3      Trustee's Remuneration and Expenses..................................................................25
   5.4      Performance of Covenants by Trustee..................................................................25

Article 6 ENFORCEMENT............................................................................................25

   6.1      Suits by Offered Warrantholders......................................................................25
   6.2      Immunity of Shareholders, Etc........................................................................25
   6.3      Limitation of Liability..............................................................................26
   6.4      Waiver of Default....................................................................................26

Article 7 MEETINGS OF OFFERED WARRANTHOLDERS.....................................................................26

   7.1      Convening Meetings...................................................................................26
   7.2      Notice of Meetings...................................................................................27
   7.3      Chairman.............................................................................................27
   7.4      Quorum...............................................................................................27
   7.5      Power to Adjourn.....................................................................................28
   7.6      Voting...............................................................................................28
   7.7      Polls................................................................................................28
   7.8      Regulations..........................................................................................28
   7.9      Attendance by the Trustee and the Corporation........................................................29
   7.10     Powers Exercisable by Special Resolution.............................................................29
   7.11     Meaning of Special Resolution........................................................................30
   7.12     Powers Cumulative....................................................................................31
   7.13     Minutes..............................................................................................31
   7.14     Special Resolution Binds All.........................................................................32

Article 8 SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS.....................................................32

   8.1      Provision for Supplemental Indentures for Certain Purposes...........................................32
   8.2      Successor Corporations...............................................................................33

Article 9 THE TRUSTEE............................................................................................33

   9.1      Trust Indenture Legislation..........................................................................33
   9.2      Rights and Duties of Trustee.........................................................................33
   9.3      Evidence, Experts and Advisers.......................................................................34
   9.4      Documents, Monies, Etc. held by Trustee..............................................................35
   9.5      Actions by Trustee to Protect Interests..............................................................35
   9.6      Trustee not Required to Give Security................................................................36

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                                    - iii -

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<S>                                                                                                             <C>
   9.7      Protection of Trustee................................................................................36
   9.8      Replacement of Trustee...............................................................................36
   9.9      Conflict of Interest.................................................................................38
   9.10     Acceptance of Trust..................................................................................38
   9.11     Privacy Laws.........................................................................................38

Article 10 GENERAL...............................................................................................39

   10.1     Notice to Corporation and Trustee....................................................................39
   10.2     Notice and Delivery to Offered Warrantholders........................................................39
   10.3     Counterparts.........................................................................................40
   10.4     Multiple Closings....................................................................................40
   10.5     Satisfaction and Discharge of Indenture..............................................................40
   10.6     Anti-Money Laundering................................................................................41
   10.7     Sole Benefit of Parties and Offered Warrantholders...................................................41

</TABLE>

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                                WARRANT INDENTURE

                  THIS WARRANT INDENTURE is made as of March 23, 2004

BETWEEN:

         SPECTRUM SIGNAL PROCESSING INC., a corporation duly incorporated under
         the laws of Canada and having an office at Suite 200 - 2700 Production
         Way, Burnaby, British Columbia, V5A 4X1 (hereinafter referred to as the
         "CORPORATION")

AND

         COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company incorporated
         under the laws of Canada and authorized to carry on business in all
         provinces of Canada (hereinafter referred to as the "TRUSTEE")

WHEREAS:

A.       The Corporation has created and issued up to 2,212,000 Units, each
         consisting of one Common Share and one-half of one common share
         purchase warrant ("each whole warrant, an "OFFERED WARRANT");

B.       this Indenture provides for the issuance of the Offered Warrants;

C.       one whole Offered Warrant shall, subject to adjustment, entitle the
         holder thereof to acquire one (1) additional Common Share upon payment
         of the Exercise Price upon the terms and conditions herein set forth;
         and

D.       all things necessary have been done and performed to make the Offered
         Warrants, when created and issued as provided in this Indenture, legal,
         valid and binding upon the Corporation with the benefits and subject to
         the terms of this Indenture;

                  NOW THEREFORE, in consideration of the premises and mutual
covenants hereinafter contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Corporation hereby
appoints the Trustee as trustee to hold the rights, interests and benefits
contained herein for and on behalf of those persons who from time to time become
the holders of Offered Warrants issued pursuant to this Indenture and the
parties hereto agree as set forth below:

                                   ARTICLE 1
                                 INTERPRETATION

1.1               DEFINITIONS

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

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                                     - 2 -

         (a)      "ACCREDITED INVESTOR" means an accredited investor within the
                  meaning of Rule 501 of Regulation D;

         (b)      "ADJUSTMENT PERIOD" has the meaning set forth in Section 4.1;

         (c)      "AGENCY AGREEMENT" means the agreement between the Corporation
                  and the Agents dated March 23, 2004;

         (d)      "AGENTS" means GMP Securities Ltd., Griffiths McBurney &
                  Partners Corp. and Dlouhy Merchant Group Inc.;

         (e)      "APPLICABLE LEGISLATION" means the provisions of the Company
                  Act, R.S.B.C. 1996, c. 62, as from time to time amended, any
                  successor legislation thereof, and any statute of Canada or a
                  province thereof, and the regulations under any such named or
                  other statute, relating to trust indentures or to the rights,
                  duties and obligations of trustees and of corporations under
                  trust indentures, to the extent that such provisions are at
                  the time in force and applicable to this Indenture;

         (f)      "AUTHORIZED INVESTMENTS" means short term interest bearing or
                  discount debt obligations issued or guaranteed by the
                  Government of Canada or a Canadian chartered bank (which may
                  include an affiliate or related party of the Trustee) provided
                  that each such obligation is rated at least R1 (middle) by
                  DBRS Inc. or an equivalent rating by Standard & Poor's Rating
                  Group, a division of McGraw-Hill Inc.;

         (g)      "BUSINESS DAY" means, with respect to any place, any day that
                  is not a Saturday, Sunday or statutory holiday in the City of
                  Vancouver, the City of Calgary or the City of Toronto or a day
                  when the principal office of the Trustee in the City of
                  Vancouver, the City of Calgary or the City of Toronto is not
                  generally open to the public for the transaction of business;

         (h)      "COMMON SHARES" means, subject to Article 4, the fully paid
                  and non-assessable shares of the Corporation as presently
                  constituted designated as common shares;

         (i)      "CORPORATION" means Spectrum Signal Processing Inc., a
                  corporation incorporated under the laws of Canada and its
                  lawful successors from time to time;

         (j)      "CORPORATION'S AUDITORS" means a firm of chartered accountants
                  duly appointed as auditors of the Corporation;

         (k)      "COUNSEL" means a barrister or solicitor or a firm of
                  barristers and solicitors retained by the Trustee or retained
                  by the Corporation and acceptable to the Trustee;

         (l)      "CURRENT MARKET PRICE" of the Common Shares at any date means
                  the weighted average of the trading price per share for such
                  shares for the 20 consecutive Trading Days ending the Third
                  Trading Date immediately preceding such date on

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                                     - 3 -

                  the principal stock exchange on which the Common Shares are
                  listed and as selected by the directors, or, if such shares
                  are not listed on any stock exchange, then on such
                  over-the-counter market as may be selected for such purpose by
                  the directors;

         (m)      "DIRECTOR" means a director of the Corporation for the time
                  being and, unless otherwise specified herein, reference to
                  action "by the directors" means action by the directors of the
                  Corporation as a board or, whenever duly empowered, action by
                  any committee of such board;

         (n)      "EFFECTIVE DATE" means the date of this Indenture;

         (o)      "EXERCISE DATE" means, with respect to any Offered Warrant,
                  the date on which the Offered Warrant Certificate representing
                  such Offered Warrant is surrendered for exercise together with
                  full payment of the Exercise Price in accordance with Section
                  3.1;

         (p)      "EXERCISE PRICE" at any time means, the price at which a
                  Common Share may be purchased by the exercise of one Offered
                  Warrant and which is currently Cdn. $1.50, subject to
                  adjustment in accordance with the provisions of Article 4, in
                  which case it shall mean the adjusted price in effect at such
                  time and, for greater certainty, the Exercise Price of any
                  Offered Warrants acquired by the Agents after the date of an
                  adjustment referred to in Article 4 shall be adjusted as if
                  such Offered Warrants had been issued prior to such date;

         (q)      "EXPIRY DATE" means September 23, 2005;

         (r)      "EXPIRY TIME" means 4:30 p.m. (Vancouver time) on the Expiry
                  Date;

         (s)      "ISSUE DATE" means the date upon which the Offered Warrants
                  are issued;

         (t)      "ORIGINAL U.S. PURCHASER" means an Accredited Investor that
                  purchased the Units in the United States directly from the
                  Corporation in a purchase of Units as part of the private
                  placement of Units made pursuant to the Agency Agreement dated
                  March 23, 2004;

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

         (v)      "REGULATION D" means Regulation D under the U.S. Securities
                  Act;

         (w)      "REGULATION S" means Regulation S under the U.S. Securities
                  Act;

         (x)      "RULE 506" means Rule 506 of Regulation D under the U.S.
                  Securities Act;

         (y)      "RULE 904" means Rule 904 of Regulation S;

         (z)      "SHAREHOLDER" means a holder of record of one or more Common
                  Shares;

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                                     - 4 -

         (aa)     "SPECIAL RESOLUTION" has the meaning set forth in Section
                  7.11;

         (bb)     "SUBSIDIARY OF THE CORPORATION" or "SUBSIDIARY" means any
                  corporation of which more than fifty (50%) percent of the
                  outstanding Voting Shares are owned, directly or indirectly,
                  by or for the Corporation, provided that the ownership of such
                  shares confers the right to elect at least a majority of the
                  board of directors of such corporation and includes any
                  corporation in like relation to a Subsidiary;

         (cc)     "SUCCESSOR CORPORATION" has the meaning set forth in Section
                  8.2;

         (dd)     "THIS OFFERED WARRANT INDENTURE", "THIS INDENTURE", "HEREIN",
                  "HEREBY", "HEREOF" and similar expressions mean and refer to
                  this Indenture and any indenture, deed or instrument
                  supplemental hereto; and the expressions "ARTICLE", "SECTION",
                  "SUBSECTION" and "PARAGRAPH" followed by a number, letter or
                  both mean and refer to the specified article, section,
                  subsection or paragraph of this Indenture;

         (ee)     "TRADING DAY" means, with respect to a stock exchange, a day
                  on which such exchange is open for the transaction of business
                  and with respect to an over-the-counter market means a day on
                  which such over-the-counter market is open for the transaction
                  of business;

         (ff)     "TRANSFER AGENT" means the transfer agent for the time being
                  of the Common Shares and Offered Warrants;

         (gg)     "TRUSTEE" means Computershare Trust Company of Canada or its
                  successors from time to time in the trust hereby created;

         (hh)     "UNITS" means the units issued by way of a private placement
                  of Units made pursuant to the Agency Agreement between the
                  Corporation and Computershare Trust Company of Canada dated
                  March 23, 2004;

         (ii)     "U.S. PERSON" means "U.S. person" as defined in Regulation S;

         (jj)     "U.S. SECURITIES ACT" means the United States Securities Act
                  of 1933, as amended;

         (kk)     "VOTING SHARES" means shares of the capital stock of any class
                  of any corporation carrying voting rights under all
                  circumstances, provided that, for the purposes of such
                  definition, shares which only carry the right to vote
                  conditionally on the happening of an event shall not be
                  considered Voting Shares, whether or not such event shall have
                  occurred, nor shall any shares be deemed to cease to be Voting
                  Shares solely by reason of a right to vote accruing to shares
                  of another class or classes by reason of the happening of any
                  such event;

         (ll)     "OFFERED WARRANT AGENCY" means one of the principal offices of
                  the Trustee in the cities of Calgary, Alberta or Toronto,
                  Ontario, Montreal, Quebec or

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                                     - 5 -

                  Vancouver, British Columbia or such other place(s) as may be
                  designated in accordance with subsection 3.1(d);

         (mm)     "OFFERED WARRANT CERTIFICATE" means a certificate,
                  substantially in the form set forth in Schedule "A" hereto,
                  issued on or after the Issue Date to evidence Offered
                  Warrants;

         (nn)     "OFFERED WARRANT EXERCISE FORM" means an exercise form,
                  substantially in the form set forth in Schedule "A" hereto,
                  delivered by an Offered Warrantholder to the Offered Warrant
                  Agency at any time after the Issue Date and prior to the
                  Expiry Time;

         (oo)     "OFFERED WARRANTHOLDERS", or "HOLDERS" without reference to
                  Common Shares, means the persons who are registered owners of
                  Offered Warrants;

         (pp)     "OFFERED WARRANTHOLDERS' REQUEST" means an instrument signed
                  in one or more counterparts by Offered Warrantholders entitled
                  to acquire in the aggregate not less than 25% of the aggregate
                  number of Common Shares which could be acquired pursuant to
                  all Offered Warrants then unexercised and outstanding,
                  requesting the Trustee to take some action or proceeding
                  specified therein;

         (qq)     "OFFERED WARRANTS" means the warrants created by and
                  authorized by and issuable under this Indenture; and

         (rr)     "WRITTEN ORDER OF THE CORPORATION", "WRITTEN REQUEST OF THE
                  CORPORATION", "WRITTEN CONSENT OF THE CORPORATION" and
                  "CERTIFICATE OF THE CORPORATION" mean, respectively, a written
                  order, request, consent and certificate signed in the name of
                  the Corporation by its Chairman, Chief Executive Officer,
                  Chief Operating Officer, Chief Financial Officer, President or
                  any Vice-President, or a person acting in any such capacity
                  for the Corporation and may consist of one or more instruments
                  so executed.

1.2               GENDER AND NUMBER

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

1.3               INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.

                  The division of this Indenture into articles, sections,
subsections, paragraphs, subparagraphs, clauses and subclauses, the provision of
the table of contents and the insertion of headings are for convenience and
reference only and shall not affect the construction or interpretation of this
Indenture.

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                                     - 6 -

1.4               DAY NOT A BUSINESS DAY

                  If the day on or before which any action that would otherwise
be required to be taken hereunder is not a Business Day in the place where the
action is required to be taken, that action will be required to be taken on or
before the requisite time on the next succeeding day that is a Business Day.

1.5               TIME OF THE ESSENCE

                  Time will be of the essence in all respects in this Indenture.

1.6               CURRENCY

                  Except as otherwise stated, all dollar amounts herein are
expressed in Canadian dollars.

1.7               APPLICABLE LAW

                  This Indenture and the Offered Warrant Certificates and all
documents relating thereto, which by common accord have been and will be drafted
in English, shall be construed in accordance with the laws of the Province of
British Columbia and the federal laws applicable therein and shall be treated in
all respects as British Columbia contracts.

                                   ARTICLE 2
                              THE OFFERED WARRANTS

2.1               CREATION AND ISSUE OF OFFERED WARRANTS

                  Up to an aggregate of 1,155,872 Offered Warrants are hereby
created and authorized to be issued on the Effective Date in accordance with the
terms and conditions hereof. The Offered Warrant Certificates shall be certified
and delivered by the Trustee to such persons as the Corporation may direct by
written order of the Corporation.

2.2               TERMS OF OFFERED WARRANTS

         (a)      Each whole Offered Warrant authorized to be issued hereunder
                  will entitle the holder thereof, upon exercise, together with
                  the payment of the Exercise Price, to acquire one (1) Common
                  Share, subject to adjustment in accordance with Article 4, at
                  any time after the Issue Date until the Expiry Time.

         (b)      No fractional Offered Warrants will be issued or otherwise
                  provided for hereunder and any fractional entitlements will be
                  rounded down to the nearest whole number.

         (c)      Each Offered Warrant will entitle the holder thereof to such
                  other rights and privileges as are set forth in this
                  Indenture.

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                                     - 7 -

         (d)      The number of Common Shares which may be purchased pursuant to
                  the Offered Warrants and the exercise price therefor will be
                  adjusted in the events and in the manner specified in Article
                  4.

2.3               OFFERED WARRANTHOLDER NOT A SHAREHOLDER

                  Except as may be specifically provided herein, nothing in this
Indenture or in the holding of an Offered Warrant evidenced by an Offered
Warrant Certificate, or otherwise, will be construed as conferring on an Offered
Warrantholder any right or interest whatsoever as a Shareholder or as any other
shareholder of the Corporation, including, but not limited to, any right to vote
at, to receive notice of, or to attend any meetings of shareholders or any other
proceedings of the Corporation, or any right to receive any dividend or other
distribution.

2.4               OFFERED WARRANTS TO RANK PARI PASSU

                  All Offered Warrants will rank equally and without preference
over each other, whatever may be the actual date of issue thereof.

2.5               FORM OF OFFERED WARRANT CERTIFICATES

         (a)      The Offered Warrant Certificates (including all replacements
                  issued in accordance with this Indenture) will be
                  substantially in the form set out in Schedule "A" hereto, will
                  be dated March 23, 2004 regardless of their date of issue,
                  will bear such legends and distinguishing letters and numbers
                  as the Corporation, with the approval of the Trustee, may
                  prescribe, and will be issuable in any whole number
                  denomination. No fractional Common Shares and Offered Warrants
                  shall be issued or otherwise provided for hereunder and any
                  such fractioned entitlements shall be rounded down to the
                  nearest whole number of Common Shares and Offered Warrants.

         (b)      The Offered Warrant Certificates may be engraved, lithographed
                  or printed (the expression "printed" including for purposes
                  hereof both original typewritten material as well as
                  mimeographed, mechanically, photographically, photostatically
                  or electronically reproduced, typewritten or other written
                  material), or partly in one form and partly in another, as the
                  Corporation may determine.

2.6               SIGNING OF OFFERED WARRANT CERTIFICATES

         (a)      The Offered Warrant Certificates will be signed by any one
                  authorized officer or director of the Corporation.

         (b)      The signatures of any officer or director referred to in
                  subsection (a) may be manual signatures, engraved,
                  lithographed or printed in facsimile and Offered Warrant
                  Certificates bearing such facsimile signatures will be binding
                  on the Corporation as if they had been manually signed by such
                  officer or director.

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                                     - 8 -

         (c)      Notwithstanding that any person whose manual or facsimile
                  signature appears on an Offered Warrant Certificate as an
                  officer or director referred to in subsection (a) no longer
                  holds the same or any office or is no longer a director at the
                  date of any Offered Warrant Certificate or at the date of
                  certification, delivery, or exercise thereof, such Offered
                  Warrant Certificate will, subject to Section 2.7, be valid and
                  binding on the Corporation.

2.7               CERTIFICATION BY THE TRUSTEE

         (a)      No Offered Warrant Certificate will be issued or, if issued,
                  will be valid for any purpose or entitle the holder to the
                  benefit hereof until it has been certified by manual signature
                  by or on behalf of the Trustee by its authorized signing
                  officers substantially in the form of the certificate set out
                  in Schedule "A" as the case may be, or in such other form
                  approved by the Trustee, and such certification by the Trustee
                  on any Offered Warrant Certificate will be conclusive evidence
                  as against the Corporation that the Offered Warrant
                  Certificate so certified has been duly issued hereunder and
                  that the holder thereof is entitled to the benefits hereof.

         (b)      The certification of the Trustee on any Offered Warrant
                  Certificate issued hereunder will not be construed as a
                  representation or warranty by the Trustee as to the validity
                  of this Indenture or such Offered Warrant Certificate (except
                  the due certification thereof) and the Trustee will in no
                  respect be liable or answerable for the use made of any
                  Offered Warrant Certificate or of the consideration therefore,
                  except as otherwise specified herein.

2.8               ISSUE IN SUBSTITUTION FOR OFFERED WARRANT CERTIFICATES LOST,
                  ETC.

         (a)      If any Offered Warrant Certificate becomes mutilated or is
                  lost, destroyed or stolen, the Corporation, subject to
                  applicable law and to subsection (b), will issue, and
                  thereupon the Trustee will certify and deliver, a new Offered
                  Warrant Certificate of like tenor as the one mutilated, lost,
                  destroyed or stolen in exchange for and in place of and on
                  surrender and cancellation of such mutilated certificate or in
                  lieu of and in substitution for such lost, destroyed or stolen
                  certificate.

         (b)      The applicant for the issue of a new Offered Warrant
                  Certificate pursuant to this Section 2.8 will bear the cost of
                  the issue thereof and in case of loss, destruction or theft
                  will, as a condition precedent to the issuance thereof:

                  (i)      furnish to the Corporation and the Trustee such
                           evidence of ownership and of the loss, destruction or
                           theft of the Offered Warrant Certificate to be
                           replaced as is satisfactory to the Corporation and
                           the Trustee in their discretion;

                  (ii)     furnish an indemnity and surety bond in amount and
                           form satisfactory to the Corporation and the Trustee
                           in their discretion; and

                  (iii)    pay the reasonable charges of the Corporation and the
                           Trustee in connection therewith.

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2.9               EXCHANGE OF OFFERED WARRANT CERTIFICATES

         (a)      One or more Offered Warrant Certificates may, on compliance
                  with the reasonable requirements of the Trustee (including
                  compliance with applicable securities legislation), be
                  exchanged for one or more Offered Warrant Certificates of
                  different denomination evidencing in the aggregate the same
                  number of Offered Warrants as represented by the Offered
                  Warrant Certificate(s) being exchanged. Where only part of the
                  Offered Warrants evidenced by an Offered Warrant Certificate
                  are transferred, the Trustee shall issue separate Offered
                  Warrant Certificates in respect of the Offered Warrants
                  respectively transferred and retained to the Offered
                  Warrantholder.

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

2.10              TRANSFER AND OWNERSHIP OF OFFERED WARRANTS

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

                  (i)      the conditions herein;

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

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

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

         (b)      The Trustee acknowledges that the Offered Warrants and the
                  Common Shares issuable upon exercise thereof have not been
                  registered under the U.S. Securities Act, or the securities
                  laws of any state of the United States, and may not be offered
                  or sold in the United States unless the Offered Warrants and
                  the Common Shares issuable upon exercise thereof have been
                  registered under the U.S. Securities Act and the securities
                  laws of all applicable states of the United States or an
                  exemption from registration is available. It is further
                  acknowledged that Units were offered in the United States by
                  the Agents pursuant to the exemption from registration set
                  forth in Rule 506. If Offered Warrants are being sold outside
                  the United States in accordance with Rule 904, and provided
                  that the Corporation is a "foreign issuer" within the meaning
                  of Regulation S at the time of sale, then

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                                     - 10 -

                  any such transfer must be accompanied by a completed and
                  executed declaration for removal of legend in the form
                  attached as Exhibit A to the Offered Warrant Certificate.

         (c)      Subject to applicable law, the Corporation and the Trustee,
                  notwithstanding any notice to the contrary, shall treat the
                  Offered Warrantholder as the absolute owner of the Offered
                  Warrants for all purposes and such person will for all
                  purposes of this Indenture be and be deemed to be the absolute
                  owner thereof, and neither the Corporation nor the Trustee
                  will be affected by any notice or knowledge to the contrary
                  except as required by statute or by order of a court of
                  competent jurisdiction.

2.11              CHARGES FOR EXCHANGE OR TRANSFER

                  A reasonable service charge may be levied by the Trustee for,
pursuant to this Indenture, the transfer of any Offered Warrant or the exchange
of any Offered Warrant Certificate, and the Trustee may charge for the
reimbursement of any taxes, rates, levies or duties of any kind required to be
paid on any such exchange or transfer.

2.12              CANCELLATION OF SURRENDERED OFFERED WARRANTS

                  All Offered Warrant Certificates surrendered pursuant to
Sections 2.8, 2.9, 2.10, 3.1, 3.3, 3.4 or 5.1 will be returned to the Trustee
and will be cancelled and, after the expiry of any period of retention
prescribed by law, destroyed by the Trustee in accordance with the Trustee's
ordinary business practices. Upon request by the Corporation, the Trustee will
furnish the Corporation with a destruction certificate identifying each Offered
Warrant Certificate so destroyed, the number of Offered Warrants evidenced
thereby and the number of Common Shares, if any, issued pursuant to such Offered
Warrants and the details of any Offered Warrant Certificates issued in
substitution or exchange for such Offered Warrant Certificates destroyed.

2.13              REGISTRATION OF OFFERED WARRANTS

         (a)      The Trustee will keep at the Offered Warrant Agency: (i) a
                  register of Offered Warrantholders in which shall be entered
                  in alphabetical order the names and addresses of the holders
                  of Offered Warrants and particulars of the Offered Warrants
                  held by them and (ii) a register of transfers in which all
                  transfers of Offered Warrants and the date and other
                  particulars of each transfer shall be entered. Such registers
                  will at all reasonable times be open for inspection by the
                  Corporation and/or any Offered Warrantholder. The Trustee will
                  from time to time upon the written request of the Corporation
                  or any Offered Warrantholder, upon payment of the Trustee's
                  reasonable charges, furnish a list of the names and addresses
                  of Offered Warrantholders showing the number of Offered
                  Warrants held by each such Offered Warrantholder.

         (b)      The Corporation with approval of the Trustee may at any time
                  and from time to time change the place at which the registers
                  referred to in subsection (a) are kept, cause branch registers
                  of holders or transfers to be kept at other places and close
                  such branch registers or change the place at which such branch
                  registers are kept.

<PAGE>
                                     - 11 -

                  Notice of any such change or closure shall be given by the
                  Trustee to the Offered Warrantholders.

                                   ARTICLE 3
                          EXERCISE OF OFFERED WARRANTS

3.1               METHOD OF EXERCISE OF OFFERED WARRANTS

         (a)      The holder of any Offered Warrant may exercise the right
                  conferred on such holder to acquire Common Shares by
                  surrendering, after the Issue Date and prior to the Expiry
                  Time, to the Offered Warrant Agency, the Offered Warrant
                  Certificate representing such Offered Warrant, with a duly
                  completed and executed Offered Warrant Exercise Form, together
                  with a certified cheque, bank draft or money order, in lawful
                  money of Canada payable to or to the order of the Corporation
                  at par in the city where the Offered Warrant Agency is located
                  in an amount equal to the Exercise Price multiplied by the
                  number of Common Shares subscribed for.

                  A Offered Warrant Certificate with the duly completed and
                  executed Offered Warrant Exercise Form referred to in this
                  subsection 3.1(a) shall be deemed to be surrendered only upon
                  personal delivery thereof or, if sent by mail or other means
                  of transmission, upon actual receipt thereof at, in each case,
                  the Offered Warrant Agency, provided that such Offered Warrant
                  Certificate is accompanied by the requisite certified cheque,
                  bank draft or money order in the amount of the aggregate
                  Exercise Price for the Offered Warrants represented thereby
                  that are being exercised.

         (b)      Any Offered Warrant Exercise Form referred to in subsection
                  3.1(a) shall be signed by the Offered Warrantholder and shall
                  specify:

                  (i)      the number of Common Shares which the holder wishes
                           to acquire (being not more than those which the
                           holder is entitled to acquire pursuant to the Offered
                           Warrant Certificate(s) surrendered);

                  (ii)     the person or persons in whose name or names such
                           Common Shares are to be issued;

                  (iii)    the address or addresses of such person or persons;
                           and

                  (iv)     the number of Common Shares to be issued to each such
                           person if more than one is so specified.

                  If any of the Common Shares subscribed for are to be issued to
                  a person or persons other than the Offered Warrantholder, the
                  Offered Warrantholder shall pay to the Corporation or the
                  Offered Warrant Agency on behalf of the Corporation, all
                  applicable transfer or similar taxes and the Corporation shall
                  not be required to issue or deliver certificates evidencing
                  Common Shares unless or until such Offered Warrantholder shall
                  have paid to the Corporation, or the

<PAGE>
                                     - 12 -

                  Offered Warrant Agency on behalf of the Corporation, the
                  amount of such tax or shall have established to the
                  satisfaction of the Corporation that such tax has been paid or
                  that no tax is due.

         (c)      No exercise of any Offered Warrant shall be effective, and no
                  certificate representing Common Shares shall be issued
                  pursuant to the exercise of Offered Warrants, unless:

                  (i)      the Offered Warrantholder represents in writing that
                           it is not in the United States or a U.S. Person and
                           is not exercising the Offered Warrants on behalf of a
                           U.S. Person or a person in the United States, and did
                           not execute or deliver the Offered Warrant Exercise
                           Form in the United States; or

                  (ii)     the Offered Warrantholder represents in writing
                           either: (A) that it is an Original U.S. Purchaser and
                           that each representation, warranty and covenant made
                           by such Original U.S. Purchaser in the Subscription
                           Agreement pursuant to which it purchased Units is
                           true and correct as of the date the Offered Warrant
                           is exercised, or (B) that it is a U.S. person, or
                           person in the United States, that has acquired the
                           Offered Warrants in a transaction exempt from
                           registration under the U.S. Securities Act where such
                           transfer was in compliance with this Indenture and
                           any applicable state securities laws and signs and
                           delivers a letter in the form attached hereto as
                           Exhibit B to the Offered Warrant Certificate.

                  No certificate for Common Shares issuable upon exercise of an
                  Offered Warrant shall be registered or delivered to an address
                  in the United States unless the Offered Warrantholder shall
                  have complied with subsection 3.1(c)(ii) and in the case of
                  subection (ii)(B) provides an opinion of counsel of recognized
                  standing in form and substance satisfactory to the Corporation
                  to the effect that registration under the U.S. Securities Act
                  and applicable state securities laws is not required.

         (d)      In connection with the exchange of Offered Warrant
                  Certificates and exercise of Offered Warrants and compliance
                  with such other terms and conditions hereof as may be
                  required, the Corporation has appointed the principal offices
                  of the Trustee in Vancouver and Toronto as the Offered Warrant
                  Agencies at which Offered Warrant Certificates may be
                  surrendered for exchange, transfer or repurchase or at which
                  Offered Warrants may be exercised and the Trustee has accepted
                  such appointment. The Corporation may from time to time
                  designate alternate or additional places as an Offered Warrant
                  Agency upon notice to and consent of the Trustee of any change
                  of any Offered Warrant Agency.

3.2               EFFECT OF EXERCISE OF OFFERED WARRANTS

         (a)      Upon the exercise of Offered Warrants pursuant to Section 3.1
                  and subject to Section 3.3, the Common Shares to be issued
                  pursuant to the Offered Warrants exercised shall be deemed to
                  have been issued and the person or persons to whom

<PAGE>
                                     - 13 -

                  such Common Shares are to be issued shall be deemed to have
                  become the holder or holders of record of such Common Shares
                  on the Exercise Date unless the transfer registers of the
                  Corporation shall be closed on such date, in which case the
                  Common Shares subscribed for shall be deemed to have been
                  issued and such person or persons deemed to have become the
                  holder or holders of record of such Common Shares, on the date
                  on which such transfer registers are reopened.

         (b)      Within three (3) Business Days after the Exercise Date with
                  respect to an Offered Warrant, the Corporation shall cause to
                  be mailed to the person or persons in whose name or names such
                  Offered Warrant is registered or, if so specified in writing
                  by the holder, cause to be delivered to such person or persons
                  at the Offered Warrant Agency where the Offered Warrant
                  Certificate was surrendered, a certificate or certificates for
                  the appropriate number of Common Shares subscribed for.

3.3               PARTIAL EXERCISE OF OFFERED WARRANTS; FRACTIONS

         (a)      The holder of any Offered Warrants may exercise his right to
                  acquire a number of Common Shares less than the aggregate
                  number which the holder is entitled to acquire pursuant to the
                  surrendered Offered Warrant Certificate(s). In the event of
                  any exercise of a number of Offered Warrants less than the
                  number which the holder is entitled to exercise, the holder of
                  the Offered Warrants upon such exercise shall, in addition, be
                  entitled to receive, without charge therefor, a new Offered
                  Warrant Certificate(s) in respect of the balance of the
                  Offered Warrants represented by the surrendered Offered
                  Warrant Certificate(s) and which were not then exercised.

         (b)      Notwithstanding anything herein contained including any
                  adjustment provided for in Article 4, the Corporation shall
                  not be required, upon the exercise of any Offered Warrants, to
                  issue fractions of Common Shares or to distribute certificates
                  which evidence fractional Common Shares. Any fractional
                  entitlements will be rounded down to the nearest whole number.

3.4               EXPIRATION OF OFFERED WARRANTS

                  Immediately after the Expiry Time, all rights under any
Offered Warrant in respect of which the right of acquisition provided for herein
shall not have been exercised shall cease and terminate and each Offered Warrant
shall be void and of no further force or effect except to the extent that the
Offered Warrantholder has not received in full all monies to which it is
entitled pursuant to Article 4 or Article 5 hereof or has not received
certificates representing the Common Shares issued upon exercise of Offered
Warrants held by it, in which instances the Offered Warrantholders' rights
hereunder shall continue until it has received that to which it is entitled
hereunder.

3.5               ACCOUNTING AND RECORDING

         (a)      The Trustee shall promptly account to the Corporation with
                  respect to Offered Warrants exercised. Any securities or other
                  instruments, from time to time

<PAGE>
                                     - 14 -

                  received by the Trustee shall be received in trust for, and
                  shall be segregated and kept apart by the Trustee, the Offered
                  Warrantholders and the Corporation as their interests may
                  appear.

         (b)      The Trustee shall record the particulars of Offered Warrants
                  exercised, which particulars shall include the names and
                  addresses of the persons who become holders of Common Shares
                  on exercise and the Exercise Date, in respect thereof. The
                  Trustee shall provide such particulars in writing to the
                  Corporation within five (5) Business Days of any request by
                  the Corporation therefor.

3.6               SECURITIES RESTRICTIONS

                  Notwithstanding anything herein contained, Common Shares will
only be issued pursuant to any Offered Warrant in compliance with the securities
laws of any applicable jurisdiction. The certificates representing the Common
Shares issued will bear such legend as may, in the opinion of Counsel to the
Corporation be necessary in order to avoid a violation of any securities laws of
any province or territory in Canada or of the United States or any state thereof
to comply with the requirements of any stock exchange or over-the-counter market
on which the Common Shares are listed or quoted, as the case may be, provided
that if, at any time, in the opinion of Counsel to the Corporation, such legends
are no longer necessary in order to avoid a violation of any such laws, or the
holder of any such legended certificate, at the holder's expense, provides the
Corporation with evidence satisfactory in form and substance to the Corporation
(which may include an opinion of counsel satisfactory to the Corporation) to the
effect that such holder is entitled to sell or otherwise transfer such Common
Shares in a transaction in which such legends are not required, such legended
certificate may thereafter be surrendered to the Trustee in exchange for a
certificate which does not bear such legend.

3.7               U.S. TRANSFER RESTRICTIONS AND LEGENDS

                  The Offered Warrants and the Common Shares issuable upon
exercise of the Offered Warrants have not been and will not be registered under
the U.S. Securities Act or the securities laws of any state.

         (a)      The Offered Warrants and the Common Shares issuable upon
                  exercise of the Offered Warrants may be offered, sold, pledged
                  or otherwise transferred only (i) to the Corporation, (ii) in
                  a transaction outside the United States in compliance with
                  Rule 904 of Regulation S under the U.S. Securities Act, or
                  (iii) in a transaction exempt from the registration
                  requirements under the U.S. Securities Act and any applicable
                  state securities laws. In connection with any transfer
                  pursuant to the foregoing clause (iii), there must be
                  furnished to the Corporation a written opinion of counsel
                  reasonably acceptable to the Corporation to the effect that
                  such transfer is exempt from the registration requirements of
                  all applicable United States federal and state securities
                  laws. In connection with any proposed transfer of the Offered
                  Warrants to a person in the United Stated or to a U.S. Person,
                  the Corporation may request such further information as may be
                  necessary to determine whether such transfers are being made:
                  (i) to Accredited Investors; (ii) in accordance with, and
                  pursuant to, an exemption from registration

<PAGE>
                                     - 15 -

                  under the U.S. Securities Act and any applicable state
                  securities laws, and (iii) otherwise in compliance with
                  applicable securities laws;

         (b)      At the instruction of the Corporation, Common Shares issued
                  pursuant to the exercise of the Offered Warrants any time
                  during the period which is four months and one day after the
                  Closing Date will bear a legend in substantially the following
                  form:

                  "Unless permitted under securities legislation, the holder of
                  the securities shall not trade the securities before [insert
                  date that is four months and one day after the Closing Date]."

                  and may also contain such other legends as may be required by
                  applicable securities regulatory requirements, authorities or
                  stock exchanges including, without limitation, the Toronto
                  Stock Exchange.

         (c)      (i) Until such time as it is no longer required under
                  applicable requirements of the U.S. Securities Act or
                  applicable state securities laws, certificates representing
                  the Offered Warrants and all certificates issued in exchange
                  therefor or in substitution thereof, shall bear the following
                  legend in the case of certificates held by holders who are
                  U.S. Persons:

                  "THE WARRANTS REPRESENTED HEREBY AND THE COMMON SHARES
                  ISSUABLE UPON EXERCISE HAVE NOT BEEN AND WILL NOT BE
                  REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
                  AMENDED (THE "U.S. SECURITIES ACT"). THESE WARRANTS MAY BE
                  OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
                  THE CORPORATION, (B) IN A TRANSACTION OUTSIDE THE UNITED
                  STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
                  U.S. SECURITIES ACT, OR (C) IN A TRANSACTION EXEMPT FROM THE
                  REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND
                  ANY APPLICABLE STATE SECURITIES LAWS. IN CONNECTION WITH ANY
                  TRANSFER PURSUANT TO THE FOREGOING CLAUSE (C), THERE MUST BE
                  FURNISHED TO THE CORPORATION A WRITTEN OPINION OF COUNSEL
                  REASONABLY ACCEPTABLE TO THE CORPORATION TO THE EFFECT THAT
                  SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
                  ALL APPLICABLE UNITED STATES FEDERAL AND STATE SECURITIES
                  LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD
                  DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
                  CANADA AND, IN CONNECTION WITH ANY SALE OF SUCH WARRANTS
                  PURSUANT TO THE FOREGOING CLAUSE (B) AT A TIME WHEN THE
                  CORPORATION IS A "FOREIGN ISSUER" AS DEFINED IN RULE 902 UNDER
                  THE U.S. SECURITIES ACT, THE LEGEND MAY BE REMOVED BY

<PAGE>
                                     - 16 -

                  PROVIDING A DECLARATION TO THE CORPORATION'S TRANSFER AGENT IN
                  SUCH FORM AS THE CORPORATION MAY REASONABLY PRESCRIBE, TO THE
                  EFFECT THAT THE SALE OF THE WARRANTS IS BEING MADE IN
                  COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.
                  SECURITIES ACT."

                  (ii) Until such time as it is no longer required under
                  applicable requirements of the U.S. Securities Act or
                  applicable state securities laws, certificates representing
                  the Offered Warrants and all certificates issued in exchange
                  therefor or in substitution thereof, shall bear the following
                  legend in the case of certificates held by holders who are not
                  U.S. Persons:

                  "THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER
                  THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT"), AND MAY NOT
                  BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
                  ACCOUNT OR BENEFIT OF, U.S. PERSONS (I) AS PART OF THEIR
                  DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40 DAYS AFTER
                  THE LATER OF THE COMMENCEMENT OF THE OFFERING AND CLOSING
                  DATE, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S
                  UNDER THE 1933 ACT. TERMS USED HEREIN HAVE THE MEANING GIVEN
                  TO THEM IN REGULATION S."

         (d)      (i) Until such time as it is no longer required under
                  applicable requirements of the U.S. Securities Act or
                  applicable state securities laws, certificates representing
                  the Common Shares issuable upon exercise of the Offered
                  Warrants, and all certificates issued in exchange therefor or
                  in substitution thereof, shall bear the following legend in
                  the case of certificates held by holders who are U.S. Persons
                  :

                  "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT
                  BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,
                  AS AMENDED (THE "U.S. SECURITIES ACT"). THESE SECURITIES MAY
                  BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO
                  THE CORPORATION, (B) IN A TRANSACTION OUTSIDE THE UNITED
                  STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
                  U.S. SECURITIES ACT, OR (C) IN A TRANSACTION EXEMPT FROM THE
                  REGISTRATION REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND
                  ANY APPLICABLE STATE SECURITIES LAWS. IN CONNECTION WITH ANY
                  TRANSFER PURSUANT TO THE FOREGOING CLAUSE (C), THERE MUST BE
                  FURNISHED TO THE CORPORATION A WRITTEN OPINION OF COUNSEL
                  REASONABLY ACCEPTABLE TO THE CORPORATION TO THE EFFECT THAT
                  SUCH TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF
                  ALL APPLICABLE UNITED STATES FEDERAL AND STATE SECURITIES
                  LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE "GOOD

<PAGE>
                                     - 17 -

                  DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN
                  CANADA AND, IN CONNECTION WITH ANY SALE OF SUCH SECURITIES
                  PURSUANT TO THE FOREGOING CLAUSE (B) AT A TIME WHEN THE
                  CORPORATION IS A "FOREIGN ISSUER" AS DEFINED IN RULE 902 UNDER
                  THE U.S. SECURITIES ACT, THE LEGEND MAY BE REMOVED BY
                  PROVIDING A DECLARATION TO THE CORPORATION'S TRANSFER AGENT IN
                  SUCH FORM AS THE CORPORATION MAY REASONABLY PRESCRIBE, TO THE
                  EFFECT THAT THE SALE OF THE SECURITIES IS BEING MADE IN
                  COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.
                  SECURITIES ACT."

                  (ii) Until such time as it is no longer required under
                  applicable requirements of the U.S. Securities Act or
                  applicable state securities laws, certificates representing
                  the Common Shares issuable upon exercise of the Offered
                  Warrants, and all certificates issued in exchange therefor or
                  in substitution thereof, shall bear the following legend in
                  the case of certificates held by holders who are not U.S.
                  Persons :

                  "THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER
                  THE U.S. SECURITIES ACT OF 1933 (THE "1933 ACT"), AND MAY NOT
                  BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
                  ACCOUNT OR BENEFIT OF, U.S. PERSONS (I) AS PART OF THEIR
                  DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40 DAYS AFTER
                  THE LATER OF THE COMMENCEMENT OF THE OFFERING AND CLOSING
                  DATE, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S
                  UNDER THE 1933 ACT. TERMS USED HEREIN HAVE THE MEANING GIVEN
                  TO THEM IN REGULATION S."

provided, that if Offered Warrants are being sold outside the United States in
accordance with Rule 904, and provided that the Corporation is a "foreign
issuer" within the meaning of Regulation S at the time of sale, any such legend
may be removed by providing a declaration to Computershare Trust Company of
Canada, as registrar and transfer agent, to the effect set forth in Exhibit A to
the Offered Warrant Certificate.

                                   ARTICLE 4
            ADJUSTMENT OF NUMBER OF COMMON SHARES AND EXERCISE PRICE

4.1               ADJUSTMENT OF NUMBER OF COMMON SHARES AND EXERCISE PRICE

         (a)      The rights of an Offered Warrantholder to receive Common
                  Shares, in effect at any date attaching to the Offered
                  Warrants, and the Exercise Price in respect thereof, will be
                  adjusted as provided in, and in accordance with the provision
                  of, this Section 4.1, and for such purposes and as used in
                  this Section 4.1, "Adjustment Period" means the period from
                  and including the Effective Date up to and including the
                  Expiry Time.

<PAGE>
                                     - 18 -

         (b)      If and whenever at any time during the Adjustment Period, the
                  Corporation shall (i) subdivide or redivide the outstanding
                  Common Shares into a greater number of Common Shares, (ii)
                  combine, consolidate or reduce the outstanding Common Shares
                  into a lesser number of shares or (iii) issue Common Shares to
                  all or substantially all of the holders of Common Shares by
                  way of a stock dividend, then, in each such event, the
                  Exercise Price in effect on the effective date of such
                  subdivision, redivision, combination, consolidation, reduction
                  or on the record date of such stock dividend, as the case may
                  be, shall in the case of the events referred to in (i) or
                  (iii) above be decreased in proportion to the number of
                  outstanding Common Shares resulting from such subdivision,
                  redivision or stock dividend, or shall, in the case of the
                  events referred to in (ii) above, be increased in proportion
                  to the number of outstanding Common Shares resulting from such
                  combination, consolidation, or reduction. Such adjustment
                  shall be made successively whenever any event referred to in
                  this subsection 4.1(b) shall occur. Upon any adjustment of the
                  Exercise Price pursuant to subsection 4.1(b), the number of
                  Common Shares subject to the right of purchase under each
                  Offered Warrant shall be contemporaneously adjusted by
                  multiplying the number of Common Shares theretofore obtainable
                  on the exercise thereof by a fraction of which the numerator
                  shall be the respective Exercise Price in effect immediately
                  prior to such adjustment and the denominator shall be the
                  respective Exercise Price resulting from such adjustment.

         (c)      If and whenever at any time during the Adjustment Period, the
                  Corporation shall fix a record date for the issuance of
                  rights, options or warrants to all or substantially all the
                  holders of its outstanding Common Shares entitling them, for a
                  period expiring not more than forty-five (45) days after such
                  record date, to subscribe for or purchase Common Shares (or
                  securities convertible or exchangeable into Common Shares) at
                  a price per share (or having a conversion or exchange price
                  per share) less than ninety-five (95%) percent of the Current
                  Market Price on such record date, the Exercise Price shall be
                  adjusted immediately after such record date so that it shall
                  equal the amount determined by multiplying the Exercise Price
                  in effect on such record date by a fraction, of which the
                  numerator shall be the total number of Common Shares
                  outstanding on such record date plus a number of Common Shares
                  equal to the number arrived at by dividing the aggregate price
                  of the total number of additional Common Shares offered for
                  subscription or purchase (or the aggregate conversion or
                  exchange price of the convertible or exchangeable securities
                  so offered) by such Current Market Price, and of which the
                  denominator shall be the total number of Common Shares
                  outstanding on such record date plus the total number of
                  additional Common Shares offered for subscription or purchase
                  or into which the convertible or exchangeable securities so
                  offered are convertible or exchangeable; any Common Shares
                  owned by or held for the account of the Corporation or any
                  Subsidiary shall be deemed not to be outstanding for the
                  purpose of any such computation; such adjustment shall be made
                  successively whenever such a record date is fixed; to the
                  extent that any such rights or warrants are not exercised
                  prior to the expiration thereof, the Exercise Price shall be
                  readjusted to the Exercise Price which would then be in effect
                  if such record date had not been fixed or to

<PAGE>
                                     - 19 -

                  the Exercise Price which would then be in effect based upon
                  the number of Common Shares (or securities convertible or
                  exchangeable into Common Shares) actually issued upon the
                  exercise of such rights or warrants, as the case may be. Upon
                  any adjustment of the Exercise Price pursuant to this
                  subsection 4.1(c), the number of Common Shares subject to the
                  right of purchase under each Offered Warrant shall be
                  contemporaneously adjusted by multiplying the number of Common
                  Shares theretofore obtainable on the exercise thereof by a
                  fraction of which the numerator shall be the respective
                  Exercise Price in effect immediately prior to such adjustment
                  and the denominator shall be the respective Exercise Price
                  resulting from such adjustment.

         (d)      If and whenever at any time during the Adjustment Period the
                  Corporation shall fix a record date for the making of a
                  distribution to all or substantially all the holders of its
                  outstanding Common Shares of (i) shares of any class, whether
                  of the Corporation or any other corporation, (ii) rights,
                  options or warrants to subscribe for or purchase Common Shares
                  (or other securities convertible into or exchangeable for
                  Common Shares) for a period expiring not more than forty-five
                  (45) days after such record date at a price per share (or
                  having a conversion or exercise price per share) not less than
                  ninety-five (95%) percent of the Current Market Price on such
                  record date), (iii) evidences of its indebtedness or (iv) any
                  property or other assets (excluding Dividends Paid in the
                  Ordinary Course) then, in each such case, the Exercise Price
                  shall be adjusted immediately after such record date so that
                  it shall equal the price determined by multiplying the
                  Exercise Price in effect on such record date by a fraction, of
                  which the numerator shall be the total number of Common Shares
                  outstanding on such record date multiplied by such Current
                  Market Price less the aggregate fair market value (as
                  determined by the directors, acting reasonably, which
                  determination shall be conclusive) of such shares or rights,
                  options or warrants or evidences of indebtedness or assets to
                  be issued or distributed, as the case may be, and of which the
                  denominator shall be the total number of Common Shares
                  outstanding on such record date multiplied by such Current
                  Market Price; and Common Shares owned by or held for the
                  account of the Corporation or any Subsidiary shall be deemed
                  not be outstanding for the purpose of any such computation;
                  such adjustment shall be made successively whenever such a
                  record date is fixed; to the extent that such distribution is
                  not so made, the Exercise Price shall be readjusted to the
                  Exercise Price which would then be in effect if such record
                  date had not been fixed or to the Exercise Price which would
                  then be in effect based upon such shares or rights, options or
                  warrants or evidences of indebtedness or assets actually
                  distributed, as the case may be; Upon any adjustment of the
                  Exercise Price pursuant to this subsection 4.1(d), the number
                  of Common Shares subject to the right of purchase under each
                  Offered Warrant shall be contemporaneously adjusted by
                  multiplying the number of Common Shares theretofore obtainable
                  on the exercise thereof by a fraction of which the numerator
                  shall be the respective Exercise Price in effect immediately
                  prior to such adjustment and the denominator shall be the
                  respective Exercise Price resulting from such adjustment.

<PAGE>
                                     - 20 -

         (e)      If and whenever at any time during the Adjustment Period,
                  there is (i) any reclassification of the Common Shares at any
                  time outstanding, any change of the Common Shares into other
                  shares, securities or property or any other capital
                  reorganization of the Corporation (other than as described in
                  subsection 4.1(b)), (ii) any consolidation, amalgamation,
                  arrangement, merger or other form of business combination of
                  the Corporation with or into any other corporation or
                  otherwise resulting in any such reclassification or change or
                  any other capital reorganization of the Corporation, or (iii)
                  any sale, lease, exchange or transfer of the undertaking or
                  assets of the Corporation as an entirety or substantially as
                  an entirety to one or more other corporations or entities,
                  then, in each such event, each holder of any Offered Warrant
                  which is thereafter exercised will be entitled to receive, and
                  shall accept, in lieu of the number of Common Shares to which
                  such holder was theretofore entitled upon such exercise, the
                  kind and number or amount of shares or other securities or
                  property which such holder would have been entitled to receive
                  as a result of such event if, on the effective date thereof,
                  such holder had been the registered holder of the number of
                  Common Shares to which such holder was theretofore entitled
                  upon such exercise. If necessary as a result of any such
                  event, appropriate adjustments will be made in the application
                  of the provisions set forth in this Section 4.1 with respect
                  to the rights and interests thereafter of the holders of
                  Offered Warrants to the end that the provisions set forth in
                  this Section 4.1 will thereafter correspondingly be made
                  applicable as nearly as may reasonably be in relation to any
                  shares or other securities or property thereafter deliverable
                  upon the exercise of any Offered Warrant.

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

         (g)      In any case in which subsections 4.1(c) or 4.1(d) require that
                  an adjustment be made to the Exercise Price, no such
                  adjustment shall be made if the holders of the outstanding
                  Offered Warrants receive the rights, options or warrants
                  referred to in subsection 4.1(c) or the shares, rights,
                  options, warrants, evidences of indebtedness, property or
                  assets referred to in subsection 4.1(d), as the case may be,
                  in such kind and number as they would have received if they
                  had been holders of Common Shares on the applicable record
                  date or effective date, as the case may be, by virtue of their
                  outstanding Offered Warrants having then been

<PAGE>
                                     - 21 -

                  exercised into Common Shares at the Exercise Price in effect
                  on the applicable record date or effective date, as the case
                  may be. Any such issuance of share, rights, options, or
                  warrants will be subject to regulatory approval.

         (h)      The adjustments provided for in this Section 4.1 are
                  cumulative, and shall, in the case of adjustments to the
                  Exercise Price be computed to the nearest whole cent and shall
                  apply to successive subdivisions, redivisions, reductions,
                  combinations, consolidations, distributions, issues or other
                  events resulting in any adjustment under the provisions of
                  this Section 4.1, provided that, notwithstanding any other
                  provision of this Section 4.1, no adjustment of the Exercise
                  Price shall be required unless such adjustment would require
                  an increase or decrease of at least one (1%) percent in the
                  Exercise Price then in effect; provided, however, that any
                  adjustments which by reason of this subsection 4.1(h) are not
                  required to be made shall be carried forward and taken into
                  account in any subsequent adjustment.

         (i)      After any adjustment pursuant to this Section 4.1, the term
                  "Common Shares" where used in this Indenture shall be
                  interpreted to mean securities of any class or classes which,
                  as a result of such adjustment and all prior adjustments
                  pursuant to this Section 4.1, the Offered Warrantholder is
                  entitled to receive upon the exercise of his Offered Warrant,
                  and the number of Common Shares indicated by any exercise made
                  pursuant to an Offered Warrant shall be interpreted to mean
                  the number of Common Shares or other property or securities an
                  Offered Warrantholder is entitled to receive, as a result of
                  such adjustment and all prior adjustments pursuant to this
                  Section 4.1, upon the full exercise of an Offered Warrant.

4.2               ENTITLEMENT TO SHARES ON EXERCISE OF OFFERED WARRANT

                  All shares of any class or other securities which an Offered
Warrantholder is at the time in question entitled to receive on the exercise of
its Offered Warrant, whether or not as a result of adjustments made pursuant to
this Article 4, shall, for the purposes of the interpretation of this Indenture,
be deemed to be shares which such Offered Warrantholder is entitled to acquire
pursuant to such Offered Warrant.

4.3               NO ADJUSTMENT FOR CERTAIN TRANSACTIONS

                  Notwithstanding anything in this Article 4, no adjustment
shall be made in the acquisition rights attached to the Offered Warrants if the
issue of Common Shares is being made pursuant to or in connection with:

         (a)      any stock option or stock purchase plan in force from time to
                  time for directors, officers, employees, consultants or other
                  service providers of the Corporation; or

         (b)      the satisfaction of existing instruments issued at or prior to
                  the date hereof.

<PAGE>
                                     - 22 -

4.4               DETERMINATION BY CORPORATION'S AUDITORS

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

4.5               PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT

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

4.6               CERTIFICATE OF ADJUSTMENT

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

4.7               NOTICE OF SPECIAL MATTERS

                  The Corporation covenants with the Trustee that, so long as
any Offered Warrant remains outstanding, it will give notice to the Trustee and
to the Offered Warrantholders and to the Agents of its intention to fix a record
date that is prior to the Expiry Date for the issuance of rights, options or
warrants (other than the Offered Warrants) to all or substantially all the
holders of its outstanding Common Shares. Such notice shall specify the
particulars of such event and the record date for such event, provided that the
Corporation shall only be required to specify in the notice such particulars of
the event as shall have been fixed and determined on the date on which the
notice is given. The notice shall be given in each case not less than fourteen
(14) days prior to such applicable record date.

4.8               NO ACTION AFTER NOTICE

                  The Corporation covenants with the Trustee that it will not
close its transfer books or take any other corporate action which might deprive
the holder of an Offered Warrant of the opportunity to exercise its right of
acquisition pursuant thereto during the period of fourteen (14) days after the
giving of the certificate or notices set forth in Sections 4.6 and 4.7.

<PAGE>
                                     - 23 -

4.9               OTHER ACTION

                  In case the Corporation, after the date hereof, shall take any
action affecting the Common Shares other than action described in Section 4.1,
which in the reasonable opinion of the directors of the Corporation would
materially affect the rights of Offered Warrantholders, the number of Common
Shares which may be acquired upon exercise of the Offered Warrants shall be
adjusted in such manner and at such time, by action of the directors, acting
reasonably, in their sole discretion as they may determine to be equitable in
the circumstances, provided that no such adjustment will be made unless prior
approval of any stock exchange on which the Common Shares are listed for trading
has been obtained.

4.10              PROTECTION OF TRUSTEE

                  Except as provided in Section 9.2, the Trustee shall not:

         (a)      at any time be under any duty or responsibility to any Offered
                  Warrantholder to determine whether any facts exist which may
                  require any adjustment contemplated by Section 4.1, or with
                  respect to the nature or extent of any such adjustment when
                  made, or with respect to the method employed in making the
                  same;

         (b)      be accountable with respect to the validity or value (or the
                  kind or amount) of any Common Shares or of any shares or other
                  securities or property which may at any time be issued or
                  delivered upon the exercise of the rights attaching to any
                  Offered Warrant;

         (c)      be responsible for any failure of the Corporation to issue,
                  transfer or deliver Common Shares or certificates for the same
                  upon the surrender of any Offered Warrants for the purpose of
                  the exercise of such rights or to comply with any of the
                  covenants contained in this Article; and

         (d)      incur any liability or responsibility whatsoever or be in any
                  way responsible for the consequences of any breach on the part
                  of the Corporation of any of the representations, warranties
                  or covenants herein contained or of any acts of the directors,
                  officers, employees, agents or servants of the Corporation.

                                    ARTICLE 5
                     RIGHTS OF THE CORPORATION AND COVENANTS

5.1               OPTIONAL PURCHASES BY THE CORPORATION

                  Subject to compliance with applicable securities legislation
and approval of applicable regulatory authorities, the Corporation may from time
to time purchase by private contract or otherwise any of the Offered Warrants.
Any such purchase shall be made at the lowest price or prices at which, in the
opinion of the directors, such Offered Warrants are then obtainable, plus
reasonable costs of purchase, and may be made in such manner, from such persons
and on such other terms as the Corporation, in its sole discretion, may
determine. Any Offered Warrant Certificates representing the Offered Warrants
purchased pursuant to this

<PAGE>
                                     - 24 -

Section 5.1 shall forthwith be delivered to and cancelled by the Trustee. No
Offered Warrants shall be issued in replacement thereof.

5.2               GENERAL COVENANTS

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

         (a)      it will reserve and keep available a sufficient number of
                  Common Shares for the purpose of enabling it to satisfy its
                  obligations to issue Common Shares upon the exercise of the
                  Offered Warrants;

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

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

         (d)      it will use all reasonable efforts to maintain its corporate
                  existence and carry on its business in the ordinary course;

         (e)      if any of its Common Shares are listed on a stock exchange, it
                  will use all reasonable efforts to ensure that the Common
                  Shares issuable on the exercise of the Offered Warrants are
                  listed and posted for trading on such stock exchange, subject
                  to any restrictions or limitations imposed by applicable
                  securities laws;

         (f)      it will make all requisite filings under applicable Canadian
                  securities legislation and stock exchange rules;

         (g)      if it is a party to any transaction in which the Corporation
                  is not the continuing corporation, it shall use its
                  commercially reasonable best efforts to obtain all consents
                  which may be necessary or appropriate under Canadian law to
                  enable the continuing corporation to give effect to the
                  Offered Warrants;

         (h)      it will provide to Offered Warrantholders copies of all
                  financial statements and other documentation required to be
                  provided by applicable laws to registered holders of Common
                  Shares as if such Offered Warrantholders were registered
                  shareholders of the Corporation; and

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

<PAGE>
                                     - 25 -

5.3               TRUSTEE'S REMUNERATION AND EXPENSES

                  The Corporation covenants that it will pay to the Trustee from
time to time reasonable remuneration for its services hereunder and will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in the administration
or execution of the trusts hereby created (including the reasonable compensation
and the disbursements of its Counsel and all other advisers and assistants not
regularly in its employ) both before any default hereunder and thereafter until
all duties of the Trustee hereunder shall be finally and fully performed, except
any such expense, disbursement or advance as may arise out of or result from the
Trustee's negligence, wilful misconduct or bad faith. The Trustee shall not have
any recourse against any monies, securities or other property held by it for the
benefit of the Offered Warrantholders pursuant to this Indenture for the payment
of its fee.

5.4               PERFORMANCE OF COVENANTS BY TRUSTEE

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

                                    ARTICLE 6
                                   ENFORCEMENT

6.1               SUITS BY OFFERED WARRANTHOLDERS

                  All or any of the rights conferred on any Offered
Warrantholder by any of the terms of the Offered Warrant Certificate evidencing
such Offered Warrant or of this Indenture may be enforced by such holder by
appropriate legal proceedings but without prejudice to the right which is hereby
conferred on the Trustee to proceed in its own name to enforce each and every
provision herein contained for the benefit of the Offered Warrantholders.

6.2               IMMUNITY OF SHAREHOLDERS, ETC.

                  The Trustee and the Offered Warrantholders, by the acceptance
of the Offered Warrant Certificates and as part of the consideration for the
issue of the Offered Warrants, hereby waive and release any right, cause of
action or remedy now or hereafter existing in any jurisdiction against any past,
present or future shareholder, director, officer, employee or agent of the
Corporation or any successor corporation (i) on any covenant, agreement,
representation or warranty by the Corporation herein or contained in the Offered
Warrant Certificates, and (ii) for the issue of shares or other securities or
property pursuant to any Offered Warrant.

<PAGE>
                                     - 26 -

6.3               LIMITATION OF LIABILITY

                  The obligations hereunder are not personally binding upon, nor
will resort hereunder be had to the private property of any past, present or
future director, shareholder, officer, employee or agent of the Corporation or
any successor corporation, but only the property of the Corporation or any
successor corporation will be bound in respect hereof.

6.4               WAIVER OF DEFAULT

                  Upon the happening of any default hereunder:

         (a)      the holders of not less than 51% of the Offered Warrants then
                  outstanding shall have power (in addition to the powers
                  exercisable by Special Resolution) by requisition in writing
                  to instruct the Trustee to waive any default hereunder and the
                  Trustee shall thereupon waive the default upon such terms and
                  conditions as shall be prescribed in such requisition; or

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

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

                                    ARTICLE 7
                       MEETINGS OF OFFERED WARRANTHOLDERS

7.1               CONVENING MEETINGS

         (a)      The Trustee may at any time convene a meeting of the Offered
                  Warrantholders, and the Trustee shall do so upon a requisition
                  in writing by the Corporation or by an Offered Warrantholders'
                  Request, and upon receiving such funding and indemnity against
                  the costs of summoning and holding such meeting as it may
                  reasonably require and to hold it harmless against the
                  liabilities to be incurred thereby.

         (b)      If the Trustee fails, within five (5) days after receipt of
                  such written request, funding and indemnity, to give notice
                  convening a meeting, the Corporation or any of the Offered
                  Warrantholders signing such Offered Warrantholders' Request,
                  as the case may be, may convene such meeting.

         (c)      Every meeting shall be held at Vancouver, British Columbia or
                  such other place in Canada as the Corporation and the Trustee
                  may decide.

<PAGE>
                                     - 27 -

7.2               NOTICE OF MEETINGS

         (a)      At least seven (7) days' notice of all meetings of Offered
                  Warrantholders shall be sent to all Offered Warrantholders
                  entitled thereto. A copy of the notice shall be sent to the
                  Trustee (unless the meeting has been called by the Trustee)
                  and to the Corporation (unless the meeting has been called by
                  the Corporation).

         (b)      The notice must state the time when and the place where the
                  meeting is to be held and must state briefly the general
                  nature of the business to be transacted thereat but need not
                  set out the terms of any resolution to be proposed or any of
                  the provisions of this Article 7.

         (c)      The accidental omission to give notice of any meeting or any
                  irregularity in the notice of any meeting or the non-receipt
                  of any notice by any Offered Warrantholder, the Trustee or the
                  Corporation shall not invalidate any resolution passed or any
                  proceedings taken at any meeting of Offered Warrantholders.

         (d)      Any Offered Warrantholder present, either in person or by
                  proxy, at any meeting of the Offered Warrantholders shall for
                  all purposes be deemed to have received due notice of such
                  meeting and, where requisite, of the purposes for which such
                  meeting was convened.

7.3               CHAIRMAN

                  An individual (who may but need not be the proxy or
representative of an Offered Warrantholder) nominated in writing by the Trustee
(the "CHAIRMAN") shall be entitled to take the chair at every such meeting and
if no person is so nominated or if at any meeting a person so nominated shall
not be present within fifteen (15) minutes after the time appointed for holding
the meeting, the Offered Warrantholders present in person or by proxy shall
choose any one of their number to be Chairman.

7.4               QUORUM

         (a)      Subject to the provisions of Section 7.11, a quorum for the
                  transaction of business at any meeting of Offered
                  Warrantholders shall be two persons present in person, each
                  being an Offered Warrantholder entitled to vote thereat or a
                  duly appointed proxyholder for or representative of an Offered
                  Warrantholder so entitled, and together holding or
                  representing by proxy Offered Warrants representing not less
                  than twenty-five percent (25%) of all outstanding Offered
                  Warrants entitled to vote at the meeting.

         (b)      If a quorum of Offered Warrantholders is not present within 30
                  minutes after the time fixed for holding a meeting, the
                  meeting, if summoned on an Offered Warrantholders' Request,
                  will be dissolved but, subject to Section 7.11, in any other
                  case will be adjourned to the third following Business Day at
                  the same time and place and no notice of the adjournment need
                  be given.

<PAGE>
                                     - 28 -

         (c)      At the adjourned meeting the Offered Warrantholders present in
                  person or by proxy will form a quorum and may transact any
                  business for which the meeting was originally convened,
                  notwithstanding the number of Offered Warrants they hold.

7.5               POWER TO ADJOURN

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

7.6               VOTING

                  Every question submitted to a meeting of the Offered
Warrantholders other than a Special Resolution shall be decided in the first
instance by a show of hands and unless a poll is directed by the Chairman or
demanded by one or more Offered Warrantholders present in person or by proxy
holding in the aggregate not less than 10% of the total number of Offered
Warrants then outstanding, a declaration by the Chairman that a resolution has
been carried or lost or carried by a particular majority shall be conclusive
evidence of the fact.

7.7               POLLS

         (a)      If at any such meeting a poll is directed or demanded as
                  aforesaid, it shall be taken in such manner and either at once
                  or after an adjournment as the Chairman directs and the result
                  of such poll shall be deemed to be the resolution of the
                  meeting at which the poll was demanded. The demand for a poll
                  may be withdrawn. On a poll every Offered Warrantholder who is
                  present in person or by proxy shall have one vote for each
                  Offered Warrant held by such Offered Warrantholder.

         (b)      Any poll directed or demanded at any meeting on the election
                  of a Chairman or on any question of adjournment shall be taken
                  at the meeting without adjournment. A poll directed or
                  demanded on any other question shall be taken at such time and
                  place as the Chairman directs.

7.8               REGULATIONS

         (a)      The Trustee may from time to time make or vary such
                  regulations as it thinks fit:

                  (i)      for the form of instrument appointing a proxy, the
                           manner in which it must be executed, and verification
                           of the authority of a person who executes it on
                           behalf of an Offered Warrantholder;

                  (ii)     governing the places at which and the times by which
                           instruments appointing proxies must be deposited;

                  (iii)    for the deposit of instruments appointing proxies at
                           some approved place or places other than the place at
                           which the meeting is to be held and

<PAGE>
                                     - 29 -

                           enabling particulars of such voting certificates or
                           instruments appointing proxies to be sent by mail,
                           cable, telex or other means of prepaid, transmitted,
                           recorded communication before the meeting to the
                           Corporation or to the Trustee at the place where the
                           meeting is to be held and for voting pursuant to
                           instruments appointing proxies so deposited as though
                           the instruments themselves were produced at the
                           meeting; and

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

         (b)      Any regulations so made will be binding and effective and the
                  votes given in accordance therewith will be valid and will be
                  counted.

         (c)      Except as such regulations provide, the only persons who will
                  be recognized at a meeting as the holders of any Offered
                  Warrants, or as entitled to vote or, subject to Section 7.9,
                  be present at the meeting in respect thereof, will be the
                  registered holders of such Offered Warrants.

7.9               ATTENDANCE BY THE TRUSTEE AND THE CORPORATION

                  The Trustee and the Corporation and their duly authorized
representatives may attend and speak at any such meeting of Offered
Warrantholders, but will have no vote as such.

7.10              POWERS EXERCISABLE BY SPECIAL RESOLUTION

                  A meeting of the Offered Warrantholders shall, in addition to
the powers hereinbefore given, have the power, exercisable by Special
Resolution, to:

         (a)      sanction any modification or compromise of or arrangement in
                  respect of the rights of the Offered Warrantholders or of the
                  Trustee in its capacity as Trustee (subject to the consent of
                  the Trustee) against the Corporation, whether such rights
                  shall arise under this Indenture or otherwise, subject to the
                  agreement by the Corporation, and to authorize the Trustee to
                  concur in or execute any indenture supplemental hereto in
                  connection therewith;

         (b)      amend, alter or repeal any Special Resolution previously
                  passed, subject to the written consent of the Corporation
                  where such amendment, alteration or repeal affects the rights
                  of the Corporation under this Indenture;

         (c)      assent to any modification of the provisions contained in this
                  Indenture proposed or agreed to by the Corporation and to
                  authorize the Trustee, on its own behalf and on behalf of the
                  Offered Warrantholders, to concur in and execute any
                  supplemental indenture embodying any such modifications;

         (d)      agree to the release or exoneration of the Trustee from any
                  liability in respect of anything done or omitted to be done by
                  the Trustee before the giving of such release;

<PAGE>
                                     - 30 -

         (e)      direct the Trustee to exercise, on behalf of the Offered
                  Warrantholders, such of the powers of the Offered
                  Warrantholders as are exercisable by Special Resolution for
                  the enforcement of any obligation of the Corporation under
                  this Indenture or of any right of the Offered Warrantholders;

         (f)      refrain from enforcing any obligation or right referred to in
                  paragraph 7.10(e);

         (g)      waive and direct the Trustee to waive any default by the
                  Corporation in complying with any provision of this Indenture
                  either unconditionally or on any condition specified in the
                  Special Resolution;

         (h)      appoint a committee with power and authority to exercise, and
                  to direct the Trustee to exercise, on behalf of the Offered
                  Warrantholders, such of the powers of the Offered
                  Warrantholders as are exercisable by Special Resolution;

         (i)      restrain any Offered Warrantholder from taking or instituting
                  any suit, action or proceeding against the Corporation for the
                  enforcement of any obligation of the Corporation under this
                  Indenture or to enforce any right of any Offered
                  Warrantholder;

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

         (k)      from time to time and at any time to remove the Trustee and
                  appoint a successor Trustee.

7.11              MEANING OF SPECIAL RESOLUTION

         (a)      The expression "Special Resolution" when used in this
                  Indenture means, subject to the provisions of this Section
                  7.11, a resolution proposed at a meeting of Offered
                  Warrantholders duly convened for that purpose and held in
                  accordance with the provisions of this Article 7 at which
                  there are present in person or by proxy Offered Warrantholders
                  holding in the aggregate more than 25% of the total number of
                  Offered Warrants then outstanding and passed by the
                  affirmative votes of Offered Warrantholders who hold in the
                  aggregate not less than 66 2/3% of the total number of Offered
                  Warrants represented at the meeting and voted on a poll on the
                  resolution.

         (b)      If, at a meeting called for the purpose of passing a Special
                  Resolution, the quorum required by Section 7.11 is not present
                  within thirty (30) minutes after the time appointed for the
                  meeting, the meeting, if convened on an Offered
                  Warrantholders' Request, will be dissolved, but in any other
                  case will stand adjourned to such day, being not fewer than
                  fifteen (15) days or more than sixty (60) days later, and to
                  such place and time, as is appointed by the Chairman.

<PAGE>
                                     - 31 -

         (c)      Not less than seven (7) days' notice must be given to the
                  Offered Warrantholders of the time and place of the adjourned
                  meeting referred to in subsection 7.11(b).

         (d)      The notice referred to in subsection 7.11(c) must state that
                  at the adjourned meeting the Offered Warrantholders present in
                  person or by proxy will form a quorum but it will not be
                  necessary to set forth the purposes for which the meeting was
                  originally called or any other particulars.

         (e)      At the adjourned meeting referred to in subsection 7.11(b),
                  the Offered Warrantholders present in person or by proxy will
                  form a quorum and may transact any business for which the
                  meeting was originally convened, and a resolution proposed at
                  such adjourned meeting and passed by the affirmative votes of
                  Offered Warrantholders who hold in the aggregate not less than
                  66?% of the total number of Offered Warrants represented at
                  such adjourned meeting and voted on a poll on the resolutions
                  will be a Special Resolution within the meaning of this
                  Indenture notwithstanding subsection 7.11(a).

         (f)      Votes on a Special Resolution must always be given on a poll
                  and no demand for a poll on a Special Resolution will be
                  necessary.

         (g)      Any action that may be taken and any power that may be
                  exercised by Offered Warrantholders at a meeting held as
                  provided in this Article 7 may also be taken and exercised by
                  Offered Warrantholders who hold in the aggregate not less than
                  66?% of the total number of Offered Warrants at the time
                  outstanding, by their signing, each in person or by attorney
                  duly appointed in writing, an instrument in writing in one or
                  more counterparts, and the expression "Special Resolution"
                  when used in this Indenture includes a resolution embodied in
                  an instrument so signed.

7.12              POWERS CUMULATIVE

                  Any one or more of the powers, and any combination of the
powers, in this Indenture stated to be exercisable by the Offered Warrantholders
by Special Resolution or otherwise, may be exercised from time to time, and the
exercise of any one or more of such powers or any combination of such powers
from time to time will not prevent the Offered Warrantholders from exercising
such power or powers or combination of powers thereafter from time to time.

7.13              MINUTES

                  Minutes of all resolutions and proceedings at every such
meeting as aforesaid shall be made and duly entered in books to be from time to
time provided for that purpose by the Trustee at the Corporation's expense and
any such minutes as aforesaid if purporting to be signed by the Chairman of the
meeting at which such resolutions were passed or proceedings had or by the
Chairman of the next succeeding meeting of the Offered Warrantholders shall be
conclusive evidence of the matters therein contained and until the contrary is
proved every such meeting in respect of the proceedings of which minutes have
been made shall be deemed to have

<PAGE>
                                     - 32 -

been duly convened and held and all resolutions passed and proceedings held
thereat to have been duly passed and held.

7.14              SPECIAL RESOLUTION BINDS ALL

                  A Special Resolution passed at a meeting of the Offered
Warrantholders duly convened and held in accordance with this Indenture shall be
binding upon all the Offered Warrantholders whether present or not present at
such meeting, and each of the Offered Warrantholders and the Trustee (subject in
the case of the Trustee to the provisions for its indemnity contained in this
Indenture) shall be bound to give effect thereto accordingly.

                                    ARTICLE 8
               SUPPLEMENTAL INDENTURES AND SUCCESSOR CORPORATIONS

8.1               PROVISION FOR SUPPLEMENTAL INDENTURES FOR CERTAIN PURPOSES

                  From time to time the Corporation and the Trustee may, subject
to the provisions hereof, and will when so directed hereby, execute and deliver
by their authorized officers or directors indentures or instruments supplemental
hereto, which thereafter will form part hereof, for any or all of the following
purposes:

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

         (b)      adding hereto such additional covenants and enforcement
                  provisions as in the opinion of Counsel are necessary and
                  advisable, and are not in the opinion of the Trustee relying
                  on the opinion of Counsel prejudicial to the interests of the
                  Offered Warrantholders as a group;

         (c)      giving effect to any Special Resolution passed as provided in
                  Article 7;

         (d)      making such provisions not inconsistent with this Indenture as
                  are necessary or desirable with respect to matters or
                  questions arising hereunder, provided that the same are not,
                  in the opinion of the Trustee relying on the opinion of
                  Counsel prejudicial to the interests of the Offered
                  Warrantholders as a group;

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

         (f)      modifying any provision of this Indenture (including, without
                  limitation, making any modification which increases the number
                  or amount of Common Shares issuable pursuant to the Offered
                  Warrants) or relieving the Corporation from any of obligation,
                  condition or restriction herein contained, except that no such
                  modification or relief will be or become operative or
                  effective if in the opinion of the Trustee relying on the
                  opinion of Counsel it would impair any right of the Offered
                  Warrantholders or of the Trustee, and the Trustee may decline
                  to enter

<PAGE>
                                     - 33 -

                  into any such supplemental indenture which in its opinion
                  relying on the opinion of Counsel will not afford adequate
                  protection to the Trustee or the Offered Warrantholders when
                  it becomes operative; and

         (g)      for any other purpose not inconsistent with the terms of this
                  Indenture, including the correction or rectification of any
                  ambiguity, defective or inconsistent provision, error or
                  omissions herein, if in the opinion of the Trustee relying on
                  the opinion of Counsel, the rights of the Trustee and of the
                  Offered Warrantholders, as a group, are not prejudiced
                  thereby.

8.2               SUCCESSOR CORPORATIONS

                  In the case of the consolidation, amalgamation, arrangement or
merger of the Corporation with another corporation or entity or the transfer of
the undertaking or assets of the Corporation as an entirety, or substantially as
an entirety, to another corporation or entity, the corporation (the "SUCCESSOR
CORPORATION") resulting from such consolidation, amalgamation, arrangement,
merger or transfer (if not the Corporation) will be bound by the provisions
hereof and for the due and punctual performance and observance of each and every
covenant and obligation contained in this Indenture to be performed by the
Corporation, and, if requested by the Trustee, will by supplemental indenture
satisfactory in form to the Trustee and executed and delivered to the Trustee,
expressly assume such obligations.

                                    ARTICLE 9
                                   THE TRUSTEE

9.1               TRUST INDENTURE LEGISLATION

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

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

9.2               RIGHTS AND DUTIES OF TRUSTEE

         (a)      In the exercise of the rights and duties prescribed or
                  conferred by the terms of this Indenture, the Trustee will act
                  honestly and in good faith with a view to the best interests
                  of the Offered Warrantholders, and will exercise that degree
                  of care, diligence and skill that a reasonably prudent trustee
                  would exercise in comparable circumstances.

         (b)      No provision of this Indenture will be construed to relieve
                  the Trustee from liability for its own negligent act,
                  negligent failure to act, wilful misconduct or bad faith.

<PAGE>
                                     - 34 -

         (c)      The obligation of the Trustee to commence or continue any act,
                  action or proceeding for the purpose of enforcing any right of
                  the Trustee or the Offered Warrantholders hereunder is on the
                  condition that, when required by notice to the Offered
                  Warrantholders by the Trustee, the Trustee is furnished by one
                  or more Offered Warrantholders with sufficient funds to
                  commence or continue such act, action or proceeding and
                  indemnity reasonably satisfactory to the Trustee to protect
                  and hold it harmless against the costs, charges and expenses
                  and liabilities to be incurred thereby and any loss and damage
                  it may suffer by reason thereof.

         (d)      The Trustee shall not be bound to give any notice or do or
                  take any act, action or proceeding by virtue of the powers
                  conferred on it hereby unless and until it shall have been
                  required so to do under the terms hereof; nor shall the
                  Trustee be required to take notice of any default hereunder,
                  unless and until notified in writing of such default, which
                  notices shall distinctly specify the default desired to be
                  brought to the attention of the Trustee and in the absence of
                  any such notice the Trustee may for all purposes of this
                  Indenture conclusively assume that no default has been made in
                  the observance or performance of any of the representations,
                  warranties, covenants, agreements or conditions contained
                  herein. Any such notice shall in no way limit any discretion
                  herein given to the Trustee to determine whether or not the
                  Trustee shall take action with respect to any default.

         (e)      No provision of this Indenture will require the Trustee to
                  expend or risk its own funds or otherwise incur financial
                  liability in the performance of any of its duties or in the
                  exercise of any of its rights or powers unless it is so funded
                  and indemnified.

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

         (g)      Every provision of this Indenture that relieves the Trustee of
                  liability, or entitles it to rely on any evidence submitted to
                  it, is subject to the provisions of Applicable Legislation and
                  of this Section 9.2.

9.3               EVIDENCE, EXPERTS AND ADVISERS

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

         (b)      In the exercise of any right or duty hereunder the Trustee, if
                  it is acting in good faith, may act and rely, as to the truth
                  of any statement or the accuracy of any opinion expressed
                  therein, on any statutory declaration, opinion, report,
                  certificate

<PAGE>
                                     - 35 -

                  or other evidence furnished to the Trustee pursuant to a
                  provision hereof or of Applicable Legislation or pursuant to a
                  request of the Trustee.

         (c)      Whenever Applicable Legislation requires that evidence
                  referred to in subsection (a) be in the form of a statutory
                  declaration, the Trustee may accept such statutory declaration
                  in lieu of a certificate of the Corporation required by any
                  provision thereof.

         (d)      Any such statutory declaration may be made by any one or more
                  authorized officers or directors of the Corporation.

         (e)      Proof of the execution of an instrument in writing, including
                  an Offered Warrantholders' Request, by an Offered
                  Warrantholder may be made by the certificate of a notary
                  public, or other officer with similar powers, indicating that
                  the person signing such instrument acknowledged to him the
                  execution thereof, or by an affidavit of a witness to such
                  execution, or in any other manner that the Trustee considers
                  adequate.

         (f)      The Trustee may, at the expense of the Corporation, employ or
                  retain such counsel, accountants, engineers, appraisers, or
                  other experts or advisers as it reasonably requires for the
                  purpose of determining and discharging its duties hereunder
                  and may pay reasonable remuneration for all services so
                  performed by any of them, payable by the Corporation in
                  accordance with section 5.3, without taxation of costs of any
                  counsel, and will not be responsible for any misconduct or
                  negligence on the part of any of them who has been selected
                  with due care by the Trustee or for any actions taken in
                  reasonable reliance of the advice provided.

9.4               DOCUMENTS, MONIES, ETC. HELD BY TRUSTEE

                  Unless herein otherwise expressly provided, any of the funds
held by the Trustee may be deposited in a trust account in the name of the
Trustee (which may be held with the Trustee or an affiliate or related party of
the Trustee) which account shall be non-interest bearing. Upon the written order
of the Corporation, the Trustee shall invest in its name such funds in
Authorized Investments in accordance with such direction. Any direction by the
Corporation to the Trustee as to the investment of the funds shall be in writing
and shall be provided to the Trustee no later than 9:00 a.m. (Vancouver time) on
the day on which the investment is to be made. Any such direction received by
the Trustee after 9:00 a.m. (Vancouver time) or received on a non-Business Day,
shall be deemed to have been given prior to 9:00 a.m. (Vancouver time) the next
Business Day. Unless the Corporation shall be in default hereunder, all interest
or other income received by the Trustee in respect of such deposits and
investments shall belong to the Corporation.

9.5               ACTIONS BY TRUSTEE TO PROTECT INTERESTS

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

<PAGE>
                                     - 36 -

9.6               TRUSTEE NOT REQUIRED TO GIVE SECURITY

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

9.7               PROTECTION OF TRUSTEE

                  By way of supplement to the provisions of any law for the time
being relating to trustees, it is expressly declared and agreed that:

         (a)      the Trustee will not be liable for or by reason of, or
                  required to substantiate, any statement of fact or recital in
                  this Indenture, in the Offered Warrant Certificates (except
                  the representation contained in Section 9.9 or in the
                  certificate of the Trustee on the Offered Warrant
                  Certificates), but all such statements or recitals are and
                  will be deemed to be made by the Corporation;

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

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

         (d)      the Trustee will not incur any liability or responsibility
                  whatever or be in any way responsible for the consequence of
                  any breach by the Corporation of any obligation or covenant
                  herein contained or of any act of any director, officer,
                  employee or the agents of the Corporation; and

         (e)      the Corporation shall be liable for and hereby indemnifies and
                  saves harmless the Trustee and its officers, directors,
                  employees, and agents from and against all liabilities,
                  losses, costs, claims, actions or demands whatsoever which may
                  be brought against the Trustee or which it may suffer or incur
                  as a result of or arising out of the performance of its duties
                  and obligations under this Indenture, including any and all
                  legal fees and disbursements of whatever kind or nature, save
                  only in the event of the negligent action, the negligent
                  failure to act, or the wilful misconduct or bad faith of the
                  Trustee. It is understood and agreed that this indemnification
                  shall survive the termination or discharge of this Indenture
                  or the resignation or removal of the Trustee.

9.8               REPLACEMENT OF TRUSTEE

         (a)      The Trustee may resign its trusts and be discharged from all
                  further duties and liabilities hereunder, except as provided
                  in this Section 9.8, by giving to the Corporation and the
                  Offered Warrantholders not less than thirty (30) days' notice
                  in writing or, if a new Trustee has been appointed, such
                  shorter notice as the Corporation accepts as sufficient.

         (b)      The Offered Warrantholders by Special Resolution may at any
                  time remove the Trustee and appoint a new Trustee.

<PAGE>
                                     - 37 -

         (c)      If the Trustee resigns or is removed or is dissolved, the
                  Corporation will forthwith appoint a new Trustee unless a new
                  Trustee has already been appointed by the Offered
                  Warrantholders.

         (d)      Failing such appointment by the Corporation the retiring
                  Trustee or any Offered Warrantholder may apply to the Supreme
                  Court of British Columbia (the "COURT"), on such notice as the
                  Court directs, for the appointment of a new Trustee at the
                  Corporation's expense.

         (e)      Any new Trustee so appointed by the Corporation or by the
                  Court will be subject to the provisions of this Section 9.8.

         (f)      If a Trustee has been appointed by the Corporation or the
                  Court, the Corporation may at any time on sixty (60) days
                  written notice (or such shorter period as may be agreed)
                  terminate the appointment of the Trustee hereunder provided
                  always that no such termination shall take effect until a new
                  Trustee has been appointed by the Corporation on the terms set
                  out herein and the new Trustee has acquired any property then
                  being held by the retiring Trustee pursuant hereto.

         (g)      Any new Trustee appointed under any provision of this Section
                  9.8 must be a corporation authorized to carry on the business
                  of a trust company in British Columbia, Alberta, Quebec and
                  Ontario and, if required by the Applicable Legislation of any
                  other province, in such other province.

         (h)      Notice of such change of the Trustee shall be given by the
                  Corporation to the Offered Warrantholders within thirty (30)
                  days of the appointment of the successor Trustee hereunder.

         (i)      If the appointment of the Trustee hereunder terminates for
                  whatever reason, the Trustee shall, on the date on which such
                  termination takes effect and upon payment of all outstanding
                  fees and expenses, deliver to the successor Trustee the
                  Register and all other books and records maintained by it
                  pursuant to this Indenture, together with all other property
                  held by it hereunder. As from that time the successor Trustee
                  shall be substituted for its predecessor for all purposes
                  hereof and shall be vested with the same powers, rights,
                  duties and responsibilities as if it had been originally named
                  herein as Trustee without any further assurance, conveyance,
                  act or deed, but there will be immediately executed all such
                  conveyances or other instruments as are in the opinion of
                  counsel necessary or advisable for the purpose of assuring
                  such powers, rights, duties and responsibilities of the new
                  Trustee. Any expense payable as a result of the termination of
                  such appointment shall be paid by the Corporation.

         (j)      A corporation into or with which the Trustee is merged or
                  consolidated or amalgamated, or a corporation succeeding to
                  the trust business of the Trustee, will be the successor to
                  the Trustee hereunder without any further act on its part or
                  on the part of any party hereto if such corporation would be
                  eligible for appointment as a new Trustee under subsection (e)
                  of this Section 9.8.

<PAGE>
                                     - 38 -

         (k)      A Offered Warrant Certificate certified but not delivered by a
                  predecessor Trustee may be delivered by the new or successor
                  Trustee in the name of the predecessor Trustee.

9.9               CONFLICT OF INTEREST

                  The Trustee, in its personal or any other capacity, may buy,
lend upon and deal in shares in the capital of the Corporation and in the
Offered Warrants and generally may contract and enter into financial
transactions with the Corporation or any related corporation without being
liable to account for any profit made thereby; however, the Trustee represents
to the Corporation that at the time of the execution and delivery hereof no
material conflict of interest exists between its role as a fiduciary hereunder
and its role in any other capacity, and if a material conflict of interest
arises hereafter it will, within ninety (90) days after ascertaining that it has
such material conflict of interest, either eliminate the conflict of interest or
resign its trusts hereunder.

9.10              ACCEPTANCE OF TRUST

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

9.11              PRIVACY LAWS

                  The parties acknowledge that federal and provincial
legislation that addresses the protection of individuals' personal information
(collectively, "PRIVACY LAWS") applies to obligations and activities under this
Indenture. Despite any other provision of this Indenture, neither party shall
take or direct any action that would contravene, or cause the other to
contravene, applicable Privacy Laws. The Corporation shall, prior to
transferring or causing to be transferred personal information to the Trustee,
obtain and retain required consents of the relevant individuals to the
collection, use and disclosure of their personal information, or shall have
determined that such consents either have previously been given upon which the
parties can rely or are not required under the Privacy Laws. The Trustee shall
use commercially reasonable efforts to ensure that its services hereunder comply
with Privacy Laws. Specifically, the Trustee agrees: (a) to have a designated
chief privacy officer; (b) to maintain policies and procedures to protect
personal information and to receive and respond to any privacy complaint or
inquiry; (c) to use personal information solely for the purposes of providing
its services under or ancillary to this Agreement and not use it for any other
purpose except with the consent of or direction from the Corporation or the
individual involved; (d) not to sell or otherwise improperly disclose personal
information to any third party; and (e) to employ administrative, physical and
technological safeguards to reasonably secure and protect personal information
against loss, theft, or unauthorized access, use or modification.

<PAGE>
                                     - 39 -

                                   ARTICLE 10
                                     GENERAL

10.1     NOTICE TO CORPORATION AND TRUSTEE

         (a)      Any notice to be given by the Corporation or the Trustee shall
                  be in writing and signed by an authorized signatory of the
                  party giving the notice. Any such notice shall be addressed to
                  the relevant party at its address as given below or at such
                  other address as may be noted from time to time in accordance
                  with this Section 10.1.

                  Any such notice to the Corporation shall be addressed to:

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

                  Attention: Pascal Spothelfer
                  Facsimile: (604) 421-1764

                  Any such notice to the Trustee shall be addressed to:

                  Computershare Trust Company of Canada
                  510 Burrard Street
                  Vancouver, British Columbia V6C 3B9

                  Attention:  Nicole Clement
                  Facsimile: (604) 661-9480

                  Any such notice shall, unless delivered personally to a
                  responsible officer of the addressee, be given by courier
                  service or facsimile and shall be deemed to have been given
                  when actually received.

         (b)      Any and all notices to any party hereto shall be deemed to
                  have been duly given on the day of delivery if personally
                  delivered to a responsible officer of the addressee, provided
                  such day is a Business Day and, if such day is not a Business
                  Day, on the next succeeding Business Day.

10.2              NOTICE AND DELIVERY TO OFFERED WARRANTHOLDERS

         (a)      Unless herein otherwise expressly provided, a notice to be
                  given hereunder to Offered Warrantholders will be deemed to be
                  validly given if the notice is sent by ordinary surface or air
                  mail, postage prepaid, addressed to the Offered Warrantholders
                  or delivered (or so mailed to certain Offered Warrantholders
                  and so delivered to the other Offered Warrantholders) at their
                  respective addresses appearing in the Register, and if in the
                  case of joint holders of any Offered Warrant more than one
                  address appears on the Register in respect of the joint
                  holding, the notice must be addressed or delivered, as the
                  case may be, only to the

<PAGE>
                                     - 40 -

                  address of the First Named, provided, however, that if, by
                  reason of a strike, lockout or other work stoppage, actual or
                  threatened, involving Canadian postal employees, the notice
                  could reasonably be considered unlikely to reach or likely to
                  be delayed in reaching its destination, the notice will be
                  valid and effective only if it is so delivered or transmitted
                  by facsimile.

         (b)      A notice so given by mail or so delivered will be deemed to
                  have been given on the fourth Business Day after it has been
                  mailed or on the day on which it has been delivered or
                  transmitted by facsimile, provided such day is a Business Day
                  and, if such day is not a Business Day, on the next succeeding
                  Business Day, as the case may be. In determining under any
                  provision hereof the date when notice of a meeting or other
                  event must be given, the date of giving notice will be
                  included and the date of the meeting or other event will be
                  excluded. Accidental error or omission in giving notice or
                  accidental failure to mail notice to any Offered Warrantholder
                  will not invalidate any action or proceeding founded thereon.

         (c)      Any and all documents (other than Offered Warrant
                  Certificates) to be sent to any Offered Warrantholder may be
                  given or sent to the address shown on the Register by
                  registered mail and shall be deemed to be received (if given
                  or sent in such a manner) two days after mailing. Any Offered
                  Warrant Certificate or payments made hereunder shall be sent
                  by registered and/or insured mail.

         (d)      Whenever payments are to be made or documents are to be sent
                  to any Offered Warrantholder by the Trustee, by the
                  Corporation or by an Offered Warrantholder to the Trustee or
                  to the Corporation, then if such payment is made or such
                  document is sent by mail, such payment or document shall be so
                  sent at the risk of the Offered Warrantholder.

10.3              COUNTERPARTS

                  This Indenture may be executed in counterparts, each of which
when so executed shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument, and notwithstanding the
date of their execution will be deemed to be dated as of March 23, 2004.

10.4              MULTIPLE CLOSINGS

                  The Offered Warrants may be issued pursuant to the terms of
this Indenture at one or more closing upon the joint notice of the Corporation
and the Agents to the Trustee. Any Offered Warrants issued pursuant to this
Indenture after March 23, 2004 shall be subject to the same terms and conditions
as any other Offered Warrants issued under this Indenture and the Trustee shall,
upon written direction of the Corporation, certify any Offered Warrants
Certificates representing such Offered Warrants in accordance with Section 2.7
hereof.

10.5              SATISFACTION AND DISCHARGE OF INDENTURE

                  On the earlier of:

<PAGE>
                                     - 41 -

         (a)      the date by which there has been delivered to the Trustee for
                  exercise, surrender for cancellation or destruction all
                  Offered Warrant Certificates theretofore certified hereunder;
                  or

         (b)      the Expiry Time;

and if all certificates representing Common Shares required to be issued in
compliance with the provisions hereof have been issued and delivered hereunder
or to the Trustee in accordance with such provisions, this Indenture will cease
to be of further effect and, on demand of and at the cost and expense of the
Corporation and on delivery to the Trustee of a certificate of the Corporation
stating that all conditions precedent to the satisfaction and discharge of this
Indenture have been complied with and on payment to the Trustee of the fees and
other remuneration payable to the Trustee, the Trustee will execute proper
instruments acknowledging satisfaction of and discharging this Indenture. Any
failure on the part of the Corporation or the Trustee to give any such notice
shall not affect the rights of Offered Warrantholders.

10.6              ANTI-MONEY LAUNDERING

                  The Trustee shall retain the right not to act and shall not be
liable for refusing to act if, due to a lack of information or for any other
reason whatsoever, the Trustee, in its sole judgment, determines that such act
might cause it to be in non-compliance with any applicable anti-money laundering
or anti-terrorist legislation, regulation or guideline. Further, should the
Trustee, in its sole judgment, determine at any time that its acting under this
Indenture has resulted in its being in non-compliance with any applicable
anti-money laundering or anti-terrorist legislation, regulation or guideline,
then it shall have the right to resign on 10 days written notice to the
Corporation, provided (i) that the Trustee's written notice shall describe the
circumstances of such non-compliance; and (ii) that if such circumstances are
rectified to the Trustee's satisfaction within such 10 day period, then such
resignation shall not be effective.

10.7              SOLE BENEFIT OF PARTIES AND OFFERED WARRANTHOLDERS

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

<PAGE>
                                     - 42 -

         IN WITNESS WHEREOF this Offered Warrant Indenture has been executed and
delivered as of the date first before written.

                                     SPECTRUM SIGNAL PROCESSING INC.

                                     Per: /s/ Pascal Spothelfer
                                          --------------------------------------

                                     COMPUTERSHARE TRUST COMPANY OF CANADA

                                     Per: /s/ Nicole Clement
                                          --------------------------------------

                                     Per: /s/ June Glover
                                          --------------------------------------

<PAGE>

           THIS IS SCHEDULE "A" TO THE OFFERED WARRANT INDENTURE MADE AS
           OF MARCH 23, 2004 BETWEEN SPECTRUM SIGNAL PROCESSING INC. AND
           COMPUTERSHARE TRUST COMPANY OF CANADA AS TRUSTEE.

THE WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID AND OF NO VALUE UNLESS
EXERCISED BY 4:30 P.M. (VANCOUVER TIME) ON OR BEFORE SEPTEMBER 23, 2005.

WITHOUT THE PRIOR WRITTEN APPROVAL OF THE TORONTO STOCK EXCHANGE AND COMPLIANCE
WITH ALL APPLICABLE SECURITIES LEGISLATION, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE AND THE COMMON SHARES ISSUABLE UPON THE EXERCISE HEREOF MAY NOT BE
SOLD, TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE FACILITIES
OF THE TORONTO STOCK EXCHANGE OR OTHERWISE IN CANADA OR TO OR FOR THE BENEFIT OF
A CANADIAN RESIDENT UNTIL JULY 24, 2004.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES
SHALL NOT TRADE THE SECURITIES BEFORE JULY 24, 2004.

[CERTIFICATES HELD BY HOLDERS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION
S UNDER THE SECURITIES ACT) SHALL ALSO BEAR THE FOLLOWING LEGEND]

         THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
         SECURITIES ACT OF 1933 (THE "1933 ACT"), AND MAY NOT BE OFFERED OR SOLD
         WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
         PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE
         UNTIL 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND
         CLOSING DATE, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S
         UNDER THE 1933 ACT. TERMS USED HEREIN HAVE THE MEANING GIVEN TO THEM IN
         REGULATION S.

[CERTIFICATES HELD BY HOLDERS WHO ARE U.S. PERSONS (AS DEFINED IN REGULATION S
UNDER THE SECURITIES ACT) SHALL ALSO BEAR THE FOLLOWING LEGEND]

         THE WARRANTS REPRESENTED HEREBY AND THE COMMON SHARES ISSUABLE UPON
         EXERCISE HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
         STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES ACT").
         THESE WARRANTS MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
         ONLY (A) TO THE CORPORATION, (B) IN A TRANSACTION OUTSIDE THE UNITED
         STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.
         SECURITIES ACT, OR (C) IN A TRANSACTION EXEMPT FROM THE REGISTRATION
         REQUIREMENTS UNDER THE U.S. SECURITIES ACT AND ANY APPLICABLE STATE
         SECURITIES LAWS. IN CONNECTION WITH

<PAGE>
                                     - 2 -

         ANY TRANSFER PURSUANT TO THE FOREGOING CLAUSE (C), THERE MUST BE
         FURNISHED TO THE CORPORATION A WRITTEN OPINION OF COUNSEL REASONABLY
         ACCEPTABLE TO THE CORPORATION TO THE EFFECT THAT SUCH TRANSFER IS
         EXEMPT FROM THE REGISTRATION REQUIREMENTS OF ALL APPLICABLE UNITED
         STATES FEDERAL AND STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE
         MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON
         STOCK EXCHANGES IN CANADA AND, IN CONNECTION WITH ANY SALE OF SUCH
         WARRANTS PURSUANT TO THE FOREGOING CLAUSE (B) AT A TIME WHEN THE
         CORPORATION IS A "FOREIGN ISSUER" AS DEFINED IN RULE 902 UNDER THE U.S.
         SECURITIES ACT, THE LEGEND MAY BE REMOVED BY PROVIDING A DECLARATION TO
         THE CORPORATION'S TRANSFER AGENT IN SUCH FORM AS THE CORPORATION MAY
         REASONABLY PRESCRIBE, TO THE EFFECT THAT THE SALE OF THE WARRANTS IS
         BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S.
         SECURITIES ACT.

                               WARRANT CERTIFICATE

                         SPECTRUM SIGNAL PROCESSING INC.
                     (Incorporated under the laws of Canada)

                                       ___________ WARRANTS, each entitling the
                                       holder to acquire, subject to adjustment
WARRANT                                and without payment of any additional
CERTIFICATE NO.                        consideration, one Common Share at a
                                       price of Cdn.$1.50 per share for each
                                       whole Offered Warrant represented hereby.

                           THIS IS TO CERTIFY THAT [O]

(hereinafter referred to as the "holder") is entitled to acquire in the manner
and subject to the restrictions and adjustments set forth herein, at any time
and from time to time until 4:30 p.m. (Vancouver time) (the "Expiry Time") on
September 23, 2005 (the "Expiry Date"), one fully paid and non-assessable common
share ("Common Share") without nominal or par value of SPECTRUM SIGNAL
PROCESSING INC. (the "Corporation"), as such shares were constituted on March
23, 2004 at an exercise price of Cdn.$1.50, subject to adjustment as described
below (the "Exercise Price") for each Offered Warrant represented hereby.

                  The Offered Warrants represented by this certificate are
issued under and pursuant to an Offered Warrant Indenture (hereinafter referred
to as the "Indenture") made as of March 23, 2004 between the Corporation and
Computershare Trust Company of Canada (the "Trustee"). Reference is made to the
Indenture and any instruments supplemental thereto for a

<PAGE>
                                     - 3 -

full description of the rights of the holders of the Offered Warrants and the
terms and conditions upon which the Offered Warrants are, or are to be, issued
and held, with the same effect as if the provisions of the Indenture and all
instruments supplemental thereto were herein set forth. By acceptance hereof,
the holder assents to all provisions of the Indenture. In the event of a
conflict between the provisions of this Offered Warrant Certificate and the
Indenture, the provisions of the Indenture shall govern. Capitalized terms used
in the Indenture have the meaning herein as therein, unless otherwise defined.

                  The right to acquire Common Shares may be exercised by the
holder within the time set forth above by:

         (a)      duly completing and executing the Offered Warrant Exercise
                  Form attached hereto; and

         (b)      surrendering this Offered Warrant Certificate to the Trustee
                  together with a certified cheque, bank draft or money order,
                  in lawful money of Canada payable to or to the order of the
                  Corporation at par at the principal offices of the Trustee in
                  the cities of Calgary or Toronto or Vancouver for the Exercise
                  Price for the Common Shares subscribed for.

                  These Offered Warrants shall be deemed to be surrendered only
upon personal delivery hereof or, if sent by mail or other means of
transmission, upon actual receipt thereof by the Trustee at either office
referred to above.

                  Upon surrender of these Offered Warrants, the person or
persons in whose name or names the Common Shares issuable upon exercise of the
Offered Warrants are to be issued shall be deemed for all purposes (except as
provided in the Indenture) to be the holder or holders of record of such Common
Shares and the Corporation has covenanted that it will (subject to the
provisions of the Indenture) cause a certificate or certificates representing
such Common Shares to be delivered or mailed to the person or persons at the
address or addresses specified in the Offered Warrant Exercise Form within three
(3) Business Days of the receipt of this Offered Warrant Certificate, the
Exercise Price and the Offered Warrant Exercise Form duly completed.

                  The registered holder of these Offered Warrants may acquire
any lesser number of Common Shares than the number of Common Shares which may be
acquired for the Offered Warrants represented by this Offered Warrant
Certificate. In such event, the holder shall be entitled to receive a new
Offered Warrant Certificate for the balance of the Common Shares which may be
acquired. Any fractional entitlements will be rounded down to the nearest whole
number.

                  These Offered Warrants and the Common Shares issuable upon
exercise of the Offered Warrants have not been and will not be registered under
the United States Securities Act of 1933, as amended (the "U.S. Securities
Act"). These Offered Warrants may be offered, sold, pledged or otherwise
transferred only (A) to the Corporation, (B) in a transaction outside the United
States in compliance with Rule 904 of Regulation S under the U.S. Securities
Act, or (C) in a transaction exempt from the registration requirements under the
U.S. Securities Act and any applicable state securities laws. In connection with
any transfer pursuant to the foregoing clause

<PAGE>
                                     - 4 -

(C), there must be furnished to the Corporation a written opinion of counsel
reasonably acceptable to the Corporation to the effect that such transfer is
exempt from the registration requirements of all applicable United States
federal and state securities laws. Any person in the United States or "U.S.
person" as defined in Regulation S under the U.S. Securities Act, that transfers
Offered Warrants outside the United States in accordance with Rule 904 of
Regulation S must execute a Declaration in the form attached hereto as Exhibit A
to this Offered Warrant Certificate. A Offered Warrantholder that either (i) is
at the time of exercise of these Offered Warrants in the United States, (ii) is
a "U.S. person" as defined in Regulation S under the U.S. Securities Act, or
(iii) that executes or delivers the Offered Warrant Exercise Form in the United
States, must sign and deliver a letter in the form attached hereto as Exhibit B
to the Offered Warrant Certificate.

                  In the event of any alteration of the Common Shares, including
any subdivision, consolidation or reclassification, and in the event of any form
of reorganization of the Corporation, including any amalgamation, merger or
arrangement, an adjustment shall be made to the terms of the Offered Warrants
such that the holders of Offered Warrants shall, upon exercise of the Offered
Warrants following the occurrence of any of those events, be entitled to receive
the same number and kind of securities that they would have been entitled to
receive had they exercised their Offered Warrants immediately prior to the
occurrence of those events, provided that no fractional shares will be issued.
The Indenture also provides that the exercise price per Common Share is subject
to adjustment in certain events.

                  The registered holder of this Offered Warrant Certificate may,
at any time prior to the Expiry Time, upon surrender hereof to the Trustee at
its principal offices in the cities of Calgary or Toronto or Vancouver, exchange
this Offered Warrant Certificate for other Offered Warrant Certificates
entitling the holder to acquire, in the aggregate, the same number of Common
Shares as may be acquired under this Offered Warrant Certificate.

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

                  The Indenture provides that all holders of Offered Warrants
shall be bound by any resolution passed at a meeting of the holders held in
accordance with the provisions of the Indenture and resolutions signed by the
holders of Offered Warrants entitled to acquire a specified majority of the
Common Shares which may be acquired pursuant to all then outstanding Offered
Warrants.

                  The Offered Warrants evidenced by this Offered Warrant
Certificate may be transferred on the register kept at the offices of the
Trustee by the registered holder hereof or its legal representatives or its
attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee, upon compliance with the conditions prescribed in
the Indenture and upon compliance with such reasonable requirements as the
Trustee may prescribe.

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

<PAGE>
                                     - 5 -

                  Time shall be of the essence hereof.

                  IN WITNESS WHEREOF the Corporation has caused this Offered
Warrant Certificate to be signed by its duly authorized officer as of March 23,
2004.

                                     SPECTRUM SIGNAL PROCESSING INC.

                                     Per: /s/ Pascal Spothelfer
                                          --------------------------------------

Certified by:
COMPUTERSHARE TRUST COMPANY OF CANADA
Trustee

    /s/ Nicole Clement
    ---------------------------------
By: /s/ June Glover
    ---------------------------------

<PAGE>

                              TRANSFER OF WARRANTS

                  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers to ___________________________________________ [NAME AND ADDRESS OF
TRANSFEREE], ___________________________________________ [NUMBER OF OFFERED
WARRANTS] Offered Warrants of SPECTRUM SIGNAL PROCESSING INC. registered in the
name of the undersigned on the records of Computershare Trust Company of Canada
represented by the Offered Warrant Certificate attached and irrevocably appoints
Computershare Trust Company of Canada the attorney of the undersigned to
transfer the said securities on the books or register with full power of
substitution.

                  The undersigned hereby certifies the following (CHECK ONE AND
ONLY ONE OF THE FOLLOWING BOXES THAT IS APPLICABLE):

            A    [ ]    that the transfer of these securities is not being made
to, and the offer of these securities was not made to, a person in the United
States or a U.S. Person, as such terms are defined in Regulation S under the
United States Securities Act of 1933, as amended (the "U.S. Securities Act")

            B    [ ]    that the transfer of these securities is being made in
accordance with, and pursuant to, an exemption from registration under the U.S.
Securities Act and any applicable state securities laws.

             DATED the _____________ day of _______________ , 200 __

-------------------------------------    ---------------------------------------
Signature Guaranteed                     (Signature of Offered Warrantholder)

                                         ---------------------------------------
                                         Name of Offered Warrantholder

                                         ---------------------------------------
                                         Address of Offered Warrantholder

Instructions:

1.       Signature of the Offered Warrantholder must be the signature of the
         person appearing on the face of this Offered Warrant Certificate.

2.       If the Transfer Form is signed by a trustee, executor, administrator,
         curator, guardian, attorney, officer of a corporation or any person
         acting in a fiduciary or representative capacity, the certificate must
         be accompanied by evidence of authority to sign satisfactory to the
         Trustee and the Corporation.

3.       The signature on the Transfer Form must be guaranteed by a Schedule A
         major chartered bank/trust company, or a member of an acceptable
         Medallion Guarantee Program. The guarantor must affix a stamp bearing
         the actual words "Signature Guaranteed". Please note signature
         guarantees are not accepted from Treasury Branches or Credit Unions

<PAGE>
                                     - 2 -

         unless they are members of the Stamp Medallion Program. Please note
         that in the United States, signature guarantees must be done by members
         of the Medallion Signature Guarantee Program only.

4.       If the Offered Warrant Certificate contains a restrictive legend
         relating to the U.S. Securities Act and Box A above is checked, this
         transfer form must be accompanied by a completed and executed
         declaration for removal of legend in the form attached as Exhibit A to
         the Offered Warrant Certificate.

5.       If Box B above is checked, Spectrum Signal Processing Inc. must be
         provided a written opinion of legal counsel reasonably satisfactory to
         Spectrum Signal Processing Inc. to the effect that the proposed
         transfer may be effected without registration under the U.S. Securities
         Act and any applicable state securities laws. In connection with any
         such proposed transfer of the Offered Warrants, Spectrum Signal
         Processing Inc. may request such further information as may be
         necessary to determine whether such transfers are being made: (i) to
         "accredited investors" as such terms is defined in Regulation D under
         the U.S. Securities Act; (ii) in accordance with, and pursuant to, an
         exemption from registration under the U.S. Securities Act and any
         applicable state securities laws and (iii) otherwise in compliance with
         applicable securities laws.

<PAGE>

                                  EXERCISE FORM

TO:                     SPECTRUM SIGNAL PROCESSING INC. (The "Corporation")

AND TO:                 Computershare Trust Company of Canada (The "Trustee")

DELIVER TO:             100 University Avenue
                        8th Floor
                        Toronto, Ontario  M5J 2Y1

                        or

                        Suite 710, Western Gas Tower 530 - 8th Avenue S.W.
                        Calgary, Alberta T2P 3S8

                        or

                        510 Burrard Street
                        2nd Floor
                        Vancouver, British Columbia V6C 3B9

                        or

                        1500 University Street
                        7th Floor
                        Montreal Quebec H3A 3S8

                  The undersigned hereby exercises the right to acquire Common
Shares of SPECTRUM SIGNAL PROCESSING INC. as constituted on March 23, 2004 (or
such number of other securities or property to which such Offered Warrants
entitle the undersigned in lieu thereof or in addition thereto under the
provisions of the Indenture referred to in the accompanying Offered Warrant
Certificate) in accordance with and subject to the provisions of such Indenture.

         The Common Shares (or other securities or property) are to be issued as
         follows:

         Name:
              ------------------------------------------------------------------
              (print clearly)

         Address in full:
                         -------------------------------------------------------

         -----------------------------------------------------------------------
         Social Insurance Number:
                                 -----------------------------------------------
         Number of Common Shares:
                                 -----------------------------------------------

         Note: If further nominees intended, please attach (and initial)
         schedule giving these particulars. The undersigned holder hereby
         represents and certifies as follows (CHECK ONE AND ONLY ONE OF THE
         FOLLOWING BOXES THAT IS APPLICABLE):

         A. [ ] The undersigned holder (i) at the time of exercise of these
         Offered Warrants is not in the United States; (ii) is not a "U.S.
         person" as defined in Regulation S under the United States Securities
         Act of 1933, as amended (the "U.S. Securities Act") and is not
         exercising these Offered Warrants on behalf of a "U.S. person," or a

<PAGE>

                                     - 2 -

         person in the United States, and (iii) did not execute or deliver this
         Offered Warrant Exercise Form in the United States.

         B. [ ] The undersigned holder is either: (A) an Original U.S.
         Purchaser, as such term is defined in the Indenture, and each
         representation, warranty and covenant made by the undersigned in the
         Subscription Agreement entered into by and between the undersigned and
         the Corporation, pursuant to which the undersigned purchased Units is
         true and correct as of the date hereof, or (B) a U.S. person, or a
         person in the United States, that has acquired these Offered Warrants
         in a transaction exempt from registration under the U.S. Securities Act
         where such transfer was in compliance with the Indenture and any
         applicable state securities laws and has signed and delivered a letter
         in the form attached hereto as Exhibit B to the Offered Warrant
         Certificate.

             DATED the _____________ day of _______________ , 200 __

-------------------------------------    ---------------------------------------
Signature Guaranteed                     (Signature of Offered Warrantholder)

                                         ---------------------------------------
                                         Print full name

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

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

                                         Print full address
                                         ---------------------------------------

Instructions:

1.       The registered holder may exercise its right to receive Common Shares
         by completing this form and surrendering this form and the Offered
         Warrant Certificate representing the Offered Warrants being exercised
         together with the exercise price to Computershare Trust Company of
         Canada at its principal offices at 100 University Avenue, 8th Floor,
         Toronto, Ontario M5J 2Y1, Suite 710 Western Gas Tower, 530 - 8th Avenue
         S.W., Calgary, Alberta, T2P 3S8, 510 Burrard Street, 2nd Floor,
         Vancouver, British Columbia, V6C 3B9 or 1500 University Street, 7th
         Floor, Montreal Quebec H3A 3S8 Certificates for Common Shares will be
         delivered or mailed within three (3) business days after the exercise
         of the Offered Warrants.

2.       If the Offered Warrant Exercise Form indicates that Common Shares are
         to be issued to a person or persons other than the registered holder of
         the Certificate the signature of such holder must be guaranteed by a
         Schedule A major chartered bank/trust company, or a member of an
         acceptable Medallion Guarantee Program. The guarantor must affix a
         stamp bearing the actual words "Signature Guaranteed". Please note
         signature guarantees are not accepted from Treasury Branches or Credit
         Unions unless they are members of the Stamp Medallion Program. Please
         note that in the United States, signature guarantees must be done by
         members of the Medallion Signature Guarantee Program only.

3.       If the Offered Warrant Exercise Form is signed by a trustee, executor,
         administrator, curator, guardian, attorney, officer of a corporation or
         any person acting in a fiduciary or representative capacity, the
         certificate must be accompanied by evidence of authority to sign
         satisfactory to the Trustee and the Corporation.

4.       Certificates representing Common Shares will not be registered or
         delivered to an address in the United States unless Box B above is
         checked.

<PAGE>
                                     - 3 -

5.       If Box B above is checked, the certificate representing the Common
         Shares will bear a legend in the form set forth in the Indenture
         restricting transfer without registration under the U.S. Securities Act
         and applicable state securities laws unless an exemption from
         registration is available.

<PAGE>

                                    EXHIBIT A

                    FORM OF DECLARATION FOR REMOVAL OF LEGEND

TO:      COMPUTERSHARE TRUST COMPANY OF CANADA
         as registrar and transfer agent for Common Shares and Offered Warrants
of SPECTRUM SIGNAL PROCESSING INC.

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

Dated:
      -------------------------------

                                         ---------------------------------------
                                         Name of Seller

                                         By:
                                            ------------------------------------
                                            Name:
                                            Title:

<PAGE>

                                    EXHIBIT B

                        FORM OF LETTER TO BE DELIVERED BY
            ORIGINAL U.S. PURCHASER UPON EXERCISE OF OFFERED WARRANTS

SPECTRUM SIGNAL PROCESSING INC.
One Spectrum Court, Suite 200, 2700 Production Way
Burnaby, British Columbia
V5A 4X1

- and to -

Computershare Trust Company of Canada  as registrar and transfer agent
510 Burrard Street
Vancouver, British Columbia
V6C 3B9

Dear Sirs:

         We are delivering this letter in connection with the purchase of common
shares (the "Shares") of SPECTRUM SIGNAL PROCESSING INC., a corporation
incorporated under the laws of Canada (the "Corporation"), upon the exercise of
warrants of the Corporation ("Offered Warrants") issued pursuant to an
Indenture, dated as of March 23, 2004, between the Corporation and Computershare
Trust Company of Canada.

         We hereby confirm that:

         (a)      we are an "accredited investor" within the meaning of Rule 501
                  of Regulation D under the United States Securities Act of 1933
                  (the "U.S. Securities Act");

         (b)      we are purchasing the Shares for our own account;

         (c)      we have such knowledge and experience in financial and
                  business matters that we are capable of evaluating the merits
                  and risks of purchasing the Shares;

         (d)      we are not acquiring the Shares with a view to distribution
                  thereof or with any present intention of offering or selling
                  any of the Shares, except (i) to the Corporation, (ii) outside
                  the United States in compliance with Rule 904 of Regulation S
                  under the U.S. Securities Act or (iii) in a transaction exempt
                  from the registration requirements under the U.S. Securities
                  Act and any applicable state securities laws, provided that in
                  connection with any transfer referred to in clause (iii), a
                  written opinion of counsel reasonably acceptable to the
                  Corporation to the effect that such transfer is exempt from
                  the registration requirements of all applicable United States
                  federal and state securities laws will be provided to the
                  Corporation;

<PAGE>

                                     - 2 -

         (e)      we acknowledge that we have had access to such financial and
                  other information as we deem necessary in connection with our
                  decision to purchase the Shares; and

         (f)      we acknowledge that we are not purchasing the Shares as a
                  result of any general solicitation or general advertising,
                  including advertisements, articles, notices or other
                  communications published in any newspaper, magazine or similar
                  media or broadcast over radio, television, or any seminar or
                  meeting whose attendees have been invited by general
                  solicitation or general advertising.

         We understand that the Shares are being offered in a transaction not
involving any public offering within the United States within the meaning of
U.S. Securities Act and that the Shares have not been and will not be registered
under the U.S. Securities Act. We further understand that any Shares acquired by
us will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of paragraph (d) above.

         We acknowledge that you will rely upon our confirmations,
acknowledgements and agreements set forth herein, and we agree to notify you
promptly in writing if any of our representations or warranties herein ceases to
be accurate or complete.

                                     (Name of Purchaser)

                                     By:
                                         ---------------------------------------
                                         Name:
                                         Title:

                                         Address:<PAGE>
                                                                    Exhibit 4.29

                                AGENCY AGREEMENT

March 23, 2004

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

ATTENTION: PASCAL SPOTHELFER, PRESIDENT AND CHIEF EXECUTIVE OFFICER

Dear Sirs/Mesdames:

Reference is made to a letter agreement dated January 12, 2004 (the "LETTER
AGREEMENT") between Spectrum Signal Processing Inc. (the "CORPORATION") and GMP
Securities Ltd. ("GMP"). The Corporation hereby appoints GMP and Dlouhy Merchant
Group Inc. (collectively, the "AGENTS"), and the Agents hereby agrees to act, as
exclusive agents on a best efforts agency basis to raise gross proceeds of up to
$2,986,470 for the Corporation through the sale of up to 2,212,200 units
("UNITS") at a price of $1.35 per Unit. Each Unit shall consist of one common
share in the capital of the Corporation (an "OFFERED SHARE") and one-half of one
Common Share purchase warrant. Each whole warrant (an "OFFERED WARRANT") shall
be issued pursuant to and subject to the terms of a warrant indenture (the
"WARRANT INDENTURE") dated the date hereof between the Corporation and
Computershare Trust Company of Canada. Each Offered Warrant is exercisable at
any time until that date which is 18 months following the Closing Date (as
defined herein) for one Common Share (an "OFFERED WARRANT SHARE") at an exercise
price of $1.50 per share. The offering of the Units by the Corporation is
hereinafter referred to as the "OFFERING". It is understood that the sale of
Units will take place only in the Provinces of British Columbia, Alberta, Quebec
and Ontario (the "OFFERING JURISDICTIONS"); and (ii) in the United States, in
each case in accordance with the provisions of this Agreement. It is hereby
agreed and understood that the Agents shall act as agents only and shall not at
any time be obligated to purchase or arrange for the purchase of any Units but
may subscribe for and purchase Units if the Agents so chooses.

1.       Interpretation

(a)      Unless expressly provided otherwise, where used in this Agreement or
         any schedule hereto, the following terms shall have the following
         meanings, respectively:

<PAGE>

"AGENTS" shall have the meaning ascribed thereto in the first paragraph of this
Agreement;

"AGENTS' PERSONNEL" has the meaning ascribed thereto in Section 11 of this
Agreement;

"AGENCY FEE" shall have the meaning ascribed thereto in subsection 3(a) of this
Agreement;

"AGREEMENT" means this agreement resulting from the acceptance of the offer made
by the Corporation;

"APPLICABLE SECURITIES LAWS" means, collectively, the applicable securities laws
of the Offering Jurisdictions and the United States, the regulations, rules,
rulings and orders made thereunder, the applicable published policy statements
issued by the Securities Commissions and the United States Securities and
Exchange Commission thereunder and the securities legislation and published
policies of each other jurisdiction in Canada the securities laws of which are
applicable to the sale of the Units on the terms and conditions set out in this
Agreement;

"AUDITED FINANCIAL STATEMENTS" means the audited consolidated financial
statements of the Corporation as at and for the twelve month period ended
December 31, 2002;

"BUSINESS DAY" shall mean any day except Saturday, Sunday or a statutory or
civic holiday in Toronto, Ontario or Vancouver, British Columbia;

"CLOSING" means the closing on the Closing Date of the transaction of purchase
and sale in respect of the Units pursuant to this Agreement;

"CLOSING DATE" means March 23, 2004, or such other date as the Agents and the
Corporation may agree;

"COMMON SHARES" means the common shares in the capital of the Corporation;

"COMPENSATION WARRANTS" shall have the meaning ascribed thereto in subsection 3
of this Agreement;

"DISCLOSURE DOCUMENTS" means all documents that have been disclosed by the
Corporation to the public and filed since December 31, 2002 with the relevant
securities regulatory authorities pursuant to the requirements of Applicable
Securities Laws, including all press releases filed on SEDAR;

"EXCHANGE" means the Toronto Stock Exchange;

"GROSS PROCEEDS" means the gross proceeds raised from the sale of the Units;

"HAZARDOUS SUBSTANCES" shall have the meaning ascribed thereto in subsection
5(jj) of this Agreement;

"INDEMNIFIED PARTY" shall have the meaning ascribed thereto in Section 11 of
this Agreement;

                                       2
<PAGE>

"INTELLECTUAL PROPERTY" shall have the meaning ascribed thereto in subsection
5(ll) of this Agreement;

"KNOWLEDGE" or "AWARE" or similar words in respect of any facts or circumstances
by the Corporation means only those facts or circumstances of which the
President or the Chief Financial Officer of the Corporation has actual knowledge
or is actually aware on or before the Closing Date;

"LEASED PREMISES" shall have the meaning ascribed thereto in subsection 5(dd) of
this Agreement;

"LETTER AGREEMENT" shall have the meaning ascribed thereto in the first
paragraph of this Agreement;

"MATERIAL AGREEMENTS" has the meaning ascribed thereto in subsection 5(n) of
this Agreement;

"MATERIAL CHANGE" means a material change for the purposes of the Applicable
Securities Laws or any of them or where undefined under the Applicable
Securities Laws of an Offering Jurisdiction means a change in the business,
operations or capital of the Corporation that would reasonably be expected to
have a significant effect on the market price or value of any of the
Corporation's securities and includes a decision to implement such a change made
by the Corporation's board of directors or by senior management of the
Corporation who believe that confirmation of the decision by the board of
directors is probable;

"MATERIAL FACT" means a material fact for the purposes of the Applicable
Securities Laws or any of them or where undefined under the Applicable
Securities Laws of an Offering Jurisdiction means a fact that significantly
affects, or would reasonably be expected to have a significant effect on, the
market price or value of the Corporation's securities;

"MISREPRESENTATION" means a misrepresentation for the purposes of the Applicable
Securities Laws or any of them or where undefined under the Applicable
Securities Laws of an Offering Jurisdiction means (i) an untrue statement of a
material fact, or (ii) an omission to state a material fact that is required to
be stated or that is necessary to make a statement not misleading in the light
of the circumstances in which it was made;

"NASDAQ" means the Nasdaq Small Cap Market;

"OFFERED WARRANT SHARES" means the Common Shares issuable upon the due exercise
of the Offered Warrants; and

"OFFERED WARRANTS" has the meaning ascribed thereto in the first paragraph of
this Agreement.

"OFFERING" shall have the meaning ascribed thereto in the first paragraph of
this Agreement;

"OFFERING JURISDICTIONS" shall have the meaning ascribed thereto in the first
paragraph of this Agreement;

                                       3
<PAGE>

"PERSON" includes any individual, corporation, limited partnership, general
partnership, joint stock company or association, joint venture association,
company, trust, bank, trust company, land trust, investment trust, society or
other entity, organization, syndicate, whether incorporated or not, trustee,
executor or other legal personal representative, and governments and agencies
and political subdivisions thereof;

"PRIVATE PLACEMENT EXEMPTIONS" means the prospectus exemptions pursuant to which
the Units are to be issued in the Offering Jurisdiction as more specifically set
out in the Subscription Agreements;

"PURCHASERS" means, collectively, those persons or companies who are purchasing
the Units as contemplated herein;

"SECURITIES COMMISSIONS" means the applicable securities regulatory authorities
in the Offering Jurisdictions;

"SUBSCRIPTION AGREEMENTS" means, collectively, the subscription agreements in
the form agreed to by the Agents and the Corporation to be entered into between
the Purchasers and the Corporation pursuant to which the Purchasers agree to
subscribe for and purchase Units as herein contemplated and shall include, for
greater certainty, all schedules thereto;

"SUBSIDIARIES" means collectively, Spectrum Signal Processing (USA), Inc. and
Spectrum Signal Processing (UK) Ltd. and "SUBSIDIARY" means any one of them;

"TIME OF CLOSING" means 8:00 a.m. (Vancouver time) on the Closing Date or such
other time on the Closing Date as the Corporation and the Agents may agree;

"UNITED STATES" means the United States of America, as defined in Regulation S
under the U.S. Securities Act;

"UNITS" shall have the meaning ascribed thereto in the first paragraph of this
Agreement;

"U.S. SECURITIES ACT" means the United States Securities Act of 1933, as
amended; and

"WARRANT INDENTURE" has the meaning ascribed thereto in the first paragraph of
this Agreement.

(a)      The division of this Agreement into sections, subsections, paragraphs
         and other subdivisions and the insertion of headings are for
         convenience of reference only and shall not affect the construction or
         interpretation of this Agreement. Unless something in the subject
         matter or context is inconsistent therewith, references herein to
         sections, subsections, paragraphs and other subdivisions are to
         sections, subsections, paragraphs and other subdivisions of this
         Agreement. Unless otherwise expressly provided, all amounts expressed
         herein in terms of money refer to lawful currency of Canada and all
         payments to be made hereunder shall be made in such currency.

                                       4
<PAGE>

(b)      If any provision of this Agreement shall be adjudged by a competent
         authority to be invalid or for any reason unenforceable, such
         invalidity or unenforceability shall not affect the validity,
         enforceability or operation of any other provision herein.

(c)      The following are the schedules attached to this Agreement, which
         schedules are deemed to be a part hereof and are hereby incorporated by
         reference herein:

         Schedule "A" - List of Options, Warrants and Convertible Securities

         Schedule "B" - Form of Compensation Warrant Certificate

         Schedule "C" - United States Offers and Sales

2.       Nature of Transaction

         (a)      Each Purchaser shall purchase Units under a Private Placement
                  Exemption. The Agents shall offer the Units for sale on behalf
                  of the Corporation in the Offering Jurisdictions in compliance
                  with Applicable Securities Laws. The Corporation undertakes to
                  file or cause to be filed all forms or undertakings required
                  to be filed by the Corporation and to pay all filing fees in
                  connection with the purchase and sale of the Units so that the
                  distribution of such securities may lawfully occur without the
                  necessity of filing a prospectus in Canada or comparable
                  document elsewhere. The Agents shall arrange for Purchasers of
                  the Units in the United States through Griffiths McBurney
                  Corp. (the "U.S. AFFILIATE") pursuant to exemptions from the
                  registration requirements of the U.S. Securities Act and
                  applicable state securities laws, all such sales to be carried
                  out and completed in accordance with Schedule "C" attached
                  hereto.

         (b)      The certificates representing the Offered Shares and Offered
                  Warrants delivered at Closing shall contain the following
                  legend:

         "UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE
         SECURITIES REPRESENTED HEREBY SHALL NOT TRADE THE SECURITIES BEFORE
         JULY 24, 2004."

         (d)      The certificates representing the Offered Shares delivered at
                  Closing shall also contain the following legend:

         "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE
         TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES CAN NOT BE TRADED
         THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY
         TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH
         SECURITIES

                                       5
<PAGE>

         IS NOT 'GOOD DELIVERY' IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO
         STOCK EXCHANGE.

         THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S.
         SECURITIES ACT OF 1933 (THE "1933 ACT"), AND MAY NOT BE OFFERED OR SOLD
         WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
         PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE
         UNTIL 40 DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE OFFERING AND
         CLOSING DATE, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S
         UNDER THE 1933 ACT. TERMS USED HEREIN HAVE THE MEANINGS GIVEN TO THEM
         IN REGULATION S."

         (e)      Each of the Corporation and the Agents (on their own behalf or
                  on behalf of the U.S. Affiliate) agree that the
                  representations, warranties and covenants contained in
                  Schedule "C" to this Agreement entitled "United States Offers
                  and Sales" are incorporated by reference in and shall form
                  part of this Agreement with respect to offers and sales of
                  Units in the United States.

3.       AGENTS' COMPENSATION

         (a)      In consideration for the performance of its obligations
                  hereunder, the Corporation shall, subject to the provisions of
                  this Agreement, pay to the Agents an aggregate fee (the
                  "AGENCY FEE") equal to: (i) 7.5% of the Gross Proceeds on
                  sales of Units to Purchasers other than Ventures West 7
                  Limited Partnership, Ventures West 7 U.S. Limited Partnership,
                  directors, officers and employees of the Corporation; and (ii)
                  3.75% of the Gross Proceeds on sales of Units to Ventures West
                  7 Limited Partnership, Ventures West 7 U.S. Limited
                  Partnership, directors, officers and employees of the
                  Corporation.

         (b)      The Agents may retain one or more registered securities
                  brokers or investment dealers to act as selling agents
                  (individually, each a "SELLING AGENT" and collectively, the
                  "SELLING AGENTS") in connection with the sale of the Units
                  provided that (i) the compensation payable to such Selling
                  Agents shall be the sole responsibility of the Agents; (ii)
                  retaining such Selling Agents, and their sale of the Units, is
                  permitted by and in compliance with Applicable Securities
                  Laws; (iii) such Selling Agents agree to be bound by, and the
                  Agents shall be responsible for ensuring that the Selling
                  Agents abide by, the restrictions applicable to Agents
                  hereunder as if the Selling Agents were Agents hereunder.

         (c)      In addition to the Agency Fee, as additional consideration for
                  the performance of their obligations hereunder, the
                  Corporation shall issue to the Agents at the Time of Closing
                  on the Closing Date, non-assignable and non-transferable
                  compensation warrants (the "COMPENSATION WARRANTS"),
                  substantially in the form set out in Schedule "B" hereto,
                  entitling the Agents to acquire, in the aggregate, a number of
                  Units equal to 4.5% of the aggregate number of Units sold

                                       6
<PAGE>

                  hereunder exercisable by the Agents at a price of $1.50 per
                  Unit for a period of one year following the Closing Date.

4.       REPRESENTATIONS AND WARRANTIES OF THE AGENTS

Each of the Agents hereby certifies that it is an "accredited investor" as
defined under Applicable Securities Laws by virtue of being a company registered
under the Securities Act (Ontario) as an adviser or dealer (other than a limited
market dealer) and is acquiring the Compensation Warrants as principal for its
own account and not for the benefit of any other person.

Each of the Agents represents and warrants to the Corporation that it is a
corporation duly incorporated, organized and subsisting under the laws of the
jurisdiction in which it was incorporated, with good and sufficient power,
authority and right to enter into and deliver this Agreement and to complete the
transactions to be completed by the Agents contemplated hereby.

It is understood and agreed that for the purpose of the opinions to be delivered
pursuant to subparagraph 7(e) of this Agreement, counsel to the Corporation will
rely on inter alia, the accuracy and truth of the representations, warranties
and covenants set forth in this paragraph 4.

5.       REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

The Corporation hereby represents and warrants to and with the Agents (on the
Agents' own behalf and on behalf of each of the Purchasers) and acknowledges
that each of them is relying upon such representations and warranties in acting
as agents, in the case of the Agents, and in purchasing the Units, in the case
of the Purchasers, that as at the date hereof:

         (a)      the Corporation and each of the Subsidiaries has been duly
                  incorporated or amalgamated and is existing under the laws of
                  its jurisdiction of incorporation or amalgamation and has all
                  requisite power and authority necessary to, and is qualified
                  to, carry on its business as now conducted and to own or lease
                  its properties and assets in all jurisdictions in which it
                  currently carries on business and/or owns or leases its
                  properties and assets; and the Corporation has all required
                  corporate power and authority to allot, issue and sell the
                  Units, to enter into this Agreement, the Subscription
                  Agreements, the Warrant Indenture, the Compensation Warrants
                  and to carry out the provisions of each of such agreements;

         (b)      the authorized capital of the Corporation consists of
                  50,000,000 Common Shares, of which, as of the date hereof,
                  14,751,724 Common Shares are issued and outstanding as fully
                  paid and non-assessable shares in the capital of the
                  Corporation;

         (c)      the Corporation has no subsidiaries other than the
                  Subsidiaries and the Corporation does not beneficially own or
                  exercise control or direction over, 10% or more of the
                  outstanding voting shares of any company other than the
                  Subsidiaries; the Corporation beneficially owns, directly or
                  indirectly, 100% of the issued and outstanding shares in the
                  capital of each of the Subsidiaries free

                                       7
<PAGE>

                  and clear of all mortgages, liens, charges, pledges, security
                  interests, encumbrances, claims or demands of any kind
                  whatsoever; to the Corporation's knowledge all of such shares
                  have been duly authorized and validly issued and are
                  outstanding as fully-paid shares and, in respect of the
                  Subsidiaries only, no person has any right, agreement or
                  option, present or future, contingent or absolute, or any
                  right capable of becoming a right, agreement or option, for
                  the purchase from the Corporation of any interest in any of
                  such shares or for the issue or allotment of any unissued
                  shares in the capital of any Subsidiary or any other security
                  convertible into or exchangeable for any such shares;

         (d)      to the knowledge of the Corporation, no order ceasing or
                  suspending trading in any securities of the Corporation or
                  prohibiting the sale of the Units or the trading of any of the
                  Corporation's issued securities has been issued and no
                  proceedings for such purpose are pending or, to the knowledge
                  of the Corporation, threatened;

         (e)      to the knowledge of the Corporation, other than as disclosed
                  in the Disclosure Documents, no agreement is in force or
                  effect which in any manner affects the voting or control of
                  any of the securities of the Corporation or any of the
                  Subsidiaries;

         (f)      other than as disclosed in the Disclosure Documents, the
                  Corporation has not declared or paid any dividends or declared
                  or made any other payments or distributions on or in respect
                  of any of its shares and has not, directly or indirectly,
                  redeemed, purchased or otherwise acquired any of its shares or
                  agreed to do so or otherwise effected any return of capital
                  with respect to such shares;

         (g)      except as set forth in Schedule "A" hereto and except as
                  contemplated hereby, no person, firm or corporation, as of the
                  date hereof, has any agreement or option, or any right or
                  privilege (whether pre-emptive or contractual) capable of
                  becoming an agreement or option, for the purchase,
                  subscription or issuance of any securities of the Corporation;

         (h)      the Corporation is, and on the Closing Date will be, a
                  "qualifying issuer" within the meaning of Multilateral
                  Instrument 45-102 Resale of Securities ("MI 45-102") and is a
                  reporting issuer under the applicable securities laws in each
                  of Ontario, British Columbia and Alberta and will at the Time
                  of Closing be a reporting issuer under the applicable laws of
                  the Province of Quebec; the Corporation is not in default in
                  any material respect of any requirement of the Applicable
                  Securities Laws of the Offering Jurisdictions and the
                  Corporation is not included in a list of defaulting reporting
                  issuers maintained by the Securities Commission in each of
                  Ontario, British Columbia and Alberta. In particular, without
                  limiting the foregoing, the Corporation is in compliance at
                  the date hereof with its obligations under Applicable
                  Securities Laws to make timely disclosure of all material
                  changes relating to it and, since December 31, 2002 (other
                  than in respect of material change reports previously filed on
                  a confidential basis and thereafter made public or material
                  change reports previously filed on a confidential basis

                                       8
<PAGE>

                  and in respect of which no material change ever resulted), no
                  such disclosure has been made on a confidential basis and
                  there is no material change relating to the Corporation which
                  has occurred and with respect to which the requisite material
                  change report has not been filed, except to the extent that
                  the Offering constitutes a material change;

         (i)      the currently issued and outstanding Common Shares of the
                  Corporation are listed and posted for trading on the Exchange
                  and quoted for trading on Nasdaq and to its knowledge no order
                  ceasing or suspending trading in any securities of the
                  Corporation or prohibiting the sale of the Units has been
                  issued and no proceedings for such purpose are pending or, to
                  the knowledge of the Corporation, threatened;

         (j)      the definitive form of certificate representing the Offered
                  Shares complies with the requirements of the Company Act
                  (British Columbia) and of the Exchange;

         (k)      to the knowledge of the Corporation, each of the Corporation
                  and the Subsidiaries has conducted, and is conducting, its
                  business in material compliance with all applicable laws,
                  rules and regulations of each jurisdiction in which its
                  business is carried on and is licensed, registered or
                  qualified in all jurisdictions in which it owns, leases or
                  operates its property or carries on business to enable its
                  business to be carried on as now or proposed to be conducted
                  and its property and assets to be owned, leased and operated
                  and all such licences, registrations and qualifications are
                  and will at the Time of Closing be valid, subsisting and in
                  good standing, except in each case in respect of matters which
                  do not and will not result in any material adverse change to
                  the business, business prospects or condition (financial or
                  otherwise) of the Corporation and the Subsidiaries (on a
                  consolidated basis), and except for the failure to be so
                  qualified or the absence of any such license, registration or
                  qualification which does not and will not have a material
                  adverse effect on the assets or properties, business, results
                  of operations, prospects or condition (financial or otherwise)
                  of the Corporation and the Subsidiaries (on a consolidated
                  basis) or on the corporate power or authority of the
                  Corporation to perform its obligations under this Agreement;

         (l)      except as qualified by the disclosure in the Disclosure
                  Documents, each of the Corporation and the Subsidiaries is the
                  beneficial owner of the properties, business and assets or the
                  interests in the properties, business or assets referred to as
                  owned by it in the Corporation's most recent annual
                  information form filed on SEDAR, all agreements under which
                  the Corporation or the Subsidiaries holds an interest in a
                  property, business or asset are in good standing according to
                  their terms except where the failure to be in such good
                  standing does not and will not have a material adverse effect
                  on the Corporation and the Subsidiaries (on a consolidated
                  basis) or its properties, business or assets, and the
                  Disclosure Documents were as at the date thereof true and
                  correct in all material respects concerning the Corporation
                  and the Subsidiaries, and contained no misrepresentations;

                                       9
<PAGE>

         (m)      none of the Corporation or the Subsidiaries has received any
                  notice of proceedings relating to the revocation or
                  modification of any material certificate, authority, permit or
                  license necessary to conduct the business now owned or
                  operated by it which, if the subject of an unfavourable
                  decision, ruling or finding would materially and adversely
                  affect the conduct of the business, operations, financial
                  condition or income of the Corporation and the Subsidiaries
                  (on a consolidated basis);

         (n)      the Corporation is not in default or in breach in any material
                  respect of, and the execution and delivery of this Agreement,
                  the performance and compliance with the terms hereof and the
                  completion of the transactions described herein by the
                  Corporation will not result in any material breach of, or be
                  in conflict with or constitute a material default under, or
                  create a state of facts which, after notice or lapse of time,
                  or both, would constitute a material default under any term or
                  provision of the constating documents or any resolutions of
                  the Corporation or any material mortgage, note, indenture,
                  contract, agreement (written or oral), instrument, lease or
                  other document to which the Corporation is a party or by which
                  it or a material portion of its assets are bound (a "MATERIAL
                  AGREEMENT"), or any judgment, decree, order, statute, rule or
                  regulation applicable to any of them;

         (o)      the auditors of the Corporation who audited the Audited
                  Financial Statements are independent public accountants as
                  required by Applicable Securities Laws and to the knowledge of
                  the Corporation there has never been any reportable
                  disagreement (within the meaning of National Policy Statement
                  No. 31 of the Canadian Securities Administrators) with the
                  present auditor or, to the knowledge of the Corporation, any
                  former auditor of the Corporation;

         (p)      each of the Corporation and the Subsidiaries has filed all
                  federal, provincial, state, local and foreign tax returns that
                  are required to be filed or have requested extensions thereof
                  (except in any case in which the failure so to file would not
                  have a material adverse effect on the assets and properties,
                  business, results of operations, prospects or condition
                  (financial or otherwise) of the Corporation and the
                  Subsidiaries (on a consolidated basis)) and has paid all taxes
                  required to be paid by it and any other assessment, fine or
                  penalty levied against it, to the extent that any of the
                  foregoing is due and payable, except for any such assessment,
                  fine or penalty that is currently being contested in good
                  faith;

         (q)      the Corporation and each of the Subsidiaries has established
                  on its books and records reserves that are adequate for the
                  payment of all taxes not yet due and payable and there are no
                  liens for taxes on the assets of the Corporation or any of the
                  Subsidiaries, and, there are no audits known by the
                  Corporation's management to be pending of the tax returns of
                  the Corporation or any of the Subsidiaries (whether federal,
                  state, provincial, local or foreign) and there are no claims
                  which have been or may be asserted relating to any such tax
                  returns, which audits and claims, if determined adversely,
                  would result in the assertion by any

                                       10
<PAGE>

                  governmental agency of any deficiency that would have a
                  material adverse effect on the assets or properties, business,
                  results of operations, prospects or condition (financial or
                  otherwise) of the Corporation and the Subsidiaries (on a
                  consolidated basis);

         (r)      no domestic or foreign taxation authority has asserted or, to
                  the Corporation's knowledge, threatened to assert any
                  assessment, claim or liability for taxes due or to become due
                  in connection with any review or examination of the tax
                  returns of the Corporation or any of the Subsidiaries
                  (including, without limitation, any predecessor companies)
                  filed for any year which would have a material adverse effect
                  on the assets or properties, business, results of operations,
                  prospects or condition (financial or otherwise) of the
                  Corporation or any of the Subsidiaries;

         (s)      neither the Corporation nor, to the Corporation's knowledge,
                  any other party to a Material Agreement is in material default
                  in the observance or performance of any term or obligation to
                  be performed by it under any such Material Agreement and, to
                  the Corporation's knowledge, no event has occurred which with
                  notice or lapse of time or both would constitute such a
                  default, in any such case which default or event would have a
                  material adverse effect on the assets or properties, business,
                  results of operations, prospects or condition (financial or
                  otherwise) of the Corporation and the Subsidiaries (on a
                  consolidated basis);

         (t)      at the Time of Closing, the Corporation will have filed all
                  documents, taken all proceedings and obtained all regulatory
                  consents necessary to be filed by the Time of Closing in
                  connection with the sale of the Units;

         (u)      upon completion of all of the transactions contemplated in
                  this Agreement the Units will be validly issued and
                  outstanding as fully paid and non-assessable and will not have
                  been issued in violation of or subject to any pre-emptive
                  rights or other contractual rights to purchase securities
                  issued by the Corporation;

         (v)      the execution and delivery of each of this Agreement, the
                  Warrant Indenture, the Compensation Warrants and the
                  Subscription Agreements and the performance of the
                  transactions contemplated thereunder, the offering and sale of
                  the Units at the Time of Closing and any compliance by the
                  Corporation with the other provisions of each of such
                  agreements to be complied with by it does not and will not:

                  (i)      require the consent, approval, authorization,
                           registration or qualification of or with any
                           governmental authority, stock exchange, securities
                           regulatory authority or other third party, except:
                           (i) such as have been obtained; or (ii) such as may
                           be required under the applicable by-laws, policies,
                           regulations and prescribed forms of the Exchange or
                           Nasdaq;

                  (ii)     result in a breach of or default under, or create a
                           state of facts which, after notice or lapse of time
                           or both, would result in a breach of or default
                           under, or conflict with:

                                       11
<PAGE>

                  (iii)    any of the terms, conditions or provisions of the
                           constating documents or resolutions of the
                           shareholders, directors or any committee of directors
                           of the Corporation or any of the Subsidiaries or any
                           Material Agreement ; or

                  (iv)     any statute, rule, regulation or law applicable to
                           the Corporation, or any of the Subsidiaries
                           including, without limitation, the Applicable
                           Securities Laws of the Offering Jurisdictions, or any
                           judgment, order or decree of any governmental body,
                           agency or court having jurisdiction over the
                           Corporation or any of the Subsidiaries; or

                  (v)      give rise to any lien, charge or claim in or with
                           respect to the properties or assets now owned or
                           hereafter acquired by the Corporation or the
                           Subsidiaries or the acceleration of or the maturity
                           of any debt under any indenture, mortgage, lease,
                           agreement or instrument binding or affecting any of
                           them or any of their properties;

         (w)      the financial statements, press releases, material change
                  reports, management information circulars or annual
                  information forms filed by or on behalf of the Corporation
                  since December 31, 2002 with any Securities Commission, the
                  Exchange or Nasdaq taken together as a whole, are true and
                  correct and do not contain a misrepresentation, determined as
                  at the date of filing, which has not been corrected;

         (x)      other than the Agents, there is no person acting or, to the
                  knowledge of the Corporation, purporting to act at the request
                  of the Corporation, who is entitled to any brokerage or agency
                  fee in connection with the transactions contemplated herein;

         (y)      the minute books and records of the Corporation made available
                  to counsel for the Agents in connection with its due diligence
                  investigation of the Corporation for the periods from the date
                  of amalgamation or incorporation, as the case may be, to the
                  date of examination thereof respectively, are all of the
                  minute books and records of the Corporation and contain copies
                  of all proceedings (or certified copies thereof) of the
                  shareholders and the board of directors of the Corporation to
                  the date of review of such corporate records and minute books
                  and there have been no other meetings, resolutions or
                  proceedings of the shareholders or board of directors of the
                  Corporation to the date of review of such corporate records
                  and minute books not reflected in such minute books and other
                  records, other than those which have been disclosed to the
                  Agents;

         (z)      there is not, in the constating documents of the Corporation
                  or in any Material Agreement, any restriction upon or
                  impediment to the declaration or payment of dividends by the
                  directors of the Corporation or the payment of dividends by
                  the Corporation to the holders of its Common Shares, however
                  such restrictions or impediments may exist under applicable
                  law;

                                       12
<PAGE>

         (aa)     Computershare Trust Company of Canada at its principal office
                  in the City of Vancouver, has been duly appointed transfer
                  agent and registrar for the Common Shares;

         (bb)     the Audited Financial Statements and the unaudited interim
                  consolidated financial statements of the Corporation for the
                  nine-month period ended September 30, 2003:

                  (i)      have been prepared in accordance with Canadian
                           generally accepted accounting principles;

                  (ii)     present fully, fairly and correctly, in all material
                           respects, the assets, liabilities and financial
                           condition of the Corporation as at December 31, 2002
                           and as at September 30, 2003, respectively, and the
                           results of each of their operations and the changes
                           in each of their financial positions for the relevant
                           period then ended; and

                  (iii)    contain and reflect adequate provision or allowance
                           for all reasonably anticipated liabilities, expenses
                           and losses of the Corporation;

         (cc)     except as disclosed in the Disclosure Documents, since
                  December 31, 2002 (i) the Corporation has not incurred any
                  material liabilities or obligations (absolute, accrued,
                  contingent or otherwise), or entered into any material
                  transaction, not in the ordinary course of business; (ii)
                  there has been no material adverse change in the financial
                  position or condition of the business of the Corporation from
                  that indicated by the Audited Financial Statements; and (iii)
                  there has not been any material adverse change in the affairs,
                  business, prospects, liabilities, assets, operations or
                  condition of the business, financial or otherwise of the
                  Corporation or any of the Subsidiaries;

         (dd)     with respect to each premises which is material to the
                  Corporation on a consolidated basis and which the Corporation
                  or any of the Subsidiaries occupies as tenant (the "LEASED
                  PREMISES"), the Corporation or such Subsidiary occupies the
                  Leased Premises and has the right to occupy and use the Leased
                  Premises and each of the leases pursuant to which the
                  Corporation and/or the Subsidiaries occupies the Leased
                  Premises is in good standing and in full force and effect ;

         (ee)     to the knowledge of the Corporation, there has not been and
                  there is not currently any labour disruption or conflict which
                  is adversely affecting or could adversely affect, in a
                  material manner, the carrying on of the Corporation's or any
                  Subsidiaries' business, considered as a whole;

         (ff)     the Corporation and each of the Subsidiaries has procured and
                  maintains adequate insurance against all insurable risks which
                  are material to the Corporation and the Subsidiaries (taken as
                  a whole);

                                       13
<PAGE>

         (gg)     the Corporation is not in default with respect to any material
                  provisions contained in any material insurance policies and
                  has not failed to give any notice or pay any premium or
                  present any material claim under any such insurance policy and
                  has no reason to believe that any of its material insurance
                  policies will not be renewed by the insurer;

         (hh)     except as previously disclosed in the Disclosure Documents or
                  to the Agents, there are no actions, suits, proceedings or
                  inquiries pending or to the knowledge of the Corporation,
                  threatened against or affecting the Corporation or any of the
                  Subsidiaries at law or in equity or before or by any federal,
                  provincial, municipal or other governmental department,
                  commission, board, bureau, agency or instrumentality which in
                  any way materially adversely affects the business, operations
                  or condition (financial or otherwise) of the Corporation and
                  the Subsidiaries or their properties or assets or which
                  affects or may affect the distribution of the Units and none
                  of the actions, suits, proceedings or inquiries so disclosed
                  is expected to materially adversely affect, the business,
                  operations or condition (financial or otherwise) of the
                  Corporation and the Subsidiaries or their properties or
                  assets;

         (ii)     except as disclosed in the Disclosure Documents, none of the
                  directors, officers or employees of the Corporation or the
                  Subsidiaries, any known holder of more than ten per cent of
                  any class of shares of the Corporation, or any known associate
                  or affiliate of any of the foregoing persons or companies (as
                  such terms are defined in the Securities Act (Ontario)), has
                  had any material interest, direct or indirect, in any material
                  transaction within the previous two years or any proposed
                  material transaction which, as the case may be, materially
                  affected, is material to or will materially affect the
                  Corporation and the Subsidiaries;

         (jj)     except in material compliance with applicable legislation, to
                  its knowledge, the Corporation has not used any of its
                  properties or facilities to generate, manufacture, process,
                  distribute, use, treat, store, dispose of, transport or handle
                  any pollutants, contaminants, chemicals or industrial toxic or
                  hazardous waste or substances ("HAZARDOUS SUBSTANCES");

         (kk)     except in material compliance with applicable legislation, to
                  its knowledge, none of the Corporation nor any Subsidiary has
                  caused or permitted the release of any Hazardous Substances on
                  or from any of its properties or assets or any such release on
                  or from a facility owned or operated by third parties but with
                  respect to which the Corporation or any Subsidiary is or may
                  reasonably be alleged to have material liability or has
                  received any notice that it is potentially responsible for a
                  federal, provincial, municipal or local clean-up site or
                  corrective action under any applicable laws, statutes,
                  ordinances, by-laws, regulations or any orders, directions or
                  decisions rendered by any ministry, department or
                  administrative regulatory agency relating to the protection of
                  the environment, occupational health and safety or otherwise
                  relating to dealing with Hazardous Substances;

                                       14
<PAGE>

         (ll)     each of the Corporation and the Subsidiaries has good and
                  valid title to all material intellectual property rights used
                  by the Corporation or relating to the operation of its
                  business, including copyrights, industrial designs, trade
                  marks, trade secrets, know how and proprietary rights
                  necessary to carry on its business (the "INTELLECTUAL
                  PROPERTY") free and clear of any and all encumbrances, except
                  for royalty obligations and general bank security incurred or
                  granted, as the case may be, in the ordinary course of
                  business. Other than as disclosed in the Disclosure Documents,
                  no royalty or other fee is required to be paid by the
                  Corporation or the Subsidiaries to any other person in respect
                  of the use of any of the Intellectual Property. To the
                  knowledge of the Corporation, no employee of the Corporation
                  or the Subsidiaries is in violation of any term of any
                  non-disclosure, proprietary rights or similar agreement
                  between such employee and the Corporation or the Subsidiaries
                  or between such employee and any former employer. To the
                  knowledge of the Corporation, all technical information
                  developed by and belonging to the Corporation and/or the
                  Subsidiaries which has not been copyrighted or patented has
                  been kept confidential;

         (mm)     to the knowledge of the Corporation there are no material
                  restrictions on the ability of the Corporation or the
                  Subsidiaries to use and exploit all rights in the Intellectual
                  Property required in the ordinary course of the Corporation's
                  or the Subsidiaries' business. None of the rights of the
                  Corporation or the Subsidiaries in the Intellectual Property
                  will be impaired or affected in any way by the transactions
                  contemplated by this agreement. To the knowledge of the
                  Corporation, the conduct of the business of the Corporation
                  and the Subsidiaries and the use of the Intellectual Property
                  does not infringe, and each of the Corporation and the
                  Subsidiaries has not received any notice, complaint, threat or
                  claim alleging infringement of, any patent, trade mark, trade
                  name, copyright, industrial design, trade secret or other
                  Intellectual Property or proprietary right of any other
                  person, and the conduct of the business of each of the
                  Corporation does not include any activity which may constitute
                  passing off. Each of the Corporation and the Subsidiaries has
                  no notice of any infringements of the Intellectual Property or
                  material claims against the Intellectual Property by any third
                  party; and

         (nn)     the data processing systems used by the Corporation adequately
                  meet the data processing needs of the business and operations
                  of the Corporation as presently conducted. The Corporation has
                  taken appropriate action by instruction, agreement or
                  otherwise with its employees or other persons permitted access
                  to system application programs and data files used in the data
                  processing systems to protect against unauthorized access,
                  use, copying, modification, theft and destruction of such
                  programs and files. The data processing and data storage
                  facilities of the Corporation are adequate and properly
                  protected.

                                       15
<PAGE>

6.       Covenants of the Corporation

The Corporation hereby covenants to and with the Agents (on its own behalf and
on behalf of the Purchasers) that:

         (a)      the Corporation will duly execute and deliver the Subscription
                  Agreements, the Warrant Indenture and the Compensation
                  Warrants at the Closing Time, and comply with and satisfy all
                  terms, conditions and covenants therein contained to be
                  complied with or satisfied by the Corporation;

         (b)      the Corporation will use its commercially reasonable best
                  efforts to maintain its status as a reporting issuer not in
                  default in each of Ontario, British Columbia, Alberta and
                  Quebec for a period of 36 months from the Closing Date;

         (c)      the Corporation will use its commercially reasonable best
                  efforts to maintain the listing of the Common Shares on the
                  Exchange to the date which is two years following the Closing
                  Date and to ensure that the Offered Shares and the Offered
                  Warrant Shares will be listed and posted for trading on the
                  Exchange upon their issue subject to satisfaction with the
                  continued listing requirements of the Exchange;

         (d)      other than as contemplated herein, the Corporation will not,
                  directly or indirectly, without the prior written consent of
                  GMP, issue, sell or grant any securities of the Corporation
                  for a period commencing on the date hereof and ending 90 days
                  thereafter nor shall the Corporation publicly announce during
                  such period the intention to do so, except for (i) the
                  issuance of Common Shares in connection with the exercise of
                  any currently outstanding stock options, warrants or other
                  convertible securities, (ii) the issuance of Offered Warrant
                  Shares pursuant to the exercise of any Offered Warrants; (iii)
                  the issuance of Compensation Warrant Shares pursuant to the
                  exercise of any Compensation Warrants; (iv) the issuance of
                  Broker Warrant Shares pursuant to the exercise of any Broker
                  Warrants; (v) the grant of stock options in the normal course
                  pursuant to the Corporation's stock option plan; or (vi) the
                  issuance to its landlord of up to 200,000 Common Shares and up
                  to 200,000 warrants to acquire Common Shares;

         (e)      in the event any person acting for the Corporation establishes
                  a claim from the Agents for any brokerage or agency fee in
                  connection with the transactions contemplated herein, the
                  Corporation shall indemnify and hold harmless the Agents with
                  respect thereto and with respect to all costs reasonably
                  incurred in the defence thereof provided that such claim is
                  not a result of the actions of the Agents;

         (f)      until the Time of Closing, at the request of the Agents, which
                  request shall not be unreasonably denied, the Corporation will
                  give to the Agents, the Agents' counsel and other authorized
                  representatives of the Agents, full access during normal
                  business hours to all locations where the business of the
                  Corporation is carried on

                                       16
<PAGE>

                  and to the properties, books, contracts, commitments and
                  records of the Corporation pertaining to its business (taken
                  as a whole);

         (g)      until the Time of Closing, subject to any applicable legal
                  restrictions, the Corporation shall furnish the Agents in
                  confidence with all information concerning the affairs of the
                  business of the Corporation as the Agents may reasonably
                  request; and

         (h)      the Corporation shall, as soon as practicable, use its
                  commercially reasonable best efforts to receive all necessary
                  consents to the transactions contemplated herein.

7.       Conditions to Closing

The following are conditions to the closing of the transactions involving the
issuance and sale of the Units contemplated hereby, which conditions the
Corporation covenants to exercise its reasonable best efforts to have fulfilled
on or prior to the Time of Closing and which conditions may be waived in writing
in whole or in part by the Agents:

         (a)      the Corporation will have made and/or obtained the necessary
                  filings, approvals, consents and acceptances of the
                  appropriate regulatory authorities required to be made or
                  obtained by the Corporation in connection with the sale of the
                  Units to the Purchasers prior to the Time of Closing on the
                  Closing Date as herein contemplated, it being understood that
                  the Agents shall do all that is reasonably required to assist
                  the Corporation to fulfil this condition;

         (b)      the Corporation will be a "qualifying issuer" in the Offering
                  Jurisdictions within the meaning of MI 45-102 at the Time of
                  Closing;

         (c)      the Corporation's board of directors shall have authorized and
                  approved the execution and delivery of this Agreement, the
                  acceptance of the Subscription Agreements, the allotment,
                  issuance and delivery of the Offered Shares, the creation and
                  issuance of the Offered Warrants and the Compensation
                  Warrants, the allotment, issuance and delivery of the Offered
                  Warrant Shares issuable upon the due exercise of the Offered
                  Warrants, the allotment, issuance and delivery of the
                  Compensation Warrant Shares issuable upon the due exercise of
                  the Compensation Warrants, the creation and issuance of the
                  Broker Warrants issuable upon the due exercise of the
                  Compensation Warrants, the allotment, issuance and delivery of
                  the Broker Warrant Shares issuable upon the due exercise of
                  the Broker Warrants, and all matters relating thereto;

         (d)      the Corporation shall have accepted one or more Subscription
                  Agreements with the Purchasers;

         (e)      the Agents shall have received an opinion, dated the Closing
                  Date, of the Corporation's counsel (it being understood that
                  such counsel may rely to the extent appropriate in the
                  circumstances, (i) as to matters of fact, on certificates of
                  the Corporation executed on its behalf by a senior officer of
                  the Corporation and

                                       17
<PAGE>

                  on certificates of Computershare Trust Company of Canada, the
                  registrar and transfer agent for the Offered Shares, as to the
                  issued capital of the Corporation; (ii) as to matters of fact
                  not independently established, on certificates of the
                  Corporation's auditor(s), and (iii) on the representations and
                  warranties of the Agents set out herein, which opinion shall,
                  as appropriate, include the following opinions:

                  (i)      the Corporation is a body corporate amalgamated under
                           the laws of British Columbia and has not been
                           discontinued or dissolved, and has all requisite
                           corporate power and capacity to carry on its business
                           to own or lease its assets and properties and to
                           carry out the provisions of this Agreement, the
                           Subscription Agreements, the Warrant Indenture and
                           the Compensation Warrants;

                  (ii)     an opinion as to the authorized and issued capital of
                           the Corporation;

                  (iii)    all requisite corporate actions have been taken by or
                           on behalf of the Corporation to authorize the
                           issuance and sale of the Units;

                  (iv)     the execution and delivery of this Agreement, the
                           Warrant Indenture, the Subscription Agreements and
                           the Compensation Warrants has been duly authorized
                           by, and has been executed and delivered on behalf and
                           is legally binding upon, the Corporation and is
                           enforceable in accordance with its terms, subject to
                           the usual qualifications;

                  (v)      the Offered Shares comprising the Units will have
                           been and the Offered Warrant Shares, Compensation
                           Warrant Shares and Broker Warrant Shares issuable
                           upon the due exercise of the Offered Warrants, the
                           Compensation Warrants and the Broker Warrants,
                           respectively, will be issued as fully paid and
                           non-assessable shares in the capital of the
                           Corporation;

                  (vi)     no documents need be filed, proceedings taken or
                           approvals, permits, consents or authorizations
                           obtained under the Applicable Securities Laws of the
                           Offering Jurisdictions and the rules, regulations and
                           policies thereunder to permit the offer and sale of
                           the Units in the Offering Jurisdictions and the
                           issuance of the Compensation Warrants, other than
                           applicable reports of trade and a report on Form
                           45-102F2 pursuant to MI 45-102 with the applicable
                           securities regulatory authorities in each of the
                           Offering Jurisdictions;

                  (vii)    the first trade of the Offered Shares, the Offered
                           Warrants, the Offered Warrant Shares, the
                           Compensation Warrants, the Compensation Warrant
                           Shares, the Broker Warrants or the Broker Warrant
                           Shares, other than a trade that is otherwise exempted
                           by the Securities Laws, will be subject to the
                           prospectus and registration requirements of the
                           Securities Laws unless:

                                       18
<PAGE>

                           (A)      the Corporation is and has been a "reporting
                                    issuer" in one of the Offering Jurisdictions
                                    for at least four months (determined in
                                    accordance with section 2.9 of the
                                    Multilateral Instrument) immediately
                                    preceding such trade;

                           (B)      at least four months have elapsed from the
                                    distribution date of the Units or the
                                    Compensation Warrants, as applicable;

                           (C)      such trade is not a "control distribution"
                                    as defined in the Multilateral Instrument;

                           (D)      no unusual effort is made to prepare the
                                    market or to create a demand for such
                                    securities;

                           (E)      no extraordinary commission or other
                                    consideration is paid in respect of the
                                    trade;

                           (F)      certificates representing the Offered
                                    Shares, the Offered Warrants, the Offered
                                    Warrant Shares (if issued on or before that
                                    date which is four months from the Closing
                                    Date), the Compensation Warrants, the
                                    Compensation Warrant Shares (if issued on or
                                    before that date which is four months from
                                    the Closing Date), the Broker Warrants (if
                                    issued on or before that date which is four
                                    months from the Closing Date), and the
                                    Broker Warrant Shares (if issued on or
                                    before that date which is four months from
                                    the Closing Date), were issued with a legend
                                    stating the prescribed restricted period in
                                    accordance with section 2.5 of the
                                    Multilateral Instrument; and

                           (G)      if the selling security holder is an insider
                                    or officer of the Corporation, the selling
                                    security holder has no reasonable grounds to
                                    believe that the Corporation is in default
                                    of any applicable securities legislation.

                  (viii)   the execution and delivery of this Agreement, the
                           Warrant Indenture, the Subscription Agreements, the
                           Compensation Warrants and the fulfilment of the terms
                           hereof, do not and will not result in a breach of, do
                           not create a state of facts which after notice or
                           lapse of time or both will result in a breach of, and
                           do not and will not conflict with, any of the terms,
                           conditions or provisions of the constating documents
                           of the Corporation;

                  (ix)     the Exchange has approved the listing and posting for
                           trading of all of the Common Shares comprising the
                           Offered Shares, the Offered Warrant Shares,

                                       19
<PAGE>

                           the Compensation Warrant Shares and the Broker
                           Warrant Shares, subject to the satisfaction of the
                           conditions set out in its conditional listing letter;
                           and

                  (x)      such other opinions as may be reasonably requested by
                           the Agents.

         (f)      the Agents shall have received an Incumbency Certificate dated
                  the Closing Date including specimen signatures of the
                  President, the Chief Financial Officer and any other officer
                  of the Corporation signing this Agreement or any document
                  delivered hereunder;

         (g)      the Agents shall have received a certificate, dated the
                  Closing Date, of the President and the Chief Financial Officer
                  of the Corporation (or such other officer or officers of the
                  Corporation acceptable to the Agents, acting reasonably),
                  addressed to the Agents and their counsel to the effect that,
                  to the their knowledge, information and belief, after due
                  enquiry and without personal liability:

                  (i)      the representations and warranties of the Corporation
                           in this Agreement are true and correct in all
                           material respects as if made at and as of the Time of
                           Closing and the Corporation has performed all
                           covenants and agreements and satisfied all conditions
                           on its part to be performed or satisfied in all
                           material respects at or prior to the Time of Closing;

                  (ii)     no order, ruling or determination having the effect
                           of suspending the sale or ceasing, suspending or
                           restricting the trading of Common Shares in any of
                           the Offering Jurisdictions has been issued or made by
                           any stock exchange, securities commission or
                           regulatory authority and is continuing in effect and
                           no proceedings, investigations or enquiries for that
                           purpose have been instituted or are pending;

                  (iii)    the articles and by-laws of the Corporation attached
                           to the certificate are full, true and correct copies,
                           unamended, and in effect on the date thereof;

                  (iv)     the minutes or other records of various proceedings
                           and actions of the Corporation's Board of Directors
                           attached to the certificate relating to the Offering
                           are full, true and correct copies thereof and have
                           not been modified or rescinded as of the date
                           thereof; and

                  (v)      since the date of the Letter Agreement, other than as
                           disclosed in the Disclosure Documents, there has been
                           no material adverse change in the business, affairs,
                           operations, assets, liabilities or capital of the
                           Corporation and the Subsidiaries taken as a whole.

         (h)      the Offered Shares and the Offered Warrant Shares shall have
                  been approved for listing on the Exchange, subject only to the
                  official notices of issuance and fulfilment of such other
                  conditions of the Exchange as set out in the conditional
                  listing letter;

                                       20
<PAGE>

         (i)      the Agents shall have conducted all due diligence inquiries
                  and investigations to its satisfaction, acting reasonably;

         (j)      the Agents shall have received a certificate, issued under
                  applicable provisions of the securities laws of Ontario,
                  British Columbia and Alberta stating that the Corporation is
                  not in default under the Applicable Securities Laws of
                  Ontario;

         (k)      the Agents shall have received evidence that the Corporation
                  has been deemed a reporting issuer in the Province of Quebec;

         (l)      [INTENTIONALLY DELETED]; and

         (m)      if any of the Purchasers is subject to the U.S. Securities
                  Act, the Agent shall have received an opinion from U.S.
                  counsel for the Corporation, dated as of the Closing Date, in
                  form and substance satisfactory to the Agent, acting
                  reasonably, to the effect that registration of the Units and
                  the underlying securities will not be required under the U.S.
                  Securities Act.

It is understood that the Agents may waive in whole or in part or extend the
time for compliance with any of such terms and conditions without prejudice to
its rights in respect of any other of the foregoing terms and conditions or any
other or subsequent breach or non-compliance, provided that to be binding on the
Agents any such waiver or extension must be in writing and signed by it.

The Corporation agrees that the aforesaid legal opinions and certificate to be
delivered at the Time of Closing will also be addressed to the Purchasers and
that the Agents may deliver copies thereof to the Purchasers.

8.       Termination of Obligations

If at any time before the Time of Closing on the Closing Date:

         (a)      there shall have occurred any material adverse change (actual,
                  intended, anticipated or threatened) in or affecting the
                  business, affairs, operations, prospects, assets, liabilities,
                  capital or control of the Corporation or the Subsidiaries,
                  taken as a whole, which, in the opinion of either of the
                  Agents, prevents or restricts trading in or the distribution
                  of the Common Shares or adversely affects or would reasonably
                  be expected to adversely affect the market price or value of
                  the Common Shares;

         (b)      there shall have occurred any change in the applicable
                  securities laws of any province of Canada or any inquiry,
                  investigation or other proceeding is made or any order is
                  issued under or pursuant to any statute of Canada or any
                  province thereof or any statute of the United States or any
                  state thereof or any stock exchange in relation to the
                  Corporation or any of its securities (except for any

                                       21
<PAGE>

                  inquiry, investigation or other proceeding based upon
                  activities of the Agents and not upon activities of the
                  Corporation) which, in the opinion of either of the Agents,
                  prevents or restricts trading in or the distribution of the
                  Common Shares or adversely affects or would reasonably be
                  expected to adversely affect the market price or value of the
                  Common Shares;

         (c)      if there should develop, occur or come into effect or
                  existence any event, action, state, condition or major
                  financial occurrence or catastrophe of national or
                  international consequence or any law or regulation which, in
                  the opinion of either of the Agents, seriously adversely
                  affects or involves, or will seriously adversely affect or
                  involve, the financial markets or the business, operations or
                  affairs of the Corporation and the Subsidiaries, taken as a
                  whole;

         (d)      a cease trading order is made by any Securities Commission or
                  other competent authority by reason of the fault of the
                  Corporation or its respective directors, officers and Agents
                  and such cease trading order is not rescinded within 48 hours;

         (e)      any enquiry, investigation or proceeding (whether formal or
                  informal) in relation to the Corporation, any of its assets or
                  undertaking, or any of the Corporation's directors or
                  officers, or in relation, directly or indirectly, to the
                  Offering is commenced or threatened by any regulatory
                  authority or other body having jurisdiction, whether inside or
                  outside of Canada, and whether in connection with a
                  "securities offence" or any other offence of whatsoever
                  nature, or any charge is laid pursuant thereto, which
                  materially adversely affects or may reasonably be expected to
                  so affect the business or prospects of the Corporation or the
                  marketability of the Units, unless such order, enquiry,
                  investigation or proceeding is solely attributable to the
                  actions of the Agents; or

         (f)      the Corporation is in material breach of a material term,
                  conditions or covenant of this Agreement which has not been
                  cured,

the obligations of the Agents contained in this Agreement may be terminated by
the Agents in their sole discretion.

Any termination pursuant to the foregoing provisions shall be effected by notice
in writing delivered by the Agents to the Corporation at its address as herein
set out. Notwithstanding the giving of any notice of termination hereunder, the
expenses agreed to be paid by the Corporation shall be paid by the Corporation
as herein provided and the obligations of the Corporation under sections 10, 11
and 12 hereof shall survive. The right of the Agents to terminate this Agreement
shall be exercised by them in their sole discretion.

In the event of a termination pursuant to and in accordance with the provisions
hereof and notice having been given, as aforesaid, there will be no further
liability on the part of the Agents under this Agreement. The rights of the
Agents to terminate its obligations hereunder are in addition to, and without
prejudice to, any other remedies they may have.

                                       22
<PAGE>

9.       CLOSING

The sale of Units (the "CLOSING") will be completed at the offices of McCarthy
Tetrault LLP, Vancouver, British Columbia, or such other place or places as may
be agreed upon by the Corporation and the Agents, at the Time of Closing on the
Closing Date, provided that if the Corporation has not been able to comply with
any of the conditions to closing set forth under "Conditions to Closing" prior
to the Time of Closing on the Closing Date, the Closing Date may be extended by
mutual agreement of the Corporation and the Agents, failing which, the
respective obligations of the parties will terminate without further liability
or obligation except as set out under sections 10, 11 and 12 hereof.

At the Time of Closing, the Corporation shall deliver to the Agents:

         (a)      certificates, duly registered as the Agents may direct,
                  representing the Offered Shares and Offered Warrants purchased
                  other than to Ventures West 7 Limited Partnership, Ventures
                  West 7 U.S. Limited Partnership and directors, employees and
                  officers of the Corporation to whom Units were sold;

         (b)      certificates, duly registered as the Agents may direct,
                  representing the Compensation Warrants;

         (c)      the requisite legal opinions and certificates as contemplated
                  in Section 8 hereof;

         (d)      a direction addressed to the Agents directing the Agents to
                  pay the Gross Proceeds less the Agency Fees and expenses; and

         (e)      such further documentation as may be contemplated herein,

against payment of the purchase price for the Units by certified cheque or bank
draft to the Corporation as contemplated herein.

All representations and warranties contained herein and all of the covenants and
agreements of the Corporation herein, to the extent that they are required to be
performed on or before Closing, shall be construed as conditions and any breach
or failure to comply with any thereof shall entitle the Agents, at its option,
in addition to and not in lieu of any other remedies the Agents has in respect
thereof, to terminate and cancel their obligations hereunder by written notice
to that effect given to the Corporation prior to the Time of Closing on the
Closing Date. It is understood that the Agents may waive in whole or in part or
extend the time for compliance with any of such terms and conditions without
prejudice to its rights in respect of any other of such terms and conditions or
any other or subsequent breach or non-compliance, provided that to be binding on
the Agents any such waiver or extension must be in writing and signed by the
Agents.

10.      Expenses

Whether or not Closing occurs, the Corporation shall pay all costs and expenses
of or incidental to the Offering, including, without limitation, the costs and
filing fees with respect to the private placement of the Units, the listing of
the Offered Shares, the Offered Warrant Shares, the

                                       23
<PAGE>

Compensation Warrant Shares, and the Broker Warrant Shares on the Exchange, the
cost of printing the certificates representing the Offered Shares, the Offered
Warrants, the Offered Warrant Shares, the Compensation Warrants, the
Compensation Warrant Shares, the Broker Warrants and the Broker Warrant Shares,
the cost of registration and delivery of such certificates, and the fees and
expenses of each of the Corporation's auditors, counsel and local counsel. The
Corporation shall also pay the Agents' counsel with regard to its reasonable
fees, disbursements and taxes thereon, including G.S.T. All fees and expenses of
the Agents (such fees not to exceed $40,000 excluding disbursements and G.S.T.)
shall be payable by the Corporation upon the closing of the Offering or upon the
Corporation receiving an invoice from the Agents and shall be payable by the
Corporation whether or not the Offering is completed.

11.      Indemnity

The Corporation covenants and agrees to indemnify and save harmless each of the
Agents and their respective directors, officers, employees, shareholders and
Agents (collectively, the "AGENTS' PERSONNEL"), against all losses (other than
loss of profits), claims, damages, liabilities, costs or expenses, whether joint
or several, caused or incurred by reason of or in connection with the
transactions contemplated hereby including, without limitation, the following:

         (a)      any statement (other than a statement contained in and
                  included in reliance upon and in conformity with written
                  information furnished to the Corporation by the Agents
                  relating to the Agents specifically for use therein) in any
                  document delivered by or on behalf of the Corporation to the
                  Agents pursuant to this Agreement, which at the time and in
                  the light of the circumstances under which it was made
                  contains or is alleged to contain a misrepresentation;

         (b)      the omission or alleged omission to state in any certificate
                  of the Corporation or of any officers of the Corporation
                  delivered hereunder or pursuant hereto any material fact
                  (other than a material fact omitted in reliance upon and in
                  conformity with written information furnished to the
                  Corporation by the Agents relating to the Agents specifically
                  for use therein) required to be stated therein where such
                  omission or alleged omission constitutes or is alleged to
                  constitute a misrepresentation;

         (c)      any order made or in any inquiry, investigation or proceeding
                  commenced or threatened by any securities regulatory
                  authority, stock exchange or by any other competent authority
                  based upon any failure or alleged failure to comply with
                  Applicable Securities Laws (other than any failure or alleged
                  failure to comply by the Agents) preventing and restricting
                  the trading in or the sale of the Common Shares in the
                  provinces of Canada;

         (d)      the non-compliance or alleged non-compliance by the
                  Corporation with any requirement of Applicable Securities
                  Laws, including the Corporation's non-compliance with any
                  statutory requirement to make any document available for
                  inspection; or

                                       24
<PAGE>

         (e)      any breach of any representation, warranty or covenant of the
                  Corporation contained herein or the failure of the Corporation
                  to comply with any of its obligations hereunder.

The Corporation shall not, without the prior written consent of the Agents,
which shall not be unreasonably withheld, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action, suit or
proceeding in respect of which indemnification may be sought hereunder (whether
or not the Agents or any Agents' Personnel are a party to such claim, action,
suit or proceeding), unless such settlement, compromise or consent includes an
unconditional release of the Agents and each Agents' Personnel from all
liability arising out of such claim, action, suit or proceeding.

Notwithstanding the foregoing, an indemnifying party shall not be liable for the
settlement of any claim or action in respect of which indemnity may be sought
hereunder effected without its written consent, which consent shall not be
unreasonably withheld.

If any matter or thing contemplated by this paragraph shall be asserted against
any person in respect of which indemnification is or might reasonably be
considered to be provided, such person (the "INDEMNIFIED PARTY") will notify the
Corporation as soon as possible and in any event on a timely basis, of the
nature of such claim and the Corporation shall be entitled (but not required) to
assume the defence of any suit brought to enforce such claim; provided, however,
that the defence shall be through legal counsel acceptable to the Indemnified
Party, acting reasonably, and that no settlement may be made by the Corporation
or the Indemnified Party without the prior written consent of the other acting
reasonably.

In any such claim, the Indemnified Party shall have the right to retain other
counsel to act on the Indemnified Party's behalf, provided that the fees and
disbursements of such other counsel shall be paid by the Indemnified Party,
unless (i) the Corporation and the Indemnified Party mutually agree to retain
such other counsel or (ii) the named parties to any such claim (including any
third or implicated party) include both the Indemnified Party on the one hand
and the Corporation, on the other hand, and the representation of the
Corporation and the Indemnified Party by the same counsel would be inappropriate
due to actual or potential conflicting interests, in which event such fees and
disbursements shall be paid by the Corporation to the extent that they have been
reasonably incurred.

To the extent that any Indemnified Party is not a party to this Agreement, the
Agents shall obtain and hold the right and benefit of the indemnity provisions
hereunder in trust for and on behalf of such Indemnified Party.

The indemnity provided for in this Agreement shall not apply to the extent that
a court of competent jurisdiction in a final judgment that has become
non-appealable shall determine that: (i) the Agents or the Agents' Personnel
have been negligent or dishonest or have committed any fraudulent act in the
course of the performance of their duties or have breached any of their legal
obligations; and (ii) the expenses, losses, claims, damages or liabilities, as
to which indemnification is claimed, were directly caused by the negligence,
dishonesty or fraud referred in clause (i) of this paragraph.

                                       25
<PAGE>

12.      Contribution

In the event that the indemnity provided for above is, for any reason, illegal
or unenforceable as being contrary to public policy or for any other reason, the
Agents and the Corporation shall contribute to the aggregate of all losses,
claims, costs, damages, expenses or liabilities (including any legal or other
expenses reasonably incurred by the Indemnified Party in connection with
investigating or defending any action or claim which is the subject of this
section but excluding loss of profits or consequential damages) of the nature
provided for above such that the Agents shall be responsible for that portion
represented by the percentage that the Agency Fee paid by the Corporation to the
Agents bears to the Gross Proceeds realized from the sale of the Units and the
Corporation shall be responsible for the balance, whether or not it has been
sued, provided that, in no event, shall the Agents be responsible for any amount
in excess of the amount of the Agency Fee actually received by it. In the event
that the Corporation may be held to be entitled to contribution from the Agents
under the provisions of any statute or law, the Corporation shall be limited to
contribution in an amount not exceeding the lesser of: (i) the portion of the
full amount of losses, claims, costs, damages, expenses and liabilities, giving
rise to such contribution for which the Agents are responsible, as determined
above, and (ii) the amount of the Agency Fee actually received by the Agents.
Notwithstanding the foregoing, a party guilty of fraudulent misrepresentation
shall not be entitled to contribution from the other party. Any party entitled
to contribution will, promptly after receiving notice of commencement of any
claim, action, suit or proceeding against such party in respect of which a claim
for contribution may be made against the other party under this section, notify
such party from whom contribution may be sought. In no case shall such party
from whom contribution may be sought be liable under this Agreement unless such
notice has been provided, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any other obligation
it may have otherwise than under this section.

The rights to indemnity and contribution provided in this Agreement shall be in
addition and not in derogation of any other right to indemnity or contribution
which the Agents or the Corporation may have by statute or otherwise by law.

13.      AGENTS' OBLIGATIONS

The Agents' obligations under this Agreement shall be several and not joint, and
the Agents' respective obligations and rights and benefits hereunder shall be as
to the following percentages:

         GMP Securities Ltd.                -        90%
         Dlouhy Merchant Group Inc.         -        10%

14.      Notice

Any notice or other communication to be given by delivery or by telecopier
hereunder shall, in the case of notice to the Corporation, be addressed to the
Corporation at the address appearing on page 1 of this Agreement, Attention: Mr.
Pascal Spothelfer, President and Chief Executive Officer, Telecopier No. (604)
421-1764, and in the case of notice to the Agents:

                                       26
<PAGE>

                               GMP Securities Ltd.
                              145 King Street West
                                   Suite 1100
                                Toronto, Ontario
                                     M5H 1J8

                            Attention: Lorne Sugarman
                         Telecopier No.: (416) 943-6160

                                       and

                           Dlouhy Merchant Group Inc.
                     1350 Sherbrooke Street West, Suite 1200
                                  Montreal, QC
                                     H3G 1J1

                            Attention: William Murray
                         Telecopier No.: (514) 845-4437

and if so given, shall be deemed to have been given and received upon receipt by
the addressee or a responsible officer of the addressee if delivered, or one
hour after being telecopied and receipt confirmed during normal business hours,
as the case may be. Any party may, at any time, give notice in writing to the
others in the manner provided for above of any change of address or telecopier
number.

15.      Time of the Essence

Time shall be of the essence of this Agreement and every part hereof.

16.      Assignment

Except as contemplated herein, no party hereto may assign this Agreement or any
part hereof without the prior written consent of the other parties hereto.
Subject to the foregoing, this agreement shall enure to the benefit of, and
shall be binding upon, the Corporation and the Agents and their respective
successors and legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person any legal
or equitable right, remedy or claim under or in respect of this Agreement, or
any provisions contained in this Agreement, this Agreement and all conditions
and provisions of this Agreement being intended to be and being for the sole and
exclusive benefit of such persons and for the benefit of no other person except
that the covenants and indemnities of the Corporation set out under the headings
"Indemnity" and "Contribution" shall also be for the benefit of the Agents'
Personnel.

                                       27
<PAGE>

17.      Counterpart Provision

This Agreement may be executed in any number of counterparts, each of which when
delivered shall be deemed to be an original and all of which together shall
constitute one and the same document.

17.      Entire Agreement

The provisions herein contained constitute the entire agreement between the
parties relating to the Offering and supersede all previous communications,
representations, understandings and agreements between the parties including,
but not limited to, the Letter Agreement, with respect to the subject matter
hereof whether verbal or written.

18.      Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the Province of British Columbia and the federal laws of Canada applicable
therein.

19.      Survival of Warranties, Representations, Covenants and Agreements

All warranties, representations, covenants, indemnities and agreements of the
Corporation herein contained or contained in documents submitted or required to
be submitted pursuant to this Agreement shall survive the purchase by the
Purchasers of the Units and shall continue in full force and effect for the
benefit of the Agents and the Purchasers for a period of two (2) years from the
Closing Date, regardless of any investigation which the Agents or the Purchasers
may carry on or which may be carried on behalf of the Agents or the Purchasers,
provided that no proceeding to which the Limitations Act 2002 (Ontario) applies,
shall be commenced in respect of any claim arising under or in connection with
this Agreement after the last date on which such proceeding may be commenced
pursuant to such Act.

20.      Language

The parties hereto confirm their express wish that this agreement and all
documents and agreements directly or indirectly relating thereto be drawn up in
the English language.

Les parties reconnaissent leur volonte express que la presente convention ainsi
que tous les documents et contrats s'y rattachant directement ou indirectement
soient rediges en anglais.

                                       28
<PAGE>

21.      Facsimile

The Corporation and the Agents shall be entitled to rely on delivery by
facsimile of an executed copy of this Agreement and acceptance by the
Corporation and the Agents of that delivery shall be legally effective to create
a valid and binding agreement between the Corporation and the Agents in
accordance with the terms of this Agreement.

                     [REST OF PAGE LEFT INTENTIONALLY BLANK]

                                       29
<PAGE>

22.      Acceptance

If this letter accurately reflects the terms of the transaction which we are to
enter into and if such terms are agreed to by the Corporation, please
communicate acceptance by executing where indicated below and returning a signed
copy of this Agreement to the Agents.

Yours very truly,

GMP SECURITIES LTD.

Per: /s/ Andrew Kiguel
     ---------------------------------------------

DLOUHY MERCHANT GROUP INC.

Per: /s/ William Murray
     ---------------------------------------------

The foregoing accurately reflects the terms of the transaction which we are to
enter into and such terms are agreed to with effect as of the date provided at
the top of the first page of this Agreement.

SPECTRUM SIGNAL PROCESSING INC.

Per: /s/ Pascal Spothelfer
     ---------------------------------------------
     Pascal Spothelfer
     President and Chief Executive Officer

                                       30
<PAGE>

                                  SCHEDULE "A"

                  OPTIONS, WARRANTS AND CONVERTIBLE SECURITIES

Total number of stock options granted and currently held
by staff, directors and consultants as at March 23, 2004      3,741,307

<PAGE>

                                  SCHEDULE "B"

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THE SECURITIES
REPRESENTED HEREBY SHALL NOT TRADE THE SECURITIES BEFORE JULY 24, 2004.

THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933 (THE "1933 ACT"), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (i) AS PART OF
THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40 DAYS AFTER THE LATER
OF THE COMMENCEMENT OF THE OFFERING AND CLOSING DATE, EXCEPT IN EITHER CASE IN
ACCORDANCE WITH REGULATION S UNDER THE 1933 ACT. TERMS USED HEREIN HAVE THE
MEANINGS GIVEN TO THEM IN REGULATION S.

THE BROKER'S WARRANTS EVIDENCED HEREBY ARE EXERCISABLE ON OR BEFORE 5:00 P.M.
(TORONTO TIME) ON MARCH 23, 2005, AFTER WHICH TIME THE BROKER'S WARRANTS
EVIDENCED HEREBY SHALL BE DEEMED TO BE VOID AND OF NO FURTHER FORCE OR EFFECT.

               COMPENSATION WARRANTS TO PURCHASE UP TO - UNITS OF

                         SPECTRUM SIGNAL PROCESSING INC.
                  (EXISTING UNDER THE LAWS OF BRITISH COLUMBIA)

                                   VOID AFTER
                                 MARCH 23, 2005

         THIS CERTIFIES that, for value received, - (the "HOLDER"), is the
registered holder of - compensation warrants (the "COMPENSATION WARRANTS") each
of which entitle the holder, subject to the terms and conditions set forth in
this Compensation Warrant Certificate, to purchase from Spectrum Signal
Processing Inc. (the "Corporation"), one unit (a "UNIT"), at any time until 5:00
p.m. (Toronto time) on March 23, 2005, at which time this Compensation Warrant
shall become wholly void and the unexercised portion of the subscription right
represented hereby will expire and terminate (the "TIME OF EXPIRY") on payment
of $1.50 per unit (the "EXERCISE PRICE"). Each Unit shall consist of one common
share in the capital of the Corporation (a "COMPENSATION WARRANT SHARE") and
one-half of one Common Share purchase warrant. Each whole warrant (a "BROKER
WARRANT") is exercisable at any time until that date which is 18 months
following the date hereof for one common share in the capital of the Corporation
(a "BROKER WARRANT SHARE") at an exercise price of $1.50 per share. The number
of Compensation Warrant Shares which the Holder is entitled to acquire upon
exercise of the Compensation Warrants and the Exercise Price are subject to
adjustment as hereinafter provided.

1.       EXERCISE OF COMPENSATION WARRANTS

<PAGE>

         (a)      Election to Purchase. The rights evidenced by this certificate
                  may be exercised by the Holder in whole or in part and in
                  accordance with the provisions hereof by delivery of an
                  Election to Purchase in substantially the form attached hereto
                  as Schedule 1, properly completed and executed, together with
                  payment by certified cheque or bank draft of the Exercise
                  Price for the number of Units specified in the Election to
                  Purchase at the office of the Corporation at One Spectrum
                  Court, 200 - 2700 Production Way, Burnaby, British Columbia
                  V5A 4X1, or such other address in Canada as may be notified in
                  writing by the Corporation (the "Corporation Office"). The
                  election to purchase must be executed outside the United
                  States. In the event that the rights evidenced by this
                  certificate are exercised in part, the Corporation shall,
                  contemporaneously with the issuance of the Units issuable on
                  the exercise of the Compensation Warrants so exercised, issue
                  to the Holder a Compensation Warrant Certificate on identical
                  terms in respect of that number of Units in respect of which
                  the Holder has not exercised the rights evidenced by this
                  certificate.

         (b)      Exercise. The Corporation shall, within three business days
                  after receiving a duly executed Election to Purchase and the
                  Exercise Price for the number of Units specified in the
                  Election to Purchase (the "EXERCISE DATE"), issue that number
                  of Units specified in the Election to Purchase.

         (c)      Certificates. As promptly as practicable after the Exercise
                  Date, the Corporation shall issue and deliver to the Holder,
                  registered in such name or names as the Holder may direct or
                  if no such direction has been given, in the name of the
                  Holder, a certificate or certificates for the number of
                  Compensation Warrant Shares and Broker Warrants specified in
                  the Election to Purchase. To the extent permitted by law, such
                  exercise shall be deemed to have been effected as of the close
                  of business on the Exercise Date, and at such time the rights
                  of the Holder with respect to the number of Compensation
                  Warrants which have been exercised as such shall cease, and
                  the person or persons in whose name or names any certificate
                  or certificates for Compensation Warrant Shares and Broker
                  Warrants shall then be issuable upon such exercise shall be
                  deemed to have become the holder or holders of record of the
                  Compensation Warrant Shares and Broker Warrants represented
                  thereby.

         (d)      Fractional Units. No fractional Units shall be issued upon
                  exercise of this Compensation Warrant and the Agent will not
                  be entitled to any cash payment or compensation in lieu of a
                  fractional Unit.

         (e)      Corporate Changes.

                  (i)      Subject to paragraph 1(e)(ii) hereof, if, after March
                           23, 2004 and prior to the Time of Expiry, the
                           Corporation shall be a party to any reorganization,
                           merger, dissolution or sale of all or substantially
                           all of its assets, whether or not the Corporation is
                           the surviving entity, the Compensation Warrants
                           evidenced by this certificate shall be adjusted so
                           that the holder hereof

                                       2
<PAGE>

                           shall be entitled to acquire the same number and type
                           of securities to which the holder of that number of
                           Compensation Warrant Shares of the Corporation
                           subject to the unexercised Compensation Warrants
                           would have been entitled by reason of such
                           reorganization, merger, dissolution or sale of all or
                           substantially all of its assets (the "EVENT"), and
                           the Exercise Price shall be adjusted to be the amount
                           determined by multiplying the Exercise Price in
                           effect immediately prior to the Event by the number
                           of Compensation Warrant Shares subject to the
                           unexercised Compensation Warrants immediately prior
                           to the Event, and dividing the product thereof by the
                           number of securities to which the holder of that
                           number of Compensation Warrant Shares subject to the
                           unexercised Compensation Warrants would have been
                           entitled to by reason of such Event.

                  (ii)     If the Corporation is unable to deliver securities to
                           the Holder pursuant to the proper exercise of a
                           Compensation Warrant, the Corporation may satisfy
                           such obligations to the Holder hereunder by paying to
                           the Holder in cash the difference between the
                           Exercise Price of all unexercised Compensation
                           Warrants granted hereunder and the Fair Market Value
                           of the securities to which the Holder would be
                           entitled to upon exercise of all unexercised
                           Compensation Warrants. Adjustments under this
                           subparagraph (e) or (subject to subparagraph (o)) any
                           determinations as to the Fair Market Value of any
                           securities shall be made by the board of directors of
                           the Corporation, or any committee thereof
                           specifically designated by the board of directors to
                           be responsible therefor, and any reasonable
                           determination made by such board or committee thereof
                           shall be binding and conclusive, subject only to any
                           disputes being resolved by the Corporation's
                           auditors, whose determination shall be binding and
                           conclusive.

         (f)      Subdivision or Consolidation of Common Shares.

                  (i)      In the event that, after March 23, 2004 and prior to
                           the Time of Expiry, the Corporation shall subdivide
                           its outstanding common shares ("COMMON SHARES") into
                           a greater number of shares, the Exercise Price in
                           effect immediately prior to such subdivision shall be
                           proportionately reduced, and conversely, in case the
                           outstanding Common Shares shall be consolidated into
                           a smaller number of shares, the Exercise Price in
                           effect immediately prior to such consolidation shall
                           be proportionately increased.

                  (ii)     Upon each adjustment of the Exercise Price as
                           provided herein, the Holder shall thereafter be
                           entitled to acquire, at the Exercise Price resulting
                           from such adjustment, the number of Compensation
                           Warrant Shares (calculated to the nearest tenth of a
                           Compensation Warrant Share) obtained by multiplying
                           the Exercise Price in effect immediately prior to
                           such adjustment by the number of Compensation Warrant
                           Shares which may be

                                       3
<PAGE>

                           acquired hereunder immediately prior to such
                           adjustment and dividing the product thereof by the
                           Exercise Price resulting from such adjustment.

         (g)      Change or Reclassification of Common Shares. In the event
                  that, after March 23, 2004 and prior to the Time of Expiry,
                  the Corporation shall change or reclassify its outstanding
                  Common Shares into a different class of securities, the rights
                  evidenced by the Compensation Warrants shall be adjusted as
                  follows so as to apply to the successor class of securities:

                  (i)      the number of the successor class of securities which
                           the Holder shall be entitled to acquire as part of
                           the Units shall be that number of the successor class
                           of securities which a holder of that number of
                           Compensation Warrant Shares subject to the
                           unexercised Compensation Warrants immediately prior
                           to the change or reclassification would have been
                           entitled to by reason of such change or
                           reclassification; and

                  (ii)     the Exercise Price shall be determined by multiplying
                           the Exercise Price in effect immediately prior to the
                           change or reclassification by the number of
                           Compensation Warrant Shares subject to the
                           unexercised Compensation Warrants immediately prior
                           to the change or reclassification, and dividing the
                           product thereof by the number of shares determined in
                           paragraph 1(g)(i) hereof.

         (h)      Offering to Shareholders. If and whenever at any time after
                  March 23, 2004 and prior to the Time of Expiry, the
                  Corporation shall fix a record date or if a date of
                  entitlement to receive is otherwise established (any such date
                  being hereinafter referred to in this subsection 1(h) as the
                  "record date") for the issuance of rights, options or warrants
                  to all or substantially all the holders of the outstanding
                  Common Shares entitling them, for a period expiring not more
                  than 45 days after such record date, to subscribe for or
                  purchase Common Shares or securities convertible into or
                  exchangeable for Common Shares at a price per share or, as the
                  case may be, having a conversion or exchange price per share
                  less than 95% of the Fair Market Value (as hereinafter
                  defined) on such record date, the Exercise Price shall be
                  adjusted immediately after such record date so that it shall
                  equal the price determined by multiplying the Exercise Price
                  in effect on such record date by a fraction, of which the
                  numerator shall be the total number of Common Shares
                  outstanding on such record date plus a number equal to the
                  number arrived at by dividing the aggregate subscription or
                  purchase price of the total number of additional Common Shares
                  offered for subscription or purchase or, as the case may be,
                  the aggregate conversion or exchange price of the convertible
                  or exchangeable securities so offered by such Fair Market
                  Value, and of which the denominator shall be the total number
                  of Common Shares outstanding on such record date plus the
                  total number of additional Common Shares so offered (or into
                  which the convertible or exchangeable securities so offered
                  are convertible or exchangeable); Common Shares owned by or
                  held for the account of the Corporation or any subsidiary of
                  the Corporation shall be deemed not to be

                                       4
<PAGE>

                  outstanding for the purpose of any such computation; such
                  adjustment shall be made successively whenever such a record
                  date is fixed; to the extent that any rights or warrants are
                  not so issued or any such rights or warrants are not exercised
                  prior to the expiration thereof, the Exercise Price shall then
                  be readjusted to the Exercise Price which would then be in
                  effect if such record date had not been fixed or to the
                  Exercise Price which would then be in effect based upon the
                  number of Common Shares or conversion or exchange rights
                  contained in convertible or exchangeable securities actually
                  issued upon the exercise of such rights or warrants, as the
                  case may be. In any case in which this section requires that
                  an adjustment be made to the Exercise Price, no such
                  adjustment shall be made if the Holder of the outstanding
                  Compensation Warrants receives the rights, options or warrants
                  referred to in this section in such kind and number as the
                  Holder would have received if the Holder had been a holder of
                  Common Shares on the applicable record date by virtue of the
                  Holder's outstanding Compensation Warrants having then been
                  exercised into Compensation Warrant Shares at the Exercise
                  Price in effect on the applicable record date or effective
                  date, as the case may be. Any such issuance of share, rights,
                  options, or warrants will be subject to regulatory approval.

         (i)      Carry Over of Adjustments. No adjustment of the Exercise Price
                  shall be made if the amount of such adjustment shall be less
                  than 1% of the Exercise Price in effect immediately prior to
                  the event giving rise to the adjustment, provided, however,
                  that in such case any adjustment that would otherwise be
                  required then to be made shall be carried forward and shall be
                  made at the time of and together with the next subsequent
                  adjustment which, together with any adjustment so carried
                  forward, shall amount to at least 1% of the Exercise Price.

         (j)      Notice of Adjustment. Upon any adjustment of the number of
                  Compensation Warrant Shares and upon any adjustment of the
                  Exercise Price, then and in each such case the Corporation
                  shall give written notice thereof to the Holder, which notice
                  shall state the Exercise Price and the number of Compensation
                  Warrant Shares and Broker Warrants or other securities subject
                  to the unexercised Compensation Warrants resulting from such
                  adjustment, and shall set forth in reasonable detail the
                  method of calculation and the facts upon which such
                  calculation is based. Upon the request of the Holder there
                  shall be transmitted promptly to the Holder a statement of the
                  firm of independent chartered accountants retained to audit
                  the financial statements of the Corporation to the effect that
                  such firm concurs in the Corporation's calculation of the
                  change.

         (k)      Other Notices. In case at any time after March 23, 2004 and
                  prior to the Time of Expiry:

                  (i)      the Corporation shall declare any dividend upon its
                           Common Shares payable in Common Shares;

                                       5
<PAGE>

                  (ii)     the Corporation shall offer for subscription pro rata
                           to the holders of its Common Shares any additional
                           shares of any class or other rights;

                  (iii)    there shall be any capital reorganization or
                           reclassification of the capital stock of the
                           Corporation, or consolidation, amalgamation or merger
                           of the Corporation with, or sale of all or
                           substantially all of its assets to, another
                           corporation; or

                  (iv)     there shall be a voluntary or involuntary
                           dissolution, liquidation or winding-up of the
                           Corporation,

         then, in any one or more of such cases, the Corporation shall give to
         the Holder (A) at least 10 days' prior written notice of the date on
         which a record date shall be taken for such dividend, distribution or
         subscription rights or for determining rights to vote in respect of any
         such reorganization, reclassification, consolidation, merger,
         amalgamation, sale, dissolution, liquidation or winding-up and (B) in
         the case of any such reorganization, reclassification, consolidation,
         merger, sale, dissolution, liquidation or winding-up, at least 10 days'
         prior written notice of the date when the same shall take place. Such
         notice in accordance with the foregoing clause (A) shall also specify,
         in the case of any such dividend, distribution or subscription rights,
         the date on which the holders of Common Shares shall be entitled
         thereto, and such notice in accordance with the foregoing clause (B)
         shall also specify the date on which the holders of Common Shares shall
         be entitled to exchange their Common Shares for securities or other
         property deliverable upon such reorganization, reclassification,
         consolidation, merger, amalgamation, sale, dissolution, liquidation or
         winding-up, as the case may be.

         (l)      Shares to be Reserved. The Corporation will at all times keep
                  available, and reserve if necessary under Canadian law, out of
                  its authorized Common Shares, solely for the purpose of issue
                  upon the exercise of the Compensation Warrants, (i) such
                  number of Compensation Warrant Shares as shall then be
                  issuable upon the exercise of the Compensation Warrants, and
                  (ii) such number of Broker Warrant Shares issuable upon the
                  due exercise of the Broker Warrants issuable upon the due
                  exercise of the Compensation Warrants. The Corporation
                  covenants and agrees that the Compensation Warrant Shares and
                  the Broker Warrant Shares which shall be so issuable upon
                  being duly exercised will, upon issuance, be duly authorized
                  and issued as fully paid and non-assessable. The Corporation
                  will take all such actions as may be necessary to ensure that
                  all such Compensation Warrant and Broker Warrant Shares may be
                  so issued without violation of any applicable requirements of
                  any exchange upon which the Common Shares may be listed or in
                  respect of which the Common Shares are qualified for unlisted
                  trading privileges. The Corporation will take all such actions
                  are within its power to ensure that all such Compensation
                  Warrant Shares and the Broker Warrant Shares may be so issued
                  without violation of any applicable law.

         (m)      Issue Tax. The issuance of certificates for Compensation
                  Warrant Shares and Broker Warrants upon the exercise of
                  Compensation Warrants shall be made

                                       6
<PAGE>

                  without charge to the Holder for any issuance tax in respect
                  thereto, provided that the Corporation shall not be required
                  to pay any tax which may be payable in respect of any transfer
                  involved in the issuance and delivery of any certificate in a
                  name other than that of the Holder.

         (n)      Listing. The Corporation will, at its expense and as
                  expeditiously as possible, use its reasonable commercial
                  efforts to cause all Compensation Warrant Shares and Broker
                  Warrant Shares issuable upon the exercise of the Compensation
                  Warrants and the Broker Warrants, respectively, to be duly
                  listed on the Toronto Stock Exchange and/or any other stock
                  exchange upon which the Common Shares may be then listed prior
                  to the issuance of such shares.

         (o)      Fair Market Value. For the purposes of any computation
                  hereunder, the "Fair Market Value" at any date shall be the
                  weighted average sale price per share for the Common Shares of
                  the Corporation for the 20 consecutive trading days
                  immediately before such date on the most senior stock exchange
                  in Canada on which the Common Shares may then be listed and on
                  which there is the greatest volume of trading of the Common
                  Shares for such 20 day period, or, if the shares or any other
                  security in respect of which a determination of Fair Market
                  Value is being made are not listed on any stock exchange, the
                  Fair Market Value shall be determined by the directors, which
                  determination shall be conclusive. The weighted average price
                  shall be determined by dividing the aggregate sale price of
                  all such shares sold on the said exchange during the said 20
                  consecutive trading days by the total number of such shares so
                  sold.

2.       REPLACEMENT.

         Upon receipt of evidence satisfactory to the Corporation of the loss,
theft, destruction or mutilation of this Compensation Warrant Certificate and,
if requested by the Corporation, upon delivery of a bond of indemnity
satisfactory to the Corporation (or, in the case of mutilation, upon surrender
of this Compensation Warrant Certificate), the Corporation will issue to the
Holder a replacement certificate (containing the same terms and conditions as
this Compensation Warrant Certificate).

3.       EXPIRY DATE.

         The Compensation Warrants shall expire and all rights to purchase Units
hereunder shall cease and become null and void at 5:00 p.m. (Toronto time) on
March 23, 2005.

4.       COVENANT.

         So long as any Compensation Warrants remain outstanding the Corporation
covenants that it shall use its commercially reasonable best efforts to maintain
its status as a reporting issuer not in default in the Offering Jurisdictions.

                                       7
<PAGE>

5.       DEFINED TERMS.

         All capitalized terms used herein and not otherwise defined shall have
the meaning ascribed thereto in the agency agreement dated as of March 23, 2004
among the Corporation, GMP Securities Ltd. and Dlouhy Merchant Group Inc.

6.       GOVERNING LAW

         The laws of the Province of British Columbia and the laws of Canada
applicable therein shall govern the Compensation Warrants.

7.       SUCCESSORS

         This Compensation Warrant Certificate shall enure to the benefit of the
Holder and its successors or assigns and shall be binding on the Corporation and
its respective successors.

8.       GENERAL

         This Compensation Warrant is non-assignable and non-transferable.

         By acceptance hereof, the Agent hereby represents and warrants to the
Corporation that the Agent is acquiring this Compensation Warrant as principal
for its own account and not for the benefit of any other person.

         All amounts of money referred to in this Compensation Warrant
Certificate are expressed in lawful money of Canada.

                                       8
<PAGE>

         IN WITNESS WHEREOF the Corporation has caused this Compensation Warrant
Certificate to be signed by a duly authorized officers.

         DATED as of March 23rd, 2004.

                                         SPECTRUM SIGNAL PROCESSING INC.

                                         Per:
                                             -----------------------------------
                                             Authorized Signing Officer

                                       9
<PAGE>

                                  SCHEDULE "1"

                              ELECTION TO EXERCISE

         The undersigned hereby irrevocably elects to exercise the number of
Compensation Warrants of Spectrum Signal Processing Inc. set out below for the
number of Units (or other property or securities subject thereto) as set forth
below:

    (a)  Number of Compensation Warrants to be Exercised:     ____________

    (b)  Number of Units to be Acquired:                      ____________

    (c)  Exercise Price per Unit:                            $____________

    (d)  Aggregate Purchase Price [(b) multiplied by (c)]    $____________

and hereby tenders a certified cheque, bank draft or cash for such aggregate
purchase price, and directs such Units to be registered and a certificate
therefor to be issued as directed below.

         DATED this ______ day of ____________, 200__ .

                                            [NAME OF HOLDER]

                                            Per:
                                                --------------------------------

                                            Name of Registered Holder:

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

                                            Address of Registered Holder:
                                            ------------------------------------

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

<PAGE>

                                  SCHEDULE "C"

                         UNITED STATES OFFERS AND SALES

         As used in this Schedule C, capitalized terms used herein and not
defined herein shall have the meanings ascribed thereto in the agency agreement
to which this Schedule is annexed and the following terms shall have the
meanings indicated:

         (a)      "DIRECTED SELLING EFFORTS" means directed selling efforts as
                  that term is defined in Regulation S. Without limiting the
                  foregoing, but for greater clarity in this Schedule, it means,
                  subject to the exclusions from the definition of directed
                  selling efforts contained in Regulation S, any activity
                  undertaken for the purpose of, or that could reasonably be
                  expected to have the effect of, conditioning the market in the
                  United States for any of the Units, Offered Shares or Offered
                  Warrants, and includes the placement of any advertisement in a
                  publication with a general circulation in the United States
                  that refers to the offering of the Units, Offered Shares or
                  Offered Warrants;

         (b)      "DISTRIBUTION COMPLIANCE PERIOD" means the 40 day period that
                  begins on the later of (i) the date the Units are first
                  offered to persons other than distributors in reliance on
                  Regulation S or (ii) the Closing Date; provided that, all
                  offers and sales by a distributor of an unsold allotment or
                  subscription shall be deemed to be made during the
                  Distribution Compliance Period;

         (c)      "ACCREDITED INVESTOR" means an accredited investor as that
                  term is defined in Rule 501(a) of Regulation D;

         (d)      "REGULATION D" means Regulation D adopted by the SEC under the
                  1933 Act;

         (e)      "REGULATION S" means Regulation S adopted by the SEC under the
                  1933 Act;

         (f)      "SEC" means the United States Securities and Exchange
                  Commission;

         (g)      "SUBSTANTIAL U.S. MARKET INTEREST" means substantial U.S.
                  market interest as that term is defined in Regulation S;

         (h)      "1933 ACT" means the United States Securities Act of 1933, as
                  amended;

         (i)      "U.S. EXCHANGE ACT" means the United States Securities
                  Exchange Act of 1934, as amended;

         (j)      "U.S. PERSON" means a U.S. person as that term is defined in
                  Regulation S; and

         (k)      "UNITED STATES" means the United States of America, its
                  territories and possessions, any state of the United States,
                  and the District of Columbia.

<PAGE>

             REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AGENTS

Each Agent acknowledges that the Units, Offered Shares and Offered Warrants have
not been and will not be registered under the 1933 Act and may be offered and
sold only in transactions exempt from or not subject to the registration
requirements of the 1933 Act. Accordingly, each Agent represents, warrants and
covenants to the Corporation that:

1.       It has not offered and sold, and will not offer and sell, any Units,
         Offered Shares or Offered Warrants except (a) in an offshore
         transaction in accordance with Rule 903 of Regulation S or (b) within
         the United States as provided in paragraphs 2 through 8 below.
         Accordingly, neither the Agent, its affiliates nor any persons acting
         on its or their behalf, has made or will make (except as permitted in
         paragraphs 2 through 8 below):

         (a)      any offer to sell or any solicitation of an offer to buy, any
                  Units, Offered Shares or Offered Warrants to any person within
                  the United States, any U.S. person, or for the account or
                  benefit of any U.S. person or person within the United States;

         (b)      any sale of Units, Offered Shares or Offered Warrants to any
                  purchaser unless such purchaser is not a U.S. person and is
                  not purchasing for the account or benefit of any U.S. person
                  and, at the time the buy order was or will have been
                  originated, the purchaser was outside the United States, or
                  such Agent, affiliate or person acting on behalf of either
                  reasonably believed that such purchaser was outside the United
                  States; or

         (c)      any Directed Selling Efforts in the United States with respect
                  to the Units, Offered Shares or Offered Warrants. It agrees
                  that, at or prior to confirmation of the sale of the Units,
                  Offered Shares or Offered Warrants, it will have sent to each
                  distributor, dealer or person receiving a selling concession,
                  fee or other remuneration that purchases Units, Offered Shares
                  or Offered Warrants from it during the Distribution Compliance
                  Period a confirmation or notice to substantially the following
                  effect:

                           "THE SECURITIES COVERED HEREBY HAVE NOT BEEN
                           REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 (THE
                           "1933 ACT"), AND MAY NOT BE OFFERED OR SOLD WITHIN
                           THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
                           BENEFIT OF, U.S. PERSONS (i) AS PART OF THEIR
                           DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40
                           DAYS AFTER THE LATER OF THE COMMENCEMENT OF THE
                           OFFERING AND CLOSING DATE, EXCEPT IN EITHER CASE IN
                           ACCORDANCE WITH REGULATION S UNDER THE 1933 ACT.
                           TERMS USED HEREIN HAVE THE MEANINGS GIVEN TO THEM IN
                           REGULATION S."

                  In addition, prior to the expiration of the Distribution
                  Compliance Period, all subsequent offers and sales of the
                  Units, Offered Shares or Offered Warrants by

                                       2
<PAGE>

                  such Agent shall be made only in accordance with the provision
                  of Rule 903 or 904 of Regulation S; pursuant to a registration
                  of the Units, Offered Shares or Offered Warrants under the
                  1933 Act; or pursuant to an available exemption from the
                  registration requirements of the 1933 Act.

                  Such Agent agrees to obtain substantially identical
                  undertakings from each member of any banking and selling group
                  formed in connection with the distribution of the Units,
                  Offered Shares or Offered Warrants contemplated hereby and to
                  comply with the offering restriction requirements of
                  Regulation S.

2.       It has not entered and will not enter into any contractual arrangement
         with respect to the distribution of the Units, Offered Shares or
         Offered Warrants, except with its affiliates, any selling group members
         or with the prior written consent of the Corporation. It shall require
         each selling group member to agree, for the benefit of the Corporation,
         to comply with, and shall use its best efforts to ensure that each
         selling group member complies with, the same provisions of this
         Schedule as apply to such Agent as if such provisions applied to such
         selling group member.

3.       All offers and sales of Units, Offered Shares or Offered Warrants in
         the United States shall be made through the Agent's U.S. registered
         broker-dealer affiliate in compliance with all applicable U.S.
         broker-dealer requirements.

4.       Offers and sales of Units, Offered Shares or Offered Warrants in the
         United States shall not be made (i) by any form of general solicitation
         or general advertising (as those terms are used in Regulation D)
         including advertisements, articles, notices or other communications
         published in any newspaper, magazine, or similar media or broadcast
         over radio or television, or any seminar or meeting whose attendees had
         been invited by general solicitation or general advertising or (ii) in
         any manner involving a public offering within the meaning of Section
         4(2) of the 1933 Act.

5.       Any offer, sale and solicitation of an offer to buy Units, Offered
         Shares or Offered Warrants that has been made or will be made in the
         United States was or will be made to Accredited Investors that are
         exempt, or in transactions that are exempt, from registration under
         applicable state securities laws.

6.       The Agent, acting through its U.S. broker-dealer affiliate, may offer
         the Units, Offered Shares or Offered Warrants in the United States only
         to offerees with respect to which such Agent has a preexisting
         relationship and has reasonable grounds to believe are Accredited
         Investors.

7.       Prior to completion of any sale of Units, Offered Shares and Offered
         Warrants in the United States, each U.S. purchaser thereof will be
         required to execute a Purchaser's Letter in the form attached as a
         Schedule to the Subscription Agreement entered into by each U.S.
         purchaser and the Corporation.

                                       3
<PAGE>

8.       At least one business day prior to the Closing Date, it will provide
         the transfer agent with a list of all purchasers of the Units, Offered
         Shares and Offered Warrants in the United States.

          REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE CORPORATION

         The Corporation represents, warrants, covenants and agrees that:

1.       The Corporation is a "foreign issuer" within the meaning of Regulation
         S.

2.       The Corporation is not, and as a result of the sale of Units, Offered
         Shares or Offered Warrants contemplated hereby will not be, an
         "investment company" as defined in the United States Investment Company
         Act of 1940, as amended.

3.       Except with respect to offers and sales to Accredited Investors within
         the United States in reliance upon an exemption from registration under
         Section 4(2) of the 1933 Act, neither the Corporation nor any of its
         affiliates, nor any person acting on its or their behalf, has made or
         will make: (A) any offer to sell, or any solicitation of an offer to
         buy, any Units, Offered Shares or Offered Warrants to a person in the
         United States; or (B) any sale of Units, Offered Shares or Offered
         Warrants unless, at the time the buy order was or will have been
         originated, the purchaser is (i) outside the United States or (ii) the
         Corporation, its affiliates, and any person acting on their behalf
         reasonably believe that the purchaser is outside the United States.

4.       During the period in which the Units, Offered Shares and Offered
         Warrants are offered for sale, neither it nor any of its affiliates, or
         any person acting on their behalf (i) has made or will make any
         Directed Selling Efforts in the United States, or (ii) has engaged in
         or will engage in any form of general solicitation or general
         advertising (as those terms are used in Regulation D) with respect to
         the offers or sales of the Units, Offered Shares and Offered Warrants
         in the United States, including advertisements, articles, notices or
         other communications published in any newspaper, magazine or similar
         media, or broadcast over radio, or television, or any seminar or
         meeting whose attendees have been invited by general solicitation or
         general advertising.

5.       Except with respect to the offer and sale of the Units, Offered Shares
         and Offered Warrants offered hereby, the Corporation has not, for a
         period of six months prior to the date hereof sold, offered for sale or
         solicited any offer to buy any of its securities in the United States.

                                       4

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